A floating charge for instance, is created on delivery of the deed and not when, later, it comes to be registered in the Companies Register.7 An equivalent rule operates in respect of so-called "overriding interests".8 Thus if an easement, created by adverse "possession" and confirmed by court declaration, is noted on the Land Register,9 the purpose is merely to publicise a right which was created previously and by other means. In jurisdictions which make a distinction between law and equity, the pattern is often for registration to mark the creation of the legal right, an equitable right having come into existence on some earlier event such as conclusion of contract. Thus, the English Court of Appeal has held in the noted case of Eccles v Bryant [1948] that as far as real property conveyancing is concerned that no right passes to the purchaser/buyer until the parties have exchanged contracts. Jessel MR has also tersely observed in the case of Edwards v Lysacht [1876] that upon the execution or signing of the contract or sale agreement, the buyer is clothed with equitable right in the property ie the equitable interest in the subject property passes on to the purchaser upon the signing of the contract or sale agreement by the parties.
Registration of deeds or registration of title. There is always fundamental distinctio between systems which merely register deeds like the Bahamas and some common law countries and systems which go further by entering on the register the legal result to which the deed is thought to give rise like England and Wales and most countries that operate a system of land title registration. The former leaves interpretation of deeds to the parties, the latter appropriates it to the registrar. Take the case of transfer of ownership which, under English law, is effected by registration of a disposition. A deeds register, like the Register of Deeds as we have in the Bahamas, merely records a copy of the disposition or conveyance, leaving its legal effect to be determined by others. A register of titles, however, like the Land Register as operated in England and Wales under the LRA 1925 and the recent LRA 2002, evaluates the disposition, determines its validity, and, having concluded that it is sufficient to transfer ownership, gives it effect by entering the name of the grantee on the Register as owner of the land. The difference is particularly important when it comes to subsequent transactions. A person buying land on a deeds register can verify the seller's title only by examining a sequence of prior deeds; but if the land is on a register of title it is only necessary to check that the seller is the person listed on the register as owner.
What is true of ownership is true also of subordinate or secondary real property rights and interests such as mortgages or covenants and other incorporeal hereditaments. A real property right which requires registration for its constitution will, under a system of registration of title, be listed in the unique title sheet which is made up for each parcel of land. Its existence and extent can then be discovered at a glance. Under a system of registration of deeds it is necessary first of all to locate the deed in question, and then to consider its effect. It may be added that both systems face the difficulty that some real rights can be created without registration. But it must be noted that registration or recording of a deed is not evidence of due execution as such deed may be set aside on different grounds ranging from defective execution or want of due execution, forgery, lack of capacity and substantial ambiguity to say the least! A deed is merely a prima facie evidence of title under our deeds registration and unregistered conveyancing system
Positive system or negative system. A "positive" system confers the right in question by the very act of registration, and without regard to the validity of the underlying title. Thus the registration of a conveyance which is forged or granted without requisite legal capacity confers ownership in just the same way as registration of a conveyance which was granted by the true owner and properly executed. Title flows from the register and the register, by definition, cannot be wrong. But note the difference between register error and transactional error and their consequent effects. At worst, a title on a positive register is voidable, that is to say, subsistent but challengeable. It cannot be void. A positive system is thus one which turns void titles into voidable titles. Conversely, it holds nothing for titles which are good already; and, since most titles are good, it does not usually matter whether a registration system is positive or negative. A "negative" system operates within the normal rules of the law of property. Registration, although usually necessary, is not a sufficient step for the creation of a real right. There must also be a valid deed granted by a person with title to grant. Title thus flows from the register only in the sense that registration marks the final stage in the process of transfer; and the registration of a conveyance which is forged or granted without the requisite capacity confers no right at all. Such a deed is normally said to be incurably defective. It is suggested that our current system of conveyancing is to a large extent based on a negative system that draws solely on the ordinary law of property. Void titles, in short, are not cured and cannot be cured by the act of registration or recordation. Note however, that time pursuant to prescription [adverse possession] and Limitation Act may wipe out the inherent underlying defect in such title but this is not as easy as said here and will be subject to some complex application of other real property laws
In the Bahamas it is obvious that the Land Registry administered by the Registrar General Dept operates a negative system of land deeds registration [recording, more specifically]. Most Register of Deeds use a negative system.
