A recent judgment of the Supreme Court of New South Wales has
highlighted an issue for any party seeking to register dealings
using the Bulk Lodgment System at Land and Property Information
In Barlin Investments Pty Ltd v Westpac Banking Corporation
Limited , the Court considered the question of when
lodgment of a dealing, memorandum or caveat is complete. At issue
were the two systems by which the LPI accepts documents for
Bulk Lodgment System – this is where
batches of documents are lodged with LPI in bulk by frequent users.
Although the cheques presented with the documents are processed at
the time the documents are received by the LPI, the documents
themselves are not allocated a distinct reference number until they
are processed, usually within 24 hours of delivery at the counter,
at which time they are entered on to the Integrated Tiling System
on which the Torrens Register is based.
Face to Face Lodgment – this is
where the documents are examined at the time of presentation and if
in registrable form, are given a distinct reference number at that
time and immediately entered onto the Integrated Tiling
The proceedings concerned the lodgment by Westpac of a mortgage
for registration at the LPI. The mortgage was granted to Westpac as
security for funds advanced for the purchase of the property. After
settlement of the purchase the mortgage, transfer and a discharge
of mortgage for the previous mortgage to Capital Finance were
provided to LPI for lodgment using the Bulk Lodgment System.
On the following day Barlin Investments, which held an
unregistered mortgage provided by the vendor of the property,
attended the LPI and lodged a caveat on the title to note its
interest under that unregistered mortgage. The caveat was lodged
using the Face to Face Lodgment System.
Because of the delays associated with Bulk Lodgment System,
Barlin Investment's caveat was recorded on the title before the
mortgage was processed. As a consequence, Westpac's mortgage
was not able to be registered.
Counsel for Westpac argued that because the mortgage had been
presented to the LPI prior in time to the caveat, the caveat could
not prevent the recording of that dealing in the Register.
However, the judge in the case, Justice Ball, disagreed. He
found that simply providing the documents through the Bulk Lodgment
System did not constitute lodgment for the purpose of the Real
Property Act. Justice Ball held that lodgment consists of both
"...presentation and acceptance of the thing being
lodged" and said the lodging of a dealing, memorandum or
caveat was complete only once it has been allocated a distinctive
reference by the Registrar-General.
Although the caveator won that battle, for other reasons the
judge found that Westpac's interest in the land had priority
over the interest of the caveator and ordered the caveat be
The decision in this case highlights a potentially significant
problem with the Bulk Lodgment System at the LPI. Lenders need to
be aware that there can be a delay of up to 24 hours between the
time a mortgage is provided to the LPI via the Bulk Lodgment System
and registration of that mortgage. If in that time a competing
interest is registered via Face to Face Lodgment, the lender's
priority could well be lost.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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