Assets Co Ltd v Mere Roihi

The judgment of their Lordships was delivered by

Lorp Linpury. The substantial question raised in each of
these three appeals is whether the Assets Company, Limited,
has acquired a good title as against the plaintiffs, who are
natives, to certain lands in New Zealand. The natives have
long been out of possession. The Assets Company is and has
been for many years not only in possession, but also registered
in the land registers of the Colony as owner of the lands in
dispute. The appeals arise out of actions brought in the
Supreme Court by a few natives to recover portions of land
which formerly belonged to them and many others. In form
the actions are not for recovery of possession, but for the
rectification of the register and for mesne profits. But whether

(1) (1899) 17 N. Z. L. R. 7738. (8) (1900) 20 N. Z. L. R. (C.A.) 288.
(2)F 899) 7 No Za Re ot. (9) (1878) 3 N. Z. Jur. (8.C.) 149 ;
(8) (1888) 6 N. Z. L. R. 760. affirmed on appeal (1879) 3 N. Z.
(4) (1890) 9 N. Z. L. R. 134. Li. R. (C.A.) 97.

(6)°6 NeZ ai Rel Oe. (10) (1885) 3 N. Z. L. R. 255.

(6) (1892) 10 N. Z. L. R. 677. (11) (1889-90) 8 N. Z. L. RB. (C.A.)
(7) 18 N. Z. L. R. 226. 338.

A.C. AND PRIVY COUNCIL.

the substance or the form of the actions is regarded, it is
obvious that it is for the plaintiffs to establish their claim, and
not for the Assets Company to prove their title as if they
were themselves plaintiffs out of possession.

The lands in question in the first appeal are known as
Waingaromia No. 3; those in question in the second appeal
as Waingaromia No.2; and those in question in the third
appeal as Rangatira No. 2.

The title of the Assets Company is derived historically
through one Cooper, who many years ago bought the lands in
question from the natives. The sales to him were carried out
in the Native Land Court. Orders and other documents
necessary to enable the Assets Company to be registered as
owner under the Land Transfer Acts were obtained, and the
Assets Company was registered accordingly as its titles were
completed. The company's title as registered owner is
impeached by the plaintiffs in all three cases on two grounds,
namely, first, that the registration of the company as owner
was procured by fraud; and, secondly, that such registration
was invalid by reason of the invalidity of the orders of the
Native Land Court on which warrants of the Governor, having
the effect of Crown grants, were issued, on which warrants
the registration was founded.

Before dealing with the facts relied upon for the purpose
of establishing these contentions, it will be convenient to
examine the statutes relating to the land registry, and to
ascertain the legal effect of registration, for if this effect is
what the Assets Company contends there is an end of the
natives' claim. The Assets Company contends that, in the
absence of fraud by the company or its agents, registration is
conclusive, and confers a good title on the company; and that
defects in the proceedings in the Native Land Court, even if
proved, cannot affect the title of the company, although such
defects may possibly entitle the natives to compensation for
any injury caused to them by improper registration. The
question thus raised is one of the greatest importance in the
Colony, and, unfortunately, there is a difference of opinion
upon it amongst the members of the Supreme Court.

A. C. 1905. 3 E

189

J.C.
1905

—~
ASSETS
ComPany,
LimitEp

Vv
Mere Roruy.

1$0

J.C.
1905

—~
ASSETS
ComPaANy,
LimITED

Vv.
Mere Rorut.

HOUSE OF LORDS {1905}

The system of land registry in New Zealand was introduced
in 1860; and from 1870 to 1885 it was governed by the Land
Transfer Act of 1870 and Acts amending it passed in 1871,
1874, 1880, and 1885, when it was repealed, but re-enacted
with amendments and additions.

The Act of 1870 was, shortly, to the following effect. In
every district there was a district land registrar (s. 7) whose
duty it was to examine into the title of every person applying
for registration, and if satisfied with the title he was to issue a
certificate of title and to register it (ss. 19, 23, and 37). His
certificate, duly authenticated under his hand and seal, was
made evidence in all Courts of Law and Equity (ss. 39 and
139) of the particulars therein set forth, and of their being
entered in the register book; and except in cases after provided
the certificate was conclusive evidence that the person named
in it was entitled to the land mentioned in it for the estate
or interest therein mentioned, and no certificate could be
impeached on the ground of want of notice or of insufficient
notice of the application to bring the land under the provisions
of the Act, or on account of any error, omission, or informality
in such application or in the proceedings pursuant thereto by
the district land registrar.

In connection with this enactment it is material to notice
that on registration the applicant's documents of title had to
be given up to the registrar to be cancelled and kept in the
office (ss. 22 and 28).

The excepted cases mentioned in the clause referred to above
were fraud, prior certificates or registered grants, omitted or
misdescribed easements, and errors in descriptions of parcels or
boundaries (ss. 46 and 129). There was, moreover, another
exception in favour of persons adversely in possession when the
land was brought under the provisions of the Act and continuing
up to the time of granting the certificate (s. 139).

As regards fraud, it was provided (s. 119) that, except in cases
of fraud, no person dealing with a registered proprietor need
inquire into the circumstances in, or the consideration for,
which he or any previous registered proprietor became registered,
nor see to the application of purchase-money, nor be affected

A. C. AND PRIVY COUNCIL.

with notice direct or constructive of any trust or unregistered
interest ; and knowledge of any such trust or interest was not
of itself to be imputed as fraud.

It was further provided (s. 129) that no action for possession
or other action for the recovery of any land should lie against
the registered proprietor for the estate or interest in respect of
which he was registered except in certain specified cases; and
except in these cases the production of a registered grant or
certificate was an absolute bar to any such action against the
registered proprietor, any rule of law or equity to the contrary
notwithstanding. The only excepted case which need be
mentioned was thus expressed: '' the case of a person deprived
of any land by fraud as against the person registered as pro-
prietor of sucb land through fraud, or as against a person
deriving otherwise than as a transferee bona fide for value from
or through a person so registered through fraud."

The other excepted cases above referred to do not require
further attention.

