Ebanks v Clarke

• Jurisdiction: Cayman Islands
• Judge: (Schofield, J.)
• Judgment Date: 19 March 1992
• Court: Grand Court (Cayman Islands)
• Date: 19 March 1992

Grand Court

(Schofield, J.)

EBANKS

and

CLARKE

N.W. Hill, Q.C. and Ms. G. Maierhofer for the plaintiff;

P. Lamontagne, Q.C. and R. Nelson for the defendant.

Cases cited:

(1) Beaman v. A.R.T.S. Ltd., [1949] 1 K.B. 550; [1949] 1 All E.R. 465, dictum of Lord Greene, M.R. applied.

(2) Cook-Bodden v. Kirkconnell, 1990–91 CILR N–17, dicta of Harre J. considered.

(3) Ebanks v. Powery, 1980–83 CILR N–7, dicta of Summerfield, C.J. considered.

(4) McCormick v. GroganELR(1869), L.R. 4 H.L. 82, dicta of Lord Westbury applied.

(5) Roberts v. ToussaintUNK(1963), 6 W.I.R. 431, dictum of Wooding, C.J. applied.

(6) Waimiha Saw Milling Co. Ltd. v. Waione Timber Co. Ltd., [1926] A.C. 101, considered.

(7) Willis v. Howe (Earl), [1893] 2 Ch. 545.

(8) Wilson v. Bodden, 1988–89 CILR N–17, dicta of Collet, C.J. considered.

(9) Wood v. Wood, 1980–83 CILR 281, considered.

Legislation construed:

Registered Land Law (Revised) (Law 21 of 1971, revised 1976), s.23: The relevant terms of this section are set out at page 39, line 33 – page 40, line 12.

s.140: The relevant terms of this section are set out at page 38, line 39 – page 39, line 11.

Land Law-registration-rectification-acquisition of title by fraud-rectification of Register permitted by Registered Land Law (Revised), s.140 if fraud on adjudication process-applicant”s illiteracy and subsequent discovery of fraudulent transfer of property justification for rectifying Register to acknowledge his title

Land Law-registration-rectification-acquisition of title by fraud-rectification of Register to change fraudulent registration may recognize full legal rights of rightful owner or, alternatively, recognize beneficial ownership with current registered proprietor as trustee

Limitation of Actions-fraud-registration of title to land-time starts to run from discovery of fraud-plaintiff not statute-barred if establishes (a) existence of fraud; (b) deprivation of title to land as consequence; (c) concealment of fraud; and (d) inability to discover fraud sooner with exercise of reasonable diligence

The plaintiff sought rectification of the Land Register.

The plaintiff, in return for paying off the mortgage on land belonging to his half-brother, was given the land by deed of gift subject to his half-brother”s being entitled to occupy a house on the land for life. The plaintiff at all times thereafter exercised the rights of a legal owner over the property. In 1971, at the time the adjudication process was being carried out prior to registration of all land in the Cayman Islands, the plaintiff was possibly away at sea. In any event, since he was illiterate, it was unlikely that he would have understood the import of the land registration scheme. Unknown to him, the land was registered in the name of his half-brother, who subsequently in 1987 transferred it jointly to himself, his companion and her daughter, the defendant. There was no direct evidence of fraud but there was evidence that a conveyance in the half-brother”s name had been tendered during the adjudication process and that an application had also been made by him for a land certificate. The deed of gift was not recorded as having been produced before the Records Officer.

On the death of the defendant”s mother in 1989, the plaintiff learned that the land had not been registered in his name and asked his half-brother to rectify the situation. Nothing was done and the half-brother died in 1990. When the defendant purported to exercise proprietary rights over the land, the plaintiff brought the present proceedings seeking rectification of the Land Register and other consequential orders.

He submitted, inter alia, that he was deprived of title to the land by undisclosed fraud on the part of his half-brother and, being the true owner, was entitled to rectification of the Land Register to record his full legal interest or, alternatively, to reflect his beneficial interest in the property with the defendant holding the land as a trustee for him.

The defendant submitted that (a) under the Land Registration Law (Revised) and the Land Adjudication Law, 1971, the court had no power to rectify a first registration after the adjudication process had been completed or the time for it had passed; (b) there was no direct evidence of fraud upon which the plaintiff could base his claim; and (c) in any event, the action was statute-barred since it was brought more than 12 years after the alleged acts giving rise to the cause of action.

