Khan v Buanasolo [2013] FJCA 10; ABU49.2011 (8 February 2013)

IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT

CIVIL APPEAL NO. ABU 49 of 2011
(High Court Action HBC 355 of 2001 Lautoka)

BETWEEN:

ALI HASSAN KHAN
Appellant

AND:

LIVIA BUANASOLO and PRAKASH
Respondents

Coram : Calanchini AP
Basnayake JA
Mutunayagam JA

Date of Hearing : 24 May 2012

Counsel : Mr H Nagin for the Appellant
Mr S Nacolawa for the Respondents

Date of Judgment : 8 February 2013

JUDGMENT

Calanchini AP

[1]. This is an appeal from a judgment of the High Court at Lautoka delivered on 13 July 2011. The learned Judge awarded judgment to the Respondents and dismissed the Appellant's counterclaim. The Appellant was ordered to pay $60,000.00 to the first Respondent and $20,000.00 to the second Respondent. On payment the Respondents were required to vacate the land that they occupied and to hand over the improvements thereon including all fixtures and fittings within seven days. The Appellant was ordered to pay costs in the sum of $1,500.00 within 28 days.

[2]. The Respondents commenced their action by writ issued out of the Court on 13 November, 2001. In the Statement of Claim attached to the Writ the first Respondent claimed that in about 1972 she and the Ilami Group, whom she represented, entered into an agreement with the Koyas who were the then owners (hereafter referred to as the previous owners) of the land described on CT 6993 to purchase a house together with a ½ acre of land for the sum of $18,000.00. The house was built on the ½ acre that was the subject of the agreement. Payment of the purchase price was $10,000.00 by way of cash payment and the balance was to be paid by way of deductions from wages paid to members of the Ilami Group for working on the land which was a sugar cane farm. It was agreed that half the wages would be withheld and paid towards the purchase price. The first Respondent and the Group then built a second house on the ½ acre block with the consent of the previous owners.

[3]. The Statement of Claim alleges that the previous owners also agreed in 1982 to sell a ¼ house site to the second Respondent for $5000.00. Sometime later the second Respondent built a house on this ¼ acre lot at a cost of $7,500.00.

[4]. In about August 2000 the Appellant became the registered proprietor of the land. The Appellant acquired all the land on the title from the Koyas. The Respondents alleged in the Statement of Claim that prior to purchasing the land the Appellant had inquired of the Respondents as to their occupation of part of the said land. The Respondents claimed that they had informed the Appellant as to the circumstances leading to their occupation of the land. They claimed to have informed the Appellant that they had rights and claims over the land that they occupied. The Respondents informed the Appellant that they intended to lodge caveats to protect their rights.

[5]. The Respondents alleged (i) that the Appellant led the Respondents to believe and (ii) tthat they did in fact believe that the Appellant would honour the agreements that the Respondents had entered into with the previous owners if the Respondents agreed not to lodge any caveat or take legal proceedings to protect their interest in and rights over the land that they occupied.

[6]. The Respondents alleged that after he became the registered proprietor and contrary to his representation the Appellant commenced eviction proceedings in the Magistrates Court and claimed damages in the same proceedings.

[7]. The Respondents claimed that the Appellant is estopped from denying their rights to the land. They also claimed that the Appellant acted fraudulently and unconscionably. The Respondents sought a declaration that the Appellant was holding the land as trustee for himself and the Respondents, a declaration and order that the Appellant was bound to transfer separate titles to their portions of the land or, alternatively, that the Appellant pay to the Respondents $15,000.00 each (as per the agreements) as damages and compensation. The Respondents also asked for payment of $38,000.00 to the first Respondent and $7,500.00 to the second Respondent being the value of improvements on the land.

[8]. In his Statement of Defence the Appellant acknowledged that he became registered proprietor of the land on 30 August 2000. He denied any knowledge of the agreement or arrangement between the Respondents and the previous owners prior to becoming registered proprietor of the land. In his counter-claim the Appellant claimed that the Respondents had been occupying the land unlawfully and without his permission. He claimed that he had given the Respondents notice dated 8 August 2001 to vacate and to dismantle their houses but they had refused to do so. As a result he had been prevented from developing the land and had suffered loss. The Appellant sought an order for vacant possession and damages.

