Hansard debates

                      TRANSFER OF LAND AMENDMENT BILL 2014
                         Introduction and first reading
Received from Assembly.
Read first time for

 Hon. M. J. GUY (Minister for Planning) on motion  of Hon. G.
K. Rich-Phillips; by leave, ordered to be read second time forthwith.
Statement of compatibility
For

 Hon. M. J. GUY  (Minister  for  Planning),  Hon.  G. K. Rich-Phillips tabled
following   statement   in  accordance  with  Charter  of   Human   Rights   and
Responsibilities Act 2006:

  In  accordance   with  section  28  of   the  Charter  of   Human  Rights  and
  Responsibilities   Act   2006  (charter  act),  I  make  this   statement   of
  compatibility with respect to the Transfer of Land Amendment Bill 2014.
  In my opinion,  the  Transfer  of  Land  Amendment  Bill  2014  (the bill), as
  introduced to the  Legislative  Council, is compatible  with the human  rights
  protected by  the charter  act. I base my opinion on the  reasons outlined  in
  this statement.
  Overview of bill
  The proposed bill will:

(a) facilitate efficiencies in the conveyancing  process by enabling the phasing
        out  of  paper  certificates  of title  and  the  adoption of  the  same
        requirements for paper conveyancing as electronic conveyancing;
(b) facilitate  nationally  consistent conveyancing  practices  by enabling  the
        registrar  of titles to  establish requirements  for  paper conveyancing
        which,  as far  as  practicable, are  consistent  with  those  of  other
        jurisdictions;
(c)  improve the efficiency  and  equity of  the  compensation scheme under  the
        Transfer of Land Act 1958 and improve  stakeholder understanding of when
        the state is liable to pay compensation for mortgage fraud; and
(d) make several minor  changes  to the Transfer of  Land  Act 1958 so  that  it
        operates more effectively.

  Human rights issues
  Privacy
  Section 13 of the charter act provides that a person has the right not to have
  his or her privacy unlawfully or arbitrarily interfered with.
  A primary purpose of the Transfer of Land Amendment Bill 2014 is to enable the
  registrar  of titles to establish requirements  for  paper  conveyancing  that
  those engaging  in  paper  conveyancing must follow (for example, requirements
  for entering into client authorisation  agreements  with clients and verifying
  the identity of parties). It is intended that, as far  as  practicable,  these
  requirements will be consistent with 

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 those already  in place for  electronic  conveyancing and with  those  of other
jurisdictions.
  Personal  information, such  as  names and  addresses,  will  be  included  in
  documents lodged for registration using the  requirements  determined  by  the
  registrar. Section 114 of the Transfer of  Land  Act  1958  provides  that the
  general public can access the information and documents registered or recorded
  in the register.
  Given that information of the type which will be recorded in documents  lodged
  using the requirements is already publicly available, there is  unlikely to be
  any  expectation  of  privacy  regarding this  information.  Additionally, the
  Transfer  of Land Act  1958 contains provisions which  regulate the collection
  and dissemination of information and documents.

  For  example,  section  104(1) of the Transfer of Land Act 1958  empowers  the
  registrar to require any person to submit documents or give any information or
  comply  with any requisition  relating to any  land. Consequently, creating  a
  power for the registrar of  titles to determine  requirements for conveyancing
  is not an unlawful or arbitrary interference with the right to privacy.
  One  of  the  matters  to be included in the requirements  determined  by  the
  registrar  will  be  the  steps  that  conveyancers,  lawyers   and  financial
  institutions  preparing  conveyancing  instruments  must  take to  verify  the
  identity of their clients or the parties they are dealing  with. The registrar
  will  also  issue   requirements  requiring  persons  undertaking  their   own
  conveyancing  (i.e., without engaging  a conveyancer or  lawyer) to have their
  identity  verified  by  an  authorised  identity  verification service  before
  lodging instruments with the registrar.

  Verifying the identity of persons will involve the provision of documents such
  as  drivers  licences  and  passports which will disclose personal information
  such as names, addresses, and dates of birth. Verifiers of identity  will need
  to keep copies of  the documents  used to  verify identity  for a certain time
  period.
  The  verification of  identity  requirements will  affect persons  voluntarily
  choosing to engage  in conveyancing transactions and the duty to  provide this
  information is consistent with the reasonable expectations of  persons engaged
  in lodging transactions affecting assets with a large monetary value within  a
  regulated   scheme.  In   most  cases  financial   institutions,  lawyers  and
  conveyancers are already bound to comply with privacy laws. For those that are
  not, they are now required to comply with these laws as part of the electronic
  conveyancing legal framework.

