Wati v Kwon [2018] FJCA 174; ABU0029.2017 (5 October 2018)

IN THE COURT OF APPEAL, FIJI
ON APPEAL FROM THE HIGH COURT

Civil Appeal No. ABU 0029 of 2017
(High Court Civil Action No. HBC 413 A of 2006)

BETWEEN:

PHUL WATI aka FEROZA BIBI aka PHULMATI aka FIROZA BIBI

Appellant

AND:

BYEONG BAK KWON and EUI TAE KIM

1^st Respondent

AND:

NAZIR HUSSAIN

2^nd Respondent

AND:

ACTING REGISTRAR OF TITLES

3^rd Respondent

AND:

ATTORNEY GENERAL OF FIJI

4^th Respondent

Coram : Basnayake, JA

Almeida Guneratne, JA

Jameel, JA

Counsel: Mr. A.K. Singh for the Appellant

Mr. V. Singh and Mr. E. Kumar for First-named 1^st Respondent

2^nd Respondent -Absent & unrepresented.

Mr. J. Sherani for the 3^rd and 4^th Respondents

Date of Hearing: 20 September 2018

Date of Judgment: 05 October 2018

JUDGMENT

Basnayake, JA

[1] I agree with the reasons and conclusions arrived at by Jameel, JA.

Almeida Guneratne, JA

[2] I agree with Jameel JA’s conclusion that the appeal should be allowed.

Jameel, JA

Introduction

[3] This is an appeal against the Judgement of the High Court of Suva dated 3 March 2017 dismissing in entirety the claim of the Appellant. By writ of Summons the Appellant commenced action in the lower court. After the application for the interim injunction was concluded, the Appellant filed an Amended Statement of Claim dated 27 January 2009 ( RHC 221), by which she sought a declaration that the transfer of her property to the 1^st Respondent by the 2^nd Respondent was void for fraud, a restraining order restraining the Respondents from registering the purported transfer lodged on 22 June 2006, that all the sales proceeds be paid to the Plaintiff directly, or in the alternative the 1^st Respondent pay the Appellant the best market price of the property, mesne profits of $1000.00 a month until the determination of the Appellant, and an order preventing the 3^rd Respondent from registering the transfer of the subject property in the name of the 1^st named Respondent.

Factual Background

[4] This case has a protracted history. The genesis of the problem is the execution and revocation of a Power of Attorney given by the Appellant in favour of the Appellant’s son, who used it to sell the Appellant’s property to the 1^st- named 1^st Respondent. The Appellant contended that as far as she was aware, the Power of Attorney was given for the limited purpose of managing the property which is the subject matter of this case. Her complaint is that she did not grant the 2^nd Respondent the power to sell and dispose of the property. The main matters for determination by this court relate to the validity of the Power of Attorney granted by the Appellant in favour of her son the 2^nd Respondent, and its subsequent revocation at the time of the transfer of the property to the 1^st Respondent.

[5] The property which is the subject matter of this appeal is situated at Vere Road, Laucala Beach Estate, Nasinu. The Appellant’s husband the late Mohamed Hanif, originally owned the property. They had four children; Shainaz Hanif, Nazir Hussain the 2^ndRespondent, Mohamed Riaz Hanif, and Shabnam Suliman (“Shabnam”). The Appellant’s husband died in 2000, having appointed their daughter Shabnam as executor of his Last Will (RHC, 371). The Appellant inherited the property on the death of her husband, and became the registered owner of the Property. The Certificate of Title No. 16922, is in respect of Lot 21 on Deposited Plan No. 4058, containing in extent 1 rood and 4 perches, (RHC 51 and 52).

The first Power of Attorney- to the daughter

[6] By Power of Attorney No. 38808 dated 27 November 2001, attested by Mr. Suresh Chandra (“Mr. Chandra”), Commissioner for Oaths and Notary Public, the Appellant appointed her daughter Shabnam Suliman (“Shabnam”) as her Attorney. This Power of Attorney was registered on 5 December 2001. (RHC, 47), and bears the seal of the Registrar of Titles on it. After her husband died, the Appellant proceeded to live in New Zealand with her daughter Shabnam. The 2^nd Respondent moved to Australia, but used to travel to Fiji intermittently.

The second Power of Attorney – to the son the 2^nd Respondent

[7] Since the Appellant was living with Shabnam in New Zealand, the 2^nd Respondent had agreed to look after the property. On one of her trips to Fiji in 2006 March, the 2^nd Respondent requested her to execute a Power of Attorney in his favour, to enable him to manage the property. A Power of Attorney bearing No. 41575 dated 27 March 2006, was prepared by Mr. Chandra, and was tendered to the office of the Registrar of Titles on 4 April 2006, and was registered on the same date.

Revocation of the Power of Attorney to the son

[8] After having executed the second Power of Attorney in favour of the 2^nd Respondent Nazir, the Appellant returned to New Zealand, and a short while thereafter, she received information that the 2^nd Respondent had sold the property. She became anxious and concerned as she was under the distinct impression that she had not granted the 2^nd Respondent the power to sell the property, but had only granted him power to manage the property. The Appellant telephoned her Solicitor, Mr. Chandra from New Zealand, and informed him that in view of the information received, she wanted to immediately revoke the Power of Attorney granted to the 2^nd Respondent. Mr. Chandra then prepared a revocation of the Power of Attorney and sent it to New Zealand for the signature of the Appellant, which the Appellant signed by affixing her thumbprint and returned to Mr. Chandra.

The Pleadings

The first Statement of Claim dated 13 September 2006

[9] The parties to the first Statement of Claim (RHC 33) were the same as the parties to the Amended Statement of Claim, except that the 4^th Respondents were Haroon Lateef and Caesar Shazran Lateef, Barristers & Solicitors. This Statement of Claim was settled by Maharaj Chandra Associates as Solicitors for the Appellant. The Appellant pleaded that; the Power of Attorney No. 45175 dated 27 March 2006 given to the 2^nd Respondent had, without her knowledge included the power to sell the property, had been fraudulently obtained because as far as she was aware it was only to maintain and collect rent for the property, the property had been purportedly sold for $130,000, whilst its market value was in excess of $296,000 and the 2^nd Respondent had received the proceeds of the sale, but had not given it to her. She claimed that upon realizing that the Power of Attorney had been obtained fraudulently, she immediately took steps to revoke it and through her Solicitors and the revocation of the said Power of Attorney was lodged on 2 May 2006. By letter dated 8 September 2006 (RHC 666), her Solicitors advised the 3^rd Respondent, the Registrar of Titles not to proceed with the registration of the transfer pursuant to the Power of Attorney 45175, as the said Power of Attorney had been revoked.

