Breskvar v Wall

Breskvar v Wall
Breskvar v Wall
Court	High Court of Australia
Decided	13 December 1971
Citation(s)	[1971] HCA 70, (1971) 126 CLR 376
Case history
Prior action(s)	Breskvar v Wall; [1972] Qd R 28
Appealed from	Supreme Court (Qld)
Subsequent action(s)	Breskvar v White; [1978] Qd R 187
Court membership
Judge(s) sitting	Barwick CJ, McTiernan, Menzies, Windeyer, Owen, Walsh and Gibbs JJ
Case opinions
	7:0
Keywords
	fraud, indefeasibility of title

Last updated January 24, 2024

Breskvar v Wall,^[1] was an Australian court case, decided in the High Court on 13 December 1971. The case was an influential decision in property law, specifically the effect of obtaining title by registration under the Torrens title system, the application of the fraud exception to the principle of indefeasibility and whether Frazer v Walker ^[2] should be followed in Australia. The High Court followed Frazer v Walker in upholding that a bona fide purchaser for value without notice of the fraud obtained an effective title even though the person they purchased from was registered by fraud against the original owner.

Facts

Essentially this was a contest between two innocent parties, the Breskvars and Alban Pty Ltd in relation to the ownership of a two acre block of land at Acacia Ridge, Brisbane, each of who were victims of fraud by Petrie and Wall. Whoever succeeded would be the owner of the land, while the other party would be left to recovering damages against Petrie and Wall. Emilie & Franc Breskvar were the registered owners of the land. They took a loan of $1,200 from Petrie and gave Petrie the title documents and transfer papers as collateral. Petrie fraudulently inserted the name of his grandson G.W. Wall onto transfer papers and had it registered with Titles Office. Petrie, on behalf of Wall sold the property for $3,500 to Alban Pty Ltd who were unaware of the fraud. The Breskvars were trying to sell the land and discovered that Wall had been registered on the title and lodged a caveat in an attempt to prevent the property from being sold. The caveat was lodged after the sale to Alban Pty Ltd had been completed, but before the transfer had been registered.^[5]

Trial

At the time, there were two approaches to indefeasibility of title under the Torrens system. The prevailing view, known as the theory of deferred indefeasibility, was that title only became indefeasible on the registration of a subsequent transfer to a bona fide purchaser for value.^[5]^[6] Under the deferred theory, because Alban Pty Ltd was not registered, Wall's title could be set aside for fraud. The Breskvars argument was, in effect, that Wall never had title to the property and so could pass no title to Alban Pty Ltd. This was because the transfer to Wall was fraudulent and because Wall's name was not on the transfer at the time of signing and so the transfer was void under the Stamp Act 1894 (Qld).^[5] The deferred theory had been rejected by the Privy Council in Frazer v Walker.^[2] If the Breskvars failed in their challenge to the registration, then the issue was whether their equitable interest in the land should be given priority over the equitable interest of Alban Pty Ltd, as a bona fide purchaser for value. The difficulty with the Breskvars claim in this respect was that they had enabled the fraud by signing a blank transfer of the property.^[5]

In the Supreme Court of Queensland Justice Graham Hart followed Frazer v Walker and held that Alban Pty Ltd was a bona fide purchaser for value without notice of the fraud and were entitled to be registered as the owners of the land. The Breskvars were awarded damages against Petrie and Wall and were required to pay the legal costs of Alban Pty Ltd. The Breskvars could recover those costs from Petrie and Wall, if they were able to pay.^[5]^[7]

The Breskvars appealed directly to the High Court. While Petrie and Wall had appeared in the Supreme Court, they did not appear in the High Court.^[1]

Judgment

Chief Justice Barwick

The leading judgment was delivered by Chief Justice Garfield Barwick with whom justices Victor Windeyer, William Owen and Harry Gibbs agreed.

'a registration which results from a void instrument is effective according to the terms of the registration. It matters not what the cause or reason for which the instrument is void'.^[3]
'a right to sue to recover the land ... is an equitable claim'^[8]
Before the equitable claim was made, bona fide purchaser for value without notice intervened, giving 3rd party an equitable interest in land.^[9]
'The priority of the creation of that right will only be lost by some conduct on the part of the [plaintiffs] which must have contributed to the assumption, false as the event proved, upon which the holder of the competition equity acted when that equity was created. Here the appellants armed the [2nd Def] with the means of placing himself … on the register'.^[10]
Barwick CJ, agreed with Supreme Court ruling that by reason of Breskvars (Plaintiff) conduct in providing the means of transfer to G.P. Wall (2nd Def), their equity though prior in time was postponed to the equitable interest of the 3rd party bona fide purchaser for value and without notice.^[10]

