Indefeasibility of title: law reform in Scotland and New Zealand

In Scotland and New Zealand the law of land registration has been the subject of recent legislative reform. In both cases this has involved a move towards protecting existing owners at the expense of purchasers in good faith. But whereas Scotland has introduced a system of deferred indefeasibility, New Zealand has persevered with a system of immediate indefeasibility tempered by a new discretion for the court to restore property to the original owner. This paper explores the issues which were at play in the reform process as well as the reasons for the different outcomes. Drawing on the work of Thomas Mapp it argues that: (i) the registration of an invalid instrument (or deed) leads inevitably to a defeasible title; (ii) while such defeasibility, once present on the register, can be reallocated by legislative means, it cannot be eliminated; (iii) immediate indefeasibility reallocates the defeasibility consequent on an invalid instrument from the purchaser of the property to the existing owner, the total amount of defeasibility on the register remaining the same; (iv) subject to qualifications, immediate indefeasibility protects against pre-registration error (ie error in the instrument being presented for registration) while deferred indefeasibility protects against post-registration error (ie error caused by the later registration of a rogue instrument granted without the knowledge of the owner); (v) the statistical probability of losing property is the same with both immediate and deferred indefeasibility so that titles under the one are just as secure, or insecure, as titles under the other; (vi) but the source of peril is different and, in the case of deferred indefeasibility, more easily detected dealt with. The paper goes on to examine the arguments for and against the different types of indefeasibility, but concludes that the choice made by legal systems may depend more on legal-cultural factors than on a careful weighing of relative advantage and disadvantage.