The Belize Bank Ltd v Garry Young

• Jurisdiction: Belize
• Judge: Sir Manuel Sosa P,Ducille JA,Campbell JA
• Judgment Date: 12 February 2019
• Neutral Citation: BZ 2019 CA 001
• Docket Number: CIVIL APPEAL NO 4 OF 2018
• Court: Court of Appeal (Belize)
• Date: 12 February 2019

IN THE COURT OF APPEAL OF BELIZE AD 2018

Before:

The Hon Justice Sir Manuel Sosa President

The Hon Mr Justice Murrio Ducille Justice of Appeal

The Hon Mr Justice Lennox Campbell Justice of Appeal

CIVIL APPEAL NO 4 OF 2018

Between

The Belize Bank Limited

Appellant

and

(1) Garry Young

(2) Glenda Rose Young

Respondents

APPEARANCES:

E A Marshalleck SC for the appellant.

S Grinage for the first respondent.

N UK Myles for the second respondent.

Sir Manuel Sosa P

Introduction

1 The central question in this appeal revolves around the true effect of the interplay, if any, between subsection (2) of section 78 and section 26 of the Registered Land Act (‘the Act’). (I shall in the remainder of this judgment refer to the two simply as Subsection (2) and Section 26, respectively.). Relying on its interpretation of Subsection (2), The Belize Bank Limited (‘the Bank’), by its Fixed Date Claim Form filed on 20 June 2017, as amended, sought an order for possession of Parcel 673, Block 23, Registration Section Santa Elena/Cayo (‘the Parcel’) against Garry Young (‘Mr Young’) and his mother, Glenda Rose Young (‘Mrs Young’). The matter was heard on 10 October 2017 by Griffith J (‘the Judge’), who announced her decision, dismissing the claim for lack of standing on the part of the Bank, on 27 November 2017 and handed down her reasons for decision in writing (‘the Reasons’) on 18 January 2018. The position successfully adopted by Mr Young, in support of his contention that the Bank lacked standing to advance the claim in question, was that the Bank's interpretation of Subsection (2) was untenable ‘as a result of the completion of [a] transfer in favour of … new owners who purchased [the Parcel] via auction’: para 5 of the Reasons.

The facts

2 Insofar as they are material for present purposes, the facts, though rather unusual in some respects, are not in dispute. On 12 July 2005, Mr Young was registered as proprietor of a lease of the Parcel, at the time national land and officially designated Parcel 673/1. Mr Young admits to having been granted by the Bank a loan of $165,000.00 on or about 25 July 2005, on which date he signed a promissory note in favour of the Bank. Almost six years later, Mr Young was registered as proprietor of the Parcel itself and issued with a Land Certificate dated 26 May 2011. Mr Young claims to have taken certain steps in June 2011 towards the transfer of the Parcel to Mrs Young and the issue to her of a Land Certificate; but no such Land Certificate was ever issued to her. On 19 July 2011, an Instrument of Charge signed by Mr Young in favour of the Bank and dated 12 September 2005, on which date, of course, Mr Young was proprietor of no more than a lease, was filed at the Land Registry. Mr Young having later defaulted on his loan, the Bank took steps to exercise its power of sale under the Instrument of Charge and the relevant provisions of the Act. On 6 December 2016, the Bank caused the Parcel to be sold by public auction, the successful bidder being Challete Limited (‘Challete’), a company registered in Belize. The Bank thereafter made repeated demands on Mr Young for delivery of possession of the Parcel to it but such demands were not complied with. The date on which the Transfer of Land in favour of Challete was lodged at the Land Registry for registration was 15 March 2017.

