Dennis Dean and another v Arawak Homes Ltd

In a competition between documentary titles to land, the court determines which claimant has the better title. A claimant cannot derive title through a person who had already conveyed the land or lacked title to convey it. Earlier proceedings may be used as evidence of fraud and notice; they need not bind later purchasers as judgments in rem. Constructive notice is assessed objectively by asking what title searches, inquiries and inspections a purchaser or the purchaser’s advisers reasonably ought to have made. Proprietary estoppel requires an equity arising from conduct that makes it unconscionable to assert strict legal rights. A stranger who builds on land knowing it belongs to another cannot ordinarily establish such an equity. A possessory-title claim must be properly raised and supported by evidence of the relevant period of adverse possession.

The appellants purchased and developed plots in subdivisions in New Providence, The Bahamas. They traced their documentary title through Bahamas Variety Company (1989) Limited and through the widow of Thaddeus Johnson, who had obtained a certificate of title under the Quieting Titles Act 1959. Johnson had previously conveyed the land to C.B. Bahamas Limited and other land to Mildred Farquharson.

Arawak Homes Ltd claimed the better title. Earlier proceedings had found that Johnson obtained his certificate through fraudulent suppression of material information, although the certificate was not initially set aside in proceedings to which the appellants’ predecessors were parties. The Supreme Court rejected the appellants’ claims based on title and proprietary estoppel. The Court of Appeal upheld the better-title finding, rejected the estoppel claim, and reduced damages. The central issues before the Board were documentary title, the evidential effect of the earlier judgment, bona fide purchase without notice, proprietary estoppel and possessory title.

1. Appeal dismissed. The Board advised that Arawak Homes Ltd had the better documentary title and was not subject to proprietary estoppel.
2. Under the principle of relative title, the court compares the strengths of the rival titles. If Johnson’s certificate had been valid, his prior conveyance to C.B. Bahamas Limited would have prevented Johnson, Bahamas Variety Company (1989) Limited or his widow from conveying a good title to the appellants. Arawak was entitled to plead the ius tertii. The principle in Ocean Estates v Pinder [1969] 2 AC 19 was applied.
3. The judgment in the earlier action against C.B. Bahamas Limited was not treated as a judgment in rem binding on the appellants. It was admissible as part of the agreed evidence and provided a basis for findings that Johnson had acted fraudulently and that later purchasers could not claim protection as bona fide purchasers for value without notice. Section 121 of the Evidence Act 1996 therefore had no bearing on the case.
4. The defence of bona fide purchase without notice had not properly been raised in the appeal. In any event, it failed. Under section 57(1) of the Conveyancing and Law of Property Act 1909, constructive knowledge depends on an objective assessment of the inquiries and inspections reasonably required. Ordinary Bahamian conveyancing practice included searches for the root title and relevant judgments and conveyances. Those searches would have revealed the defects and the fraud.
5. The proprietary-estoppel claim failed on concurrent factual findings. The appellants knew, or at least Mr Dean knew, that the land was not theirs when they built. Applying the principle stated in Ramsden v Dyson (1866) LR HL 129, their expenditure did not make it unconscionable for Arawak to assert its legal rights.
6. The possessory-title claim was not pleaded or argued below and lacked evidential support. There was no evidence of qualifying adverse possession by Johnson or Bahamas Variety Company (1989) Limited before the appellants’ occupation.

• Privy Council: The appeal was dismissed on 29 July 2014.
• Court of Appeal of the Commonwealth of The Bahamas: On 9 March 2012, the Court of Appeal held that Arawak had the better documentary title, rejected proprietary estoppel, and reduced the damages award.
• Supreme Court of The Bahamas: Allen SJ decided action no. 1883 of 2002 in favour of Arawak on title and proprietary estoppel and later assessed damages. Sir Michael Barnett CJ decided action no. 727 of 2008 in favour of Arawak on lawful ownership.