[9]. In the pre-trial conference minutes it was agreed by the parties that the Koyas had been the registered proprietors of the land and that the Appellant had become the registered proprietor. It was also agreed that the Appellant had served a notice dated 8 August 2001 on the Respondents to vacate the land and dismantle their houses. The eviction proceedings commenced in the Magistrates Court on 24 September 2001 had been stayed pending the determination of the present action in the High Court.

[10]. During the course of his judgment the learned trial Judge noted that the Respondents limited their claim to compensation for the value of their blocks and the improvements thereon. He noted that the Respondents were prepared to leave the land if they are paid the compensation. On the other hand, the Appellant wanted the Respondents evicted because they were a hindrance to his business and development plans for the land.

[11]. Having considered the evidence the learned trial judge set out his findings of fact. He found that the Respondents had been given permission by the previous owners to build on and occupy their blocks of land. He also concluded that under the agreements between the previous owners and the Respondents payment (consideration) for the ½ acre and ¼ acre blocks was in part by cash payment with the balance to be paid by deductions from harvesting wages. The learned Judge accepted that the first Respondent and the group she represented paid $15,000.00 for their ½ acre block and that the second Respondent paid $5000.00 for his ¼ acre block. He found that in consideration for those payments the Respondents were to own the houses and their blocks and were to remain on the land as unregistered owners. He declined to make any adverse findings in respect of the lack of documentary material to verify these transactions since he accepted that the documents were no longer in existences as a result of having been lost or destroyed.

[12]. The learned Judge did not accept the evidence given by the Appellant on the basis that the Appellant was evasive and his evidence was self-serving. The learned Judge said that he found it difficult to accept that the Appellant did not know of the circumstances surrounding the Respondents being on the land nor the arrangements and agreements between the previous owners and the Respondents. The learned Judge noted that the Appellant had lived on land adjacent to the subject land for his entire life (46 years). The learned Judge also found the Appellant's evidence to be inconsistent. He found that the Appellant was involved in or at least aware of negotiations in 1996 between the Appellant's father and the Respondents in relation to a possible purchase of the land. The learned Judge held that the Appellant knew about the agreements between the Respondents and the previous owners when he purchased the land. He also found as a fact that the Appellant and his father had told the Respondents during the 1996 negotiations that they could stay on the land if they did not lodge caveats to protect their interests.

[13]. As a result of the findings outlined above the learned Judge concluded that the Appellant should not be allowed to resile from the promise made to the Respondents. The Respondents had not lodged caveats to protect their interests over the land and had not done so in reliance of the promise that the Appellant would honour the terms of the agreements made between the Respondents and the previous owners. In reaching this conclusion the learned trial Judge relied on the decision in Central London Property Trust Ltd –v- High Trees House Ltd [1947] K B 30.

[14]. In the alternative, the learned Judge found that it would be inequitable and unconscionable for the Appellant to evict the Respondents since he had prior knowledge of the Respondents' rights of occupation before he became registered proprietor. In respect of this conclusion the learned Judge relied on the decision of Barry –v- Heider [1914] HCA 79; (1914) 19 CLR 197.

[15]. The learned Judge concluded that the Respondents were entitled to the compensation that they were seeking. Although there was no evidence as to the present value of the land, he used the purchase price as the value. The learned Judge accepted the evidence as to the value of the improvements on each block. In respect of the first Respondent's ½ acre block, improvements were valued at $45,000.00. The learned Judge accepted that $15,000.00 was the purchase price and as a result he awarded $60,000.00 to the first Respondent and the Group that she represented. In respect of the second Respondent's ¼ acre block, improvements were valued at $15,000.00. The learned Judge accepted that $5,000.00 was the purchase price for that block and as a result awarded $20,000.00 to the second Respondent. On payment of those amounts by the Appellant, the improvements, including fixtures and fittings were to belong to the Appellant. The counter claim was dismissed and the Respondents were awarded costs of $1500.00.

