1. (CRCOS) #00212K FRAUD AND LAND TITLE REGISTRATION IN INTERNATIONAL COMPARATIVE PERSPECTIVE Prof. Murray Raff School of Law & Justice, University of Canberra

2. (CRCOS) #00212K Fraud and corruption in LTR takes place in a broader social context: Freedom of information – independent Media Wide access to independent courts, esp. civil courts Independent auditing Anti-corruption commissions Whistle blower protection Ombudsman-style complaint systems Community Legal Centers and education about rights Our focus is on fraud in Land Title Registration [LTR] Anti-Corruption Measures

3. (CRCOS) #00212K International Model of LTR What do I mean by LTR in this context? Emergence of the international model of LTR A “circulating model” influenced by Torrens and German LTR models International convergence of law driven by globalizing pressures: eg. advances in ICT

4. (CRCOS) #00212K Characteristics of International LTR 1.public register of rights over land that may be asserted against third parties 2.registration of an interest is best evidence that the registered party has title to it 3.reliance on the register is protected against challenges to accuracy 4.remedies are provided to honest parties who lose their interests in land through deeming the register accurate

5. (CRCOS) #00212K A vulnerable point – also a policy blind-spot: Creation of a provisional title in the register Land Commission: potential for public hearings Giving public notice of the conversion Opportunities to enter caveats on the title with potential to lead to court hearing Accelerated systems for conversion of deeds to LTR Fraud/Corruption in Broader Context: Bringing Land under a Registration System

6. (CRCOS) #00212K Private parties lose control of transaction lodged for registration: – testing paper, ink and signatures forensically – persuading registry to arrange expert testing – gratitude to Prof Dr Meliha Povlakić, Uni of Sarajevo Cf. deeds conveyancing on the common law model – chain of title privately held Merits review or judicial review of registry decisions – oversight of registry by German local court Control of the Transaction

7. (CRCOS) #00212K General Anti-Fraud Laws: Germany cf. Australia criminal fraud, such as obtaining property by deception (eg ss 81- 86 Crimes Act (Vic) misrepresentation as a ground of rescission of a transaction misleading or deceptive conduct in the course of trade or commerce (s. 18 Australian Consumer Law) bad faith and fraud (common law – equity) criminal fraud (§§263-266b Crim. Code) – computer fraud (§263a) transactions with objective of causing others harm (§226 CivilC) good faith in performance of obligations (§242) willful harm contrary to good morals (§826)

8. (CRCOS) #00212K German and the Torrens LTR systems foresee problem of fraud and the entrenched status of registered title German system: – prevention: role of notaries in authenticating transactions prior to registration (§§ 873, 892, 925) – exception to doctrine of public faith in the register: person acquiring registered interest must be in good faith (§§ 891-3) Torrens system: – exception to doctrine of indefeasibility of title in cases of fraud (ss 41-44 TLA) Fraud in Land Transactions

9. (CRCOS) #00212K A person is not in good faith if s/he has: positive awareness of incorrectness or incompleteness of the register: eg. another interest is not registered actual knowledge of the facts causing the incorrectness, amounting to awareness of a deficiency in the register Would an honest thinking person, not influenced by his or her own advantage, be convinced of incorrectness? § 892: Awareness of Inaccuracy

10. (CRCOS) #00212K On registration, title is not affected by notice, actual or constructive, of any unregistered interest, and knowledge of an unregistered interest is not to be imputed as fraud – “race to the register” – massive incentive to register BUT registration gained by fraud is not protected by indefeasibility of title – extends to actual awareness of fraud and “willful blindness” (failure to inquire when suspicions are aroused) Torrens: Fraud Exception

11. (CRCOS) #00212K The LTR principles that maintain certainty for the greater good can lead to loss in the individual case: eg. true owner is defrauded, new owner acquires innocently, fraudulent party and the $$ vanish remedies for defrauded true owner Remedies for Loss through Operation of the LTR System

12. (CRCOS) #00212K Rectification of title Resulting and constructive trusts: common law and equity Torrens compensation scheme Professional Liability ‒prof. assurance schemes ‒prof. indemnity insurance Rectification of title Unjust Enrichment: §816 ‒claim of advantage to one not entitled re disposition of property - surrogate Morally Dubious Transactions: §826 Professional Liability ‒prof. indemnity insurance

13. (CRCOS) #00212K Registration of interests in land constitutes their legal status as property and places them beyond challenge The simplicity, protection and certainty achieved by LTR depend on this – many interests in society depend on the register Fraud in Land Transactions

14. (CRCOS) #00212K However, it is necessary to: take preventive measures before registration prevent fraudulent transactions from acquiring registered proprietary status that is beyond challenge provide civil law remedies for innocent parties who suffer loss Dilemmas of: i)notarial screening or other preventive measure, and ii)requiring good faith (notice) or fraud as the standard iii)duty of care on professionals working in the system Fraud in Land Transactions

15. (CRCOS) #00212K Thank you!