Equipment Rental and Services Ltd Appellant v Texaco [West Indies] Ltd Respondent [ECSC]
| Jurisdiction | Dominica |
| Judge | BYRON C.J. [Ag.] |
| Judgment Date | 26 October 1998 |
| Judgment citation (vLex) | [1998] ECSC J1026-1 |
| Docket Number | CIVIL APPEAL NO. 16 OF 1997 |
| Court | Court of Appeal (Dominica) |
| Date | 26 October 1998 |
IN THE COURT OF APPEAL
The Hon. Mr. C.M.Dennis Byron Chief Justice [Ag.]
The Hon. Mr. Satrohan Singh Justice of Appeal
The Hon. Mr. Albert Redhead Justice of Appeal
CIVIL APPEAL NO. 16 OF 1997
Consolidated Suits No. 304 of 1993
No. 345 of 1993
Mr. D. Knight Q.C. and Mr. E. de Freitas for the Appellants
Mr. F. Solomon S.C., Mr. R Armour, and Mr. A Astaphan for the Respondents
This is an appeal against the judgment of Einfeld J. delivered 18 th April 1997. The ruling was given preliminary to the trial with the consent of counsel for all parties in two consolidated civil suits on agreed facts and issues submitted to the learned trial judge for determination. There were a plethora of matters in controversy but in essence their resolution revolved around the disposal of the preliminary legal issues submitted to the learned trial judge. This shortened the proceedings to one day, and an oral judgment with reasons which were recorded was delivered on the following day. A full trial was thought likely to have lasted three weeks. It was in our opinion a useful method of dealing with these proceedings.
Daniel Green was the Registered Proprietor, [W4 folio 22] of about 300 acres of land. By a lease dated 20 th January, 1968, registered as an incumbrance under the Title by Registration Act, he leased about one and half acres of the land to the respondent for a period of 25 years with effect from 1 st August, 1967 with an option to renew. The respondent had an Aliens Landholding licence to hold the 25 year lease of the land .
By letter dated 5 th May, 1992 the respondent exercised the option for renewal of the lease for a further period of twenty five [25] years commencing 1 st August, 1992, but did not obtain an Alien's Landholding Licence for that further period of 25 years. The lease expired on 31 st July, 1992.
On the 15 th day of August, 1992, Daniel Green entered into a written contract with the appellant for sale of 66,575 sq.ft. of land then currently occupied by the respondent. The balance of the agreed price of E.C.$665,750 was paid on the 16 th September, 1992. At the time of the agreement for sale, there was no notification on the Certificate of Title that the respondent had exercised the option to renew.
On the 29 th September, 1992, the respondent presented a Caveat to be entered on the title of Daniel Green supported by allegations of its exercise of the option to renew the lease. This caveat was noted on the title in June 1993.
As a result of the Caveat, the appellant was not able to obtain a certificate of title notwithstanding that Daniel Greene had executed a memorandum of transfer in the statutory form and on 27 th November, 1992 it was noted on the title.
The main issues decided by the trial judge resolved themselves in to two questions:
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1. whether on the agreed facts the respondent was entitled by equitable relief to obtain the lease pursuant to the exercise of the option to renew, and
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2. whether that right to the lease was affected by the fact that at the time the first lease expired the respondent had no aliens landholding licence.
The judge considered that an option to renew once registered as part of the lease must be regarded as indefeasible although it might only confer equitable interests. He rejected the contention that the failure of the respondent to place a caveat on the title to protect its interest when it exercised the option was the decisive factor in determining whether its claim could now be defeated. He reasoned that, a prudent purchaser conducting reasonable searches would have seen the lease with the option to renew and requisitioned what the situation was in regard to the option. He concluded that the exercise of the option created a prima facie entitlement in the respondent to the delivery of the lease and its due execution for the period for which it was renewed. He answered the Aliens Landholding Licence question by affirming the principle that there is no provision for a lacuna of ownership of land and once the vendor has received the consideration for sale he has no further interest in the land.