[16]. The Appellant now appeals the orders made by the learned Judge and seeks an order from this Court that the judgment be partly set aside in so far as it relates to the orders made by the learned Judge and that the relief claimed in the counterclaim be granted. The Appellant relies on 15 grounds of appeal in the amended notice filed on 1 May 2012. Although the grounds of appeal are not in any logical order, they raise issues that cover the complete period of time under consideration in the proceedings. It is therefore more convenient to consider the appeal in terms of (a) the arrangements and agreements made between the previous owners and the Respondents, (b) the discussions between the Appellant's father, the Appellant and the Respondents in 1996, (c) the purchase of the land by the Appellant and his becoming registered proprietor and (d) the eviction proceedings in the Magistrates Court.

[17]. The Respondents claimed that they had purchased from the previous owners two small blocks of land, one being ½ acre block and the other, some years later, a ¼ acre block. It was at all times the position of the Respondents that the purchases of the two blocks were made pursuant to oral agreements between them and the previous owners. There were no agreements in writing or memoranda evidencing agreements as required by section 59 of the Indemnity Guarantee and Bailment Act Cap 232 (the Act).

[18]. Under that section a contract for the sale of land or any interest in land must be evidenced by a written memorandum signed by the party to be charged or his duly authorized agent. In the present case the agreements were oral.

[19]. However, pursuant to Order 18 Rule 7 (1) (a) a party must, in any pleading subsequent to the Statement of Claim, plead specifically any matter which he alleges makes any claim of the opposite party not maintainable. Consequently section 59 of the Act (which in effect reproduces the old section 4 of the Statute of Frauds) must be specifically pleaded if a defendant intends to rely on it. (Supreme Court Practice 1991 Volume 1 at paragraph 18/8/21). Furthermore, the section must be pleaded in such a way as to indicate to the other party clearly the exact point raised and in what respect it will be contended that the statute applies: Pullen –v- Snelus (1879) 40 LT 363, North –v- Loomes [1919] 1 Ch. 378 and generally Halsbury's Laws of England Fourth Edition Volume 36 paragraph 48.

[20]. The Appellant's Statement of Defence filed on 13 December 2005 makes no reference to section 59 of the Act and as a result the Appellant cannot rely on the Defence. Even if the Appellant had properly pleaded the Defence the Respondents, rightly or wrongly, had pleaded in the Statement of Claim sufficient facts to raise the common law exception to the requirement in section 59 that the contract had been partly performed. Furthermore the inclusion of alleged facts by way of part performance in the Statement of Claim in order to take the case out of the operation of section 59 of the Act did not relieve the Appellant from the requirement to plead the defence if he wanted to raise it and rely on it: Clarke –v- Callow (1877) 46 L.J.Q.B. 53

[21]. The learned Judge concluded that there were oral agreements in existence whereby the previous owners had agreed to sell a ½ acre block and later a ¼ acre block to the Respondents. The learned Judge accepted the evidence of the Respondents on this point, and indicated that in so far as there was any conflict in the evidence given on behalf of the Respondents and the evidence given by the Appellant, he preferred the evidence of the Respondents. He gave his reasons for that preference based on the advantage that he enjoyed observing and listening to the witnesses as they gave their evidence. This Court did not have that benefit. I see no reason why this Court should differ from the learned trial judge's preference for the evidence given by the Respondents.

[22]. Before leaving the issue of the agreements made by the previous owners and the Respondents, there is one further matter that should be considered. That matter is whether the agreements were sufficiently certain. The parties were known. The land had been identified and the purchase price had been agreed. The consideration in each case was specified. It would appear that the first Respondent and her Group had paid the balance of the purchase money for the ½ acre block by the time the Appellant had become the registered proprietor in August 2000. In my judgment the terms of the contract were sufficiently certain in respect of all the essential elements of a contract for the sale of land.

[23]. In considering whether any conversations took place between the Appellant and his father on the one part and one or more of the Respondents on the other part in 1996 concerning an intention to purchase the land, the lodging of caveats and any promise to allow the Respondents to remain on the land, I note that the learned Judge made certain findings of fact. The learned Judge formed certain opinions about the reliability and credibility of the evidence given by the witnesses who testified as to those matters. I see no reason why this Court should disturb those findings of fact. Apart from not having had the opportunity or advantage that was enjoyed by the learned trial Judge, there is nothing in the material before this Court that would indicate that the preferred evidence was not logically consistent.

