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JUDGMENT
INTRODUCTION
[1] In this case we must decide which of two ladies is entitled to the
ownership of a condominium unit ("the unit"). The unit was originally owned
by the Central Housing and Planning Authority ("the Authority"), a statutory
corporation created under the Housing Act. The Authority purported to sell
the unit twice. In each case the full purchase price of $25,000 was paid.
Obviously, the Authority acted in a reprehensible manner. The Authority
first agreed to sell the property to Sybille Sinclair whom for reasons of
clarity we take the liberty of referring to as "Sybille". After receiving
from her a substantial part of the purchase price, the Authority proceeded
to transport the unit to Elizabeth Ross whom, to be consistent, we shall
refer to as "Elizabeth", even though it had received from Sybille's daughter
the balance outstanding on Sybille's agreement. In the resulting litigation
the trial court and the Court of Appeal awarded the unit to Sybille's
daughter, as administratrix of Sybille's estate. Elizabeth has appealed to
us and we consider that her appeal should be upheld.
THE FACTUAL BACKGROUND
[2] The unit in question is Lot 95 Laing Avenue, West Ruimveldt, Georgetown.
It is one of a number of units that comprise a condominium scheme owned by
the Authority. In 1993 Sybille was registered as a tenant of the Authority
in respect of the unit. Elizabeth and Sybille then resided in the unit.
Sybille received from Elizabeth a monthly sum for the latter's use and
occupation of a part of the unit. The tenancy agreement under which Sybille
held the apartment did not permit her to assign or underlet any part of the
premises without the consent in writing of the Authority. That agreement
stipulated that the tenancy could be terminated by either party at any time
serving upon the other 14 days' notice in writing of intention to terminate
the same.
[3] In 1996 the Authority decided to sell off the units in the condominium.
They were priced at $25,000. The Condominium Act required the Authority to
give preference to a tenant of the unit who had been residing in the unit
immediately before the sale.[FN1] The Authority agreed to sell the unit to
Sybille but apparently she was unable to pay at once the whole of the
purchase price. She paid $23,000. Unfortunately, she died intestate on the
2nd September, 1996 with the balance of $2,000 still unpaid.
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[FN1] Section 50(2) states : "In selling ... any unit in a condominium ...
the owner thereof shall give preference to a tenant of the unit who has been
residing in the unit immediately before the sale."
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[4] Sybille's daughter, Coreen Sinclair ("Coreen") has never resided in the
unit but on the 19th September, 1996 shortly after the death of her mother,
she paid and the Authority accepted the remaining $2,000. At the time she
had not yet obtained a grant of letters of administration of her mother's
estate. Elizabeth continued to occupy the unit. Effectively, Coreen became
Elizabeth's landlady. As Elizabeth now occupied the entire property, Coreen
increased the sum being paid by Elizabeth for use and occupation of the unit.
[5] At some point, it seems, the Authority learned that Coreen was
collecting "rent" from Elizabeth. On 1st December, 1997 the Authority
ordered Coreen to refund Elizabeth all the monies which she had collected
from Elizabeth and that same day the Authority registered Elizabeth as the
tenant of the unit. On 3rd December, 1997 the unit was sold to Elizabeth who
paid the Authority the entire purchase price of $25,000. On 23rd November,
1998 the Authority issued a Certificate of Sale to Elizabeth. The
Certificate was filed in the Deeds Registry on 14th December, 1998 as No.
330 of 1998.
[6] Coreen obtained letters of administration of her mother's estate on 2nd
February, 2000. Armed with the grant of letters of administration, she
instituted this action against Elizabeth and the Authority. The essence of
the claim, as filed in the High Court, was that the Authority purported to
transfer and sell to Elizabeth rights and title that it did not possess and
that the sale to Elizabeth was void for mistake. Coreen claimed specific
performance of the agreement to sell the unit to Sybille and a declaration
that, as administratrix of her mother's estate, she was entitled to
possession and ownership of the unit. She also claimed against the
Defendants, jointly and severally, an order of mandamus commanding them to
transfer ownership in the unit to her.
[7] Although it was served with the proceedings the Authority did not enter
an appearance. Nor did it appear at the trial. Both Coreen and Elizabeth
gave evidence at the trial. Coreen called one witness, an employee of the
Authority.
