Wati v Charan [2013] FJCA 132; ABU0027.2012 (5 December 2013)

IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT

CIVIL APPEAL NO: ABU 0027 OF 2012
(HIGH COURT CIVIL ACTION NO. HBC 372 OF 2006L)

BETWEEN:

1. RUP WATI
2. SHIU VIDYA CHARAN
Appellants

AND:

ESTATE OF SHIU CHARAN
Respondent

CORAM : Chandra, JA
Lecamwasam, JA
Kumar, JA

COUNSEL : Mr. W. Pillay for the Appellants
Mr. D. Naidu for the Respondent

Date of Hearing : 20 November 2013
Date of Judgment : 05 December 2013

JUDGMENT

Chandra JA:

[1] I agree with the reasons and conclusions reached by Lecamwasam JA.

Lecamwasam JA:

[2] The 1st and 2nd Defendant Appellants are respectively the daughter in law and the eldest son of the Plaintiff Respondent. The Plaintiff lived with his wife and other family members including the Defendants at Vuniyasi, Nadi in his matrimonial home. After the death of his wife in 1978, he continued to live in the said home at Vuniyasi with other family members. Upon the deaths of his sisters in law viz: Daya Wati and Lila Wati, the Plaintiff became entitled to the two blocks of land situated in Simla, which are the subject matter of this action. The Plaintiff moved to Simla and occupied one of the houses in those two blocks and rented out the other house. The two Defendants who originally lived in Vuniyasi also moved to Simla, Lautoka in 2004 to live with the Plaintiff as there was unpleasantness with the younger brother Adithaya. On the 15th of August, the Plaintiff transferred the subject matter of this action viz: CT 15496 and CT 13915 in extent of twenty (20) perches each to the two Defendants respectively for the consideration of FD$5000.00 each. As per the deed that the above consideration is to be paid to the transferor, indicating that the consideration was not paid at the time of execution but payable in due course.

[4] Having transferred the properties to the two Defendants in August 2004, the Plaintiff returned to Vuniyasi on 11th October 2005 he then files an action against the Defendants in November 20006, on the ground that the Defendants failed to provide food, maintenance, accommodation and medical care to the Plaintiff. The Defendants have also failed to pay the consideration of $10,000.00 stated in the relevant deeds and hence the Plaintiff moved for the following orders:

(a) that the transfer to the 1st Defendant of Lot 30 on DP 3165 being Certificate of Title No. 15496 being land known as Vitogo and Drasa having an area of 20 perches by transfer dated 18th August 2004. Be rescinded and / or revoked or alternatively the 1st Defendant execute transfer of the said property to the Plaintiff.

(b) that the transfer to the 2nd defendant of Lot 29 on DP 3165 being CT 13915 known as Vitogo and Drasa having an area of 20 perches dated 18th August 2004 be rescinded and / or revoked or alternatively the 2nd defendant execute transfer of the said property to the Plaintiff.

(c) The first defendant give detailed account on the rental earned from CT 15496.

(d) Damages.

(e) Costs.

(f) Any other relief that this honourable court deems just and equitable in all the circumstances.

[5] The Learned High Court Judge having deliberated the case made an order granting the reliefs prayed for by the Plaintiff. The present appeal is against the said order of the Learned High Court Judge. The appellants relied on the following grounds of appeal, as stated in the case record, viz:

(1) That the learned Trial Judge erred in law to provide any legal authorities, precedent or decisions in support of Her Ladyship's judgment.

(2) That the Learned Trial Judge failed to distinguish or give reasons for departing from the authorities submitted by the Appellant including Prasad v Wati [2001]FJCA 40, Sharma v Singh [2004] FJCA, Narayan v Sigamani [2008] FJHC 204, Nair v Nair [1994] FJHC 127 and Reddy v Reddy Construction Company Ltd [2008] FJHC 310.

(3) The Learned Trial Judge erred in law in finding fraud against the Appellants under the Land Transfer Act without referring to an applying the statutory test and criteria set down in Section 39 of the Land Transfer Act.

(4) The Learned Trial Judge erred in law in finding that consideration or the passing of consideration is a necessary or conditional precedent element to obtaining a transfer under the Land Transfer Act.

