Registrar of Titles fails to comply with Model Litigant Guidelines

The Registrar of Titles has been criticised by the Court of Appeal for its conduct in a proceeding brought by a plainiff under s.110 of the Transfer of Land Act 1958.  Section 110 provides, among other things, that a person who sustains loss or damage by reason of an amendment of the Register is entitled to be indemnified. Solak alleged that an imposter fraudulently obtained a loan in his name from a bank  and secured the loan by a registered mortgage over his land. The claim to have the loan agreement and mortgage discharged failed due to the indefeasibility provisions of the Act. See: Solak v Bank of Western Australia [2009] VSC 82. Solak then commenced a proceeding against the Registrar seeking an indemnity under s.110 for the loss he suffered by registration of the mortgage. The Registrar was not a party to the first proceeding. Among other things, the Registrar was going to argue that Solak had suffered no loss because non-compliance with the Consumer Credit Code resulted in the mortgage being unenforceable; this had not been argued at trial and therefore there was the risk of inconsistent judgments. The Registrar successfully applied for summary dismissal on the grounds of Anshun estoppel. See: Solak v Registrar of Titles (No. 2) [2010] VSC 46. It is unusual for a party to assert Anshun estoppel in proceeding where it was not a party to the earlier proceeding.  In Solak v Registrar of Titles [2011] VSCA 279 the Court of Appeal overturned the summary dismissal decision and held tht the Registrar had not complied with the Model Litigant Guidelines that govern the behaviour of the State of Victoria and its agencies in litigation. Warren CJ (with whom Neave JA agreed) held that there were “a number of serious difficulties….in relation to the Credit Code point” particularly because of its potential to undermine the doctrine of indefeasibility [38]-[39]. Hargrave AJA held that the Credit Code point was “wholly without merit” [94]. After reviewing the cases on Anshun estoppel Warren CJ said at [70]:

“All of the Australian cases to which the Court was referred where a defendant was not a party to the first proceeding was able to rely on Anshun estoppel in the second proceeding involved the estopped plaintiff attempting to assert in the second proceeding some proposition inconsistent with the judgment in the first proceeding. Even if such a collateral attack by the plaintiff is not a necessary precondition for Anshun estoppel, its absence is a significant factor militating against a finding that Anshun estoppel has arisen”.

Solak was not attempting to assert a proposition inconsistent with the judgment in the first proceeding. Her Honour held that the first proceeding determined the enforceability of the mortgage and it was at that point that Solak suffered loss and the Registrar could not undo this by showing in a subsequent proceeding that the mortgage was unenforceable. Warren CJ held that the Registrar had failed to comply with its obligations as a model litigant because the Credit Code point was so tenuous. Her Honour said [88]: 

It is puzzling that the government agency entrusted with administering the Torrens system would advance the Credit Code point. Furthermore, the Registrar appears to have forgotten that he is administering a beneficial fund. The purpose of the fund is not to accumulate money but to provide compensation to persons who are deprived of an interest in land by the operation of the indefeasibility provisions. The Registrar’s primary role is to ensure that persons who are entitled to compensation receive it. The responsibility to protect the fund from unmeritorious claims is not paramount. The Registrar ‘has no legitimate private interest of the kind which often arises in civil litigation. [He] acts, and acts only, in the public interest'”.

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