The Tribune

By NATARIO McKENZIE

Tribune Business Reporter 

nmckenzie@tribunemedia.net

THE London-based Privy Council has dismissed an appeal arising out of a family dispute over two plots of land on Bimini.

The Privy Council, which is the Bahamas’ final appellate court ruled earlier this week that the appeal by Rolle Family and Company Limited against an earlier Court of Appeal decision in favour of Ena Rolle be dismissed. 

According to the facts of the case, on May 24, 2006, Emanuel Rolle conveyed three plots of land on Bimini to his daughter Ena by deed of gift. Some three and a half months later, on  September 8, however he executed two conveyances purporting to convey two of those plots, and a portion of the third to Rolle Family & Co Ltd, for a consideration of US$100 each. That company, which was incorporated by Holowesko & Co is controlled by his son Paul, who is the majority shareholder, its president and director.

The Privy Council noted that Under Section 10 of the Registration of Records Act, Cap 187, successive conveyances of the same land take priority in the order that they are lodged and accepted for record in the Bahamas Registry of Records.

“On May 22, 2007, stamp duty was paid on the conveyances in favour of the company, and on the following day they were lodged and accepted for registration in the Registry. Ena stamped and lodged the deed of gift in her own favour eight weeks later on July 18, 2007. It follows that if the conveyances in favour of the company were valid, it has title in priority to Ena,” the Privy Council ruled.

The Council further noted a conveyance, like any other deed, must be signed, sealed and delivered in order to take effect.

“Both deeds in favour of the company were expressed to have been signed, sealed and delivered on the date of execution, September 8 2006. The problem arises from the fact that although on that date lawyers had been instructed to incorporate the grantee company, the formalities were not completed and the company did not come into existence until September 12, 2006, four days later. It follows that at the time when the conveyances were executed, there was no grantee in existence in whose favour the deed could be delivered. The general rule at common law is that a company cannot adopt or ratify a transaction purporting to have been made on its behalf before its incorporation. In the ordinary course, the result would be that the conveyances in the company’s favour were void,” the Privy Council noted.

The appellant company had argued the conveyances of September 8, 2006 were delivered as escrows, conditional on the incorporation of the company and taking effect as valid grants when that condition was satisfied. Secondly, the company relied on Section 22 of the Companies Act, Cap 308, which validates pre-incorporation contracts on certain conditions. 

In siding with Ena Rolle, the Privy Council found the Rolle Family and Company Ltd did not have title to the two plots purportedly conveyed in September, 2006. “That leaves unresolved the question who does have title. It will not necessarily be Ena, because it is arguable that since the transaction is void at common law and the company cannot claim title by adoption under section 22(2) of the Act, the legal owner is Paul by virtue of section 22(1). Another possibility is that Ena might derive rights from the fact that the failure of the company’s claim leaves her as the only claimant on whose behalf any conveyance has been lodged for registration with the Register of Records. The Board is unwilling to express a view on these points, because Paul Rolle is not party to these proceedings, and the implications of the Board’s conclusions have not been fully addressed in the arguments on this appeal. They would need to be properly considered as between Paul and Ena Rolle in proceedings to which both of them were parties,” the Privy Council stated.

“The only question under this head which the Board thinks it right to address, arises out of a submission made on behalf of the company to the effect that if Paul Rolle has the legal title to the two plots by virtue of section 22(1), he would hold it on trust for the company. The Board cannot accept this, because it is not consistent with the statutory scheme. The scheme makes the company’s interest in the transaction dependent on its adoption of the transaction within a reasonable time. Equity cannot intervene to create a trust inconsistent with the statutory principle.”

Subject to any written submissions which may be addressed to the Board within 14 days of its ruling, the company must pay Ena Rolle’s costs of the appeal.