There was power (s. 19, sub-s. 4) to rectify the register, and
to state cases (s. 116) for the opinion of the Supreme Court.
The provisions relating to these matters were recast in the Act
of 1885, and may be passed over.

Light is thrown on the general scheme of the Act by the
provisions (ss. 35 and 130) relating to the Land Assurance Fund.
A schedule of charges to be paid by persons applying for registra-
tion is given at the end of the Act, and these charges form the
fund. Any person deprived of land in consequence of any fraud,
or through the bringing of such land under the provisions of the
Act or by the registration of any other person as proprietor, or
in consequence of any error, omission, or misdescription in any
certificate of title or in any entry or memorial in the register
book, might bring an action for damages against the person
upon whose application such land was brought under the pro-
visions of the Act or such erroneous registration was made, or
who acquired title through such fraud, error, omission, or mis-
description. This was qualified in certain cases of a transfer
to a bond fide purchaser for value by making the assurance

fund bear the damages sustained. This provision, taken in
3 IP

191

J.C.
1905

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ASSETS
Company,
LimitEep
Vv,
Mere Rotatr.

192

J.C.
1905

—~
ASSETS
ComMPaNny,
Limrep

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Mere Roast.

HOUSE OF LORDS ) [1905]

connection with those already referred to, went far to shew
that except in the excepted cases the registered certificate
was to be conclusive, and that the remedy of persons wrong-
fully deprived of their property was to obtain damages from
the wrong-doer.

So the matter stood under the Act of 1870.

The Act of 1871 (1) introduced a provisional register for deal-
ings with Crown lands before grants for them were obtained and
before certificates of title under the Act of 1870 could be issued.
The temporary receipts and memorials issued under this Act
were made evidence (s. 9); but it was enacted at the end of s. 9
that the estate or interest of a registered proprietor of land on
the provisional register should be indefeasible only against the
person named in the original receipt, and all persons claiming
through, under, or in trust for him. This shews pretty plainly
what the effect of being on the permanent register was
understood to be.

The Act of 1874 (2) provided for the registration of instru-
ments affecting land granted under the Native Land Acts, but
for which no Crown grant had been issued. The machinery of
the provisional registry was made applicable to these cases ;
but otherwise the Act is not important.

The Act of 1880 (8) merely extended the Act of 1870 to some
cases to which that Act did not originally apply.

The Land Transfer Act of 1885 consolidated and amended
the previous Acts, and although it was not in force when
the property in dispute was being dealt with in the Native
Land Court, it was in operation when the Assets Company
was registered as owner. The system of registration already
described was continued, but some important provisions were
added, and many of the clauses in the previous Acts were
revised and altered. The following are those sections which
are important on the present occasion.

Sect. 10 describes the land subject to the provisions of the
Act. It includes—

'All land which has already in any manner become subject

(1) Land Transfer Act, 1871, ss. 8, 12. (2) Land Transfer Act, 1874.
(3) Land Transfer Act, 1880, ss. 7, 9.

A. C. AND PRIVY COUNCIL.

to the provisions of the Land Transfer Act, 1870, or any Act
amending the same, or of the Land Registry Act, 1860."

" All land hereafter alienated, or contracted to be alienated,
from the Crown in fee."

"All land in respect of which any order shall hereafter be
made under the provisions of any Native Land Act in force for
the time being which shall have the effect of vesting such land
in any person in freehold tenure."'

All the lands in dispute in these appeals appear to their
Lordships clearly to come within this s. 10. The certificates
of title issued under the Act of 1870, s. 33, and the issue of the
Governor's warrants make this point plain.

Sect. 12 makes a certificate of title issued on the Governor's
warrant equivalent to a Crown grant, and s. 13 makes the
warrant conclusive evidence to the registrar of the matters
required to be stated therein.

The mode of applying for certificates of title (ss. 17 et seq.
and Sched. II., and ss. 19 and 28) is much the same as before ;
and the old title-deeds are to be delivered up and cancelled as
before. The sections relating to this subject, and the forms in
Sched. II., strongly confirm the view that the lands in dispute
come within s. 10.

The old provisions respecting the register and the duty to
keep it are reproduced (ss. 31, 35, and 36), and a certificate of
registration is conclusive evidence of registration. No instru-
ment not registered is effectual to pass any estate or interest in
land under the provisions of the Act, but upon the registration
of any instrument in manner described the estate or interest
specified in such instrument shall pass according to its terms.

The old enactments relating to provisional registration are
consolidated (ss. 42, 48, and 44), and provision is made for
transferring to the register the memorials and entries on the
provisional register as soon as they are finally completed.

Sect. 45 enacts that, subject to any special provisions in the
Act, all its provisions shall, so far as circumstances will admit,
apply to land on the provisional register and to the registration
of instruments and other matters affecting the same. This
lets in a number of important sections making the register

193

J.C.
1905

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ASSETS
CoMPANY,
LIMITED

".
Mere Rorst.

194

J.C.
1905

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ASSETS
CoMPANY,

LImM1reD

P Vv.
Mere Rorut.

HOUSE OF LORDS [1905]

conclusive—e.g., ss. 55, 67, 189, and 190—but it is provided that
the estate or interest of a proprietor on the provisional register
shall be indefeasible only against the person named in the
original receipt or order and those claiming through, under, or
in trust for him. This reproduces the last part of s. 9 of the
Act of 1871 before referred to. As in the Act of 1870, so in
this Act of 1885, the register is made conclusive evidence of the
title of the registered proprietor (s. 55) except in cases of fraud,
prior certificates of title or registered grants, omissions or mis-
descriptions of easements, and wrong description of parcels or
boundaries, to which must be added adverse claimants in
possession at the time of bringing the land under the Act and
continuing in such possession at the time of issuing the
certificate.

Certificates of title duly signed and sealed are made
conclusive evidence (ss. 65 and 66) of title as in the Act of 1870,
ss. 39 and 139.

The protection thus afforded is strengthened, as in the Act
of 1870, by the preservation in s. 56 of the enactment against
bringing actions against registered proprietors, i.e., s. 129 of
1870, already noticed.

Further protection is afforded by the reproduction of s. 119
of the Act of 1870 relating to notice and knowledge of
unregistered interests, and there is a new clause specially pro-
tecting bond fide purchasers or mortgagees from registered
proprietors (ss. 189 and 190).

