Beardsley v Registrar of Titles & Anor [1992] QCA 347

IN THE COURT OF APPEAL [1992] QCA 347 QUEENSLAND Appeal No. 97 of 1992 BETWEEN: MARIE BEARDSLEY (otherwise known as MARY BEARDSLEY) (Plaintiff) Appellant - and - REGISTRAR OF TITLES (First Defendant) Respondent - and - THE REGISTRAR-GENERAL (Second Defendant) The President Mr Justice McPherson Mr Justice Davies Judgment of the Court delivered the twelfth day of October, 1992 APPEAL DISMISSED WITH COSTS TO BE TAXED -- 1 of 15 -- IN THE COURT OF APPEAL QUEENSLAND Appeal No. 97 of 1992 Before the Court of Appeal The President Mr. Justice McPherson Mr. Justice Davies BETWEEN: MARIE BEARDSLEY (otherwise known as MARY BEARDSLEY) (Plaintiff) Appellant - and - REGISTRAR OF TITLES (First Defendant) Respondent - and - THE REGISTRAR-GENERAL (Second Defendant) REASONS FOR JUDGMENT OF THE COURT Delivered the twelfth day of October 1992 MINUTE OF ORDER: Appeal dismissed with costs to be taxed CATCHWORDS: Mortgages. Rights and liabilities of parties. Appellant's property sold by mortgagee under power of sale after appellant's husband forged her signature on mortgage - whether deprived of estate - whether recoverable loss sustained - whether person who derived benefits adjudged insolvent - whether cause of action arose on bankruptcy. Counsel: Mr L. Harrison Q.C. with him Mr H. Linacre for the appellant Mr P.A. Keane Q.C. with him Mr B.J. Clarke for the respondent Solicitors: Messrs. Cooper, Grace and Ward as t/a for Messrs. McDonald, Balanda and Chesters for the appellant Crown Solicitors Office for the respondent Hearing date: 7th August 1992 -- 2 of 15 -- IN THE COURT OF APPEAL QUEENSLAND Appeal No. 97 of 1992 BETWEEN: MARIE BEARDSLEY (otherwise known as MARY BEARDSLEY) (Plaintiff) Appellant - and - REGISTRAR OF TITLES (First Defendant) Respondent - and - THE REGISTRAR-GENERAL (Second Defendant) REASONS FOR JUDGMENT OF THE COURT Delivered the twelfth day of October 1992 This is an appeal from a judgment dated 30 April 1992 dismissing the appellant's action for damages with costs, including reserved costs, to be taxed. The appellant and her husband were registered proprietors as joint tenants of a home unit on the Gold Coast. On 23 February 1984, a mortgage over the property in favour of National Westminster Finance Australia Limited was registered, number H202302. On 8 June 1984, a further mortgage over the property in favour of Gold Coast Credit Union was registered number H297131 The appellant's husband had forged the appellant's signature to both mortgages. Both parties accepted that the mortgages were valid and binding on the appellant. On 12 February 1988, the first mortgagee obtained an order for possession of the property, which it sold on 30 June that year. When the sale was -- 3 of 15 -- 4 completed on 26 July 1988, the proceeds were insufficient to pay the second mortgagee in full and the appellant received nothing. The appellant's husband became bankrupt on 17 October 1988. The purchasers from the first mortgagee were registered on 9 December 1988. The appellant commenced the present action on 14 December, 1990. According to her notice of appeal, the judgment sought by the appellant against the respondent, the Registrar of Titles, is for the value of the appellant's half interest in the property "as at the date on which she was deprived of that interest", which is stated alternatively as 12 February, 30 June, 26 July or 9 December 1988. However, without objection from the respondent, the appeal was argued on a wider basis which included as a further possibility that the appellant had earlier been deprived of an interest in the property when the mortgages were registered in 1984. The respondent accepted and himself contended that a deprivation had occurred at that time in support of the submission that, throughout the relevant part of 1988, the appellant had no interest in the property of which she could be deprived or at least that her interest then was valueless. The parties agreed that the amounts owed to the mortgagees exceeded the value of the property at all material times. The appellant's claim is based upon either s.127 or s.128 of the Real Property Act 1861. Ss. 126, 127 and 128 relevantly provide: "126. Persons defrauded may bring action against fraudulent proprietor for damages. Any person deprived -- 4 of 15 -- 5 of any land or of any estate or interest in land in consequence of fraud or in consequence of the issue of a certificate of title to any other person or in consequence of any recording in the register or of any error or omission in any certificate of title or in any recording in the register may bring and prosecute an action at law in the Supreme Court for the recovery of damages against the person who derived benefit by such fraud or in consequence of the issue of such certificate of title or by such certificate of title or by such recording or in consequence of such error or omission. Provided always that no such action shall lie or be sustained unless the same shall be commenced within six years from the date of such deprivation except nevertheless that any person being under the disability of infancy or mental sickness may bring such action within six years from the date on which such disability shall have ceased. Saving the case of a purchaser or mortgagee for valuable consideration. Provided also that nothing in this Act contained shall be interpreted to subject to any action of ejectment or for recovery of damages any purchaser or mortgagee bona fide for valuable consideration of any land under the provisions of this Act although his vendor or mortgagor may have been registered as proprietor through fraud or error or may have derived from or through a person registered as proprietor through fraud or error whether by wrong description of land or of its boundaries or otherwise. 