Supreme Court
Action No. 55 of 2000
4th April, 2000
GONZALEZ, J.

Mr. Dean Barrow, S. C. for the Defendant

Vacation of caution lodged in Land Register - Jurisdiction of court to order vacation of registered caution - Principles to be applied by court in deciding whether to vacate caution.

J U D G M E N T

This is an Application, heard on the 1st March, 2000 pursuant to Section 132 of the Registered Land Act, for the vacation of a caution on a 36.13 acre parcel of land (i.e. Parcel 353 Block 1 Santa Elena Registration Section) situate along the 4 Mile Lagoon in the Corozal District of Belize.

The plaintiff brought this application by Originating Notice of Motion. As originally filed, the Originating Notice of Motion also prayed other ancillary reliefs including a declaration, an injunction, and damages for trespass and for filing the caution. When this action first came up for the hearing on 17th December, 2000 learned counsel for the Defendant, Mr. Dean Barrow S.C., moved to have these ancillary reliefs struck out. He submitted that, while an application to remove a caution may be brought by Originating Notice of Motion, application for the other reliefs could only be brought by Writ of Summons. I accepted his submission and ordered that those parts of the application that relate to the ancillary reliefs be struck out.

Learned senior counsel for the Defendant also asked the Court to take judicial notice of the fact that his client had by Writ of Summons dated 11th of August, 1999 commenced Supreme Court Action (Action No. 328 of 1999) against the plaintiff company and Mr. Lewis Flynn, the company's majority shareholder and chairman. In that Action Mr. Blades seeks a declaration and other remedies to enforce his claim for one half of parcel 353. The issues raised in that Action are, therefore, substantially the same as the issues at this Application. On that basis Mr. Barrow, S. C. applied to have this Application stayed. I declined his application.

The only matter before me now, therefore, is the application to vacate the caution. The caution in question was placed on the land on the 28th day of January, 1997 at the behest of the Defendant, Godfrey Elnathan Blades Sr. In support of his application to register the caution Mr. Blades made a statutory declaration setting out the grounds on which he applied to register the caution. The declaration reads as follows:

"I, Godfrey Elnathan Baldes Sr. do solemnly and sincerely declare that:-

1. From around 1969-70, I have been in occupation of a portion of parcel 314 Santa Elena registration section now being parcel 353.

2. That I was put into occupation of the said parcel of land by Mr. Louis Flynn on the clear verbal promise made to me by Mr. Lewis Flynn that one half of parcel 353 would be mine for services to be performed on parcel 314.

3. That for the past 27 years in reliance of the understanding I have been taking care of and maintaining that portion of parcel 353 which I was made to believe was mine as well as the remaining portion the property of Mr. Louis Flynn.

4. That for all the years I have been taking care of and maintaining the property (now parcel 352 and 353), I have not been receiving wages on the understanding I had with Mr. Flynn, namely that my compensation would be in the form of land.

5. That as a result of the aforementioned understanding, I, through my personal efforts and expenses built a canteen, four cabanas, two toilets, a dock made of stones, filled the road to the property and a portion of the land which was swampy (this fill covered his portion and mine). On this portion I maintained in good repair his house and keep the grounds.

6. About 1992 or 1993, Mr. Flynn approached me requesting that I give up my portion in lieu of another portion. I rejected his offer indicating to him that our agreement was that I would get this piece of land (portion of parcel 353) and that I was not interested in any other piece."

For its part, the Plaintiff Company filed two affidavits in support of the application to remove the caution - one by one of its directors, John Burks, and the other by its Chairman and majority shareholder, Lewis Flynn. In these affidavits the Plaintiff Company takes issue with practically every assertion made by the defendant in his declaration. Since the facts in view were in dispute and could not best be resolved by affidavits evidence, I ordered viva voce testimony.

At the hearing the Plaintiff presented two witnesses, Mr. Flynn and Mr. Sylvestre Trejo. Mr. Flynn gave evidence in terms of his affidavit. He testified that around 1969 the Plaintiff company purchased approximately 2,865 acres of land in the Santa Elena area. In the month of May 1976 the said lands were compulsorily acquired by the Government of Belize and some two or three years thereafter portions of the said land comprising in the aggregate 358.3 acres or thereabouts (and including the present parcel 353) were re-conveyed to the Plaintiff Company by the Government.

