Forum Hotels Ltd v Native Lands Trust Board [2013] FJCA 17; ABU0046.2010 (12 March 2013)

IN THE COURT OF APPEAL
On Appeal from the High Court
Civil Appeal No ABU 0046/10
(High Court HBC 224 of 2005)

BETWEEN:

Forum Hotels Limited
Appellant

AND:

Native Land Trust Board
Registrar of Titles
Attorney General of Fiji
Respondents

Coram: Calanchini PA
Lecamwasam JA
Kotigalage JA

Counsel: Mr H Nagin for the Appellant
Mr C Tuberi for the 1st Respondent
Mr R Green for the 2nd & 3rd Respondent

Date of Hearing: 15 February, 2013
Date of Judgment: 13 March 2013

JUDGMENT
Calanchini AP

[1]. I have had the opportunity of reading the draft judgment of Lecamwasam JA. I have also come to the view that this appeal should be allowed.

[2]. The relevant facts are set out in the judgment of Lecamwasam JA and I do not propose repeating them.

[3]. Before stating my reasons for taking this view of the appeal, I would indicate at the outset that I agree that the notice period of 30 days given by the First Respondent to the Appellant to remedy the alleged breach was not in the circumstances of this case reasonable. Although the Appellant had no intention of erecting an industrial building on the land, it had acquired plans for the construction of the hotel and 30 days notice was not a reasonable time to compel completion.

[4]. The preliminary issue raised in the summons filed by the Appellant was concerned with the legality of the actions of the Second Respondent, the Registrar of Titles.

[5]. The Registrar was acting under section 57 of the Land Transfer Act Cap 131 when he registered the cancellation of the Appellant's lease. Before doing so the Registrar was, in this case, required to do two things. The first was to be satisfied upon proof that the re-entry and recovery of possession by the First Respondent was lawful. The second was to require notice of the application to register the cancellation to be served on all persons interested under the lease or arrange publication of the application in the Gazette before making any entry in the register. This second requirement is contained in proviso (b) to section 57 of the Land Transfer Act.

[6]. In Central Rentals Limited –v- Patton and Storck Limited (1996) 42 FLR 137 this Court at page 138 commented on the scope of proviso (b):

"Para (b) was included in section 57 on the enanctment of the Land Transfer Act following the repeal of the Land (Transfer and Registration) Ordinance (Cap 136) (1955). Its evident purpose was to reverse the effect of Ram Kali –v- John Bayly (1954) 4 FLR 139 to ensure that a lessee is given a reasonable opportunity to make submissions to the Registrar against the cancellation of the lease and if necessary to take court proceedings."

[7]. It was not disputed that the Registrar had not served a notice under section 57 proviso (b) on the Appellant. In passing I indicate that I do not accept the submission by the Second and Third Respondents that notice under section 57 proviso (b) is not necessary when the lessee has been properly served notice under section 105 of the Property Law Act Cap 130. The notices are necessary conditions precedent to (a) re-entry by the landlord under section 105 of the Property Law Act and (b) registration of the cancellation by the Registrar under section 57 of the Transfer of Land Act.

[8]. At the very least the notice under proviso (b) was an administrative requirement to be complied with before the Registrar could be satisfied upon proof that re-entry and recovery of possession was lawful. The performance of the discretion to register the cancellation was dependent upon the lessee being given the opportunity to be heard in the form of making submissions. By proceeding to register the cancellation before sending the notice the Registrar of Titles had exceeded his jurisdiction. By not giving the Appellant an opportunity to make a submission the Registrar of Titles had failed to observe the principles of natural justice. Both are grounds for challenging the actions of the Registrar of Titles.

[9]. There is authority that would appear to indicate that a challenge to a decision made or action taken by the Registrar of Titles may proceed under section 168 of the Land Transfer Act. That section states:

"In any proceedings respecting any land subject to the provisions of this Act, or any estate or interest therein, or in respect of any transaction relation thereto, or in respect of any instrument, memorial or other entry or endorsement affecting any such land, estate or interest, the court may by decree or order direct the Registrar to cancel, correct, substitute or issue any instrument of title or make any memorial or entry in the register or any endorsement or otherwise to do such acts as may be necessary to give effect to the judgment or decree or order of such court."

