Quinto & Anor v. Santiago Castillo Ltd (Belize) [2009] UKPC 15

Judicial Committee of the Privy Council
Case No Privy Council Appeal No 27 of 2008Venue FROM THE COURT OF APPEAL OF BELIZE - - - - - - - - - - - - - - - - -
Between
Quinto & AnorAppellantSantiago Castillo Ltd (Belize)Respondent
Before
Lord Phillips of Worth Matravers Baroness Hale of RichmondLord CarswellLord Brown of Eaton-under-HeywoodLord ManceDate 28 April 2009
[1]:- Lord Phillips of Worth Matravers Baroness Hale of Richmond Lord Carswell Lord Brown of Eaton-under-Heywood Lord Mance - - - - - - - - - - - - - - - - [Delivered by Lord Phillips of Worth Matravers ] This appeal raises issues of both law and fact in respect of the effect of the Torrens system of land registration, as enacted by the Registered Land Act 1974 ("the Act"), which forms Chapter 194 of the Laws of Belize. In issue is title to a parcel of land which has been registered as Parcel 869, Block 16 Caribbean Shores ("Parcel 869"). Parcel 869 was owned by the appellants ("the Quintos"). A woman called Ann Williams, who had no claim to ownership of Parcel 869, succeeded in getting herself registered as the proprietor of that parcel. She then sold it to the respondent ("Santiago"), which obtained registration as proprietor in Ann Williams' place. The Quintos claimed an order for the rectification of the register so as to substitute themselves as proprietors of Parcel 869. Their claim was consolidated with a claim by the Registrar of Lands, who sought similar relief. Each claim was commenced by Originating Summons and was brought against both Ann Williams and Santiago. The Quintos' summons was filed on 3 February 2005 and the Registrar's on 22 February 2005.[2]Conteh CJ granted the appellants the relief that they sought. His judgment was reversed on appeal by the Court of Appeal of Belize (Mottley P, Sosa and Morrison JJA). The Quintos appeal against their decision, having been granted leave to do so by that court. The Quintos' original title to Parcel 869.[3]Parcel 869 is a substantial piece of land that extends from what is now called Northern Highway to Haulova Creek in Belize City. The Creek frontage extends about 300 feet. The Quintos acquired title to Parcel 869 at a time when registration of land in Belize was governed by provisions of the Law of Property Act 1954 and the General Registry Act 1954. William Quinto acquired registered title to the parcel on 31 December 1973. On 12 February 1981 he transferred that title to himself and his son Jimmy. Again the title was duly registered. The Torrens system in Belize[4]Under the Torrens system registration confers title on the registered proprietor. A merit of the system is that a purchaser from the registered proprietor does not normally need to look further than the register for reassurance that the vendor has good title. Under some systems once a title is registered it is indefeasible. Under other systems the title of a bona fide purchaser from the registered proprietor will, once it is registered, be indefeasible. The indefeasibility of title is, however, capable of giving rise to injustice if the registration of the title is brought about by fraud, or by a mistake. For this reason, many Torrens systems make provision for rectification of the register, but the nature of such provision varies from system to system. The effect of each depends on its own terms.[5]The regime introduced in 1954, under which the Quintos had registered their title, had not resulted in universal registration. The Act provides for the progressive replacement of the old regime with a universal system of compulsory registration. Under section 4 the Minister is entitled to declare an area a compulsory registration area with effect from a specified date. He made such a declaration in relation to the area that included Parcel 869 on 20 October 1981, and it was at this point that the parcel was designated as Parcel 869. Section 11 of the Act specified the effect of this declaration:
"From the date of any Order made by the Minister under section 4, all dealings relating to any land in the compulsory registration area named in that Order shall be made in accordance with this Act, and no dealing made otherwise than in accordance with this Act shall have any validity or effect."
[6]Section 12 provided what should then happen in relation of land that had been registered under the old regime:
"12. (1) On the declaration by the Minister of a compulsory registration area under section 4 the Registrar shall, in relation to every parcel of land situated in that area the title to which is already registered under the General Registry Act, prepare a register in the prescribed form showing all the subsisting particulars registered under that Act. (2) Any person having an interest in any parcel of land registered under the General Registry Act shall be given notice in writing by the Registrar that the particulars of the said registration have been transferred to the Land Register compiled under this Act and thereupon the General Registry Act shall cease to apply to such parcel and this Act shall apply thereto."
