Conolly v Rankine

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P., Georges and Collett, JJ.A.)
• Judgment Date: 20 August 1999
• Court: Court of Appeal (Cayman Islands)
• Date: 20 August 1999

Court of Appeal

(Zacca, P., Georges and Collett, JJ.A.)

R. CONOLLY (as Personal Representative of the Estate of A. McF. CONOLLY, deceased)

and

RANKINE

P. Lamontagne, Q.C. and Mrs. E. Nervik for the appellant;

N.W. Hill, Q.C. and A.S. McField for the respondent.

Cases cited:

(1) Juneau v. Gynell, 1984–85 CILR 1, applied.

(2) Kleinwort Benson Ltd. v. Lincoln City Council, [1999] 2 A.C. 349; [1998] 4 All E.R. 513, distinguished.

Legislation construed:

Registered Land Law (1995 Revision) (Law 21 of 1971, revised 1995), s.38(2): The relevant terms of this sub-section are set out at page 395, lines 26–30.

s.140(1): The relevant terms of this sub-section are set out at page 395, lines 32–36.

(2): The relevant terms of this sub-section are set out at page 395, lines 37–43.

Succession-life interest-remainder-beneficiary of remainder interest in land under will acquires vested interest on death of testator-survives for benefit of holder”s estate if predeceases life tenant

Land Law-registration-rectification-‘mistake’ justifying rectification under Registered Land Law (1995 Revision), s.140 must be mistake of fact, not law-transfer by personal representative in ignorance of survival of third party”s remainder interest under will involves mistake of law

The appellant applied to the Grand Court for a declaration that a transfer of land to the respondent was invalid, and for rectification of the Land Register.

The owner of the land left it by will to his wife for her lifetime, and after her death to his son, L, and two unmarried daughters, I and A, in equal shares. It was described in the will as the ‘house, appurtenances and yard premises.’ The testator”s other children were to be entitled to the residue of the estate. The entire estate was charged for the support and maintenance of his wife and minor children, and of his unmarried daughters so long as they remained so. The will was not submitted to probate.

I predeceased her mother. The remaining daughter, A, obtained letters of administration with will annexed in order to provide for herself and her mother. Over a number of years, the respondent, her nephew, made a series of payments to A and a lump-sum payment to L as payment for their interests in the land. After the death of her mother, A transferred the land to him (now designated as a specific parcel following a cadastral survey) using the form for use between a personal representative and a person entitled under a will. The land was registered in his name, and he renovated the property and rented it out.

The appellant was later appointed as personal representative of the deceased”s estate and challenged the validity of the transfer to the respondent.

The Grand Court (Douglas, Ag. J) refused to order rectification of the Land Register under s.140 of the Registered Land Law (1995 Revision), since although A had used the wrong form of transfer (the respondent not having been specifically mentioned in the will), she had had power

as administratrix to dispose of the land and had done so under a mistake of law which was not contemplated by s.140. In any event, the respondent was a bona fide purchaser for value without notice of any prior interest. The proceedings in the Grand Court are reported at 1998 CILR 133.

On appeal the appellant submitted that (a) as one of the three children named in the will, I had acquired a vested interest in remainder in the land upon her father”s death, which had survived for the benefit of her own estate when she predeceased her mother, the life tenant; (b) accordingly, the ownership of and legal right to transfer the land had not vested wholly in the remaining two children, A and L, when it was disposed of to the respondent; (c) furthermore, since the respondent had been aware of the existence of I”s interest before the transfer to him, he was not a bona fide purchaser, and the court should order rectification of the register or the retransferral of the land; and (d) in any event, the ‘house, appurtenances and yard premises’ referred to in the will formed only part of the parcel transferred, and the remaining land still formed part of the residue of the testator”s estate.

The respondent submitted in reply that (a) although I”s interest in remainder had survived for the benefit of her estate, none of the parties to the subsequent transfer had been aware of this consequence, and the court could not order rectification of the Land Register on the basis of a mistake of law; (b) he was protected under s.140(2) as a proprietor without knowledge of the mistake at the time of the transfer; (c) he had been entitled, under s.38(2) of the Registered Land Law, to regard A as the legal proprietor of the land, in view of her status as administratrix, and therefore had taken ownership of it free of any interest belonging to I”s successors; and (d) the ‘house, appurtenances and yard premises’ referred to all the land now contained in the parcel transferred to him.

Held, dismissing the appeal:

(1) Although the land had remained part of the testator”s estate until its transfer to the respondent (the will never having been submitted to probate), I had acquired a vested one-third interest in remainder on her father”s death, which by the common law of succession survived for the benefit of her estate when she predeceased her mother. This interest had not been extinguished by later events (and I”s successors were at liberty to make a claim against the estate for its value), but it had been overreached by the transfer of the land to the respondent by A, as administratrix, for the purpose of maintaining herself. This was authorized by the terms of the will, which had charged the whole of the estate for the support and maintenance of such of the testator”s daughters as remained unmarried. Furthermore, the land in question comprised the whole of the parcel transferred to the respondent, since it had been occupied by the testator and his family as a single tract. The expression ‘yard’ was understood to mean the entire land and was not to be given a restricted meaning by

reference to English case law or usage (page 393, lines 7–22; page 394, line 33 – page 395, line 17; page 397, lines 29–44).

(2) The court could not order rectification of the Land Register, since the mistake as to the legal status of I”s beneficial interest was not a proper basis for rectification under s.140 of the Registered Land Law (1995 Revision). It was a mistake of law, not fact, and therefore was not contemplated by s.140. The respondent”s prior knowledge of facts from which he could have concluded that I”s interest subsisted, had he had the necessary legal knowledge, did not deprive him of the...