Fiji's Land Transfer Act, Cap 131, confers an indefeasible title to land on any proprietor who registers the title in accordance with the Land Transfer Act. There is only one exception that can defeat a registered title and this arises where it can be shown that the registered proprietor obtained the title by actual fraud.
In this legal bulletin we explain the law in relation to indefeasibility of title which includes consideration of leading case authorities from New Zealand, Australia and Fiji. We also discuss a recent Fiji Court of Appeal case authority that confirms that a registered proprietor of land has indefeasibility of title whether he or she is a purchaser of the title or obtains the title as a volunteer under a will.
More than 100 years ago this passage appeared in a New Zealand Court of Appeal decision:
"...It occurred now many years ago to an ingenious gentleman in South Australia Mr Torrens that the Merchant Shipping Acts supplied a model for which a scheme of land registration could be devised by which all trusts should be excluded from the register and under which a person dealing honestly with the registered proprietor should not be called upon to look further than the register and should be entirely unaffected by any breach of trust committed by the registered proprietor with whom he dealt.” - Edwards J, in the New Zealand Court of Appeal Fels and another v Knowles and Another  CA Vol XXVI
This is a reference to Sir Robert Richard Torrens (1814-1884) who created what is known as the Torrens title system or Torrens system for short.
Fiji, along with a dozen or so other jurisdictions worldwide has adopted the Torrens system through the Land Transfer Act, Cap 131 which regulates ownership of, and dealings in, land.
The Torrens system includes the following principles:
The Certificate of Title reflects or mirrors every dealing or encumbrance that affects a parcel of land. This means that a simple search will tell any purchaser or lender of each dealing that affects the land (e.g. a transfer, mortgage, lease, easement or covenant).
Any person is entitled to rely on the Certificate of Title as proof of ownership and because all the information regarding ownership is on the Certificate of Title a prospective purchaser does not need to go behind the Certificate of Title.
In addition, the owner of the land registered pursuant to the Land Transfer Act (registered proprietor) has what has become known as an indefeasible title meaning that the title cannot be made void, defeated or cancelled by any past event, error or omission in the title.
Fiji's Land Transfer Act therefore provides certainty and security to the registered proprietor of any title to land and to any prospective purchaser of the title to land, who is entitled to search and rely on the Certificate of Title.
However, there is one exception to indefeasibility of title, and this is when it can be shown that the title has been obtained by fraud on the part of the registered proprietor. The fraud exception is recorded in the key provisions of the Land Transfer Act (sections 39 and 40) and is a common provision in other jurisdictions that have adopted the Torrens system like New Zealand and Australia.
A long line of famous case authorities from New Zealand, Australia and Fiji have established that to defeat the registered proprietor's certificate of title it must be shown that the actual fraud was committed by the registered proprietor of the title. This means that a subsequent innocent purchaser of the title who is registered in accordance with the Land Transfer Act obtains, upon registration, an indefeasible title that cannot be invalidated. The person who has been defrauded may still bring an action for damages against the fraudster but he or she cannot defeat the registered title of a subsequent bona fide purchaser of the title to the land. As we discuss below recent case law in Fiji has extended this principle to cover a registered proprietor who has not purchased the title but has become the registered proprietor of the title as a volunteer under a will.
The case authorities that have established that actual fraud must be traced to the registered proprietor to invalidate a registered title include: Frazer v Walker  A.C. 569, Assets Co v Mere Roihi others  HL AC, Boyd v Mayor of Wellington,  Gazette Law Reports 490, Fels and another v Knowles and Another  CA Vol XXVI, Breskvar v Wall  126 C.L.R.
Lord Lindley in Assets Co v Mere Roihi (page 210) explained the fraud exception to indefeasibility of title succinctly as follows:
Further it appears to their lordships that the fraud which must be proved in order to invalidate the title of a registered purchaser for value whether he buys from a prior registered owner or from a person claiming under a title certified must be brought home to the person whose registered title is impeached or to his agents. Fraud by persons from whom he claims does not affect him unless knowledge of it is brought home to him or his agents. The mere fact that he might have found out fraud if he had been more vigilant and had made further enquiries which he had omitted to make does not of itself prove fraud on his part. But if it be shown that his suspicions were aroused and that he abstained from making enquiries for fear of learning the truth the case is very different. The fraud may be properly ascribed to him. The person who presents for registration a document which is forged or has been fraudulently or improperly obtained is not guilty of fraud if he honestly believes it to be a genuine document which can be properly acted upon.
Fiji's own body of case law has established the indefeasibility of registered titles to land. The most recent and well known case authority is from Fiji's Supreme Court (Chief Justice Gates, Mr Justice Marsoof, Mr Justice Mutunayagam) in the 2013 case of Star Amusement Limited v Prasad & Ors, Supreme Court of Fiji Civil Petition No CBV 0005 of 2012 (28 August 2013) FJSC 8.
