12 March 1991 - Current
TRANSFER OF LAND AMENDMENT BILL 2014
21 August 2014
|COUNCIL||Statement of Compatibility||GUY|
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.
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
Statement of compatibility
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
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).