Held, granting the orders sought:

(1) Although there was no direct evidence of fraud by the plaintiff”s half-brother, there was conclusive evidence that he had acquired title to the land by fraudulent non-disclosure. The plaintiff, on the other hand, had never sought to assert his own title as he was statutorily required to do, which was understandable in view of his illiteracy and a circumstance which weighed against allowing fraud to prevail. The Land Adjudication Law, 1971 and the Registered Land Law (Revised), though intended to bring certainty and finality to the registration of titles in the Land Register, should not be construed in such a way as to condone fraud and fraud on the adjudication process itself must therefore be open to review. Since the wording of s.140 of the Registered Land Law (Revised) together with the provisions of the Land Adjudication Law, 1971 did not expressly preclude rectification of a first registration in these circumstances, the plaintiff as the true owner of the land was entitled to the rectification sought (page 38, lines 30–36;page 43, line 25 – page 44, line 5; page 44, lines 11–22;page 47, lines 3–9).

(2) Alternatively, since equity treats a person who has obtained property by fraud as a trustee for the victim of that fraud, the deceased, on his registration as the owner, would have become at most a trustee for the plaintiff. It would follow that he could pass no more than a similar status to the defendant who would in consequence hold the land in trust for the plaintiff. Accordingly, the plaintiff would be entitled to rectification to reflect his ownership of the land, or alternatively that he was the beneficial owner with the defendant holding the land only as a trustee for him (page 46, lines 2–4;page 47, lines 9–17).

(3) The plaintiff”s claim that time for bringing the action began to run against him only when he discovered the fraud would succeed, its having met the four requirements for the success of such a claim, namely that (a) there must have been a fraud; (b) the fraud must have deprived him of the title to the land; (c) the fraud must have been concealed; and (d) the concealment must have been such that it could not with reasonable diligence have been discovered sooner. The action had therefore been properly brought (page 44, line 34 – page 45, line 32).

25	SCHOFIELD, J.: The plaintiff in this action is a 67-year-old
Caymanian who spent most of his working life at sea. He stopped
going to sea in about 1978 but managed to get work on the docks
in George Town. He has little formal education and in fact cannot
read or write. When he was away at sea, he kept in touch with his
30	family and sent money to Miss Una Bush at the George Town
Post Office, who kept it for him. In this way he accumulated a
little money. His mother at one time owned the plot of land in
George Town which is the subject-matter of this suit. It measures
0.10 acres and is adjacent to the Caribbean Utilities Station. The
35	plaintiff”s mother sold the land but, eventually, it found its way
back into the family and into the ownership of the plaintiff”s half-
brother, Fred Connor. Fred Connor was literate.
In 1972 Fred Connor ran into money difficulties and he asked
the plaintiff to pay off the bank mortgage on the land. They went
40	together to the bank and the plaintiff paid off Fred Connor”s loan
and they received the title documents to the land. They then went

to Ms. Anna Bodden, an attorney, who drew up a deed of gift by
which the land, together with two dwelling houses thereon, was
transferred to the plaintiff and by which Fred Connor was entitled
to occupy the smallest of those dwelling houses for life. The
5	plaintiff and Fred Connor then went on to Berkley Bush, a
Justice of the Peace, and Fred Connor attested the deed before
him. According to the plaintiff Mr. Bush asked Fred Connor if he
knew what he was signing and received an affirmative reply. The
document was duly registered in the Public Record Office of
10	these Islands on July 5th, 1972. It is accepted by all parties that
the document exhibited to the court as that deed is a true
document, duly registered, and by such document the plaintiff
was given proper title to the land in dispute.
Fred Connor continued to live on the land. He lived there with
15	a lady called Edith Flennaugh. The plaintiff was away at sea much
of the time but sent money back for maintenance and improve-
ments to his house and yard. Even when he left the sea the
plaintiff, according to his evidence, helped to maintain Fred
Connor and Edith Flennaugh, and when the small house fell into
20	disrepair he invited them to move into the larger house with him.
In 1974 the land adjudication process took place in the area
where the land is situated. The documentation does not show
by whom, but a claim was made and documents were tendered
to the Records Officer appointed under the Land Adjudication
25	Law, 1971. The documents so tendered were conveyances,
the last one being to Fred Connor. The deed of gift to the
plaintiff is not recorded as having been produced to the Records
Officer.
The plaintiff has testified that he must have been out when the
30	officers from the adjudication

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