Land registration – Registered Land Act 1974 (Belize) – Rectification of register – Fraud or mistake – Land owned by appellants registered in name of another party through fraud – Land subsequently sold – Whether appellants entitled to rectification – Whether rectification available where fraud or mistake relating to earlier registration – Whether protection of bona fide purchaser for valuable consideration applying only to purchaser in actual physical possession – Appeal allowed
In 1973, the first appellant acquired title to land in Belize and was registered as proprietor under the Law of Property Act 1954 and the General Registry Act 1954; the respondent owned adjoining land. In 1981, the first appellant transferred title to his son, the second appellant. The Registered Land Act 1974 subsequently introduced a universal system of compulsory land registration, which was implemented progressively by a series of ministerial declarations that designated compulsory registration areas. A declaration for the area incorporating the appellants’ land was made in 1981.
In 1992, W, as the administrator of the estate of the deceased owner, was registered as proprietor of another nearby parcel of land on an application for first registration. She then applied to be registered as the proprietor of the appellants’ land, submitting the same documents as she had used in the previous application as proof of her title. Although it would have been apparent on inspection, that the documents did not relate to the appellants’ land, the Registry none the less registered W as the proprietor under the 1974 Act. W sold the land to the respondent, who was in turn registered as the proprietor.
The appellants sought rectification of the register, under section 143 of the 1974 Act, on the ground of fraud or mistake. By section 143(2), such a rectification could not affect the title of a proprietor “in possession” or in receipt of the rents or profits, who had acquired the land for valuable consideration without knowing or substantially contributing to the fraud or mistake.
The appellants contended that: (i) the fraud or mistake did not have to relate to the current registration but could relate to any earlier registration, so that rectification was available if any registration in the chain of title (here, that of W) had been obtained by fraud or mistake; and (ii) the respondent could not rely on section 143(2) since “possession” for that purpose required actual physical possession not merely the registered ownership of a fee simple in possession. An order for rectification was initially granted but was reversed on appeal by the respondent. The appellants appealed.
Held: The appeal was allowed.
(1) In order to obtain rectification under section 143, it was not necessary for the registration in respect of which there had been a mistake or error to be that which rectification was being sought. Although that significantly diminished the element of indefeasibility of registered land, the desirability of a simple system had to be balanced against the interests of justice. It was not irrational to strike a balance in that way, given that the remedy of rectification lay within the discretion of the court. It was subject to the protection given to a bona fide purchaser in possession by section 143(2); the 1974 Act did not provide for the indemnification of a party that had been unfairly prejudiced by the operation of the system.
(2) The words “in possession” in section 143(2) referred to actual physical possession; otherwise, the addition of the following words “or is in receipt of the rents or profits” would make little sense.
(3) In the instant case, it was appropriate to award rectification in favour of the appellants. The initial registration in favour of W and the subsequent registration in favour of the respondent had been obtained as a result of mistake and fraud. The mistake of the registrar, namely the erroneous belief that W held title to the appellants’ land at the time of initial registration under the 1974 Act, had been causative both of the initial registration and of the second registration in favour of the respondent. The fraud on the part of W likewise had a causative effect on the obtaining of both registrations. Moreover, W’s fraud could also be ascribed to the respondent, who had known that the propriety of W’s original registration was in doubt but had proceeded with the transfer regardless. Further, even had this not been the case, section 143(2) would not have precluded rectification since the respondent had not entered into possession of the appellant’s land within the meaning of that provision until after the appellants had commenced proceedings for rectification and the registrar had imposed a restriction order on dealings with the land.
James Guthrie QC and Fred Lumor SC (instructed by Simons Muirhead & Burton) appeared for the appellants; David Elvin QC and Tom Weekes (instructed by Pinsent Masons) appeared for the respondent.
Sally Dobson, barrister