[10]. In Central Rentals Limited –v- Patton and Storck Limited (supra) at page 140 this Court stated:

"This section applies in litigation between parties where there is no challenge to any decision of the Registrar, but we see no reason why it should not extend to cases where the Registrar has made entries in the Register unlawfully or in error but is not willing to apply to the High Court under section 166 to have the Register corrected. There is nothing in Part XXIV of the Act "Special Jurisdiction of the High Court" to exclude its ordinary jurisdiction to protect property rights and to grant relief against unlawful administrative action."

[11]. It must be noted that this Court in Central Rentals Limited (supra) has indicated that the function performed by the Registrar of Titles is administrative when it referred at page 140 to the High Court exercising its ordinary jurisdiction "to grant relief against unlawful administrative action."

[12]. Had the only issue been whether this Court should interfere with the orders of the court below on the basis of the failure of the Registrar of Titles to give notice to the Appellant as required by proviso (b), I may well have taken the view that the process of cancellation could have started again with the Registrar complying with proviso (b). The result then would have been the same and nothing would have been gained.

[13]. However the Appellant has argued that the pleadings raise a number of other issues that are in dispute and which relate to the validity of the notice served by the First Respondent under section 105 of the Property law Act. It is claimed that the manner in which those matters were to proceed before the learned Judge who took over the action has not been settled to the satisfaction of the parties and certainly those matters have not been argued before the learned Judge. I note that the issues had been fully argued initially before Phillips J. On page 824 of the Record it is recorded by the learned Judge that the parties agreed that the summons filed on 30 September 2009 is to be considered as part of the judgment in the action and that the judgment is to be delivered on the notes made by Phillips J and the parties' submissions.

[14]. It is significant to note that the second application in the Appellant's summons in the court below sought an order:

"If the issue above determines in favour of the Plaintiff the Court proceed to grant such reliefs consequential thereon including assessment of damages."

[15]. It would only be open to the Court to grant the consequential relief claimed and damages to the Appellant if the Court was satisfied that the Appellant had established its claim. In seeking order number 2 in its summons it seems to me that the Appellant contemplated the Court examining the substantive validity of the section 105 notice and the validity of the Registrar's actions. The learned Judge could not have proceeded to grant consequential relief and damages to the Appellant unless the Appellant had established his claim that the notice under section 105 of the Property Law Act was invalid.

[16]. The application before the learned Judge required the Court to determine whether there was material before the Registrar of Titles to be satisfied that the re-entry and recovery of possession was lawful. That required no more than an assessment as to whether there was evidence of re-entry and taking of possession. The lodging of a notice under section 105 of the Property Law Act and evidence of re-entry on 8 March 2005 was sufficient proof for that purpose.

[17]. The learned Judge, however, as agreed by the parties determined the substantive action. However, in my view he has done so without adequately considering all the other issues raised in the pleadings. The learned Judge has not, for example, adequately considered the issues of waiver, estoppel or relief against forfeiture.

[18]. Furthermore the learned Judge was required to consider the issue of the failure by the Registrar to give notice under proviso (b) to section 57. In my view the Registrar had no power to cancel the lease without first giving notice of the application to the Appellant. The learned Judge did not consider this matter.

[19]. For the reasons stated above I would allow the appeal. The orders made by the learned Judge should be set aside. The substantive issues raised by the pleadings are a matter for the court below to determine at first instance. That court may be called upon to assess damages. The costs of the summons should be costs in the cause. The parties are to pay their own costs in respect of this appeal.

Lecamwasam JA

[20] This is an appeal against the order of the Learned High Court Judge at Lautoka dated 31 August 2010. Briefly the facts are as follows:

[21] In January 1998 Enormous Investment Ltd was granted a Native Lease bearing no. 24345 by NLTB in respect of land called Legalega, Lot 1, Plan No. 3578 in area 8486 sq meters situated in Nadi and it was to take effect from the 1st January 1996. Out of the clauses contained in the lease, two clauses are relevant to the issues before us, viz Clause 2 (k) and clause 2 (o). Clause 2 (k) requires Enormous Investment Ltd to build on the land an industrial building within 2 years from the 1st January 1996 to the satisfaction of the lessor. Clause 2 (o) required the lessee to keep the said land clear of refuse, rubbish, weeds and unsightly growth to the satisfaction of the lessor. Enormous Investment Ltd failed to erect a building within the stipulated period of 2 years and in the year 2000 with the consent of the NLTB, the plaintiff Forum Hotels acquired the lease as a purchaser in the exercise of the power of sale by the mortgagee of the said lease and the subsequent lease was registered on the 2nd May 2000. As Forum Hotels too failed to erect any building within 2 years or within a reasonable period the first defendant NLTB in exercising its right of re-entry issued a notice under Section 105 of the Property Law Act on the 7th February 2005 and informed the plaintiff Forum Hotels to remedy the breach mentioned in the notice within a period of 30 days. As the plaintiff failed to remedy the breaches the first defendant exercised the power of re-entry on the 8th of March and cancellation of the lease was registered by the 2nd Defendant on the 14th March 2005. Aggrieved by the above acts of re-entry and the cancellation of the lease the plaintiff filed Civil Action in the High Court challenging the above said re entry and the registration of the cancellation of the re entry. The High Court Judge at Lautoka in his judgment dismissed the claim of the Plaintiff which resulted in the instituting of the instant appeal in the Court of Appeal.

[22] Before considering the grounds of appeal it is pertinent for us to advert our attention to the sequence of events that had taken place in the High Court. The plaintiff Forum Hotel instituted action in the High Court by filing writ of summon on the 22nd September 2005 (later amended in March 2007) seeking various orders, inter alia, that the re-entry by the NLTB was unlawful, void and of no effect.

[23] The case was initially tried by Madam Justice Phillips who heard the case fully when the case was called on 3rd April 2009 reserved judgement for the 17th July 2009. By the 17th July 2009 the new Judge had assumed duties (Justice Inoke) and thereafter the case had been mentioned on a few occasions to ascertain whether to adopt the evidence already recorded and to announce the judgement on the evidence already on record. The defendants moved for denovo trial but as the plaintiff was overseas, his Counsel moved for further time to get further instructions on that matter.

[24] In the meantime plaintiff by summons dated the 30th September 2009 under (O) 33 of the High Court Rules moved Court to rule on certain preliminary issues. They are viz:

[i] Whether the application for cancellation of the Plaintiff's Native Lease No. 24345 by the 1st Defendant and registration thereof by the 2nd Defendant was unlawful, void and/or ineffectual due to non compliance with the procedure for cancellation required under section 57 of the Land Transfer Act [Cap 131];

[ii] If the issue above determines in favour of the Plaintiff the Court proceed to grant such reliefs consequently thereon including assessment of damages;

[iii] Evidence for the trial of the above issue or preliminary issue by way of affidavits with the liberty of the parties to call oral evidence limited to the trial of the above preliminary issue;

[iv] Costs of this application be costs in the cause.

[25] Although the appellant in his written submission avert ten grounds of appeal, some of them are interconnected and over-lapping.

[26] Grounds of Appeal

i] The learned Judge erred in law and in fact in dismissing the Appellant's full claim when the application before him only related to certain preliminary issue.

[ii] That the learned judge erred in law and in fact in going through the trial transcript and fully deciding the case when he had not heard the case and it was heard by another Judge and the parties had not consented to him giving a judgment based on the evidence heard by the other Judge.

iii] The Learned Judge failed to properly consider other issues such as relief against forfeiture and representations made by officers of the 1st Respondent's and whether such representations amount to waiver.

[iv] The Learned Judge erred in law and in fact in holding that estoppels could not apply in relation to representation made by the officers of the 1st Respondent when the evidence was very clear that the Appellant had acted on them to its detriment.

[v] The Learned Judge erred in law and in fact in holding that the 1st Respondent could only act under its seal.

[vi] The Learned Judge erred in law and in fact in holding that the Appellant did not comply and could not comply with clause 2 (k) of the lease.

[vii] The learned Judge erred in law and in holding that it was not necessary for him to consider clause 2(o) of the lease.

[viii] The learned trial judge erred in law and in fact in not properly applying Section 57 of the Land Transfer Act.

[ix] The learned trial judge erred in law and in fact in not properly applying the authorities and in particular Central Rental Limited v Patton & Storck Limited CB 004 of 2008.

[x] The learned judge erred in law and in fact in awarding costs of $5,000 each to the 1st and 2nd Respondent's and basing the amount on what he perceived from the trial transcript that Phillips J thought the trial was unnecessarily prolonged by the way the Appellant's counsel ran his case.