(5) The Learned Trial Judge erred in law in failing to take into consideration that the Property Law Act and Land Transfer Act do not require any consideration or for consideration to pass before the transfer can be registered.

(6) The Learned Trial Judge erred in law in failing to take into consideration that nominal consideration which is not payable or demanded but noted on a transfer form was capable of allowing registration of at transfer under the Torrens System of title transfer and registration.

(7) The Learned Trial Judge erred in law in failing to take into consideration that the appellants and respondent had not made any contract for sale of land and therefore the respondent had no contractual remedies as pursuant to Section 59 of the Indemnity, Guarantee and Bailment Act provides that no law suit can be brought in a court upon any sale of land, contract of land, any interest in land or any interest concerning land unless there is some agreement / memorandum, not in writing signed by the party to be charged.

(8) The Learned Trial Judge erred in finding fraud on the part of the Appellants when the Respondent did not give any evidence of fraud, actual dishonesty, coercion or duress on the part of the appellants.

(9) The Learned Trial Judge erred in fact in making a finding in paragraph 19 of the judgment that her Ladyship stated that Her Ladyship had no doubt that the respondent expected the appellants to look after him in his old age and perhaps the appellants also had a strong moral obligation to do so when there was no evidence upon which such findings could be made.

(10) The learned Trial Judge erred in fact in making a finding in paragraph 21 of the judgment that the appellants were well aware of the payments but simply decided not to pay the respondent in the affidavit of the common solicitor, Mr. Roopesh Singh stated that the instructions received was that the consideration of $5000 on each property was nominal consideration which would not be demanded at the time of registration.

(11) The learned Trial Judge erred in fact and in law in finding in paragraph 23 of the judgment that the respondent wanted to transfer the properties upon consideration of $10,000 when the affidavit of Mr. Roopesh Singh was unchallenged that the consideration would not be demanded.

(12) The Learned Trial Judge erred in fact and in law in finding in paragraph 23 of the judgment that the transfer lacks consideration when Her Ladyship had made a finding that the Respondent agreed to accept the consideration at a future date but was waiting for it to be paid and in light of the affidavit of Mr. Roopesh Singh that the respondent agreed that a nominal consideration would not be demanded at the time of registration.

(13) The Learned Trial Judge erred in fact and law in holding paragraph 26 of the Judgement that non payment of the consideration by the appellants is dishonest, clearly imputes fraud and renders the contract invalid. The Learned Judge failed to give reasons why the non payment itself amounted to fraud.

(14) The Learned Trial Judge erred in fact and law in holding in paragraph 28 of the judgment that the entire transaction is couched in fraud without giving particulars of what evidence Her Ladyship relied to make such a blanket finding of fraud.

(15) The Learned Trial Judge erred in law in failing to apply or giving reasons for departing from long held authority followed in decisions such as the Fiji Court of Appeal authority of Prasad v Wati [2001] FHCA 40 required the learned Judge to make findings of fact of actual fraud which involves some act of dishonesty which the learned Judge failed to do.

(16) The Learned Trial Judge erred in law in failing to apply the reasoning of the Fiji Court of Appeal in Sharma v Singh [2004] FJCA 12 as to the legal test of fraud under the Land Transfer Act.

(17) The Learned Trial Judge erred in law and fact in failing to appreciate and give due weight and consideration that fraud was not raised, examined upon, or cross-examined upon at the trial and no party or their witness gave any evidence of fraud.

(18) The Learned Trial Judge erred in law in not upholding the ruling in Browne v Dunn (1894) 6 R 67 (HL) as the Respondent did not put or raised particulars of fraud to the appellants in cross examination.

(19) The Learned Trial Judge erred in law in failing to appreciate that the appellant's failure to pay consideration on the transfer was due to a mutual understanding between the parties that the consideration would not be demanded. That the Respondent gave no evidence of demanding payment.

(20) The Learned Trial Judge erred in law and in fact in failing to take into account the affidavit of Roopesh Singh in which the deponent as common Solicitor confirmed that the consideration was not to be demanded by the Respondent or paid by the Appellant and no coercion pressure observed.

(21) The Learned Trial Judge erred in law in failing to appreciate and take into account that at best on a finding that a consideration amount was owing, the only remedy available to the respondent was to sue for damages for the amount of consideration outstanding.