[10] In the Statement of Claim, the particulars of fraud were pleaded under two heads, one dealt with the sale of the property outside the authority granted in the Power of Attorney, she pleaded that the 2^nd Respondent had received and had deprived the Appellant the proceeds of the sale. The other head of fraud pleaded was that whilst the Power of Attorney in favour of Shabnam was in existence, the 2^nd Respondent persuaded the Appellant to appoint him to maintain and collect rent on the Appellant’s behalf. The 2^nd Respondent then persuaded her to attend the office of a Solicitor to have the Power of Attorney executed in his favour. The Appellant pleaded that being uneducated and illiterate, she executed a Power of Attorney, which “by mistake” contained the power enabling the 2^nd Respondent to sell the property, and the 2^nd Respondent took advantage and sold the property without instructions. She feared that the 4^th Respondents, as Solicitors for the 1^st Respondent would hold the proceeds of the sale and would release it to the 2^nd Respondent, who was no longer her attorney. It is to be noted that the Power of Attorney was prepared and attested by the said Mr. Chandra, who settled the pleadings.

[11] The Appellant pleaded that the Power of Attorney No. 45175 was revoked on 24 April 2006. The 2^nd Respondent was aware of the revocation, it had been lodged for registration on 2 May 2006, and that the instrument purportedly lodged on 22 June 2006 was invalid, unlawful and ought not to be registered by the 3^rd Defendant. The Appellant also pleaded that all documents executed under the impugned Power of Attorney were untraceable, and that she continued to suffer loss and damages.

[12] The Appellant therefore had sought an order restraining the 3^rd Respondent from registering the purported transfer, a declaration that the transfer executed by the 2^nd Respondent is null and void, an order that the sales proceeds be paid to her directly, and that the 1^st Respondent pay the Appellant mesne profits of $1000.00 per month.

The affidavit of Shabnam Suliman (RHC 42)

[13] She pleaded that she is the lawful Attorney of the Appellant by virtue of Power of Attorney No. 38808, dated 27 November 2001, her mother the Appellant, has been the registered owner of the property from 17 September 2001, having inherited it from her husband’s estate, after all other beneficiaries renounced their shares. According to the valuation obtained by the Appellant on 10 February 2006, the property was worth at $296,000, (RHC 336-346). Whilst the Power of Attorney executed in her favour had not been revoked and remained valid, (RHC p.42, paragraph (6) of the Affidavit), on 27 March 2006 the 2^nd Respondent obtained a Power of Attorney in his favour, which included the power to sell the property. This Power of Attorney had been executed by the Appellant and 2^nd Respondent when they went to the office of their Solicitors, namely Messrs. Maharaj Chandra Associates. The Appellant had executed the Power of Attorney in the belief that she was authorizing the 2^nd Respondent to only manage the property. Her signature was affixed with her left thumb impression. Subsequently, when money had to be withdrawn for the Appellant’s use, Shabnam discovered that the 2^nd Respondent had withdrawn $2500.00 from the Appellant’s bank account bearing No.5126892 at ANZ Bank. The bank informed her that she no longer had access to the joint account, as they had another Power of Attorney in respect of the Appellant’s bank account. It was only then that Shabnam discovered that a Power of Attorney had been granted to the 2^nd Respondent. The Appellant and Shabnam then suspected that the 2^nd Respondent may have abused the authority granted under the Power of Authority. Shabnam made a complaint to the Police (RHC 329) about the withdrawal of the money from the account. Thereafter, on the advice of her Solicitors, on or about 24 April 2006, the said Power of Attorney given to the 2^nd Respondent was revoked in Auckland. Shabnam also instructed her Solicitors to lodge a caveat in respect of the property as she and her brother Mohamed Riaz Hanif had a beneficial interest. The caveat was lodged on 1 September 2006, (RHC, 54). The subsequent events confirmed the suspicions of the Appellant; the 1^st Respondent refused to pay rent to the Appellant on the basis that he had purchased the property, and a search at the office of the Registrar of Titles revealed the existence of a photocopy of the unregistered, purported transfer from the 2^nd Respondent to the 1^st Respondent. Shabnam requested her Solicitors to serve a copy of the Notice of Revocation of the Power of Attorney on the 2^nd Respondent, but was informed by them that the 2^nd Respondent could not be traced. From then onwards, the 2^nd Respondent had been absconding.

[14] Both the 1^st and 2^nd Respondents failed to file an Acknowledgement of Service and Statement of Defence and default judgment was entered against them. The judgment against the 1^st Respondent was set aside by this court on 13 April 2007 (RHC, 128).

[15] On 28 September 2006, when the Motion dated 13 September 2006 came up for support (RHC, 83), the Appellant was represented by Mr. Chandra. The 4^th Respondents (Haroon Lateef and Caesar Shazran Lateef,) were represented by Caesar Lateef. After hearing Counsel for all parties, the lower court granted leave to the Appellant to withdraw the action against the 4^th Respondents, granted the Appellant leave to serve notice on the 2^nd Respondent out of the jurisdiction of the court, and for service to be effected on the 2^nd Respondent by way of advertisement in the “Melbourne Age”, and by registered mail posted to the last known address. The court granted an Interim Order restraining the 3^rd Respondent from registering the instrument of transfer dated 4 May 2006 until 16 October 2006.

The Judgment of the Court of Appeal on appeal from the Interim Injunction

[16] The High Court issued an interim injunction and extended it on 21 May 2007, against which the 1^st Respondent appealed. This court had observed that by this time, the original 4^th Respondents had been dropped (RHC 668). This court then delivered Judgment dated 3 July 2008 (RHC, 181), refusing the appeal, and therefore the registration of the purported transfer made by the 2^nd Respondent to the 1^st Respondent was not effected until the conclusion of the trial.

The Appellant’s Amended Statement of Claim dated 27January 2009

[17] In addition to what was contained in the first Statement of Claim, the Appellant’s Amended Statement of Claim (RHC, 203), contained the following additional averments:

“9. (a) The First and Second Defendant (sic) together conspired against the Plaintiff and acted in a deceptive and fraudulent manner to defeat the Plaintiff’s interest in the property and the proceeds of the sale of the property.

PARTICULARS OF FRAUD

1. The First Defendant was fully aware of the ownership of the property to the Plaintiff and Second Defendant as attorney only at the time of the transfer.
2. The First named Defendant and Second named Defendant knew each other for over number of years and were business partners in New Zealand before the sale of the property by the Second Defendant to the First Defendants.

100. The First named Defendant and Second named Defendant became acquainted when the First Defendant came from Korea to Fiji worked for Dong San Construction Company in Fiji when the said company was constructing roads near Tailevu in 1990.