[27] The summons pursuant to Order 33 Rule 3 & 7 (on pages 698 & 699) it's clearly confined to Section 57 of the Land Transfer Act only. In the summon the issue no.1 is stated thus:

"Whether the application for the cancellation of the Plaintiff's Native Lease No. 24345 by the 1st Defendant and registration thereof by the 2nd Defendant was unlawful, void and/or ineffectual due to non compliance with the procedure for cancellation required under Section 57 of the Land Transfer Act Cap 131".

[28] According to the journal entries of 26/04/2010 (Page 824) it is obvious that the parties have agreed to consider the plaintiff's summons filed on the 30th September 2009 as part of the judgment to be delivered in the action and to deliver the judgment based on Judge's notes and parties' submissions. By the time Justice Inoke assumed duties as a Judge, Justice Phillips had recorded all the evidence of the plaintiff as well as the defendant and it had been fixed for judgment. Hence, when Counsel agreed to act on summons of the 30th September 2009, Judge's notes and submissions of parties, one can presume that all counsel agreed for the Court to deliver full judgment and not merely an order on a preliminary issue. All the facts were before Justice Inoke and this admission of counsel had given the authority to the Judge to accept everything that was there before him and for him to give judgment. There was nothing more to elicit as all the facts were before him. Although the plaintiff in summons of the 30th September 2009 reserved the right to call oral evidence, it seems, by the 26th of April 2010 he had waived his right to call oral evidence. If not, counsel could have moved Court to call such oral evidence. Instead by his silence it could only connote plaintiff's agreement to the judgment being pronounced as agreed on the 26th April 2010. On the other hand there was no necessity to repeat oral evidence as evidence was already on record. Plaintiff cannot now turn back and say that he has not agreed to abide by evidence already recorded. Even if the Court decided only on the preliminary issue and if the decision was against the plaintiff then again there would not have been any necessity for the Court to go on a futile exercise of answering the other issues, as all those issues anchored on the first issue based on the notification and registration of re entry followed by the cancellation of the lease.

[29] The appellant argues in his written submission that even if Section 57 issues become redundant is answered against the appellant, he should have had a trial on the other claims. But when the Counsel agreed on the 26th April 2010 to consider the plaintiff's summons as part of the judgment on Judge's notes and parties' submission, thereby they have agreed to the delivery of the main judgment and not mere preliminary issues. Therefore the plaintiff too had agreed to adopt and consolidate everything and for the Court to deliver judgment, and that is the judgment in respect of the main case. Tilling vs Whiterman, Richards vs Naum and Redstock Corporative Industrial Society judgments are not relevant to the instant case as all the facts were before the Court when the judgment entered in the instant case. The Court had all the material before it to deliver the full judgment when the plaintiff moved the Court to answer preliminary issue raised on the 30th September 2009 (Page 698) are very much similar to the facts contained in the admitted facts and issues in the main case (page 201). Therefore I do not perceive any prejudice that has been caused to the plaintiff when Court delivered the judgement in the main case, as main case too contained the same issues that were brought by way of preliminary issues. Therefore grounds 1 & 2 must fail.

[30] The Learned Judge has dealt with the issues raised in the 3rd ground of appeal in a cursory manner and whereas he had failed to deal with issues raised in the 4th and 5th grounds satisfactorily. The letters written by the Deputy General Manager (Operations) and the Acting Manager (Legal Services) had not been given a proper evaluation by the learned judge. These are letters written on behalf of the NLTB by responsible officers of the NLTB. Therefore the failure on the part of the learned Judge to deal with issues raised in the 3rd, 4th and 5th grounds of appeal is fatal. Had he considered the issues raised in the 3rd ground carefully that would have had an impact on the validity of the re entry by the NLTB.

[31] Ground 6 relates to failure of the plaintiff to comply with the clause 2 (k) of the lease. I also agree with Justice Inoke when he said in para.12 of his judgment that the building covenant required Forum Hotel to complete the building within 2 years ie. by the 2nd May 2002. Upon the lease being transferred, the lessee cannot say that the covenant applied to the first lessee only and the new lessee is not bound by the covenant of the lease. Therefore the plaintiff had sufficient time to comply with the building requirements. Even though initially it was meant for industrial purposes, the plaintiff could have had it re-zoned under Tourist Industry. When the NLTB issued a letter dated the 18th September 2002 it did not give an unconditional approval. The approval given in that letter is subject to three conditions viz:

1. Payment of all necessary fees, any other costs required;

2. The surrender or variation of your current industrial lease for tourism purposes; and

3. Approval of the necessary authorities.

[32] Out of those conditions there is no evidence that plaintiff had fulfilled at least 2nd and 3rd conditions, those being more important. Within a reasonable time since the receipt of the letter dated the 18th September 2002 letter that is by the 1st October, he had written to the Director, Nadi Rural Local Authority seeking his approval for rezoning. But during the period from the 1st October 2002 to the 7th February 2005 there seems to be no effort on the part of the plaintiff to seek approval from any other Government department, no doubt in the meantime he had taken the trouble to take a team to Australia to see Formula One Hotel, had attended to preparation of survey plans and had discussions with the Colonial Bank etc. Despite such zealous preparations the plaintiff had failed to seek and obtain approval from the relevant government bodies on which the viability of the entire project rested.

[33] When the learned judge had answered clause 2 (k) he would have thought answering 2 (o) is superfluous. He was well within his judicial mandate to come to that conclusion in view of the circumstances of this case.

[34] Relevancy of Section 57 of the Land Transfer Act is very important in this case. Section 57 states:

"Cancellation by Registrar

57. The Registrar, upon proof to his satisfaction of lawful re-entry and recovery of possession by a lessor either by process of law or in conformity with the provisions for re-entry contained or implied in the lease, shall cancel the original of such lease and enter a memorial to that effect in the register, and the estate of the lessess in such land shall thereupon determine but without releasing the lessee from his liability in respect of the breach of any covenant in such lease expressed or implied, and the Registrar shall cancel the duplicate of such lease if delivered up to him for that purpose:

(a)......

Provided that-

(b) Unless the re-entry and recovery of possession have been by the formal process of law, the Registrar shall require notice of application to register the same to be served on all persons interested under the lease, or, failing such notice, shall give at least one calendar month's notice of the application by publication in the Gazette and in one newspaper published and circulating in Fiji before making any entry in the register".

[35] Proviso (b) requires the Registrar to give notice of the application to register the same to be served on all persons interested under the lease. In this case it was Registrar's duty to serve the notice at least on the plaintiff and which he had not done. He cannot take cover under the notice issued by the NLTB under Section 105 of the Property Law Act. It is a notice issued by a different entity at a different time. According to proviso to Section 57 the Registrar of Titles is bound to serve their notice of application on all the persons interested or give at least one month notice of the application by publication of the same in the Gazette or newspapers. With the Registra, has omitted to do. He has not only failed to adhere to the provisions of the law but also he had the audacity to register the cancellation of re entry on the same day that was tendered for registration ie. on the 14th of March itself. Therefore the cancellation of registration by the Registrar of Titles is not valid and bad in law.

[36] On careful consideration of the provisions of Section 105, it is manifestly clear the Section envisaged a situation where it is expected the lessee to remedy the breach within a reasonable time. And the notice dated the 7th February 2005 stipulates the period within which to remedy the breaches as 30 days from the 7th February 2005. The NLTB should have had more realistic and objective approach in fixing the time limit to remedy the breach. Nevertheless, when you consider the breach viz. non construction of an industrial building, the NLTB should have given plaintiff a longer period to remedy the breach. In my view at least three to six months. It seems that NLTB had given a period of 30 days just for the sake of satisfying the requirement under Section 105 of the Property Law Act.

[37] Having considered the overall circumstances of this case especially the fact that the learned Judge had failed to address his mind to some of the grounds of appeal adequately, I am of the view that the orders made by the learned judge should be set aside. Hence the appeal allowed. This is sent back for retrial before another judge.

[38] Considering the circumstances of this case especially the lapses on both sides there will be no order for costs.

Kotigalage JA

[39] Concur with the judgment allowing the Appeal and remitting the Action to the High Court.

Orders of Court

Appeal allowed. Action remitted to the High Court.
No costs.

...........................................
Hon. Mr Justice Calanchini
Justice of Appeal

.......................................................
Hon. Mr. Justice Lecamwasam
Justice of Appeal

...........................................
Hon. Mr. Justice Kotigalage
Justice of Appeal

Counsel: Mr H Nagin for the Appellant
Mr C Tuberi for the 1st Respondent
Mr R Green for the 2nd & 3rd Respondent