(22) The Learned Trial Judge erred in law and fact in failing to appreciate that the act of non-payment of monies outstanding on a transfer of land does not amount to fraud under the Land Transfer Act.

(23) The Learned Trial Judge erred in law in failing to apply authorities submitted namely Narayan v Sigamani [2008] FJHC 2014, Nair v Nair [1994] FJHC 127 and Reddy v Reddy Construction Company Ltd [2008] FJHC 310, held that non payment of consideration monies does not amount to fraud under the Land Transfer Act permitting the recession of a transfer.

(24) The Learned Trial Judge erred in law and in fact in failing to appreciate that non payment cannot amount to fraud because the act of non payment is merely the failure to do something which the parties agreed to do. Such an act of non payment does not go towards an 'interest' in the land itself which may be defeated in a case of fraud.

(25) The Learned Trial Judge erred in law in finding fraud in relation to events that occurred after a post transfer of land.

(26) The Learned Trial Judge erred in fact in finding fraud on the part of the appellants when the respondents pleaded that fraud was committed by the appellants exerting influence and pressure on his mind, that the respondents was pressured into signing documents yet none of this was proof at the trial.

Although the Appellants have set out 26 grounds of appeal, the main trust of the Appeal revolves around indefeasibility of title.

[6] Sections 39, 40 and 41 of the Land Transfer Act play a pivotal role in relation to land transferring in Fiji. Sections 39, 40 and 41 read as follows:

"39. –(1) Notwithstanding the existence in any other person of any estate or interest, whether derived from the grant from the crown or otherwise, which but for this act, might be held to be paramount or to have priority, the registered proprietor of any land subject to the provisions of this act, of any estate or interest therein, shall, except in case of fraud, all the same subject to such encumbrances as may be notified on the folium of the Register, constituted by the instrument of title thereto, but absolutely free from all other encumbrances whatsoever except;

(a) the estate or interest of a proprietor claiming the same land, estate or interest under the prior instrument of title registered under the provisions of this act; and

(b) so far as regards any portion of land that may by wrong description or parcels or boundaries be erroneously included in the instrument of title of the registered proprietor not being a purchaser or mortgagee for value or deriving title from a purchaser of mortgagee for value; and

(c) any reservations, exceptions, conditions and powers contained in the original grant.

39. - (2) Subject to the provisions of Part 13 i.e., no estate or interest in any land subject to the provisions of this Act shall be acquired by possession or user adversely to or interrogation of the title of any person registered as the proprietor of any estate or interest in such land under the provisions of this Act.

Purchase not Affected by Notice

40. Except in the case of fraud, no person contracting or dealing with or taking or proposing to take a transfer from the proprietor of any estate or interest in land subject to the provisions of this Act shall be required or in any manner concern to inquire or ascertain the circumstances in or the consideration for which such proprietor or in any previous proprietor of such estate or interest is or was registered, on to see to the application of the purchase money or any part thereof or shall be affected by notice, direct or constructive of any trust of unregistered interest, any rule of law equity to the contrary notwithstanding, and the knowledge that such trust or unregistered interest is in existence shall not of itself be imputed as fraud.

Instrument etc, void for Fraud

41. Any instrument of title or entry, alteration, removal or cancellation in the Register procured or made by fraud shall be void against as any person defrauded or sought to be defrauded thereby a no party or privy to the fraud take any benefit there from."

[7] In Fraser v Walker & Others [1967] 1 All ER 649, The Privy Council dealt with the concept of indefeasibility of title as regards the analogous provisions contained in the Land Transfer Act of New Zealand, the Privy Council held that this concept of 'indefeasibility' is central to the system of registration found in the Land Transfer Act. It further held; "it is these sections which, together with those next referred to, confer the registered proprietor what has come to be called 'indefeasibility of title'. The expression, not used in the Act itself, is a convenient description of the immunity from attack by adverse claim to the land or interest in respect of which he is registered, which a registered proprietor enjoys".

