Registration, Fraud and Notice

For a considerable period of time, statutes have existed which require the registration of deeds, third party incumbrances affecting land, or title to the land itself. In general, the sanction for non-compliance with these registration requirements is that a purchaser for valuable consideration takes free from any interest which should have, but has not, been registered. Throughout the period when registration statutes have been in force, however, a tension has existed between literal compliance with them on the one hand, and seeking to read into them general equitable principles on the other. The effect of introducing these principles is to bind a purchaser by notice of an unregistered interest that is not protected in the appropriate manner by registration. The most popular method of achieving this result has been to apply the maxim: equity will not allow a statute to be used as an instrument of fraud. The maxim is one of some antiquity. It does, nevertheless, display a continuing vitality, as is demonstrated by the decision in Lyus v. Prowsa Developments Ltd.,1 discussed below. The aim of this paper is to assess how this maxim has been applied in the registration context and also to consider what role personal, as opposed to proprietary, remedies have in resolving the conflicts arising in this area.