Prior to the acquisition by the Government, Mr. Flynn lived on the property with his family. During that time, he constructed a home near the shoreline of the Four Mile Lagoon and reared and tended cattle in other areas of the property. Following the re-conveyance to the Company of portions of the said lands, re-entered the land and effected repairs to the building and repaired and replaced the equipment and fittings.

While in residence on the property, Mr. Flynn made the acquaintance of the Plaintiff and Mrs. Blades in 1989. Mr. Flynn gave Mr. and Mrs. Blades license and permission to use the kitchen facilities in a building on the land. This allowed them to conduct their business of selling food and beverages especially on weekends to persons who visited the Lagoon. In turn Mr. and Mrs. Blades agreed that they would prevent persons entering the property from causing damage to the buildings and other improvements and that they would use their best efforts to prevent trespassers from being on the property. In Mr. Flynn's absence they were to have custody of the company's farm equipment including a bush hog, a tractor and a land rover.

Mr. Flynn was emphatic that it was never agreed that Godfrey Elnathan Blades Sr., was to receive a beneficial interest in any portion of the Company's lands or to receive any consideration for his services other than the benefit of the license in favour of his wife and himself to use the Company's facilities and to carry on their food and beverage business on the Company's property at Four Mile Lagoon.

Mr. Flynn further testified that any labour, repairs, improvements or expenditures Mr. Blades may have made upon the property were for the benefit of the defendant's own food and beverage business and not for the benefit of the Plaintiff Company - for example, repair works of a superficial nature to structures used by Mr. Blades and his wife for the purposes of their food and beverage business, filling of potholes in the access roadways servicing their business as well as the erection of thatched "palapas" to provide shade to tables installed for Mr. Blades's customers. Such works were performed using the tractor, equipment and tools of the Company. The assets of the Company enjoyed no appreciation as the result of Mr. Blades' efforts but instead depreciated during the period in which he enjoyed the Company's license.

After 1990 the Company's agricultural ventures shrunk and were abandoned shortly thereafter. The only significant activity conducted on the land after that time was the restaurant and bar business conducted by Mr. and Mrs. Blades. During that period the Company suffered substantial deterioration, loss and damage to its property including the lack of maintenance and repair of the structures, the removal and loss of doors and plumbing fixtures in the buildings as well as loss of tools and equipment.

In 1993 Mr. Flynn advised Mrs. Blades that he was receiving offers to purchase the property but that she could continue to use the same as license until such time as the property was actually sold. On the 8th August, 1995 Mr. Blades' attorneys delivered a letter to the Company's attorneys in which the nature of his claim was first formally delineated. A copy of the said letter was tendered into evidence. By letter dated the 21st August, 1995 the Company's attorneys set out the Company's response to Mr. Blades' claim. No reply to this letter was entered on the 28th January, 1997. At the end of Mr. Flynn's testimony, the Defendant was given an opportunity to cross-examine the witness but as he said that he was not represented by counsel for this portion of the case, he declined to cross-examine Mr. Flynn.

The other witness called by the Plaintiff was Mr. Sylvester Trejo. Mr. Trejo testified that from the mid 1970's to 1988 he was manager of Barclays Bank in Corozal Town. During that time the plaintiff company maintained two accounts with Barclays; one was the main company account and the other was a farm account. Mr. Flynn provided funds for the main account, and monies from the main account were used to fund the farm account. Mr. Flynn was the sole signatory on the main account. Himself and Mr. Blades were signatories on the farm account. Funds were drawn from the farm account by Mr. Blades. From conversations with Mr. Blades Mr. Trejo learned that these funds were used to meet the expenses of the farm. The farm account was, however, frequently in overdraft. These overdrafts had to be honoured by Mr. Flynn. Eventually Mr. Flynn removed Mr. Blades as a signatory on the account apparently because Mr. Blades mismanaged the account.

Mr. Trejo further testified that Mr. Blades was, himself, a customer of the bank. Mr. Blades gave the Bank a mortgage on a property in Corozal Town to secure a loan of $10,000.00. The purpose of the loan was to improve the amenities Mr. Blades offered to the customers of his bar and restaurant business at the 4 Mile Lagoon. Mr. Blades failed to meet his commitments and, when the loan with interest arrears was at $15,000.00 to $16,000.00, it was assured by his wife. Mr. Trejo could not say if the loan had been paid off when he left the bank in 1988.

