Edwin M Hughes v La Baia Ltd

JurisdictionUK Non-devolved
CourtPrivy Council
JudgeLORD WALKER
Judgment Date28 Mar 2011
Neutral Citation[2011] UKPC 9
Docket NumberAppeal No 0027 of 2010

[2011] UKPC 9

Privy Council

before

Lord Rodger

Lord Walker

Lord Mance

Lord Clarke

Lord Saville of Newdigate

Appeal No 0027 of 2010
Edwin M Hughes
and
La Limited

Appellant

Dr John Roberts CBE QC

Christopher Drew

Cheryl Drew

(Instructed by Whitworth and Green Solicitors)

Respondent

Saul Froomkin QC

(Bermuda Bar)

Kenneth Porter

Ms Michelle Smith

(Anguilla Bar)

(Instructed by Charles Russell LLP)

LORD WALKER

The facts

1

This appeal is concerned with the title to a piece of seaside land, about seven and a half acres in extent, at West End Bay on the north-west coast of Anguilla. Anguilla is one of the northernmost islands in the chain of the Leeward Islands, with the neighbouring islands of St Martin and St Maarten close to its south coast, and St Thomas (one of the US Virgin Islands) close on the west.

2

The land in question was owned under an unregistered title by Isaac Richardson, who died intestate on 24 August 1946 survived by his widow Cassie, and four children, Nathaniel, Edward, Sylvia (Bryson) and Bernard. (These and other names of members of the extended family occur frequently and the Board will for brevity, and without any disrespect, refer to them by their first names.) Bernard moved to St Maarten and died in 1957. There is no evidence in the record as to whether he died testate or intestate, or as to his personal representatives (if any). Cassie died some time after Bernard.

3

On 21 February 1975 the title to the land was registered under the Land Adjudication Ordinance, the owners being designated as "heirs of Isaac Richardson (represented by George Richardson of West End, Anguilla)" under title number Block 17709 B, parcel 23. There was conflicting evidence as to whether or not George was a relative of Isaac, but he was certainly a neighbour and it seems that he agreed to act as representative at the title adjudication preceding the registration since none of Isaac's surviving children lived in Anguilla: Nathaniel and Edward were in St Thomas and Sylvia was in Aruba.

4

On 20 January 1982 letters of administration to Isaac's estate were granted to George as attorney for Edward. This was about the time when Ms Cheri Batson became interested in the possibility of buying the land at West End Bay. Ms Batson is an American citizen. She was a long-term resident of St Maarten and she was looking for a site for a house in Anguilla. She thought that the land at West End Bay was very attractive, but the site was too large for a single house. She saw it as a development opportunity. A friend and business associate of hers, Rosario Spadaro, agreed to provide finance. Ms Batson and Mr Spadaro are the beneficial owners of the shares in La Baia Ltd ("Baia"), the claimant at first instance and the respondent to this appeal. Baia is a company incorporated in Anguilla on 13 June 1983.

5

When she visited the land Ms Batson contacted George who told her to discuss the matter with Edward. The outcome was a written sale agreement executed in duplicate on 15 October 1982. It was signed by Edward as seller and Ms Batson as purchaser (the definition of "purchaser" included "or a corporation" to be designated by [Ms Batson], but she was clearly contracting on her own behalf as a principal). Edward was also expressed to sign as representative of Nathaniel and Sylvia (each of whom later personally signed one copy of the agreement). The land to be sold was seven acres, excluding an identified half-acre plot. The price was US$91, 000 with a deposit of US$10, 000 to be paid at once. In the event US$20, 000 was paid either on signature of the agreement or shortly afterwards.

6

The agreement contained an important condition:

"This agreement is conditioned upon the purchaser obtaining from the government of Anguilla of a building licence for said parcel of land.

In the event the purchaser cannot obtain a building licence the parties agree that this agreement shall be null and void and all monies received under this agreement by the seller shall be returned to the purchaser. Upon such payment, the obligations of the seller and purchaser under this agreement shall cease.

The parties agree that title to the above parcel of land will be transferred on January 14 1983 or sooner at the law offices of Dr William Herbert on Anguilla BWI."

