High Court Upholds Original Purchase Priority in Land Dispute

OUTCOME: Dismissed

High Court of Australia Dixon C.J. Kitto and Taylor JJ. [COMPANY] v [NAME] [1963] HCA 64

ORDER Appeals dismissed with costs.

Cur. adv. vult.

1963, Dec. 20 Dixon C.J.

These are three appeals heard together from a decree of the Supreme Court of New South Wales in Equity. The decree was pronounced by [NAME] J. in a suit for the enforcement of rights depending upon a contract for the sale of land. The plaintiffs, who were the respondents in the appeals, consisted of three persons named [NAME] and one named [NAME]. Mr. [NAME] died and has been replaced as a party, if I understand the matter correctly, by [NAME]. (See affidavit by [NAME] sworn on 28th June 1962.) Among the defendants who were respondents to the appeals, Miss [RESPONDENT] [NAME], a defendant, died on 6th February 1962. By an order dated 13th August 1962 Mr. [NAME] was appointed to represent all persons interested in her estate in these appeals.

Miss [NAME] was entitled as registered proprietor to an estate in fee simple in the land sold. It consisted of fifty-two or fifty-three acres. It appears that on 24th February 1958 she executed a contract of sale of her land, which is the subject of these proceedings. The four plaintiffs (i.e. the three [NAME] and [NAME]) were the purchasers. Some days before 24th February 1958 she had received a preliminary deposit of £100 on the sale. The purchase price named in the contract was £15,000 and the terms contained in the contract were that £3,000 should be paid as deposit, and that the balance of the purchase money would be payable within three years, bearing interest at six per cent. The purchasers would place in the hands of the agent a cheque for £3,000 by way of deposit and the balance was to be secured by mortgage back to the vendor. The contract said the mortgage should contain the usual terms and conditions and be prepared by the vendor's solicitor at the expense of the purchasers. It should be a mortgage for three years and of course interest was provided for. Endorsed on the contract is a receipt for payment of £3,000 in cash by Mr. [NAME], one of the plaintiffs. [NAME]. were the vendor's firm of solicitors and Mr. [COUNSEL]. [COUNSEL]. [COUNSEL] was the purchasers' solicitor. A transfer was executed by the registered proprietor, [NAME] [NAME], in consideration of £15,000 paid to her, the receipt whereof she thereby acknowledged. The transfer was to the four plaintiffs (three [NAME] and [NAME]) of her whole estate and interest in the land. The transfer is expressed to be signed at Sydney on 23rd July 1958 by the transferor [COUNSEL] [NAME] in the presence of [COUNSEL]. [COUNSEL], solicitor, and it is accepted and verified as correct by Mr. [COUNSEL]. [COUNSEL], solicitor to the transferees. The evidence shows that [COUNSEL] lodged the memorandum of transfer and the mortgage back for registration at the Lands Titles Office but that he withdrew them on 16th September 1959. On the day following the withdrawal, namely 17th September 1959, a contract of sale was made between the defendant appellant [APPELLANT]. and the vendor whose name though left blank in the particulars is given as [COUNSEL]. [COUNSEL], witnessed by [COUNSEL]. [COUNSEL]. [COUNSEL] as her solicitor. The vendor's solicitors are given as [NAME]. The whole amount of the purchase money under this contract is given as £26,000, the deposit being £1,500.

In his reasons for judgment [NAME]. says that the uplifting of the documents from the Registrar-General's office "was undoubtedly related to the negotiations for the sale of the same land by [NAME] which were then in progress or had just been finalised. On 28th September 1959, again without any reference to or consultation with the plaintiffs or their solicitor, [NAME] forwarded a letter to the Registrar-General in these terms: "Re Dealing Nos. H194403-4. We refer to the aforementioned transfer and mortgage and confirm that same have been withdrawn from registration." No explanation was forthcoming as to the circumstances under which Mr. [NAME] came to write this letter." These documents were not relodged for registration and [NAME], who was arrested in March 1960, appears to have retained them in his possession.

The suit out of which this appeal arises was commenced by a statement of claim dated 3rd September 1960 and numbered in the [ADDRESS]. 1341 of 1960. On 15th August 1960, however, a suit numbered 1154 had been commenced in the [ADDRESS] based upon the contract between Miss [NAME] and the respondents, the [NAME], for the sale of the land for £15,000, £3,000 being paid as deposit and £12,000 by a mortgage back. Apparently, after delivery of the statement of claim this suit was left in suspense while the question as to who was entitled to the land was fought out in suit No. 1341 of 1960 brought by the three [NAME] and [NAME] [NAME] as plaintiffs against [COMPANY]., [NAME]. ([COMPANY]., [COMPANY]. and [NAME]. [NAME]. (Finance) [COMPANY]. and [COMPANY]., a company misnamed in the testimonium of at least one of the documents, were mortgagees, while [COMPANY]. was a party to the contract with Miss [NAME]. We were not informed as to the details of the dealings with the moneys. It is enough to say that it is sufficiently evident that the money cannot be restored and there was mishandling of money. As has already been stated [NAME] was arrested about March 1960. The question in this suit therefore comes back to the priorities in relation to the dealings with the land whether by way of security or otherwise and substantially the question is whether the [NAME], notwithstanding the withdrawal of the transfer to them, are to be preferred to [COMPANY]. and those who obtained securities under that company in recourse to the land.

A question of fact in the case is how the withdrawal of the transfer was related to the transaction with [COMPANY]. Of course, looking at the transactions in a general way it is obvious that some dishonesty took place somewhere and it is taken for granted that it arose from the dishonesty of [NAME]. But let it be supposed that the transactions were all straightforward. On such a footing three courses were open to the parties. It would have been open to [NAME] by agreement with the [NAME] to rescind the first contract. She then might have resold to [COMPANY]. Secondly, the [NAME] might have resold the land to her and she might then have sold it to [COMPANY]. Thirdly, the [NAME], leaving the purchase by them from her standing, might themselves have sold the land to [COMPANY]. Of course these transactions would have expressed considerations which by agreement of all parties distributed the money passing in accordance with the true intention they all possessed in common.

The transfer and mortgage which gave effect to the first transaction (i.e. the sale by [NAME] to the [NAME]) were executed and placed in the hands of [NAME] on 23rd July 1958. [NAME] J. in his reasons said that he was satisfied that [NAME] was left with the custody of the transfer for the sole purpose of lodging it, together with the mortgage to Miss [NAME], for registration. For some unexplained reason the two documents were not lodged at the Registrar-General's office until 22nd April 1959. It seems apparent that [NAME] authority could not have extended to withdrawing the transfer the registration of which was essential to give title to the purchasers. However, it is conceivable that a rescission might have carried with it as a consequence authority for the withdrawal of the transfer as well of course as of the mortgage. On 28th September 1959, [NAME] wrote a letter to the Registrar-General confirming the fact that the transfer and mortgage had been withdrawn from registration. Had the transfer not been withdrawn it could hardly have been disputed that a subsequent dealing lodged subsequently could not take priority when the question was which should be registered first. Of course in the present case neither the transfer to the [NAME] nor the dealings with [COMPANY]. and the other two appellants have been registered. It seems obvious, however, that the withdrawal of the transfer was unauthorized in fact, and was not to be regarded as ostensibly authorized, whatever practice may have developed in the Lands Titles Office. The rights of the [NAME]—the transferees—could not be prejudiced by the actual but unwarranted withdrawal of the memorandum of transfer. An attempt was made to show that if otherwise under the legal order of priority the [NAME] might come first, such priority of the [NAME] as the first purchasers of the land who had completed their contract and lodged the transfer to them for registration had been lost. It was said to have been lost by conduct which on equitable principles would be regarded as postponing a claim in a conflict of interests under the general law. [NAME]. went thoroughly into the facts and I see no reason again to discuss them. I agree that no conduct on the part of the [NAME] or their solicitor occurred which enabled [COUNSEL] to defraud [COMPANY]. or mislead them into adopting any prejudicial step. But I am not disposed to think that under [NAME] a priority giving a right to registration under the statute can be lost on equitable grounds of such a character.

