Clements v Ellis [1934] HCA 18

Clements v Ellis [1934] HCA 18

The High Court was equally divided. The ratio is that, under the Victorian Torrens system, the registration of a bona fide purchaser for value as proprietor following a forged discharge of mortgage may or may not confer indefeasible title: Rich and Evatt JJ considered registration protected the purchaser under s 72 unless involved in fraud; Dixon and McTiernan JJ, relying on Gibbs v Messer, reasoned that an interest removed from the register only by a forged instrument is not destroyed unless an actual registered proprietor for value subsequently acts in reliance on the register, and in this case, as transfer and forged discharge were lodged simultaneously, Clements could not acquire a...

Parties
Appellant; Defendant: Edwin Thomas Clements; Respondents; Plaintiffs: Smith Ellis and Esther Dunn Wilson (as executors and trustees of Richard Smith Ellis, deceased); Defendant: Lily Holmes; Defendant: Registrar of Titles (Victoria)
Jurisdiction
Australia
Procedural Posture
Appeal (civil) / High Court of Australia on Appeal From Supreme Court of Victoria
Outcome
Appeal dismissed (by operation of equal division in the High Court)
Legal Topics
Indefeasibility of Registration, Land Transfer Under Fraud or Forgery, Forged Instrument, Discharge of Mortgage, Rectification of Register
Property Law Real Property Torrens Title System Indefeasibility of Registration Land Transfer Under Fraud or Forgery Forged Instrument Discharge of Mortgage Rectification of Register

Case Brief

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Parties

Edwin Thomas Clements

Appellant; Defendant

Smith Ellis and Esther Dunn Wilson (as executors and trustees of Richard Smith Ellis, deceased)

Respondents; Plaintiffs

Lily Holmes

Defendant

Registrar of Titles (Victoria)

Defendant

Procedural Posture

Appeal (civil) / High Court of Australia on Appeal From Supreme Court of Victoria

Legal Issues

  1. 1 Whether a bona fide purchaser registered as proprietor under the Transfer of Land Act 1915 (Vic) acquires an indefeasible title where registration was preceded by registration of a forged discharge of mortgage
  2. 2 Effect of a forged discharge of mortgage on the removal of a registered encumbrance under the Torrens system
  3. 3 Whether the purchaser or transferee must have dealt with a registered proprietor of an unencumbered estate, or whether registration alone cures underlying defects not disclosed on the register

Ratio Decidendi

The High Court was equally divided. The ratio is that, under the Victorian Torrens system, the registration of a bona fide purchaser for value as proprietor following a forged discharge of mortgage may or may not confer indefeasible title: Rich and Evatt JJ considered registration protected the purchaser under s 72 unless involved in fraud; Dixon and McTiernan JJ, relying on Gibbs v Messer, reasoned that an interest removed from the register only by a forged instrument is not destroyed unless an actual registered proprietor for value subsequently acts in reliance on the register, and in this case, as transfer and forged discharge were lodged simultaneously, Clements could not acquire a...

Court Disposition

Appeal dismissed (by operation of equal division in the High Court)

Orders

  • Order of Supreme Court of Victoria (Lowe J) affirmed, requiring rectification of the register to restore the plaintiffs' mortgage unless the mortgage is paid by Lily Holmes, delivery up of the duplicate certificate of title and mortgage to the plaintiffs, and dismissal of claim against Registrar for damages.