Dear Editor,
I read with accustomed interest your editorial of November 4, headlined ‘Municipal drama’ addressing some of the problems attending that modern-day enigma operating under the official name of The Mayor and Councillors of the City of Georgetown.
What particularly attracted my attention in relation to the collection of overdue rates on property was the statement “the process for recovering the rates is a relatively simple and straightforward one, and should not involve miring the council in the notoriously dilatory court system.” The statement added the proceedings are “remarkably quick.” I must say categorically and with regret that it is no longer so. And because of the serious implications of the present legal provisions for collection of overdue general rate, I am moved to venture into rather lengthy commentary mainly for the edification of the executive but also for the information of the citizenry at large.
Whenever appeals to the public for timely payments of rates fail to earn the desired results, resort may ultimately be had to the process of levying execution on the property in respect of which the rates are due. The process known in law as parate execution involves the service by the Town Clerk of Georgetown or the chief clerk of a local government body of a notice or summation stating the amount of rate due on a particular lot upon the owner of that lot or affixing it onto the lot itself. Once the rate remains unpaid, the process passes through the Deeds Registry (and now the Land Registry also), the High Court, the High Court Registry and finally the Marshal of the Court who, after due advertisement of the intended sale in the Official Gazette, would sell the property at public auction on an appointed day. Out of the proceeds of the auction sale the Marshal would satisfy the outstanding rate and costs of the execution process.
It is important to note that the purchaser of land at an auction (execution) sale is entitled to have a transport known as a “judicial sale transport” upon the payment of a small fee to the Deeds/Land Registry. Indeed this particular feature was put to extensive use throughout the rated areas of the coastland for many decades, at least since 1920, as the occupiers of lands in a rated area who had no proper title to their land would, purposely and in collaboration with the Local Authority, allow their rates to become overdue. The village overseer, acting under the provisions of the Local Government Act, Chapter 28:02 would eventually by common consent put up those properties for sale at parate execution for that non-payment, and at the ensuing execution sale by the Marshal of the Court each lot-holder would bid the price without competition from the public. By this process he/she would obtain a judicial sale transport from the Registrar of Deeds. These sales were communally described as “title sales,” so hallowed and respected was the process.
The corresponding procedure on the part of the Councils of Georgetown and New Amsterdam is authorized by the Municipal and District Councils Act, Chapter 28:01.
All went reasonably well until 1988 with the passing of the Municipal and District Councils (Amendment) Act 1988 (No. 17/1988) and the Local Government (Amendment) Act 1988 (No. 18/1988). These two pieces of legislation known in polite circles as ‘The Nutman Acts’ were enacted in particular response to the activities of a certain gentleman of commerce who developed a propensity for attending the parate execution (title) sales and outbidding the aspirants for title who could not compete with his financial resources. This well-meaning legislation with its cumbersome provisions to thwart predatory bidding had the untoward effect of stultifying the parate execution process for rate recovering, so that little record can be found of any execution sales of that type after the year 1989. The entire system has since remained in a state of virtual paralysis.
It must be appreciated, however, that the two principal acts provide for individual legal proceedings by the Clerk of the Council against the owner personally for recovery of the debt as an alternative to the parate execution process. The many thousands of such proceedings, the legal personnel to pursue them and the multiple Magistrates’ Courts that would have to be established for the sole purpose of hearing these proceedings render such course a formidable and impracticable solution.
That remedy has been employed in a few cases mainly against business property owners who do comprise a significant proportion of debtors particularly in urban areas. It barely scratched the surface of the continuing problem.
It is clear that the existing legal situation calls for drastic executive action, firstly in removal or attenuation of the paralytic effects of the Amendment Acts of 1988 and a serious meeting of the entire Local Government body with the Registrars of Deeds, Lands and the High Court and with appropriate legal advice. There is no alternative to urgent executive action. The present situation cannot be allowed to persist. The problem will not evaporate or just go astray. It must be met head-on.
