Transfer of Land Amendment Bill 2014
Introduction Print
EXPLANATORY MEMORANDUM
General
The Bill will—

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;

facilitate nationally consistent conveyancing practices by
enabling the Registrar of Titles ("the Registrar") to establish
requirements for conveyancing which, as far as practicable, are
consistent with those of other jurisdictions;

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

make several minor changes to the Transfer of Land Act 1958
so that it operates more effectively.
The Bill will amend the Transfer of Land Act 1958 to—
571492

give the Registrar the power to decide whether to issue a paper
certificate of title;

give the Registrar the power to cease issuing paper certificates
of title and to declare that those issued have no effect from a
specified date;

amend the provisions relating to the power of the Registrar to
determine verification of identity requirements in order to
provide clarity to stakeholders;
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BILL LA INTRODUCTION 5/8/2014

give the Registrar the power to set client authorisation and
certification requirements for paper conveyancing transactions
and any other amendments necessary to align paper and
electronic processes and provide that the Registrar may require
a certification in place of any evidence otherwise required to be
presented to the Registrar;

introduce Priority Notices;

streamline the processes relating to mortgages;

remove the requirement for a mortgagee's consent to an
instrument to be lodged with the Registrar and instead, provide
that an instrument is not binding on a mortgagee if the
mortgagee did not consent to it;

provide that a mortgage, variation of mortgage or transfer of
mortgage, will be void if reasonable steps were not taken to
verify the identity of the mortgagor;

provide that the rate of interest due on a fraudulent mortgage
will be limited to a rate that represents reasonable borrowing
costs;

give the Registrar the power to require that certain types of
instruments be lodged electronically;

give the Registrar the power to determine who can lodge
certain types of instruments;

