IBRAHIM AHMED SHAHEEN AND ANOTHER, Applicants-Defendants v. HUSSEIN AHMED SHAHEEN AND ANOTHER, Respondents-Plaintiffs
Land Law-Pre-emption-Exchange of undivided share for other property-Not
a sale-No right of pre-emption in co-owners-Fictitious exchanges
Land Registration-Undivided shares-Small plots-Discretion of registrar to refuse registration
1. Where a co-owner of land exchanges his undivided share for land
belonging to an outsider, such transfer is not a sale and the other co-
owners have no right of pre-emption unless they can prove that the ex-
change was merely a fraudulent device for carrying tprough a previous sale.
* Court: Creed, C.J., Flaxman I. and Cumings, D.J.
2. The Registrar of lands should, in the exercise of his discretion, re-
fuse to register the transfer of undivided shares in very small plots of land
where nol all the co-owners participate.
Pre-emption Ordinance 1928, ss. 5, 7 (g).
Land Settlement and Registration Ordinance 1925, s. 30'.
Revision
July 24, 1937. Creed C.J.: The leasehold of plot 5, block 4 F,
Haifa Town, was prior to February 14, 1937, held by the six heirs of
Ahmed Shaheen in undivided shares. The landlord is the Government,
and the lease was registered. In the latter part of 1936 the second de-
fendant desired to acquire an interest in this property, and so his
brother, Mahir Abu Zeid, acting on his behalf, arranged with the first
defendant Ibrahim, and his brother and sister, Saleh and Fatma, to
purchase their shares. He paid to Ibrahim the sum of £E.26.700
m/ms, £E.32.250 m/ms to Saleh and £E.13.620 m/rns to Fatma.
He intended to buy the other shares of the property from the remain-
ing heirs, but they refused to sell. The sale thus fell through, and Ibra-
him gave a promissory note for the amount he had received.
Later, Ibrahim came to Haifa. During his stay an exchange was
arranged between Ibrahim and the second defendant, under which Ibra-
him was to transfer his undivided share in plot 5, and the second de-
fendant was to transfer another property which he owned to Ibrahim.
The exchange was registered, and then the plaintiffs, who were co-
owners in plot 5, claimed that they had the right of pre-emption in re-
spect of the undivided share of plot 5 which had been transferred.
The plaintiffs alleged that the exchange was a purely fictitious
transaction, that in fact the transaction was merely a fraudulent device
for carrying through the original sale, and that the court should grant
them the right to pre-empt. The learned judge gave judgement for the
plaintiffs.
Although the circumstances of the transaction are not altogether
free from suspicion, nevertheless, in the opinion of this court it has not
been proved that the transaction of exchange was a purely fictitious
transaction. Had, for example, it been proved that there was a secret
agreement for the re-transfer of the second plot to the second defend-
ant, when once the second defendant had been registered as an owner
of a share in plot 5, the position would have been different, but there
was no such proof, and in the opinion of this court there are not ade-
quate grounds for holding that the exchange was a purely fictitious
transaction, carried out in such manner as to constitute fraud. The
transfer of the second plot to the first defendant was duly registered.
This Court therefore holds the view that the plaintiffs have not
established a right to pre-emption .. The decision of the learned judge
will be reversed. No tears need be shed over the decision of this court.
This is not a case of a stranger forcing his way into part ownership of a
much prized family property. All the heirs have been anxious to dis-
pose of this property for some time. There is no reason to suppose
that the remaining heirs will not be able to obtain a fair price for their
shares.
Nevertheless, this is an obvious case in which the registrar should
have exercised his powers under section 30 of the Land-Settlement and
Registration Ordinance and refused to register the transfer of an un-
divided share in the property. The whole property only comprises an
area of 85 square metres. Although this court regrets that the registrar
did not exercise his discretion in the matter, as he clearly should have
done, this court is unable to undo the past, and satisfies itself with an
expression of disapproval of the action taken by the Assistant Registrar
Halfa.
Flaxman J.: I concur.
Cumings D.J.: I concur.
Application allowed