[7]Section 13 made provision for dealing in land that had not been registered under the old regime. "13. (1) Where a person having an interest in land which is not registered under the General Registry Act and which is situated in a compulsory registration area wishes to deal in such interest, he shall, prior to such dealing, submit to the Registrar an application for first registration in the prescribed form and shall attach to such application all documents in his possession relating to that interest."[8]Unhappily the Land Registry was not provided with the resources needed to implement the provisions of section12. What appears to have occurred is that, whether land was registered under the old regime or not, registration under the Act was carried out piecemeal on application by proprietors in accordance with the provisions of section13. Section 159 of the Act provides that, upon first registration of any land under the Act, the General Registry Act and the Law of Property Act shall cease to apply to such land.[9]Section 26 of the Act provides that registration of any person as the proprietor with absolute title of a parcel shall vest in that person absolute ownership of that parcel, subject to any leases, charges or other encumbrances shown on the register. Section 41 provides:
"41. (1) No person dealing or proposing to deal for valuable consideration with a proprietor shall be required- (a) to inquire or ascertain the circumstances in or the consideration for which such proprietor or any pervious proprietor was registered or the manner in which any such consideration or part thereof was utilised; (b) to search any register kept under the General Registry Act."
[10]Section 86 of the Act provides that transfer of land shall be completed by the registration of the transferee as proprietor of the land.[11]Section 7 of the Act gives the Registrar wide powers to call for documentation and information and to refuse to proceed with any registration in the event of a failure to comply with such requests. Section 135 gives the Registrar the power, for the prevention of fraud or improper dealing or for any other sufficient cause, to make an order prohibiting or restricting dealings with any particular land, and section 136 provides that, in that event, no instrument inconsistent with that order may be registered.[12]The most critical provisions of the Act in the context of this appeal are those dealing with rectification:
"Rectification and Indemnity . . . 143. (1) Subject to subsection (2), the court may order rectification of the register by directing that any registration be made, 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."
The evidence[13]Ann Williams was, at the outset of the hearing, represented by counsel who told Conteh CJ:
"Ann Williams concedes that …a mistake may have occurred in the first issuance of the first title, however since that title is no longer in existence, our client did not see fit to file an affidavit …and will not contest the claim."
[14]The parties had filed evidence in the form of affidavits and before the hearing it was not clear whether applications would be made to cross-examine the deponents. At the commencement of the hearing Mr Elrington SC for Santiago stated that the only witness whom he wished to cross-examine was Ms Enid Welch, the Registrar of Lands. Mr Elrington said that he intended to rely on the affidavit of Santiago Castillo Junior ("Mr Castillo"), the Managing Director and Chief Executive of Santiago. Neither of the claimants' counsel sought to cross-examine this deponent. When the Registrar came to be cross-examined, Mr Elrington did not challenge any of the facts that she had set out in her affidavit. Rather he concentrated his energies on seeking to elicit from her agreement to what was in effect a proposition of law, namely that under the Act one needed to look no further than the register in order to see whether a vendor was in a position to give good title as the proprietor of the estate being transferred.[15]Thus Conteh CJ had to found his judgment on affidavit evidence that had not been challenged in cross-examination. A number of documents were exhibited by the Registrar to her affidavit, some of which bore dates that antedated the dates on which she stated that they had been drawn up. This reflects a practice in the Registry of antedating documents so as to show, not the dates of drawing up documents, but the earlier dates of applications pursuant to which the documents are drawn up. This, we were told, was to give effect to section 44(2) of the Act, which provides that where an instrument is prepared in the Registry, it shall be deemed to have been presented on the date on which its application for presentation was made to the Registrar. The facts[16]We shall set out first the facts that appear in the claimants' affidavits.[17]On 19 June 1992 a grant of administration was made to Ann Williams in respect of the estate of Herbert Williams, who had died seven years before. The inventory of the estate included a piece of land which corresponded to a parcel which the Registry had designated Parcel 818, Block 16 Caribbean Shores. This lay to the west of Parcel 869, and was separated from it by another parcel. In July 1992 Ann Williams successfully applied for a first registration of herself as proprietor of Parcel 818. The documents that she produced to prove her title included an indenture that identified the land by reference to, among other matters, its description which showed that it had a frontage of only 100 feet.