make amendments to facilitate electronic processes; and

make miscellaneous minor amendments.
Clause Notes
Clause 1
sets out the main purpose of the Bill.
Clause 2
provides that the Bill comes into operation the day after the Bill
receives the Royal Assent.
Clause 3
amends section 4 (1) of the Transfer of Land Act 1958 to insert
definitions of administrative notice, authorised representative,
client authorisation, conveyancing transaction, priority notice,
relevant person and subscriber.
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Clause 4
makes a number of amendments to section 27 of the Transfer of
Land Act 1958. Section 27 provides for the keeping of the
Register of land ("the Register") under the Transfer of Land Act
1958.
The clause removes the words "Subject to the regulations" in
section 27(2) of the Transfer of Land Act 1958 as this reference
is unnecessary and could cause confusion. It is understood that
no such regulations have ever existed or are likely to be needed.
However, the regulation making power in section 120 of the
Transfer of Land Act 1958 exists if regulations become
necessary.
The clause also replaces in section 27 of the Transfer of Land
Act 1958 the use of the terms "substitute" and "substitution" with
"cancel" and "cancellation". The change in terminology better
reflects how the Register is updated given the Register now exists
in electronic form rather than paper format. Obsolete folios are
now cancelled in the electronic Register using electronic
processes.
The clause also repeals section 27(10) of the Transfer of Land
Act 1958 as this subsection is now anachronistic as it relates to
processes associated with a paper Register.
The clause also inserts new section 27(11A) which allows the
Registrar to accept a certification on terms satisfactory to the
Registrar that a certificate of title was destroyed rather than
requiring production of the certificate of title.
Clause 5
removes the words "Subject to the regulations" in section 27A(3)
of the Transfer of Land Act 1958. Section 27A provides for the
making of recordings in the Register under the Transfer of Land
Act 1958.
The reference to regulations is unnecessary and could cause
confusion. It is understood that no such regulations have ever
existed or are likely to be needed. However, the regulation
making power in section 120 of the Transfer of Land Act 1958
exists if regulations become necessary.
Clause 6
repeals section 27AB(2) and (3) of the Transfer of Land Act
1958. These provisions relate to verification of identity
requirements and will be replaced with new provisions (see
clause 24).
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Clause 7
makes a number of amendments to section 27B of the Transfer
of Land Act 1958. Section 27B relates to certificates of title.
The clause removes the words "Subject to the regulations" in
sections 27B(3) and 27B(5) of the Transfer of Land Act 1958.
The reference to regulations is unnecessary and could cause
confusion. It is understood that no such regulations have ever
existed or are likely to be needed. However, the regulation
making power in section 120 of the Transfer of Land Act 1958
exists if regulations become necessary.
The clause also repeals section 27B(4) of the Transfer of Land
Act 1958 which relates to the format of certificates of title.
This section was introduced at a time when electronic documents
were in their infancy. Section 27B(4) is now redundant.
The clause also amends section 27B(7) of the Transfer of Land
Act 1958 which provides for the production of certificates of title
by the Registrar in specified situations to be subject to new
section 27B(7B) in the Transfer of Land Act 1958 in addition to
section 27B(7A).
The clause also substitutes a new section 27B(7B) in the
Transfer of Land Act 1958 for the existing section 27B(7B).
The current section 27B(7B) allows the Registrar to not issue a
certificate of title if the relevant parties consent and the Registrar
is satisfied that non-production is appropriate. The new section
27B(7B) enables the Registrar to not issue a certificate of title if
the Registrar considers it appropriate.
This new provision will facilitate the phasing out of certificates
of title. The introduction of new safeguards will facilitate the
removal of certificates of title which are not required in
electronic conveyancing.
The clause also inserts new sections 27B(7C) and 27B(7D) in the
Transfer of Land Act 1958. These new subsections enable a
person entitled to the production of a certificate of title
(for example, the registered first mortgagee or when there is
no mortgagee, the registered proprietor) to request a certificate
of title. This provision is intended to cover situations during the
transition period when paper certificates of title are being phased
out and can be used for some transactions but not others.
For example, a paper certificate of title may have ceased to exist
for a particular parcel of land but the registered proprietor wishes
it to be reissued to facilitate a non-electronic conveyancing
transaction. It is not intended that persons will be able to use this
new provision to request a paper certificate of title after the
Registrar has published a notice in the Victoria Government
Gazette declaring all certificates of title to be void (see clause 8).
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The clause also amends section 27B(10) of the Transfer of Land
Act 1958 to include obliteration of a certificate of title as grounds
for the Registrar excusing a person from providing a certificate of
title to the Registrar when the existing certificate of title is called
in for destruction. This will make section 27B(10) consistent
with section 31 of the Transfer of Land Act 1958 which deals
with the replacement of lost, damaged or obliterated certificates.
Clause 8
inserts new section 27BAA into the Transfer of Land Act 1958.
Section 27BAA provides that the Registrar may, by notice
published in the Victoria Government Gazette, declare
certificates of title or classes of certificates of title to be void and
of no effect from a specified date.
This new provision will facilitate the phasing out of certificates
of title by giving the Registrar a discretion to declare particular
certificates of title or classes of certificates void from a specified
date. For example, the Registrar could declare void all
