[1] Phillip Brelsford v [1] Providence Estate Ltd

• Jurisdiction: Montserrat
• Court: Court of Appeal (Montserrat)
• Judge: Carrington JA
• Judgment Date: 15 February 2018
• Neutral Citation: MS 2018 CA 1
• Judgment citation (vLex): [2018] ECSC J0215-1
• Docket Number: MNIHCVAP2016/0008 MNIHCVAP2016/0010 MNIHCVAP2016/0011
• Date: 15 February 2018

Between

[1] Phillip Brelsford

[2] Joel Osborne

[3] Ingrid Osborne

[4] Alyn Russell Krause

[5] Gail Ann Cimon-Krause

[6] Kenneth Allen

[7] Yvonne Daly-Weekes

[8] Kathleen Allen Ferdinand

[9] Kharl Markham

Appellants

and

[1] Providence Estate Limited

[2] Owen Rooney

Respondents

Before:

The Hon. Mde. Gertel Thom Justice of Appeal

The Hon. Mr. Paul Webster Justice of Appeal [Ag.]

The Hon. Mr. John Carrington, QC Justice of Appeal [Ag.]

MNIHCVAP2016/0008

MNIHCVAP2016/0009

MNIHCVAP2016/0010

MNIHCVAP2016/0011

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Land Law — Registered Land Act — Effect of registration based on a forged document — Indefeasibility of title — Enforcement of personal equities against registered proprietors — Company law — Rectification of the land register — Company law — Effect of actions taken by persons not validly appointed as directors in accordance with the constitutional documents of a company — Whether such a person has ostensible authority to represent the company

The appellants all purchased lands from the first named respondent, Providence Estate Limited (“PEL”) which was the registered proprietor of lands at Providence, Montserrat with absolute title. In these transactions, PEL was purportedly represented by Mr. Warren Cassell (“Mr. Cassell”), an attorney-at-law, as its sole director. Mr. Cassell's law firm acted as legal representative for PEL in the transactions which all culminated with the registration of the appellants as proprietors of the lands in question under the Registered Land Act (“RLA”).

Subsequently, Mr. Cassell was convicted in the Montserrat High Court for conspiracy to defraud PEL. The appellants brought individual claims against PEL and Mr. Owen Rooney, a director of PEL, for inter alia, declarations that they are the absolute owners of the lands which had been transferred to them from PEL. The respondents, in their defence, alleged that the transfer instruments were not executed in compliance with the provisions of the RLA; Mr. Cassell was never a director or officer of PEL; the appellants were on notice of the fraud perpetrated on PEL, as inter alia, the consideration was considerably less than the market value; the registrations of the appellants as proprietors of the lands were obtained by fraud and the appellants at all material times had knowledge of and/or contributed to the fraud; and that the appellants were unjustly enriched as PEL never received any of the consideration for the transfer. They also counterclaimed for various declarations including that the appellants were not bona fide purchasers for value of the parcels; the appellants have been unjustly enriched at the expense of PEL; the parcels transferred to the appellants are held on constructive trust for PEL; for rectification of the land register to reflect PEL as the proprietor of the parcel in issue; and for restitution of the amount by which they were unjustly enriched at the expense of PEL.

The learned judge found that neither the appellants nor their lawyers had conducted any due diligence searches on PEL prior to concluding the purchases of the land from it. He further noted the land transfer instruments had not been executed in accordance with section 107 of the RLA. He found that the appellants relied merely on Mr. Cassell's representations of his authority to act for PEL. The learned judge concluded that the appellants, having failed to make proper inquiries to ascertain the authority of Mr. Cassell to represent PEL, acquired the lands subject to PEL's rights and were not bona fide purchasers of the lands for value without notice. He dismissed the appellant's claim with costs and declared that PEL is the owner of the various parcels in question and gave directions for the rectification of the land registers in relation to each of the parcels by removing the appellants as registered proprietors and substituting PEL as registered proprietor.

Dissatisfied with the decision of the learned judge, the appellants appealed.