4. The First and Second Defendant were together business partners in Auckland, New Zealand in the company named Feeka Panel beating & Mechanical Repairs Limited before First Defendant occupied the property at Laucala Beach, Nasinu.
5. The First named Defendant and Second named Defendant who knew the Plaintiff well and without any reference to the Plaintiff failed and or neglected to pay the consideration sum to the Plaintiff instead purportedly paid to the Second Defendant.
   

The 1^st Respondent’s Statement of Defence to the Amended Statement of Claim

[18] The 1^st Respondent’s Defence to the Amended Statement of Claim was dated 11 February 2009 (RHC, 238). In response to the Appellant’s averment (paragraph 4.e.) that the property was sold at a gross undervaluation of $130, 000 whereas the property had been valued at over $ 296, 000, the 1^st Respondent averred that he was unaware of any valuation done by the Appellant. This statement assumes significance when the 1^st Respondent’s testimony on this matter is examined in due course, when he admits that he got a ‘bargain’.

[19] In respect of the particulars of fraud pleaded by the Appellant which have been reproduced in paragraph 17 above, the 1^st Respondent denied sub paragraphs 9 b and e. This denial is contradicted by the evidence of the Appellant, Shabnam as well as the 1^st Respondent himself. The 1^st Respondent admitted the averments in paragraphs 9 b, 9.c, and 9.d. of the Appellant’s Amended Statement of Claim.

[20] The Appellant sought an order to serve the Statement of Claim on the 2^nd Respondent by substituted service. The relief sought is identical to the relief sought in the First Statement of Claim.

The Minutes of the Pre- Trial Conference

[21] Under the “Agreed Facts” recorded in the Pre- Trial Conference Minutes (RHC, 315), two are relevant to the matter for determination by this court, and are reproduced below:

“1.2 The son of the Plaintiff, Nazir Hussain, obtained a Power of Attorney No. 45175 on 27 March 2006 from the Plaintiff including the powers to sell the property.”

1.3 MC Lawyers acted for Nazir Hussain and the Plaintiff in preparation of Power of Attorney No. 45175

The Trial before the High Court

[22] Trial commenced on 26 September 2016, (RHC 388). The Appellant was represented by Mr. Chandra, who commenced his submissions (RHC 390) by stating that:

“Plaintiff now lives in New Zealand and managing her property through her daughter from New Zealand from Auckland by virtue upon Power of Attorney 38808”.

[23] Being unable to understand and speak English, the Appellant gave evidence in Hindi. Four witnesses gave evidence for the Appellant, and the 1^st Respondent testified on his behalf. A matter of significance was the fact that the Counsel for the Appellant eventually stepped down and testified as a witness for the Appellant.

Testimony of the Appellant

[24] Five witnesses testified on behalf of the Appellant, and the 1^st Respondent testified on his behalf. The learned trial Judge found that the Appellant had first given a Power of Attorney to Shabnam, and as Shabnam could not take care of the house, she gave it to the 2^nd Respondent. In cross-examination, the Appellant admitted that the 2^nd Respondent and she went to see the 1^st Respondent, she identified her thumbprint affixed on the Power of Attorney No.54175, given to him (Exhibit D1), and that he explained the contents to her in the Hindi language, and that Mr. Chandra may have told her that the Power of Attorney gave Nazir the right to sell the property. She also said that If Mr. Chandra had told her that it gave Nazir the right to sell the property, she would not have affixed her thumbprint. When she got to know that the 2^nd Respondent had sold the house, she gave instructions to her lawyers to revoke the Power of Attorney.

[25] When Mr. Chandra was leading the examination -in -chief of the Appellant, the learned trial Judge observed that there appeared to be a conflict of interest, because the impugned Power of Attorney had been prepared by, and executed in the office of Mr. Chandra. He also made his observations known. Mr. Chandra then attempted to explain what aspect of the Power of Attorney the Appellant was referring to, (RHC, 403-410). It appears that the questions asked by the Judge at that stage stemmed from the allegation of the Appellant contained in paragraph 4 of her Amended Statement of Claim. The essence of this was that whilst the Power of Attorney that the Appellant had executed in 2001 in favour of Shabnam was already in existence, the 2^nd Respondent had persuaded her to give him a Power of Attorney to assist her to manage the property. The Appellant believed that the Power of Attorney given to the 2^nd Respondent was only to manage her property.

Testimony of the 3^rd Respondent

[26] The second witness for the Appellant was Torika Goneca, Deputy Registrar of Titles, (RHC, 499). However, in view of my finding and conclusion that the Power of Attorney given to the 2^nd Respondent was obtained by fraud, and is therefore null and void, it is not necessary to analyse her testimony.

Testimony of the Valuer

[27] The third witness for the Appellant was a registered Valuer Sanjay Kirpal who testified that he had prepared the Valuation Report for the property on being retained by Shabnam in 2006, its value at the time was $296,000, and its present value would be more than $500,000.

Testimony of Mr. Chandra

[28] Mr. Chandra was the fourth witness for the Appellant. He testified that the Power of Attorney (Exhibit 1) in favour of the 2^nd Respondent was prepared by him and that he had told the Appellant that the Power of Attorney given to the 2^nd Respondent allowed him to sell the property. He said that his firm now known as ‘MC Lawyers’, had also prepared the revocation of the Power of Attorney (Exhibit 4). It was sent to Auckland for execution by the Appellant in the presence of a qualified witness, was signed in Auckland and returned, and lodged for registration on 2 May 2006.

Testimony of Shabnam Suliman

[29] The fifth witness for the Appellant was Shabnam, the daughter of the Appellant. She testified that the Appellant gave the Power of Attorney to Nazir to have access to the property, and that the Appellant informed Mr. Chandra that she did not want to sell the property. In cross-examination she said that she had not seen Nazir since April 2006, at which time he was in Sydney. The Appellant lived with her in Auckland, and she denied that the Appellant had to sell the property to meet her medical expenses.

The testimony of the 1^st Respondent

[30] The 1^st Respondent testified on his behalf. He said he had known the Appellant’s entire family from the time he came to Fiji in April 1990, they treated him as a member of the family, and the Appellant’s children referred to him as ‘brother’. He was aware that after the Appellant’s husband died, she migrated to New Zealand, (RHC 588).

