August 28; September 27, 1895

Supreme Court In Banco, Christchurch

Denniston, J.

Land Transfer—Foreign Bankruptcy—Effect of Same on Title to Land in New Zealand—Notice of Enforceable Rights—Production of Certificate of Title.

A bankruptcy in Victoria confers no title recognisable in New Zealand to land in New Zealand, and what purports to be a transmission under such circumstances is not a registrable document.

Where the Registrar has, on behalf of the applicant, a statutory transfer of land, with notice that another party has certain enforceable rights and also holds the certificate of title, that, apart from the possession of the certificate, is no ground for refusing to register the transfer.

Although there is no specific provision in “The Land Transfer Act, 1885,” that the production of the original grant or certificate of title is to be a condition precedent to the right to have a memorial of a transaction registered, such a provision must be inferred, and the Registrar, if he does not dispense with it under section 38 of the Act, is not, in the absence of the certificate, bound to register a dealing.

Where a certificate of title is put into the District Land Registrar’s office by a claimant to the land for the purpose of asserting his claim, it is not competent to the Registrar, without his consent or without notice to him, to use the certificate to defeat his claim.

SUMMONS calling upon the District Land Registrar to show cause why a memorandum of transfer dated the 1st of July, 1895, from A. R. Bloxam, as Sheriff of the Supreme Court for the Christchurch District, to Elizabeth Robertson Bettle, should not he registered. This summons was afterwards removed into Court.

The facts were as follows: Under and by virtue of a writ of sale in an action in which John Joseph Ashford Ellis, of Wanganui, was plaintiff, and Peter Ellis, of Bendigo, in the Colony of Victoria, was defendant, the Sheriff of the Supreme Court for the Canterbury District sold by auction, on the 30th of March, 1895, two pieces of land, containing [*130] 1 rood 24 perches, as described in certificates of title, vol. cxxii., folio 201, and vol. cxxxiii., folio 168, to one Joseph Bettle, for the sum of £85. The purchaser paid the purchase-money to the Sheriff, and instructed a land-broker to prepare a memorandum of transfer to Elizabeth R. Bettle, the purchaser’s wife. The broker searched the Register, and found that Peter Ellis was the registered proprietor in fee-simple of the land, and, so far as could he ascertained from the Register, there were no encumbrances. On asking the Sheriff for the certificates of title he ascertained that the Sheriff did not hold them, and did not know who did. On the 5th of April the broker saw the District Land Registrar, who told him that unless he could satisfy him, under section 38 of “The Land Transfer Act, 1885,” that there was reasonable cause for dispensing with the production of the certificates of title, he could not register the transfer; at the same time he informed the broker that the usual course was to make a declaration to the effect that the titles had been lost or destroyed, and had not been deposited with, or were not held by, any one as a security. This declaration was not made. On the 26th of April a caveat was lodged by Bettle, claiming as purchaser under the sale from the Sheriff. On the 29th of April a caveat was lodged on behalf of the Commercial Bank of Australia (Limited), claiming as purchaser from John Hasker, the trustee in the insolvent estate of Peter Ellis, who had presumably prior to the sale of the land by the Sheriff-been adjudicated a bankrupt in the Colony of Victoria. On the 17th of June what purported to be a transmission of; the bankrupt’s estate in the land to John Hasker, the trustee in his bankruptcy, was lodged for registration, together with the appropriate certificates of title. On the 1st of July a memorandum of transfer from the Sheriff to E. R. Bettle was formally presented for registration, and, the titles being in the office, was received subject to the caveat lodged on behalf of the Commercial Bank, and to the transmission under which John Hasker claimed to he registered. On the presentation of the transmission and transfer the usual notices were sent to the caveators. The bank’s caveat lapsed, no proceedings having been instituted by it within the prescribed time after notice. [*131]

Russell in support of the summons:—

The transmission in this case is not a registrable document in New Zealand; it may only he such on the hypothesis that by virtue of the Victorian Act the property vests in the assignee. It is not open for one colony to make laws affecting the devolution of property in another: Selkrig v. Davis(1); Cockerell v. Dickens(2). Real estate in England does not vest in an assignee under a Victorian bankruptcy: Waite v. Bingley(3); Re Aylwin’s Trusts(4); In re Levy’s Trusts(5). It is quite clear that the Victorian bankruptcy does not vest any property except that iii the colony. "The Bankruptcy Act, 1892," section 162, show’s the procedure which ought to be adopted by the assignee of another colony to get at real property here. This confirms lice view that bankruptcy in another colony does not vest property in this, and that the transmission is not a document which can be registered. If the assignee has at law no right to the laud, the mere deposit of the titles without any registrable instrument cannot confer such right, or place him in any better position. A dealing can be registered without the production of the certificate of title. At the time of the sale by the Sheriff there was nothing on the title to show any: encumbrance. The. purchaser therefore paid his money. In the meanwhile, and before the presentation of the transfer, a caveat>, was lodged by the hank, and, later, what purported to be a transmission to Hasker; later still, the transfer to Mrs. Bettle was presented. Section 33 of the Land Transfer Act shows in what order of priority instruments are to be registered. Section 32 of the Act shows that the marking of the duplicate certificate is no part of the registration Section 36; inferentially supports this contention. The policy of the Act make registration the title. The duplicate in the Land Transfer Office is the root of the title, and cannot be affected by the absence of the certificate. If the assignee had a registrable title, then both parties had an equitable title, and the Court will decide who is entitled to be registered. Section 146