The main relevant provisions of the Act

3 Subsection (2), is best read together with the subsection immediately preceding it. Taking them and Section 26 in ascending order, these provisions, insofar as relevant for present purposes, are respectively as follows:

• ‘26. Subject to section 30 of this Act, the registration of any person as the proprietor with absolute title of a parcel shall vest in that person the absolute ownership of that parcel together with all rights and privileges belonging or appurtenant thereto, free from all interests and claims whatever but subject,

• (a) to the leases, charges and other encumbrances and to the conditions and restrictions, if any, shown in the register; and

• (b) unless the contrary is expressed in the register, to such liabilities, rights and interests as affect the same and are declared by section 31 not to require noting on the register …’

• ‘78.-(1) A chargee exercising his power of sale shall act in good faith and have regard to the interests of the chargor, and may sell or concur with any person in selling the charged land, lease or charge, or any part thereof, together or in lots, by public auction for a sum payable in one amount or by instalments, subject to such reserve price and conditions of sale as the chargee thinks fit, with power to buy in at the auction.

• (2) Where the chargor is in possession of the charged land or the land comprised in the charged lease, the chargee shall become entitled to recover possession of the land upon a bid being accepted at the auction sale.’

It is as well immediately to note that the sections of the Act referred to in Section 26, viz sections 30 and 31, relate to cases of voluntary transfers and overriding interests, respectively, and are, therefore, of no relevance for present purposes.

The decision of the Judge

4 Before the Judge, dealing with the claim by way of a summary trial, were two issues, viz (i) whether the Bank had the standing to file claim for recovery of possession and (ii), if so, whether possession of either Mr Young or Mrs Young had been proven. In the event, the Judge, reaching the conclusion that the Bank lacked such standing, did not go on to resolve the second issue.

5 Having noted the position taken by Mr Young before her, which position has already been identified at para [1], above, the Judge pointed out that ‘no substantive submissions’ had been deployed in support thereof. She proceeded thereafter, first, to set out the submissions of counsel for the Bank and, next, to analyse them. In the course of her analysis, she indicated that she had found assistance, in the form of extractable general principles, in three decisions (from Northern Ireland, Ireland and Malaysia, respectively.) The essence of the Reasons, however, is found in paras 19 and 20, where, having referred to Section 26 and section 78(4) of the Act, the Judge said:

• ‘19. These sections provide in the case of section 26(1) (sic) that upon registration the proprietor becomes entitled to absolute ownership of the parcel and to all the rights and privileges belonging or appurtenant thereto. Section 78(4) provides that upon registration of the transfer effected in the exercise of the chargee's power of sale, the transferee becomes vested with all the right and interest of the chargor except for pre-existing interests as therein defined. As already stated, along with the right of ownership, moreso absolute ownership arising out of registration, the right of possession also becomes vested in the transferee. This is not the position upon conclusion of a sale upon exercise of the chargee's power of sale. Notwithstanding the sale, the chargor remains the registered owner until the register is altered to reflect a new owner and as such entitled to possession. In this context the express right to seek to recover possession afforded to the chargee upon conclusion of a sale is consistent with that position.

• 20. With reference to the [Bank's] position in this matter, its right to seek an order of possession arose in December, 2016 upon conclusion of the sale by way of public auction in favour of [Challete]. The transfer was registered the latest by the 15 ^th March 2017 as evidenced by issuance of the certificate of title in favour of the purchasers. In the Court's view, the right afforded to the chargee under section 78(2) was extinguished upon registration of the transfer in favour of [Challete]. As a consequence, at the time the instant claim was instituted in April 2017, the [Bank] was no longer entitled to maintain the action for possession unless authorised by the new registered owners to do so. There being no such authority evidenced as given by the new registered proprietors, it is the Court's position that the [Bank] lacked necessary legal standing to seek the order of possession against the chargor. As a result of this finding, the second issue regarding who was in actual possession of the [Parcel] no longer arises for consideration.’

The submissions on appeal

1. On behalf of the Bank

6 Mr Marshalleck SC, who also appeared for the Bank below, complained to this Court that the decision of the Judge was based on a wrong interpretation of Subsection (2), read in the light of the Act as a whole. Whilst recognising that the backdating in the Land Registry of the transfer in favour of Challete to 15 March 2017, ie the previously mentioned date of lodgment of the relevant Transfer of Land form, was in keeping not only with established practice but also with the provisions of the Act, he...