The meeting on 26 April 2006 and the offer to buy the property

[31] The 1^st Respondent said that on 26 April 2006, the 2^nd Respondent came to his office with the Appellant. The Appellant was too sick to come up to his office, so he came down and met her in the car park. They were meeting for the first time since the Appellant had left for New Zealand in 2001. The Appellant had told him that she was ill, and needed to undergo an operation without delay. The 1^st Respondent said that however, they could not communicate much as the Appellant did not know much English, and the 1^st Respondent did not know much Hindustani. A short while later, the 1^st Respondent took the Appellant to the iLTB office because the 2^nd Respondent wanted to meet a prospective buyer there. They met a man there from whom the 2^nd Respondent demanded a deposit, but the prospective buyer refused and the deal fell through. On the way back to the 1^st Respondent’s office, the 2^nd Respondent told him that “they” were trying to sell the house, and asked the 1^st Respondent to buy it, and told him that he would sell it at a ‘special price’ because they needed the money urgently (RHC 593). However, the 1^st Respondent told him he was not ready to buy the house. Eventually, ‘they’ agreed on a price of $130,000 of which he paid as requested, $40,000 as a deposit in cash to Nazir.

The meeting in the office of Lateef & Lateef- the execution of the Sale & Purchase Agreement

[32] During the next two days the 1^st and 2^nd Respondents communicated by telephone, and two days later, on 28 April 2006 the 2^nd Respondent and he went to the office of Lateef and Lateef and entered into a Sale and Purchase Agreement (“SPA”), which had been prepared by Lateef and Lateef. He identified his signature on Exhibit D11, the SPA. There were two signatories, one was the 1^st Respondent’s, the other was that of the Second – Named First Respondent, who 1^st Respondent referred to as his ‘financial supporter’. He testified that he had paid stamp duty of $ 2600 (Exhibit D10), He testified that he paid the cash deposit of $40,000 to the 2^nd Respondent. After the SPA was signed, the Appellant and the 2^nd Respondent left Fiji for New Zealand. The testimony is as follows:

Mr. V. Singh: And was the Plaintiff still in Fiji at the time?

Mr. Kwon : Yes, they left 30^th April, going back to New Zealand.

[33] The Sale and Purchase Agreement (RHC 672) dated 28 April 2006, describes the Appellant as the vendor. It was signed by the 2^nd Respondent as the ‘lawful Attorney ‘of the Vendor. The Agreement provided for the balance $90,000 of the purchase price to be paid on or before 30 June 2006. This was then paid on 19 May 2006 via Electronic transfer from South Korea to the 2^nd Respondent’s bank account in Australia. On being cross-examined about proof of payment for the purchase, he said that the 2^nd Respondent’s Statutory Declaration was valid and sufficient evidence of payment.

The Judgment of the High Court

[34] Having heard the several witnesses who testified before him, the learned trial Judge found (at paragraph 46 of his judgment) that;

“46. A Solicitor Mr. Chandra has confirmed the mark of the Plaintiff was made to the PA in his presence and she appeared to fully understand the meaning and effect thereof.”

[35] The learned trial Judge arrived at the conclusion that the statement of Mr. Chandra was sufficient to cut across the Appellant’s case, the fundamental basis of which was that the very same Power of Attorney had been obtained by fraud. The learned Judge then went on to consider the contents of the said Power of Attorney and held that it continued to be valid because notice of its revocation had not been received by the 2^nd Respondent. The learned Judge went further and in paragraph 48 of the Judgment held that the Power of Attorney was ‘still valid and effective’. The basis of the learned Judge’s finding was the words contained in the Power of Attorney which stated as follows:

“AND I HEREBY FURTHER DECLARE that this Power of Attorney remain in full force and effect until due notice of our death or other revocation shall be actually received by my attorney and that no person or persons or corporation or corporations dealing with my attorney shall be concerned to see or enquire as to the propriety or expediency of any act deed matter or thing which my attorney may do execute or perform or purport to do execute or perform in my name be(sic) virtue of these presents”( emphasis added).

[36] The learned trial Judge held that until the notice of revocation is received by the 2^nd Respondent, the Power of Attorney continued to remain valid. In my view such an interpretation amounts to giving the grantee of a Power of Attorney the opportunity to disobey the terms of the Power of Attorney and then abscond. If the receipt of the notice of revocation is to be treated as a shield for a fraudulent grantee, it would mean that a grantor would have to remain helpless until the grantee decides to surface.

[37] In my view, the clause in the Power of Attorney relied on by the learned Judge to uphold its validity, has not been included for the benefit of, or to protect a dishonest grantee. It is included to protect an honest grantee who acts in good faith, and to prevent him from being placed in a position where he is taken by surprise and left without a remedy should the grantor(principal) revoke the Power of Attorney suddenly and unannounced, thus leaving him vulnerable and answerable to third parties with whom he acted contracted with in good faith. It certainly cannot be regarded as a shield for a fraudulent grantee, as was the case here. If the view of the learned trial Judge were to prevail, it would mean that the 2^nd Respondent continues to have authority under the impugned Power of Attorney, as long as he absconds. This cannot have been the intention of the grantor, and does not reflect the law.

[38] In my view, the law will not condone or protect such a grantee of a Power of Attorney, who in law is regarded as a trustee who has a fiduciary relationship with the grantor. Therefore, upholding the Power of Attorney until the notice of revocation is received, is not justified. Thus, the basis of the judgement is untenable, and the judgement must be set aside.

The Grounds of appeal

[39] The grounds of appeal urged by the Appellant are reproduced below:

1. That the Learned Trial Judge erred in law and in fact in allowing a continuation of hearing without ordering fresh hearing upon realising the conflict of interest issue against the Appellant original Solicitor, Mr Suresh Chandra, which was prejudicial to the Appellants’ case;
   
2. That the Learned Trial Judge erred in law and in fact in holding that the second Respondent had validly and effectively conveyed the property to the first Respondents when the Power of Attorney in question was validly revoked by the Plaintiff, registered at the Registrar of Deeds Office and without considering the undisputed letter dated 30^th June 2006 to the First Respondents from Maharaj Chandra Associates;
   
3. That the Learned Trial Judge erred in law and in fact in holding that the second Respondent has the power to sell the property without considering the undisputed evidence of abuse of power, bad faith, inconsistent act, fraud against the 2^nd Defendant, without strictly construed the Power of Attorney and without taking into account Section 115 of the Property Law Act;
   
4. That the Learned Trial Judge erred in the law and in fact in not considering the doctrine of indefeasibility of title of the Appellant under the Torrens System;
   
5. That the Learned Trial Judge erred in law and in fact in relying and accepting the Sale and Purchase Agreement and statutory declaration of the Second Respondent as evidence of sale, without an opportunity for the Appellant to cross-examine the Second Respondent on the statutory declaration;
   
6. That the Learned Trial Judge erred in law and in fact in not taking into account Judgment previously entered against the Second Respondent and finding no evidence of fraud with regard to the obtaining of the Power of Attorney No. 45175 and no evidence of conspiracy or fraud between the First Respondents and the Second Respondent;
   
7. That the Learned Trial Judge erred in law and in fact in not allowing the counsel for the Appellant to cross-examine the First named Respondent on the Receiving Order advertisement disclosed in the Plaintiff’s Bundle of Documents and the e-mail of 19 September 2006 from Mere Tabuya disclosed as Documents No. 3 on the First Respondents Bundle of Documents;
   
8. Such further grounds of appeal as may be added upon receipt of record/ judges noted of the court.
   

The first ground of appeal –Conflict of interest and resultant prejudice

The Appellant’s position-

[40] The essence of this ground is that despite the learned Judge himself realizing and acknowledging the conflict of interest on the part of the Appellant’s Counsel, he failed to exercise his discretion to prevent the continuation of the hearing of the trial. The Appellant contends that the allowing Mr. Chandra to have led her examination-in-chief on the first date of trial, resulted in the failure to elicit the relevant evidence to establish her claim, and that this was unfair and prejudicial to the Appellant’s case.

