Deborah Loraine Webb v Orville Webb and Memeile Webb; Cowcatcher Collection Ltd v Robert Hawkes and Belinda Hawkes - Judgment

¶ ```html OPEN COURT IN THE GRAND COURT OF THE CAYMAN ISLANDS CAUSE NO. 415 OF 1992 CAUSE NOS. 198 AND 353 OF 1996 CAUSE NO. 415 OF 1982: BETWEEN：DEBORAH LORAINEWEBB PLAINTIFF AND：ORVILLE B.WEBB RESPONDENT AND：MEMEILE WEBB INTERVENER CAUSE NO. 198 AND 353 OF 1996： BETWEEN：COWCATCHER COLLECTION LIMITED PLAINTIFF AND：ROBERT HAWKES DEFENDANT AND：BELINDA HAWKES INTERVENER APPEARANCES： In Cause 415 of 1982： Mr. McDonough of Bruce Campbell & Co. for the Plaintiff. Mr. Orville Webb，the Respondent in person. Mr. Helfretchxall & Co Mr. of Ian B. for the causes 198of 1996 e I In C and 353 Plaintiff Mr. Lamontagne Q.C. instructed by Mrs. Nervik of Nervik & Co. for the Intervener. The Respondent unrepresented.(absent) ```
```markdown # SMELLIE J. ## JUDGMENT The issue presented in each action is whether there is power in the Court to make charging orders in favour of the judgment creditor over property in respect of which the judgment debtor is registered as joint proprietor. While unrelated in any other respect, the two actions have been consolidated for the purposes of the determination of that common issue. In Cause 415 of 1982 the judgment creditor is the former wife of the respondent judgment debtor. She has obtained a judgment against him in respect of arrears of maintenance for the child of the former marriage. In an effort to secure that judgment she has obtained a charging order nisi over property at George Town East, Block 14D, Parcel 113 which is registered in the names of the respondent judgment debtor and his present wife, as joint proprietors. The wife claims to have had no notice of the proceedings leading up to that charging order nisi and not being herself a party to or in any way liable for that judgment debt, has intervened to set aside the order on the basis that the Court had no power to make it. In Cause 198 of 1996 the plaintiff sued on a contractual debt and obtained default judgment against the defendant. In order to secure that judgment the plaintiff obtained, in Cause 353 of 1996, a charging order nisi over property at Bodden Town Block 44B Parcel 276 which is registered in the names of the defendant and his wife, the intervener in the Cause, as joint proprietors. The intervener in Cause 198 of 1996 also is in no way liable for the debt and she therefore asserts that there is no power to charge the jointly held property with it. ```
It is conceded by counsel on behalf of both judgment creditors, and correctly so in my view, that there can be no basis for impeding or interfering with any interest of a joint proprietor who is not liable for the debt. What is, in essence, being advanced, is the argument that the judgment debtor has a beneficial interest in the land, in his undivided, unidentified, aliquot share, to which the charging order may be attached, even if it may not be enforced by a power of sale because of the indefeasible nature of the interest of the non-liable joint proprietor. The contrary argument centres around the principle that a joint proprietor has no separate disposable beneficial or legal interest in the land which is the subject of the joint proprietorship. That being so, there can be no charging order made in respect of an interest only of one joint proprietor, in these cases, the respective judgment debtor. To the extent relevant to the present matters it is convenient that I set out here the enabling provisions. They are in Section 29 and the Third Schedule of the Judicature Law (1995 Revision) (“The Law”): 29. The Third Schedule shall have effect with respect to the imposition of charges to secure payment of money due or to become due under Judgments or orders of the court; and the Schedule has effect to make provision for restraining and prohibiting dealings with and the making of payments in respect of, certain securities” | Third Schedule | (1) Where, under a judgment of the Grand Court, a person (the “debtor”) is required to pay a sum of money to another person (the
``` "creditor") then, for the purpose of enforcing that judgment or order, the Court may make an order (a "charging order") in accordance with this Schedule imposing on any such property of the debtor as may be specified in the order a charge for securing the payment of any money due or to become due under the judgment or order. (2). Property which may be charged 2.(1) Subject to sub-paragraph (3), a charge may be imposed by a charging order only on - (a) any interest held by the debtor beneficially in any asset of a kind mentioned in subparagraph (2) or any interest held by him beneficially under any trust, or .... (b) (2). The assets referred to in subparagraph (1) are - (a) land; (b) ------- (3) ---------------------------- visions Su 35 id 2 ing para 33 Proppleme 34 1 annu 36 37 38

