Question

A clerk in the land title office mistakenly registered a fee simple transfer on the wrong title, with the result that Lot 5, owned by Michael, was transferred to Scott. Scott discovered this error and, instead of correcting the error, he sold the property to another person who was unaware of the clerical error and of Scott's dishonest conduct. Michael discovered the error after the buyer had registered the transfer from Scott. He wants his land restored to him and the register corrected. You correctly advise Michael that:

(a) Because this situation was caused by a clerical error, the Registrar will correct the register and restore Michael's property to him.
(b) The person who bought the property, bona fide and for value, from Scott, is protected by the British Columbia land title system; as a result, Michael cannot have his property restored to him.
(c) Michael contributed to his own loss by neglecting to register a lien on his title to indicate to anyone searching title that he was the registered owner; as a result, he cannot recover damages in a lawsuit against Scott.
(d) Because Scott acted fraudulently, the transfer of the property to the third party is a void deed, meaning that Michael can have the property restored to him.

Answer 1

Michael is advised that the purchaser from Scott, being a bona fide buyer for value, is protected by the British Columbia land title system, meaning Michael cannot reclaim his property from this innocent purchaser.

Step-by-step explanation:

You correctly advise Michael that option B is true: The person who bought the property, bona fide and for value, from Scott, is protected by the British Columbia land title system; as a result, Michael cannot have his property restored to him. In many jurisdictions, including British Columbia, the land title system is designed to protect 'good faith purchasers' for value. This means that if a person purchases property without knowledge of any defects in the title, and pays a fair price for it, the title they receive can be defended against previous claims. The system maintains the integrity of the land registration and the transfer process by ensuring that purchasers can rely on the information found in the public registry.

Although Michael is the victim of a clerical error and Scott's fraudulent behavior, the buyer, assuming they did not know of these issues, is typically considered to be in a stronger position once they have registered the property in their name. This is because the registrar's error has not been corrected in time, and the new buyer may have been protected under the Torrens system principles of indefeasibility of title. Michael may possibly pursue legal action against Scott or seek compensation from the assurance fund or indemnity granted under the applicable land title statutes. However, this does not typically include the ability to reclaim the property from an innocent purchaser.