S. Birrell
J. Barry
D. Hall
J. Parker
Is the Torrens system, once the pride of the fleet, now a tired old tug and in the future a shipwreck? Has technology and society out grown our Torrens system, or does it just require modification? The 21st century is fast approaching, so questions about our Torrens system's reliability, simplicity, low cost, speed and suitability have to be discussed now, otherwise our Torrens system will be in dry dock when the new century sails by.
Reliability, simplicity, low cost, speed and suitability. Five qualities that are desirable for any activity. Turn the clock back to the late 1850's and travel to South Australia. Sir Robert Richard Torrens, the father of the Torrens system, is aiming for these five qualities in a revolutionary land registration and transfer system (Ruoff, 1957). Now return to the present, and ask yourself the question, what system of land registration operates throughout Australasia today?
The 1857 Title system of Richard Torrens. A system of land registration and transfer that has survived for over one hundred and thirty years without significant amendment, despite substantial changes in society. A remarkable achievement which surely proves that the Torrens system is a system that works. Or does it prove that the law and the land registration system have been strong enough to resist change and reform? Is the Torrens system still appropriate? Does it still achieve its objectives? Does it need modifications to survive in the 21st century? Are the surveying and legal professions addressing the issue or are we too easily led into believing that our system is the best and does not need improvements? Think about the future, turn the clock forward to the year 2010. Is the Torrens system still a success; is it still regarded as one of the best title systems in the world?
To borrow some words from a former leading international expert on the Torrens system, the late Theodore Ruoff, this paper is to "stimulate zest, not resentment, and to provoke fresh thinking rather than to preserve complacency"(Ruoff, 1957). It is to question rather than to answer, for without questions there can be no answers. This paper looks at a selection of land registration and associated survey issues of today and the future. It is unnecessary to look at the detailed history of the Torrens system, which in its own right deserves a whole paper and has been studied many times before. If you spend too long looking over your shoulder, looking at where you have come from, you do not see what is approaching or in which direction you are heading.
If Torrens was alive, what would he say about the Torrens system we use today? Would he repeat the statements he made in the 1850's regarding the state of real property law:
"(it) could not be patched or mended: the very foundation was rotten, therefore the entire fabric must be razed to the ground and a new super-structure substituted. Like a blundered calculation on a slate, it was in too much confusion for correction, so he would take a sponge and rub the whole out." (Torrens, 1858-9)
While Torrens would be unlikely to change the principles and objectives of his own land registration system, he would recognise the need to modify it as society changes. There is no doubt that Torrens' system was constructed on firm foundations: reliability, simplicity, low cost, speed and suitability. In preparation for the 21st century though, does the system need renovations, or does it need to be completely demolished and rebuilt?
The Torrens system was born in revolution. A revolt against a deed based system of registration that was cumbersome and expensive. Espoused by an outsider to the legal fraternity it gained acceptance only after a bitter struggle with those knowledgeable in the deeds system. Practitioners could acknowledge that their system had deficiencies but not that the system itself was deficient. For them it would be acceptable to graft onto the old rather than rethink the whole basis and approach to the matter of title to land.
The challenge for us as practitioners within the Torrens system, is to think both within and outside the present system for appropriate ways of achieving its principles in a rapidly changing technological and business environment. Grafting changes on the present system can provide short term benefits. Only a fundamental rethinking of the Torrens system in the context of expected technological change will enable us to meet the next century successfully.
Torrens' ideal qualities are still desirable and relevant today. The rest of the paper looks at our Torrens system and addresses the appropriateness of those five qualities for the future.
We discuss the reliability of the Torrens system by questioning the duplicate Certificate of Title and Survey Accuracy.
There are a number of provisions in our Torrens system that make it very reliable, including the indefeasibility of title, the Register's conclusive evidence, and the State guarantee. Is it necessary then, to issue duplicate Certificates of Title to property owners?
There are two roles for the duplicate title:
Let us test these roles.