[24]. It seems to me that by the time the Appellant had entered into an agreement to purchase the land from the previous owners he was aware that the Respondents claimed an equitable interest in the ½ acre and ¼ acre blocks as unregistered owners. At the same time the previous owners were certainly aware of the Respondents' occupation of the ½ acre and ¼ acre blocks of their land and the circumstances under which they came to be in possession. It is clear that the Respondents, on the findings of the learned Judge, could have commenced proceedings for specific performance compelling the previous owners to provide to them certificates of title as registered proprietors. Furthermore, it can only be a matter of speculation as to what, if any, disclosures were made to the Appellant by the previous owners when the Appellant entered into the agreement with them. The Appellant has maintained all along that he knew nothing about the basis of the Respondents' occupation of the land in question. It would appear that there may be a further issue of credibility on the part of the Appellant or a failure to disclose by the previous owners.

[25]. The simple fact is that there were agreements for the sale of two blocks of land between the previous owners and the Respondents. The terms of the sale agreements have been fulfilled. However the Respondents have never been registered as proprietors and have never been issued with certificates of title. It would appear to have been a term (express or implied) of the agreements between the Respondents and the previous owners that the Respondents could enter into immediate possession of the land prior to settlement and registration. The Appellant has, subsequent to the Respondents' agreements, also entered into an agreement to buy all the land belonging to the previous owners, including the land purchased by the Respondents. The Appellant has become the registered proprietor of all the land and presumably has received a certificate of title. It is fair to say that the Respondents may have a good cause of action against the previous owners for damages. It is perhaps just as well that the Respondents as unregistered owners were not seeking to remain on the land since the Appellant's title by registration might have prevented any claim for specific performance against the previous owners.

[26]. The essential question raised by the proceedings was whether the Respondents had any claim for compensation against the Appellant. The answer to that question depends upon the legal consequences of the 1996 conversation between the parties, a conversation which has been determined, as a finding of fact by the learned Judge, to have taken place. The learned Judge stated in paragraph 16 of his judgment:

"I do not accept that he did not know or involve himself in the negotiations for the 1996 purchase of the land with his father. He was 32 years old then. I therefore find that the defendant knew of the arrangements and agreements between the plaintiffs and the previous owners before he purchased the land."

[27]. The learned Judge concluded that what the Appellant had knowledge of was that the Respondents had unregistered interests in the land which they occupied as owners pursuant to agreements between them and the previous owners. On the basis of these findings it is clear that the Appellant was not an innocent purchaser because he had notice of the prior equity in favour of the Respondents. He was not a purchaser for value without notice. What was that prior equity? Upon the making of the agreements between the Respondents and the previous owners there was a change in the equitable, but not the legal, interest in the land. In equity, from that point, since the contract was one of which specific performance could be ordered, the beneficial interest passed to the Respondents immediately after the agreements were made. After that the previous owners, in regard to their legal ownership of the ½ acre and ¼ acre blocks, became constructively trustees for the Respondents.

[28]. Thus when the Appellant entered into his sale and purchase agreement with the previous owners, he (the Appellant) had prior actual notice of the Respondents' equity and as a result constructive notice that the previous owners held the legal title of the two blocks as constructive trustees for the benefit of the Respondents.

[29]. However under section 40 of the Land Transfer Act Cap 131 a purchaser of land from a registered proprietor is not affected by any notice of any trust or unregistered interest, except in case of fraud. It must be recalled that this provision will only assist a purchaser after his title has been registered. In Lapin –v- Abigail [1930] HCA 6; (1930) 44 CLR 166 Knox CJ at page 182 stated:

"I see no reason to modify the opinion expressed by me in Templeton –v- Leviathan Pty Ltd (1921) CLR 34 that the immunity conferred on the purchaser under this section extends to him only when he becomes registered and not before."

[30]. Consequently the Appellant may prima facie rely on the provision as he has been the registered proprietor of the land since August 2000. Although the learned trial Judge has referred to the decision of Barry –v- Heider [1914] HCA 79; (1914) 19 CLR 197, its application to the present case is somewhat limited since in that case there were two competing unregistered interests. In the present proceedings the position was that the Appellant was registered as proprietor and was being challenged by a prior unregistered interest of which he had notice.