Consequently he ruled, that prima facie the respondent is entitled to the delivery of a new lease, duly executed by the appellant, and that nothing in the Aliens Land Holding Act 1992 invalidated or otherwise impinged on the respondent's entitlement to the delivery of the said lease. He ordered that all questions of costs be reserved.
At the hearing the appellant had obtained leave to amend its pleadings to allege that the respondent had waived or abandoned its rights to the lease. The trial judge had reserved his ruling on that issue. That ruling is no longer necessary because we have received formal notice that the appellant will not be pursuing the claim for waiver and abandonment.
The appellant challenged the ruling on the Aliens Landholding licence. We can dispose of this challenge quickly. The abundance of authority makes it unnecessary to revisit this argument in detail. The law is well settled. The Aliens Landholding Licence legislation does not affect the contractual and other relationships between vendor and purchaser and lessor and lessee. The rights, powers and privileges to forfeit land held by the unlicenced alien vests in the State, and not in the individual citizen. Any such land or interest in land, including a 25 year lease, is merely liable to forfeiture. The forfeiture is not automatic nor is it mandatory. In effect this means that the unlicenced alien can hold the land or interest in the land subject to the right of the State to initiate steps to forfeit it . See the Privy Council decision of Young v Bess [1995] 46. W.I.R. 165 applied by this Court in Village Cay Marina v Acland and Others British Virgin Islands Civil Appeal No. 8 of 1995. The ruling of the learned Trial Judge on this issue accords with binding authority.
The appellant has challenged the ruling of the learned Trial Judge that The respondent had an interest in the land which had priority to the appellant as a purchaser for value. His contentions could be fairly grouped and dealt with under four main points.
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1. In Dominica the statutory definition of land under the Title by Registration Act does not include equitable interests, Consequently the respondent had no interest that could be recognised under the Act, and could gain no priority over the appellant.
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2. In Dominica the option to renew is not protected by registration as is the lease itself.
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3. In Dominica the option to renew is not a registrable interest, therefore it is not indefeasible and cannot gain priority against a registered proprietor whose title is protected by the doctrine of indefeasibility.
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4. Even if the option to renew runs with the land the exercise of the option does not as it causes a new lease to spring up and the new lease requires registration.
Mercantile Credits Limited v The Shell Company of Australia (1975–1976) 136 C.L.R. 326 is a decision of the High Court of Australia on appeal from the Supreme Court of South Australia a jurisdiction which applies the Torrens System on which the Title by Registration Act on Dominica is based.
Shell was a lessee under a lease which contained covenants giving the right to renew for three successive periods each of five years. After the first extension, which was duly registered, another became registered as the proprietor of the land subject to the memorandum of lease, and the appellant became registered as mortgagee. Shell gave notice of a further extension and the registered proprietor executed a memorandum in registrable form but it was not registered. The mortgagee did not consent to the extension. There was a default on the mortgage and the mortgagee gave notice of its intention to sell. The appeal affirmed the decision that the lessee was entitled to registration of the extension of its lease and the mortgagee's right to sell was subsequent to the lessee's right of renewal so that the mortgagee was not at liberty to sell the land free from the leasehold interest.
I have concluded that the Mercantile case is very similar to this one. In both cases the relevant interests were the equitable interests that arose in favour of a lessee who had exercised an option to renew and failed to register it. The three members of the High Court of Australia, and the learned trial Judge in this case were satisfied that the registration of the lease with such a clause constituted an interest which ran with the land which was indefeasible, and the interests resulting from the exercise of the option were not dependent on the registration of the extension of the new lease.
Counsel for the appellant contended that the case should be distinguished because its rationale was based on or aided by statutory provisions which did not exist in Dominica. In particular he referred to the fact that under the South Australia Act land was very widely defined to include equitable estates and interests; under section 56 of the South Australia Act gives priority to registered interests over subsequent instruments affecting the same land; section 67 of the South Australia Act provided the lease to contain covenant. I will consider these submissions when dealing with the position under our law.
Does "Land" include "equitable interests in land."
The appellant's position was based to a considerable extent on the argument that the Torrens system as introduced to Dominica by the Title by...
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