certificates of title where the land is subject to a mortgage.
Clause 9
repeals section 27E of the Transfer of Land Act 1958.
Section 27E of the Transfer of Land Act 1958 is unnecessary as
it duplicates the content of section 104 of that Act. Section 104
will be further amended to clarify this (see clause 23).
Clause 10 repeals section 40(2) of the Transfer of Land Act 1958.
Section 40(1) of the Transfer of Land Act 1958 provides that
registration gives effect to instruments. Section 52(1) of the
Property Law Act 1958 provides that all conveyances of land
must be by deed. Instruments registered under the Transfer of
Land Act 1958 are usually not deeds. Section 40(2) of the
Transfer of Land Act 1958 deems a registered instrument to be
a deed. It is believed that section 40(2) was included to cure any
perceived defect in a registered instrument. However, as
section 40(1) provides that registration gives effect to the
instrument, it is considered that section 40(2) is unnecessary and
could cause confusion.
Clause 11 repeals section 66(2) of the Transfer of Land Act 1958.
Section 66(2) provides that a lease is not valid if a mortgagee's
consent has not been given to it. The content of section 66(2) is
being transferred to the new section 87C (see clause 17) and has
been expanded to cover easements and restrictive covenants.
Evidence of any mortgagee's consent is no longer required to be
provided to the Registrar.
5
Clause 12 repeals section 67A(2) of the Transfer of Land Act 1958.
Section 67A(2) provides that a variation of a lease is not valid if a
mortgagee's consent has not been given to it. The content of
section 67A(2) is being transferred to the new section 87C (see
clause 17) and has been expanded to cover easements and
restrictive covenants. Evidence of any mortgagee's consent is no
longer required to be provided to the Registrar.
Clause 13 omits from section 69(1) of the Transfer of Land Act 1958 the
requirement for a mortgagee's consent to the surrender of a lease.
The omitted content is being transferred to the new section 87C
(see clause 17) and has been expanded to cover easements and
restrictive covenants. Evidence of any mortgagee's consent is no
longer required to be provided to the Registrar.
Clause 14 makes a number of amendments to section 74 of the Transfer of
Land Act 1958. Section 74 provides for the creation of
mortgages and annuities under the Transfer of Land Act 1958.
The clause substitutes a new 74(1) for the existing 74(1).
The current 74(1) provides that a registered proprietor may
mortgage land or charge it with an annuity using an approved
form. The new 74(1) provides for the same using updated
language.
The clause also inserts a new section 74(1A) which allows the
Registrar to register a mortgage where the mortgagee has signed
the mortgage and certified that it holds a mortgage on the same
terms granted by the mortgagor.
The clause also inserts new sections 74(3), 74(4) and 74(5).
These new sections provide that when a mortgage is registered
under the new section 74(1A), the mortgagee must retain the
mortgage granted by the mortgagor. If the mortgage is not
retained, the mortgage is void. New section 74(5) provides that if
any mortgage is found to be void or unenforceable, the
mortgagee must discharge the mortgage as soon as practicable.
The changes to section 74 will enable financial institutions to
seek to have a mortgage registered under the Transfer of Land
Act 1958 without having to supply the Registrar a copy of the
mortgage granted by the mortgagor.
This aligns the processes for electronic and paper mortgages.
A financial institution may not know at the outset whether a
transaction will be completed in paper or electronically and it is
more efficient for financial institutions if the same processes
apply for both mediums. This will also enable financial
6
institutions to explore different methods by which a mortgagor
can grant a mortgage (for example, electronic means).
Clause 15 repeals paragraphs (a) and (b) from section 77(4) of the Transfer
of Land Act 1958. Section 77 relates to the power of
mortgagees or annuitants to sell the land secured by a mortgage
or charge following a default.
The wording to be deleted relates to the process of determining
whether an encumbrance is binding on a mortgagee or annuitant.
It is often difficult to make this assessment. This current process
has therefore been replaced by one providing greater clarity for
all parties (see new sections 88A and 88B in clause 19).
Clause 16 amends section 86 of the Transfer of Land Act 1958.
Section 86 currently requires a first mortgagee to provide a
certificate of title when it is required for the registration of a
subsequent instrument.
The clause substitutes a new heading for section 86 which
clarifies that a "title" in this context references a certificate of
title.
The clause amends section 86 to cover situations when no
certificate of title exists. In such situations the first mortgagee
must instead provide an administrative notice to the Registrar if
an administrative notice is required by the Registrar.
The amendments to section 86 will facilitate the phasing out of
certificates of title.
Clause 17 inserts new sections 87A, 87B, 87C, 87D and 87E in the
Transfer of Land Act 1958.
New section 87A(1) provides that a mortgagee must take
reasonable steps to verify the authority and identity of a
mortgagor before the execution of a mortgage or variation of
mortgage.
New section 87A(2) also provides that the mortgagee is
considered to have taken reasonable steps if the mortgagee
verified the authority and identity of the mortgagor in accordance
with the requirements determined by the Registrar. A mortgagee
can either follow the standards set by the Registrar or verify the
authority and identity of the mortgagor in some other way that
constitutes reasonable steps.
7
New section 87A(3) also provides that if the Registrar is satisfied
that a mortgagee did not take reasonable steps to verify authority
and identity and the registered proprietor did not grant the
mortgage, then the Registrar may remove the mortgage from the
Register (or refuse to register the mortgage if the mortgage is not
yet registered). The mortgage will then be void. The same
applies to a variation of mortgage.
New section 87B(1) requires that when a mortgage is being
transferred, the transferee mortgagee must either take reasonable
steps to—

