By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Five families have become the latest victims of a massive New Providence land fraud, after the Court of Appeal affirmed that Arawak Homes had superior title to their properties.

The appellate court, in a unanimous verdict late last week, also overturned the prior ruling of then-Justice Neville Adderley that four of the five families had established an “estoppel” against the developer, and should be compensated for the investment made in their respective homes.

The verdict thus leaves the families of Theresa Sands, Rosalie Sands, Keino and Rochelle Stuart and Roy Burrows without any compensation or title to the land/homes they purport to own. They also face potentially large bills for legal costs

The Court of Appeal also rejected the appeal of Gary Ds’Ecas and Mavis Knowles-Ds’Ecas, the one family who former Justice Adderley found had failed to establish an “estoppel” against Arawak Homes.

The five families are among “hundreds” of Bahamians who became the unwitting victims of a huge land fraud, perpetrated in the Sir Lynden Pindling Estates area near Nassau Village/Pinewood Gardens, by a group of land speculators with the assistance of greedy, unscrupulous attorneys.

Arawak Homes has been forced into a three-decade long defence of its title to the land through the Bahamian court system, after a John Sands, using a 1926 diagram of the Nassau Village Subdivision, obtained a Certificate of Title to 156.069 acres on September 30, 1990.

Sands used a Quieting Titles Act petition to obtain his rights to the land, arguing that it should be granted because of his “long, exclusive and undisturbed occupation and possession”of it.

Arawak Homes challenged the Certificate of Title granted to Sands via a Supreme Court action launched on January 8, 1991, sparking a 12-year legal battle that ended with the developer’s victory on November 7, 2003.

The Sands title certificate “was declared void and was set aside on the ground of fraud on the part of Sands and his attorneys”, the Court of Appeal said in last week’s judgment.

Then-Justice John Lyons, in his November 2003 ruling, found that Sands and his attorneys, Smith, Smith & Company, had perpetrated a fraud by failing to serve Arawak Homes with notice of their Quieting Titles petition.

This breached the law, as the Quieting Titles Act requires all parties with an interest in the relevant property to be notified of such a petition, and Sands and his attorneys knew of the developer’s interest.

Justice Lyons found Sands and his attorneys had lied to former Supreme Court Justice, Cyril Fountain, when it came to serving notice of their action, describing it as “a blatant fraud”.

However, upon obtaining his fraudulent Certificate of Title, Sands almost immediately transferred ownership of the 156-acre plot to a company called Horizon Systems in December 1990.

That company then used the almost-13 years between that deal and then-Justice Lyons ruling to divide up, and sell, land they did not properly own/had obtained by fraud to hundreds of unsuspecting Bahamians seeking to realise their dream of ‘owning a piece of the rock’.

The Sands/Horizon Systems transaction is almost a model for the template laid out by the late Paul Adderley, who warned in 2001 that the Quieting Titles Act was being used to effectively steal land.

“You fine two unemployable drunks who swear affidavits of possession of 50 or 100 acres of land. You apply to the court for a Certificate of Title. You then find two or three adverse claimants who file claims that the land is not yours but theirs,”the late attorney general said.

“A few days before you go to court the adverse claimants withdraw their claim. You go to court with an unopposed application and you get your Certificate of Title.

“The same day or the following day, you convey the land to a company which you have had incorporated by a relative or friend without actual knowledge of the fraud, and thereby claim that purchaser is a bona fide purchaser for value. You have gotten what you set out to do.”

In the latest appeal, Arawak Homes argued that it had better title to the land than the five families. It said no “equitable estoppel” had arisen in their favour because it “had done everything, legally, that could be done to assert its title to the land”.

In response, the families argued that they were all “bona fide purchasers for value without notice”, and that the seller had the ability to transfer good title to their properties to them.

The Court of Appeal found that the five families ‘roots of title’ were all ultimately traceable to the Certificate granted to Sands, and the onward transfer to Horizon Systems.

Ruling that the Sands/Horizon dealings were “without doubt a fraud”, the Court of Appeal found: “It was submitted on appeal by Arawak that the transfer to Horizon a few days after the grant of the certificate, through the method of lease and release, amounted to an attempt to launder the land by quickly distributing it to third parties, and supported their contention that Horizon was not a bona fide purchaser (BFP).

“In our view, it was doubtful whether the method of property transfer used by Sands to Horizon was valid in the Bahamas..... In the premises, we were satisfied that.. Horizon was not a BFP as it was imputed with notice of the fraud perpetrated in obtaining the Certificate of Title.”

The five families conceded that Arawak Homes’ 1991 action had given them notice there were competing claims to the properties they ultimately purchased, and the Court of Appeal affirmed that the developer has “the best documentary title to the land”.

However, the five argued at the appeal hearing that Arawak Homes was “estopped from asserting ownership to the land”, giving them all better title.

“In essence, the [four families] and the DS’Ecas’s all submitted that Arawak knew of their interest in the land and sat idly by allowing them to expend money to improve the land,” the Court of Appeal noted.

“In those circumstances, they submitted that it would be unconscionable for Arawak to obtain the benefit of their investments.”

However, the appellate court found that while all five families had “suffered detriment through their expenditure, it could not be said that that expenditure was based on encouragement from Arawak.

“Further, it could not reasonably be said that their expenditure was based on the expectation or belief that they owned the land, as either at the time of the purported conveyance or at the commencement of construction of the respective buildings, there was an outright legal challenge to their title to the land.”

The Court of Appeal, referring to the launch of Arawak Homes’ 1991 action, added that the developer was unable to take legal action to remove the five families until the Sands’ title was set aside in late 2003.

“Arawak was, at every opportunity, asserting its title to the land, and no amount of empathy or sympathy for the [four families] and the DS’Ecas’s could vitiate the positive acts taken by Arawak to assert its ownership to the land,” the Court of Appeal ruled.