This case raises no question of the priority which a registrable instrument may take as a dealing made bona fide on the state of the Register as against a prior unregistered dealing. Here the title prior in time existed in the form of a registrable instrument lodged for registration, and the competition is with a later registrable instrument made in pursuance of a later transaction.

Whatever be the meaning of s. 43A, it cannot give priority to the later dealing over the earlier in circumstances like this.

I am therefore of opinion that Hardie J. was right and I do not think [COMPANY]. and [NAME]. ([COMPANY]. and [COMPANY]. obtained any interest or interests in the land to which the interest of the [NAME] should be postponed or by which that interest could be defeated. I am therefore of opinion that the defendants in suit No. 1341 fail.

I think the appeals should be dismissed with costs.

Kitto J.

Three appeals are before us. Each is by one of five defendants to a suit in the equitable jurisdiction of the Supreme Court of New South Wales. The plaintiffs in that suit, who for convenience will be referred to as the [NAME], sued to establish their right to have registered under the provisions of the [NAME], 1900-1956 N.S.W. a transfer of certain land which had been executed in their favour by the registered proprietor. The defendants were (1) the registered proprietor, a Miss [NAME]; (2) a company called [COMPANY], (I shall refer to it as [NAME]), which had obtained from [NAME] a transfer in its favour subsequent in date to the [NAME]' transfer, and asserted a right to registration which, if soundly based, would defeat the [NAME]' claim to registration of their transfer; (3) a company called [NAME]. ([COMPANY] (to be called [NAME].), which held a memorandum of mortgage from [NAME] and claimed a right to have it registered in the event of [NAME]'s transfer being registered; (4) a company called [COMPANY] (to be called [NAME]) which held a later memorandum of mortgage from [NAME] and claimed a right to have it registered, subject only to [NAME].'s mortgage, in the event of [NAME]'s transfer being registered; and (5) the Registrar-General. The appellants are the three companies. Miss [NAME] having died since the date of the Supreme Court's order, a representative of her estate has been made a party to the appeal but has taken no part in the argument. The Registrar-General has appeared before us by counsel who has assisted us with a thoughtful argument, but he properly maintains an attitude of neutrality as between the contending parties.

The [NAME]' transfer from [NAME] was produced to the Registrar-General for registration on 22nd April 1959, together with a memorandum of mortgage back from the [NAME] to Miss [NAME]. [NAME] memorandum of transfer from Miss [NAME] and [NAME].'s memorandum of mortgage from [NAME] were produced for registration some seven months later, on 25th November 1959. [NAME] memorandum of mortgage from [NAME] was produced later still, on 10th February 1960. None of the five instruments has been registered. Since s. 32 (2) of the [NAME] requires the Registrar-General to record (i.e. to register, see. s. 35) registrable instruments and s. 36 (1) provides that every instrument presented for registration shall be registered in the order of time in which the same is produced for that purpose, it would be clear, if there were no other relevant facts than I have stated, that the [NAME]' transfer would have to be registered first; and the result would be that [NAME] transfer to [NAME], and [NAME]'s mortgages to [NAME]. and [NAME], would all become incapable of registration. The argument for the appellants both at the trial and on appeal revolved around three contentions. The first was that the [NAME]' application of 22nd April 1959 for registration of the transfer to them was withdrawn, in the sense of being terminated, on 16th September 1959; that, as no new application for registration of the instrument was made before [NAME] and its mortgagees lodged their respective instruments to be registered, s. 36 (1) works against the [NAME] and not for them; and that by virtue of s. 43, or alternatively s. 43A, of the [NAME] the appellants are free to obtain registration of their instruments notwithstanding any notice they may have received at any time of the [NAME]' interest in the land. A second contention was that the [NAME] have resold the subject land to [NAME] and are no longer entitled to have her transfer to them registered. Finally it is said that the circumstances in which each of the appellants parted with the moneys for which it obtained the instrument it now seeks to have registered were such that as against them the [NAME] are in equity disentitled to insist on their statutory right to priority of registration.

The facts that are relevant to the first contention may be quickly related. The transfer to the [NAME] was taken, and their mortgage back to [NAME] was given, upon completion of the contract of sale from [NAME] to the [NAME]. The sale price was £15,000. A deposit of £3,000 had been paid to Miss [NAME] at the time of the contract, and the mortgage was given, in accordance with the contract, to secure the balance, viz. £12,000. Settlement of the transaction took place on 23rd July 1958, the vendor-mortgagee acting through one solicitor and the purchasers-mortgagors acting through another. The memorandum of transfer and the memorandum of mortgage had been executed in anticipation. Miss [COUNSEL] signature to each was witnessed by her solicitor, he being described on the face of the mortgage as her solicitor. The [NAME]' signature to the mortgage was witnessed by their solicitor; but they did not sign the transfer at all: their solicitor signed it, with the addition of the words: "solicitor for Transferee(s) whose signatures cannot be obtained without difficulty or delay". (The statutory authority for this is to be found in the Fifth Schedule to the Act.) A procedure for settlement was adopted which, according to the evidence, followed the usual practice. The transfer, duly executed, was produced by Miss [COUNSEL] solicitor but retained by him. A representative of the [NAME]' solicitor then handed to Miss [COUNSEL] solicitor the mortgage, signed by the [NAME], together with a cheque for a sum covering usual adjustments and the amount of the registration fee payable in respect of the transfer. The transfer was left with [NAME]'s solicitor for the sole purpose (as the trial Judge expressly found) of its being lodged by him, together with the mortgage, with the Registrar-General for registration.

For some unexplained reason, seven months went by before the instruments were lodged in the Registrar-General's office. The profession had apparently become used to long delays in that office, and the [NAME]' solicitor, having no reason to doubt that the transfer had been lodged with due expedition, made no inquiry as to what had happened. Nothing turns, however, on the delay, for no event occurred in the interval that could affect the relative positions of the parties. It was after the transfer and the mortgage had been lodged, and while they were still awaiting registration, that Miss [NAME] entered into a contract with [COUNSEL] to sell the same land to it. Her solicitor was informed by a [NAME] on 15th September 1959 that this sale had been agreed upon, and on the next day he uplifted from the Registrar-General's office both the transfer to the [NAME] and their mortgage to [NAME]. A receipt which he signed for these documents contained the words "dealings withdrawn". A few days later he wrote the Registrar-General a letter confirming that the instruments had been "withdrawn from registration". It may be that he had no dishonest purpose in doing this, and thought that the best way of carrying out a repurchase of the land by his client from the [NAME] would be by cancelling the transfer that had been lodged and giving [NAME] a direct transfer from Miss [COUNSEL]. But he did not consult the [NAME] or their solicitor, and he received no authority from either of them to terminate the application which he had initiated on their behalf for registration of their transfer. The appellants contend that he had implied or at least ostensible authority to do so, because he had been authorized to lodge the instruments in the first place, and it was well known at the time that in the Registrar-General's office a practice existed of allowing instruments awaiting registration to be uplifted by the person who lodged them.