Against such a background, it is with much regret that I must introduce some negatives or as some may term it, bad news. On account of the lapsed years since the last recorded sales at parate execution for rate recovery, more than 16 years, it would be difficult to find within the existing administration any persons familiar with the process. The essential personnel should exist within the Municipal and Local Government bodies, the staff of the Deeds/Lands Registries, the Judiciary and the staff of the Supreme Court Registry being mainly the Marshals who would eventually conduct the execution sales.
Allowing that after a few months of embarkation on the process, a sufficient number of the required personnel may emerge or be trained, I am forced to identify one significant factor which at the outset will present a practical obstacle to the smoothness of the operation. It is the Deeds Registry, the home of the ‘transports’ system, the integrity of whose records and the capacity for utilizing them are an essential legal component.
The initial notice of debt, called a summation, must by law be served upon the owner, namely the owner by transport. Accordingly, every such summation must first be processed through the Deeds Registry to verify ownership so that the summation may be properly served. Great dependence is therefore had upon the accuracy and faithful upkeep of the property or land registers. Having regard to the known current condition of these registers and their management over the past two decades, it is essential that the bodies submitting summations for instituting the execution process meet with the Registrar and be satisfied with their condition as a basis for such proceedings.
There is however, a far more severe problem and here I must be specific. It is stipulated at section 28 of the Deeds Registry Act that the sale of property for the purpose of enforcing a statutory claim (eg collection of rates) shall be free from all registered encumbrances (eg mortgages) registered leases (the short term or the long lease for 99 or 999 years). Accordingly every mortgage company and every lessee is liable to have its mortgage or lease wiped out by the sale of that land at parate execution. They must therefore maintain a serious watch upon the relevant section of the Official Gazette dealing with sales at execution.
In recognition of this jeopardy, the very section 28 requires the Registrar to notify in writing every mortgagee or lessee likely to be affected and to include in the Gazette advertisement the existence of the mortgage or lease to which the property is subject.
The practical effect of such a notification is that the mortgagee or lessee would be able to hurry down to the municipal or local government office and pay the overdue rates and so avoid the sale and save their mortgage or lease from extinction.
And this is where the larger Deeds Registry problem arises – the further bad news! Among the duties of the Registrar and listed at section 7 (k) of the Deeds Registry Act is to keep land and mortgage registers requisite for the performance of his duties, eg the register that would reflect the mortgage or lease on property being subjected to parate execution. The relevant register, familiarly known as the encumbrance register, was properly maintained for decades until the year 1982 from which time their upkeep came to an end. The result is that the discovery of the existence of a mortgage or lease on any land has become so difficult and laborious a process that compliance with the notification requirements of section 28 will be a formidable and unreliable process. Let the mortgagee and lessee beware!
I could not end this commentary without drawing attention to some of the socio-economic implications of a resumption of the drastic process of parate execution across the nation. The objective end-product of the parate execution sale is the recovery of money paid either by the owner or family member or by some stranger. Except for the title-sale situation, the failure of the owner to buy-in the property at execution would raise the question of his incapacity to pay the rates in the first place. The acquisitive stranger would then be the more likely source of payment at the sale. But remember, the Amendment Acts of 1988 were framed to thwart his ambitions. And would he buy in a lower-income area?
The expected surge of sales upon the resumption of the process must be expected to produce a fair degree of social uncertainty. But by far the more compelling objective of a renewed exercise should be to encourage the defaulting rate-payer to re-enter the community of rate-paying citizens and to cater for this expense which has for so long not featured in their family budgets. A recommended device is the granting of an amnesty that might, for example, require a repentant rate-payer to pay up his arrears of the immediate past three years and be forgiven any amounts due for the preceding period. This would also remove from the books of the municipal or local authority some totally illusory credits which it would have no realistic expectation of ever collecting.
The ball is now in everyone’s court.
Yours faithfully,
Leon O. Rockcliffe
Attorney-at-Law