This case was brought by judgment creditors (the Prasads) who had obtained a High Court money judgment of FJ$95,000.00 against Krispa Foods, and who registered this as a charge on Krispa Foods registered Native Lease Title with the Registrar of Titles in accordance with section 104 of the Land Transfer Act on 18 January 2008. Unfortunately for the Prasads the Registrar of Titles wrongly recorded the registration date as 18 January 2007, and on 16 January 2008 Krispa Foods sold the Native Lease to Star Amusements for FJ$382,000.00, and this meant that in accordance with s105(2) of the Land Transfer Act that the charge in favour of the Prasads was removed from the lease because any charge ceases to bind, charge or effect an estate or interest in land unless the transfer upon sale under order is presented within 6 months of the date that the charge was registered unless this time extended by the Court. Due to the mistake of the Registrar of Titles, Star Amusement obtained a clear registered and therefore, indefeasible title and the Prasads were deprived of their rights to exercise their judgment.
While, the Court of Appeal found in favour of the Prasads because it considered that but for the error of the Registrar of Titles in recording the date, the Prasads would have had an enforceable judgment as the 6 months would not have expired, the Supreme Court overturned the Court of Appeal on the basis of the Torrens system and in particular the principle of indefeasibility of registered title. The Supreme Court provided:
We are therefore firmly of the view that the Court of Appeal clearly failed to uphold the cardinal principle of the Land Transfer Act that the Register is absolute and conclusive except in the case of actual fraud that has to be brought home to the registered proprietor.
The Supreme Court judgment in Star Amusement v Prasad & Ors is well worth a careful read, as from paragraph 37 onwards it provides a detailed and definitive explanation of the Torrens system, the Land Transfer Act, Cap 131 and indefeasibility of title. The Supreme Court cited and relied on Frazer v Walker as the leading NZ Privy Council case that
settled any doubt relating to deferred defeasibility [because] the Privy council upheld the title of the a bona fide purchaser for value despite the existence of a fraud on the part of a predecessor in title as he himself was unaware of any fraud.
Other Fiji case authorities that support indefeasibility of title include: Attorney General v Vijay Kumar and Everett Riley 1985 FLR Vol 31, 23 and Matuwalu v Tamanisau, Fiji Court of Appeal, Civil Appeal number ABU 0032 of 2013 (3 October 2013)  FJCA 101. In the latter case the Court of Appeal (Calanchini P, Lecamwasam, JA, and Amaratunga, JA) provided another definitive judgment in support of indefeasibility of title in the absence of fraud by the registered proprietor.
Jacob John Steiner Jnr v Ernie Steiner
In the recent Fiji Court of Appeal (Calanchini, P, Jameel, JA, and Kumar, JA) Judgment, Jacob John Steiner Jnr v Ernie Steiner, Fiji Court of Appeal, Civil Appeal number ABU 0091 of 2015 (14 September 2017) upheld the principle of indefeasibility of title and extended the principle to a volunteer under a will.
The facts of Jacob John Steiner Jnr v Ernie Steiner are unusual, and are not repeated here except to say that it involved a family dispute regarding the registered title to an island and the validity of a will dated 26 December 1969. The key point is that on appeal, the Fiji Court of Appeal considered, amongst other things, the question of whether the principle of indefeasibility of title attaches to a volunteer under a will in the same way that it does to a purchaser of the title for value. The Fiji Court of appeal considered the Australian case authority of Bogdanovic v Koteff (1988) 12 NSWLR 472 . This Australian case cited and applied Frazer v Walker a registered proprietor who was a volunteer under a will.
The facts in that case were that Mrs Bogdanovic claimed she had a life interest in a house based on promises made to her by the registered proprietor (Mr S Koteff) before he died. Mr S Koteff died and his son (Mr N Koteff) inherited the house under his father's will and Mr N Koteff became the registered proprietor. The lower court was satisfied that there were promises made to Mrs Bogdanovic by Mr S Koteff which she had relied on to her detriment and found in her favour. However, on appeal, while the court agreed there was an agreement in favour of Mrs Bogdanovic, and that she had an equitable interest in the land this interest was defeated when Mr N Koteff became the registered proprietor as he had no notice of Mrs Bogdanovic’s equitable interest in the land. The Court also applied Breskvar v Wall, and found that there was no distinction between a bona fide registered proprietor who obtained the title as a volunteer or as a purchaser.
The Fiji Court of Appeal applied this principle in Jacob John Steiner Jnr v Ernie Steiner and after carefully considering the evidence before the High Court made the following finding:
On a consideration of the evidence and the relevant law, this court holds that the conduct of Jacob Jnr was not fraudulent. The argument of the Respondent that the statutory protection of indefeasibility does not apply to a volunteer under a Will is rejected as having no legal basis.
The Court of Appeal upheld the principle of indefeasibility of title and found:
In the absence of a finding of fraud on the part of the Appellant, the High Court erred in entertaining the application of the Respondent...
Fiji's case authorities have firmly established that there can be no challenge to the validity of a registered proprietor's title to land in the absence of actual fraud that must be "brought home" to the registered proprietor.
This consistent approach that upholds the Torrens system provides security and certainty of title to land in Fiji - both for holders of the Certificate of Title and for prospective purchasers of the Certificate of Title.
The recent case authority of Jacob John Steiner Jnr v Ernie Steiner affirms the Torrens system and makes it clear that it is irrelevant whether the bona fide registered proprietor is a purchaser for value or a volunteer under a will.
A soft copy of the judgment Jacob John Steiner Jnr v Ernie Steiner can be provided upon request, please email: email@example.com
Note: The Court of Appeal judgment in Jacob John Steiner Jnr v Ernie Steiner was appealed to the Supreme Court but on 7 March 2018 this appeal was withdrawn.