Common Court confirms liability for overlooking mortgage registration

March 27, 2012 12:42 PM

WILLEMSTAD - On 20 March 2012 the Common Court of Justice of Aruba, Curaçao, Sint Maarten, and of Bonaire, Sint Eustatius and Saba confirmed the sentence of the Court of First Instance of Curacao of 25 May 2009 in which a civil-law notary, the Land Registry Office (Kadaster) and the Island Territory of Curacao were held liable for overlooking a mortgage registration on a parcel of land when the ownership of such parcel of land was transferred to a new owner.

As consequence of the constitutional changes of the Kingdom of the Netherlands on 10 October 2010, the country of Curacao replaced the Island Territory of Curacao as a party in these legal procedures. Therefore, according to the decision of the Common Court the country of Curacao is now liable for the damages suffered or to be suffered by the N.V. De Spaar en Beleenbank van Curacao (“SBC”).

The Common Court ruled that the civil-law notary is obliged to perform a search regarding the legal status of a registered real estate property in the public registers as referred to in article 3:16 of the Civil Code of Curacao when transferring such registered property. According to the Common Court, a civil-law notary, in view of the high degree of due care which a civil-law notary must exercise when providing his services, must consult all public registers. The civil-law notary could not suffice with only performing a search in the E-register. In addition, the civil-law notary had to take into account that the E-register was defective in view of the fact that it was commonly known by the local civil-law notaries during such period that there was a backlog with the record keeping of the E-register. Therefore, the civil-law notary had to also search the B-register, being the register in which mortgages are registered. As the civil-law notary did not search the B-register, the Common Court ruled that the civil-law notary is liable for all damages suffered or to be suffered by SBC.

With respect to the Land Registry Office, the Common Court ruled that it is a fact that the Land Registry Office made a mistake by mentioning in the E-register that the earlier registered right of mortgage of Maduro & Curiel’s Bank N.V. (“MCB”) on the parcel of land was deregistered. In doing so the Land Registry Office acted wrongfully and is therefore liable for damages towards SBC, as it is the duty of the Land Registry Office to register the correct information regarding the legal status of a registered real estate property in all public registers. Additionally, the country of Curacao is liable on the basis of art. 3:30 paragraph 2 of the Civil Code of Curacao, which stipulates that the country of Curacao is liable for any mistakes made the Land Registry Office in keeping record of the public registers.

According to the decision of the Common Court, the civil-law notary, the Land Registry Office and the country of Curacao are jointly and severally liable pay the damages suffered or to be suffered by SBC, which will have to be established in follow-up proceedings regarding the determination of such damages.

Dave E. Liqui-Lung of VanEps Kunneman VanDoorne represented the interests of SBC.

(Source: www.ekvandoorne.com)