The provisions relating to the correction of certificates of
title and of the register! have been recast, and the powers of
the registrar in this respect have been enlarged (ss. 68-71).
Subject to regulations under the Act, he is empowered to
correct errors and supply omissions, and to require certificates
of title or other instruments to be delivered up to be cancelled
or corrected if issued in error, or if they contain any mis-
description of land or boundaries, or if fraudulently or wrong-
fully obtained. He can apply to the Supreme Court to compel
people to appear before him and to deliver up documents as
required. Appeals lie from his decisions to the Supreme Court
(ss. 191 et seq.). Large, however, as these powers are, it has

A.C. AND PRIVY COUNCIL.

been decided that they cannot be exercised to the prejudice of a
registered bona fide purchaser: In re Macarthy and Collins. (1)
Their Lordships have not to consider his power, but they
doubt whether the registrar can set aside a Crown grant or
its statutory equivalent; they are disposed to think that his
power to rectify is limited to some fraud or other cause inter-
vening after the Crown grant or equivalent instrument which
originally brought the land on the register.

There does not, moreover, appear to be any power conferred
on the Supreme Court to cancel or correct any certificate of
title or entry on the register unless applied to by the registrar
or on appeal from him, except where land or some estate or
interest therein is recovered by some proceeding in that Court
from a registered proprietor. In such a case, if the proceeding
is not expressly barred—i.e., if having regard tos. 56 the plaintiff
is entitled to recover—the Supreme Court or judge can direct
the registrar to cancel a certificate or entry and to substitute
another for it (s. 78).

These provisions confer upon the Supreme Court jurisdiction
to entertain such actions, and to make such orders as those
which give rise to these appeals, if the plaintiffs are entitled to
recover the land. Whether those orders have been rightly
made is a different question.

The provisions (ss. 177 et seq.) relating to the insurance fund
are also reproduced, but are considerably altered and extended.
Any person sustaining loss through any omission, mistake, or
misfeasance of the registrar or any of his officers, and any
person deprived of any land through its being brought under
the Act, or by the registration of any other person as proprietor,
or by any error in any certificate of title or in any entry or
memorial of the register, or who has sustained any loss by the
wrongful inclusion of land in any certificate, and who by that
Act is barred from bringing an action for possession or other
action for the recovery of the land, may obtain compensation
out of the fund. Provision is also made for the recovery by
the registrar of any money paid out of the fund as compensa-
tion for loss occasioned by fraud. Certain cases are excluded

(1) (1901) 19 N. Z. L. R. 545.

195

J.C.
1905

—\~
ASSETS
Company,
LIMITED

v.
Mere Rorat.

196

J.C.
1905

—m
ASSETS
ComPany,
Limrrep

v
Mere Rorat.

HOUSE OF LORDS [1905}

from compensation out of the fund, but they are not material
on the present occasion. Actions for the recovery of com-
pensation out of the fund are barred after the lapse of six
years, with an extension in case of disability (ss. 185 and 187).

The acquisition by Europeans of lands held by natives under
their native customs was regulated by the Native Land Act,
1873. The procedure to be followed is there fully set out. The
proceedings commenced by bringing in a claim for investigation
(s. 33) of the native title; and if the title of the natives was
found satisfactory a memorial of their ownership (s. 47) was
drawn up and signed by the judge, and sealed with the seal of
the Court and enrolled. It might be appealed against (s. 58) ;
but, subject to appeal, a certified copy of the memorial, signed
by a judge of the Court and sealed with its seal, was not only
evidence of the facts stated in it, but was made '' conclusive
of the ownership of the land described therein according to
native custom '"' (s. 51). Leases for not more than twenty-one
years could then be granted, but native land could not be
otherwise dealt with except under the direction of the Court
(ss. 48, 59, 60, and 87). Sect. 87 is express on this point. In
the case of a sale, a memorandum of transfer by the sellers to
the purchasers was signed and submitted to the judge, and it
was his duty to satisfy himself that everything was in order,
and that the proposed sale was fair to the natives, and that the
consideration was adequate and was paid. The memorandum
of transfer was an important document, but it was not binding
even as an agreement (s. 87). On being satisfied that all was
right, the judge (s. 61) was to draw up a certificate of the com-
pletion of the sale, and indorse it on the memorial of ownership.
with a declaration as thereinafter mentioned to the effect that the
purchaser should thenceforth hold the land as freehold. This
document was then to be sent by the judge to the Governor
with a recommendation for a Crown grant. By s. 75 the judge
of the Native Land Court was authorized, by an order signed
by him and under the seal of the Court, to declare that the.
land should be held for the future in freehold tenure, and it
was enacted that such land should be held as freehold accord-
ingly, anything thereinbefore provided notwithstanding, and

A. C. AND PRIVY COUNCIL.

from the date of such order the native title over the land com-
prised in such order should be extinguished ; and the Governor
was empowered at any time thereafter to issue a Crown grant
for any such land. The effect of such an order, commonly
called an '' Order of freehold tenure," was not to transfer the
title of the natives, but to extinguish it, and to confer a new
right on the purchaser.

This Act of 1873 was followed by several amending Acts, and
was repealed by the Native Land Court Act, 1886.

Their Lordships do not consider it necessary at present
to allude further to the Native Land Acts. The important
matters to be borne in mind are: (1.) That the Native Land
Act, 1873, was passed after the Land Transfer Act, 1870, and
that orders made by judges of the Native Land Court would
have to be acted on by district land registrars; (2.) that the
Native Land Court was specially created to watch over and
protect the natives against being unfairly dealt with by
Europeans in transactions relating to lands; and that the
jurisdiction of that Court to sanction sales and make orders
vesting lands in purchasers for estates of freehold cannot be
denied. How far errors in procedure affect the validity of
orders made by the Court in the exercise of its jurisdiction is
one of the questions raised by these appeals.