The duplicate is a statement of the state of the Register at the time of issue, but it is immediately outdated. There are several classes of entries that are made in the Register, but not on the duplicate: e.g. caveats and land tax charges. At any time current information can only be obtained with certainty by a search of the Register.
This confirmation role of the duplicate can easily be met by a search statement.
The possession of the duplicate can never be absolute proof of authority to deal with the land. However it tends to be treated as absolute proof in the jurisdictions where it exists. Parties to transactions with registered proprietors must satisfy themselves that the person signing is the registered proprietor. Reliance is placed on execution before a witness, who ostensibly has satisfied himself or herself as the identity of the person signing. The instrument signed and witnessed and supported by the duplicate title is accepted as sufficient proof of identity for registration purposes.
Fraudulent dealings, while uncommon, are a reality in all jurisdictions. The existence of the duplicate has not proved to be a bar to fraud. Would stricter witnessing requirements prove to be a more appropriate curb on fraud?
The obtaining of possession of the duplicate at settlement has been relied upon as a safeguard against possible competing dealings. Torrens legislation gives precedence to a dealing accompanied by the duplicate over a competing dealing without it. Is this sufficient to justify its existence? Perhaps a more appropriate approach is the use of priority notices.
The combination of strict witnessing requirements and provision of a priority notice was the approach settled on by Queensland in its recent move to abolish the duplicate certificate. Only time will tell whether that approach is appropriate from the perspective of fraud and cost reduction.
The recent legislative reform in Queensland is at best a partial answer. While it has removed the mandatory issuing of Certificates of Title, it has not addressed the underlying incongruity of paper within an electronic system. The ghosts of the last century remain in its continuing requirement of signed and witnessed paper instruments. The electronic conveyancing of the next century must address this issue. The answer may be found in an expanded concept of agency in which agents are authorised to complete the transaction on behalf of the parties. Perhaps authorised classes of customers should be responsible for updating the Register. This solution would require a combining of the present separate roles of settlement and registration. The paperless transaction system of the Australian Stock Exchange may point the way.
Reliability is all about being able to depend on something. But what degree of dependence do we need on title boundaries? The stringent standards of accuracy maintained by Australian surveyors have been criticised for many years. In 1957, Ruoff points it out in An Englishman Looks at the Torrens System:
"...nowhere is it more evident that modern surveying is near to being an exact science than in several Australian States where a standard of extraordinary accuracy, surely second to none...is maintained. Nevertheless, there is a point beyond which practical exactitude neither can nor need be carried. If the degree of perfection sought is such that the amount of public time and money expended are out of all proportion to the results achieved, it may be questioned whether the surveyor is fulfilling his most useful function in the community. ...It is pertinent to remember that the measurements on the diagram of a title can never be absolutely perfect but only as perfect as the information upon which they are founded." (Ruoff, 1957)
It is important to remember that surveys are performed to both locate and provide information about the extent of property and where it is situated. The standard of accuracy required should be based on the client's needs. Does every client need to know, to the millimetre level, where their boundaries lie? Do all property owners think of their boundaries as mathematical positions or do most think of their boundaries in terms of the fences separating them from their neighbours? Most purchasers of land in Victoria rely on a simple tape measure check of boundaries and fences to satisfy themselves as to their occupation of land in accordance with title. Judgements are made about slight variations and in most cases near enough is accepted. It must be remembered that the original Crown surveyors deliberately allowed extra land in the Crown Grants to compensate for the limitations of accuracy of their equipment. The titling system has coped well with this deliberate level of accuracy. How accurately do the boundaries need to be located? If the accuracy of surveys were less, what real risks would we be exposed to?
Do the state guarantee and the associated Assurance Fund cover incidents such as incorrect or inaccurate boundaries? This topic could be debated well into the time when GPS takes over and coordinates are everything and still it would not be resolved. The extent of the State guarantee in relation to incorrect boundaries has not been tested in the Victorian courts. For a topic that we place such an enormous importance on, we know very little about it. This is a major issue facing the Torrens system as the 21st century approaches.
