C.B. Bahamas Ltd v Arawak Homes Ltd

JurisdictionBahamas
CourtSupreme Court
JudgeGonsalves, Sabola, J.
Judgment Date11 Apr 1986
Docket NumberCommon Law Side No. 355 of 1985

Supreme Court

Gonsalves-Sabola, J.

Common Law Side No. 355 of 1985

C.B. Bahamas Ltd
and
Arawak Homes Ltd.
Appearances:

J. M. Thompson for the plaintiff

Mrs. Allison Maynard-Gibson and Mrs. Donna Smith for the defendant.

Company Law - Corporate personality — Lifting corporate veil — Finding of court that company formed by plaintiff was a shell company — That the individuals who formed it were using its name to achieve their own personal end — Declaration that plaintiff was not a bona fide purchaser for value without notice of the land in question in contemplation of s. 27 of the Quieting Titles Act — Injunction granted defendant to restrain plaintiff from entering land.

Gonsalves, Sabola, J.
1

After some eight weeks of actual trial time, exhaustive testimony by several witnesses, production of substantial documentary evidence, wide hanging submissions by counsel and ample citation of authorities, the court now proceeds to judgment.

2

This has not proved to be a run of the mill case. The plaintiff and the defendant both claim title to the same piece of land. Each party relies on a documentary title. The plaintiff can show a root of title in a certificate of title granted under the Quieting Titles Act (the Act). The defendant's title stems from a conveyance, an assignment of an equity of redemption, which antedates the plaintiff's conveyance as well as its root certificate of title. The defendant was not an adverse claimant in the quieting proceedings. Its predecessor in title was, but withdrew its adverse claim before the culmination of those proceedings in the grant of a certificate of title to the petitioner.

3

The defendant contends that the plaintiff's conveyance is null and void because the plaintiff was not a “bona fide purchaser for valuable consideration without notice” in contemplation of Section 27 of the Act when it purchased the land in question from the grantee of the certificate of title. The fundamental contention is that the said certificate of title was obtained by means of a fraud perpetrated on the court. The plaintiff denies the fraud alleged or knowledge thereof and says that its title, deriving from a certificate of title, is by operation of Section 19 indefeasible at the instance of the defendant which lacks the locus standi to mount a challenge to the validity of that certificate of title on the grounds of lack of interest in the land and the statute bar under Section 7(2) of the Act.

4

Matters of fact touching questions of alleged unprincipled conduct on the part of certain persons need to be threshed out and their impact on the issues joined, determined. A regrettable feature of the case is that one of those persons is a counsel and attorney of the Supreme Court of the Bahamas. That attorney had, at the outset of the hearing appeared as one of the counsel for the plaintiff but he subsequently testified for the plaintiff and, as was proper, ceased to appear as a counsel in the case.

5

The case commenced as an ordinary action for trespass. However, at the close of the trial, after several rounds of amendment of pleadings, it had become divested of much of the original seeming simplicity. As in any other action, in determining this one the pleadings must be kept in view and it is convenient to set them out hereunder:–

STATEMENT OF CLAIM
  • “1. On the 28th day of January, A.D. 1985, the Supreme Court declared Thaddeus Johnson to be the legal and beneficial owner of Blocks 155, 156 and 157 (inter alia) comprising portions of the Nassau Village Subdivision situate to the south of Soldier Road in the Eastern District of the Island of New Providence one of the Islands of the said Commonwealth. The certificate of title is presently being recorded in the Registrar General's office.

  • 2. By an indenture of conveyance dated the 29th day of January, A.D. 1985, the said Thaddeus Johnson granted and conveyed unto the plaintiff the said Blocks Numbered 155, 156 and 157 (inter alia) TO HOLD the same unto and to the use of the plaintiff in fee simple. This document is presently being recorded in the said Registrar General's office.

  • 3. Shortly after the 29th day aforesaid, agents of the plaintiff discovered that servants or agents of the defendant had tortiously entered upon portions of the said Blocks and commenced laying foundations thereon, digging trenches for utility services and quarrying fill therefrom.

  • 4. The defendant threatens and intends unless restrained by the Honourable Court to continue and repeat the acts complained of.

  • 5. By reason of the matters aforesaid, the plaintiff has been deprived of the use and enjoyment of the subject land and has thereby suffered damage.

AND THE PLAINTIFF CLAIMS:

  • (1) Possession of the said land.

  • (2) A Declaration that the defendant, its servants or agents are not entitled to enter or cross the plaintiff's said land;

  • (3) An Injunction to restrain the defendant whether by its servants or agents or otherwise howsoever from entering or crossing the plaintiff's said land;

  • (4) Damages;

  • (5) Further or other relief;

  • (6) Costs.

