Nathalie Creque v Cecil Penn
| Jurisdiction | UK Non-devolved |
| Judge | Lord Walker of Gestingthorpe |
| Judgment Date | 27 June 2007 |
| Neutral Citation | [2007] UKPC 44 |
| Court | Privy Council |
| Docket Number | Appeal No 36 of 2005 |
| Date | 27 June 2007 |
[2007] UKPC 44
Present at the hearing:-
Lord Bingham of Cornhill
Lord Rodger of Earlsferry
Lord Walker of Gestingthorpe
Lord Carswell
Lord Mance
Privy Council
[Delivered by Lord Walker of Gestingthorpe]
This appeal is concerned with the sale of two parcels of land (plots 125 and 126) in Virgin Gorda. The vendor was Mrs Nathalie Creque (the appellant before the Board) acting as administratrix of her late husband's estate. The purchaser was Mr Cecil Penn (the respondent, though he has not appeared, before the Board).
The sale was not preceded by any written contract. It was effected by two transfers executed on 22 July 1996. The transfers were in the standard form set out in the Third Schedule to the Registered Land Rules and contained the printed words "In consideration of … (the receipt whereof is hereby acknowledged)". The words "the sum of $40,000" and "the sum of $60,000" were typed in on the transfers of plot 125 and plot 126 respectively. But Mrs Creque claimed that when she executed the transfers she had not in fact received $100,000 or any part of that sum; and that her subsequent attempts to attain payment produced only $14,800 from Mr Penn. Her case was that she executed the transfers without the purchase price having been paid because Mr Penn was a friend and she trusted his statement that he needed the executed transfers in order to obtain finance from a bank.
In 2002, shortly before the end of the limitation period, Mrs Creque commenced proceedings against Mr Penn, claiming $85,200 as the balance of the purchase price, and interest from 22 July 1996 (there were further and alternative claims which are no longer relevant). Mr Penn's pleaded case was that he had paid the purchase price in full on execution of the transfers. His case at trial was that the consideration took the form of the release of Mrs Creque from pre-existing indebtedness to him under various commercial transactions.
The case was heard by d'Auvergne J who on 25 May 2004 delivered a reserved judgment in favour of Mrs Creque. The judge accepted Mrs Creque's evidence and found the evidence of Mr Penn inconsistent and unreliable. Her judgment contained some paragraphs concerned with the parole evidence rule but no discussion of section 106 of the Registered Land Act (which neither side seems to have referred to). The judge ordered Mr Penn to pay to Mrs Creque $85,200 and costs of $10,000. Her judgment did not award interest (nor did she give any reason for not awarding it). It appears that no formal order was drawn up, since when Mr Penn appealed to the Eastern Caribbean Supreme Court his notice of appeal annexed the full text of the judgment below.
Mr Penn's notice of appeal set out several grounds of appeal. There was no respondent's notice claiming interest. None of the grounds of appeal referred to section 106 of the Land Registration Act, although the second ground did refer to "evidence that contradicted and undermined the written documents." Nor was the section mentioned in the course of argument.
On 28 February 2005 the Court of Appeal (Alleyne and Gordon JJA and Rawlins JA (Ag)) gave judgment allowing the appeal and setting aside the judge's order. Rawlins JA (Ag) gave a written judgment in which the other members of the Court concurred. Section 106 of the Land Registration Act assumed central importance in his judgment. It is in the following terms:
"(1) Every disposition of land, a lease or a charge shall be affected [ sic] by an instrument in the prescribed form or in such other form as the Registrar may in any particular case approve, and every person shall use a printed form issued by the Registrar unless the Registrar otherwise permits.
(2) [Relates to leases and charges]
(3) Instruments shall contain a true statement of the amount of [ sic] value of the purchase price or loan or other consideration (if any), and an acknowledgment of the receipt of the consideration."
The crucial passage in the judgment of Rawlins JA (Ag) was as follows (para 20):
"Section 106 contemplates that when a person executes a transfer in accordance with the stipulated requirements and acknowledges receipt of the value of the consideration, that person has in fact received it. A court cannot go behind an instrument of transfer, which is completed in accordance with the terms of section 106. The court cannot go behind the transaction and rely on extrinsic evidence in order to determine whether a seller in fact received the consideration that he or she acknowledges or whether the consideration was the same as that which is acknowledged in the instrument. The words in the instruments, '… in consideration of the sum of $60,000 (receipt of which is hereby acknowledged)' suffice."
Mrs Creque now appeals to the Board. Mr Penn has not been represented, nor has he appeared in person, before the Board. But their Lordships have had the advantage of excellent written and oral submissions from Mr Chivers QC and Mr Wells, counsel for Mrs Creque. Mr Chivers has ably performed counsel's duty of putting before the Board any matters on which counsel for Mr Penn, if instructed, might have been expected to rely.
Counsel's submissions on behalf of Mrs Creque can be summarised in two basic propositions. First, there is a well-settled rule of equity that a vendor or mortgagor may, as against his own purchaser or mortgagee, give evidence to contradict a receipt clause, even if it is contained in a deed. Second, there is nothing in the scheme or language of the Land Registration Act which operates, either expressly or by necessary implication, to oust this well-settled equitable rule.
The leading statement of the equitable rule is in the judgment of Sir John Romilly MR in Wilson v Keating (1859) 27 Beav 121, 54 ER 47, affirmed by Lord Campbell LC and the Lords Justices 4 De G & J 588, 45 ER 228. The Master of the Rolls said ( 27 Beav 121, 126, 54 ER 47, 49),
"It is true the deed does estop the parties at law, because at law you cannot contradict the deed, but it is settled by abundance of authority, that in this [Rolls] Court you can contradict the statement of the payment of the purchase-money; nay more, though there is a receipt for the purchase-money endorsed and duly signed by the vendor, yet, even then, the vendor would have a lien on the estate for the unpaid purchase-money, and which...
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