It is relatively well understood that it is not possible to record that the legal title to a privately owned property is held on trust: Land Transfer Act, s 128. However, a lesser known “no survivorship” notation can in fact be used to indicate that the land is owned on trust: Land Transfer Act s 131 – 133.
While some clever cloggs out there might want to leap in to utilise this “legitimate” recognition of a trust it is important to appreciate that where a no survivorship notation has been registered on a certificate of title the Registrar is constrained from transferring the title to a lesser number of registered proprietors or to the same number holding as tenants in common without the sanction of the Court.
The restriction attached to the title indicates the existence of a trust (Hogg’s Registration of title to Land Throughout the Empire) and due to the statutory frame-work that requires a court sanction for a transfer requires that “in the making of its order the Court shall protect the persons beneficially interested.”: (Re Denniston and Hudson).
The difficulty with the provision for the Courts is how to interpret the legislation consistently with the provision of s 128 – or as noted in Sell v Registrar-General of Land “… it is not the function of the Torrens Statute to supervise trusts. The Judges of inherent jurisdiction are the guardians of trusts …”. In that case the issue was whether the court’s sanction was required when there was no change in the number of trustees but the trustees merely wish to sell trust property. Finding no previous case on all fours with the case in hand the court formed the view at para 37 that:
“The function of the “no survivorship” notation is to alert persons dealing with the Land Registry to the fact that the registered proprietors are trustees. The “sanction” of the Court is intended to be limited to changes in the number, and so identity of the proprietors.”
While the court exercised its powers, as the matter was put before it due to the position taken by the Registrar-General, there was no real need as there was no change in the number of trustees, the issue upon what the relevant provisions of the Property Law Act related.
The matter is esoteric. However, from time to time titles will come to light that bear such a notation and it is important to appreciate when this could be a barrier to registration of a transfer.
- Sell v Registrar-General of Land  NZHC 1219
- Re Denniston and Hudson  NZLR 255
- Hogg’s Registration of title to Land Throughout the Empire
- Land Transfer Act 1952