Cenac and others v Schafer

Restrictions on alien landholding do not, without more, invalidate an unlicensed alien’s contractual or equitable interest in land. Forfeiture is not automatic; it requires proceedings by the Crown and a judgment declaring forfeiture. A purchaser who has paid the price under a specifically enforceable land sale may acquire an equitable proprietary interest, capable of protection by a registered caution, even without a licence. A caution does not confer priority, but gives notice and prevents registration of an inconsistent disposition without the cautioner’s consent or a court order. Competing equitable interests are ordinarily ranked by the first in time, and actual or deemed notice defeats a later purchaser’s claim to priority. Good faith alone is insufficient. Delay defeats specific performance only where prejudice is shown.

Saint Lucian citizens sold land to US citizens who held an alien landholding licence subject to conditions. The purchasers failed to complete the required residence and later agreed to sell the land to another US citizen, who paid the full price, lodged a caution and obtained a power of attorney, but never obtained a licence for that parcel. After his death, his estate was represented by the respondent, who was substituted as cautioner and later obtained the requisite licence.

The original purchasers then purported to resell the land to the appellants, who sought removal of the caution and registration of their own title. The High Court dismissed that claim, awarded damages and directed execution of a deed of sale to the respondent. The Eastern Caribbean Court of Appeal dismissed the appeal. The Privy Council considered the effect of the alien-landholding legislation, the equitable interest arising from payment, the caution, competing equities, delay, illegality, liability for procuring a breach of trust or contract, alleged bias and costs.

1. Appeal and equitable interest. The appeal was dismissed except that paragraph 6(ii) of the trial judge’s order was discharged. A vendor under a specifically enforceable contract for sale of land becomes a trustee for the purchaser, subject to the right to receive the price; on payment in full, the purchaser holds the beneficial interest absolutely. That principle applied in Saint Lucia through section 916A(2) of the Civil Code.
2. Alien-landholding restrictions. Under the Aliens (Landholding Regulation) Act 1973, an unlicensed alien’s landholding was liable to forfeiture at the Crown’s suit, but forfeiture was not automatic. Failure to comply with licence conditions did not itself divest the original purchasers of title or invalidate the equitable interest created for the subsequent purchaser. The Board rejected a proposed distinction between an alien who had held a licence subject to conditions and one who had never obtained a licence.
3. Illegality. The equitable interest could be enforced without relying on an illegal purpose. The Board considered the approach in Murphy v Quigg consistent with Tinsley v Milligan and with Young v Bess. Although the broader approach in Patel v Mirza had superseded the reliance test, it would not alter the outcome.
4. Caution and registration. The purchaser’s equitable interest was an interest in land and an unregistrable interest within section 86 of the Land Registration Act. The absence of an express provision dealing with cautions by unlicensed aliens did not restrict the general language of section 86. Under sections 30 and 87(2), registration gave notice and prevented registration of an inconsistent disposition without consent or a court order. The caution did not itself confer an interest or priority.
5. Competing equities. The court’s power to order registration of a disposition inconsistent with a caution was governed by general equitable principles. The earlier equity prevailed where the equities were equal. The appellants had both deemed notice from the register and actual knowledge of the earlier transaction. Their good faith, the absence of licensing and registration formalities, speculation, non-payment of fees and delay did not displace the respondent’s earlier equity. Delay alone was insufficient to resist specific performance without resulting prejudice.
6. Ancillary liabilities and bias. Saint Lucian law was not shown to recognise a general liability for procuring a breach of trust. Dishonest assistance requires dishonesty, knowing receipt requires receipt of trust property, and procuring breach of contract requires loss. Those ingredients were not found. A single semi-jocular remark about politicians did not establish apparent bias. The Board declined to reconsider the costs order because the issue had not been argued below and the necessary materials were absent.

• Privy Council: The appeal was otherwise dismissed; paragraph 6(ii) of the trial judge’s order was discharged. The Board’s preliminary view was that the respondent should receive the costs of the appeal, subject to written submissions within 21 days.
• Court of Appeal of the Eastern Caribbean Supreme Court (Saint Lucia): The appeal from the High Court was dismissed.
• High Court of Saint Lucia: The claim to remove the caution was dismissed. Damages and consequential relief were ordered, including authorisation for execution of a deed of sale to the respondent on registration of an alien landholding licence.