Official Trustee in Bankruptcy v Registrar of Titles [2015] VSC 563

(a) cancel the existing Certificate of Title for the property located at 164 Matthews Road, Corio, in the State of Victoria, being the property more particularly described in Certificate of Title 10073 Folio 559 ('the Property');

(b) issue a replacement Certificate of Title in the name of ARQA Developments Pty Ltd ('ARQA');

(c) remove the restraining order (Instrument AK684488N) from the Certificate of Title;

(d) record the Commonwealth of Australia as the registered proprietor of the Property in accordance with s 67 of the Proceeds of Crime Act 2002 (Cth); and

(e) issue a new Certificate of Title to the Commonwealth of Australia.

2 On 29 October 2013, on application of the Commissioner of the Australian Federal Police in proceeding CI-13-05552, the County Court of Victoria ordered that a restraining order be made on the Property pursuant to ss 19 and 25 of the Proceeds of Crime Act 2002 (Cth). The subject of those proceedings was Mr Amer Haddara.

3 The registered proprietor of the Property is ARQA, a company that was deregistered on 5 October 2014 pursuant to s 601AB of the Corporations Act 2001 (Cth). The sole director of that company was Mr Haddara.

4 On 29 October 2013, on the application of the Commissioner of the Australian Federal Police made pursuant to s 106(1) of the Transfer of Land Act 1958, the defendant registered on the Certificate of Title of the Property the restraining order referred to in paragraph [2] above.

5 On 20 May 2014, on the application of the Commissioner of the Australian Federal Police, the County Court of Victoria ordered that the Property be forfeited to the Commonwealth of Australia pursuant to s 49 of the Proceeds of Crime Act 2002 (Cth).

6 On the making of a forfeiture order with respect to registrable property, s 67(1) of the Proceeds of Crime Act 2002 (Cth) relevantly provides as follows:

(a) [the registrable property] vests in equity in the Commonwealth but does not vest in the Commonwealth at law until the applicable registration requirements have been complied with; and

...

(c) the Commonwealth is entitled to be registered as the owner of [the registrable property];

(d) [the plaintiff] has power, on behalf of the Commonwealth, to do, or authorise the doing of, anything necessary or convenient to obtain the registration of the Commonwealth as the owner.

7 The applicable registration requirements referred to in s 67(1)(a) above are set out in the Transfer of Land Act 1958. Since the making of the forfeiture order, the plaintiff has been unable to obtain the original Certificate of Title which is necessary for the purpose of complying with the defendant's ordinary requirements for the registration of a transferee as the proprietor of the Property. The plaintiff has made the following efforts to obtain the Certificate of Title for the Property:

(a) A search of the titles register on 5 August 2015 showed that the Certificate of Title was issued to Medina Financial and Para-legal Services ('Medina') who acted on behalf of ARQA for the purchase of the Property on 6 May 2013.

(b) By letter dated 14 October 2014 to Medina, the Australian Government Solicitor, which was at that time acting on behalf of the plaintiff, enquired about the whereabouts of the Certificate of Title.

(c) By reply email dated 21 October 2014, Medina advised that their client had collected the Certificate of Title "a while ago".

(d) On 20 August 2015, Mr Saad Hussein, an employee of Medina, provided a statutory declaration stating among other things:

(i) he believed on or about October 2013, a Mr Haled Adoula attended the offices of Medina and collected the Certificate of Title on behalf of Mr Haddara; and

(ii) he did not know, and believed that no other employee of Medina knew, the location of the Certificate of Title or the whereabouts of Mr Haddara.

(e) By email dated 24 August 2015 to Harris Carlson Lawyers, the plaintiff's current solicitors, Mr Hussein provided the contact details held by Medina with respect to Mr Adoula.

(f) The plaintiff's current solicitors have attempted to contact Mr Adoula by using the contact details provided by Mr Hussein, a search of the White Pages website and a search of a person locator application called 'Info Track'. None of these searches have been successful in locating Mr Adoula.

(g) By letter dated 24 August 2015 to the plaintiff's current solicitors, ASIC confirmed that ARQA had been deregistered on 5 October 2014 and that all property owned by that company had vested in ASIC. The letter further stated that:

I note that the Commonwealth obtained an order forfeiting the Property under the Proceeds of Crime Act 2002 prior to the company's deregistration. ASIC has no objection to the Commonwealth taking any steps necessary to give effect to the order.

The letter also enclosed a statutory declaration by Ms Sarah Heke, an officer employed by ASIC, which stated that ASIC has never had possession of the Certificate of Title and has no knowledge of its whereabouts.

(h) On 11 February 2015 the Australian Government Solicitor attempted to contact the former sole director of ARQA, Mr Haddara, at his last known phone number without success.

(i) The plaintiff's current solicitors also made attempts to contact Mr Haddara at his last known phone number on 5 and 6 August 2015, again without success.

(j) On 6 August 2015, the plaintiff's current solicitors sent a letter to Mr Haddara, with respect to the whereabouts of the Certificate of Title, at the address of his former principal place of business and the address listed for ARQA on the company extract for Mr Haddara. The same letter was also sent to Mr Haddara at another former principal place of business listed for ARQA in the company extract. No response has been received to those letters.

(k) On 5 August 2015 the plaintiff's current solicitors spoke to Mr Victor Andreou who represented ARQA at the proceedings before the County Court on 20 May 2014. Mr Andreou stated that he understood that Mr Haddara was in Lebanon at the time of the forfeiture order and continues to remain there.