On the assumption that this view as to the solicitor's authority should be accepted, the appellants rely on s. 36 (1) to entitle them to registration ahead of the [NAME]' transfer. To any suggestion that their right is subject to the [NAME]' interest as having been acquired with notice of that interest they make the reply that s. 43, or alternatively s. 43A, of the [NAME] exempts them from the effect of any such notice. If the preliminary assumption were sound, I should be of opinion that [NAME], if not the other appellants, should succeed by virtue of s. 43A, though not of s. 43; and as the operation of these sections has been argued at length I shall explain at once why that would be my conclusion, although, for reasons which I shall state subsequently, I think the assumption as to the solicitor's authority is unwarranted.

The purpose and effect of s. 43A (1) have been the subject of controversy among legal writers, and they are not apparent until the provision is read, as its numbering suggests that it should be, as a supplement to the preceding provisions, and in particular ss. 41, 42 and 43. Until registration, a person who has dealt with a registered proprietor cannot have more than an equitable interest, for until that event even a registrable instrument cannot pass the estate or interest which it specifies: s.

41. After registration, he holds, by virtue of s. 42, free from all encumbrances, liens, estates or interests not notified on his certificate of title (with immaterial exceptions); but this does not exclude equitable interests: [NAME] v. [NAME] [1] ; Great West Permanent Loan Co. v. [NAME] [2] ; [NAME] v. [NAME] [3] . Even as regards equitable interests he has a degree of immunity by virtue of s.

43. But the immunity under that section is limited: it is only such immunity as is created by exonerating him from the effect of notice of any trust or unregistered interest. "Except in the case of fraud," the section says, "no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any registered estate or interest shall be affected by notice, direct or constructive, of any trust or unregistered interest." It is settled law that the immunity thus conferred, upon a purchaser for example, is afforded to him if and when he becomes registered and not before: [NAME] v. [COMPANY]. [4] ; [NAME] v. [NAME] [5] . In order to appreciate the nature of the addition which s. 43A enacts it is important to have in mind that this conclusion as to the operation of s. 43 is not reached by a process of interpretation. It is a conclusion not as to the meaning of the section but as to the way it works. A purchaser, his interest before registration being necessarily equitable only, derives no priority over the holder of a pre-existing equitable interest from absence of notice: [NAME] v. [NAME] [6] ; [NAME] v. [NAME] [7] . Consequently, a provision that a person is not to be affected by notice of prior interests has no application to him so long as he remains unregistered. For the same reason, it has no application even to one who has become registered, if he acquired his estate or interest as a volunteer. It is only a person having a legal estate or legal interest acquired for value whose position is prejudiced by his having received, before paying his money, direct or constructive notice of an outstanding equitable interest. This is so even under the [NAME], for a registered interest is not (as was suggested in the course of the appellants' argument) some special kind of statutory interest—it is a legal interest, acquired by a statutory conveyancing procedure and protected from competition to the extent provided for by the Act, but having, subject to the Act, the nature and incidents provided by the general law. So all that the provision does which I have quoted from s. 43 is to protect against notice of any trust or unregistered interest a legal estate acquired for value. The statement that it has no operation in favour of a person before he becomes registered means, simply, before he acquires a legal estate by registration.

1. (1914) 19 [NAME]. 197. 2. [1925] [NAME]. 208. 3. [1934] [NAME]. 491, at p. 500; (1934) 51 [NAME]. 58, at pp. 64, 65. 4. (1921) 30 [NAME]. 34, at pp. 54, 55. 5. (1930) 44 [NAME]. 166, at pp. 182, 188, 196, 203 (cf. [1934] [NAME]., at p. 509; (1934) 51 [NAME]., at p. 73). 6. (1861) 4 De G. F. & J. 208, at pp. 215, 216 [45 E.R. 1164, at p. 1166]. 7. [1934] [NAME]., at pp. 498, 499, 504; (1934) 51 [NAME]., at pp. 63, 64, 68.

It is to this situation, as I understand the matter, that s. 43A (1) is addressed. Indeed, the introductory words by which its operation is limited, "For the purpose only of protection against notice", preclude, I think, any other view. Something which is less than a legal estate is to be deemed a legal estate for the purpose of the protection against notice which s. 43 provides for a legal estate. What is to receive this protection is the estate or interest in land "taken" by a person under an instrument which either is registrable or, if signed by or on behalf of that person, would be registrable. The word "taken" must be construed having regard to the provision in s. 41 that no instrument until registered shall be effectual to pass any estate or interest in land under the Act. The estate or interest "taken" under an unregistered instrument must therefore mean the estate or interest which the instrument on its true construction purports to confer, and upon its being registered will confer. That estate or interest is given by s. 43A the same immunity from the effect of notice as s. 43 provides for registered estates or interests in virtue of their being legal estates or interests. The result is that (fraud apart) a purchaser may pay his money to the registered proprietor in exchange for a registrable instrument (or one that will be registrable upon his signing it) without troubling about any notice that he may have received of a trust or unregistered interest. Provided that he lodges his instrument for registration before the holder of a competing prior interest renders the purchaser's instrument no longer registrable by lodging a registrable instrument for registration or entering a caveat, s. 36 (1) will ensure that the purchaser obtains registration and thus obtains the protection of s. 43 (see also s. 36 (3)). This is so because, by reason of a proviso added to s. 74 by the amending Act which inserted s. 43A, no caveat subsequently entered can defeat him, and the holder of the competing interest will not be entitled to the intervention of a court of equity on the ground that the purchaser acquired his right to registration with notice of that interest.

Accordingly in the present case [NAME] would be entitled by virtue of s. 43A, in my opinion, to have its transfer from [NAME] registered, notwithstanding that before the settlement of its purchase it had express notice of the [NAME]' interest, if the [NAME]' prior application for registration had been effectually determined by the action that was taken by Miss [COUNSEL] solicitor. But [COUNSEL].'s conclusion that the application was not so determined seems to me to be plainly correct. It may well be that where a person has lodged an instrument on behalf of another as his solicitor, or in any other capacity which implies an authority to act for him in regard to the matter generally, the Registrar-General and other persons are justified in assuming in the absence of any indication to the contrary that the general authority is undetermined and extends to uplifting the instrument so as to withdraw the application for its registration: cf. [NAME] v. [NAME] [1] . But the situation cannot be the same where a memorandum of transfer is lodged by a person who is shown as the solicitor for the transferor only, and whose possession of the instrument—which normally would be lodged by the transferee's solicitor—is to be accounted for by the fact that the transferor is taking a mortgage back and requires the transfer in his hands so that he may be in a position to perfect his security by lodging it for registration and lodging the mortgage immediately afterwards. It seems to me that in such a case, even if both solicitors know that the Registrar-General's office follows the loose practice referred to, there is nothing to make it a reasonable inference that the transferee meant to make the transferor's solicitor his agent not only to apply for registration but also to withdraw the application if he should choose to do so. What was said by [NAME] J. in relation to a caveat in his dissenting judgment in [NAME] v. [NAME] [2] states, I think, what anyone would naturally infer in such a situation: "the authority to lodge (the instrument) is complete in itself, and is exhausted when the (instrument) is lodged The person authorized to lodge the (instrument) is then functus officio " [3] . In my opinion the proper conclusion in the present case is that the purported withdrawal of the transfer by Miss [COUNSEL] solicitor, being unauthorized, left the application for registration on foot notwithstanding the physical removal of the document from the Registrar-General's custody. The appellants' first contention, in my opinion, fails.