¶ [3] (1) A charging order may be made absolutely or subject to conditions as to notifying the debtor or as to the ```
```markdown time when the charge has become enforceable, or as to other matters. (2) A charge imposed by a charging order made in relation to any interest in land shall be in the prescribed form and shall be registered in the encumbrances section of the relevant land register. (3) A judgment creditor may enforce a charge imposed by a charging order made in respect of any interest in land by selling that interest and sections 75 and 76 of the Registered Land Law (Revised) shall apply in relation to any such sale. (4) ------ (5) ------ (6) Where a charging order has been made the Court may, at any time, on the application of the debtor or of any person interested in any property to which the order relates, make an order discharging or varying the charging order". In arriving at the conclusion in this matter, I accept Mr. Lamontagne's, missions, by Mrs. Thompson, joint proprietorship of land. The following passage 34 in Halsbury's Laws 4th Ed. Vol. 4, paragraph 529 describes the incidents of joint tenancy as it applied in England prior to January 1926 and - but for an important distinguishing principle affecting the ```
```html 1 individual right of joint proprietors to sever - as it would apply in the 2 Cayman Islands today: 3 4 “Each joint tenant has an identical interest in 5 the whole land and every part of it. The title 6 of each arises by the same act. The interest 7 of each is the same in extent, nature and 8 duration. In the case of freeholds, the seisin, 9 and in the case of leaseholds, the possession, 10 is vested in all, none holds any part to 11 the exclusion of the others. At common law the 12 interest of each must vest at the same time. 13 These are the four unites of title, interest, 14 possession and time ----”. 15 16 At footnote 5 (op. cit, ibid) it is stated that each joint tenant holds the whole 17 land and holds nothing, that is, he holds the whole jointly and nothing 18 separately. 19 20 This principle is most clearly borne out by what is perhaps the most 21 important incident of joint tenancy or proprietorship： the jus accrescendi or 22 right of survivorship which operates so that the death of one joint tenant 23 creates no vacancy in the seisin or possession of the land. His interest is 24 extinguished and the survivor becomes seized or possessed of the whole and 25 where there is more than one survivor, they continue to hold as joint tenants： 26 Halsbury’s (op. cit. para 531). 27 28 The similarities between the nature of joint proprietorship under the law of 29 Cayman and joint tenancy under the law of England pre-1926 were 30 recognised by the Court of Appeal in the unreported judgment given (per 31 Georges J.A.) in Mumms Incorporated/Anthony Thiam-Hong Tan and man Capana others at hT. 25 and others Civil Appeal no. 25 of 1989， written gment del28th Maroi 1989 - v 32 Caytal Trust a Civil Appruen 33 judivered on ch 1990pea 34 The important distinction between the right of any joint 35 tenant at 36 common law to demand severance of his interest and the absence of any such 37 right under Cayman law without the consent of all joint proprietors, was a 38 pivotal factor to the outcome in the Mumms case (supra). ```
It is a factor of equal importance here. In the Mumms case the appellants/judgment creditors contended that the interest of the judgment debtor held as joint proprietor with his wife in his matrimonial home could be sold pursuant to section 42 (now repealed) of the Judicature Law, to satisfy the judgment debt. That contention was addressed in the following terms which I find applicable to the present case by Justice of Appeal Georges: "As in the joint proprietorship under the Registered Land Law, joint tenants at common law prior to 1925 had no separate claim in the land. They did, however, have separate rights or interests. The appellants contend this interest can be sold under section 42 of the Judicature Act.(sic) Joint proprietorship under the RLL and joint tenancy at common law prior to 1925 had another characteristic in common - the right of survivorship. As set out in Section 99(1)(b) "on the death of a joint proprietor his interest vested" in the surviving proprietors jointly. There is, however, a clear distinction between the two. At common law prior to 1925 the rule is as stated in Williams (on Real Property 23rd Ed (1920) at page 147): "The incidents of a joint tenancy above referred to lasts only as long as the joists. In the joint tenancy, each of the joint tenants possesses an absolute power to dispose, in his lifetime of his own share of the property."
