Attorney General of the Turks and Caicos Islands and another v Richardson (as Trustee in bankruptcy of Yellowstone Club World LLC) (Turks and Caicos Islands)

Registration with absolute title gives the proprietor power to deal with registered land free from antecedent claims, subject to statutory exceptions and matters shown on the register. Underpaid stamp duty creates a debt, not an interest in land or a charge, unless written law expressly makes it a charge. A Registrar exercising the discretionary power to impose a restriction must independently decide whether sufficient cause exists and must exercise the discretion on the correct basis. A restriction cannot be validated by material or reasons that were not actually considered. A decision based solely on an erroneous claim to an interest in land is unlawful.

Emerald Cay Ltd acquired registered land after the consideration stated in the transfer was allegedly understated, resulting in underpayment of stamp duty. The Government applied under section 132 of the Registered Land Ordinance for a restriction preventing dealings until the duty was paid. The Registrar entered the restriction, preventing registration of a collateral charge granted to the respondent trustee. The Supreme Court ordered removal of the restriction and registration of the charge. The Court of Appeal dismissed the Government’s appeal. The Privy Council considered whether the Government had an interest in the land and whether the Registrar had lawfully exercised the power to impose a restriction.

Disposition. The Board advised that the appeal should be dismissed. The appellant was to pay the costs of the appeal.

1. Effect of registration. Under the Registered Land Ordinance, registration as proprietor with absolute title vests ownership and the power to dispose of the land free from other interests and claims, subject to matters shown on the register, specified unregistered interests and overriding interests. Rectification for fraud or mistake is the statutory route for challenging registration.
2. Stamp duty. The obligation to pay underpaid stamp duty is a civil debt. It does not create an interest in land. Section 28(e) recognises unpaid money as an overriding interest only where written law expressly declares it to be a charge upon land. The Stamp Duty Ordinance contained no such declaration. Sections 109 and 14(2) did not alter that consequence.
3. Restriction power. Section 132(1) permits the Registrar to impose a restriction, with or without an application by an interested person, where sufficient cause exists. The Registrar must decide independently whether the statutory power should be exercised, after directing such inquiries, notices and hearings as are appropriate. A restriction is an order of the Registrar, not an assertion by the applicant. Entry No 5 showed that the Registrar had simply adopted the Government’s erroneous claim to an interest in the land.
4. Actual decision required. The lawfulness of a discretionary decision depends on whether the discretion was properly exercised, not whether material existed on which a different lawful decision could have been based. The Board applied the approach in R v Secretary of State for Trade and Industry, Ex p Lonrho [1989] 1 WLR 525 and R(Richards) v Pembrokeshire County Council [2004] EWCA Civ 1000. The application disclosed underpayment but did not provide a sufficient basis for restricting the registered proprietor’s power to deal with the land.
5. Rectification alternative. The Board assumed, without deciding, that a restriction might in an appropriate case preserve the position pending rectification proceedings. That would require a proper basis for believing that such proceedings had been or were about to be commenced. A restriction lasting until stamp duty was paid was not an appropriate restriction for that purpose.

1. Privy Council: Appeal dismissed; advice given that the appellant should pay the appeal costs.
2. Court of Appeal of the Turks and Caicos Islands: By order dated 26 January 2012, the appeal was dismissed and the Supreme Court order affirmed.
3. Supreme Court of the Turks and Caicos Islands: By order dated 9 June 2011, the Registrar was directed to remove the restriction and register the respondent trustee’s collateral charge.