Bijuralism or monojuralism. A negative system, as just mentioned, operates within the normal rules of the law of property. At first sight a positive system does not. To confer ownership on the basis of, for example, a forged conveyance is to apply wholly new rules to the acquisition of real property rights. Yet, unless a positive system is to be confiscatory in nature, it must also have regard to the underlying law of property. For if ownership passes on a forged conveyance, some redress is required for the person thus deprived of property. Either the property must be returned or compensation paid: in the language of land title registration legislations in jurisdictions that have adopted a system of title registration like in England, most provinces in Canada, Ireland etc. there must either be rectification or indemnity. This is the hallmark of a registered system of conveyancing where registered title once acquired is said to be "indefeasible". But note that in reality, no title is indefeasible and in most progressive jurisdiction the term often used is "guaranteed" title rather than "indefeasible2 title. The reason is not far-fetched as such a title may be vulnerable to challenge either on the basis of a transactional error or a register error. But the advantage of a system of title registration is that even if a challenge of the acquired registered title is successful, the Registrar will either rectify the Land register in favour of the "true" owner and the purchaser is indemnified ie paid compensation or he is allowed to retain the property and the true owner is compensated. But an acquirer can never lose in a system of title registration except in rare cases of gross fraud or gross carelessness. Herein lies the beauty of a registered conveyancing!
The question of whether redress is due, however, can only be determined by the application of the ordinary rules of property law. In other words, there must be "a comparison between the effect of the [registration] statute and the effect of the law which would apply if the statute were not in force".11 This means that a positive system has no choice but to work with two different laws of property. In the first instance the position is governed by the special rules of the positive system. These provide, among other things, that the person who is registered as owner is as a matter of law the owner. But in the event of a dispute the position must then be re-analysed using the ordinary rules of property law. Who, under that law, would be owner? And if the answer is different from that given by registration law, the register is, in that sense at least, "inaccurate", and questions of rectification and indemnity arise. A system which operates with two different laws of property may be described as "bijural". A negative system, which employs only the ordinary law of property, may be called "monojural". Ours in the present day Bahamas is a monjural albeit operating without a system of title registration and operating within the framework of deeds registration or deeds recording.
Interactions. As just mentioned, a positive system of registration is likely to be bijural and a negative system monojural. But it will not be difficult to introduce a registered system in the Bahamas given the size of the country except of course there are people who are profiting from the present system that neither has facility of transfer nor security of transfer and there is a high rate of transactional failure and frustration among ordinary persons in the Bahamas who have been involved in real property transaction. We had experience of this confusion and injustice suffered by many Bahamians in their efforts to acquire or retain the real estate possession!
Typically in Torrens systems the property cannot be returned and so compensation is paid. In the Scottish and English systems the question of which remedy is available is determined largely by whether the acquirer is a proprietor in possession..
If the acquirer has assumed possession of the property, the register may not be rectified against him and the true owner may have to do with indemnity or compensation. But again, an acquirer or purchaser or a true owner cannot and never lose their property under a system of land title registration. Why can’t we adopt such a system in the Bahamas to make life easier for people and even further boost the investment opportunities in the Bahamas as people will be more inclined to invest in real estate acquisition in the Bahamas where there is facility of transfer and security of title ie where they are certain that their title is secure and guaranteed?
Clement Chigbo is a registerd associate with the law firm of C F Butler and Associates, Nassau, The Bahamas. He is also a Member of the Chartered Institute of Arbitrators, U K and a peripatetic lecturer in law in the U K. He may be contacted at lawscholar2006@yahoo.com, clemsweiss@hotmail.com.
- Austin DWI - New York DWI