Learned counsel for the Defendant declined to cross-examine Mr. Trejo, so that neither the evidence of Mr. Flynn or Mr. Trejo was tested by cross-examination. Nonetheless, I formed a good impression of the credibility of both these witnesses. Mr. Flynn's viva-voce testimony was consistent with his affidavit evidence and with the evidence of Mr. Trejo. At no time did either witness contradict himself.

The same cannot be said for Mr. Blades. Mr. Blades was the only witness to testify in support of the defendant's case, and he proved a totally unreliable witness. His testimony was riddled with inconsistencies and contradictions. He was evasive and exhibited throughout his testimony what can only be described as either an extremely faulty memory or a callous disregard for the truth. His viva voce evidence was inconsistent with the defence. He filed in support of his application to register the caution and both of these were inconsistent with the letter of demand dated the 8th August, 1995, and written by his attorney-at-law. In fact, having myself made several unsuccessful attempts to piece together a single consistent narrative from Mr. Blade's testimony I have concluded that it is impossible to do so because Mr. Blades gave so many inconsistent accounts of what occurred. Rather than attempting to summarize his testimony I will, therefore, merely highlight some of the more glaring inconsistencies. The first deals with the amount of land Mr. Flynn is alleged to have promised to give him. In the letter of the 8th August, 1995, Mr. Blade's attorney-at-law wrote as follows:

"...Mr. Flynn promised our client that in return for his services as caretaker, Mr. Flynn would convey to him the said 7 acre parcel now being claimed by Mr. Wingler. Acting on that promise our client with Mr. Flynn's complete knowledge and compliance borrowed monies from the Bank in order to build a structure on the said land comprising, inter alia, a bar and two bedrooms to be operated as a small going concern. The amount of that loan including interest was some $17,000.00 which was partly paid by Mr. and Mrs. Godfrey Blades and partly by Mr. Flynn."

However, about a year and a half later, on the 28th January, 1997, when Mr. Blades filed his declaration in support of the application to register the caution, the portion of land he claimed Mr. Flynn had promised him was not 7 acres but "half of Parcel 353" (i.e.18 acres).

The second glaring inconsistency is the matter of the source of the money Mr. Blades used to build amenities on the land for his guests. Mr. Blade's attorney in her letter stated that Mr. Blades "borrowed monies from the Bank in order to build a structure on the said land comprising, inter alia, a bar and two bedrooms". In his evidence-in-chief, however, Mr. Blades testified that the money he used to build on the land was money he received from his two daughters who lived in the United States of America. Under cross-examination when confronted with the assertion in his attorney's letter that he had borrowed money from the bank to build on the land, he at first claimed ignorance of the letter and then admitted that he had in fact borrowed money from the bank to fund the construction. Reminded by Counsel for the Plaintiff of his earlier testimony that he had used money from his daughters to fund the construction, he immediately and vehemently disowned his earlier testimony "No, no, no. The money I got from my daughters is to keep me going, to eat, and clothing."

The next inconsistency involves the question of who repaid Mr. Blade's loan. In her letter of the 8th August, 1995, Mr. Blades' attorney had conceded that the loan had been paid off in part by Mr. Flynn. In his testimony, however, Mr. Blades denied that this was so. He claimed that his wife and his daughters alone paid back the loan. When pressed further, however, he said he did not know if Mr. Flynn had in fact partly paid off the loan. Finally he said that Mr. Flynn should have paid off the entire loan because the arrangement was that Mr. Flynn "was to send his money to the bank" for the purpose of paying off the loan.

Mr. Blades contradicted himself on even seemingly small and insignificant matters like the question of whether he ever held liquor license, or how frequently he visited the land. He claimed at first that he never had a liquor license only to admit later on that he did have a liquor license for a time. At one point in his testimony he said he visited the land weekly. Later on he claimed he visited the land each day.

The most glaring contradictions in the defendant's testimony occurred, however, with respect to a very significant issue, namely, the question of the date on which it is alleged Mr. Flynn promised to give the parcel of land. In his declaration Mr. Blades claimed that he was put into occupation of the land by Mr. Flynn around 1969-70 and that, at the time he was put into occupation, "a clear verbal promise" was made to him by Mr. Lewis Flynn that one half of parcel 353 would be his. The thrust of Mr. Blades's declaration is, therefore, that he received the promise from Mr. Flynn around 1969-70.