Their Lordships' attention was called to many decisions on
the Native Land Acts and the Land Transfer Acts, and some
of them are important. The memorial of ownership, which is
a very important document and the root for future purposes
of the title of the natives mentioned in it, has been held to be
conclusive: In re Okirae Block. (1)

A memorandum of transfer has been held to have no opera-
tion as a transfer or as an agreement until approved by the
Native Land Court, but after such approval it becomes binding :
In re Kotarepaia Block (2); Creditors' Trustee of Arekatera
Te Wera v. Walker (3); Paraone v. Matthews. (4)

Orders of freehold tenure have given rise to differences of

@ye10 Ne Zt (6:0. 1671: (QiGINwA. LR. 744:° 7 Ne
(2) 3N. Z. L. B. (S.C.) 54. L. R. 528.
(3) 3N.Z. L. B. (A.C.) 91.

197

J.C.
1905

—~
ASSETS
Company,
Limitep)

ve:
Mere Rorst.

198

J.C.
1905

~~
ASSETS
Company,
Limi1tEep

OF
Mere Rorat.

HOUSE OF LORDS [1905]

opinion. There are several decisions to the effect that, as
between private individuals, they are conclusive in favour of
bona fide registered purchasers, namely: Attorney-General v.
Tipae (1), Matai v. Assets Co. (2), Hani Tikitiki v. Assets
Company and District Land Registrar (8), and Public Trustee
v. Registrar-General of Land (4), mentioned below. Indeed,
except the decisions under appeal their Lordships have found
no case to the contrary. There are cases, however, in which
orders of the Native Land Court have been impeached and held
void, and great reliance was placed upon them by the counsel
for the respondents. They were as follows :—

In Te Rathi v. Grice (5) the Native Land Court made an
order and then cancelled it, and made another on which a
Crown grant issued. The Supreme Court, in an action to
which the Attorney-General was a party, declared the Crown
grant void on the ground that the order on which it was
obtained was void, the Native Land Court having had no
power to cancel its first order. This case turned on an Act of
1867, and not on any of the statutes which have to be con-
sidered on the present occasion. No registered title was in
question then.

Seymour v. Macdonald (6) was an application for a mandamus
which was very properly refused. The last part of the head-
note, namely, that the certificate, if granted, would be invalid,
does not appear in the judgment, and can only mean that the
applicant for it could not properly make use of it.

Poaka v. Ward (7) was an application for a prohibition to
stay a partition amongst natives. There was no question of

_vegistered title. But the Court held that the proper steps to

obtain a partition had not been taken, and a prohibition was
granted.

Paraone v. Matthews (8) was really a case of fraud, and
might have been shortly disposed of on that ground. The

(1) 6N. Z. L. BR. (8.C.) 157. (6) (1887) 5 N. ZL. RB. (A.C.
(2) 6 N. Z. L. R. (8.C.) 359. 167.

(3) 18 N, Z. L. R. 226. (7) 8N. ZL. B. 338.

(4) 10 N, Zola hese (8). GUN. Zev ad oti ed

(5) (1886) 4 N.Z.L.R.(A.C.) 219. 7N. Z. L. RB. 528.

A.C. AND PRIVY COUNCIN.

defendants knew they had no title when they got on the
register. The case, however, was decided on the ground that
the proceedings were null and void rather than on the ground
of fraud.

Solicitor-General v. Mere Tint (1) was a somewhat similar
case, but the Crown there applied to have a certificate of title
followed by registration cancelled. This case does not shew
that if the suit had been between private individuals it would
have succeeded.

fiutu Peeht v. Davy (2) was a decision on points of law
raised before trial. The district land registrar was a party,
and compensation out of the assurance fund was claimed. It
is obvious that this involved a much wider inquiry than an
action against a registered owner; and in that very case no
decision was given to the prejudice of the only bona fide
purchaser.

Public Trustee v. Registrar-General of Land (8) was, again,
an application for compensation out of the assurance fund on
the ground that the Crown had been wrongfully deprived of
certain reserve lands vested in it. The title of the registered
purchaser was admitted to be unimpeachable.

No one of these cases can be regarded as a clear decision
adverse to the Assets Company on these appeals unless fraud
'be established against it.

The Assets Company procured itself to be registered in the
following way :—

As regards the lands known as Waingaromia No. 3, the com-
pany produced to the district land registrar a warrant from the
Governor of the Colony on May 7, 1889.

As regards Waingaromia No. 2, the company bought from
the liquidators of the Glasgow Bank, who were already on the
register, and produced an Imperial Act of Parliament vesting
the assets of the bank in the company.

As regards Rangatira No. 2, the Assets Company produced
certificates of title from the Native Land Court and Crown
grants, and it was provisionally registered. Its title depends

(Lye lo Za lip BAT U8. (2) 9 N. Z. L. R. (8.C.) 134.
(3) 17 N. Z. L. B. 877.

199

J.C.
1905

—~
ASSETS
ComMPANy,
LimItTEp

Vv
More Rornt.

200 x HOUSE OF LORDS [1905)

J.C. on the Native Land Court Act, 1894, which has no application
1905 to the other cases.

—~

ASsETS As regards Waingaromia No. 3, the Assets Company rely
ponent, primarily on the absence of fraud and on the conclusiveness of
Nea eee their registered title. They raise other defences if their main

— contention fails. The question of fraud will be considered
later; but apart from fraud the respondents contend that the
warrant was invalid because it was founded on an invalid order
of freehold tenure; that this order was invalid because it was.
founded on an invalid memorandum of transfer from the
natives ; that this was invalid because it was not founded on
any memorial of title, but only on an order for a memorial,
and that this order was worthless because there was no.
certified plan before the Court when the order was made.

The alleged invalidity of the memorandum of transfer itself
is based on evidence of irregularities in the signatures to it.
It is alleged that some natives who were interested did not:
sign it, and that others who were minors were not properly
represented, and other irregularities are suggested. Having:
regard to the lapse of time and the long undisturbed possession
and to what subsequently took place, their Lordships think
they ought not to entertain objections of this character to the
memorandum of transfer. They must assume that Rogan J.
performed his statutory duty and satisfied himself that the.
memorandum was substantially in order.