Technology has played a large part in the advance of surveying. The achievable accuracies are improving all the time and the 21st century will continue this tradition. Are the accuracy standards we specify today dictated by the accuracies we can achieve, or are they based on the needs of the client? We may be able to quote a boundary to an accuracy of 5 millimetres, but bearing in mind that most fence posts are between 50 and 200 millimetres thick, what is the purpose of an accuracy of 5mm for urban housing blocks? Are we using technology just for the sake of using it or is it really benefiting the Torrens system? It appears we are in danger of losing sight of the task at hand: defining property boundaries to an extent necessary to provide confidence to owners when dealing with land. Extreme accuracy is unnecessary for many purposes yet surveys are being produced to ever increasing levels of accuracy.
Measures must be taken to avoid accuracy levels being determined by technological advances. All land subdivisions do not need a level of accuracy appropriate to inner city buildings. The value of the land could be a factor in determining accuracy requirements. General boundary principles may be more appropriate for country areas.
There is no doubt that the Torrens system is a safer, better functioning, and better operated system than the deeds system which it replaced. But is it simple?
The deeds system required the owner of the property to keep a chain of deeds that proved their claim to the land. Each time the land was sold an extensive search was carried out on the authenticity of the chain and a new deed drawn up by solicitors and added to the chain. One hiccup in the chain and the title to the land was questionable. The chain of deeds was only as good as its weakest link.
Torrens approached the proof of title differently. When land is sold to another, the property does not move, the person moves. One property, one title, but many owners over time. The Torrens system philosophy of a single title document, provides a simpler record of changes in interests in land compared to the deeds system. But what about the survey component of title?
Under the deeds system, each deed relied on the previous deed, much like each survey relies on the previous survey. If one of the deeds was faulty then your title to that land was void. If one of the surveys is faulty then any subsequent surveys based on it are also faulty. Under the Torrens system, each registered title is conclusive proof of ownership. The Torrens system applies a curtain to the previous history of each title. Why does not the curtain principle apply to previous survey history? We still base each survey on the previous survey like under the deeds system. On face value this seems inappropriate. Do we need to lower the curtain on old surveys and introduce a system based on legal coordinates?
Utility easements - an important legal/survey component of title or an anachronism? Easements have their origin in the concept of private rights agreed between individual landowners. These rights were recorded in the deed. At that time, planning schemes and broadly based utility services such as water, drainage and sewerage were unknown. In 1857 Torrens included the easement concept as part of his land title system. The use of easements for 'private rights' purposes between land owners remains valid today. However the same cannot be said of public utility easements.
Today utility services are recognised as express and implied rights created on the subdivision of land. Common rights are implied for all lots on a subdivision. The infrastructure to support such easements is built as part of the subdivision and becomes an asset of the relevant service provider. Even in older areas public or private utility providers are responsible for such services. If a drain is blocked owners look to the utility provider for a solution rather than neighbours in the immediate vicinity. The utility easement is not a private agreement between individual land owners. The continued depiction of the right to such services as easements on title should therefore be seriously questioned.
These easements should be considered simply as rights of connection and use of the utilities and services regardless of their location. This reflects the reality for most land owners. Land owners are concerned that waste water is taken away, not that it is taken away over a particular route defined on title. We should recognise the reality.
The bottom line of any project or system has always been and will continue to be the cost. The question of cost in relation to the operation of the Torrens system may be confronted with conflicting views. The Torrens system seems to be cheaper for the consumer than the deeds system was, where it was necessary to engage the services of a solicitor, but is it cheap for the government to operate? The realisation that the Torrens system must become more cost efficient and run as a business has been accepted for many years. Even back in 1957 Ruoff recognised the need for the Torrens land registration system to be:
"a businesslike system, used in a businesslike way by the lawyers, and administered as a businesslike undertaking by the public officials who have the privilege and responsibility of serving the man in the street who seeks registration." (Ruoff, 1957).