  Additionally,   the  requirements  will  protect  consumers  by  reducing  the
  potential for  fraudulent  transactions obtained  by  a  person  impersonating
  another person. For these reasons, in my view the power to set verification of
  identity requirements does not limit the right to privacy.
  Consequently, in my view, these provisions do not  limit  section  13  of  the
  charter act.
  Property
  Section 20  of the charter act provides  that a person must not be deprived of
  his or her property other than in accordance with law.

  Section 40 of the Transfer of Land Act 1958 provides  that instruments are not
  effectual  to create,  vary,  extinguish or pass  any  estate or  interest  or
  encumbrance in, on  or over  any land  until registered. It is possible that a
  person who refused  to  follow the requirements  established by the  registrar
  could  not  acquire and/or  dispose  of property as  the  registrar would  not
  register  an  instrument  where  the  registrar's  requirements had  not  been
  followed (e.g. because  identity had not  been verified). Therefore the  power
  for  the registrar to set requirements could impact upon a person's ability to
  dispose of his or her property or a person's ability to acquire new property.
  However, refusing registration  of itself does not result in a  deprivation of
  property rights, but rather ensures the integrity of the register.

  The requirements  that  the registrar  will  set relate  to  enforcing prudent
  conveyancing practice (for example, assuring that the  identity of parties  to
  the transaction and their right to deal in  the  land  has  been appropriately
  verified).  The duty  to  abide  by the  requirements  is consistent with  the
  reasonable expectations of  persons engaged in lodging transactions  affecting
  assets with  a large monetary  value within a regulated  scheme. Additionally,
  the requirements will protect  consumers, in that  they  will serve to  ensure
  that  participants in paper  conveyancing  operate as intended  and reduce the
  potential for fraudulent transactions  being obtained by persons impersonating
  another person or without the appropriate authorisation of the person engaging
  in a conveyancing transaction.
  Consequently,  in my view, these provisions do not limit  section  20  of  the
  charter act.

  The bill also inserts provisions providing that:
    a mortgage is void for the purposes of the Transfer of Land Act 1958  if the
    mortgage  is  fraudulent and the  mortgagee  did not  adequately  verify the
    identity of the mortgagor; or
    if the mortgagee  did adequately verify identity  but the mortgage was still
    fraudulent, the rate of  interest due on the fraudulent mortgage is  limited
    to the bank-accepted bills rate.
  These  provisions  will  remove property  rights  from  mortgagees  (generally
  financial  institutions)  as  they will on the one  hand  no  longer  have  an
  indefeasible interest in the  land  (the mortgage) and on the other be limited
  in what they can recoup when using the land as security.

  However, this removal  of property rights will only occur in  situations where
  the  mortgagee has entered  into  a fraudulent  mortgage  and  failed to  take
  reasonable  steps to  identify  the registered proprietor  or  entered into  a
  fraudulent mortgage  with interest rates  in excess of normal  market interest
  rates. These provisions  will enhance the  property  rights of the  legitimate
  owners  of a  property  by  reducing their  exposure  in  situations  where  a
  fraudulent  mortgage has been registered against  their property. Furthermore,
  these provisions do not impact on the ability of a  mortgagee to  pursue legal
  action against the fraudster.
  Consequently, in my view, these  provisions  do  not  limit  section 20 of the
  charter act.

  The  bill also inserts a provision removing the requirement to lodge with  the
  registrar a mortgagee's  consent to an instrument and instead provide  that an
  instrument is not binding on a mortgagee if the mortgagee  did not  consent to
  it.  This  provision  will  facilitate  administrative   efficiencies  in  the
  operation of the register but will not adversely impact on the 

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 property rights of mortgagees.  If  a mortgagee  exercises  its  power of  sale
(following default by the mortgagor), it will be able to have any instruments it
did not consent to  remove from the register.  It  could be said that  a  person
benefiting from an instrument  has their property rights affected in this  case.
However, they will be asked  to  provide evidence that the requisite consent was
provided before the encumbrance is removed. There  is  no  change to the current
requirement that  the  benefiting party satisfy  itself  as to  the  mortgagee's
consent.
  Consequently, in my view,  this  provision  does  not  limit section 20 of the
  charter act.
  Matthew Guy, MLC
 Minister for Planning

                      TRANSFER OF LAND AMENDMENT BILL 2014
                                 Second reading
Ordered that second-reading  speech be incorporated  into Hansard on  motion  of
Hon. G. K. RICH-PHILLIPS (Assistant Treasurer).