Justice McTiernan

'In my judgment the decision of the Privy Council in Frazer v Walker requires the conclusion that Wall's certificate of title was good against all the world, except of course the defrauded Breskvars'.^[11]
'When the transfer which the appellants had given to Petrie [2nd Def] was completed with the name of Wall as purchaser it operated, in my judgment, as a representation, addressed to any person who might take it without notice of the appellants' rights, that Wall had an estate in the land which he was entitled to transfer in his turn'.^[12]
'Apart from priority in time, the test for ascertaining which incumbrancer has the better equity must be whether either has been guilty of some act or default which prejudices his claim'.^[12]
'[T]he interest of Alban [3rd Def] should be accorded paramountcy'.^[13]

Justice Menzies

'The appellants can, I have no doubt, displace Wall's title. To succeed, however, at the expense of Alban Pty. Ltd., they must go further than they have to go against Wall. They must show either that Wall had no title at all, or, that their claim is to be preferred to that of Alban Pty. Ltd'.^[14]
'Frazer v Walker was not a case of conflict between unregistered interests'.^[15]
'It must now be recognized that, in the absence of fraud on the part of a transferee, or some other statutory ground of exception, an indefeasible title can be acquired by virtue of a void transfer. It seems to me to follow that, where there is fraud or one of the other statutory exceptions to indefeasibility, a transferee does, by registration of a void transfer, obtain a defeasible title'.^[15]
Contrast to 'Gibbs v Messer^[6] where, as the Privy Council has explained, there was no real registered proprietor at all but only a fictitious person'.^[16]
'The authorities already cited establish that the appellants' right or claim should, in the absence of a good ground for distinguishing them, be postponed and it becomes necessary to determine whether The Stamp Acts, s 53(5), affords any such ground for distinction'.^[17]
'What [section 53(5) of the Stamp Acts] says is that no transfer signed in blank “shall be valid either in law or in equity”'.^[16]
'Nevertheless, in executing the transfer in blank they were in breach of The Stamp Acts, s 53(5), and it was [the Breskvars'] breach of the law that enabled Wall in disregard of the section, to become registered as proprietor'.^[17]

Justice Walsh

If Breskvars had taken action before the 3rd party, then they would have been able to get it back despite Wall's registration of title.^[18]
'[W]hen the transfer was registered then, ... “the registration of Wall as the registered proprietor was effective to vest the title in him and to divest the title of the plaintiffs”'.^[19]
'The appellants placed in the hands of Wall a memorandum of transfer in a form which enabled him to complete it in such a way as to make it appear to be a valid absolute transfer of the appellants' estate. They allowed Petrie to have possession of the certificate of title. Thus they enabled Petrie to procure the registration of Wall as the owner of an estate in fee simple'.^[20]
'These acts of the appellants, coupled with their failure at the relevant time to place upon the register any notice of any interest retained by them in the land, enabled Wall and his agent Petrie to represent to an intending purchaser that Wall had an unencumbered estate in fee simple in the land'.^[20]
'In this respect their conduct was precisely the same as the conduct described in Abigail v Lapin,^[21] which was held to postpone the equity of the person who by that conduct enabled a representation to be made upon the faith of which another person acquired an equitable interest.^[20]

Aftermath

The Breskvars appeal was dismissed and they were required to pay the legal costs of the appeal. Professor Peter Butt states that the effect of Breskvar v Wall was that:

Title under the Torrens system derives from Registrar-General's act in registering an instrument - the act of a statutory official acting under statutory authority - not from the parties' act in executing the instrument. ... Registration is the source of title - it confers on the person registered as proprietor a title that did not previously exist. ... The conclusiveness of the Register confers on the registered proprietor of an interest in Torrens title land an 'indefeasible title' to that interest. By an 'indefeasible title' to an interest is meant a title that cannot be set aside on the ground of a defect existing in the title before the interest was registered.^[22]^[23]

The Breskvars sought to recover the money against Petrie and Wall. When this proved unsuccessful they sought compensation from the assurance fund under s 127 of the Real Property Act 1861-1976 (Qld). A claim under this section had to be made within six years. The Breskvars argued that the six years ran from when the judgment was unsatisfied. Justice Peter Connolly rejected their claim, holding that the six years ran from when the Breskvars were deprived of their land in 1968, noting that "In many cases a plaintiff under s. 126 would have no way of knowing that the defendant might prove to be insolvent when after litigating his claim and possibly conducting an appeal or appeals he ultimately came to execute his judgment. ... This means that for him the six-year period of limitation is really illusory".^[24]^[25]

Related Research Articles

In common law and statutory law, a life estate is the ownership of immovable property for the duration of a person's life. In legal terms, it is an estate in real property that ends at death, when the property rights may revert to the original owner or to another person. The owner of a life estate is called a "life tenant". The person who will take over the rights upon death is said to have a "remainder" interest and is known as a "remainderman".