1. (1914) 19 [NAME]. 197, at p. 210. 2. (1914) 19 [NAME]. 197. 3. (1914) 19 [NAME]. 197, at pp. 220, 221.

The contention based on the resale by the [NAME] to [NAME] ought also, I think, to fail. The contract of resale was entered into on 24th September 1959. The agreed price was £22,275, payable by a deposit of ten per cent and a cash payment of the balance on completion. The [NAME] repeatedly pressed for completion of the matter, but in March 1960 Miss [COUNSEL] solicitor was found to have misappropriated moneys including the money he had received from the [NAME] on settlement of their purchase from [NAME]. Having lost this money, Miss [NAME] was unable to complete the repurchase, and it is still uncompleted. The [NAME] asserted before Hardie J. that they had determined the contract by reason of [NAME]'s default; but his Honour found it unnecessary to decide whether or not the contract was still on foot, being of opinion that even if it was the [NAME] were entitled to have their transfer from [NAME] registered. This conclusion seems clearly correct. The contract of resale did not rescind or discharge the contract of sale from [NAME] to the [NAME]: it assumed its completion. Each contract contemplated a transfer, the one from [NAME] to the [NAME] and the other from the [NAME] to Miss [NAME], and there was no agreement at any time to obviate the circuity thus involved. A passage from the majority judgment in [NAME] v. Federal Building Society [1] was relied upon in support of the argument that the contract of resale put an end to the [NAME]' right as against Miss [NAME] to have their transfer effectuated by registration. The passage shows that a decree for specific performance of both a contract of sale and a contract of resale would not require the parties to go through the steps of transfer and retransfer in a case where no transfer under either transaction has been lodged for registration. But that is only a matter of the machinery by which the Court will give effect to the rights of the parties under both instruments taken together. Where, as in the present case, the contract of sale has been carried out to the extent that a transfer has been lodged for registration, and the original vendor is unwilling or unready to complete his repurchase, there is no ground whatever for holding that the existence of the contract of resale provides a legal obstacle to the registration.

1. (1929) 42 [NAME]. 421, at pp. 433, 434.

I turn to the appellants' third contention. In relation to each of the appellants, the case is one of competing equitable interests, with the addition that the [NAME] have not only the prior equity but also a statutory right to registration. Neither can be postponed to the interests of the appellants unless the [NAME] have by act or omission made it inequitable that they should be allowed to insist upon the priority which order in time prima facie gives them. The general principle applicable in such a case is thus stated in the judgment of the Privy Council in [NAME] v. [NAME] [2] : "the possessor of the prior equity is not to be postponed to the possessor of a subsequent equity unless the act or omission proved against him has conduced or contributed to a belief on the part of the holder of the subsequent equity, at the time when he acquired it, that the prior equity was not in existence" [1] .

1. [1934] [NAME]. 491; (1934) 51 [NAME]. 58. 2. [1934] [NAME]., at pp. 498, 499; (1934) 51 [NAME]., at p. 63.

The facts concerning the appellants' transactions with respect to the land are as follows. It was in September 1959 that Miss [NAME] agreed to sell to [NAME] the land she had already sold to the [NAME]. According to the learned trial judge's findings, which must be accepted, the [NAME] had no knowledge until some time in 1960 that Miss [NAME] contemplated a second sale of the land. However, she had entered into a contract to sell to [NAME] on 17th September 1959, the price (£26,000) being made payable as to £1,500 in cash as a deposit, as to £5,000 by second mortgage to the vendor, and as to the balance in cash on completion. It was contemplated that the cash to be paid on completion would be raised partly by a first mortgage, and in fact it was so raised from [NAME]. Settlement took place on 23rd November 1959. By that time Miss [NAME] had got the [NAME] to agree to resell the land to her for £22,275, and a contract was entered into. It had not been completed, however, when the time came for settlement of her sale to [NAME]. Settlement of that sale took place in the office of [NAME]'s solicitor. [NAME]'s solicitor arrived there before the representative of [NAME]. He had been told by a search clerk of the existence in the Registrar-General's office of certain notations indicating that the land had been the subject of a transfer to the [NAME] and a mortgage to [NAME], and that both instruments had been lodged for registration but uplifted. While awaiting the arrival of [NAME].'s representative, [COUNSEL] solicitor, who at that stage was under the misapprehension that the transfer and mortgage he had been told about related to other land, mentioned the instruments to [COUNSEL] solicitor, and was told that in fact they related to the land his client was buying. He asked what was the nature of the withdrawal of the instruments from the Registrar-General's office, and received the answer that [NAME] had purchased the land back from the [NAME]. He was shown the contract of sale which the [NAME] had executed, but he did not ask whether it had been completed or whether the purchase money had been paid. Miss [COUNSEL] solicitor spoke of having withdrawn the [NAME]' instruments for registration as a way of settling the resale from the [NAME] to [COUNSEL]; and apparently [COUNSEL] solicitor was satisfied to take it, without further inquiry, that the [NAME]' interest in the land as purchasers from [COUNSEL] had ceased. The representative of [NAME].'s solicitor was not present until after the conversation on this topic had finished. His principal had learned by search that the [NAME]' transfer and mortgage back had been withdrawn and that on the register Miss [NAME] title was clear. It was in this situation that the settlement took place. [NAME]. advanced £16,000 to [NAME] and that sum together with about £3,000 was paid to [COUNSEL] solicitor. A transfer by [COUNSEL] to [NAME] and a first mortgage by [NAME] to [NAME]. were then handed to [NAME].'s solicitor. As to the remaining £5,000, promissory notes from [NAME] were given and accepted in place of the second mortgage for which the contract had provided. On 23rd November 1959 the transfer to [NAME] and its mortgage to [NAME]. were lodged in the Registrar-General's office for registration, and were still awaiting attention there when the litigation commenced. Finally, there came the [NAME] transaction. On 28th January 1960, [NAME] advanced £5,000 to [NAME], receiving as security a memorandum of mortgage in respect of the subject land. It was duly executed by [NAME] as mortgagor, and it named [NAME] as mortgagee in the body of the instrument; but in the testimonium clause it named [NAME] (Finance) [COMPANY] as mortgagee. The security was expressly subject to [NAME].'s first mortgage. The negotiations for the loan by [NAME] had all taken place in January 1960, and [NAME] had no notice before parting with its money that the [NAME] had or claimed any interest in the land. [NAME] lodged its mortgage on 1st February 1960 for registration, but it was still unregistered when the proceedings began.