[8] The Supreme Court of Fiji in Star Amusement Limited v Navin Prasad et.l considered the concept of indefeasibility of Title and it held:

... "in exercising the powers of correction conferred by Sections 131, 166 and 168 the Registrar of Titles and the Court should be mindful of the other provisions of the Land Transfer Act which have provided for indefeasibility of title, and the fact that in those provisions, such as Sections 39(1), 40, 41,42(1)(c) and 42(3), an intention to protect the title of the registered proprietor except where there is fraud, is manifest."

[9] Indefeasibility of Title in relation to the Land Transfer Act grants impunity to the title of the land upon the registration of the instruments recognised in the Land Transfer Act. Upon the registration of an instrument under the Land Transfer Act, it attracts the sanctity of indefeasibility subject to certain exceptions such as fraud, mistake or error in terms of sections 40 and 41 of the Land Transfer Act. Hence to defeat the title of the defendants it is incumbent on the Plaintiff Respondent to prove one of the grounds stated above. The basis of the Plaintiff Respondent has been fraud and misrepresentation. The Learned High Court Judge rejected this basis and proceeded on the basis of non payment of consideration, which in her opinion amounted to fraud.

[10] In a very laconic and brief manner the Learned High Court Judge has arrived at the conclusion of fraud based on non-payment of consideration. In regard to the question of consideration one cannot come to a conclusion in such a haste. A multitude of factors ought to have been deliberated by the Learned High Court Judge. The plaintiff cannot be categorised as an inexperienced person. His actions speak of a wealth of experience. As an 85 year old person he was a trustee of a school, a landed proprietor who had donated 33 acres of agricultural land to the very son against whom he had filed action, and another land donated to the younger son, Satya.

[11] It would be logical to deduce that he cannot be deceived as to the values of lands. Forty (40) perches in a residential area close to Lautoka city ought to be much more valuable than mere FD$10,000.00. Even the younger son, Adithya was surprised to hear the sale price of FD$10,000.00 and questioned the father as to why he sold it for such a 'cheap' amount. If the intention of the Plaintiff was in fact to make a genuine sale of land, will he ever sell it for a meagre sum of FD$10,000.00? The issue of consideration is a matter that cannot be addressed without delving deeper into it especially, if the decision rests solely on consideration. Indefeasibility of title cannot be attacked on the ground of inadequacy or non payment of consideration.

[12] In my view when a person obtains a conveyance of property without fraud, but subsequently propelled by fraud refuses to pay the stipulated consideration, a transferor is not entitled to claim a cancellation of the conveyance, his remedy lies in an action for the recovery of the consideration.

[13] Therefore in this case it is not necessary to go into the question of consideration as it is not a ground on which indefeasibility can be defeated. Hence I reject the view taken by the learned High Court Judge as to the presence of the element of fraud based on non payment of consideration.

[14] The Plaintiff has not alleged any fraud against the defendants in his evidence in court furthermore there is no evidence of even a semblance of fraud at the time of execution of deeds, this position is strengthened by the affidavit of Mr. Roopesh Prakash Singh.

[15] Issues of family arrangements and non payment of valuable consideration recede to the background in view of the indefeasibility provisions and such issues are irrelevant to the main issues before this Court.

[16] In Assets Company Ltd v Mere Rohi [1905] UKLawRpAC 11; (1905) AC 176, it was held that the alleged fraud needs to be on the part of the registered owner whose right is to be impeached or on the part of his or her agent in order to vitiate the title or the interest registered on the instrument. This is important as mere fraud which does not involve the last registered proprietor or his agent will not affect the indefeasibility of the title. It was also held that fraud had to be actual and not constructive. Section 39 of the Land Transfer Act can be interpreted in the light of the provisions contained in Section 40 and 41 of the Act.

[17] In view of the indefeasibility provisions and failure on the part of the Plaintiff to prove any fraud practiced by the Defendants in relation to the execution of the deeds, I set aside the orders of the Learned High Court Judge and allow the appeal of the Defendant Appellants. No costs.

Kamal Kumar, JA:

[18] I agree with the reasons and decision of His Lordship, Justice Lecamwasam.

[19] The Orders of the Court are:
1) Appeal is allowed.
2) No costs.

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Hon. Justice S. Chandra
JUSTICE OF APPEAL

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Hon. Justice S. Lecamwasam
JUSTICE OF APPEAL

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Hon. Justice K. Kumar
JUSTICE OF APPEAL