Recreational Holdings 1 (Jamaica) Ltd v Lazarus

A registered title under the Registration of Titles Act remains subject to unregistered rights acquired by adverse possession under the Limitation of Actions Act after first registration. Those rights bind a later bona fide purchaser for value. The proviso to section 70 is not displaced by sections 68, 161, 71 or 163. Section 161 is not exhaustive: its specified exceptions reflect the main protection in section 70, while the proviso preserves additional claims. Once the limitation period expires, section 30 extinguishes the former owner’s title, leaving no title for the vendor to pass. The purchaser’s remedy is against the vendor for breach of contract.

The company purchased and was registered as proprietor of Windsor Lodge in Jamaica in 2011. Nine acres within the registered parcel were also claimed by Mr Lazarus, whose separate registration had been ineffective. Mr Lazarus had possessed the disputed land openly, exclusively and adversely since 1986.

The Supreme Court of Jamaica granted summary judgment for Mr Lazarus. The Court of Appeal of Jamaica dismissed the company’s appeal, save in an irrelevant respect. The company appealed on the question whether its registered title as a bona fide purchaser for value displaced rights acquired by adverse possession before its registration.

Appeal dismissed. The Board advised Her Majesty accordingly and directed that the company pay Mr Lazarus’s costs, subject to any submissions within 14 days.

1. Adverse possession. The Board held that the opinion in Chisholm v Hall [1959] AC 719 was correct. A bona fide purchaser for value takes land subject to unregistered rights acquired by adverse possession before registration of the purchaser’s title.
2. Statutory construction. The proviso to section 70 of the Registration of Titles Act expressly preserves rights acquired under limitation statutes after first registration. Section 68 is complementary: the word subsequent refers to the first registration, rather than the later issue of a certificate. The statute makes no exception for a bona fide purchaser for value.
3. Section 161. Section 161 does not exhaustively identify every claim for recovery against a registered proprietor. It corresponds to the main part of section 70, but does not exclude claims preserved by its proviso. The definition of recovery in Williams v Thomas [1909] 1 Ch 713 supported that analysis. Pottinger v Raffone [2007] UKPC 22 was distinguishable because it concerned a registered adverse possessor and fraud. The Board agreed with the analogous reasoning in Republic Bank Ltd v Seepersad S268 of 2014.
4. Trust and error arguments. Section 30 of the Limitation of Actions Act extinguished the former owner’s title. He was not thereafter a bare trustee for the adverse possessor, so section 71 could not defeat the preserved possessory right. The comparison with section 75(1) of the Land Registration Act 1925 did not alter that conclusion. An accurate description did not become a misdescription under section 161(e), and the registration was not through error for the purposes of section 163.
5. Consequence. The statutory scheme allocates the risk to the innocent purchaser, who is confined to a claim for damages against the vendor for breach of contract. The Court of Appeal’s decision was therefore correct.

• Privy Council: Dismissed the company’s appeal from the Court of Appeal of Jamaica and advised that it pay Mr Lazarus’s costs, subject to further submissions.
• Court of Appeal of Jamaica: Morrison JA, with Panton P and Phillips JA agreeing, dismissed the company’s appeal from the summary judgment, save in one irrelevant respect.
• Supreme Court of Jamaica: Kirk Anderson J granted summary judgment declaring ownership of the disputed land vested in Mr Lazarus.