[18]Immediately contiguous to Parcel 869 to the east was a substantial parcel of land owned by Santiago, on which it operated a supermarket. The Castillo family believed, correctly, that the Quintos owned Parcel 869. Sometime in 1990 members of the Castillo family, on behalf of Santiago, made an offer to the Quintos to buy Parcel 869. The Quintos refused the offer. In 2000, Mr Castillo Junior sought to persuade the Quintos to rent part of Parcel 869 to build a boat house. This request was refused. In June or July 2004 a family friend of the Quintos, Mr Winston Smiling, was involved on their behalf in negotiations with Mr Anthony Thurton, as agent for the Castillo family, in relation to the purchase of Parcel 869 to enable Santiago to expand its supermarket. Agreement was not reached in relation to the price of the land.[19]Other facts were relied upon by the Quintos to show that the Castillo family believed that the Quintos owned Parcel 869 but there is no need to recite these, for that belief has never been in issue. Indeed on 19 th January 2005 Mr Elrington was to tell the Registrar that Mr Castillo Junior had negotiated with the Quintos to buy Parcel 869 for many years, believing that they were the owners of the land, although he had never seen proof of their ownership.[20]On 6 October 2004 Ann Williams applied to be registered in her capacity as administrator of Herbert Williams as proprietor of Parcel 869. The documents that she produced as proof of her title related to the land in respect of which she had been registered as proprietor of Parcel 818. Indeed they included the same indenture upon which she had relied to obtain that registration. Had the Registry inspected the documents it would have been apparent that they did not relate to Parcel 869. They do not appear to have done so. On finding that there was no registration under the Act in respect of Parcel 869 they proceeded to process Ann Williams' application. This involved advertising on 30 and 31 October that an application had been made to register Parcel 869. One month was allowed for responses to these advertisements but there was none. Accordingly, on 9 December the application was passed to an officer in the Registry for registration.[21]At about this time Mr Hyde, a chartered land surveyor, called twice at the Registry, seeking a copy of one of the deeds that Ann Williams had filed in support of her application. The Registrar suspected that he might be investigating the claim to the title of Parcel 869. Because of this suspicion she called for the file and held up the registration for a period of about two weeks. She tried but failed to contact Mr Hyde, and plainly did not subject the file to a scrutiny sufficient to identify that it did not support Ann Williams' application, for on 28 December she signed the Register for Parcel 869.[22]On 31 December, unknown to the Registrar, Mr Hyde filed on behalf of the Quintos an application for first registration of Parcel 869. Mr Hyde has died and there is no evidence as to why he had been making enquiries at the Registry in the course of December. We cannot see, however, that that question is of significance, any more than the motive that led the Quintos at this point to decide to register their land.[23]On 3 January Mr Elrington lodged for registration an instrument transferring Parcel 869 from Ann Williams to Santiago. The consideration recorded was $130,000(Belize). The instrument was dated on its face 24 December 2004, and on the back two certificates of identification of the parties to the transfer were also dated 24 December 2004. One was witnessed by Mr Arnold and the other by Mr Elrington. The transfer was registered on 6 January 2005 but the entry in the register was backdated to 31 December 2004. The Registrar stated in her affidavit "…both Mr Elrington and Attorney-at-Law, Ellis Arnold, who acted as Ann Williams' attorney in the transfer, requested that the registration of the transfer instrument be treated as urgent and normally, so long as no other document pertaining to a Parcel is pending for registration, a request that the registration of an instrument pertaining to that Parcel be processed faster than usual is facilitated."[24]On 14 January the Quintos' application for registration in relation to Parcel 869 was drawn to the Registrar's attention. This led her to conduct what she described as an extensive investigation which disclosed that Ann Williams had not been the true owner of Parcel 869. She told Mr Castillo of this conclusion. He expressed astonishment and said that he had purchased the Parcel from Miss Williams for a quarter of a million dollars.[25]On 24 January 2005 the Registrar placed a restriction on dealings in respect of Parcel 869, which was followed by her application to the Court for rectification of the register.[26]On 2 March 2005 the Quintos applied for an injunction against Santiago and a company called Medina's Construction Limited, supported by an affidavit which deposed that on 25 February Medina's workmen had started to erect a chain link fence around Parcel 869 and thereafter dumped on the land building materials in preparation for the construction of buildings on the land. It was supported by exhibits that included photographs. An injunction was granted restraining the defendants from further entry onto the property.