Dated the 2nd day of April, A.D., 1985.

James M. Thompson

Attorney for the Plaintiff.”

AMENDED DEFENCE AND COUNTERCLAIM

“The defendant admits paragraph 1 of the Statement of Claim but avers that:–

  • 1. (a) the said certificate of title was granted on the basis of a plan drawn in 1926 ‘the said plan’ which said plan completely fails to show those areas of the Pinewood Gardens Subdivision encroached upon by or adjacent to the land to which the said certificate purports to convey title to the said Thaddeus Johnson, while this would not have been the case had an up-to-date plan been filed. In the circumstances, the Court was misled as to a material particular.

  • (b) an adverse claim dated 31st January, 1983 filed in the aforesaid matter by the attorneys for the then liquidators of Pinewood Gardens Subdivision was later withdrawn by the adverse claimants on the strength of an undertaking by the attorneys for the said Thaddeus Johnson to supply the official liquidators with an on-the-ground survey of the area forming the subject matter of the petition of the said Thaddeus Johnson. Despite the fact that the said undertaking was never performed for the attorneys for the said Thaddeus Johnson proceeded with the determination of the action. The said certificate of title so obtained was obtained fraudulently or by falsehood.

  • 2. The defendant admits paragraph 2 of the statement of claim but repeats paragraph 1 hereof and states further that the plaintiff company had full notice of the defendant's claim to those portions of the Pinewood Gardens Subdivision contained in the said certificate of title on the basis of the fact that persons closely associated with the plaintiff company had made approaches to the defendant to purchase lots in the said area prior to the grant of the aforesaid certificate of title to Thaddeus Johnson. In the circumstances the plaintiff was not a bona fide purchaser for value without notice.

  • 3. As to paragraph 3 of the statement of claim the defendant denies that its servants or agents tortiously entered upon portions of the said blocks. The plaintiff was not in possession nor had any lawful right to possession of the said land. The defendant is fee simple owner of the subject lands in possession.

    PARTICULARS

    • (i) By a conveyance dated the 24th April, A.D., 1972 recorded in the Registry of Records in Book 1927 at pages 362 to 367 Alexis Nihon conveyed to Pinewood Gardens Limited, 83.28 acres of land situate partly in the Southern District of the Island of New Providence in an area known as Bamboo Town and partly in the Eastern District of the said Island.

    • (ii) By a Conveyance dated the 1st May, A.D. 1972 recorded in the Registry of Records in Book 1927 at pages 349 to 354 Alexis Nihon conveyed to Pinewood Gardens Limited, 488.59 acres of land situate partly in the Eastern District in the area known as ‘Nassau Village’ in the Island of New Providence and partly in the Southern District of the said Island.

    • (iii) The tracts of land conveyed by the aforementioned conveyances together comprise the area now known as the Pinewood Gardens Subdivision.

    • (iv) By an assignment dated 8th March, A.D. 1983 and recorded in Book 3980 at pages 477 to 517 Pinewood Gardens Limited acting by its official liquidator granted and conveyed as beneficial owner the equity of redemption in all the property known as Pinewood Gardens Subdivision to Arawak Homes Limited.

    • (v) By virtue of the satisfaction of mortgage dated 30th September, 1983 from Alexis Nihon to Pinewood Gardens Limited recorded in Book 1927 at pages 334 to 348 and an additional satisfaction of mortgage also dated 30th September, 1983 from Dutch Bank and Trust Limited to Arawak Homes Limited recorded in Book 3993 at pages 394 to 396, Arawak Homes Limited became unencumbered owners of a fee simple estate in all that tract of land comprising the Pinewood Gardens Subdivision.

  • 4. As to paragraph 4 of the statement of claim the defendant repeats paragraph 3 hereof.

  • 5. As regards paragraph 5 of the statement of claim the defendant repeats paragraph 3 hereof and avers that in the premises that the plaintiff is not entitled to the use and enjoyment of the subject land.

  • 6. The defendant denies that the plaintiff has suffered the alleged or any damage due to the acts of the defendant's servants or agents.

COUNTER CLAIM

  • 7. The defendant repeats paragraph 1 to 6 of the defence herein.

  • 8. The certificate of title granted to Thaddeus Johnson dated the 28th day of January, A.D. 1985 by the Supreme Court claiming the said Thaddeus Johnson legal and beneficial owners in fee simple in possession of (inter alia) Blocks 155, 156 and 157 of the Nassau Village Subdivision was based upon the said plan and which said plan failed to show those portions of the Pinewood Gardens Subdivision contained in the...

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