The objection to the order of freehold tenure made by him is
more serious. It is admitted that what is described as a
sketch plan was before the Court, and that it was in all
particulars identical with the plan which was afterwards
approved by the proper officer, except that it was not certified.
The judge could not, therefore, then make a memorial of owner-
ship, and in making his order for a memorial, which was dated
December 27, 1876, he made a note in pencil—' Order not.
signed to stand over till plan is certified to."" Itis not denied by
the appellants that the judge could not make an order of free-.
hold tenure until a memorial of ownership had been signed and
enrolled, upon which the order could be indorsed. And their
Lordships think that Rogan J.'s order of freehold tenure must;

A. C. AND PRIVY COUNCIL.

be regarded as provisional only until the plan should be
certified. The important point for observation is that the
judicial proceedings before Rogan J. were complete, and upon
the production of the plan, with the proper certificate on it,
nothing more was required than the purely ministerial act of
signing the formal documents necessary for carrying into effect
the result of the proceedings before the judge. No further
exercise of judicial discretion was required, and on production
of the certificate to the plan Rogan J. might have signed the
formal documents at any time.

Macdonald C.J. had express statutory power conferred upon
him in 1886 (1) to act for Rogan J. and to complete what he
had left uncompleted ; and it appears to their Lordships that
Macdonald C.J. had jurisdiction to do what he did. It will be
remembered that Cooper, or those claiming under him, had
throughout been in possession. This, no doubt, was the reason
why Macdonald C.J. thought it right to antedate his orders.
Their Lordships do not overlook the fact that Macdonald C.J.
was correcting a mistake made by Brookfield J. in 1884, when
he ordered a Crown grant or certificate of title to be issued to
the natives. This order, which was never signed, must have
been made in ignorance of Cooper's position. The respondents
attach importance to this order, and in fact rely upon it as
shewing their title to sue. This, however, places them in a
difficulty, for Brookfield J.'s order presupposes a memorial of
ownership in the natives (2), and would be worthless without
it, and yet the only memorial they had to rely upon was the
order for one made by Rogan J. in 1876, which they now
contend was itself worthless.

But realizing, as their Lordships do, the difficulties arising
from Rogan J.'s failure to complete the course of procedure
prescribed by the Native Land Acts, their Lordships are of
opinion that the registered title of the Assets Company to
Waingaromia No. 3 can only be impeached for fraud. It was
strenuously contended by counsel for the natives that the

(1) See Native Land Court Act, (2) Native Land Division Act,
1886, s. 67, and ss. 52 to 64, and 115 = 1882, s. 10.
to 117.

201

J.O
1905

nH
ASSETS
ComMPANy,
Limivrep

v.
Mere Rorst.

202 HOUSE OF LORDS [1905}

IEC; proceedings in the Native Land Court were not only irregular,
1905 but that the irregularities were of such a nature as to affect
ems the jurisdiction of the Native Land Court, and to render its
ConraSYs yroceedings and its order of freehold tenure absolutely null and
z void on the ground that it was coram non judice. The same

Mere Ronit, °
— contention assumed another shape when relied on to shew
that the lands in question were never brought under the Land
Transfer Act, 1885, so as to render its provisions applicable to
them.

Their Lordships have very carefully considered the judg-
ments delivered in the Court of Appeal upon this part of the
case, aS well as the very able and exhaustive arguments of the
learned counsel for the native claimants; but their Lordships
are unable to concur in the view taken by the majority of the
Court, and they concur in that taken by Williams J., who
dissented from the judgment. The sections making registered
certificates conclusive evidence of title are too clear to be
got over.

In dealing with actions between private individuals, their
Lordships are unable to draw any distinction between the
first registered owner and any other. A registered bond fide
purchaser from a registered owner whose title might be
impeached for fraud has a better title than his vendor, even if
the title of the latter could be impeached by the Crown. The
reasons for arriving at this conclusion are so clearly given by
Williams J. that their Lordships do not think it necessary to
do more than adopt them and supplement them by a few
remarks on some of the arguments addressed to them, and to
which they are unable to assent. It is to be observed that
in Solicitor-General v. Mere Tint (1) the title of the first
registered owner was successfully impeached by the Crown.
But in Public Trustee v. Registrar-General of Land (2) his title
was admitted to be unimpeachable. These cases are noticed
above.

Their Lordships are not prepared to hold that a Crown
grant, or a warrant, or a certificate having the statutory effect
of a Crown grant, can be impeached except at the instance

CUTAN Zi aioe G)AITIN.S Zo aR ong

A. C. AND PRIVY COUNCIL.

of the Crown, or, at any rate, in an action to which the Crown
is a party. The power of the Crown to set aside its own
grant or its equivalent has not to be considered on the present
occasion, and their Lordships do not, therefore, express any
opinion upon it.

It by no means follows that errors in procedure, even in
matters which in one sense affect jurisdiction, need be noticed,
or ought to be noticed, by other persons whose duty it is to
act on orders brought to them. It is not their duty to attend
to such matters; if it were, their action would be paralyzed.
What they have to look to is the order, and, if that is good on
the face of it, it is their duty to act upon it, and it must be
treated as a sufficient foundation for what they do. Not only
are they protected from lability if the order turns out to have
been improperly obtained, but if what they do under it is
made conclusive on questions of title, a title which might be
otherwise impeachable must be treated as valid.

The cases of Matai v. Assets Co. (1), In re Aldridge (2), and
Hami Tikitiki v. Assets Co. (8) were decided, and in their
Lordships' opinion rightly decided, on this principle. Having
regard to the Land Transfer Acts and the Native Land Acts,
their Lordships are of opinion that it was not the duty ofa
district land registrar to examine into the validity of a Crown
grant, nor to inquire how a Governor's warrant had been
obtained, nor to inquire into the proceedings in the Native
Land Court culminating in an order of freehold title. The
Acts shew that these documents may be assumed to have been
properly obtained, and may be safely acted upon by the district
land registrars and by other persons acting in good faith.

The difference between want of jurisdiction over persons and
subject-matter and wrong procedure in a Court having such
jurisdiction will be found discussed in Pemberton v. Hughes (A),
where the Court of Appeal in England had to consider the
validity of a divorce in Florida alleged to be coram non judice
and void by reason of errors in procedure. The Court of

(1) 6N. Z. L. R. (8.C.) 359. (8) 18 N. Z. L. R. 226. See also

(2) (1898) 15 N. Z. L. R. 361. 17 N. Z. L. BR. 593.
(4) [1899] 1 Ch. 781.