127. If registered proprietor be dead action to be against Registrar-General as nominal defendant. In case the person against whom such action for damages is directed to be brought shall be dead or shall have been adjudged insolvent or shall have absconded out of the jurisdiction of the Supreme Court then in such case it shall be lawful to bring an action for damages against the Registrar-General as nominal defendant for the purposes of recovering the amount of the said damages and costs against the assurance fund hereinbefore described and in any such case and also in any case in which damages may be awarded in any action against the person deriving benefit by any fraud or in consequence of the issue of any certificate of title or otherwise as aforesaid and the Sheriff shall make a return of nulla bona or shall certify that the full amount with costs awarded cannot be recovered from such person the Treasurer of the Colony upon receipt of a certificate of a Judge of the Supreme Court and of a warrant under the hand of the Governor as hereinafter provided shall pay the amount of such damages and costs or the unrecovered balance thereof as the case may be and shall charge the same to the account of the assurance -- 5 of 15 -- 6 fund. Provided always that the assurance fund shall not be liable for payment of any damages after the expiration of six years from the time when the cause of action arose. Provided also that any person so absconding beyond the jurisdiction if subsequently found within the jurisdiction shall be liable to be sued in the name of the Registrar-General for the amount of the damages and costs so recovered from the assurance fund. 128. Actions for recovery of damages may in certain cases be brought against the Registrar-General as nominal defendant. Every action which shall be brought by any person to recover damages for or by reason of any loss or damage occasioned by any omission mistake or misfeasance of the Registrar-General or any of his officers or clerks in the execution of their duties under the provisions of this Act shall be brought against the Registrar-General as nominal defendant and in case in any such action the plaintiff recover final judgment against such nominal defendant then upon the application or motion of such plaintiff any Judge of the Supreme Court shall and he is hereby directed to certify to the Treasurer the fact of such judgment having been recovered and the amount of damages and costs recovered. Treasurer on receipt of warrant from Governor to pay amount of award. and thereupon or before the expiration of two calendar months after such judgment is so certified the said Treasurer upon the receipt of a warrant under the hand of the Governor shall pay the amount of such damages and costs to the person recovering the same his executors or administrators and shall charge the same to the account of the assurance fund hereinbefore described. Process and notice to be served on Attorney-General. Provided also that the Registrar-General shall not be personally chargeable upon any judgment recovered as aforesaid nor shall any process or notice in or relating to any such action be served upon the Registrar-General but all such processes and notices shall be served upon the Attorney-General for the time being." The appellant's alternative arguments in relation to her claim based on s.127 may be summarised as follows: (a) The appellant was deprived of land or an estate or interest in land within the meaning of s.126 when: -- 6 of 15 -- 7 (i) the mortgages were registered in 1984; (ii) she was ejected from possession in 1988; (iii) the property was sold in 1988. (It is unnecessary for present purposes to consider whether the deprivation referred to in paragraph (a)(iii) occurred upon registration of the transfer to the purchaser or earlier, upon the execution or completion of the contract for the sale of the unit by the mortgagee). (b) Each deprivation was "in consequence of" the fraud of her husband within the meaning of s.126. (c) Her husband was "the person who derived benefit by such fraud" within the meaning of that section. (d) Her husband was "the person against whom such action for damages is directed to be brought" and had been "judged insolvent" within the meaning of s.127. (e) Accordingly, s.127 entitled the appellant to bring an action for