lands by which means he destroys the joint tenancy”. This right has clearly not been preserved under the RLL. Dispositions under Section 99(1) [now section 100(1)] can be made only by all joint proprietors. The term “dispositions” in that subsection cannot in my view, be interpreted to mean a disposition of the entire estate in the parcel of land jointly held. Such a proposition would plainly not need to be enacted. It can only mean that one joint proprietor can dispose of his or her interest in the land jointly held only if all the other joint proprietors agree. This is confirmed by the fact that there is one exception. The joint proprietor can transfer his or her interest to the other joint proprietors. Accordingly, any sale under Section 42 of the Judicature Act would result in a disposition inconsistent with the RLL and would be ineffectual. It appears to me that the argument on behalf of the Appellants is based on the premise that a joint proprietor under the RLL has the same rights as has a joint tenant (at common law) to sever the tenancy unilaterally. Section 99(3) makes it clear that joint proprietorship can only be severed by the agreement of all the joint proprietors. A unilateral right of severance would be inconsistent with the RLL and could not therefore, be implied”. (emphasis) The Court would impose findings of fact on the meaning of the RLL and that the power of the Court to so order in respect of a joint proprietorship could be no more extensive than the right of a joint proprietor to dispose.
By the time of the Mumms case (supra) it had been settled law in the Cayman Islands that the RLL is a comprehensive Code of the law governing the registration of and dealings in land, including the dispositions of interests in registered land. As much is stated at page 2 of the written judgment in that case. And the RLL itself makes that clear. Section 37(1) of the RLL provides: "No land lease or charge registered under this Law shall be capable of being disposed of except in accordance with this Law, and every attempt to dispose of such land, lease or charge otherwise than in accordance with this Law shall be ineffectual to create, extinguish, transfer, vary or affect any estate, right or interest in the land, lease or charge". In the definition section - section 2 - "disposition" is defined as: "Any act inter vivos by a proprietor whereby his rights in or over his land, lease or charge are affected, but does not include an agreement to transfer, lease or charge". In the Mumms case Georges JA cited and applied the earlier judgment of Henry JA in Paradise Manor Limited (in Liquidation), M. Becker & M.L. Becker v Bank of Nova Scotia [1985] CILR 437 in which those sections were considered in the following terms (at page 480): By applying the definition of "disposition" in section 37, the meaning of "land, lease or charge" is that of a property interest in land or charges over land, and no rights of a proprietor under law shall be capable of being affected except in accordance with the Law and the system of registration established by it".
By applying that dictum to the case before him in Mumms Georges JA on behalf of the Court, then proceeded to conclude, as we have seen, that as a joint proprietor has no unilateral right to sever or otherwise dispose of his interest under a joint proprietorship, there could be no order made for the sale of any such interest. Is there a proper basis for contending, as have the judgment creditors before me, that a charging order should be differently regarded for present purposes as a form of disposition and that the orders should be made absolute and registered even if there never could be a power of sale? This contention, as I understand it, centres around the word “beneficially” as it is used in paragraph 2(1)(a) of the Third Schedule to the Law to describe any interest held by a judgment debtor in land. This the attorneys for the judgment creditors submit, is expression of the legislative intent that any interest, legal or beneficial in land, shall be chargeable by order. This would include the “beneficial interests” of the respectively liable joint proprietors. I find this submission to be without merit for a number of reasons. The first is the fairly obvious: the joint proprietor has no separate identifiable interest in the land and his “beneficial” interest must be coincidental and co-extensive with his legal interest - as joint proprietor he holds the whole land jointly, but nothing separately. Thus there is no separate legal or beneficial interest, only identical interests with that of the other joint proprietor(s). The second is that even if one could conceive of a separate “beneficial interest” to be charged but not sold, such a charge would be nonetheless a “disposition” within the meaning of the RLL and, therefore, impermissible as it would purport to affect land held under joint proprietorship while not forming t(00). As arising in 100. 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¶ [1] (a) dispositions may be made only by all joint proprietors; and