(1) 2 Rose 291, 312.	(3) 21 Ch.D. 674, 681.
(2) 1 Mont. D. & DeG. 45, at pp. 78, 79.	(4) 42 L.J. Ch. 745.
(2) 1 Mont. D. & DeG. 45, at pp. 78, 79.	(5) 54 L.J. Ch. 968, 970.

[*132] shows that after fourteen days’ notice the caveat lapses, unless an order to the contrary be made by the Supreme Court; and, as notice was given to the hank, and no order to the contrary obtained, the caveat lodged on its behalf lapsed. If the Court has to decide between the equities, it will take into consideration the fact that the Victorian assignee has had since the 17th of April, 1893, to take the necessary steps to obtain his title, but until the laud was sold by the Sheriff no caveat was lodged. On the other hand, the purchaser is a purchaser for value, and had no means of knowing that the title was otherwise than clear.

Fisher, for the bank:—

Ellis was the registered proprietor of the land. On the 30th of May, 1893, he became bankrupt in Victoria on his own petition, and Hasker was appointed trustee of his insolvent estate under section 34 of “The Bankruptcy Statute, 1890” (Victoria). Section 58 of the same Act vests the property of the bankrupt in the trustee. An instrument was not necessary here because Ellis had returned this property as assets in his estate, and handed the indicia of title to the assignee. This puts the assignee in the position of being able to present transmission under section 115 of the New Zealand Act. A purchaser of land at a Sheriff’s sale under a writ of fi. fa. cannot be deemed to be the proprietor until such transfer is entered by the Registrar in the Register-book: The National Bank of Australasia v. Morrow(1). “The Land Transfer Act, 1885,” section 37, provides that it is the duty of the Registrar to demand the production of the certificate of title; and he can only dispense with it in the cases mentioned in section 38. By section 211 regulations, &c., may be made for regulating the practice and conduct of business under the Act, and Regulation 21 provides that the certificate, &c., must be deposited with the transfer when presenting the latter for registration Regulation 32 provides that before paying the purchase-money the purchaser should have the existing certificate delivered up here the purchaser deliberately neglected this precaution

(1) 13 V. L.R. 2.

[*133] Under sections 35, 37, and 38 of the Act the Registrar cannot enter any memorial of a dealing unless he at the same time records such memorial on the duplicate certificate produced if he dispenses with its production, fourteen days’ notice of his intention must be published in the Gazette and in at least one newspaper published in the district. And by section 58 every registered proprietor is entitled to a certificate of title, on which all encumbrances shall be registered. If it is asserted that the certificates of title in this case are wrongfully retained by. the bank, the proper course is to proceed, under section 70, to compel the production of the certificates. The Registrar was right in refusing to register the transfer while Hasker’s application barred the way. If Hasker was not entitled to be registered as proprietor, Mrs. Bettle ought. to have come to time Court to have his application set aside. The transmission was notice to her of an equity in Hasker, and she had this notice before she got on the Register. In Kissling v. Mitchelson(1) it was laid down that it is not the duty of the Deputy Registrar to determine a question of equitable priority.

Russell in reply.

Cur. adv; vult.

Denniston, J.:—

On the 30th of March the interest, if any, of one Peter Ellis in a piece of land in the Canterbury District was sold by auction 1w the Sheriff of the district under a writ of sale issued out of this Court. The applicant was the purchaser, and immediately after the sale paid the purchase-money to time Sheriff, who executed a transfer (under the Supreme Court let) of all the estate, right, and interest of the execution debtor in the land. Under the Supreme Court Rules (Rules 373) such transfer is sufficient to convey to the purchaser all the estate, right, title, and interest of the execution debtor. On the Register, under the Land Transfer Act, the execution debtor appeared entitled to the land in question absolutely in fee-simple, without encumbrance. Although the contingency is not directly provided for by the Land Transfer Act, I have no doubt that, under the mule mentioned,

(1) N.Z. L.R. 3 CA. 261.