THE JUDGMENT OF THE TRIAL JUDGE
[8] The trial judge found that the Authority had "committed a grave error"
in agreeing the sale to Elizabeth. The judge was persuaded by counsel for
Coreen that the Authority was at all material times exercising a statutory
function and that as such it was bound by the agreement it had entered into
with Sybille. The court held that the purported sale to Elizabeth was ultra
vires and void and conveyed no interest to Elizabeth because there was
nothing in the Condominium Act (pursuant to which the unit was being sold)
which permitted the Authority to breach its contract with Sybille by selling
the same unit to Elizabeth. The case of Ashbury Rly Co. v Richie (1875) L R
7 HL 653 was relied upon. On the authority of Potter v. Shillingford [1945]
LRBG 129, the trial judge held that at best, the Authority was no more than
a trustee of the premises in favour of Sybille and hence, since the latter
was entitled to specific performance during her lifetime, after her death
her Administratrix was also so entitled. The judge accordingly made the
orders sought in the Statement of Claim.
THE COURT OF APPEAL
[9] Elizabeth appealed the judgment of the trial judge to the Court of
Appeal. The Authority was not made a party to the appeal. Regrettably, they
were thus permitted to remove themselves, relatively unscathed, from the
imbroglio they had created. Counsel for Elizabeth submitted to the Court of
Appeal that under Guyana law, no interest in land passed to Sybille as a
result of her contract with the Authority. Under the Condominium Act, the
sale of a unit is a multi-layered process and since Elizabeth had satisfied
all the stages, unlike Sybille, the sale to Elizabeth could not be
considered ultra vires. For Coreen, it was submitted that Sybille was the
beneficial owner of the unit and that the Authority was a trustee with no
beneficial interest. The contract between the Authority and Elizabeth was
void for mistake.
[10] In delivering the judgment of the Court of Appeal, Chang JA made the
following points: he held that the Certificate of Sale made out to Elizabeth
represented mere evidence of a concluded sale. Although no Certificate had
been issued to either of the Sinclairs, when Coreen paid and the Authority
accepted the balance of $2,000 outstanding on Sybille's agreement, the sale
to her was completed and that ownership of the unit passed unless the
Authority could have shown that there was some outstanding condition to be
fulfilled by Sybille and/or Coreen. Since the Authority had not established
that there was any such outstanding condition to be satisfied, it followed
that the sale of the unit was concluded on the 19th September, 1996 and the
subsequent purported sale of the unit to Elizabeth was a nullity. Sybille
had a legitimate expectation that upon payment of the remaining balance of
$2,000 the Authority would have transferred to her registered ownership of
the unit. The Authority had advanced no overriding public interest to
justify the disappointment of this expectation. The Authority had exercised
its decision to sell the unit to Elizabeth unfairly and unreasonably in
breach of the substantive legitimate expectation of Sybille and her estate
and such sale was therefore a nullity. The Court of Appeal held that the
orders for specific performance and mandamus made by the trial judge were
superfluous because the contract between Sybille's estate and the Authority
had already been specifically performed when the $2,000 balance was paid.
The judgment of the trial judge was therefore upheld in all respects save
for the making of those orders of specific performance and mandamus.
THE RELEVANT LEGISLATION
[11] Two pieces of legislation are directly relevant to a determination of
this matter. They are the Condominium (Regulation and Miscellaneous
Provisions) Act, Act No. 4 of 1989 Chapter 36:22 and the Deeds Registry Act,
Chapter 5:01. The former Act applies both to condominiums owned by the
Government as well as those owned by private entities. Part III of the Act
deals with condominiums in the public sector such as that of which the unit
in question formed part. Section 50 makes provision for the sale of units.
While selling any unit in any condominium the owner, in this case the
Authority, may stipulate that the sale is subject to all or any of a variety
of conditions listed in the legislation[FN2]. The owner may issue to any
person to whom the sale of any unit has been approved, a certificate to the
effect that the unit has been sold to that person. The conditions under
which a sale is made are required to be specified in the certificate[FN3].
Before issuing a certificate, the Authority must first satisfy itself the
purchase price has been fully paid and that other conditions, which are
required to be satisfied before the sale, have been satisfied by the
intending purchaser.[FN4] The Certificate of Sale, bearing the terms and
conditions subject to which a sale is made, is binding on the owner of the
unit who sold it and the person who purchased it and their successors in
interest.[FN5] The certificate is to be treated for all purposes as if it
were a transport or other document effecting the conveyance of the unit
mentioned therein.[FN6] Each unit shall for all purposes constitute an
interest in land and may be disposed of or dealt with in the same manner and
form as land under the Deeds Registry Act.[FN7]
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[FN2] Section 50(3)
[FN3] Section 50(6)
[FN4] Section 50(1)
[FN5] Section 50(6)
[FN6] Section 50(7)
[FN7] Section 25(1)
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[12] In light of these provisions, contrary to the Court of Appeal's view in
the matter, it is quite evident that a Certificate of Sale does indeed
constitute the completion of a sale. A tenant who seeks to purchase a unit
and who has paid a portion or even the whole of the purchase price has an
agreement to purchase but there cannot be any doubt that the sale of the
unit to that tenant is not completed until the Certificate of Sale is issued.