¶ [2] (b) on the death of a joint proprietor, his interest shall vest in the surviving proprietor or the surviving proprietors jointly. (2) For the avoidance of doubt, it is declared that - (a) the sole proprietor of any land, lease or charge may transfer the same to himself and another person jointly; and (b) a joint proprietor of any land, lease or charge may transfer his interest therein to all the other proprietors". (3) ... Paragraph 3(2) of the Third Schedule settles this point. It refers to the prescribed form and mandates that the charge shall be registered against the title to the land. A charge operates as a disposition, even if the power to sell is never exercised. Those provisions are incompatible with the restrictions imposed upon dispositions of land held upon joint tenancy - Section 100(1)(a) of the RLL - and therefore would be contrary to the paramount intentions of the RLL. Finally, I should further briefly address the contention that the interests of a joint proprietor should be chargeable, even if not amenable to sale. That argument proceeded on the basis for example, that a receiver could be appointed over the property to receive the income without interfering with the interest of the other joint proprietor(s), as a sale would do. I found intention out me to give court to make charging orders, which is in breach of the means by which the asset in the land may be sold to satisfy the debt: see paragraphs 1(1) and 3(3) of the Third Schedule to the Law. The latter provision makes ```
The legislative intent clear by stating that the judgment creditor has the right to sell. The argument that section 29 and the Third Schedule to the Law provides a self-contained and novel power given the Court to grant charges over any interest in land would, for all the foregoing reasons, be a radical departure from the definitive terms of section 100 of the RLL and the many settled judicial pronouncements to the effect that the RLL provides a comprehensive code. Any such change would, in my view, require clear and express language, not the general descriptive use of the term "beneficial interest" as it appears in paragraph 2(1)(a) of the Third Schedule to the Law. It is also to be noted that the provisions in the Law are adapted from the English legislation (the Charging Order Act 1979) which exists against the background in England where, since January 1926, it is not possible for a legal estate to subsist in an undivided share in land: Section 1(6) of the Law of Property Act 1925. If not imposed by agreement, the law there since January 1926, imposes a trust for sale on land held in undivided shares, whether it was so held either at law or in equity: section 36(1) of the Law Property Act 1925 and see Halsbury’s Laws 4th Ed Vol 17 paragraph 362 and Irani Finance Ltd v Singh and Others [1979] 3 All E.R. 199. In England, the reference to a "beneficial interest in land" in the context of a joint tenancy which is to be charged under the Charging Order Act 1979 would therefore, carry special consequences. Under that scheme, such a beneficial interest has been held to be chargeable, not as an undivided share in land, but as an interest in the proceeds of the trust for sale which is imposed upon the land: National Westrimster Bank Ltd v. Stockman [1981] 1 All E.R. 800. I have already expressed the reasons for holding that the expression "intend may here, as concerns, as an undivided interest in land be taken the plaintiff to have a proprietary interest in the land." That construction by no means renders the provisions adapted from the 1979 English Act, as they may relate to land, ineffective for all the purposes of charging orders: Cayman Islands law admits of other circumstances where
The "beneficial" (as distinct from the purely legal) interest in land may be amenable to a charging order. The beneficial interest in land held upon trust is but one example: see section 23 of the RLL the proviso which, in practice, is often reflected in legal title being registered in the names of administrators or trustees, but with beneficial title being vested in the beneficiaries under the estates or trusts. I would venture the view that there would appear, in principle, no reason why there should not be power to make a charging order against such an underlying beneficial interest. I was also referred to the more recent English case of Perry v Phoenix Assurance Plc [1988] 3 All E.R. 60. That case takes the present matter no further. It simply decided in the context of the English legislative scheme that although a charging order could be made on an undivided share in land (now in England expressed in terms of the beneficial interest in the trust for sale imposed upon land held in undivided shares) - such an order was not capable of registration under the Land Charges Act 1972 (U.K.). The obvious reason is that an undivided share in the proceeds of sale of land held on trust for sale is not land. That is a far cry from the law in the Cayman Islands where, as we have seen, legal estates still subsist in undivided shares in land. The manner of their disposition is the main issue in contention. For all the foregoing reasons, I find that there was no power in the Court to make the charging orders nisi in these matters in respect of the two parcels of land already mentioned. Those orders must be discharged and the present application of the plaintiffs that they be made absolute, refused. There remains a charging order nisi over Lower Valley, Block 37E Parcel 103, in Cause 415 of 1982. That is the house where the intervener in that Cause resides with the three children of her marriage with the respondent. It is registered in the sole name of the respondent. There is no objection to the order being made absolute for what it may be worth to the plaintiff - there is already a first charge and power of sale conceded to a bank. That order nisi now becomes absolute.
```html 1 2 3 4 5 6 7 Anthony Smellie Q.C. 8 Judge of the Grand Court 9 10 11 Dated this 21 day of February 1997