confirm that the original mortgagee took reasonable
steps to verify the authority and identity of the
mortgagor; or

themselves verify the authority and identity of the
mortgagor.
New section 87B(2) provides that the transferee mortgagee is
considered to have taken reasonable steps if the requirements
determined by the Registrar have been complied with or the
transferee mortgagee confirms that the original mortgagee took
steps consistent with the Registrar's requirements. A mortgagee
can either follow the standards set by the Registrar or verify the
authority and identity of the mortgagor in some other way that
constitutes reasonable steps.
New section 87B also provides that if the Registrar is satisfied
that a transferee mortgagee did not take reasonable steps to verify
authority and identity and the registered proprietor did not grant
the mortgage then the Registrar may remove the transfer of
mortgage and original mortgage from the Register (or refuse to
register the transfer of mortgage if the transfer is not yet
registered and remove the original mortgage). The mortgage will
then be void.
New sections 87A and 87B are designed to address the situations
where mortgagees do not confirm they are dealing with the
registered proprietor. Currently, this poor business practice is
effectively underwritten by the State once the mortgage is
registered. This is because the registered proprietor can be
required to pay to secure a discharge of the fraudulent mortgage.
The registered proprietor then generally requests an indemnity
from the State. The State operates a compensation scheme for
persons who experience loss as a result of a number of matters
including an amendment to the Register (for example, the
registration of a fraudulent mortgage).
8
It is not appropriate that registered proprietors (and ultimately the
State) should be expected to reimburse mortgagees for fraudulent
mortgages when the mortgagee failed to properly verify the
authority and identity of the person they were transacting with.
When these requirements are not complied with, and the
mortgage has not been granted by the registered proprietor, the
mortgagee will lose the benefit of the mortgage and the Registrar
will remove the mortgage from the Register. This will mean the
registered proprietor will not have to pay for a discharge of
mortgage and thus will not need to claim compensation from the
State.
New section 87C provides that where land is mortgaged or
charged—

the creation, variation or surrender of a lease; or

the creation or variation of an easement or restrictive
covenant;
is not binding against a mortgagee or annuitant unless the
mortgagee or annuitant consented in writing.
New section 87D will apply to a registered proprietor of land
when—

a fraudulent mortgage has been registered; and

the registered proprietor is not a party to the fraud; and

the registered proprietor is entitled to be indemnified
under the Transfer of Land Act 1958 because of the
fraud.
Section 87D provides that in such instances, the maximum
amount payable to the mortgagee by a registered proprietor for a
discharge of the mortgage must not exceed the amount payable to
the registered proprietor under new section 110(4)(c) (see
clause 25).
While new sections 87A and 87B will provide that a fraudulent
mortgage will be void if the mortgagee did not adequately verify
authority and identity, there may still be fraudulent mortgages
that remain registered (for example, because the mortgagee did
take reasonable steps to verify identity but the person who
committed the fraud used high quality forged identity documents
that went undetected).
9
New section 87E will apply when—

a fraudulent mortgage has been registered against land
and the registered proprietor is not a party to the fraud;
and

the registered proprietor is entitled to be indemnified
under the Act because of the fraud; and

the land has been sold under a mortgage or charge in
accordance with section 77 of the Transfer of Land
Act 1958.
Mortgagees and annuitants are currently entitled to exercise a
power of sale over mortgaged or charged land if the mortgage or
charge is in default.
New section 87E provides that the money payable to the
mortgagee from the proceeds of the sale must not exceed the
amount that would be payable to the registered proprietor under
new section 110(4)(c) (see clause 25).
Clause 18 omits from sections 88(1)(a) and 88(1AC)(d) of the Transfer of
Land Act 1958 the requirement for mortgagees to be a party to
the creation or removal or variation of a restrictive covenant.
Instead new section 88B (see clause 19) will apply.
This change will simplify the requirements for the recording of
restrictive covenants.
Clause 19 inserts a new Division 11 made up of new sections 88A and 88B
in Part IV of the Transfer of Land Act 1958.
New Section 88A provides that a mortgagee, in relation to land
mortgaged to the mortgagee, may apply to the Registrar of Titles
to—