damages against the respondent "for the purposes of recovering the amount of the said damages and costs". (f) That the "cause of action arose" within the meaning of s.127 only when the appellant's husband became bankrupt on 17 October 1988 and, therefore, her action against the respondent was not instituted outside the period permitted by the proviso to s.127. Although the appellant based an alternative submission upon the proposition that she had been deprived of an estate or interest in land when the mortgages were registered in 1984, (paragraph (a)(i)), her primary case was that there -- 7 of 15 -- 8 was no relevant deprivation of land, or of an estate or interest in land, until the property was sold by the first mortgagee in 1988, or alternatively earlier that year when she was evicted from possession. The premise upon which this case was grounded appeared to be that, despite the mortgages, ownership and rights of possession and present enjoyment were retained by the registered proprietors, who might have been able to obtain a release of the mortgages. This proposition was associated with the further assertion that any deprivation of an estate or interest in the land by reason of the mortgages was contingent only since the appellant, might not have been required to pay the mortgage debts, her fraudulent husband having had the intention of doing so. Plainly, the circumstance that the mortgages did not wholly and irrevocably deprive the appellant of her entire estate or interest in the land does not mean that they did not deprive her of any estate or interest at all. Logic and authority support the conclusion that they did. After the mortgages were registered, although the appellant retained the fee simple she had been pro tanto deprived of the land which was encumbered by the mortgages; the estate or interest of which she had been deprived corresponded with the estate or interest of the mortgagees. See Messer. v. Gibbs (1887) 13 VLR 854, 872; affirmed on appeal 13 VLR 876 and on this point by the Privy Council (1891) A.C. 248 at p.253; Registrar of Titles (W.A.) v. Franzon (1975) WAR 107, 110; (1975) 132 CLR 611, 168; Northside Developments Pty. Ltd. v. Registrar-General (N.S.W.) (1989) 170 CLR 146, 209- 210; Parker v. Registrar-General (1976) 1 NSWLR 342, 356; (1977) 1 NSWLR 22, 28; Queensland Trustees Ltd. v. Registrar of Titles (1893) 5 QLJ 46, 49; Hayes v. Bourne (1897) 7 QLJ 146, 148; Cox v. Bourne (1896) 7 QLJ 53; Cox v. Bourne(No.2) (1897) 8 QLJ 66; Finucane v. Registrar of Titles (1902) St. R.Qd. 75, 94. It is clear that the appellant was also deprived of an interest in the property when it was sold by the first -- 8 of 15 -- 9 mortgagee in 1988, and perhaps earlier in the same year when she was evicted from possession. However, it was not argued for the appellant that the possession which she had enjoyed prior to eviction was more valuable than the fee simple of which it was an incident, and the parties' agreement as to the value of the property at material times demonstrated that the fee simple encumbered by the mortgages was valueless. S.126 does not entitle a person deprived of an interest in land by fraud to recover all loss attributable to the fraud, including any loss caused by an earlier deprivation of another interest in the land. The section provides a right to recover the loss caused by the deprivation relied on, which is ordinarily measured by reference to the value of the land, or interest, of which the person seeking damages was relevantly deprived. Accordingly, if all else is assumed in her favour, the appellant sustained no loss recoverable under s.126 when she was dispossessed and the property was sold in 1988. The appellant's claim based on s.127 therefore falls to be determined by reference to the deprivation of an interest in the land which the respondent suffered when the mortgages were registered in 1984. The respondent acknowledged that the appellant suffered that deprivation "in consequence of" the fraud of her husband, that he had been "judged insolvent" and that "the person who derived benefit by" her husband's fraud within the meaning of s.126 was "the person against whom such action for damages is directed to be brought" within the meaning of s.127. However, it was submitted for the respondent that the appellant's husband was not "the person who derived benefit by" his fraud and that, accordingly, he was not "the person against whom such action was directed to be brought" for the purposes of s.127, so that, when he became bankrupt, that section did not entitle the appellant to bring an action against the respondent "for the purposes of recovering the amount of the said damages and costs". The -- 9 of 15 -- 10 respondent further submitted that, in any event, the "cause of action" referred to in the first proviso to s.127 was not the action against the respondent created by s.127 but the "action for damages" first referred to in that section; that is, the action for damages created by s.126 "against the person who derived benefit by" the fraud. The respondent also relied upon