Torrens title is a land registration and land transfer system, in which a state creates and maintains a register of land holdings, which serves as the conclusive evidence of title of the person recorded on the register as the proprietor (owner), and of all other interests recorded on the register.

Nemo dat quod non habet, literally meaning "no one can give what they do not have", is a legal rule, sometimes called the nemo dat rule, that states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership title. It is equivalent to the civil (continental) Nemo plus iuris ad alium transferre potest quam ipse habet rule, which means "one cannot transfer to another more rights than they have". The rule usually stays valid even if the purchaser does not know that the seller has no right to claim ownership of the object of the transaction ; however, in many cases, more than one innocent party is involved, making judgment difficult for courts and leading to numerous exceptions to the general rule that aim to give a degree of protection to bona fide purchasers and original owners. The possession of the good of title will be with the original owner.

Anticipatory repudiation or anticipatory breach is a concept in the law of contracts which describes words or conduct by a contracting party that evinces an intention not to perform or not to be bound by provisions of the agreement that require performance in the future.

A bona fide purchaser (BFP) – referred to more completely as a bona fide purchaser for value without notice – is a term used predominantly in common law jurisdictions in the law of real property and personal property to refer to an innocent party who purchases property without notice of any other party's claim to the title of that property. A BFP must purchase for value, meaning that they must pay for the property rather than simply be the beneficiary of a gift. Even when a party fraudulently conveys property to a BFP, that BFP will, depending on the laws of the relevant jurisdiction, take good (valid) title to the property despite the competing claims of the other party. As such, an owner publicly recording their own interests protects themselves from losing those to an indirect buyer, such as a qualifying buyer from a thief, who qualifies as a BFP. Moreover, so-called "race-notice" jurisdictions require the BFP to record to enforce their rights. In any case, parties with a claim to ownership of the property will retain a cause of action against the party who made the fraudulent conveyance.

Deeds registration is a land management system whereby all important instruments which relate to the common law title to parcels of land are registered on a government-maintained register, to facilitate the transfer of title. The system had been used in some common law jurisdictions and continues to be used in some jurisdictions, including most of the United States.

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Unregistered land in English law is land that has not been registered with HM Land Registry. Under the residual principles of English land law, for unregistered land proof of title is based upon historical title deeds and a registry for certain charges under the Land Charges Act 1972.

Frazer v Walker [1967] 1 AC 569 is a landmark New Zealand court case that went to the Privy Council on appeal. The case upheld the concept that an owner of interest in land which was originally obtained from the rightful owner through fraud, still obtains an indefeasible interest in that title if they were unaware of the fraud.

Efstratiou v Glantschnig (1972) is an often cited New Zealand case to the limits of indefeasibility of title to land ownership, where in this case, the purchaser of the land was aware of the title fraud at the time of the purchase of the property.

Latec Investments Ltd v Hotel Terrigal Pty Ltd is a 1965 property law decision of the High Court of Australia. It contains a discussion of the principles upon which the priority of competing equitable interests in land is to be determined.

Mascall v Mascall[1984] EWCA Civ 10 was an appeal on formalities in English law. The final, registration stage of a witnessed deed of transfer is not imperative in all circumstances, the court confirmed. Those circumstances include that there must be no detriment to a third party bona fide purchaser or mortgagee for value without notice; and there must be no fraud or abuse of trust as defined by law. It has wider resonance with the formalities of Trusts in English law.

Akers v Samba Financial Group[2017] UKSC 6, [2017] AC 424 is a judicial decision of the Supreme Court of the United Kingdom relating to the conflict of laws, trust law and insolvency law.

Bunny Industries v FSW Enterprises is a decision of the Supreme Court of Queensland.

Byers v Saudi National Bank[2024] UKSC 51 is a decision of the Supreme Court of the United Kingdom in the long running litigation between the liquidators of SAAD Investments Company Limited and various parties relating to the alleged defrauding of the insolvent company by one of its principals.

Pilcher v Rawlins (1872) 7 Ch App 259 is a decision of the English Court of Appeal in relation to the rights of the beneficiaries under a trust against a bona fide third party purchaser for value of the trust property.