Held: allowing the appeal in part; dismissing the counter notice; setting aside the declarations made by the learned judge on the claim and counterclaim below that the appellants are not the absolute owners of the various parcels of land and that PEL is the absolute owner of these parcels; granting the declarations sought by the appellants in their claims in the court below that they are the absolute owners of the various parcels of land for which they are respectively registered as proprietors, but with the proviso that in each case the land is held subject to the equity in favour of PEL to apply to the court for an order to compel each proprietor to re-transfer the parcel to PEL; on the counterclaim, ordering that each of the appellants shall execute an instrument transferring title to the parcel held in his or her name to PEL and setting aside the orders for rectification of the various registers; and ordering that each party bear his own costs, both in the court below and before this Court, that:

• 1. The registration of any person as the proprietor with absolute title of a parcel vests in that person the absolute ownership of that parcel, together with all rights and privileges belonging or appurtenant thereto, free from all other interests and claims whatsoever. The system of land registration confers (in broad terms) indefeasibility of title on the registered proprietor, that is, immunity from attack in respect of the land or interest of which he is registered as proprietor. Immunity, however, is not absolute as there are circumstances in which the registration may be cancelled or corrected and the proprietor remains subject to claims brought in personam against him.

  Alan Frederick Frazer v Douglas Hamilton Walker and others [1966] UKPC 27 applied; Section 23 of the Registered Land Act, Cap 8:01, Revised Laws of Montserrat 2008 applied.

• 2. Even if non-compliance with the Registered Land Act's requirements as to registration may involve the possibility of cancellation or correction of the entry, registration once effected must attract the consequences which the Act attaches to registration, whether that was regular or otherwise. It is the registration and not its antecedents which vests and divests title. As such, once the appellants were registered as proprietors of the various parcels, they acquired title to those parcels, notwithstanding any irregularity that may have occurred with respect to the vendor, PEL. Registration, based on a void instrument, is still effective to vest and divest title. It follows as well that the failure by PEL to execute the land transfer instruments in accordance with section 107 of the RLA also did not affect the title which the appellants derived by virtue of their registration.

  Section 23 of the Registered Land Act, Cap 8:01, Revised Laws of Montserrat 2008 applied; Alan Frederick Frazer v Douglas Hamilton Walker and others [1966] UKPC 27 applied; Boyd v Mayor Etc of Wellington [1924] NZLR 1174 applied.

• 3. A company can only act through its directors. Where a person has not been appointed a director in accordance with the constitutional documents of the company, the acts of such a person are not acts of the company as he would lack actual authority of the company (acting through its directors) to do such acts. He may, nevertheless, have ostensible or apparent authority to act on behalf of the company, but this will arise only where the company, but not merely the purported director, represents to the third party that the person has the authority to act on its behalf. Where a person purporting to act on behalf of a company lacked either actual or ostensible authority, the company is not bound by the act of that person in the absence of ratification of the agreement purportedly entered on its behalf. The various land transfers purportedly made on behalf of PEL in favour of the appellants were therefore void for want of authority of Mr. Cassell to act in the name of PEL. Notwithstanding, the effect of the void transfers is that PEL was nonetheless divested of its title to the parcels of land and the titles were vested in the purchasers who acquired indefeasible title to the parcels. Companies Act, Cap. 11.12, Revised Laws of Montserrat 2008 applied.

• 4. In the absence of a finding of fraud or mistake, the conditions for rectification of the register under RLA section 140 do not arise and the court has no jurisdiction otherwise to order the rectification, that is, either cancellation or correction, of the land registers. The learned judge, having made no finding of fraud, there was no basis on which he could have ordered rectification of the register.

  Section 140 of the Registered Land Act, Cap 8:01, Revised Laws of Montserrat 2008 applied.

• 5. A registered owner may hold as trustee and be compelled to execute the trusts subject to which he holds. Although trusts are kept off the register, a registered owner may not be beneficially entitled to the lands registered in his name. The representation of authority came only from Mr. Cassell himself; this is sufficient to arrive at the conclusion that these transactions were not the acts of PEL but were forgeries. The void transaction though not giving rise to an equitable interest in the property itself could give rise to the equitable right to sue for recovery of the land, and the appellants, as the new registered proprietors of the land would hold their titles subject to this right.

  Assets Company, Limited v Mere Roihi and Others [1905] AC 176 applied; Breskvar and Another v Wall and Others (1971) 126 CLR 376 applied.

Appearances:

Mr. Kharl Markham for the Appellants

Mr. Owen Rooney in person and as Director of the first named Respondent

1 Carrington JA [AG.]: Montserrat, like many of the other Territories and States in the jurisdiction, adopted a system of land conveyancing in the last century that is based on the...