(RHC 413).

[41] The record showed that the learned Judge was aware that it was the contents of the Power of Attorney prepared by Mr. Chandra himself that was under challenge by the Appellant, (RHC, 402, 403, 413, 475). The Appellant’s position in her Statement of Claim was that the Power of Attorney was fraudulently obtained. The record on page 408 shows that Learned Judge even questioned Mr. Chandra on how he, as a Solicitor prepared another Power of Attorney when he knew that the first power of Attorney given to the Appellant’s daughter Shabnam, which Mr. Chandra himself had prepared and registered in 2001 was still in existence at the time he prepared the second Power of Attorney in favour of the 2^nd Respondent. Consequently, the Appellant contends that despite realizing the prejudice and potential prejudice being caused to the Appellant’s case by permitting Mr. Chandra to continue as Counsel, the learned trial Judge allowed the Hearing to proceed, which resulted in an unfair trial. During the hearing of this appeal, learned Counsel for the Appellant submitted to court that the Appellant’s evidence was not properly led.

Resumption of trial on 27 February 2017

[42] The other aspect of the first ground of appeal is that even after the change of Counsel and trial resumed on the 27 February 2017 a (RHC 482), the Appellant’s new Counsel took over for the Appellant, the Learned Judge indicated that the Appellant had already started giving evidence, and continued to ask for the availability of the next witness, thereby indicating that evidence was not to be led afresh, but that t eh trial had to continue with the evidence already recorded. The record shows that the learned Judge directed the Defence counsel to continue with the cross examination of the Appellant, (RHC, 485). In these circumstances, the Appellant contends that in view of the prejudicial evidence contained in the record due to the fact that her evidence in chief had been led by Mr. Chandra, trial should have commenced de novo, and the failure to order that amounted to an error of law.

Conflict of Interest as a ground of court – ordered disqualification

[43] Writers have this to say in respect of court-ordered disqualification for conflict of interest:

“The most – common ground for court-ordered disqualification is conflict of interest. Courts have been most responsive to claims that the moving party might suffer prejudice because opposing counsel obtained relevant confidences while representing the moving party in a prior matter. A major advantage of disqualification, therefore, is that it eliminates counsel who is likely to have an unfair advantage gained through violation of ethical rules.” (Understanding Lawyers’ Ethics, Monroe Freedman & Abbe Smith, para. 9.12, Lexis Nexis, Fourth Ed. 2010).

Conduct that “tends to taint the trial”

[44] The same writers go on to formulate the test as follows:

“Recognizing that avoiding prejudice is the most important concern in litigation, some courts make disqualification turn upon whether the attorney’s conduct “tends to taint the trial, “as where the attorney is ‘at least potentially in a position to use privileged information concerning the other side [obtained] through prior litigation. (emphasis added). (Cited in Lawyers’ Ethics, Monroe Freedman & Abbe Smith, para. 9.12, Lexis Nexis, Fourth Ed. 2010).

[45] The admissions recorded in the Pre-Trial Conference Minutes, particularly 1.2 reproduced in paragraph [25] of this judgment shows that a specific admission was recorded that the Appellant gave the 2^nd Respondent a Power of Attorney which included the power to sell the house. This is diametrically at variance with the Appellant’s evidence, the evidence of her daughter Shabnam, and the fundamental premise of the Appellant’s case. If the Solicitor was acting fairly on her instructions, such an admission could not have been recorded. It was this admission, that eventually became the foundation of the judgment of the learned Trial Judge who held that the Power of Attorney remains valid until notice of revocation is actually received by the grantee.

The Respondent’s position

[46] In this regard the Respondent contended that, the Appellant had elected to allow her Solicitor, Mr.Chandra, to withdraw as Counsel in August 2016, and engaged a new Solicitor, Pita Niubalavu, to represent her, elected to call her former Solicitor Mr. Chandra, as a witness on her behalf at the continuation of the trial on 27 February 2017, and she failed to move the court for a fresh Hearing. The Respondent thus contends that the Appellant’s conduct precludes her from pursuing this ground of appeal.

[47] Whilst it is true that the record does not reveal that the Appellant made an application for a fresh hearing, in my view the cumulative effect of all these factors and circumstances reflect that the Appellant was prejudiced by a conflict of interest that tainted the fairness of the trial.

[48] The conduct of the 2^nd Respondent before and after the execution of the purported transfer to the 1^st Respondent, taken in conjunction with the Appellant’s evidence established that she believed that the Power of Attorney given to the 2^nd Respondent covered only the power to manage the property. However, the way in which the Appellant’s evidence was led, and the answers elicited, the fact that much of the examination -in- chief was led by Mr. Chandra, in the light of the fact that the substantial matter in issue was the contents of the Power of Attorney prepared by him, prepared it, which was used by the 2^nd Respondent to execute the purported transfer to the 1^st Respondent, did result in prejudice being caused to the case of the Appellant. Despite the change of Counsel, the new Counsel had to continue from where Mr. Chandra left off, thereby negating the very reason for the withdrawal of Mr. Chandra. In the circumstances the Appellant was prejudiced by the learned Trial Judge, not ordering the appellants evidence to be led afresh after the new Counsel took over. For the foregoing reasons, I am satisfied that the first ground of appeal has merit, and therefore I allow the first ground of appeal.

The Second and third grounds of appeal -validity and revocation of the Power of Attorney

[49] The essence of this ground of appeal is that the Learned Trial Judge erred in law and in fact in holding that the conveyance from the 2^nd Respondent to the 1^st Respondent was valid, despite the valid revocation of the Power of Attorney to the 2^nd Respondent, and the failure to consider the effect of the letter dated 30^th June 2006 sent by Maharaj Chandra Associates (RHC 326) to the 1^st Respondent, the receipt of which was not disputed. In examination- in - chief the Appellant admitted that she gave a Power of Attorney to the 2^nd Respondent but that it was for the limited purpose of managing the property (RHC 420, 421, 456, 465) This is confirmed by the evidence of Mr. Chandra.