[31]. The learned Judge has also referred to the decision of Central London Property Trust Ltd –v- High Trees House Ltd (supra). The principle for which that decision appears to be authority is summarised in 16 Halsbury's Fouth Edition 992 at paragraph 1471:

"_ _ _ in general, where one party has by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then once the other party has taken him at his word and acted on it, so as to alter his position, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he has himself so introduced, even though it is not supported in point of law by any consideration."

[32]. This principle is referred to as "promissory estoppel." At paragraph 1514 of Halsburys (supra) it is stated that:

"The doctrine cannot create any new cause of action where none existed before _ _ _."

[33]. In 9 Halsbury's Fourth Edition 399 at paragraph 578 it is stated that:

"A person seeking to take advantage of the defence of promissory estoppel must have altered his position in reliance on the representation made by the other party to the contract."

[34]. In the decision of Central London Property Trust (supra) Lord Denning said at page 134:

"_ _ _ the courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it. It is in that sense, and that sense only, that such a promise gives rise to an estoppel."

[35]. In the present case the gist of the Appellant's promise to the Respondents was that they could remain on the land if they did not lodge caveats for registration on the title or commence legal proceedings. Such a promise did not give rise to a cause of action in favour of the Respondents in the event that the Appellant breached that promise. It may however, if established by the facts, give rise to a defence for the Respondents against a claim for possession of the land by the Appellant.

[36]. There remains then only the issue of fraud which, if established, will remove the protection given to the Appellant by section 40 of the Land Transfer Act. The starting point is the general principle that a purchaser who takes bona fide and without fraud from the registered proprietor and who then registers his transfer will prevail over a prior purchaser whose interest has not been registered. It is also accepted that mere notice of an unregistered interest does not amount to fraud within the meaning of section 40 of the Land Transfer Act. In Oertel –v- Hordern [1902] 2 NSWSR (Eq.) 37 it was decided that notice of the existence of an unregistered lease and of the fact that the lessee does not concur in a sale by the registered proprietor, does not amount to fraud so as to prevent the purchaser from relying upon his transfer registered after such notice. It would seem, as a result of that decision, that it is not fraud merely for a purchaser who had become registered to take advantage of the priority that is conferred by registration, even if the purchaser proceeded to registration with the knowledge of the unregistered interest and the consequential knowledge that he was depriving another of an unregistered interest in the land. Even if it could be argued that the previous owners as vendor in the sale to the Appellant had acted fraudulently that fact alone would not render the Appellant's acquisition of title by registration fraudulent.

[37]. Generally under a system of registration of titles to land, such as that which exists under the Land Transfer Act, the courts will recognise equitable interests and rights unless otherwise precluded from doing so by the Act. This recognition forms the basis of the scheme of caveats which provides for the protection of equitable interests in contemplation of legal proceedings. Equitable claims are recognised under the Act as unregistered interests. Therefore as the unregistered owners of two blocks of land the Respondents were at any time, and especially after the 1996 conversation with the Appellant and/or his father, able to protect their unregistered interests by lodging caveats on the title which at the time was registered in the name of the previous owners.

[38]. It is not disputed that the Respondents had not lodged caveats at any time prior to 1996. It may well be that their reason for not doing so was that they did not perceive any need to do so. The learned Judge found as a fact that the Respondents had threatened to do so after becoming aware that the Appellant and/or his father were contemplating purchasing the land. The learned Judge also found that the Appellant and/or his father had promised to let them remain on the land if the Respondents did not lodge caveats. It is fair to assume that the Appellant and/or his father did not want the Respondents to lodge caveats nor commence proceedings to enforce their rights. Had the Respondents lodged caveats the agreement to sell to the Appellant could not have proceeded to transfer and the previous owners may have been required to issue separate certificates of title to the Respondents as registered proprietors. It was in the interests of both the Appellant and the previous owners that the Respondents did not lodge caveats to protect their unregistered interests. The question is whether the Appellant's conduct amounts to fraud. It must be remembered that after 1996 the Respondents' decision not to lodge caveats to protect their unregistered interests was due not to omission but due to the promise that they could remain on the land. Furthermore that promise was made when the Appellant and his father were not registered as owners and it maybe that they had not signed any contract or entered into any agreement with the previous owners. They may not even have had an equitable interest.

