UKPC 30
Privy Council Appeal No 0074 of 2011
Richardson Anthony Arthur (Appellant) v The Attorney General of the Turks & Caicos Islands (Respondent)
From the Court of Appeal of the Turks & Caicos Islands
Sir Terence Etherton
JUDGMENT DELIVERED BY
SIR TERENCE ETHERTON
16 August 2012
Heard on 28 June 2012
Ariel R Misick QC
Akierra M D Missick
(Instructed by Sharpe Pritchard)
David Phillips QC
(Instructed by Edwards Wildman Palmer UK LLP)
SIR TERENCE ETHERTON:
The strike out application
The Torrens system of land registration
"The declared intention of the Torrens systems to have absolute and indefeasible or unimpeachable titles has never been completely attainable because there have had to be exceptions to the?general rule. There are necessarily differences in the way that the system has been applied in different jurisdictions but it is generally true to say that, in certain circumstances, fraud, mistake and misdescription of property are typically exceptions to the principle of indefeasibility. There can be other situations where a Torrens title can be upset. For example, a subsequent statute has been held to override the registration of title enactment so as to make a particular transaction void and ineffective. Jurisdictions based on the Torrens system do not have a uniform approach to adverse possession. In some cases it is completely excluded. In others, there may be either a variation of the rules that apply to unregulated land which are modified to meet the requirements of the registration of title system, or there may even be a retention of those rules."
"We accept that this significantly diminishes the element of indefeasibility of registered title that is a feature of the Torrens system, but this is the manner in which the legislation of Belize has decided to balance the desirability of a simple system of land transfer with the interests of justice. The remedy of rectification lies within the discretion of the court and is subject to the protection given to the bona fide purchaser in possession by section 143(2). The Board does not consider that it is irrational to strike the balance in this way, particularly having regard to the fact that the Act makes no provision for indemnification of a person unfairly prejudiced by the operation of the system"
2. In this Ordinance, except where the context otherwise requires
"disposition" means any act inter vivos by a proprietor whereby his rights in or over his land, lease or charge are affected, but does not include an agreement to transfer, lease or charge;
"transfer" means the passing of land, a lease or a charge by act of the parties and not by operation of law, and also the instrument by which such passing is effected, but does not include an agreement to transfer;
23. Subject to the provisions of section 27 of this Ordinance, the registration of any person as the proprietor with absolute title of a parcel shall vest 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, but subject-
(a) to the leases, charges and other incumbrances and to the conditions and restrictions, if any, shown in the register; and
(b) unless the contrary is expressed in the register, to such liabilities, rights and interests as affect the same and are declared by section 28 of this Ordinance not to require noting on the register:
(i) nothing in this section shall be taken to relieve a proprietor from any duty or obligation to which he is subject as a trustee;
30. Every proprietor acquiring any land, lease or charge shall be deemed to have had notice of every entry in the register relating to the land, lease or charge.
37. (1) No land, lease or charge shall be capable of being disposed of except in accordance with this Ordinance, and every attempt to dispose of such land, lease or charge otherwise than in accordance with this Ordinance shall be ineffectual to create, extinguish, transfer, vary or affect any estate, right or interest in the land, lease or charge.
(2) Nothing in this section shall be construed as preventing any unregistered instrument from operating as a contract, but no action may be brought upon any contract for the disposition of any interest in land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and is signed by the party to be charged or by some other person thereunto by him lawfully authorised:
38. (1) No person dealing or proposing to deal for valuable consideration with a proprietor shall be required or in any way concerned-
(a) to inquire or ascertain the circumstances in or the consideration for which such proprietor or any previous proprietor was registered; or
(b) to see to the application of any consideration or any part thereof; or
(c) to search any register kept under the Recording of Deeds Ordinance.
(2) Where the proprietor of land, lease or a charge is a trustee he shall, in dealing therewith, be deemed to be absolute proprietor thereof, and no disposition by such trustee to a bona fide purchaser for valuable consideration shall be defeasible by reason of the fact that such disposition amounted to a breach of trust.
83. (1) A proprietor, by an instrument in the prescribed form, may transfer his land, lease or charge to any person with or without consideration.
(2) The transfer shall be completed by registration of the transferee as proprietor of the land, lease or charge and by filing the instrument.
122. (1) A person acquiring land or a lease or a charge in a fiduciary capacity may be described by that capacity in the instrument of acquisition and, if so described, shall be registered with the addition of the words "as trustee", but the Registrar shall not enter particulars of any trust in the register.
(2) An instrument which declares or is deemed to declare any trust, or a certified copy thereof, may be deposited with the Registrar for safe custody but such instrument or copy shall not form part of the register or be deemed to be registered.
(3) Where the proprietor of land, a lease or a charge is a trustee, he shall hold the same subject to any unregistered liabilities, rights or interests to which it is subject by virtue of the instrument creating the trusts, but for the purpose of any registered dealings he shall be deemed to be the absolute proprietor thereof, and no person dealing in good faith for valuable consideration shall be deemed to have notice of the trust, nor shall any breach of the trust create any right to indemnity under this Ordinance.
140. (1) Subject to the provisions of subsection (2) of this section, the court may order rectification of the register by directing that any registration be cancelled or amended where it is satisfied that any registration including a first registration has been obtained, made or omitted by fraud or mistake.
(2) The register shall not be rectified so as to affect the title of a proprietor who is in possession or is in receipt of the rents or profits and acquired the land, lease or charge for valuable consideration, unless such proprietor had knowledge of the omission, fraud or mistake in consequence of which the rectification is sought, or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default.
141. (l) Subject to the provisions of this Ordinance and of any written law relating to the limitation of actions, any person suffering damage by reason of-
(a) any rectification of the register under this Ordinance; or
(b) any mistake or omission in the register which cannot be rectified under this Ordinance, other than a mistake or omission in a first registration; or
(c) any error in a certificate of official search issued by the Registrar or in a copy of or extract from the register or in a copy of or extract from any document or plan, certified under the provisions of this Ordinance, shall be entitled to be indemnified by the Government out of moneys provided by the Legislature.
Judgment of Martin J
The decision of the Court of Appeal
"For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty."
"The equitable doctrine of tracing and the imposition of a constructive trust by reason of the knowing receipt of trust property are governed by different rules and must be kept distinct. Tracing is primarily a means of determining the rights of property, whereas the imposition of a constructive trust creates personal obligations that go beyond mere property rights. "
"It should also be remembered that the doctrines of purchaser without notice and constructive trusts are concerned with matters which differ in important respects. The former is concerned with the question whether a person takes property subject to or free from some equity. The latter is concerned with whether or not a person is to have imposed upon him the personal burdens and obligations of trusteeship. I do not see why one of the touchstones for determining the burdens on property should be the same as that for deciding whether to impose a personal obligation on a man. The cold calculus of constructive and imputed notice does not seem to me to be an appropriate instrument for deciding whether a man's conscience is sufficiently affected for it to be right to bind him by the obligations of a constructive trustee."
"Assuming that there was a breach of trust on the ·part of Prospect Properties, the charge would be indefeasible, even if the appellant was aware of such breach of trust, provided the appellant was a purchaser for valuable consideration."