Finally, when one examines the Condominium Act it is clear that in selling
the units the legislative policy is to favour tenants who personally occupy
the units.
[13] The Deeds Registry Act was enacted in 1920, a few years after the
passage of the Civil Law of Guyana Act. The effect of these two Acts on Real
Property law in Guyana was recently the subject of comment by this Court. In
Ramdass v Jairam[FN8] this Court confirmed that, consequent upon the
provisions of these two Acts, equitable interests in immovable property are
not recognized and cannot be acquired in Guyana[FN9]. Further, section 23 of
the Deeds Registry Act provides that every transport of immovable property
other than a judicial sale transport shall vest in the transferee the full
and absolute title to the immovable property subject only to certain
specified claims, incumbrances, registered interests and registered leases.
A proviso to that section, however, states that any transport obtained by
fraud shall be liable in the hands of all parties or privies to the fraud to
be declared void by the Court if the action is brought within twelve months
after the discovery of the fraud.
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[FN8] See [2008] CCJ 6 (AJ)
[FN9] See Br. Colonial Film Exchange v ss de Freitas [1938] LRBG 35; Dias v
Cornette (1960) LRBG 215; Kitty and Alexanderville Village Council v Veira
(1961) 3 W.I.R. 249; Singh v Bayne (Guyana Civil Appeal No 61 of 1991);
Fazal v Annamunthodo (1991) 48 W.I.R. 150
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[14] The courts below rested their decision to award the unit to Coreen on
two broad bases. Firstly, it was held that the estate of Sybille had a good
claim in equity against the Authority and Elizabeth. Secondly, it was stated
that the subsequent sale to Elizabeth was ultra vires the power of the
Authority and was in breach of a legitimate expectation - whether held by
Sybille or by Coreen, her Administratrix � that the Authority would convey
the unit in keeping with its agreement with Sybille.
THE ISSUES OF PUBLIC LAW
[15] In an ably presented argument, Mr Jonas, for Coreen, sought to support
both broad bases for the decision of the Court of Appeal. He argued that,
having agreed with the Authority to purchase the unit and having paid a
substantial portion of the purchase money, Sybille did indeed hold the
legitimate expectation found by the Court of Appeal. He also submitted that
the Authority had acted in a manner that was ultra vires because it was
functus officio after it had reached its decision to sell the unit to
Sybille. It could not subsequently, he stated, sell the same unit to
Elizabeth. He claimed that his client was entitled to public law remedies.
We do not agree.
[16] So far as the argument is made that the Authority was functus one must
examine the provisions of the Condominium Act to determine how and in what
circumstances a Certificate of Sale may be issued. As indicated at [12]
above, on a proper interpretation of the Act the Authority retained the
power to withhold the issuance of a Certificate of Sale even after it had
received all of the purchase price. Completion of a sale is conditional not
just upon full payment of the purchase price but also upon satisfaction of "other
conditions of the sale, which are required to be satisfied before the sale"
and the issuance of a Certificate of Sale. Accordingly until the Certificate
of Sale is issued there is the possibility of the agreement for sale being
rescinded (for good reason or bad) by the Authority and therefore there is
no question of the Authority being functus at that stage.
[17] It may reasonably be inferred from the provisions of the Act that the
Authority was under an obligation to issue Sybille with a Certificate of
Sale in respect of unit 95 upon payment by her of the remaining $2,000.00
together with fulfillment of such other conditions as might have been
lawfully imposed on her. This obligation was embodied in the contractual
arrangement into which she had entered with the Authority. For any
non-observance of this contract Sybille was entitled to complain of a breach
of contract and in launching this suit Coreen, as her administratrix, did so
complain. But the mere fact that the vendor in this case was a public
authority did not also entitle Coreen automatically to seek public law
remedies and in particular to rely on the doctrine of legitimate expectation.