8 In the case of Marchesi v Registrar of Titles,[1] Ferguson J reviewed the authorities with respect to the principles to be applied in considering applications for relief under s 103(1) of the Transfer of Land Act 1958 consequent on the inability to produce a duplicate Certificate of Title. Her Honour noted that in Dotter v Evans,[2] Gillard J had adopted the 'last resort' approach. His Honour had expressed concern about the possible misuse of a second duplicate of title and had refused to make an order under s 103(1) until other avenues had been completely exhausted. Similarly in Casella v Casella,[3] McInerney J had refused to make an order under s 103(1) until all other avenues had been exhausted and, in particular, the defendant had been compelled under Court ordered oral examination to disclose the identity of his friend, who appeared to be holding the duplicate.

9 However, in Rizos v Rizos,[4] Lush J distinguished Dotter and Casella on the basis that, in those cases, the duplicate certificates were not missing; but rather the party in possession was refusing to produce them. Further, to reduce the risk of misuse of the second duplicate, Lush J adopted the mechanism of directing the Registrar to register the transfer of the half interest without production of the duplicate title and to issue a new Certificate of Title and duplicate in place of the old title.

10 This technique was later adopted by Gillard J in Marshall v Evans,[5] as was explained by Ferguson J in Marchesi as follows:

In my opinion, the reasoning in Dotter v Evans and Casella v Casella must be read and understood in light of the later remarks of Gillard J in Marshall v Evans. It is clear that the rationale for the last resort approach in the two earlier cases was the concern of both McInerney and Gillard JJ that if there were two duplicate certificates of title for the same land in existence then this would fly in the face of the Torrens system encapsulated in the Transfer of Land Act. Of particular concern to their Honours was the risk that a second duplicate certificate of title might make it easier for fraud or other improper dealings with the land to be effected. Once a solution to this problem was identified (by cancellation of the existing title and the issue of a fresh title such that two duplicates for the one piece of land would not exist) Gillard J was less concerned about making orders under s 103(1) of the Transfer of Land Act 1958 (Vic). Whilst caution must be taken in making such orders, I do not think that it is necessary to exhaust every other avenue if doing so would not serve any practical purpose but rather would only serve to delay an inevitable application under the section at a later time. However, if there are other practical steps that can be taken that are likely to result in the production of the title without the need for orders under s 103(1) being made, then that route should be pursued in the first instance. An example of such a situation is Oxley v Boon. It is clear from the judgment in that case that the question of ownership of the property was the primary issue and the entitlement to a transfer and the certificate of title was not known until that issue had been determined. In those circumstances, the orders for delivery of a transfer of the property and the certificate of title served a practical purpose before the making of any orders under s 103(1).[6]

11 Accordingly, Ferguson J adopted a less strict approach to such applications and I summarise her Honour's conclusions as follows:

(a) The powers under s 103(1) of the Transfer of Land Act 1958 should be exercised with caution.

(b) If there are any practical steps that could be taken that would have a real prospect of resulting in the production of a Certificate of Title without the need for orders under s 103(1), those steps should be taken.

(c) It is not necessary to take steps to exhaust every other avenue, if such steps have no real prospect of success; and would only serve to delay the inevitable application under s 103(1) at a later time.

12 In my opinion there are no further practical steps that could be taken in this case that would have a real prospect of resulting in production of the Certificate of Title because it appears that the only person who is likely to have any knowledge of the whereabouts of the Certificate of Title is outside Australia.

13 Accordingly, I am prepared to make orders adopting the mechanism adopted by Lush J in Rizos and Ferguson J in Marchesi of cancelling the existing registration to reduce the risk of misuse of the cancelled Certificate of Title. I have been assisted by Mr Jerome Collopy who attended on behalf of the defendant for the purpose of formulating orders which are appropriate for the modern procedures in the Land Victoria, which involves electronic registration and only one Certificate of Title.

14 In formulating the directions under s 103(1), I have had regard to the following provisions of the Transfer of Land Act 1958:

(a) Sections 27(4), (5) and (9)

(4) The Register consists of folios of the Register.

(5) A folio of the Register is a division of the Register that relates to one or more parcels of land.

...

(9) The Registrar may create, amend or cancel a folio of the Register where the Registrar thinks it appropriate to do so.

(b) Section 27A(2)

(2) Other information required or authorised by or under this Act or any other Act to be recorded in the Register is recorded in the Register by -

(a) recording that information in an appropriate part of the Register; or

(b) altering an existing recording so as to comprise or include that information.

(c) Section 27B(6) and (7)

(6) The Registrar must deliver each certificate of title produced under this section to the person entitled to it.

(7) Subject to subsections (7A) and (7B), on -

(a) the creation of a folio of the Register; or

(b) the registration of an instrument under this Act, other than an instrument that is not required to be recorded on the certificate of title; or

(c) being required by or under this Act or any other Act to do so -

the Registrar must produce a certificate of title for that folio.

(d) Section 106(1)

(1) The Registrar -

...

(c) if it is proved to his satisfaction that any encumbrance recorded in the Register has been fully satisfied extinguished or otherwise determined and no longer affects the land, may make a recording to that effect in the Register[.]

15 Pursuant to s 103(1) of the Transfer of Land Act 1958, I will direct the defendant to:

(a) cancel the folio of the register for the Property;

(b) create a new folio of the register for the Property;

(c) remove the restraining order instrument AK684488N from the new folio;

(d) record the Commonwealth of Australia as the registered proprietor of the Property in the new folio; and

(e) produce a Certificate of Title for the new folio and deliver it to the Commonwealth of Australia as the person entitled to it.

[1] (2010) 30 VR 397 ('Marchesi').

[3] [1969] VicRp 8; [1969] VR 49.

[4] [1970] VicRp 19; [1970] VR 150 ('Rizos').

[5] [1974] VicRp 70; [1974] VR 592.

[6] (2010) 30 VR 397, [19] (citations omitted).