The Tribune

• Otherwise investors will ‘shy away and think twice’ 

• Land Registry ‘progressive’ solution to ongoing woe

• ‘Vexatious’ cases face revamped Supreme Court rules 

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Chief Justice’s ruling on an Exuma cay was yesterday hailed as “a deterrent to frivolous and vexatious” land ownership claims that undermine economic growth, investment and development in The Bahamas. 

Nadia Wright, partner at Providence Law, told Tribune Business she hoped the September 15 verdict - which upheld her foreign investor clients’ ownership of Polly Cay - “sends a clear message” to those challenging documentary title to Bahamian real estate that they must present “a strong case” to have any chance of success before the Supreme Court.

Revealing that her clients, Efraim Sade and his Ocean Point Estates vehicle, had been sent “back to square one” by the decade-long challenge to their ownership of the island, she added that competing title claims which have little merit are ultimately counter-productive for Bahamians and the economy because they have a chilling effect on job-creating investments.

Investors, both Bahamian and foreign, will “shy away and think twice” over exposing themselves to potential financial loss on real estate transactions where others immediately asserting rights to the same parcel no sooner has the deal closed, Mrs Wright added.

While new Supreme Court rules and civil procedures should make it easier, and quicker, to dismiss legal actions that are groundless, Mrs Wright told this newspaper that The Bahamas must create a Land Registry - and move to a system of registered land - if it is to eliminate the problems that produced Polly Cay and countless similar land ownership challenges and disputes.

Describing this as a “progressive” solution that would bring transparency to land ownership by enabling non-attorneys to detect competing claims, liens and charges over a specific land parcel, she acknowledged that multiple administrations have “kicked the can down the road” on implementing these reforms.

Mrs Wright said the Polly Cay ruling is “important for a few reasons”. Ocean Point and Mr Sade, and the latter’s business partner Eyal Ben Zvi Sasson (also known as Eyal Waters), acquired the 7.33-acre island for $500,000 in late 2009, with their confirmatory conveyance lodged in the Registry of Records on November 16 that year.

Their ownership, and claim to good title, was then challenged by Iva Dean (nee Strachan) who asserted that the island had been conveyed to her on July 8, 1988, by her uncle, Allan Strachan. And she also claimed possessory title to the cay, which is located 600 yards from mainland Exuma in the protective lagoon formed by Blue Island, by virtue of the Strachan family occupying it for more than 200 years and using it for purposes that included livestock farming.

Ms Dean initiated Supreme Court proceedings in 2014, demanding both damages and that she recover possession of Polly Cay based on her alleged documentary chain of title from the Strachan family. Ocean Point Estates and its principals, meanwhile, alleged that on September 9, 1928, one of Ms Dean’s late ancestors, Alfred Strachan, had sold and conveyed the cay to Jerome Washington Knowles. Their title chain traced back to the Knowles family.

Central to Ms Dean’s case was the allegation that the September 9, 1928, conveyance was fraudulent because the ‘X’ used by her illiterate ancestor in place of a signature “does not match that on other documents” he signed. However, at the trial before Chief Justice Ian Winder, Ms Dean dropped the fraud claim and instead focused on her possession of Polly Cay.

The Chief Justice ultimately agreed that the Registration of Records Act gives “priority” Ocean Point Estates’ conveyance because it was recorded first on November 16, 2009. Ms Dean’s was recorded on February 4, 2011, almost 23 years after it was first drawn up, and Chief Justice Winder agreed that the law “dictates that the title recorded first in time should prima facie be the accepted title” even though Ms Dean’s conveyance was dated earlier.

“With the allegations of fraud no longer alive it cannot be doubted that Ocean has the better title, as the validity of their documentary title has essentially gone unchallenged,” Chief Justice Winder said, also dismissing Ms Dean’s claim to a possessory title to Polly Cay on the basis that she lived in New Providence and had not visited the island since 2004.

Damian Gomez KC, lead attorney for Ms Dean, did not reply to Tribune Business phone calls and messages seeking comment before press time last night. However, Mrs Wright said: “What we were able to bring out is an important legal principal, which is the strongest documentary title always wins in court and, when persons put forward a case for possessory title it has to be clear, uninterrupted possession for a minimum 12-year period.”