In his evidence-in-chief, the defendant said, however, that he received the promise from Mr. Flynn "late in the 1970's". Not content with providing two inconsistent versions, Mr. Blades insisted on providing a third. Under cross-examination he specifically denied that the promise was made to him in the 1970's and said instead that it was made in the 1980's. We are left, therefore, with three inconsistent dates for the occurrence of a central event, the promise on which Mr. Blade's entire claim to the land is founded.

The coupe de grace was, however, Mr. Blade's testimony about the precise terms of the promise that he claimed was made to him with respect to the land. It was this piece of evidence that finally destroyed whatever substance was left to Mr. Blade's case. After considerable urging by learned counsel for the plaintiff, Mr. Blades finally conceded that all that Mr. Flynn told him was that after he (Flynn) had finished selling all the rest of land then, in Mr. Blade's words, "we will sit down and decide what we are going to do" with the 36 acre parcel. This clearly does not amount to a promise to grant Mr. Blades any land; it is at best, merely a promise to discuss the matter.

The inescapable conclusion, therefore, is that there was never a promise by Mr. Lewis Flynn or by any one else on behalf of the company to grant Mr. Blades any part of the land. Mr. Blades, by his own evidence, admitted that this was so. He admitted that, at best, all that Mr. Flynn had promised to do was to discuss the matter with him when all the company's other lands had been sold. In these circumstances there is no evidence before me on which this Court or indeed, any court could find that there was an enforceable promise by Mr. Flynn to give Mr. Blades a piece of the land and there is, therefore, not a triable issue.

Mr. Blades was also, by his own admission, well aware that he had received no such promise. In filing a caution and commencing Action to protect a promise he had never received, Mr. Blades was acting entirely in bad faith.

In his closing address learned senior counsel for the Defendant did not attempt to explain or resolve any of the inconsistencies in his client's testimony or to otherwise comment on the state of the evidence. Instead he sought refuge in the law. He submitted that despite the seemingly wide jurisdiction given to the Court by Section 132 of the Registered Land Act the jurisdiction conferred by that Section is in fact a limited jurisdiction - in particular where, as in the present case, there is a pending action involving largely the same issues as those in the application to vacate the caution. In such circumstances, learned senior counsel submitted, the Court could order the vacation of the caution only if it found that the claim was frivolous and vexatious, that it had no chance of success, that there is no serious issue to be tried in the action or that the lodging of the caution was done in bad faith.

Learned senior counsel relied on three cases in support of his submission. These are:(1) the judgment of Templeman J. in Clearbrook Property Holdings Ltd. v Verrier 1973 3 All ER 614, (2) the Court of Appeal decision in Price Brothers v. J. Kelly Homes [1975] 3 All ER 369, and (3) the judgment of Megarry J. in Northern Development (Holdings) Ltd. and Others v. UDT Securities and Others [1977] 1 All ER 369. It should be noted, firstly, that all these cases turn on the interpretation of certain provisions of United Kingdom statutes principally the Land Charges Act (UK) 1972 and the Land Registration Act 1923. The language of the parallel provisions In our Registered Land Act is very different.

Learned senior counsel for the defendant conceded that this is so. He argued, however, that the principles set out in the cases may be applied by analogy to our statutory provisions.

Having read the cases, however, it is my view that even if the cases could be made applicable by analogy, they would provide no support for Learned Counsel's submission. On the contrary these authorities seem to militate against Learned Counsel's position

The first of the cases, Clearbrook Property Holdings Ltd. v. Verrier comes closest to providing support for learned senior counsel's submission that the Court's jurisdiction is circumscribed in the way he suggested. In that case, Templeman J. regarded it as settled law that "in accordance with the authorities, principally Heywook v. BDC Properties Ltd [1963] 2 All ER 1063, a Court of Appeal Decision, and Georgiades v. Edward Wolfe & Co.Ltd, an application of this sort can only succeed if there is no triable issue or arguable point to go to trial in the normal way." However, the learned judge continued, "but in considering whether there is a triable issue or arguable point, I was urged, as I am always urged, and as I always do, to have regard to the observations of Megarry J. In The Rawplug Company Ltd. v. Kamvale Properties Ltd. (1969) 20 P & CR 32 in which a certain robustness of approach was not unacceptable to the learned judge." So that although Mr. Justice Templeman found as a fact that there was a triable issue, he nonetheless determined that he had jurisdiction to vacate the caution and allow the plaintiff to apply for an injunction instead.