[27]The affidavit sworn by Mr Castillo is relatively short, and we shall set it out in full. "2. In or about the 30 th December, 2004 I was approached by one Ann Williams, who introduced herself to me as the Administratrix of the Estate of Herbert Leopold Williams. I have never met Ann Williams prior to that date. 3. Ann Williams showed me what appeared to be the original Registered land Certificate in respect of Parcel 869 Block 16 Caribbean Shores Registration Section, Belize [hereinafter referred to as "the land"] and enquired whether the Company would wish to purchase same. 4. Upon examination of the certificate and the plan attached thereto, I saw that Parcel 869 abutted the land on which the San Cas Plaza is constructed on its northern boundary. 5. I thereupon informed Ann Williams that the Company would be interested in purchasing the land but that it would prefer to conclude the transaction through her legal representative. 6. I further informed Ann Williams that the Company's Lawyer who would handle the transaction was Wilfred Elrington of the law firm of Pitts & Elrington and I suggested that if she did not have a lawyer she could consult Mr. Ellis Arnold or any other lawyer of her choice. 7. Later that day Mr. Ellis Arnold contacted me and informed me that he had been instructed to offer to sell the said land to the Company. 8. I informed Mr. Arnold that the Company was interested in purchasing the said land and that Wilfred Elrington would contact him to work out the details. 9. I thereupon contacted Mr. Elrington, informed him of the offer and of the Company's desire to purchase the land. I also informed Mr. Elrington that the Company had had discussion in the past with an agent and members of the Quinto family regarding the sale and purchase of said land but that at no time had the Quintos or their agent produced any title to the said land. 10. Mr. Elrington thereupon advised me that before any agreement to purchase said land could be arrived at it was imperative that Mr. Ellis Arnold be requested to ascertain whether the Quintos, in fact, possessed any title to the said land. In addition Mr. Elrington advised me that a search had to be conducted at the Land Registry to ascertain whose name was entered on the register for Parcel 869 as the owner of said parcel of land. 11. On the 31 st December, 2004 Mr. Elrington informed me that his search at the Land's Registry showed that the said land was registered in the name of Ann Williams (as administratrix of the estate of Herbert Leopold Williams). 12. Mr. Elrington also informed me that Mr. Arnold had informed him that his inquiries revealed that the Quintos were out of the country. 13. I then informed Mr. Elrington that Mr. Howell Longsworth had presented me with a purported lease in respect of a small hamburger stand which is located on the south eastern extremity of said land and had informed me that Mr. Ellis Arnold had given him verbal notice to quit and deliver up said land. I also delivered the said document to Mr. Elrington. 14. After reading the said document Mr. Elrington opined me that it did not impair the title of the said Ann Williams (as administratrix of the estate of Herbert Leopold Williams deceased) in any way. 15. Based upon that information and advise I informed Mr. Elrington that the Company would accept the offer of sale of the said land, and on the afternoon of the said 31 st December, 2004 the Company purchased the said land for $130,000.00, the transfer instruments were duly completed and executed and the original registered land certificate was delivered to Mr. Elrington. 16. Approximately eighteen months prior to the purchase of said and the Company had commenced occupying the southern one third portion thereof for the parking of its motor vehicles and those of its employees and the Company continued so to do after the completion of the sale and purchase until the 4 th March, 2005 when it was restrained from so doing by an order of the Supreme Court, a copy of a photograph showing the vehicles parked on said property is now produced and shown to me marked "SC1". 17. On or about the 4 th January, 2005 the Company caused the said land to be surveyed by Kenneth Gillett Licensed land surveyor who produced a topographical survey plan of said land. A copy of the topographical plan is now produced and shown to me marked "SC2". 18. Between the 2 nd day of January and the 20 th February, 2005 workers employed by the Company commenced clearing the said land, erecting a fence along the eastern boundary thereof and installed an office and a warehouse on said land. A copy of photographs showing the land cleared of debris, showing the office and the warehouse and showing the said fence are now produced and shown to me marked "SC3", "SC4" and "SC5" respectively. 