remove a lease;

remove a variation of a lease;

reinstate a lease;
if the mortgagee did not consent to the action that was
undertaken.
10
New section 88B provides that a mortgagee, in relation to land
mortgaged to the mortgagee, may apply to the Registrar of Titles
to—

remove an easement or restrictive covenant;

remove a variation of an easement or restrictive
covenant;
if the mortgagee did not consent to the action that was
undertaken.
New sections 88A and 88B will only apply if the mortgaged land
is subject to sale by the mortgagee under section 77 of the
Transfer of Land Act 1958 (for example, because the mortgagor
is in default).
New sections 88A and 88B provide that the Registrar must give
notice to the party who benefited from the encumbrance, its
variation or removal, requiring the party to produce evidence of
the mortgagee's consent.
New sections 88A and 88B provide that the Registrar may grant
the mortgagee's application under section 88A or section 88B if
the Registrar is not provided with evidence of the mortgagee's
consent.
New sections 88A and 88B also apply to annuitants.
New sections 88A and 88B are designed to protect the interests
of mortgagees and annuitants.
Clause 20 amends section 91(2A) of the Transfer of Land Act 1958 to
provide clarity as to which caveats are automatically lapsed when
a transfer by a mortgagee is registered. This is because it is
difficult to establish if a caveat is binding on a mortgagee.
Clause 21 inserts a new Division 1B in Part V of the Transfer of Land Act
1958 consisting of new sections 91C, 91D, 91E, 91F, 91G, 91H,
91I and 91J.
These new sections facilitate the introduction of priority notices.
A priority notice is a notification of intended dealings with land,
which can be lodged with the Registrar by a person transacting
with the registered proprietor, or a person entitled to deal with the
land. Once recorded, a priority notice (while active) will prevent
the registration of most other dealings with the subject land.
11
An example of when a priority notice may be used is when a
seller has agreed to sell a property to a buyer with settlement to
occur on a future specified date. The conveyancer or lawyer
representing the buyer may lodge a priority notice with the
Registrar to protect the priority of the buyer's transfer.
The objectives for introducing priority notices include—

protecting the interest of parties to an intended
instrument or transaction from the time the priority
notice is lodged until lodgement of that instrument or
transaction;

alerting interested parties who search the Register to the
fact that an intended instrument or transaction is
pending; and