Hardie J. found as a fact that [NAME], before the settlement of its contract of purchase from [NAME], received through its solicitor positive and unambiguous notice, by the oral statements made by her solicitor in the conversation which preceded the settlement, that the [NAME] had been the owners (his Honour meant, of course, the beneficial owners) of the subject land at the date of [NAME]'s contract with [NAME], and his Honour held that nothing contained in the contract of resale or said in the conversation before the settlement justified the conclusion that the resale agreement had been carried out, or that Miss [NAME] had been restored to the position of beneficial owner of the land. This is plainly correct. [COUNSEL] solicitor took the chance that the [NAME]' rights as purchasers from Miss [COUNSEL] had ceased. [COUNSEL] solicitor no doubt meant him to understand that that was so, and he saw the contract; but he did not trouble to go into the question whether the contract had been completed, and in particular he made no inquiry of the [NAME] or their solicitor. The question, however, is not whether he acted wisely or unwisely, reasonably or unreasonably; and it is not to the point that what he was told gave his client notice of the [NAME]' rights. This is not a case of a competition between a legal interest and an equitable interest. The question is whether [NAME] is entitled in equity to insist that the [NAME]' statutory right to get a legal title be postponed to its own; and in order to succeed it must show that by "something tangible and distinct having grave and strong effect to accomplish the purpose" [1] the [NAME] led it to acquire its interest in the belief that the [NAME]' interest did not exist. [COUNSEL] solicitor having been told enough to show that the [NAME]' interest existed unless by or under the contract of resale to [NAME] it had been terminated, what was there to induce the belief that it had been so terminated? Nothing whatever, beyond the statement of Miss [COUNSEL] solicitor to that effect; and for that statement the [NAME] neither gave any authority nor can properly be held responsible. The only ground suggested for holding that they should be postponed to [NAME] because of the representation made by Miss [COUNSEL] solicitor is that by letting him lodge their transfer for registration they put him in a position to take advantage of the Registrar-General's practice in the matter of withdrawals, and, having done that, by not entering a caveat to guard against the possibility of an unauthorized withdrawal they provided him with the opportunity of persuading [NAME] that the [NAME] no longer had any interest in the land. But the question is not whether anything they could possibly have done would have prevented the deception of [COUNSEL] solicitor; it is whether their conduct was such that the deception was a natural consequence, so that they may fairly be said to have "armed" Miss [COUNSEL] solicitor, as Lord [COUNSEL] would have said, "with the power of going into the world under false colours": [NAME] v. [NAME] [2] . I am prepared to assume, though I do not say it was established, that all the solicitors concerned were well aware of the Registrar-General's practice. Even so, the answer to the question, in my opinion, is that in the circumstances it was not reasonably to be foreseen by the [NAME] or their solicitor that a third party might, without inquiring of them, part with money on an assumption that, contrary to all ordinary experience, their transferor's solicitor had their authority to withdraw from registration the transfer which to all appearances they were absolutely entitled to have registered. It is true that a caveat would have given notice to the world of the continuing claim of the [NAME] to an interest as purchasers of the land; but the mere lodging of the transfer gave clear notice that the interest had come into existence, and put persons in the position of [NAME] upon inquiry as to whether the interest had ceased. We have been reminded that in [NAME] v. [NAME] [1] Griffith C.J. said: "If a man having a registrable instrument neither lodges it for registration nor lodges a caveat to protect it, it is clear that a registrable instrument later in date, but lodged before his, will have precedence, notwithstanding notice of the earlier instrument received before lodging his own. That is by reason of the express provisions of the Statute" [2] . But the [NAME] did lodge their transfer for registration, and in my judgment it is not to be laid at their door that [COUNSEL] solicitor was deceived by the assurances of a rogue.

1. [1934] [NAME]., at p. 504; (1934) 51 [NAME]., at p. 68. 2. (1872) L.R. 8 Ch. 155, at p. 160. 3. (1917) 23 [NAME]. 78. 4. (1917) 23 [NAME]., at p. 92.

In my opinion the appeals fail and should be dismissed.

Taylor J.

These appeals are from a decree of the Supreme Court of New South Wales (Hardie J.) whereby the respondents, as plaintiffs, secured against the defendant in the suit the relief hereinafter mentioned. The respondents I shall hereinafter refer to as [NAME]. The defendants in the suit were [NAME] [NAME] [NAME] (hereinafter called [NAME]), [COMPANY] (hereinafter called [NAME]), [NAME]. ([COMPANY] (hereinafter called [NAME].), [COMPANY] (hereinafter called [NAME]) and the Registrar-General of New South Wales. [NAME]. and [NAME] have appealed from the decree and all three appeals were heard together in this Court.

The suit arose out of a complicated set of facts and these have been amply traversed in a careful and well-reasoned judgment of the learned trial judge. Nevertheless, it will be necessary for a proper understanding of the matters discussed in argument upon the appeals to mention again a number of the salient facts of the case.

On and prior to 24th February 1958 [NAME] was registered under the provisions of the [NAME], 1900-1956 as the proprietor for an estate in fee simple of some fifty-four acres of land at Church Point near Sydney. This was the land comprised in Certificate of Title Vol. 6795 Fol.

6. On that date she entered into a written contract to sell approximately fifty-two acres of this land to [NAME]. The purchase price was expressed to be £15,000 of which £3,000 was payable by way of deposit whilst the balance, £12,000, was to be secured by a mortgage upon specified terms back to [NAME]. There was some delay in settlement because of the necessity of obtaining consent to the necessary subdivision but, eventually, settlement took place on 23rd July 1958. It should be mentioned that at all material times the relevant certificate of title was in the custody of the Registrar-General in order that a new certificate might be issued for the residue of the land. For the purpose of settlement two essential documents had been prepared. One was a memorandum of transfer of the subject land from [NAME] to [NAME] and the other a memorandum of mortgage from [NAME] to [NAME]. These documents, fully executed, were left with [COUNSEL] solicitor, one [COUNSEL], for the purpose of registration and so that, upon receipt after registration, the duplicate memorandum of mortgage and the certificate of title for the subject land might be held by him as the solicitor for the mortgagee during the currency of the mortgage. This was done in accordance with what was proved to be the usual conveyancing practice in such circumstances. In fact, the memorandum of transfer and the memorandum of mortgage were lodged by [NAME] for registration but they were not lodged until 22nd April 1959. The reason for the delay does not appear but in the circumstances of the case it is not of any significant importance. It should be added, however, that at this time there was such a pressure of business in the office of the Registrar-General that there was a delay of up to twelve months between the lodging of instruments and their subsequent registration in accordance with the provisions of the Act.

Passing over intervening matters for the present I now mention that on 17th September 1959 [NAME] entered into a written contract to sell the same land to [NAME]. The purchase price was expressed to be £26,000 and this was to be satisfied by payment of a deposit of £1,500, as to £5,000 thereof, by a second mortgage back to [NAME] repayable in twelve months and, as to the balance of £19,500 in cash on completion. [NAME] had arranged with [NAME]. for a loan of £16,000 to be secured by a first mortgage on the subject land and when settlement took place under the contract of sale that company's representative attended. The settlement took place in [COUNSEL] office on 23rd November 1959 when the sum of £19,500, less an adjustment (in respect of arrears of rates), was paid to [COUNSEL] as [NAME]'s solicitor. In lieu of a second mortgage back for the residue of £5,000 [NAME] accepted promissory notes for that amount. The memorandum of transfer from [NAME] to [NAME] was dated 23rd November 1959 as also was the memorandum of mortgage from [NAME] to [NAME]. whose advance of £16,000 was included in the abovementioned sum of £19,500. In the final result of the settlement these instruments found their way into the hands of the solicitors for [NAME]. who lodged them with the Registrar-General for registration on 25th November 1959.

