Abstract
This paper commences by explaining the nature and origins of title insurance. It then examines the potential for title insurance to cover the residual risks of the Torrens System, focussing on four problem areas: first, the lack of security and indemnity for purchasers of interests in registered land in the pre-registration period; secondly, the lack of security and indemnity for losses resulting from the existence of overriding interests not shown on the register; thirdly, fault-based exclusion or reduction of indemnity in some jurisdictions; and fourthly, the costs and procedural hurdles in accessing indemnity payments from the Torrens assurance funds. The paper concludes with an assessment of possible impacts of the title insurance industry on the administration of the Torrens System.
Highlights
In 1989 the New South Wales and Victorian Law Reform Commissions issued a joint discussion paper and an issues paper for a review of ‘the extent of the State guarantee of Torrens titles and the manner in which it is provided’.2 The issues paper indicated that the two Commissions proposed jointly to consider, inter alia, ‘whether private title insurance could be substituted for the existing State guarantee of Torrens titles’,3 and whether it could complement the existing statutory Torrens indemnity schemes.[4]
There was at the time no private title insurer in Australia to put submissions for the industry, and no standard title insurance product on the Australian market for the Commission to cost and evaluate.[6]
In its Issues Paper and Discussion Paper, the New South Wales Commission suggested that there was a case for abolishing the indemnity: ibid and New South Wales Law Reform Commission, Issues Paper No
Summary
The New South Wales Commission suggested that there was a case for abolishing the indemnity: ibid and New South Wales Law Reform Commission, Issues Paper No. According to Willett, the objective existence of risk associated with an activity gives rise to subjective uncertainty, a disagreeable state of mind which deters risk-averse people from engaging in the activity.[122] Purchasers respond to uncertainty about title outcomes by investigating the title, which increases transaction costs and delays in completing land transfers. It was to overcome such notorious difficulties under the old conveyancing law that the Torrens System was introduced by 19th century reformers. While the indemnity provisions of the Torrens statutes vary, in all jurisdictions the right to indemnity from the fund is subject to exclusions and restrictions, and the enforcement of rights to indemnity is subject to procedural difficulties
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