assisting in fraud prevention because details of an
intended instrument or transaction will appear on a
search of the Register and thus increase the likelihood
of a fraud being detected.
Any instrument can be the subject of a priority notice. The use of
priority notices will be optional. Priority notices will be recorded
in the Register. Priority notices will be searchable.
New section 91C provides that priority notices will be effective
for 60 days from the date of lodgement. During this period the
priority notice will prevent registration, but not lodgement, of
most other types of instrument affecting an estate or interest in
the land. A priority notice will not affect the processing of an
instrument lodged but unregistered or unrecorded before the
lodgement of a priority notice.
New section 91D provides that a priority notice must be in the
approved form and priority notices can only be lodged
electronically using an electronic lodgement network.
Priority notices will be lodged electronically whether the subject
instrument or transaction is to be lodged in paper or
electronically. It is anticipated that most, if not all,
conveyancers, lawyers and financial institutions will become
subscribers to a national electronic lodgement network.
For those who do not, and for members of the public, the option
of lodging caveats will continue to be available.
12
New section 91D provides that a priority notice is sufficient
evidence that the person lodging it is entitled to do so.
Supporting evidence is not required. The Registrar is not
required to serve notice of the lodgement of a priority notice on
any person, including the registered proprietor. It should be
noted that new section 91J provides that a person who lodges a
priority notice without reasonable cause may be liable to pay
compensation.
New section 91E provides that where a priority notice is in effect
and a subsequent instrument not the subject of the priority notice
is lodged, that instrument will remain unprocessed until the
priority notice no longer has effect. If at that stage the dealing
can no longer be registered, it will be rejected. If it can be
registered, it will be processed.
The lodgement of multiple priority notices over the same folio,
by the same or different subscribers, will be allowed.
Where multiple priority notices are lodged over the same folio
they will be dealt with in the order of lodgement.
New section 91F provides that instruments which can be
recorded (rather than registered) are not affected by a priority
notice and can be lodged and recorded at any time. Examples of
instruments that are recorded include caveats, warrants, statutory
charges and notifications.
New Section 91G provides that a priority notice will expire on
the registration or recording of the instruments that are the
subject of the priority notice, or 60 days after lodgement of the
priority notice, whichever is the sooner. A priority notice cannot
be extended. If more time is required, a subsequent priority
notice can be lodged. A priority notice can also be withdrawn at
any time (for example, because a change of circumstances means
the intended transaction will no longer be proceeding).
New section 91H provides that when a priority notice is in effect,
any instrument, or group of instruments relating to the same
transaction, lodged may not be recorded or registered unless the
instrument is consistent with the details of an instrument
specified in the priority notice. Amendments or corrections to
lodged priority notices will not be allowed. If necessary, the
priority notice can be withdrawn.
New Section 91I enables a person who is adversely affected by a
priority notice to bring court proceedings requesting the removal
of the priority notice. The Registrar will give effect to any court
order that the priority notice be removed from the Register.
13
New Section 91J enables a person who has sustained loss or
damage as a result of a priority notice being lodged without
reasonable cause to seek compensation.
Clause 22 inserts a new Division 2A into Part V of the Transfer of Land
Act 1958 (consisting of new sections 91K and 91L) and a new
Division 2B into that Part (consisting of new section 91M).
New Division 2A defines a client authorisation in the Transfer
of Land Act 1958 and outlines the effect of a client
authorisation.
For most conveyancing transactions, the sellers and buyers
engage a conveyancer or lawyer to represent them and prepare
and lodge documents on their behalf.
A client authorisation, in the context of conveyancing, is an
agreement between a seller or buyer ("client") and the
conveyancer or lawyer who will be undertaking the transaction
on behalf of the client.
New section 91K provides that a client authorisation is a
document in the form required by the Registrar by which a
vendor or purchaser authorises their conveyancer or lawyer to act
as their agent and perform actions in relation to effecting the
conveyancing transaction. These actions may include
authorising, signing and/or lodging instruments and other
documents and performing associated financial transactions on
the client's behalf.
New section 91L provides that a client authorisation has effect
according to its terms and is not a power of attorney.
New section 91L also provides that if a client authorisation is
properly completed, the requirements of any other law relating to
the authorisation of documents is regarded as having been
satisfied. New section 91L also provides that a client
authorisation is not subject to any Victorian legislation setting
requirements for powers of attorney unless the client
authorisation is executed under a power of attorney.
New section 106A (see clause 24) will empower the Registrar to
issue requirements for, among other things, the form of client
authorisations, the classes of instrument to which a client
authorisation applies, and supporting evidence and document
retention requirements relating to client authorisations.
14
New Division 2B sets out the rules for reliance on and
repudiation of signatures in relation to instruments and
documents. Generally, the presence of a signature on an
instrument (or other document) purporting to be the signature of
a person authorised to sign the instrument (or other document)
will mean the instrument (or other document) is deemed to have
been validly signed and thus binding on that person and any party
who has authorised the person to represent them. However, the
signature can be repudiated (and thus the relevant instrument or
other document) if the authorised person can demonstrate the
signature was not theirs (nor that of their employee, agent,
contractor or officer) and that they did not contribute to the false
signature by negligence.
New section 91M also states a signature on an instrument is
binding to the benefit of—

each of the parties to that conveyancing transaction; and

each authorised representative who acts under a client
authorisation with respect to that conveyancing
transaction; and

any person claiming through or under any person who is
a party to the conveyancing transaction; and