7

Some of the correspondence in the record suggests that the reference to a "building licence" was understood by both sides as a reference to a licence under the Aliens Land Holding Regulation Act, Cap A55 ("ALHRA"). This impression is strengthened by the official application form, the notes to which are exclusively concerned with building time limits and costs. But Mr Froomkin QC strenuously rejected that suggestion. As matters have turned out, it is unnecessary to make any finding on that point. Section 2(b) of ALHRA defines "alien" as including a company incorporated in Anguilla if it is under alien control (as defined in section 6 in a way that includes Baia). Section 3 (read with section 4) provides that no land in Anguilla shall be held by an alien without a licence granted by the Governor in Council, and any land held by an unlicensed alien shall be forfeited to the Crown. Section 9 provides:

"(1) No person shall without the licence of the Governor in Council hold any land in trust for an alien, and any land so held shall be liable to be forfeited to the Crown.

(2) Any person who contravenes this section is guilty of an offence and on summary conviction is liable to a fine of $1, 250 or to imprisonment for a term of 3 months or to both.

(3) In this section, "trust" includes any arrangement whether written or oral, express or implied, and whether legally enforceable or not, whereby any land to which this section applies or any interest therein or any rights attached thereto is or are held for the benefit, or to the order, or at the disposal, of an alien, but does not include -

  • (a) the duties incident to a mortgage;

  • (b) the duties of a vendor to the purchaser pending payment of the purchase money, or after payment of the purchase money, if within three months after that payment, the property sold is vested in the purchaser or his interest therein is extinguished."

Section 9(3)(c) and (d) refer to trustees appointed for insolvency purposes.

8

It is debateable whether, as a matter of construction of the agreement, the condition as to obtaining a licence (of whatever sort) had to be satisfied by the completion date. There is no evidence about any separate building licence. As to a licence under ALHRA, in practice matters moved very slowly. An application for a licence, signed by Mr Spadaro on behalf of Baia on 14 October 1983, was submitted to the Chief Minister by Mr Mitchell, Baia's solicitor, on 16 February 1984, with copies to the Registrar of Lands. Mr Mitchell wrote some chasing letters. On 24 August 1984 the Permanent Secretary replied that the application was being processed. On 4 July 1985 the Permanent Secretary wrote declining to agree to an amendment in respect of what he referred to as the Savannah Bay project (another development in which Mr Spadaro was interested) and stating that no further licences would be issued to Mr Spadaro "until he has fulfilled his obligations in respect of the Savannah Bay project".

9

On 19 March 1986 Edward's solicitor, Mr Benjamin, wrote to Mr Spadaro pointing out that it was long past the time for completion and that no ALHRA licence had been obtained. He offered to return US$10, 000 of the deposit. Mr Mitchell replied on 14 April 1986 stating on instructions, but apparently contrary to the truth, that no response had been received to the application and that it would be vigorously pursued. On 30 April 1986 Mr Benjamin replied stating that the agreement was at an end and sending a cheque for US$20, 000.

10

However the cheque for the returned deposit was not cashed and further negotiations ensued. On 28 May 1986 a new agreement was entered into between Edward as seller and Baia as purchaser. Edward was also expressed to act as representative of Nathaniel and Sylvia. It had a recital affirming the subsistence of the first agreement (described as "acknowledged on 3 March 1983") but varied it by including the whole seven and a half acres in the sale and increasing the price to US$97, 500 (of which US$ 20, 000 had already been paid). After providing in clause (A) for immediate payment of the balance the agreement stated:

"(B) The Seller in consideration of receiving said US$77, 500 hereby releases all right, title and interest in said parcel of land, giving and transferring to the Purchaser the right to pledge, hypothecate and mortgage said property just as if the parcel of land had been deeded to the Purchaser. The Seller gives and transfers to the Purchaser all rights which he and or his co-owners have enjoyed to the said parcel of land and not just limited to the rights stated above in this paragraph."

(C) Seller agrees to execute a Land Transfer Form and a Charge Form in blank, as well as a Power of Attorney to be held by the Purchaser and filed with the Regional Cadastral and Registration in Anguilla at the appropriate time. The Seller further agrees to the placement of a Caution by the Purchaser on the parcel of land embraced by this document for the protection of the Purchaser's interest.

Apart from its affirmation of the earlier contract this agreement made no reference to the need to obtain a licence. But the terms of clauses (B) and (C) might be thought to suggest that the parties must have had it in mind.

11

The total actually paid was US$82, 776, so as to include some interest. Documents were executed in blank as provided in clause (C) of the agreement. In addition on 25 July 1986 Edward executed a registered charge of the land in favour of Caldwell Corporation Ltd ("Caldwell") to secure US$500, 000 with...

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