Onashile V. Barclays Bank D.C.O. (1963)

LawGlobal-Hub Lead Judgment Report

BAIRAMIAN, J.S.C. 

This appeal by Mr Onashile requires a short summary of the events which led to it.
Mr Onashile gave Barclays Bank a legal mortgage of some land of his, to secure his overdraft. The Bank did not apply to have the legal estate registered under the Registration of Titles Act.

He was remiss in repaying, and in due course the Bank, exercising a mortgagee’s power of sale, sold and conveyed the mortgaged land to two purchasers, but Mr. Onashile refused to let them have possession. He sued claiming that the Bank’s omission to apply for registration of title made the transfer of the legal estate void; the purchasers and the Bank sued for possession; and the suits were consolidated. The attitude of the Bank was that a legal mortgage was not caught in section 5 of the Registration of Titles Act.

The High Court of Lagos decided in favour of the Bank and ordered possession. The Federal Supreme Court allowed Mr Onashile’s appeal; the judgement is reported in [1961] 1 All N.L.R., 313; at p. 317 it reads:-
“It follows that this mortgage should have been registered under section 5 of the Ordinance.

It has therefore become void insofar as it purports to convey the legal estate and the purported sale under the Conveyancing Act is also void to this extent.
I would accordingly allow the appeal and set aside the order for possession and mesne profits, and the order for costs. The appellant is entitled to costs both here and in the Court below, and I would assess these costs at a total of ninety guineas.”
That was the judgement of the Court. The Bank applied for leave to appeal to the Privy Council, but gave it up.

Some time later, the Bank applied to the High Court for extension of the time within which the Bank might apply for registration as the owner of the fee simple; and the affidavit in support states that the only reason why the Bank had not applied for registration was that ever since 1936, when the Act came into force, it was assumed that a legal mortgage did not originate registration. Mr Onashile opposed the application.

Evidence was heard to the effect that before that judgement was given the Registrar of Titles did not accept mortgages for registration. Onyeama J. thought the Bank had shown sufficient cause, and made an order granting an extension of time; and this second appeal by Mr Onashile is against that order.

The relevant provisions are in section 5 of the Act, of which it will be enough to quote the following portions:-
“Every conveyance of a fee simple estate in any land for a consideration which consists wholly or in part of money executed after the creation of the registration district in which the land is situated, shall on the expiration of two months from the date thereof or of any authorised extension of that period, become void so far as regards the grant or conveyance of the legal estate unless the grantee or his successor in title or assign has in the meantime applied to be registered as the owner of the fee simple……..

Provided always that the court may, on the application of any persons interested in any particular case in which the court is satisfied that the application for registration cannot be made within the said period, or can only so be made by incurring unreasonable expense, or that the application has not been made within the said period by reason of some accident or other sufficient cause, make an order extending the said period ;”

It is under the latter part of the proviso that the period of two months was extended.
There is no need to state the objections to the order in detail: for in our opinion the decision in the first appeal, that the mortgage had become void insofar as it purported to convey the legal estate, finally closed the door on any application for extension of the prescribed period. For the Bank it is argued that that decision did no more than set aside the High Court order for possession. It is true that the Federal Supreme Court decision did that; but the ground and foundation for doing it was that the mortgage had become void to the extent aforesaid.

The other argument for the Bank is that when the period of two months has expired, the conveyance automatically becomes void as regards the legal estate by operation of law, but the court may, nevertheless, by virtue of the proviso, grant an extension of that period and enable the mortgagee to apply for registration of the fee simple estate. The deduction to be drawn from that argument is that these words, namely:-

“It (viz. the mortgage) has therefore become void insofar as it purports to convey the legal estate”:-

Merely stated the position which resulted under the enacting clause of section 5 (1) from the failure of the Bank to apply for registration within two months from the date of the mortgage, and did not close the door on an application for an extension of that period.
The enacting clause provides that the conveyance:-

“Shall on the expiration of two months from the date thereof or of any authorised extension of that period, become void unless the grantee has in the meantime applied to be registered    ”

Those words, “in the meantime” , signify before the expiration “of two months from the date thereof or of any authorised extension of that period”. It is noteworthy that the proviso speaks of “the said period”, meaning the period of those two months. If it had been intended to make the conveyance automatically void when the two months were up, then, instead of the words “in the meantime”, we would have had the words “within that period”, or “within the said period”.