203

Js Cc,
1905

—\e
ASSETS
Company,
Limrrep
v. %
Mere Rott.

204

J.C.
1905

—_~
ASSETS
ComMPANY,
LImITEep
0.
Mare Rorur.

HOUSE OF LORDS [1905]

Appeal held that such matters ought not to be regarded by
a foreign tribunal called upon to recognise the Florida decree.
It is said that Gibbs v. Messer (1) shews that registered titles
may not be conclusive even in favour of a bona fide registered
purchaser from a registered owner. The case, no doubt, does
shew that such a case may occur. The case was one of fraud
and forgery. A transfer from a registered owner to a non-
existent person had been fraudulently procured and registered,
and a fictitious transfer from that fictitious transferee to a
bona fide mortgagee was afterwards registered. In a suit by
the first registered owner against the registrar, the registered
mortgagee and the perpetrator of the fraud, the name of the
first registered owner was ordered to be restored to the register
by this Board. The Supreme Court of Victoria had held that
the true owner had lost her property, but was entitled to
damages out of the compensation fund. The appeal was by
the registrar from this decision. This Board held that, as
as there was, in fact, neither any transferee from the first
registered owner, nor any transferor to the registered mort-
gayee, there was nothing to deprive the first registered owner
of her property—nothing, in fact, on which the subsequent
registrations could operate ; and those registrations were accord-
ingly ordered to be cancelled. Lord Watson, in his observa-
tions on the protection given to bona fide purchasers, points
out that a bona fide purchaser from a registered owner is in a
better position than a first registered owner whose title may
be impeached for fraud. But there is nothing in his judgment

in favour of the view that an original registered owner,

claiming through a real person, does not get a good title
against every one, except in the cases specially mentioned in
the Act, fraud being one of them.

Then it is contended that a registered owner may hold as
trustee and be compelled to execute the trusts subject to which
he holds. This is true; for, although trusts are kept off the
register, a registered owner may not be beneficially entitled to
the lands registered in his name. But if the alleged cestui
que trust is a.rival claimant, who can prove no trust apart

(1) [1891] A. O. 248.

Av, AND PRIVY COUNCIL.

from his own alleged ownership, it is plain that to treat him as
a cestui que trust is to destroy all benefit from registration.
Here the plaintiffs set up an adverse title and nothing else ;
and to hold in their favour that there is any resulting or other
trust entitling them to the property is, in their Lordships'
opinion, to do the very thing which registration is designed to
prevent. Their Lordships cannot give effect to the ingenious
arguments addressed to them on this point; nor can they
adopt the case of Solicitor-General v. Mere Tini (1) as an
authority which ought to be followed in these appeals.

The conclusions thus arrived at really dispose of all three
appeals, except so far as they are based on fraud. But before
dealing with the charges of fraud their Lordships will shortly
allude to the special grounds relied upon in the second and
third appeals.

In Waingaromia No. 2 the liquidators of the Glasgow Bank,
who claimed through Cooper, were registered as owners on the
provisional register, and in August, 1882, they obtained a
certificate of title from the district land registrar.

By an Imperial statute, the City of Glasgow Bank (Liquidation)
Act, 1882 (2), all the assets of the Glasgow Bank were vested
in the Assets Company on their obtaining a discharge from the
liquidators for the purchase-money, and on the recording of such
discharge as mentioned in the Act. The purchase-money was
to be paid on or before October 1, 1882, but it was not in fact
all paid before December, 1882, and the statutory vesting did
not take effect until then. On August 15, 1883, the Glasgow
Bank Act was produced to the district land registrar, and he
indorsed on the liquidators' certificate of title a transfer to the
Assets Company and registered it. The Act vesting the assets
in the company vested them subject ' to the existing charges,
debts, engagements, and liabilities specifically affecting the
same in the hands of the bank or the liquidators," and the Court
below has held that these words had the effect of overriding or
controlling the Land Transfer Acts of the Colony. Their Lord-
ships are unable to concur in this view. There is nothing in

(1) 17 N. Z, L. B, 778.
(2) 45 & 46 Vict. c. 152, ss. 3, 4, and Sched. II.
A. C. 1905. : 3 Q

205

J.C,

1905
—~

ASSETS
Company,
Liwitep

0
Mere Rozat.

206 HOUSE OF LORDS [1905]

J.0. the Glasgow Bank Act to shew that interference with the

1905 Colonial Land Acts was ever contemplated, still less that those

Asewrs Acts were to be overridden. The general vesting clause, when

eae applied to lands in the Colony, must be read so as to work in
v. harmony with the Colonial Acts, and in effect as conferring
Mere Rorut. :

—— upon the Assets Company the right to procure themselves to be
registered according to the laws of the Colony; and if that
registration gave them rights in the Colony beyond what they
might have without it, there is nothing in the Imperial Act to
deprive them of those rights.

Then it was ingeniously argued that these particular lands
were not bought from the liquidators on the faith of their being
registered owners, and that the Land Transfer Acts did not
therefore apply. But although the agreement to buy the assets
of the Glasgow Bank in block was not based on the Colonial
Land Transfer Acts, the completion of the purchase of these
particular lands was based upon them, and nothing more can
be reasonably required.

In 1883 the Land Transfer Acts in force in the Colony were
the Act of 1870 and the Acts amending it. But the reasons
for which registration under the Act of 1885 confers a good
title apply also to the Acts in force in 1883, and although the
liquidators were only themselves entered as owners on the pro-
visional register, a good transferable title had been acquired
by them, and the subsequent registered title of the Assets
Company cannot be disturbed.