At a later stage, on 28th January, [NAME] secured an advance of £5,000 from [NAME] and presumably this money was used to retire the abovementioned promissory notes. In return for the advance [NAME] obtained a memorandum of mortgage from [NAME] over the subject land and this instrument was lodged for registration with the Registrar-General on 10th February 1960. On its face this instrument seems to be irregular for in the body of the instrument the mortgagee is expressed to be "[COMPANY]" whereas the instrument appears to have been accepted for and on behalf of "[COMPANY]".

[NAME] brought their suit for the purpose of obtaining, in effect, declarations that they were entitled to have their memorandum of transfer registered in priority to the transfer to [NAME] and that neither [NAME]. nor [NAME] were entitled to register their respective instruments and, further, for an appropriate order restraining the Registrar-General from registering the later set of instruments. [NAME] were successful in the suit and these appeals are brought from the decree which gave effect to their claims. It should, perhaps, also be mentioned at this stage that on 16th September 1959, which was the day before the contract between [NAME] and [NAME] was entered into, [NAME]' memorandum of transfer and the memorandum of mortgage which they had executed were removed from the Registrar-General's office. In fact, they were uplifted by [NAME] who early in 1960 was found to have been misappropriating trust funds and was then arrested. The circumstances in which [NAME]' transfer was uplifted, or, as it was said, withdrawn, will be the subject of discussion after consideration has been given to other aspects of the case.

So far I have not attempted to traverse or to refer to the whole of the facts relevant to all of the contentions advanced by the appellants. But what has been said is sufficient to enable us to deal with two fundamental submissions which they made. The first of these was based upon s. 43 of the [NAME] and it asserted that [NAME] dealings with [NAME] as the registered proprietor of the subject land had resulted in the acquisition by the former of an indefeasible title. In other words, it was contended that the protection given by that section to a person contracting or dealing with a registered proprietor does not await the registration of the appropriate instrument but is afforded from the time when the contract is made with the registered proprietor or, perhaps, from the time when a registrable instrument is obtained. The contention, however, is directly contrary to law which has been settled for a great many years. Indeed, s. 43 was enacted in its present form when its prototype had already been given, judicially, a meaning contrary to the submission now made ([NAME]. v. [NAME] [1] . The provision with which that case was concerned was s. 111 of the [NAME] of 1862 N.S.W.—26 Vict. No. 9). Previously, in Victoria in 1887, the counterpart of s. 111 in the Land Transfer Act of that State was also held to confer an indefeasible title only upon registration ([NAME] v. [NAME] [2] ). The same view has been taken upon consideration in this Court concerning s. 43 and its present counterpart in Victoria ([NAME] v. [COMPANY]. [3] ; and [NAME] v. [NAME] [4] ). The lastmentioned case was decided over thirty years ago in accordance with what was then said to be settled law and it is unthinkable that we should now proceed to unsettle it. Particularly is this so when it is seen that s. 43A of the Act, which was enacted in 1930, must have been enacted on the basis that the protection afforded by s. 43 accrues only upon registration and in an attempt to make appropriate provision in favour of a purchaser who, having upon settlement obtained a registrable instrument, has not yet obtained registration. In these circumstances I am of the opinion that the appellants' submission on this point should not be entertained and, accordingly, that they can obtain no assistance from the provisions of s. 43.

1. (1894) 15 L.R. (N.S.W.) Eq. 207. 2. (1887) 13 V.L.R. 80. 3. (1921) 30 [NAME]. 34. 4. (1930) 44 [NAME]. 166, at pp. 182, 188, 196, 203.

Alternatively, it was contended that the effect of s. 43A was such as to enable [NAME] to assert that its interest in the subject land should be held to prevail over that of [NAME]. That section is in the following terms: "(1) For the purpose only of protection against notice, the estate or interest in land under the provisions of this Act, taken by a person under an instrument registrable, or which when appropriately signed by or on behalf of that person would be registrable under this Act shall, before registration of that instrument, be deemed to be a legal estate. (2) No person contracting or dealing in respect of an estate or interest in land under the provisions of this Act shall be affected by notice of any instrument, fact, or thing merely by omission to search in a register not kept under this Act. (3) Registration under the Registration of Deeds Act, 1897, shall not of itself affect the rights of any person contracting or dealing in respect of estates or interests in land under the provisions of this Act." Clearly enough, the section was designed to deal with the position of the holder of a registrable instrument between the time of its receipt and the time of its registration. But its effect is by no means clear. No doubt it proceeds on the basis that under the law as settled at the date of its enactment s. 43 did not afford any degree of protection to a purchaser prior to registration and that any conflict between competing equitable interests prior to registration fell to be determined according to ordinary equitable principles. That is to say, that the earlier of two competing equitable interests must, in the ordinary course, be taken to prevail over the later. Of course, in any particular case, circumstances may be shown to have existed which will result in the earlier equitable interest being postponed. However, in the case where no such circumstances are shown to have existed, the question whether the second interest was acquired with notice of the earlier interest is completely irrelevant; the prior interest will prevail whether the later interest was acquired with or without notice of it. What use was it then for the section to stipulate "For the purpose only of protection against notice, the estate or interest in land taken by a person under an instrument registrable under this Act shall be deemed to be a legal estate"? The section has been the subject of much professional discussion (see e.g. [NAME]—A Commentary on [NAME] in New South Wales, (1951) pp. 176, 177; [NAME]—[NAME], (1927) p. 28; and (1932) 6 Aust. Law Journal 85). Various possibilities have been discussed but no really satisfactory answer appears as to the meaning of the section. [NAME] literally is accomplishes nothing. If an intended transferee has paid his purchase money his position will not be worsened by notice, subsequently, of a prior equitable interest. It is, of course, true that his interest may be entirely defeated, in the absence of fraud, by prior registration of the earlier interest but if this occurs he will be defeated, not because he had notice of that interest at any stage, but by the transformation of that interest into the interest of a registered proprietor. On the other hand, if he secures registration first his interest will be likewise transformed into the estate of a registered proprietor and, in the absence of fraud, he will secure an indefeasible estate.

Accordingly, a person who has paid his purchase money and who has secured a registrable memorandum of transfer needs no protection against notice received thereafter and a provision which purports, merely, to protect him against the effects of notice will not confirm his title. It is, however, not unreasonable to assume that the section was intended to achieve some object. And that object, it seems, was to make some appropriate provision for "filling" what has been called the "gap" left in s. 43 by the "settled law" concerning that section ([NAME]—supra, at p. 177). Does the section, then go further than merely to afford a so-called protection against notice and operate to give to the holder of a registrable memorandum of transfer priority over an earlier equitable interest where he has, without notice thereof, paid his purchase money and obtained his registrable instrument? The suggestion that it does is based upon the contention that the holder of a registrable instrument in such circumstances is enabled to assert, as against the prior equitable interest, that he has by virtue of the section a legal estate in the land acquired without notice of the earlier interest and that he is, therefore, entitled to perfect his title by registration. Such a construction, it is said, does some violence to the terms of the section but it is, it seems to me, the result, which notwithstanding its "ungainly approach" to the subject ([NAME], supra, at p. 177), the section was intended to produce.

