The recently reported case, Perebo Pty Ltd v Wayville Residential Investments Pty Ltd and Ors  SASC 35 Stanley J., enforced the indefeasibility of title obtained by registration in the absence of fraud and other circumstances set out in s 69 of the South Australian Real Property Act (RPA), despite an incorrect certification by the solicitor for the mortgagee.
Action was brought by the mortgagee plaintiff after loan agreements (deeds) were made in August and September 2017, a mortgage dated 3 August 2017 was registered, and a subsequent deed of variation made on 15 December 2018.
It was common ground that the mortgagor/borrower defaulted.
Although not required to be mentioned in the judgment, which turned on the benefits of registration, in the background to this case are the ARNECC rules and their adoption by RGO South Australia.
The mortgagor did not execute a mortgage.
The solicitor for the mortgagee (a Prescribed Person) registered a mortgage after incorrectly certifying to the Registrar that the mortgagee held a mortgage executed by the mortgagor and further certifying as required:
‘The Prescribed Person has taken reasonable steps to verify the identity of the mortgagee.
The Prescribed Person holds a properly completed Client Authorisation for the Conveyancing Transaction including this Registry Instrument or Document.
The Prescribed Person has retained the evidence to support this Registry Instrument or Document.
The Prescribed Person has taken reasonable steps to ensure that the Registry Instrument or Document is correct and compliant with relevant legislation and any Prescribed Requirement.
The Mortgagee, or the Prescribed Person, is reasonably satisfied that the Mortgagee it represents:
(a) Has taken reasonable steps to verify the identity of the mortgagor; and
(b) Holds a mortgage granted by the mortgagor on the same terms as this Registry Instrument or Document.'
The plaintiff mortgagee conceded that the mortgage should not have been registered but argued that there was no proper basis for equity to restrain the plaintiff.
20 “The certification is signed by the plaintiff’s solicitor, Bede Anthony Elliott on behalf of the mortgagee.
21 The mortgage was not signed by the mortgagor. The mortgagee’s certification is inaccurate to the extent it certified that the mortgagee held a mortgage granted by the mortgagor in the same terms as the registered mortgage.
22 Section 128 of the RPA provides:
128—Mortgage of land
(1) If land is to be charged or made security in favour of a person, a mortgage must be executed by the registered proprietor and the person.
(2) A mortgage lodged for registration in the Lands Titles Registration Office must be in the appropriate form.
(3) Certification required under section 273(1) in relation to a mortgage lodged for registration in the Lands Titles Registration Office must be provided by the mortgagee.
(4) If certification under section 273(1) is provided by a mortgagee in relation to a mortgage lodged for registration in the Lands Titles Registration Office, the mortgage will be taken, for the purposes of this section, to have been executed by the mortgagee.
(5) The Registrar-General may register a mortgage lodged for registration in the Lands Titles Registration Office that is executed solely by the mortgagee—
(a) if the Registrar-General is satisfied that a mortgage on the same terms as the mortgage lodged for registration (the corresponding mortgage) has been executed by the mortgagor and the mortgagee as required under subsection (1) and retained by the mortgagee; and
(b) in a case where the mortgagee is not an ADI—if certification required under section 273(1) in relation to the mortgage has been provided—
(i) by a legal practitioner or a registered conveyancer; or
(ii) if the Registrar-General has given written approval for another person to provide the certification—by that person.
(6) If the Registrar-General registers a mortgage that is executed solely by the mortgagee, the corresponding mortgage—
(a) must be retained by the mortgagee until he or she ceases to be mortgagee; and
(b) if the mortgage is transferred under section 150—must be given to the transferee.
Maximum penalty: $5 000.
(7) If a mortgage is transferred under section 150, the corresponding mortgage must be retained by the transferee until he or she ceases to be mortgagee.
Maximum penalty: $5,000.
(8) This section only applies to land intended to be charged or made security under this Act by the registration of a mortgage.
23 The plaintiff concedes that as a result it did not comply with s 128(1), (2), (5) and (6)(a) of the RPA. Nonetheless, the Registrar General registered the mortgage notwithstanding non-compliance with s 273(1) of the RPA.
24 Section 273(1) provides:
(1) Subject to subsection (2), the Registrar-General must not register or record an instrument purporting to deal with or affect land (including an instrument lodged electronically under the Electronic Conveyancing National Law (South Australia)) unless a prescribed person has, on behalf of each person required to execute the instrument under this Act, provided certification in the appropriate form—
(a) in relation to compliance with relevant legislation; and
(b) that the requirements of this Act in relation to verification of identity, verification of authority and execution of documents have been complied with in respect of the instrument; and
(c) that any document relevant to certification of the instrument that is required to be retained under this Act has been so retained; and that there has been compliance with any other requirements prescribed by regulation for the purposes of this section. “
His Honour briefly discussed leading authorities in Australia on indefeasibility of title so far as they related to registered mortgages at 31 et seq.
He said that the essential proposition of the mortgagor’s defence was that the mortgagee did not, despite its solicitor’s certificate, hold a mortgage signed by the mortgagor and that the mortgage should not have been registered, which the mortgagee conceded.
However, it was registered, and the principles of indefeasibility applied, quoting Barwick CJ’s much quoted dictum: “The Torrens system of registered title of which the Act is a form is not a system of title registration but a system of title by registration.” Breskvar v Wall  HCA 70 at 15; (1971) 126 CLR 376 at 385-386.
Relying on Breskvar v Wall, Hayne J as he then was in the Supreme Court of Victoria determined in Pyramid Building Society (in liq.) v Scorpion Hotels Pty Ltd  VR 181 at 191 (Full Court with Brooking and Tadgell JJ) that ‘… registration of the mortgage even if it was not executed by the mortgagor did not affect the title which the mortgagee acquired by registration of the mortgage.’
This in an appeal in which the trial judge had decided that the mortgagee had been fraudulent in registering the mortgage, but whose decision to declare the mortgage void was set aside by the Victorian Full Court.
Stanley J said at 37:
“Accordingly subject to s 69 of RPA (which he held did not apply), once the plaintiff mortgagee obtained registration of its mortgage, the Brighton properties became encumbered in favour of the plaintiffs irrespective of whether the mortgage document was a valid instrument.”
He further determined there was no fraud nor unconscionable conduct and that none of the eight possible bases to set aside indefeasibility under s69(a)-(i) of the RPA existed. (38)
He looked at the solicitor’s behaviour of incorrectly certifying that the mortgagee held a mortgage executed by the mortgagor but determined that the error by the solicitor in certifying that the mortgagee held an executed mortgage did not fall within those several provisions. (38)
Such incorrect representation did not amount to a ground to invalidate or lead to the unenforceability of the mortgage. (39)
Accordingly, the plaintiff obtained judgment with possession, interest and costs.