Legitimate expectations are rooted in the concept of fairness in public
administration. Recourse is had to them when persons complain that, because
of some misuse of power or an unfair exercise of discretion in the execution
of policy, they have been deprived by a public authority of a procedural or
substantive benefit to which they feel entitled in view of a promise or
assurance that had been made to them in the past. The Authority's exercise
of its power to sell units may be subject to judicial review because there
are statutory restrictions on the manner of its exercise which are tied to a
policy that underpins the Act. But Mr Jonas did not point to anything in the
facts of this case that involved a misuse or abuse of power or an unfair
exercise of discretion. There was nothing here that took the action of the
Authority outside the realm of contract law and into that of public law. On
the specific facts of this case the pleaded claim was rightly premised on
private law. The nature of the complaint, an important indicator of whether
the action was grounded in public law or otherwise, was that the Authority
was in breach of contract. The Authority may have breached its contract with
Sybille in selling the unit to Elizabeth, who was at the time recorded as
the tenant, but there was no suggestion that the Authority had transgressed
the legislative framework within which it was required to operate or that
there was a departure from the policy underlying that framework. There was
not introduced into the dispute any additional factor of a public law nature.[FN10]
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[FN10] See R v Bolsover District Council, ex p Pepper [2001] L.G.R. 43 at
[33] and also Mass Energy Limited v Birmingham City Council (1994) Env LR
298
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[18] In these circumstances, there are no grounds upon which the decision of
the Authority can properly be challenged in public law. The rights of
Sybille and of her administratrix which were undoubtedly infringed were
private rights for which Coreen was entitled to seek and obtain private law
remedies.
THE DEEDS REGISTRY ACT
[19] In this case, Elizabeth is entitled to rely on the express provisions
of the Deeds Registry Act and the notion that on registration her
certificate of title was indefeasible save for fraud. Mr Jonas has indicated
that, despite the provisions of the statute, fraud was not the only ground
on which such registered title could be rendered ineffectual. That is
certainly true and Coddett v Thomas[FN11] demonstrates this. In that case
the West Indian Court of Appeal (Mathieu-Perez and Gomes C.JJ. and Stoby,
C.J. (ag.)) rightly noted that:
(i) "... a transport confers on the transportee an indefeasible title. In
our view that quality of indefeasibility does not render the transport
unimpeachable in every circumstance; for example, possession for the
statutory period may defeat it even against an innocent purchaser and if
there be error or omission in the transport it can be rectified.
(ii) .The element of indefeasibility which a purchaser obtains when he
receives his title is derived or flows from adherence to the statutory
procedure prescribed, including the voluntary act of the seller in
surrendering his own title, together with affidavits of purchaser and seller."
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[FN11] [1957] L.R.B.G. 181
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[20] In Coddett, a landowner, T, who was resident outside of Guyana, had a
portion of her land (which she held by transport) included in a transport
passed to C, the appellant. The inclusion of the portion was attributable to
the deliberate, unwarranted and wrongful act of the sub-Registrar. T had no
notice of the inclusion and the prescribed statutory procedure was not
followed when the portion of land was conveyed to C. The conveyance to C was
set aside by the court. Coddett and the other cases cited by Mr Jonas[FN12]
are, however, clearly distinguishable. These are all cases of
mis-description or mistake or failure to follow the appropriate statutory
procedure or some combination of these matters rendering invalid the
respective transports that in each instance had been passed. In each case,
the transportee alleging the indefeasibility of his title was seeking to
profit from some error or irregularity granting him immovable property in
excess of or different from that for which he had genuinely bargained and,
moreover, at the expense of some other transportee whose title also had to
be treated as being indefeasible. These were all attempts "to use the
conveyancing statutes of the Colony as a shield and protection for fraud"[FN13].
But rightly, the courts would have none of it. There being no issue of
public law to resolve here, it is unnecessary for the Court to determine
whether, as a public law remedy, a Certificate of Sale may also be cancelled
in circumstances where a public authority has abused or misused its power in
issuing a transport to an innocent purchaser. What is clear is that in the
circumstances here Elizabeth's title is protected by the provisions of the
Deeds Registry Act.