A further suggestion is that the section was intended to advance in point of time the protection afforded by s. 43 upon registration. That is to say, that the concluding words of the section—"legal estate"—should be understood to mean "the estate of a registered proprietor". But if it was intended so to advance the unqualified protection given by s. 43 upon registration it would have been a simple matter to say so. To my mind the expression "a legal estate" was used advisedly and with a view to affording, at the most, the same measure of protection as that given at common law to a person who has acquired a legal estate in land without notice of some prior equitable interest. Some light is, I think, thrown on this particular problem by the provisions of s. 42 (d) of the Act which, itself, was introduced into the Act at the same time as s. 43A. That sub-section contains an exception from the conclusiveness of a registered proprietor's title in respect of any tenancy "whereunder the tenant is in possession or entitled to immediate possession of which the registered proprietor before he became registered as proprietor had notice against which he was not protected ". The italicized expression, it seems to me, is intended as a reference to the measure of protection afforded by s. 43A. So read the provision acknowledges that the protection afforded by s. 43A is not unqualified and provides some indication that the expression in sub-s. (1) of the section—"legal estate"—is not to be understood as synonymous with "the estate of a registered proprietor". Further, if the other view as to the meaning of the expression "legal estate" were to be entertained, it would have been unnecessary for the purposes of the section to make the specific provisions contained in sub-ss. (2) and (3). Upon the stated hypothesis notice either before or after the acquisition of a registrable instrument would be quite irrelevant.

Once the contention that the expression "legal estate" in s. 43A (1) is synonymous with "the estate of a registered proprietor" be rejected—as I think it must—it is unnecessary for us to express any positive view as to the meaning of the sub-section. I say this because it is clear upon the facts that [NAME] had express notice of [NAME]' interest before the contract of sale between [NAME] and [NAME] was carried to completion. This will appear from the facts to which I shall presently refer. In the circumstances of the case, therefore, the rights of the parties must, subject to one matter, be determined according to the ordinary principles upon which a court of equity would proceed. These principles were the subject of discussion during the course of argument but in order to appreciate the submissions which were made concerning their application to the facts of the case it is desirable to refer to some, at least, of the other events which occurred, in the main, shortly before [NAME] entered into the contract of sale with [NAME], that is to say, 17th September 1959.

Early in that month [NAME] telephoned [NAME]. [NAME]. [NAME], who represented [NAME], and offered to repurchase the land in question for the sum of £22,500. The offer was accepted and a contract of sale between them was entered into. But it was not entered into until a week after the contract of sale between [NAME] and [NAME] had been made. [NAME] maintained that she told [NAME] that she was desirous of repurchasing the land in order to resell it to [NAME] but this was denied by [NAME]. [NAME]. [NAME]'s evidence was rejected by the learned trial judge who found that [NAME] had no knowledge that [NAME] had a purchaser in view at that time. We are asked to review this finding of fact but I see no reason upon the evidence why we should. Indeed, I see no reason to suppose that [NAME] would have been prepared to resell the land to [NAME] for £22,500 if they had known that there was a purchaser in the market prepared to pay a substantially larger sum for it. [NAME] evidence, however, was the first step in an attempt to establish that it was arranged between her and [NAME] that the purchase money payable under the contract of resale was to be paid out of the moneys received by her on the sale to [NAME]. But as I have said this evidence was not accepted and his Honour found that [NAME] had no knowledge of the sale to [NAME] until after [NAME] arrest in 1960. This fact, I think, must be taken to have been established in the case. The challenge which was made to that finding rested upon some evidence given by Mrs. [NAME], a conveyancing clerk in the office of [NAME]' solicitor, concerning a telephone conversation which she had with [NAME] at a time when she was pressing for settlement of the contract of resale. Upon an examination of that evidence it is clear that Mrs. [NAME] was told that [NAME] was not in a position to settle because she was awaiting the receipt of the proceeds of a sale which she had made. But it is apparent that Mrs. [NAME] was at all material times under the impression that the reference was to the sale of other land owned by [NAME], settlement of which was awaited, and not a sale of the subject land. We see nothing in the evidence to justify us in reviewing his Honour's finding on this point.

The next matter to which we should refer is the fact, already mentioned, that on 16th September 1959 [NAME] purported to withdraw from the Registrar-General's office the memorandum of transfer from [NAME] to [NAME] and the accompanying memorandum of mortgage. This was done on the day before the contract of sale from [NAME] to [NAME] was executed. The withdrawal, of course, left the register clear for the registration of the memorandum of transfer from [NAME] to [NAME]. Whether this was done as a matter of conveyancing convenienence or as a step in the perpetration of [NAME] frauds is a matter with which we need not concern ourselves for the fact was that it was done without the knowledge or authority of [NAME]. But it was said to have been done in accordance with the practice of the Registrar-General's office pursuant to which the person who has lodged an instrument for registration is permitted to withdraw it at any time before registration. Whether the practice is justified in all circumstances is not of much importance for if, as [NAME] assert, their equitable title should be held to prevail over that of [NAME], the registration of the latters' memorandum of transfer must be restrained and [NAME] will be entitled to proceed to registration. On the other hand, if the latter's equitable interest should be held to be postponed to that of [NAME] that company will be entitled to register.

The last matter to be mentioned on this aspect of the case is that prior to settlement pursuant to the contract of sale from [NAME] to [NAME] the latter's solicitor, [COUNSEL], became aware that the earlier memorandum of transfer from [NAME] to [NAME] had been lodged for registration. He became aware of this as the result of a search made by one of his firm's employees in the Registrar-General's office. The search notes also conveyed to him some information that was not entirely correct. This was to the effect that the memorandum of transfer and the memorandum of mortgage which had accompanied it had been withdrawn by "[NAME]". So far as the evidence shows no enquiries were made by [NAME] concerning these dealings or the withdrawal of these instruments until the day when he attended at [NAME] office to effect a settlement of a contract of sale to [NAME]. At that time [NAME] seems to have been under the impression that the instruments which had been uplifted, or withdrawn, related to land other than that which had been purchased by [NAME]. [NAME] was the first of those interested in the settlement to arrive in [NAME]'s office and he made some enquiries of [NAME] concerning the withdrawal of these instruments. When he remarked that he understood that they did not relate to the land the subject of the sale to his client [NAME] informed him that they did in fact relate to the same land. When asked to explain the nature of the withdrawal [NAME] informed [NAME] that [NAME] had purchased back the land from [NAME] and said "It is now Miss [NAME] land". [NAME] then asked whether [NAME] could show him anything in relation to that transaction and [NAME] produced an unstamped contract which purported to evidence a sale from [NAME] to [NAME]. [NAME] also informed him that he had withdrawn the original memorandum of transfer from [NAME] to [NAME] because "that was his method of settling the matter between those parties". No enquiries were made by [NAME] as to whether that contract had been carried into effect but the fact that it was unstamped was, perhaps, some indication that it had not. Further, it was apparent on the face of the contract that [NAME] had no authority to act on behalf of [NAME] and yet the matter proceeded to settlement that day and without reference to the [NAME] or their solicitor. In cross-examination Mr. [COUNSEL] said that the information conveyed to him that day, in fact, meant that there had been an earlier contract of sale between [NAME] and [NAME] and it must have been apparent to him that settlement under this contract had taken place because the memorandum of transfer had been prepared and subsequently lodged with the Registrar-General for registration. To my mind, it is as clear as it could be that [NAME] must have known that day that [NAME] had purchased the land in question from [NAME], that that contract had been carried to completion and that the subsequent contract from [NAME] to [NAME] had not. Indeed, a mere perusal of the document produced by [NAME] would have shown that it was not at that stage a contract binding [NAME] and [NAME] with relation to the resale and, further, that [NAME] had no authority to act on behalf of [NAME], to my mind, was the clearest indication to [NAME] of the [NAME]' outstanding equitable interest. Yet he made no further enquiries. Nor did he insist, or even suggest, that [NAME]' representative should be present at the settlement. He, merely, accepted [NAME] statement that he proposed to pay [NAME] out of the proceeds of the sale to [NAME].