Disclosing that she will now be pursuing Ms Dean for the legal costs awarded to her client by the Chief Justice, she told Tribune Business: “I think rulings such as this one act as a deterrent. For investors who are coming into The Bahamas, it could be a bit disheartening when you complete your transaction and someone comes to challenge the title to the property you purchased.

“If definitely slows down and causes investors to shy away. That’s a fact. It slows down development, and would cause any developer to shy away and think twice but, again, hopefully with the publishing of rulings such as this one it acts as a deterrent so it kind of helps the cycle of investment not to be slowed down as a result of frivolous and vexatious litigation.”

A senior attorney and partner at a major Bahamian law firm, who has handled numerous major real estate transactions, told this newspaper that it was common for investors to be confronted with challenges to land ownership that were meritless.

Speaking on condition of anonymity, they said the ink was barely dry on the conveyance before competing claims emerged from seemingly nowhere with Bahamians claiming documentary title dating back to a long-dead ancestor or asserting that their family had been in possession (squatting) on the relevant parcel for decades. They asserted that such practices were tantamount to a ‘shake down’ in the hope that deep-pocketed investors will pay them off to go away.

There is nothing to suggest this was the case with Polly Cay. However, the attorney said the problem was especially prevalent outside New Providence, recalling one rival claim to real estate for a major resort development that went all the way to the Privy Council that is still going on today.

“It happens a lot,” they added. “All that stuff costs you a fortune to defend, and if you don’t have deep pockets it’s very, very hard to fight. They’re looking for a pay-off. When a Bahamian comes forward with a possessory claim, which is usually hot air, the court turns over backwards. They get a lot of leeway and cost you a bloody fortune.

“You had better have deep pockets. Who the hell is going to go through that? We had one in Andros where we sold a hotel, and this family came out of nowhere and claimed the land that the hotel had been on for 50 years. They still got their claim going, and the judge gave them all the time in the world. It cost my client hundreds of thousands of dollars.”

Mrs Wright, who said she is now moving to convert the Chief Justice’s verdict into an Order that will be lodged in the Registry of Records to affirm her client’s Polly Cay ownership, voiced hope that the Supreme Court’s updated civil procedure rules will make it easier and quicker for meritless claims to be struck out.

“The process I believe takes too long to get to that phase of disposition of such claims, whereas in the UK and US the court makes you come with everything at the outset of a claim,” she added. However, the best safeguard against further Polly Cay-type situations is the creation of a Land Registry.

“I would say, as many lawyers would say, that we need a Land Registry,” Mrs Wright told Tribune Business, “but we’re so far off from that. I think the discussion about it has been kicked down the road by so many administrations, and I don’t know which administration would be so brave as to getting it going and getting it done.

“They prevalence of such frivolous and vexatious claims would definitely be solved with a Land Registry. We really need to be progressive and to show we are trying our best to stay current with changes that will help our country to grow. We need to consider that type of legislation so we alleviate this situation as much as possible once we have a Land Registry.”

There will be much scepticism as to whether a land registration system will ever get off the ground. The last Ingraham administration led similar efforts more than one decade ago to develop a three-strong package of Bills that would have overhauled the existing system.

These Bills - the Land Adjudication Bill, the Registered Land Bill and the Law of Property Bill - would have created a Land Registry in the Bahamas, and given commercial and residential real estate buyers greater certainty that they had good title to their properties. However, they were ultimately shelved and no subsequent administration has seen fit to revive them, although the current government’s position is unclear.

Meanwhile, Mrs Wright said Ocean Point Estates was now revisiting its plans for Polly Cay following the 13-year delay. “The intent was to create a resort type environment, but it’s been placed on hold for so long they’re now back at square one, getting it reappraised and deciding where do they go from here,” she added.

The Providence Law partner said that, in 20 years of practice, this was the first such land ownership dispute she had been involved with that went to full trial. Normally, she added, such matters were resolved with the rival side’s attorney out-of-court.