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[FN12] Alexander v Austin [1965] L.R.B.G. 121; Baynes v Prince [1949]
L.R.B.G. 99; Heeralall v. Shivcharran [1958] L.R.B.G. 132
[FN13] Per Worley, C.J. in Baynes v. Prince [1949] L.R.B.G. 99 at 102
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[21] Contrary to the view of Chang JA, immediately before Elizabeth obtained
her transport for the unit, the Authority was lawfully seised of the legal
estate in the unit. Ownership of the unit did not pass and could not have
passed to the administratrix merely upon performance of the purchasers
obligations under Sybill's contract. In this connection it must be said that
the case of Potter v Shillingford[FN14] ought not to have been relied upon
by the trial judge. The report in that case is of an appeal from the
Dominica circuit of the old Supreme Court of the Windward and Leeward
Islands. Real property law in Dominica, however, is very different from the
law applicable to immovables in Guyana. Dominica has no legislation akin to
the Civil Law of Guyana Act. That Act makes it clear that the English common
law of real property does not apply to Guyana and that the only form of
ownership of immovables known to the law of Guyana is full ownership. While
the Authority may have been contractually bound to pass to Sybille or to her
estate the legal ownership of the unit, it cannot be said that the Authority
lacked the capacity to do otherwise. As administratrix of her mother's
estate Coreen certainly had a good cause of action against the Authority.
But on the facts here the remedy of specific performance was out of the
question. The Authority was no longer in a position specifically to perform
the contract as it had already passed the ownership to Elizabeth and nothing
had been pleaded nor any evidence given to suggest that Elizabeth was other
than an innocent purchaser who had faithfully complied with all the
requisite statutory conditions.
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[FN14] [1945] LRBG 129
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[22] In these circumstances, the claims of the administratrix are limited to
a claim in damages against the Authority. Elizabeth's registered title
cannot properly be impeached. She is protected by the provisions of the
Deeds Registry Act. The policy of that Act is twofold, firstly to produce a
measure of certainty in real property transactions and secondly to assure
innocent transportees who have purchased for value, who have obtained that
for which they have bargained and who have otherwise complied with the
procedural legal requirements, that their transports, if challenged, will be
held to be good.
[23] In an effort to impugn Elizabeth's conscience and invalidate her
transport, Mr Jonas argued that because Elizabeth paid rent both to Sybille
and subsequently to Coreen, she had actual or constructive notice of
Sybille's "title" and was therefore not an innocent purchaser. This was not
pleaded. Moreover, in the absence of further evidence on the point, the
payments made by Elizabeth were not inconsistent with a continuing
acknowledgment by her that, until she was registered as the tenant herself,
she was a sub-tenant or licensee first of Sybille and, after the latter's
death, of her estate represented by Coreen as executor de son tort before
taking out letters of administration. There was before the court no evidence
that Elizabeth made payments to Sybille or to Coreen in their supposed
capacity as owner of the unit. In this respect, this case bears some
similarity to the case of Ramdeo v Heralall[FN15] where Hayton, J. writing
for the Court stated that:
(i) "In a democratic society where the rule of law prevails it is
fundamental that if a plaintiff seeks to establish a factual basis for
allegations that the defendant defrauded him, he must in his pleadings
specify precisely the nature of the allegations upon which such very serious
charge is founded and set out in full factual particulars to justify such
allegations�"[FN16]
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[FN15] [2009] CCJ 3 (AJ)
[FN16] Ibid at [53]
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[24] One is naturally extremely sympathetic to the lamentable position in
which Coreen finds herself. It is regrettable that, in effect, the Authority
has been permitted to escape the consequence of their "grave error". The
course that should have been taken by Coreen is that she should have pursued
a case against the Authority for damages as an alternative to her hopeless
case for mandamus or specific performance or cancellation of Elizabeth's
transport. Had this been done then she would have at least been able to
obtain adequate monetary compensation and recover the $25,000 paid for the
wrong done to her. This is not the first occasion in recent times that we
have had to deal with a situation where the real wrong-doer in cases of this
sort has been allowed quietly to exit the stage, unnoticed, leaving two
innocent parties to tough it out one of whom ultimately is bound to lose.
This was also the case in Ramdass v Jairam[FN17] and Ramdeo v Heeralall[FN18].
Since the Authority is not a party before us we are not even able to make an
order in these proceedings requiring them to refund Coreen the monies paid
by her and her mother. Nevertheless, we trust that good sense will prevail
and that the Authority, as a responsible body in a democratic society that
strives to abide by the rule of law, will act in an appropriate manner so as
financially to undo the effects of its breach of contract.
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[FN17] supra
[FN18] supra
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[25] In all the circumstances we allow the appeal and quash the orders made
by the courts below. In light of the fact that both parties are poor persons,
we make no order as to costs. The lawyers on both sides are to be highly
commended for their public-spiritedness in arguing this matter pro bono and
for the great effort they put into it. |
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