[39]. However even the failure to lodge a caveat protecting an unregistered interest due to omission does not necessarily entitle a purchase to deprive a potential caveator of a known existing right. This is especially so when it is open to conclude that the Appellant's intention was to cheat a potential caveator of a known existing right. However in this case the non-lodgement of a caveat was the result of a promise made to the Respondents as potential caveator's to allow them to remain on the land. The real intention was to enable the Appellant to acquire an unencumbered title by registration. That the intention was to cheat the Respondents of their known existing rights is an inference that may be more readily drawn by the Court. In my judgment there is no doubt that had it not been for the promise made to the Respondents they would have lodged caveats to protect their unregistered interests once they had become aware of the intention to purchase the land. This in turn would have resulted in legal proceedings and possibly subsequent registration of the Respondents as proprietors of the land. For different reasons that was something that neither the Appellant nor the previous owners wanted.

[40]. In the Statement of Claim the Respondents pleaded the following particulars of fraud:

"(i) The Defendant was aware of the claims of the Plaintiffs.

(ii) The Defendant and/or his Solicitors were aware that if the Defendant purchased the said land without any Caveat and/or encumbrances registered by the Plaintiffs against the Certificate of Title No. 6993 the Defendant would purchase the said Land free of the claims of the Plaintiffs.

(iii) The Defendant accordingly got the Plaintiffs not to lodge any Caveat and/or to take legal proceedings to protect their claims and/or interests and/or rights to part of the said land.

(iv) The Defendant is now using the provisions of the Statutes, particularly the Land Transfer Act and the Property Law Act as vehicles to perpetuate fraud on the Plaintiffs."

[41]. The learned Judge made findings of fact on the evidence adduced at the trial that established the allegations set out in the Statement of Claim. There is no doubt, on the basis of section 40 of the Act that particulars (i) and (ii) would not by themselves have been sufficient to establish fraud under section 40 and in the context of title by registration established under the Land Transfer Act.

[42]. It is particular (iii) that requires further consideration. It is that allegation that introduces the element of dishonesty and hence fraud. Therefore, it is important to ascertain what was the promise made by the Appellant and/or his father to the Respondents that "got" the Respondents not to lodge caveats. On pages 211 and 212 of the Record (page 26 of the typed notes) there are notes of the evidence given by the Second Respondent. The last line of page 211 and continuing over to page 212 state:

"Only once, Defendant and his father came.

Discussion

They asked how we were on the land and we told him – I told them that I was given that piece of land to live and work on the whole land.

Defendant's father told us that we could stay on the land.

Defendant was there.

I told them of the arrangement with S M Koya.

I was told to put caveat when Defendant was buying the land.

Saw my lawyers.

Ali Hussan's father said not to put caveat, they could stay, Defendant was not there.

I told Ali Hassan's father of the arrangement and A Hassan's father told me that we could stay.

Ali Hassan came to see that land because _ _ _ wanted to buy it.

2001 Ali Hassan told us to vacate and served us."

[43]. The first issue that arises from the transcript is whether the request to the Respondents not to put a caveat on the title was made by the Appellant or by the Appellant's father in the presence of the Appellant or by the Appellant's father in the absence of the Appellant. It is difficult to determine the answer from the notes because, if for no other reason, the questions are not in the notes, only the answers. Furthermore the notes are not an accurate transcription of the evidence. However the learned Judge has made a finding that the Appellant was involved in the negotiations and consequently, as a party to the negotiations, it must be inferred that the request was made on behalf of both the Appellant and his father.

[44]. A second and more important issue is what exactly did the Appellant and his father agree to do in return for the Respondents not lodging a caveat. The evidence is clear that the Appellant and his father said that the Respondents could stay on the land. Did this mean that they could stay on the land because the Appellant and his father had decided not to go ahead with the purchase in 1996 and therefore there was no need to lodge a caveat. Alternatively, did it mean that although the Appellant and/or his father intended to purchase the land, the Respondents could remain on their blocks and therefore there was no need to lodge caveats to protect their unregistered interests.

