The Lands Titles Office must not be privatised

By Basil Kidd, former Registrar General of SA

03 August 2017

Recent television appearances by the Premier about electricity generation might have led us to hope that the Government of South Australia, unlike those of other States, had at last woken up to the folly of privatising strategic assets. Not so. They are about to make the same mistake with the Lands Titles Office.

Secure title to land does not attract the attention of ordinary South Australians in the same way as other infrastructure issues like electricity, roads and water. Most people take it for granted. They are able to do so because of the operation of the Torrens System of Title Registration. Basically, the success of that system rests on a partnership between professional surveyors, conveyancers, solicitors and valuers on the one hand and the highly trained staff of the Lands Titles Office on the other.

Title to land is affected by mortgages, easements, third party rights, Orders of Court and a myriad of other issues. It is the responsibility of LTO staff to ensure that the Title to each individual parcel of land reflects all of the issues which affect it. Indefeasibility of the Title is guaranteed by the Government so that anyone dealing with land can be confident that the Title is a complete record of interests in the land to which it refers. It is difficult to contemplate a situation in which the necessary complete and unequivocal confidence in such a system can be conveyed to the world at large by an organisation subject to commercial influences.

Earlier this year, the British Government shelved plans to privatise their Land Registry following a debate which began in 2014. Comments on the proposal by the former Chief Land Registrar, John Manthorpe, can be found by an internet browser search on his name or on the subject of Sale of HM Land Registry. The English system is the same, in principle, as ours so his comments are relevant to our situation.

However, there is no need to go so far afield for warnings. Concerns have been expressed by such prestigious local bodies as the Law Society, the Australian Institute of Conveyancers, the Institution of Surveyors, the Property Council and the Real Estate Institute. Those bodies are not satisfied with the Government's responses.

Ian Hales, Executive Assistant to successive Registrars General, author of this State's Community Titles legislation and one of the country's foremost experts on the technical aspects of land registration, has spoken against the proposal and other retired employees of the LTO have been working with Neville Kitchin, General Secretary of the Public Service Association to oppose it.

The Treasurer, who is leading the Government push, is reported to have described the move as "a simple outsourcing of the "processor of the title." It is unclear what this actually means. The Treasurer is also reported as saying that the Government will provide a number of guarantees to protect the public interest and the integrity of the land titles system. However, Law Society representatives have said that interested parties have not been allowed to see the detail of these guarantees because the Treasurer claims they are "commercial in confidence".

The Lands Titles Office is a cash cow which, of course, is exactly why private sector interests want to get hold of it. The Treasurer has said that the fee income will be retained by the Government. Even if this is true (and he hasn't disclosed how it is to happen) unfortunately, like the rest of us, he cannot control the future. He has also said that the successful tenderer will be paid a fee for providing services (again the basis for this is undisclosed) and the attraction is that it will be allowed to exploit the LTO data by developing new information products.

LTO staff already have a demonstrated record in the production of new information products and systems. The Office has won international awards for its innovation. It has sent teams into developing countries to assist with the implementation of title registration systems in their jurisdictions. Thus, new product development and innovation generally have been achieved and can continue to be achieved without change to the current situation. The LTO simply has to be resourced appropriately to produce these outcomes. If this were done, the additional revenue produced would accrue to the Government instead of a private sector organisation, no fee would be paid to an external body for providing services and the integrity of the LTO would be preserved.

Most importantly, there is no doubt that the reputation of the State will suffer. South Australia's profile in the international land information community is very high because of the above-mentioned innovations and because the Torrens System, now implemented in many jurisdictions worldwide, was invented here. The visibility and disapprobation of privatisation will be correspondingly high. As others have mentioned, secure title to land is one of the fundamental features of a sound economy. Particularly at this stage of its history, South Australia should be seeking to enhance its image as a good place to do business. Proposals which have the opposite effect, like the one under discussion, are clearly to be avoided.

lnDaily recently reported that the ALP State Council had voted the night before by "overwhelming majority" to "go on record to oppose the privatisation of the Lands Titles Office". The ALP State Council appears to understand the wide economic ramifications of the proposal. Why is it that the Government cannot?

It is time for the Premier to take a statesmanlike stance on this matter. A Premier of this State, Robert Richard Torrens, introduced the Torrens Title System to the world in 1858. How appropriate it would be if a Premier of this State were to save the LTO, the operational centrepiece of Torrens' vision, from the worst crisis it has faced in nearly 160 years!

If the Government is prepared to privatise the LTO against the advice of a long list of authoritative experts and in the face of the outcome of three years of debate about the English Registry and contrary to the views of its own ALP State Council, who can say what might be the next proposal?

Biographical Note:

LB. Kidd, B.Com, Grad Dip (Property) AAUQ, FCPA was Registrar General and, latterly, Director of the Land Services Group in the early 1990s at the end of a 35 year Public Service career which included service in the South Australian Treasury, the Department of Lands and its successor, the Department of Environment and Natural Resources. Having left the Public Service, he established a small practice, consulting on Public Policy and Public Administration. Returning to study, he graduated from UniSA in 2002 with a Graduate Diploma in Property and became a Registered Conveyancer, working in a conveyancing practice.