sub-s.10(1) of the Limitation of Action Act 1974 but, other considerations aside, we do not think that that general provision can have any relevant operation which is inconsistent with the specific provision made in the first proviso to s.127. In Breskvar v. White (1978) Qd.R. 187, Connolly J. held that the first proviso to s.127 operated to exempt the assurance fund from liability for payment of a judgment for damages which had been recovered under s.126 but which was unsatisfied and in respect of which the sheriff had made a return of nulla bona. His Honour held that the liability of the fund ceased six years from the time when the cause of action which had led to the judgment under s.126 had arisen. While that conclusion seems clear enough, it is necessary to understand statements made in that case in the context of the argument which was addressed by the unsuccessful applicant for payment out of the fund, namely, "that the first proviso to s.127 has nothing to say in relation to judgments recovered under s.126.": at p.191B. Both parties in that case accepted that the first limb of s.127 created a separate cause of action against the present respondent as nominal defendant. The issue there was whether, as the applicant contended, the first proviso to s.127 was limited "to the newly created statutory cause of action which is the subject of the earlier part of the section itself" (p.191A-B), or whether, as was contended by the respondent in that case, the "first proviso to s.127 ... applies whenever payment of any damages is sought from the assurance fund." (p.191B-C). In concluding that the latter view was correct, Connolly J. expressed views which are relied upon by the present appellant. -- 10 of 15 -- 11 At p.191C-E, his Honour said: "I should say first that in my opinion the first limb of s.127 creates a fresh statutory cause of action which is related to, but not the same as, that which is created by s.126. The arising of the cause of action under the first limb of s.127 requires a concurrence of the existence of a cause of action under s.126 and either the death, insolvency or absconding of the person benefited. When the Court said in Finucane's case (supra.) at p.95 that the cause of action in s.127 is the same thing which is described in s.126 as the deprivation it was in a context in which the insolvency of the person benefited had already occurred but the deprivation ... was held to lie in the future. The Crown contends that the cause of action under the first limb of s.127 is alternative to that which is created by s.126 and I incline to think this is correct although it is unnecessary to express a concluded opinion on the point." Later, at p.191G to p.192D, his Honour said: "... . The second limb of s.127 deals with all of the situations in which judgments fall to be satisfied out of the fund. The causes of action upon which these judgments are recovered are those created by ss.126 and 127. The first proviso to s.127 does not in truth limit the time within which actions may be brought and to treat it as confining payment out of the fund to cases in which the judgment is brought on the cause of action created by the first limb of s.127 is to give it a restricted application for which, as it seems to me, there is no warrant in the language. If it had been intended to provide a limitation period in respect of actions under the first limb it would I think have been more natural to have used the form of words employed in the first proviso to s.126 and to provide that no such action should lie or be sustained after the chosen period. The conclusion to which I have come accepts the anomalous situation to which I have referred above in relation to causes of action under s.126. But the situation under the first limb of s.127 is really not very different. The claimant must still not merely initiate his proceedings but carry them to the point at which he can perfect a judgment which entitles him to present payment from the fund and obtain the Governor's warrant within six years of the death, insolvency or absconding of the person benefited. The provision is stringent but in my view no other reading is open." -- 11 of 15 -- 12 Contrary to what is stated in the paragraph last quoted, the situation under the first limb of s.127 as interpreted by his Honour is quite different from what he referred to as "the anomalous situation ... in relation to causes of action under s.126." In discussing that anomalous situation at p.191E-G, his Honour had concluded that, although the first proviso to s.126 provides six years from the date of deprivation of the land or an estate or interest in land for the commencement of an action for damages under that section, the first proviso to s.127 makes that period of limitation illusory in that it requires that, within six years of the deprivation, not merely that the action under s.126 has been instituted but that judgment has been obtained together with a certificate and a warrant as provided by s.127. On the other hand, according to his Honour, a person deprived of land or an estate or interest