the Registrar, once the instrument or other document is
lodged.
Clause 23 amends section 104 of the Transfer of Land Act 1958.
Section 104 sets out powers of the Registrar to require the
production of documents.
The clause substitutes a new heading for section 104 which more
clearly states the content of section 104. The new heading will
provide greater clarity for stakeholders.
The clause also substitutes for "documents" in section 104(1)
"certificate of title, instrument, administrative notice or other
document". This will provide greater clarity to stakeholders over
which documents the Registrar can require to be produced.
The clause also inserts a new section 104(7) which provides that
the Registrar may require a certification in place of any evidence
under the Transfer of Land Act 1958 or any other Act.
15
A certification, in the context of conveyancing, is specific
wording by which a person certifies that certain actions have
taken place or that certain facts are correct. New section 106A
(see clause 24) will empower the Registrar to issue requirements
for, among other things, the form of certifications, who may
provide certifications and supporting evidence and document
retention requirements. The use of certifications, when permitted
by the Registrar, can reduce administrative costs to
conveyancers, lawyers and financial institutions.
Clause 24 inserts new section 106A into the Transfer of Land Act 1958.
New section 106A clarifies the ability of the Registrar of Titles to
determine requirements for paper conveyancing transactions.
The Registrar already has an explicit power to set requirements
for electronic conveyancing transactions.
The conveyancing process in Victoria can be accomplished by
either—

paper conveyancing; where the relevant documents are
in paper form and are physically lodged with the
Registrar; or

electronic conveyancing; where conveyancing is
accomplished by electronically submitting information
to the Registrar using an electronic lodgement network.
Currently, only a small percentage of conveyancing transactions
are accomplished electronically. This is expected to substantially
increase in the near future when national electronic conveyancing
becomes fully operational. However, a sizeable percentage of
conveyancing transactions will still be completed through paper
conveyancing for the foreseeable future.
The introduction of electronic conveyancing has resulted in
different practices and requirements for paper and electronic
conveyancing. The Registrar's preference is to have the same
requirements for paper and electronic conveyancing transactions
as far as practicable with minor adjustments as required given the
differences between paper and electronic conveyancing.
This will facilitate a smooth transition and efficiencies between
the two lodgement mediums. It will also avoid complexity and
costs to the conveyancing industry, in dealing with two different
processes and requirements.
New section 106A requires that the Registrar publish notice in
the Victoria Government Gazette of any of requirements
determined under section 106A.
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The matters that new section 106A provides can be the subject of
requirements determined by the Registrar include—

verification of authority and identity;

supporting document retention;

certifications;

client authorisations;

the classes of instruments that must be lodged using an
electronic lodgement network;

the classes of persons that may lodge specified classes
of instruments; and

the classes of mortgagees able to certify the matters
specified in new section 74(1A).
Clause 25 inserts a new paragraph (c) in section 110(4) of the Transfer of
Land Act 1958.
Section 110 of the Transfer of Land Act 1958 provides for the
State to indemnify persons who have suffered loss in certain
circumstances, including an amendment to the Register (for
example, the registration of a fraudulent mortgage).
Section 110(4) currently limits the amount payable by indemnity.
The clause amends section 110(4) to provide a further limitation
on the amount payable in relation to a fraudulent mortgage.
The amount is limited to the value of the principal plus interest as
calculated according to the Bank Accepted Bills rate as defined
in the Taxation (Interest on Overpayments) Act 1986.
The intention is that the Bank Accepted Bills rate will be a rate
that represents reasonable borrowing costs.
This means that when the interest rate on a fraudulent mortgage
exceeds the Bank Accepted Bills rate, the value of the excess
interest will not be indemnified. New section 87D (see
clause 17) provides that, in such instances, the maximum amount
payable to the mortgagee for a discharge of the mortgage must
not exceed the amount payable to the registered proprietor under
section 110(4)(c). The amount recoverable in a mortgagee sale is
similarly capped (see new section 87E).
The purpose of this provision is to avoid situations where the
State (via the indemnity provisions) is expected to pay for rates
of interest far exceeding normal market interest rates. The Bank
Accepted Bills rate generally approximates market interest rates.
17
Clause 26 provides for the repeal of the Bill on the first anniversary of the
first day on which all of its provisions are in operation.
The repeal of the Bill does not affect the continuing operation of
the amendments made by it (see section 15(1) of the
Interpretation of Legislation Act 1984).
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