The words “in the meantime” should therefore be understood as meaning either the period of two months or the authorised extended period, as the case may be. Where the period is extended, it is only after the extended period runs out, without an application to be registered having been made, that the mortgage becomes void as regards the conveyance of the legal estate.

An example will be useful. (For convenience, the second proviso to section 5 (1), which confers a restricted power of extension on the Registrar of Titles, is ignored.) Suppose a legal mortgage dated the 1st October, 1963; the mortgagee’s application to be registered will normally be received by the Registrar if delivered not later than the 1st December.

For delivery after that date a court order of extension will be needed. If the court refuses to grant such an order, the mortgage becomes void to the extent aforesaid; if extension is ordered-say to the 1st March, 1964, the mortgage does not become void until the 1st March arrives without an application to be registered having been made.

An application for extension of time may be made to the court at any time; and it is possible to have an order:-
(a) Before the two months are up; in the above example, say on the 15th November; or
(b) After the two months are up; in the above example, say on the 15th
February .
In case (a) the period of two months is extended before it runs out; the time within which the application to be registered can be made flows on, without any break or halting on the 1st December, down to the 1st March, 1964, and is a continuous period beginning with the 1st October, 1963 and ending with the 1st March, 1964. The argument for the Bank, that the mortgage becomes void as a conveyance of the legal estate at the end of the two months assumes that the time within which a grantee may apply to be registered terminates at the end of the period of two months: it does not if the period is extended.

Section 5 (1) and the proviso to it do not differentiate between case (a) and case (b). If an extension is ordered after the two months are up, again it is an extension of the period of two months; again the time within which application may be made to the Registrar of Titles is extended and flows on as a continuous period. That is the force of “an order extending the said period”.

In the example given, the period within which application to be registered can be made is again from the 1st October, 1963 to the 1st March, 1964. The argument for the Bank overlooks the force of the word “extension”. If an elastic piece of rubber two inches long is stretched to five inches, it is still one piece: it is not one piece of two inches plus another piece of three.

That argument means that after a mortgage has become void, it is revived by a court order of extension of time and given fresh validity. The language used by the legislature does not compel or lead us to take that view. It was doubtless in mind that good cases of delay might well arise; to create a position in which the mortgagee or his successor in interest, although not to blame for not applying within the two months, finds that his mortgage had become void when the two months were up, might have unfair consequences; our interpretation yields a fair position, and we believe that it is right.

If the mortgagor sues, claiming, as Mr Onashile did, that the mortgage had become void, to the extent laid down, at the end of the two months, he would have to serve his writ of surmmons on the mortgagee, who could plead that there was sufficient cause for not applying to be registered within the two months, and could also apply to the court for extension of time; whereupon the suit and the application would be consolidated, and the court would decide whether to grant the claim in the suit or to make an order of extension of time. If the court decides that the mortgage became void as a conveyance of the legal estate, there is no longer a conveyance of a legal estate which the mortgagee can apply to have registered, and an order for extension of the time within which to apply can serve no useful purpose.

That is the position here. It would be idle to speculate now on what the Federal Supreme Court might have done if there had been, as part of the case on appeal before it, an application by the Bank for extension of time on the ground of the mistaken view held by the Registrar-a view which could have been canvassed and decided by the courts by appropriate proceedings: there was no such application before that Court, and, in view of that Court’s decision, no such application could thereafter be entertained.

It is ordered as follows:
That the order made by the High Court of Lagos on the 28th March, 1962 in Suit No. LD/45/1960 be and the same is hereby set aside with costs here and below to be paid by Barclays Bank D.C.O. to S. T. Onashile assessed at fifty guineas in all.

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F.S.C.71/1962