Home Information Cases Half Moon Bay Ltd v Crown Eagle Hotels Ltd (2002)

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Half Moon Bay Ltd v Crown Eagle Hotels Ltd (2002)

Summary

The appellant owned and operated the Half Moon Hotel at Montego Bay, Jamaica.

Facts

The respondent owned the adjacent Holiday Inn. Between the Half Moon Hotel and the Holiday Inn were three strips of land belonging to the Holiday Inn. Those lands were acquired by the appellant in 1966 and later sold to the respondent's predecessor in title. The 1966 transfer contained restrictive covenants by the purchaser not to build anything but single family houses on the land, not to carry on any business but renting a house for family occupancy and not to effect any beach improvements detrimental to the beach of the Half Moon Hotel owned by the vendor. The title to the lands was registered but the covenants were not entered on the relevant certificates of title. In 1970 the appellant issued proceedings to enforce the covenants. In 1971 a caveat was entered requiring any future transfer to be made subject to the covenants, but that direction was not complied with. In 1974 a consent order was made directing that the covenants in the 1966 transfer should be endorsed on the certificates of title to the lands but that was not done. The lands were transferred in 1990 to UDC and in 1994 to the respondent. In 1995 the appellant commenced proceedings for a declaration that the lands were affected by the covenants in the 1966 transfer. The judge dismissed the application on grounds that the benefit of the covenants was not annexed to any land of the appellant. The appellant appealed. In 1997 while the appeal was pending, the covenants in the 1966 transfer were entered on the certificates of title in the register. In 1999 the Court of Appeal of Jamaica dismissed the appeal. In 1999 the respondent sold the Holiday Inn and the lands to Bass. The appellant appealed and Bass was joined as an additional respondent.

Held

(dismissing the appeal) Annexation was irrelevant since the appellant was the original covenantee and as such was plainly entitled to the benefit of the covenants. An original covenantee could not enforce a covenant unless he retained the ownership of land which was capable of enjoying the benefit of the covenant (London County Council v Allen [1914] 3 KB 642). That was a question of fact and in this case it was difficult to understand how it could be said that the covenants were not capable of benefiting any of the land which formed the site of the Half Moon Hotel. Not only did the lands abut the site of the hotel but one of the covenants expressly prohibited any beach improvement detrimental to the hotel and as such could scarcely be other than beneficial to the hotel. However the covenants were unenforceable for want of entry or notification at the relevant time on the certificates of title in the register under the Jamaican Registration of Titles Act 1889. The appellant had two opportunities to enter the covenants in the 1966 transfer on the title to the lands in the register. First in 1966 and secondly pursuant to the consent order in 1974. Title to the lands was then still vested in the purchaser and was liable to be rectified pursuant to s 15(b) of the 1889 Act by the entry or notification of the covenants on the register. That was not done before the lands were transferred to UDC and UDC obtained title free from the covenants by virtue of ss 26 and 70 of the 1889 Act, and by virtue of s 71 was not affected by its notice of the existence of the covenants. It was not clear how UDC was registered without any entry or notification of the covenants against its title in view of the caveat but the caveat did not of itself subject the title of the transferee to the interest or incumbrance which the caveat was supposed to protect. UDC took free from the covenants and so did the respondent. The entry of the covenants on the title in 1997 could not affect prior entries. Likewise Bass took free from the covenants since it obtained the title which the respondent had. If the 1997 entries were still on the certificates in the register they should be expunged. The appellant could not rely on ss 63 and 88 of the 1889 Act which did not have the effect of making registrable but unregistered incumbrances binding on a transferee.

Privy Council
Lord Nicholls of Birkenhead, Lord Browne-Wilkinson, Lord Millett, Sir Murray Stuart-Smith, Sir Christopher Staughton
Judgment date
20 May 2002
References

[2002] UKPC 24

Practice areas