He went on to say that:
"...the administration of the Torrens system is not a science, nor a craft, but simply a business that ought to be carried along progressive lines comparable to those of a competitive business." (Ruoff, 1957).
What is the answer, would an amalgamation of the 8 varieties of Torrens system operating in Australia prove to be cost effective?
The future vision: a national datum, a national surveying code, a national land Register, and national land registration legislation. The results: a seamless surveying system, a common Torrens system, and possible cost savings. The current reality: state datums, state surveying codes, state land Registers, and state land registration legislation. The results: conflicts between surveying systems, competition between the states to be the best, fragmented land Registers and high running costs to operate. We are living in an environment of national markets and mutual recognition, yet we still operate 8 varieties of the Torrens system. Australia is one country, we need one datum, one survey code and one land Register.
The Torrens system and all it processes are a means to an end. The quicker those processes are carried out by the surveyors and the Titles Office, the quicker the person can become the legal owner of the land. The ultimate scenario for the 21st century is immediate service through fully electronic systems. How can we achieve this?
Imagine a system where surveyors lodge their plans electronically (via modem) to the Titles Office to be automatically checked by an intelligent computer program. Plans which passed all the checks would be accepted by the Titles Office and an acceptance message would be sent electronically to the surveyor who lodged the plan. Plans that did not pass the checks would not be accepted by the Titles Office and a message detailing the plan's errors would be sent to the surveyor. This type of system would dramatically reduce the processing time and would ensure only correct, quality plans passed through to the Titles Office for certification. The certification of the plans could be performed within a day and a statement of approval sent via modem to the responsible surveyor.
As a step towards that future, surveyors must take more responsibility for their work, by employing techniques, such as Quality Assurance programs. Surveyors must also stop using Titles Offices as a proof-reading service. Error rates in surveys lodged at Titles Offices have traditionally averaged between 10% and 25% across Australia. Improved quality control by surveyors could be augmented by simplified checks in Land Titles Offices.
The last quality, but in no way the least important, is the suitability of the system to the needs of the community. The Torrens system was introduced at a time when reform was necessary, it met the needs of the people and has been hailed as one of the leading land registration systems in the world.
Change is inevitable but the commonplace impediments to reform are enormous (Wallace, 1990). The world has changed and the Torrens system needs reform. In the approaching century we can expect to see the on line electronic lodgement of all plans and land transfer instruments, remote computer title searches, a better way of dealing with easements, a system less prone to fraudulent activity through the removal of the duplicate title, national surveying codes and a number of other changes. The Torrens system must undergo reforms to keep pace with changes in society.
Will the Torrens system bid the 21st century a happy welcome? The answer will be in the surveying and the legal professions' abilities to cooperate and implement the necessary reforms to the system that has served us so well. A revamping of old principles and a rethinking of common acceptances are required in order to prepare the land registration system for the future. Sir Robert Torrens' five qualities will have a place to serve in the 21st century. For better reliability - remove the duplicate and tailor the required survey accuracies to need; for a simpler system - abolish utility easements; for a lower cost system - convert to a national Torrens system; for speedier transactions - implement electronic lodgements of plans and land registration documents; for better suitability - continue to ask the questions which will enable the Torrens system to adapt to changes of the future.
To conclude as we began with a nautical touch 'Australia II' was the Torrens approach to the America's Cup race, perhaps what we need now is a little 'Black Magic.'
Barry, J., 1994. Land Registration Issues, Victorian Land Titles Office internal document.
Ruoff, T. B. F., 1957. An Englishman Looks at the Torrens System, The Law Book Co. Of Australasia Pty. Ltd.
Torrens, R. R., 1858-9. Printed speeches, 8.
Wallace, J., 1990. Barriers to Cadastral Reform. National Conference on Cadastral Reform 1990, The University of Melbourne, pp193-200.
First Published in, Proceedinas of 1995 New Zealand - Australia Cadastral Conference, Wellington, New Zealand, 14 - 16 June, 7p.