Arrunada Seminar: Rod Thomas – Developing a Credible Automated System for Agency Registration under a “Registration of Rights” Model
| Rod Thomas |
Developing a Credible Automated System for Agency Registration under a “Registration of Rights” Model
In his book, Arruñada rehearses the debate between mere recordation of deeds versus registration of rights. Under the “registration of rights” model, the registration event may be backed by a State guarantee of ownership, as is the case under a Torrens system. Under such a system, the need for a credible automated system is paramount. This is because the registration event is normally conclusive as to title rights, even in the face of third party ineptness or fraud in undertaking the registration. By way of example, in Torrens systems, the transaction, once completed, can conventionally only be overturned where the transferee is found to have been fraudulent in obtaining the registered title interest even if the dealing is void at law.
Under a registration of rights model there is a heightened sense of vulnerability where the registration even is undertaken by an agent. This is because the agent and not the transferee may have been either fraudulent or inept in undertaking the transaction. An example of such a system in operation is the Landonline System, as it presently exists in New Zealand, where only agency registration is possible.
Arruñada also argues that for a registration system to be successful, it needs to be both cost effective and accessible. Consequently a tension arises under a registration of rights model, operated by agency registration. On the one hand effective measures need to be put in place to protect consumers from inept or fraudulent transactions. On the other hand, a system which is overly complex, or expensive to operate, is unlikely to be successful.
Such concerns may be less pressing in countries where digitalised signatures already play a key role in authorising transactions. In those jurisdictions it appears to be a relatively straightforward procedure to incorporate the need for the existing interest holder’s digitalised signature before a transaction can occur. What however of jurisdictions such as the United Kingdom, Australia or New Zealand where digitalised signatures are not in ready use and agency registration is common?
Various possibilities come to mind for these other jurisdictions. One may be imposing a system where each dealing must first be authorised by a private PIN number known only to the existing land interest holder. This however may be cumbersome to operate and regulate. Also, PIN number may not be securely kept, so abuses could still occur. Another possibility may be to incorporate “flags” into the automated system, so the interest holder is notified of any proposed dealing with his or her interest, and can therefore block the proposed registration before it occurs.
The question therefore needs to be asked; “what possibilities exist under a registration of rights model (in the absence of electronic signatures) for setting up a safe and cost effective automated system, operated by agency registration?”
Rod Thomas. Senior Lecturer in Law, Auckland University of Technology, New Zealand