[50] In arriving at the conclusion that the 1^st Respondent was fraudulent in relying on the purported Power of Attorney given to the 2^nd Respondent, and that the 2^nd Respondent was fraudulent in the manner in which the obtained the said Power of Attorney, I am guided and fortified by the decision of this court in Lok v Balram [2012] FJCA 92; (30 November 2012), in which this Court (Calanchini AP, Chandra JA and Kotigalage JA) had to consider the allegation of fraud in respect of indefeasibility of title under the Torrens System. In that case, the court was concerned with the allegation of the abuse of a Power of Attorney. The court said:

“39. Although it was strenuously argued on behalf of the Appellant that there was no proof of fraud, the above circumstances regarding the conduct of the Appellant fall in line with the scope of fraud in relation to land transfer under the Land Transfer Act as coned by Justice Jiten Sten Singh in Deo Narayan and Ar v Sigamani and Others (2008) FJHC 20re the definiefinition assigned to fraud in&d in Assets Co. LMere Roihi aihi ahers<160;[1905] A.C. 1.C. 176 where the Privy Council stated that fraud meant actual fraud, i.e. i.e. dishonesty of some sort and not what is c constructive fraud or equitable fraud, was applied.

40. In Waimiha Sling Co. Ltd v td v Waione Timber Milling Co. Ltd. [1926] A.1 the Privy Counciouncil again dealing with the issue of fraud concluded that fraud is sugge of some act of dishonesty. It was further held that if thif the designed object of a transfer is to cheat a man of a known existing right that is fraudulent. The conduct and actions of the Appellant in my view as set out above would clearly fall in line with this proposition.

42. As stated above I agree with the conclusion reached by the learned trial Judge that the Appellant had fraudulently executed the impugned transfer deed in his favour and therefore the Torrens System does not come to his rescue to safeguard the registration of the deed even though it has been registered in the Register of Titles. I state further that the concept of indefeasibility of title under the Torrens System should not be allowed in instances where a deed is declared to be void ab initio as in the present case.

43. As a matter of observation, it was the position of the 2nd Respondent before the High Court that the registration of the Transfer Deed in favour of the Appellant was lawfully registered as the Caveat filed by the 1st Respondent was ineffective when the Transfer Deed had been tendered for registration. Although this would be so prima facie, the finding of fraud in relation to the said Deed of transfer would make the registration of same devoid of any legal validity as decided by the learned trial Judge. (emphasis added).

[51] The 1^st Respondent’s defence is that he relied on the Power of Attorney obtained by the 2^nd Respondent, he was not bound to examine its genuineness, he is a bona- fide purchaser and therefore he has good title. However, the Appellant’s case is that the said Power of Attorney itself is of no effect because it was obtained by fraud, and despite the availability of evidence of fraud and abuse of power, the learned Trial Judge erred in law and in fact, when he failed to find fraud on the part of the 2^nd Respondent, and held that the 2^nd Respondent had the power to sell the property.

Validity of the Power of Attorney given to the 2^nd Respondent

[52] In considering the Second and Third grounds of appeal, I think it necessary to first consider the validity of the Power of Attorney in the light of the pleadings and evidence which disclosed that the Power of Attorney was obtained fraudulently.

[53] In arriving at the finding that the Power of Attorney given to the 2^nd Respondent was obtained by fraud, I have considered the evidence of the Appellant, her daughter Shabnam, and Mr Chandra. I set out below some extracts of such evidence, on which I base my conclusion that the Power of Attorney in favour of the 2^nd Respondent was obtained by fraud.

‘Judge: Alright, so now the title has been exhibited, are you now going to exhibit the Power of Attorney?

Mr Chandra: I think I will give a sample, the plaintiff says that it is true, yes true, that power.

Judge: Where is the Power of Attorney?

Mr Chandra: I have it here, Sir, but that doesn’t read upon by the both parties that its not disputed. So, that is why it may not be necessary to exhibit it. (RHC 405)

Mr Chandra: 5^th December 2001, you give the Power of Attorney in 2001?

Ms Mati : I admit I gave the power but I don’t recall the date.

Judge: I gave Power of Attorney to Shabnam?

Mr Chandra: Yes. Did you give that Power of Attorney to Shabnam before you gave it to Nazir?

Ms Mati: I gave to Shabnam first. (RHC 407)

Mr Chandra: And what was Shabnam supposed to do.

Judge: Alright, just hold on, now this Power of Attorney to Shabnam on November, 2001, when the revocation of, this one to Nazir was in 2006. When was the Power of Attorney to Nazir revoked?

Mr Chandra: It was revoked on 2^nd May 2006. (RHC 408)

Judge: So the Power of Attorney was given to Nazir in 2006, he has the Power of Attorney to Shabnam being revoked or what is still in existence?

Mr Chandra: It was still in existence.’

Judge: Then how was it that you as a Solicitor, or both made the second Power of Attorney when you knew the first one was still in existence?

Mr Chandra: Well that can be done, Sir. (RHC408)

Judge: So, yes but its strange that you have two Power of Attorney covering the same property.

Mr Chandra: Well, it’s not the same property Sir, it does not link to the property, but it is a general power given to the Attorneys.

(RHC 410).

Judge: I think Mr Suresh Chandra, you might get your act in order, you are the one who is signing here saying that I certify the contents read over and explained to her in the Hindustani language.

Mr Chandra: Yes.

Judge: That she appear fully to understand the meaning and effect thereof.

Mr Chandra: Yes Sir. But the point that I am trying to raise is that the Power of Attorney that she gave to her daughter has the same Power of Attorney as given to Nazir Husssein upon understanding that the property was to be managed.

Judge: ....[inaudible] ... usually think whether you are a witness or a counsel because the authority show where it tell you it cannot be both witness and counsel. Are you a witness or a Counsel?

Mr Chandra: Sir, in this case, I am the Counsel but the document was a conveyancing document. We only acted at the time for the plaintiff. The Certificate that is signed Power of Attorney is a requirement under the Land Transfer Act that it cannot be registered unless a Solicitor signs that.’

(RHC 413)

[54] As will be seen from the evidence that had transpired, it is clear that the Appellant was unaware that the Power of Attorney given to the 2^nd Respondent authorized him to transfer the property, it was not properly explained to her, and that she did not consent to a general Power of Attorney being given to the 2^nd Respondent. The fact that Mr Chandra himself testified that the Power of Attorney given to the 2^nd Respondent was explained to the Appellant in English, in my view corroborates the allegation of the Appellant that she did not know that it permitted the 2^nd Respondent to transfer the property. Mr. Chandra’s answer to court, that he explained the contents of the Power of Attorney to her in English in 2006, because she was able to understand English, is in stark contrast to the reality of what happened at the trial in 2016, when the Appellant’s testimony was given in Hindustani with the assistance of a court translator, because the Appellant did not have a sufficient knowledge and understanding of English. This fact is borne out by the proceedings.