[*134] upon the presentation and tender of the transfer executed by the Sheriff, the Registrar would (apart from the question, hereafter to be referred to, of the production of the certificate of title) be bound to register the transferee as owner. No such presentation or tender seems to have been made. In reply to a question of the applicant’s agent on the 5th of April, the Registrar seems to have intimated that lie would not register the transfer until the certificates of title were produced; and the agent at that time did nothing further. On the 26th of April the applicant lodged a caveat as purchaser. On the 29th of April a caveat was lodged by the Commercial Bank of Australia, claiming as purchasers from John Hasker as trustee in Victoria of the insolvent estate of Peter Ellis, the judgment debtor. On the 17th of June what purports to be a transmission, with the certificates of title of the land, was lodged with the Registrar. This is a claim by the said John Hasker as such trustee. On the 1st of July the transfer from the Sheriff was presented for registration, and, in the words of the Registrar, “the titles being in the office, was received subject to the caveat and transmission” before mentioned.

The purported transmission is, it is clear, of no value as a registrable document. It is admitted that a bankruptcy in Victoria confers no title recognisable in New Zealand to land in New Zealand. By proper proceedings the trustee-assignee could, under the Victorian insolvent statutes, have compelled the bankrupt to sign a transfer to hint, or he might, under the provisions of “The Bankruptcy Act, 1892” (New Zealand), section 162, have obtained an adjudication against the bankrupt in New Zealand. In the latter case the real estate in New Zealand would vest in the Official Assignee, who would probably hold it subject to the claims of creditors in New Zealand. The trustee did neither. He sold the estate to the caveators—the Commercial Bank. The bank’s caveat lapsed before the commencement of the proceedings, fourteen days having expired after notice given of the application for registration by the applicant. It was contended that the fact of the bankrupt having, in making his statutory return of his assets in his Victorian bankruptcy, included this [*135] land as property available for his creditors, amounted to an equitable authority to the assignee to sell such land, and that such authority was exercised by hint in favour of the bank. I do not think that the statement amounted to more than an enumeration of his property, and did not in any way add to or affect the legal rights of the assignee in respect of it.

The position seems to me to be that the Registrar has, on behalf of the applicant, a statutory transfer of the land, with notice that the assignee in Victoria of the registered proprietor—or his assignee, the bank—has certain enforceable rights in respect of such land, and is also the holder of the certificates of title. I do not think that such notice, apart from the possession of the certificates, would have been any reason for not proceeding with the registration. The parties interested could have protected themselves by caveating, and within the prescribed time taking steps to enforce any rights they clammed. That is the effect of the judgment of Molesworth, J., in the Victorian case of Patchell v. Maunsell(1), which is not dissented from in National Bank of Australasia v. Morrow(2).

On the question of the effect of the non-production of the certificates there scents a good deal of difficulty. Under the Land Transfer Act registration is effected when the memorial of the transaction is entered on the duplicate grant or certificate kept in the office: section 32; and the time of the production of such memorial is the date of registration: section. 34. There is no specific provision that the production of the original grant or certificate is to be a condition precedent to the right to have the memorial registered. But such provision is, I think, to be inferred from other provisions in the Act. Thus, sections 76 and 77 imply in cases of transfer a production of the certificate for either indorsement or cancellation. Section 38 shows that such production is necessary unless dispensed with, and that registration will be postponed until notice of intention so to dispense is given. I think, therefore, that the Registrar was not bound to register the applicant’s transfer in the absence of the certificates. I do not think the

(1) 7 V. L.R.. (Eq.) 6.

(2) 13 V. L.R. 2.

[*136] fact of the certificates being then in the office made any difference. The certificates were put in by claimants to the land, and for the purpose of asserting their claim. It cannot he competent to the Registrar, without their consent, or without notice to them, to use the certificates to defeat their claim. It is, however, clear that a certificate may in certain circumstances he issued although the existing certificate is in other hands. This is evident from section 38 and from sections 71 and 72, where the original certificate may be in the hands of a person who contumaciously withholds it or who has absconded with it. It seems obvious that the right to sell advantageously a debtor’s land under execution should not depend on whether the registered proprietor is or is not within the jurisdiction of this Court.

The matter is not before me in a satisfactory form. As I said earlier in the matter, it is the duty of any person aggrieved by a refusal of the Registrar to require him to set forth his reasons iii writing; and on these written grounds such persons should move. By agreement it was arranged that the Registrar should be asked for his reasons, on which the summons should be treated as being issued. The application for reasons made under this arrangement was complicated by the introduction of unnecessary matter, in consequence of which the Registrar’s statement was not as explicit as it otherwise would have been. Any objection, however, on this point has been waived by the Registrar.

For the reasons stated I think lie was justified in not there and then registering the applicant’s transfer. I shall make no order in this application. The Registrar will probably consider the propriety of acting under section 38. If he decides so to act it will be open to the bank—as, indeed, it is now—to take any steps to substantiate any claim which they may be advised to assert.

Solicitor for E. R. Bettle: T: G. Russell (Christchurch).

Solicitors for the bank: Garrick Cowlishaw & Fisher (Christchurch).