RES exam question on Land Law: Bank C's position
Tan forged Mdm Lim's signature on a transfer of her house and was registered as proprietor. He then mortgaged the house to Bank C for $700,000. Bank C knew nothing of the forgery, and its mortgage was registered. Mdm Lim has now discovered the fraud. As against Mdm Lim, what is Bank C's position?
- AIts mortgage is protected, as the forgery exception reaches a proprietor only if party to it or colluding
- BIts mortgage is void, since a forged transfer in the chain taints every later registered interest
- CIts mortgage ranks behind Mdm Lim's claim, since equity prefers the original owner who was defrauded
- DIts mortgage is valid only if Bank C obtained a final official search within 7 days before registering
Show answer & explanation
Answer
A. Its mortgage is protected, as the forgery exception reaches a proprietor only if party to it or colluding
Explanation
Answer: Its mortgage is protected. The forgery exception reaches a registered proprietor only if it or its agent was a party to the forgery or colluded, and Bank C did neither.Rule: A registered proprietor, including a registered mortgagee, holds free of unregistered claims. Fraud or forgery defeats its title only where it or its agent was a party to it or colluded in it.Source: Land Titles Act 1993, ss 46(1) and 46(2)(a) (Singapore Statutes Online, current version read 1 October 2026)
Why the other options are wrong
- A forged transfer taints every later interest: Section 46(1) protects a registered proprietor despite any lack of good faith in the person it claims through. Only Tan, the forger, has a defeasible title.
- Equity prefers the defrauded original owner: Equity's preferences do not override the statute. Mdm Lim's remedies lie against Tan.
- Valid only after a final official search: A final official search protects priority during completion but is not a condition of indefeasibility.
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