[45]. If the Respondents did not need to lodge caveats because the Appellant and/or his father were not going to proceed with the purchase, then the acquisition of title by registration was the fraudulent act. If the Respondents did not need to lodge caveats because the Appellant would allow the Respondents to remain on the land even after the Appellant acquired his title to the land by registration, then the fraud by commencing eviction proceedings occurred after registration.

[46]. Unfortunately neither the written submissions filed by Counsel nor their oral submissions before the Court are of any great assistance in respect of the question of fraud. The learned Judge has not considered the question of fraud nor its effect on the title acquired by registration by the Appellant. The issue is at large for this Court.

[47]. After a careful consideration of the material I have concluded that the Respondents did not lodge caveats in 1996 because they had been informed by the Appellant and his father that they could remain on their blocks. It is clear to me that in 1996 the Respondents understood that to mean that the Appellant and his father were not going to proceed with the intended purchase of the land. And in fact that is what happened. It was only after the Appellant's father passed away that some four years later the Appellant proceeded with the purchase and acquired title by registration unknown to the Respondents. As a result I have concluded that it was first the act of registration that constituted the fraud by the Appellant which was then compounded by the commencement of eviction proceedings.

[48]. I have concluded that although for reasons different from those relied upon by the learned Judge, the Respondents were entitled to relief. The only relief they sought in the court below was compensation. The question is what are the Respondents entitled to by way of compensation in the case of fraud that has resulted in their unregistered interest being extinguished.

[49]. The learned Judge awarded the first Respondent $60,000.00 compensation made up of $45,000.00 being the value of improvements to the ½ acre block and $15,000.00 being the purchase price of the block. The second Respondent was awarded $20,000.00 compensation comprising $15,000.00 for improvements to the ¼ acre block and $5,000 being the purchase price of the block.

[50]. The Appellant challenges the awards of compensation on the basis that there were no grounds for the award, no submissions made and no money was received by the Appellant from the Respondents. It need only be said that once the learned Judge had accepted the evidence given by the Respondents and made a finding of liability against the Appellant, there was a basis for awarding compensation. Quite clearly compensation was claimed in the relief sought by the Respondents along with damages. The learned Judge accepted the evidence given by the Respondents concerning the purchase price for both blocks. The learned Judge accepted the evidence adduced by valuation reports as to the value of the improvements on both blocks. The fact that the Appellant never received any money from the Respondents is not relevant to the issues in these proceedings.

[51]. Having found that the Respondents were entitled to compensation, the learned Judge was, in my judgment, required to determine an amount which would place the Respondents in the same position they would have been in had the fraud not occurred. Ordinarily the value of the land should be determined as at the date of the loss or even as at the date of trial. However in this case there was no evidence as to the value of the two blocks and as a result the learned Judge relied on the evidence concerning what the Respondents paid when they purchased the blocks.

[52]. Although section 148 of the Land Transfer Act specifics the measure of compensation payable in proceedings commenced under section 140 of the Act, I see no reason why the same measure should not apply in these proceedings. It would have been open to the Registrar to recover the same amount from the Appellant under section 143 had proceedings been commenced under section 140 of the Act.

[53]. Although the point was not raised in either the court below nor in this Court, it does appear that the Respondents could have availed themselves of the right to claim compensation under section 140 of the Land Transfer Act.

[54]. All the grounds of appeal have been considered, except ground 15, in a consolidated manner. The written submissions filed by the Appellant, brief as they were, have been considered. In respect of ground 15, it is my view that the learned Judge was entitled to place as little weight as he considered appropriate to the fact that Mrs Koya sought to evict the second Respondent at the time she was selling the land to the Appellant. It was equally possible to draw inferences that were not favourable to the previous owners in respect of the proceedings to evict the second Respondent at the time of the sale to the Appellant.

[55]. In view of the above I would reject all the grounds of appeal and dismiss the appeal with costs to the Respondents fixed in the sum $4,000.00 to be paid within 28 days.

[56]. Basnayake JA

I agree with the reasoning and conclusions of Calanchini AP.

[57]. Mutunayagam JA

I agree with the reasoning and conclusions of Calanchini AP.