Passing now to Rangatira No. 2, the Assets Company rests
its title on the fact that in October, 1895, it obtained a certi-
ficate of freehold title under the Land Transfer Act, 1885, and
is registered as owner under that Act. The title is impeached
for fraud and for irregularities in the Native Land Court, and
especially for the invalidity of the memoranda of transfer from
natives, on which the title is founded. Fraud is denied, and
will be passed over for the present. Their Lordships have
already expressed their view of the conclusiveness of the register.
But as the objection to the validity of the transfers was argued
at great length and prevailed in the Court of Appeal, their
Lordships think it right to express their opinion upon it. The

A.C. AND PRIVY COUNCIL.

history of the case is complicated. It is fairly and correctly
stated in the appellants' case, paragraphs 8 to 12, and their
Lordships do not think it necessary to repeat it in detail.
The important points are that in 1875 the lands in question
were brought by the natives under the Native Land Acts, when
a memorial of ownership was issued to them. Their title was
then investigated and determined. They obtained a statutory
title, and ceased to hold solely by their old custom or usage.
In the same year (1875) the natives granted a lease for twenty-
one years. Afterwards, between 1878 and 1883, most of the
natives signed memoranda of transfer of all their interests to
the then lessees. These memoranda of transfer are those now
impeached. No orders of freehold tenure followed them. But
in May, 1886, they were produced to, and approved and indorsed
by, the Trust Commissioner, and his duty was, by the Act of
1881 (1), to protect the natives in their dealings with Europeans,
to see that everything was fair, and that the purchase-money
was really paid. Without his certificate no transaction with
the natives could be registered. No rent was ever paid to the
vendors after this. In 1886 partition proceedings were pending
between the natives, and the lands known as Rangatira No. 2
were allotted to those adult natives who had sold their interests
as above mentioned, and in May, 1886, an order was made for
the issue of a Crown grant of this block to those sellers. Other
blocks were allotted to the other natives, and Crown grants
were ordered to be issued to them, and the memorial of owner-
ship issued in 1875 was then cancelled. All this was done
before August, 1886, when two important Acts were passed.
Mr. Graham, who represented the purchasers, was a consent-
ing party to all these proceedings, which were really taken, not
only to effect a partition between the natives, but also to facilitate
the completion of the purchaser's title.

These orders for Crown grants were made, but were retained
in the office as the fees for them were not paid.

Then the Native Land Court Act, 1886, and the Native
Land Administration Act, 1886, were passed. The former Act
by s. 115 repealed the Native Land Act, 1873, but enacted that

(1) Native Lands Frauds Prevention Act, 1881, ss. 4, 6, 15.

207

J.C.
1905

—~
ASSETS
Company,
LIMITED

v
Mere Rotut,

208

J.C.
1905

—ww~
ASSETS
Company,
Tamitrep

Uv.
Mere Rorat.

HOUSE OF LORDS [1905]

incompleted procedure might be completed either under the
new Act or under the old. This Act was amended in 1888 and
1889. .

By the Native Land Administration Act, 1886, further pro-
vision (s. 24) was made for the protection of natives and for
the completion of incompleted transactions. This Act did not
come into operation until January, 1887, and it was repealed
in 1888. (1)

The Assets Company did not complete its title under either
of these Acts.

' So matters stood when the Native Land Court Act, 1894, was
passed. At that time the lease and the interests of the native
sellers, which had been bought as above stated, had become
vested, first in the liquidators of the Glasgow Bank, and after-
wards in the Assets Company, by virtue of the Imperial statute
which has been already referred to, and in July, 1895, the com-
pany obtained the registration on the provisional register of the
transfers from the natives and its other documents of title, and in
October following obtained, first, a warrant from the Governor
for the issue of a certificate of title to the native sellers,
and, lastly, from the district land registrar, a certificate of the
company's ownership under the Act of 1885, and registration
of the company as owner accordingly.

The contention of the Assets Company is that the Act of
1894 cured all defects, and enabled it to acquire a complete
title and to procure itself to be registered as owner. The con-
tention on the other side is that the transfers had become pure
waste paper, and that there was no title to register.

It will be convenient first to consider the Act of 1894. It |

repealed the Native Lands Frauds Prevention Act, 1881, to
which reference has already been made, and also the several
Native Land Court Acts of 1886, 1888, and 1889.

The Act of 1894 enacts (s. 57) that every instrument indorsed
by a Trust Commissioner as approved in terms of the Act of
1881, is to be deemed to have been confirmed by the Court

within the meaning of the Act of 1894, and no further con- |

firmation is required. By s. 73 all land which was customary
(1) Native Land Act, 1888, s. 3.

a

A. C. AND PRIVY COUNCIL.

land when the Act of 1894 came into operation (and by s. 2
Rangatira No. 2 was such land) became subject to the Land
Transfer Act, 1885 (already referred to), and every native
owner of such land, subject to all equities affecting his interest
therein and to all existing restrictions on alienation thereof, is
to be deemed the proprietor thereof under the said Act for an
estate in fee simple in possession. Further, by the same s. 73,
any person claiming to have acquired an interest in any such
land by virtue of any alienation prior to the coming into
operation of the Act of 1894 may apply to the Court to have
such alienation confirmed; and upon confirmation thereof the
claimant becomes entitled to be registered under the Act of
1885 as proprietor of the estate or interest acquired.

This latter part of s. 73, above referred to, cannot mean that
cases that fall within s. 57, and which require no confirmation,
are to be again confirmed. The latter part of s. 73 can only
apply to incomplete transactions not approved and certified by
the Trust Commissioner. This being the case, their Lordships
are unable to see why s. 57 does not apply to these memoranda
of transfers from the natives which the Trust Commissioner
did approve and certify, and their Lordships can see nothing
substantially wrong in the procedure which resulted in the
registration of the company.

To treat the memoranda of transfer as waste paper appears
to their Lordships to go a great deal too far. They were not
valid as transfers, but they were the first step for obtaining
such transfers, and entitled the 'parties to take the necessary
proceedings for completing them.

The repeal of the Act of 1873 led to difficulties which do not
appear to have been removed by subsequent legislation prior
to 1894. This is apparent from Poaka v. Ward (1), already
referred to. The Act of 1894 was apparently passed to remedy
them.

The true effect of the Act of 1894, ss. 57 and 73, was, in their
Lordships' opinion, to entitle all the selling natives to their
shares in the lands sold, but subject to all equities affecting
the same. These equities included the right of the Assets

(1) 8N. Z. L. R. 338.