This is the broad outline of the relevant intervening events though they may be supplemented by reference to the very full account of the dealings between the parties which appear in the reasons of the learned trial judge.

For the respondents, it is said, [NAME]'s withdrawal from the Registrar-General's office of the first memorandum of transfer was effected without their knowledge or authority and, consequently, the withdrawal did not destroy their right to priority in registration pursuant to s. 36 of the Act. In effect, it is said, there never was an effective withdrawal of the application for registration of that memorandum of transfer and, therefore, it should now be registered as an instrument lodged in point of time prior to the lodging of [NAME]'s memorandum of transfer. The appellants, however, assert that [NAME], having authority to lodge [NAME]' memorandum of transfer, should, in the light of the practice prevailing in the Registrar-General's office as to the right to withdraw dealings, be held to have had implied authority from [NAME] to withdraw the instrument. In my view, there is no substance in this submission but, in any event, it is unnecessary to consider the opposing contentions. What we are bound to determine is which of the two competing interests should be allowed to prevail and in resolving this question it is immaterial which was first lodged for registration. If this were not so little would be achieved by the lodging of a caveat to protect an unregistered interest for the only purpose served by a caveat is to keep the matter in statu quo for a limited time after an instrument dealing with a competing interest has been lodged for registration and so that the caveator may take the appropriate proceedings for the protection of his interest ([NAME] v. [NAME] [1] ).

1. (1913) 16 [NAME]. 293.

The next step in the appellants' argument was to deny that the situation ever arose in which there were competing interests. They asserted that at no time between 17th September and 25th November 1959 did [NAME] have any equitable interest in the land. This argument rests upon the fact that [NAME] entered into the agreement to resell the subject land to [NAME]. But this, as already appears, did not occur until 24th September 1959; that is to say, one week after [NAME] had contracted to sell the land to [NAME]. Nevertheless, it is asserted, that thereupon [NAME] parted with their equitable interest and had only a contractual right to receive an ascertainable amount of money under their contract of sale. I am unable to recognize any sound basis for this submission for it is quite apparent that [NAME] was never at any time in a position to succeed in a claim for specific performance against [NAME]. The contract between them was for the resale of the land but the legal estate was at all material times outstanding in [NAME] and, this being so, the latter could not have succeeded in a claim for specific performance until [NAME]' title had been perfected by the registration of the memorandum of transfer to them. Further, the contract for sale from [NAME] to [NAME] was, as appears, never brought to completion and, ultimately, it was rescinded on the grounds of [NAME]'s default. In these circumstances the principles enunciated in [NAME] v. [NAME] [2] ; [NAME] v. Preston [3] ; and [NAME] v. [NAME] [4] would deny that [NAME]' equitable interest ever passed to [NAME].

1. (1820) 1 Jac. & W. 494 [37 E.R. 456]. 2. (1881) 18 Ch. D. 1. 3. [1904] 1 Ch. 658.

The next submission made on behalf of the appellants is that the conduct of [NAME] was such as to require us to hold that their interest in the subject land should be postponed to that of the appellants. As I see it, this submission has two aspects. The first is that [NAME]' conduct was so neglectful that [NAME] was enabled to hold out to [NAME] that the title to the land was not the subject of any prior interest. The second is, in effect, that, upon the evidence, [NAME] acquiesced in settlement between [NAME] and [NAME] taking place when it did and were content to permit [NAME] to receive [NAME]'s purchase money on the understanding that he would then settle with [NAME]. In support of the first branch of the submission stress was laid upon the fact that no caveat was lodged by the [NAME] and we were invited to consider a number of observations in Oertel v. [NAME] [5] ; [NAME] v. [NAME] [1] ; [NAME] v. [NAME] [2] ; and [NAME] v. [NAME] [3] concerning the effect of caveats and the possible consequences of a failure of the owner of an unregistered interest to lodge a caveat. But these observations have no application where, as here, the later equitable interest is acquired with full knowledge of the existence of the earlier interest. Moreover, it must be borne in mind that [NAME]' memorandum of transfer was lodged for registration on 22nd April 1959, it lay in the Registrar-General's office for nearly five months awaiting registration, it was withdrawn only on the day before the contract between [NAME] and [NAME] was made and it was then withdrawn without the knowledge or authority of [NAME]. In these circumstances I fail to see how it can be said that the failure of [NAME] to lodge, independently, a caveat to protect their interest constituted any ground upon which neglect or unreasonable conduct ought to be attributed to them. The submission to the contrary is, I think, fanciful as also is the suggestion that the [NAME] could and, perhaps, should have notified the Registrar-General, at some unspecified time, that [NAME] did not have their authority to withdraw their memorandum of transfer. Again, it was suggested that [NAME] were neglectful in failing to enquire, from time to time, concerning the progress of their application for registration. But it was well known that registration might not be effected for as long a period as twelve months and there was no reason why [NAME] should have been concerned to make enquiries before half this period had elapsed. In any event, if they had made enquiries they would have learnt, right up to 16th September 1959, that their memorandum of transfer was still awaiting registration. We should add in relation to the second aspect of the appellants' submission that, once Miss [NAME] evidence be rejected, the evidence in the case provides not the slightest ground for thinking that [NAME] acquiesced in any proposal that the sale from [NAME] to [NAME] should proceed to completion in order that [NAME] might be put in funds to enable her, subsequently, to meet her obligation to pay to [NAME] the purchase money under the contract of resale.

1. (1902) 2 S.R. (N.S.W.) Eq. 37. 2. (1914) 19 [NAME]. 197. 3. (1917) 23 [NAME]. 78. 4. (1930) 44 [NAME]. 166; [1934] [NAME]. 491; (1934) 51 [NAME]. 58.

The final question is concerned with the position of [NAME]'s proposed mortgagees—[NAME]. and [NAME]. The learned trial judge has held that they parted with their money without notice of [NAME]' interest and no reason appears for challenging this finding. In these circumstances they claim, independently of [NAME], to be entitled to a degree of protection pursuant to s. 43A. But I agree with the learned trial judge that this claim must fail. That section clearly contemplates the position of a person dealing with a registered proprietor for it speaks of "the estate or interest in land under the provisions of this Act, taken by a person under an instrument registrable under this Act" and an instrument would only be so registrable if executed by the registered proprietor. But [NAME]. and [NAME] dealt only with [NAME] and their respective instruments would become registrable only upon registration of [NAME]'s memorandum of transfer. That being so, the additional submission made on their behalf must fail and, accordingly, all three appeals should, in my view, be dismissed.