Orders of the Court

1. Appeal dismissed.

2. Appellant to pay the costs of the appeal to the Respondent fixed summarily in the sum of $4,000.00 within 28 days.

Hon. Mr Justice W.D. Calanchini
Acting President

Hon. Mr Justice Basnayake
Justice of Appeal

Hon. Mr Justice Mutunayagam
Justice of Appeal

Calanchini AP and Mutunayagam JA

[1]. For the guidance of legal practitioner it is appropriate for us to make some comments about the nature of a civil appeal by way of re-hearing when the grounds of appeal seek to challenge findings of fact. First, Rule 15 (1) of the Court of Appeal Rules (the Rules) provides that an appeal to the Court of Appeal shall be by way of re-hearing. This does not mean that the Court of Appeal conducts a fresh hearing "de novo". The parties do not start afresh as they did in the court below nor are the witnesses heard afresh. It means a re-hearing of the case on the papers but limited to the grounds of appeal. This Court will consider the material that was before the learned Judge in the court below.

[2]. In an appeal, as in the present case, from the decision of a trial judge sitting alone, the presumption is that the decision appealed against is right. (See: 37 Halbury (4th Ed) 535). In Colonial Securities Trust Company, Limited –v- Massey and Others [1895] UKLawRpKQB 192; [1896] 1 QB 38 a majority Court of Appeal applied the approach taken by the Court of Appeal in Savage –v- Adam W.N. (95) 109 (ii). Lord Esher MR at page 39 stated:

"Where a case tried by a judge without a jury comes to the Court of Appeal, the presumption is that the decision of the Court below on the facts was right, and that presumption must be displaced by the Appellant. If he satisfactorily makes out that the judge below was wrong, then in as much as the appeal is in the nature of a rehearing, the decision should be reversed: if the case is left in doubt, it is clearly the duty of the Court of Appeal not to disturb the decision of the Court below."

The burden of establishing that the trial judge has erred rests on an appellant, and if the Court of Appeal is not satisfied that the judge was wrong, the appeal will be dismissed. As the appeal is by way of re-hearing on the papers the Court of Appeal will carefully weigh and consider the judgment of the learned trial Judge and then after a full consideration of all the material determine whether the judgment was wrong.

[3]. To the extent that the grounds of appeal seek to challenge the decision on factual issues it must be recalled that a distinction needs to made between a finding of fact by the trial Judge and an inference drawn by the trial Judge from a finding of fact. This distinction is to some extent re-inforced by Rule 22 (2) of the Rules which states:

"The Court of Appeal shall have power to draw inferences of fact and to give any judgment and make any order which ought to have been given or made _ _ _."

[4]. The Court of Appeal will be reluctant to reject findings of specific facts, particularly where the findings are based on the credibility, manner or demeanour of a witness. However, an appellate court will far more readily consider itself to be in just as good a position as the court below to draw its own inferences from findings of specific facts: Benmax –v- Austin Motor Co. Ltd [1955] AC 370.

[5]. Another consideration, apart from the manner or demeanour of a witness, which may be relevant on an assessment of evidence is the logical consistency of the evidence itself. When a finding of fact depends on a matter such as the logical consistency of the evidence rather than the manner of the witness, an appellate court may be more readily willing to reject a finding of a specific fact: Faryna –v- Chorny [1952] 2 D.L.R. 354.

[6]. One other consideration that is often of some importance is the question of the reliability of evidence given by witnesses based on their memory of events that may have occurred some years earlier. In these proceedings witnesses were required to give evidence, based on memory, of events that occurred since 1972. Furthermore there were alleged conversations in 1996 that were of some significance to the outcome of the proceedings. The trial commenced in November 2010, although the writ had been issued in 2001. Although such delays, to a lesser or greater extent, are not unusual, it is, however, an inescapable reality that the ability of any witness to recall accurately what he saw or heard diminishes with time. What happens as time goes by is that the gaps in memory or recollection are often filled by a process which is sometimes referred to as reconstruction. Contemporary documentary material, if available and admissible, may assist both the court below and this Court to identify reconstructed evidence, to settle inconsistencies in evidence and to determine what is logically consistent. All these matters are for the learned trial judge to determine at the trial.

Hon. Mr Justice W.D. Calanchini
Acting President

Hon. Mr Justice A. Mutunayagam
Justice of Appeal