‘Judge: You are explaining it to her, explain as I am saying, it is amazing to me that in 2001 you are explaining the Power of Attorney to her in Hindustani.

Mr Chandra: Yes, Sir.

Judge: Then in 2006 you are explaining it to her in English language?

Mr Chandra: There are two Power of Attorneys and I don’t remember which one you are referring, My Lord.

Judge: The one to Shabnam, you were explaining it to the donor in Hindustani?

Mr Chandra: That’s right.

Judge: The one to Nazir, you were explaining to the donor in English?

Mr Chandra: It’s two different times, Sir but I think the period is about 5 years of difference between the two Power of Attorneys, it depends on which language they wanted to be explained and that was done in fact like that.

Judge: So, in 2006 she understands English perfectly?

Mr Chandra: What perfectly I don’t understand, Sir, but she did understand English’. (RHC 414)

‘Mr. V. Singh: So, Madam, what Mr Chandra is saying here today is that he explain you power of Attorney including the power given to Nazir to sell?

Ms Bibi: I don’t recall. (RHC 464)

Judge: Now you identified this as your... (in audible) ...thumb print. Did you know that you are giving Nazir the power to sell the property?

Ms Bibi: Not to sell. (RHC 464)

Mr V. Singh: Now Madam do you know whether your son has received any money from the sales of the property?

Mr. P. Niubalavu: Witness said must have received but never mentioned.

Judge : She has already answered the question.

Mr. V. Singh: Her answer was, he must have received the money’.

(RHC 494)

[55] Mr. Chandra in evidence at page 552 of the Record confirmed that the purpose of preparing the Power of Attorney to the 2^nd Respondent was that the Appellant intended somebody to look after her property in Fiji. Mr. Chandra said that:

“Yes, the Plaintiff (Appellant) actually explained to me that this Power of Attorney only for Nazir Hussein (the 2^nd Respondent) to look after and manage the property.” (RHC 556).

[56] The Appellant testified further that she was not aware of the sale of the property, and she did not receive any money from its sale. The 2^nd Respondent was un-contactable and was not responding to phone calls. (RHC 422).

[57] The Appellant’s daughter, Shabnam testified that the Power of Attorney given to her in 2001 by the Appellant was for the purpose of looking after the house and all matters associated with it such as collecting rental. The rent was deposited into the Appellant’s account. The top floor of the house was rented and the bottom flat was occupied by the Appellant and her late husband. The rent was deposited in the Appellant’s account at ANZ Account in which the appellant was the main account holder and Shabnam was a joint account holder. (RHC 571-572).

[58] It was later that Shabnam discovered that $2,500.00 had been withdrawn from the Appellant’s account at the Laucala Beach branch account and that she had no access anymore to the said account because there was a new Power of Attorney with the Bank. (RHC 574).

[59] Shabnam then inquired from the Appellant whether she had given the 2^nd Respondent a Power of Attorney, and the Appellant had told her that the he wanted the Power of Attorney without which he would be unable to enter the property and talk to the tenant. She therefore placed her thumb print on a document. (RHC 574).

[60] In my view, this testimony shows that even at the time the Appellant placed her thumb print on the purported Power of Attorney she was unaware of the significance of the document and its connection to the management of her property. It appears that it was only when the withdrawal of money from the bank was discovered, and she received information that her property was to be sold that she as well as Shabnam realized that what had been previously signed in the Solicitor’s office was the purported Power of Attorney in favour of the 2^nd Respondent. This is evident from the testimony of Shabnam at RHC 575 where she said that she discovered the existence of the purported Power of Attorney only later.

[61] In cross-examination, Shabnam maintained that the 2^nd Respondent did not answer her telephone calls and therefore the Appellant telephoned Mr. Chandra who confirmed that the 2^nd Respondent was in Fiji and was trying to sell the house. (RHC 581).

[62] In cross-examination, Shabnam rejected the suggestion that made by the learned Counsel for the 1^st Respondent that the Appellant sold the property because she needed funds for her medical expenses.

[63] In my view, the evidence had established that the General Power of Attorney had been obtained by deception, misrepresentation and fraudulent means, and therefore it is null and void and of no force or avail in law. Accordingly, the 2^nd Respondent had no legal right or power in law to alienate the Appellant’s property.

Conduct of the 2^nd Respondent

[64] The conduct of the 2^nd Respondent in obtaining the Power of Attorney could be described as dishonest. He misrepresented to his mother that he was unable to enter and have access to the property, and therefore could not look after it unless she gave him a Power of Attorney. He secretively negotiated the sale of the Appellant’s property with the 1^st Respondent, accepted an advance cash deposit of $40,000, appropriated it to himself, went with the 1^st Respondent to the office of the Solicitor for the preparation and signing of the purported transfer of the Appellant’s property, whilst keeping the Appellant out of the entire process.

[65] After having signed the transfer documents on 28 April 2006, he left Fiji on 30 April 2006 for New Zealand with the Appellant. I am satisfied on the evidence that the Appellant was totally unaware of the deception that had been practiced on her by the 2^nd Respondent. It was only when she received information from Fiji that her house had been sold, that she telephoned her Solicitor Mr. Chandra from New Zealand. Mr. Chandra had advised the revocation of the Power of Attorney. All efforts on the part of the Appellant and Shabnam to contact the 2^nd Respond failed. He ceased to communicate with the Appellant, on whose behalf he claimed to act. Mr. Chandra took steps to revoke the Power of Attorney. Having obtained the Power of Attorney, the 2^nd Respondent sold the property, and absconded with the proceeds of the sale, thus corroborating the Appellant’s position that the 2^nd Respondent’s conduct was fraudulent from the beginning.

[66] On a consideration of the evidence of the Appellant, her daughter Shabnam and the evidence of Mr. Chandra, who did admit that the Appellant’s wish (and therefore her instructions to him), was to permit the 2^nd Respondent the authority to manage her property, I accept the evidence of the Appellant that she did not grant the 2^nd Respondent the authority to sell her property, and that the Power of Attorney given to the 2^nd Respondent was obtained by fraud.

[67] For the foregoing reasons, I hold that the purported Power of Attorney number 45175 dated 27^th March 2006, in favour of the 2^nd Respondent was obtained by fraudulent means, and is of no force or avail in law. Therefore the 2^nd Respondent did not have the power to transfer the Appellant’s property. In view of my findings set out above, the matters raised in ground 2 of the appeal do not require determination. For the foregoing reasons, ground three of the appeal is allowed.