209

J.C,
1905

—m~
ASSETS
Company,
LIMITED

Vv.
Mere Rorat.

210

J.C.
1905

eam
ASSETS
CoMPANY,
Lim1ITED

Vv
Mere Rorut.

HOUSE OF LORDS [1905}

Company to have the transfers which had been approved by the
Trust Commissioner carried out and completed. There may
have been irregularities in the procedure adopted, but their
Lordships are of opinion that the Act of 1894 put matters
right, and that there was nothing wrong in substance—nothing
to affect the validity of the final certificate and registration of
the company as owner.

Passing now to the question of fraud, their Lordships are
unable to agree with the Court of Appeal. Sects. 46, 119, 129,
and 130 of the Land Transfer Act, 1870, and the corresponding
sections of the Act of 1885 (namely, ss. 55, 56, 189, and 190)
appear to their Lordships to shew that by fraud in these Acts
is meant actual fraud, i.e., dishonesty of some sort, not what is
called constructive or equitable fraud—an unfortunate expres-
sion and one very apt to mislead, but often used, for want of a
better term, to denote transactions having consequences in
equity similar to those which flow from fraud. Further, it
appears to their Lordships that the fraud which must be
proved in order to, invalidate the title of a registered purchaser
for value, whether he buys from a prior registered owner or
from a person claiming under a title certified under the Native
Land Acts, must be brought home to the person whose regis-
tered title is impeached or to his agents. Fraud by persons
from whom he claims does not affect him unless knowledge of
it is brought home to him or his agents. The mere fact that
he might have found out fraud if he had been more vigilant,
and had made further inquiries which he omitted to make,
does not of itself prove fraud on his part. But if it be shewn
that his suspicions were aroused, and that he abstained from
making inquiries for fear of learning the truth, the case is very
different, and fraud may be properly ascribed to him. A person
who presents for registration a document which is forged or
has been fraudulently or improperly obtained is not guilty of
fraud if he honestly believes it to be a genuine document which
can be properly acted upon.

In dealing with Colonial titles depending on the system of
registration which they have adopted, it is most important that
the foregoing principles should be borne in mind, for if they

A. C. AND PRIVY COUNCIL.

are lost sight of that system will be rendered unworkable.
Their Lordships are keenly alive to the necessity of vigilance
to protect natives against unfair and oppressive dealings on
the part of Europeans; but on the other hand it is equally
important not to disturb registered titles of bond fide pur-
chasers, especially when accompanied by long possession and
large outlays.

It was urged by counsel that the decision of this Board in
Gibbs v. Messer (1) shews that it is not in all cases essential to
bring fraud home to the registered owner. This is true; but
the case is not really in point. As already explained, in Gibbs
v. Messer (1) two bond fide purchasers were on the register,
and the case turned on the non-existence of any real person to
accept a transfer and get registered himself, and then to make
a transfer to some one else. Moreover, forgery is more than
fraud, and gives rise to considerations peculiar to itself.

In the first appeal, Waingaromia No. 3, the fraud charged is
fraud by the Assets Company in obtaining a warrant from
the Governor and a certificate of title from the district land
registrar.

In the second appeal, Waingaromia No. 2, various frauds on
the natives are charged against Cooper and the liquidators of
the Glasgow Bank, who purchased from him. There is no
definite charge of fraud by the Assets Company. The only
charge against the company is that the company obtained
from the district land registrar an indorsement of the
transfer from the liquidators to the company, and that the
obtaining of that indorsement was fraudulent and void as
against the plaintiffs.

In the third appeal, Rangatira No. 2, the fraud charged is,
again, that frauds were committed by other people, and that
the obtaining and retaining by the company of a certificate of
title from the district land registrar was fraudulent and void
as against the plaintiffs.

The evidence of fraud by the company entirely breaks down.
The evidence shews that in all these cases the agents of the
Assets Company in the Colony took to the registrar and got

(1) [1891] A. C. 248.

211

J.C.
1905

—~
ASSETS
Company,
LimttEep

v.
Mere Rorut.

212 HOUSE OF LORDS [1905]

J.C. him to register certain documents which according to their
1905 purport and effect entitled, and which they believed did in fact
oe entitle, the company to be registered as owners. There is no
Haten tea evidence whatever of any fraudulent statement made by the
pee seis: company's agents to the registrar, nor of any bribery, corruption,
— or dishonesty in the matter.

Their Lordships cannot help thinking that the equitable
doctrines of constructive fraud have weighed too much with
the Court of Appeal and have induced it to impute fraud to
the Assets Company, although no dishonesty by the company
or its agents, or by the liquidators of the City of Glasgow
Bank, was really established. Nor is there any proof whatever
that the liquidators or the Assets Company dishonestly refrained
from making inquiries which an honest purchaser would have
made.

The conclusions thus arrived at dispose of all these appeals.
Their Lordships do not, therefore, think it necessary to give
any opinion on several other defences to these actions which
were raised in the Court of Appeal, and relied upon by counsel
for the appellants in their argument before this Board. Their
Lordships refer to the defences based on the defective title
in the plaintiffs, the absence of other parties, the Statute of
Limitations, the effect of long possession and large outlays on
the lands sought to be recovered, and the effect of decisions in
former unsuccessful actions by natives suing on behalf of
themselves and others. Their Lordships base their judgment
on the conclusiveness of the registered title in the absence of
fraud.

In upholding the title of the appellants on this broad ground
it is satisfactory to find that their Lordships are not disturb- ©
ing, but upholding, the views which had been until recently
taken and acted upon in the Colony for many years in actions
brought against bond fide purchasers on the register. The
same view has been taken in South Australia, as is shewn by
Bonnin v. Andrews. (1)

The conclusion of the whole matter is that their Lordships
will humbly advise His Majesty to allow these appeals and to

. (1) 12S. A. L. B. 153.

A. C. AND PRIVY COUNCIL. 2138

reverse the judgments appealed from, with costs, and to enter J.C.

judgment in each action for the defendants, the Assets Com- —_1905
pany, with costs, and the costs of each appeal must be borne ea
by the respondents thereto. poet
v.