19. Between the 20 th February, 2005 and March 4 th 2005 the said workers stock piled on the said land tons of heavy duty rebars and reinforced concrete and steel pilons as well as tons of stones, sand and gravel and land fill to fill in the eroded western portion of the said land. A copy of photographs showing the heavy duty rebars, the reinforced concrete pilons, the steel pilons and the stones, sand and gravel and land fill are now produced and shown to me marked "SC6", "SC7" and "SC8" respectively 20. The Company purchased the said land for the purpose of constructing the new Sav-U-Supermarket thereon and in fact entered into actual occupation thereof and commenced working thereon immediately upon purchasing it." The issues of law[28]Two issues in relation to the interpretation of section 143 of the Act were debated before the Board. The first related to the circumstances in which the court was given power to order rectification of the register under section 143(1). The subsection twice refers to "any registration". Where that phrase is first used it can only refer to the current registration, for that will have replaced any earlier registration. The issue related to the second use of that phrase. Counsel for the Quintos argued that it covered not only the current registration, but any earlier registration. Thus, it was submitted, the discretionary power of the court to rectify the current registration arose if any registration in the chain of title had been obtained or made by fraud or mistake.[29]Counsel for Santiago submitted that, where the phrase was used for the second time, it should be given the meaning "any such registration". Thus, it was submitted, the power to rectify only arose if the current registration had been obtained or made by fraud or mistake.[30]The second issue related to the meaning of "in possession" in section 143(2). Counsel for the Quintos submitted that this meant physically in possession. Counsel for Santiago submitted that it referred to the registered proprietor's title, so that he was "in possession" if he was registered as the owner of a fee simple in possession. Issues of fact[31]For the Quintos it was submitted that both the registration of Ann Williams and the subsequent registration of Santiago as proprietor of Parcel 869 were obtained by both mistake and fraud. The mistake was that of the Registrar in believing that Ann Williams had good title to the parcel. The fraud was primarily that of Ann Williams in procuring her registration as proprietor when she knew she had no title to the parcel. Mr Castillo was party to the mistake or fraud, at least by the stage of the registration of Santiago as proprietor of the parcel, in that he was aware that, before the first registration, ownership of the parcel was vested in the Quintos rather than Ann Williams. Santiago's title was not protected by section 143(2), firstly because Santiago were not in possession of Parcel 869 and secondly because Mr Castillo had knowledge of the fraud or mistake in consequence of which rectification was sought.[32]For Santiago it was submitted that the registration in favour of Santiago was made without any fraud or mistake. As such it conferred an indefeasible title. Any fraud or mistake related only to the first registration. Furthermore, at no stage did Mr Castillo have knowledge of any mistake or fraud. He had understood that the Quintos owned Parcel 869, but had never seen any proof of this. When approached by Ann Williams he had instructed his lawyer to look into the matter. His lawyer had advised him that Ann Williams was registered as the proprietor of the parcel and that her title was not impaired by a lease that had been granted to use a small part of the land as a hamburger stand. In these circumstances he was in a position to proceed with the transfer and acquire good title. If, contrary to Santiago's primary submission, section 143(1) gave the court the power to rectify subject to section 143(2), the latter subsection precluded rectification inasmuch as Santiago was in possession of Parcel 869 without knowledge of any fraud or mistake. The findings of the courts below[33]Conteh CJ started by finding that "at the very least" the first registration in favour of Ann Williams was by mistake. The mistake was the failure to realise that the Quintos were the registered owners of the land under the General Registry Act. That was an enduring mistake that applied equally in the case of the second registration in favour of Santiago. The mistake "ineluctably coloured and affected the subsequent registration" of Santiago (para 31). The mistake was fraudulently procured by Ann Williams when she secured the registration in respect of Parcel 869 by producing papers that had nothing to do with it (para 45).[34]Conteh CJ went on to make this finding about Santiago:
"I am therefore satisfied that on the evidence, even if Santiago Castillo Ltd. did not actually procure the fraud by which Ann Williams got the first registration in her favour in respect of Parcel 869, it did actually have knowledge of it. Thus, by falsely and fraudulently representing to the Registrar that she was entitled to the first registration she got her name on the register. I cannot absolve Santiago Castillo Ltd. of knowledge of this given the history and relationship between it and the Quintos regarding Parcel 869. A more prudent and honest person would have ascertained the true position, especially in the light of the recent but inconclusive negotiations between its agent and that of the Quintos. Instead there was an indecent haste to have Ann Williams registered as a proprietor of the land and she in quick order, turned round to sell it to Santiago Castillo Ltd., who in turn knowingly without belief in the truth of the first registration in favour of Ann Williams and recklessly careless whether it be true or false, presented it to the Registrar in order to get its own name on the register as proprietor of Parcel 869."