in land who relies upon the first limb of s.127 does not have six years from deprivation to institute proceedings and obtain judgment and a certificate and warrant but six years from the deprivation or from the death, insolvency or absconding of the person benefited, whichever is the later. The sole basis for this view of the first limb of s.127 was the notion that the cause of action provided by s.126 against a person who derived benefit by the fraud is different from the cause of action provided by the first limb of s.127 against the present respondent, and that the latter is only complete when the person who derived benefit -- 12 of 15 -- 13 by the fraud is dead or has been adjudged insolvent or absconded. While it is correct that action may not be brought against the present respondent unless the person who derived benefit by fraud is dead or has been adjudged insolvent or absconded, and that that circumstance must be proved in an action under the first limb of s.127, it does not necessarily follow that the cause of action against the present respondent under the first limb of s.127 is a different cause of action from that provided against the person who derived benefit by the fraud under s.126. The better view is that it is the same cause of action which, by the first limb of s.127, is able to be brought against a different person in the event that the person otherwise liable under s.126 is dead or has been adjudged insolvent or absconded. There are aspects of the language of s.127 which may be urged against such a construction. For example, the position would be clearer if the second reference to "action for damages" in s.127 were preceded by the article "the" rather than the article "an", and if the first proviso to s.127 did not limit the material period "from the time when the cause of action arose" but repeated the language of the first proviso to s.126 and limited the period "from the date of such deprivation". On the other hand, the construction preferred by this Court provides a greater symmetry and logic to ss.126 and 127 and is consistent with the purpose of the assurance fund according to s.42. The construction adopted also avoids the -- 13 of 15 -- 14 consequence that the first proviso to s.126 would otherwise be deprived of practical effect. Since every person must eventually die, every person deprived of any land or of any estate or interest in land whose action against a person who derived benefit by such fraud had become barred by the first proviso to s.126 would otherwise be provided with a fresh cause of action against the present respondent by the first limb of s.127 upon the death of the person who had derived benefit by the fraud, even if that did not occur for decades. See also Finucane v. Registrar of Titles at p.95 and Cox v. Bourne (8 QLJ) at p.69. In these circumstances, it is unnecessary to consider whether the appellant's husband was the person who derived benefit by his fraud within the meaning of s.126, and whether she therefore had an action under s.126 against him or has an action against the present respondent under s.127. If so, any entitlement which she had to obtain payment of her damages from the assurance fund expired after the expiration of six years from, at the latest, 8 June 1984, when the second of the mortgages was registered; that is, a little more than six months prior to the commencement of the current action. The appellant's other claim was based upon s.128. It was accepted for the appellant that she did not have a cause of action "to recover damages for or by reason of any loss or damage occasioned by any omission, mistake or misfeasance "of the respondent" or any of his officers or clerks in the execution of their duties under the provisions of this Act" -- 14 of 15 -- 15 unless such an action was created by s.128. On this footing, it would be a sufficient answer to the appellant's claim that s.128 does not seem to create a fresh cause of action but to prescribe how a cause of action which otherwise exists is to be enforced and any judgment recovered is to be satisfied. The language of s.128 is materially different from analogous sections elsewhere which have been held to give rise to a new cause of action: see, eg., Papworth v. Williams (1900) AC 563 and the cases cited in Registrar-General v. Behn (1980) 1 NSWLR 589, 594. Further, the authorities suggest other obstacles to the success of this claim. For example, the only "omission, mistake or misfeasance" which the appellant was able to suggest had caused her "any loss or damage" was mistaken registration of the mortgages which had not been duly signed and attested. The proposition that loss or damage caused by mistaken registration in such circumstances is recoverable cannot be reconciled with Registry of Titles (W.A.) v. Franzon (132 CLR) at p.610. See also Finucane at p.97; Messer v. Gibbs; Davies v. Ryan (1951) VLR 283; and Mayer v. Coe (1968) 88 WN (Pt.1) (NSW) 549. The appellant has failed to establish either basis for her claim. Accordingly, the appeal is dismissed, with costs to be taxed. -- 15 of 15 --