The next development in the law was an authority not cited by learned counsel for the defendant, the decision of the Court of Appeal in Tiverton Estates Ltd. v. Wearwell Ltd. In that case, the Court of Appeal had to consider a case where there had been registration of what was alleged to be an estate contract, but it was found that in fact there was no binding contract. In that case the court directed that the cautions that had been registered be vacated. Lord Denning M.R. said:

"These courts are masters of their own procedure and can do what is right even though it is not contained in the rules. If it is drawn to the attention of court, by affidavit or otherwise, that a caution has been entered when it ought not to be, the court can order it to be vacated forthwith."

In an earlier passage he had said: "If a caution is entered when it ought not to be, the court can order the register to be rectified by vacating the entry."

Lord Denning's judgment was quoted with approval and applied in the second case cited by learned senior counsel, Price Brothers v. Kelly Homes (supra). There the plaintiffs made an application (inter alia) for an order vacating cautions that had been placed on certain registered properties. The judge found that "the defendants have no principal grounds for upsetting the sale as far as [the plaintiffs are concerned]". The judge ordered vacation of the cautions. The defendants appealed on the ground that, by analogy with s. 5(10) of the Land Charges Act (UK) 1972 in relation to unregistered land, the judge should have exercised his jurisdiction under s. 82(1)(b) of the Land Registration Act 1925 to vacate the charges in the absence of a finding that the defendant's lodging of the cautions was done in bad faith.

The Court rejected the defendant's submission that its jurisdiction was constrained by analogy to s. 5(10) of the Land Charges Act. It ruled that the jurisdiction conferred by s. 82(1) was unqualified by its terms and conferred a wide discretion on the court. The court stated the rule as follows: "If we find on the facts of the case that the caution is one which ought not to be on the register, it is a proper exercise of the court's discretion to delete it."

In the third case cited by learned counsel for the defendant the Court went further. It held that even in a case where there is a pending action involving unregistered land within s. 5(10) of the Land Charges Act 1972, the court's jurisdiction to vacate cautions was not confined to situations in which there was an absence of good faith in prosecuting the proceedings. Notwithstanding that section, the court had a general discretion to vacate cautions, and the reasonableness of the proceedings is a circumstance to be considered in exercising that discretion.

The jurisdiction conferred by Section 132 of the Belize Registered Land Act is, like that conferred by Section 82(1) of the U. K. Land Registration Act 1925, unqualified by its terms and allows the court a wide discretion. It preserves unfettered the court's original jurisdiction. The rule applied by Lord Denning in Tiverton Estates Ltd. v. Wearwell Ltd., and approved by the Court of Appeal in Price Brothers v. Kelly Homes is, therefore, also applicable in Belize. That rule is, in the words of Buckley LJ, "If we find on the facts of the case that the caution is one which ought not to be on the register, it is a proper exercise of the court's discretion to delete it." As long as the applicant can demonstrate by affidavit or other evidence that the caution is "one which not ought to be on the register" he needs prove no other circumstance or condition in order to have the caution vacated.

The submission by learned senior counsel that, under the Belize Registered Land Act, the jurisdiction to remove a caution exists only within limited parameters (i.e. where the matter is frivolous and vexatious, where there is no chance of success, where there is no serious issue to be tried in the action or where the lodging of the caution was done in bad faith) is an attempt to constraint the court's discretion in ways that the legislature never intended. No doubt the instances cited by learned counsel are circumstances that would justify the exercise of the court's discretion to vacate, but they are not the only circumstances that would do so. The court can, without more, vacate any caution that it finds should not be on the register.

In any case, even if I am wrong on the law and the discretion to vacate a caution is constrained as learned counsel has submitted, the defendant would be in no better position. As I have already indicated, the defendant having admitted that the plaintiff did not promise to give him a part of the land, there is no triable issue. Furthermore, I have also found that the defendant acted throughout in bad faith. The facts of this particular case fit, therefore, within even the constrained jurisdiction advocated by learned counsel for the defendant.

In the circumstances, I order therefore that the caution be vacated. The plaintiff is to have its costs except those costs that relate to its application for the ancillary reliefs that were struck out earlier.