[35]On these findings Conteh CJ ordered the rectification sought by the claimants.[36]In the Court of Appeal Morrison JA held that the Chief Justice had been wrong to hold that the mistake in respect of the first registration in favour of Ann Williams was an "enduring mistake" so as to render Santiago's title vulnerable to attack. Such a finding subverted the objectives of certainty and security of title that the Torrents system was designed to promote (paras 53). Where section 143 referred to "any registration" having been obtained, made or omitted by fraud or mistake, "any registration" had to be given a restrictive interpretation so as to apply only to the registration that it was sought to impugn. There was no mistake that related to the obtaining of the second registration.[37]So far as fraud was concerned, there was no evidence that Santiago or its legal advisers had any knowledge of the original application for registration by Ann Williams. A "troubling feature" of the case was the long history of Santiago and others regarding Parcel 869 as the Quintos' land, but Mr Castillo had instructed Mr Elrington to look into the situation. He had carried out a search of the register and it was "only after the results of this search and Mr Elrington's advice were received by him" that Mr Castillo had felt able to instruct Mr Elrington to accept Miss Williams' offer to sell Parcel 869.In these circumstances the allegation of fraud against Mr Castillo had not been made out (paras 65-67). There was no case for rectification.[38]Had the requirements of section 143(1) been satisfied, rectification would still have been precluded by section 143(2), for Santiago had entered into actual possession of the land without knowledge of fraud or mistake in respect of which rectification was sought. Conclusions of law[39]The Board differs from the conclusion of the Court of Appeal in relation to the construction of section 143(1) of the Act. It would have been easy and natural for the draftsman to use the phrase "such registration" in place of the second "any registration" if that is what he had intended the phrase to mean. He did not, and the addition of the words "including a first registration" after the second "any registration" is a further indication that the registration in respect of which there has been a mistake or error need not necessarily be the registration in respect of which rectification is sought. 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, despite the title of the relevant Part, makes no provision for indemnification of a person unfairly prejudiced by the operation of the system.[40]As for the meaning of "in possession" in section 143(2), the Board is satisfied that this means actual physical possession. Were this not so the addition of "or is in receipt of the rents or profits" would make little sense. Conclusions of fact[41]The Board is satisfied that both the initial registration in favour of Ann Williams and the subsequent registration in favour of Santiago were obtained as a result of both mistake and fraud. The mistake was that of the Registrar and consisted in the erroneous belief that Ann Williams, rather than the Quintos, had title to Parcel 869 at the time of the initial registration in Ann Williams' favour. The causative effect of that mistake persisted up to and resulted in the second registration in favour of Santiago, and was augmented by a further mistake in that the Registrar was unaware that an application in respect of Parcel 869 had been made on behalf of the Quintos on 31 December 2004, before registration in favour of Santiago had been completed. But for these mistakes, the Registrar would plainly not have completed the registration in favour of Santiago, but would have placed a restriction order on the land until the position had been clarified by the court.[42]Not merely did the mistake have causative effect on the obtaining of both registrations, the same is true of Ann Williams fraud. Her fraudulent intent clearly extended to obtaining payment for Parcel 869 by selling it to Santiago. To obtain payment the transfer to Santiago had to be completed and registration was required to complete the transfer – see section 86 of the Act. Ann Williams, through her attorney, was urging the registry to expedite the transfer to Santiago and, in so doing, was acting fraudulently.[43]The Board has concluded that Conteh CJ was correct to hold that Santiago had knowledge of Ann Williams fraud, and of the mistake that this induced in relation to both registrations and that the Court of Appeal should not have reversed this finding. As to this there is a pertinent passage in the judgment of the Board given by Lord Lindley in an appeal dealing with the effect of registration of land under legislation then in force in New Zealand, namely Assets Company Ltd v Mere Roihi [1905] AC 176 at p. 210. "Further, it appears to their Lordships that the fraud which must be proved in order to invalidate the title of a registered purchaser for value, whether he buys from a prior registered owner or from a person claiming under a title certified under the Native Land Acts, must be brought home to the person whose registered title is impeached or to his agents. Fraud by persons from whom he claims does not affect him unless knowledge of it is brought home to him or his agents. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shown that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different, and fraud may be properly ascribed to him."[44]Mr Castillo's affidavit is remarkable, not for what it says, but for what it does not say. He believed, and had very good reason to believe, that Parcel 869 was owned by the Quintos. According to him, he was approached by Ann Williams, who offered to sell the land. It is hard to conceive that he did not ask her how it was that she was in a position to offer for sale land owned by the Quintos, but he says nothing of any such enquiry. What he did was to instruct Mr Elrington. Mr Elrington advised him that two enquiries had to be made. First " it was imperative" that Mr Ellis Arnold be requested to ascertain whether the Quintos, in fact, possessed any title to Parcel 869. "In addition" a search had to be conducted at the Land Registry. We can well understand why Mr Elrington advised both enquiries. Having regard to Mr Castillo's belief that the Quintos owned the land that Ann Williams had offered him, he could not safely abstain from making proper enquiries into the propriety of the transaction. In those circumstances a simple search of the Registry would not suffice to protect Santiago.[45]Mr Elrington reported back that the land was registered in the name of Ann Williams, but that Mr Arnold had informed him that his inquiries had revealed that the Quintos were abroad.[46]Mr Castillo thereupon decided to proceed with the transaction. He does not state that Mr Elrington advised that he could safely do so and it is not to be inferred that he did so, for that would have been in stark contrast to his previous advice.[47]The most charitable conclusion that can be drawn about Mr Castillo's conduct is that, knowing that there was serious doubt as to the propriety of the original registration by Ann Williams, he decided not to clarify the position but to proceed with the transfer regardless. In such circumstances her fraud falls to be ascribed to him.[48]In these circumstances there is no need for the Board to record any conclusions on the implication of the conflict between the account given by Mr Castillo in his affidavit and the fact that, according to the dates upon it, the instrument of transfer between Ann Williams and Santiago was executed, with the participation of Mr Arnold and Mr Elrington, on 24 December, that is before the events that Mr Castillo stated had preceded the transaction.[49]The Board also differs from the conclusion of the Court of Appeal that Santiago had entered into possession of Parcel 869 at the material time. The affidavit supporting the Quintos' application for an injunction on 2 March demonstrates that it was not until about 25 February that Santiago commenced erecting a fence on Parcel 869 preparatory to placing building materials on the land. By this time the Registrar had placed a restriction order on dealings with the land and both she and the Quintos had commenced proceedings for rectification of the register.[50]For these reasons the Board has concluded that Conteh CJ had jurisdiction under section 143(1) of the Register to order rectification of the Register and that he was not precluded from exercising his discretion by section 143(2). No suggestion has been made that, if Conteh CJ had jurisdiction to order rectification, he was wrong to do so. In the Board's view he correctly appraised the relevant facts and made the appropriate order.[51]There are two matters to which the Board wishes to refer before concluding. Mr Elvin QC submitted on behalf of Santiago that it would be wrong to make any finding that Mr Castillo was party to Ann Williams' fraud, when no such allegation had been pleaded against him, nor any application made to cross-examine him on his affidavit. As to the former, allegations of fraud were spelt out in Mr Lumor's skeleton argument that was served on Santiago in advance of the hearing. As to the latter, the Board finds it surprising that no application was made to cross-examine Mr Castillo but no point was taken at the time that he should have been cross-examined. In the circumstances it was open to the Chief Justice to make the findings that he did.[52]The second matter is of more significance. The Torrens system of land registration is capable of resulting in grave injustice if it is not efficiently implemented. When it was introduced in Belize the Land Registry was not provided with the resources needed to implement it. The Quintos' title was not registered under the Act when it should have been. Had it been, Ann Williams' fraud would not have been possible. Furthermore, had proper scrutiny been applied to the documents that she submitted in support of her application for registration, her fraud would have been discovered. This shortcoming may also be attributable to lack of resources. That said, the Board would commend the action taken by the Registrar once she became aware of what had transpired.[53]For the reasons given the Board will humbly advise Her Majesty that this appeal should be allowed, Conteh CJ's order restored and that the respondent should pay the appellants their costs of this appeal and of the appeal below.

Cited in 4 later judgments