References

1 2 Breskvar v Wall [1971] HCA 70, (1971) 126 CLR 376(13 December 1971), High Court .
1 2 Frazer v Walker [1966] UKPC 27 , [1967] 1 AC 569, Privy Council (on appeal from New Zealand). LawCite.
1 2 126 CLR, p. 386, Barwick CJ at [15].
↑ Castle Constructions Pty Limited v Sahab Holdings Pty Ltd [2013] HCA 11 , (2015) 254 CLR 425(10 April 2013), High Court.
1 2 3 4 5 Teh, Gim L (1974). "Breskvar v Wall: The End of Deferred Indefeasibility?". Melbourne University Law Review. (1974) 9(3) Melbourne University Law Review 381
1 2 Gibbs v Messer [1891] UKPC 1 , [1891] AC 248, Privy Council (on appeal from Victoria).
↑ Breskvar v Wall [1972] Qd R 28, Supreme Court (Qld).
↑ 126 CLR, p. 387, Barwick CJ at [20].
↑ 126 CLR, p. 387, Barwick CJ at [18].
1 2 126 CLR, pp. 388–389, Barwick CJ at [21].
↑ 126 CLR, p. 391, McTiernan J.
1 2 126 CLR, p. 393, McTiernan J.
↑ 126 CLR, p. 394, McTiernan J.
↑ 126 CLR, p. 395, Menzies J.
1 2 126 CLR, p. 397, Menzies J.
1 2 126 CLR, p. 398, Menzies J.
1 2 126 CLR, p. 399, Menzies J.
↑ 126 CLR, p. 401, Walsh J.
↑ 126 CLR, p. 407, Walsh J.
1 2 3 126 CLR, p. 409, Walsh J.
↑ Abigail v Lapin [1934] UKPC 33 , [1934] AC 491 at 506, Privy Council (on appeal from Australia).
↑ Butt, Peter (2010). Land Law (6th ed.). Law Book Co. at [20 12] to [20 15]. ISBN 9780455225326.
↑ Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395
↑ Breskvar v Wall [1978] Qd R 187, Supreme Court (Qld).
↑ "Recent cases" (1978) 52 Australian Law Journal 333.

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[Breskvar_v_Wall-1] 1 2 Breskvar v Wall [1971] HCA 70, (1971) 126 CLR 376(13 December 1971), High Court .

[Frazer_v_Walker-2] 1 2 Frazer v Walker [1966] UKPC 27 , [1967] 1 AC 569, Privy Council (on appeal from New Zealand). LawCite.

[FOOTNOTE126_CLR386Barwick_CJ_at_[15]-3] 1 2 126 CLR, p. 386, Barwick CJ at [15].

[4] Castle Constructions Pty Limited v Sahab Holdings Pty Ltd [2013] HCA 11 , (2015) 254 CLR 425(10 April 2013), High Court.

[Teh_1974-5] 1 2 3 4 5 Teh, Gim L (1974). "Breskvar v Wall: The End of Deferred Indefeasibility?". Melbourne University Law Review. (1974) 9(3) Melbourne University Law Review 381

[Gibbs_v_Messer-6] 1 2 Gibbs v Messer [1891] UKPC 1 , [1891] AC 248, Privy Council (on appeal from Victoria).

[1972_Qd_R_28-7] Breskvar v Wall [1972] Qd R 28, Supreme Court (Qld).

[FOOTNOTE126_CLR387Barwick_CJ_at_[20]-8] 126 CLR, p. 387, Barwick CJ at [20].

[FOOTNOTE126_CLR387Barwick_CJ_at_[18]-9] 126 CLR, p. 387, Barwick CJ at [18].

[FOOTNOTE126_CLR388–389Barwick_CJ_at_[21]-10] 1 2 126 CLR, pp. 388–389, Barwick CJ at [21].

[FOOTNOTE126_CLR391McTiernan_J-11] 126 CLR, p. 391, McTiernan J.

[FOOTNOTE126_CLR393McTiernan_J-12] 1 2 126 CLR, p. 393, McTiernan J.

[FOOTNOTE126_CLR394McTiernan_J-13] 126 CLR, p. 394, McTiernan J.

[FOOTNOTE126_CLR395Menzies_J-14] 126 CLR, p. 395, Menzies J.

[FOOTNOTE126_CLR397Menzies_J-15] 1 2 126 CLR, p. 397, Menzies J.

[FOOTNOTE126_CLR398Menzies_J-16] 1 2 126 CLR, p. 398, Menzies J.

[FOOTNOTE126_CLR399Menzies_J-17] 1 2 126 CLR, p. 399, Menzies J.

[FOOTNOTE126_CLR401Walsh_J-18] 126 CLR, p. 401, Walsh J.

[FOOTNOTE126_CLR407Walsh_J-19] 126 CLR, p. 407, Walsh J.

[FOOTNOTE126_CLR409Walsh_J-20] 1 2 3 126 CLR, p. 409, Walsh J.

[Abigail_v_Lapin-21] Abigail v Lapin [1934] UKPC 33 , [1934] AC 491 at 506, Privy Council (on appeal from Australia).

[Butt_2010-22] Butt, Peter (2010). Land Law (6th ed.). Law Book Co. at [20 12] to [20 15]. ISBN 9780455225326.

[23] Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395

[1978_Qd_R_187-24] Breskvar v Wall [1978] Qd R 187, Supreme Court (Qld).

[52_ALJ_333-25] "Recent cases" (1978) 52 Australian Law Journal 333.

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