The fourth ground of appeal - indefeasibility of title under the Torrens system

[68] The Appellant contends that as the registered owner, the protection of indefeasibility accorded to her under the Torrens system is not removed or displaced by the purported registration of the impugned transfer in favour of the 1^st Respondent, and that this principle of law was overlooked by the learned trial Judge. In my view, the Appellant’s complaint is well-founded.

[69] Despite the numerous judgements on the Torrens System, the following exposition is a useful summary:

“More succinctly, the Torrens system is a system of “title by registration”, as distinct from “registration of title” under the old system. Title under the Torrens system derives from Registrar General’s actin registering an instrument- the act of a statutory official acting under statutory authority- not form the parties’ act in executing the instrument. Commonwealth v State of New South Wales (1918)25CLR 325 at 342; Hemmes HermitagePty Ltd v Abdulrahman (1991)22 NSWLR343 at 344-345. IN doing so the Torrens system substitutes£ conveyance by registration for conveyance by deed”. Clements v Ellis [1934] HCA 18; (1934) 51 CLR 217 at 232 per Rich J. Registration is the source of title- it confers on the person registered as proprietor a title that did not previously exist. Peldon v Anderson [2006] HCA 48; (2006) 227 CLR 471 at [20]. (Cited in Land Law, Peter Butt, Thomson Reuters, Sixth Ed, 2010, paragraph 21-12, p.751).

[70] The effect of registration provided in section 37 of the Land Transfer Act Cap 131, confers conclusiveness of title and priority, but this is subject to the provisions of the fraud exception contained in section 41 of the Act.

[71] In Assets Co Ltd. v Mere Roihi [1905] UKLawRpAC 11; [1905] AC 176 at 210, the Privy Council, in explaining the meaning of ‘fraud’ in early New Zealand Torrens Registration held that:

“By fraud is meant actual fraud, that is, dishonesty of some sort, not what is called constructive or equitable fraud- an unfortunate expression and one very apt to mislead, but often used, for want of a better term, to denote transactions having consequences in equity similar to those which flow from fraud. Further, the fraud which must be proved in order to invalidate the title of the registered purchaser for value ... must be brought home to the person whose registered title is impeached or to his agents. Fraud by persons from whom he claims does not affect him unless knowledge of it is brought home to him or his agents. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shown that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different and fraud may be properly ascribed to him.” (Emphasis added)

[72] Text writers say that:

“The significance of the last two sentences of this extract is that “wilful blindness” to the presence of fraud- an abstention from enquiry for fear of learning the truth- is tantamount to actual fraud’. Young v Hoger [2001] QCA 453; (2001) Q Conv R 54-557 at 11 (cited in Land Law, Peter Butt, Thomson Reuters, Sixth edition 2010).

[73] It will not assist a purchaser who has notice that the vendor does not have title, and. In this case the evidence of the 1^st Respondent (RHC 586–615) reveals that the 1^st Respondent was very well known to the Appellant and her children including the 2^nd Respondent. The 1^st Respondent’s testimony which has been summarized in paragraph [31] of this judgment establishes that he knew that it was the Appellant who owned the property, and not the 2^nd Respondent, and that his conduct amounted to fraud. When the 2^nd Respondent was negotiating with the 1^st Respondent to transfer the property, he told him that he would give him a bargain.

“Mr. V. Singh: So you told him you were not ready to buy the house, what happened next?

Mr. Kwon: Then he nearly, you know the bargain price, the, you know nearly come down that’s why you know we emerged it to you know $130,000. Then he just asked me buy this amount, you, if you can pay me cash $40,000 then so.

Judge : Slowly, so you agreed on the price of 130?

Mr. Kwon: Yes. 130,000”

[74] The extract of the testimony reproduced above reveals that the 1^st Respondent had knowledge that he was getting an unconscionable bargain, it was described to him at that, the property belonged to the Appellant, and she was excluded from the entire transaction. The 1^st Respondent also testified that the 2^nd Respondent asked for a deposit of $40,000 and on 28 April 2006 took him to the office of Lateef & Lateef and made a Sale and Purchase Agreement, that he paid $40,000 in cash direct to the 2^nd Respondent, and the balance was deposited from Korea into the 2^nd Respondent’s account in Australia in May 2006.

[75] The 1^st Respondent was unable to prove that he had paid money for the property. Instead, he relied on the Statutory Declaration of the 2^nd Respondent. Although the 1^st Respondent said that money was paid, he said it was paid by someone else on his behalf, whom he called his ‘financial supporter’. It is relevant that by a letter dated 30^th June 2006 (RHC 326), the Appellant’s Solicitors wrote to the 1^st Respondent that the Power of Attorney given to the 2^nd Respondent had been revoked. The 1^st Respondent himself testified that he moved into the property in May 2006, after he pad the deposit of $40,000. This letter states as follows:

“We act on the instructions from Phul Mati aka Feroza Bibi who is the registered proprietor of the above property.

Our instructions are that Nazir Hussein’s authority to manage the property has been cancelled therefore any dealings with the landlady shall be dealt with by our firm.

Our further instructions are that you pay all rent with immediate effect into our office, we shall give you the receipt of the same.

If you continue to pay rent to Nazir or at his instructions we have instructions to give you Notice to vacate.

Please contact Mr. Chandra if you have any enquiries”

[76] Several matters emerge from this letter: It was written after Mr. Chandra said that he had tendered the notice of revocation of the Power of Attorney on 2 May 2006, if that was so, he could not have referred to the 2^nd Respondent’s authority as authority to manage the property, when he knew well that he had executed a general Power of Attorney; despite the contents of the letter the 2^nd Respondent took no steps to ascertain the truth of the matter, nor did he take steps against the 2^nd Respondent, instead he continued to live on the property. When the subsequent conduct of the 1^st and 2^nd Respondents, the contents of the emails, (RHC 299-307) between the 1^st Respondent and his Solicitor and the evidence of the 1^st Respondent that he was in continuous communication with the 2^nd Respondent are considered, the cumulative effect is that the 1^st and 2^nd Respondents clearly acted in concert with stealth, to fraudulently deprive the Appellant of her lawful title in the property.

[77] The 1^st Respondent relies on the tender of the transfer document for registration as being sufficient evidence of indefeasible title. However, the mere tendering of the document of transfer for registration could not have given title to the transferee, until registration is effected. For the reasons set out in this judgement, the registration effected by the 3^rd Respondent after the delivery of the judgment of the High Court, has no effect in law. Therefore, the 1^st Respondent has been in unlawful occupation of the property from May 2006.

[78] Although this court is not bound by it, it is now relevant in this regard to refer to the order made by this court when it had to consider the application for the grant of the injunction restraining the registration of the transfer to the 1^st Respondent. One reason, I refer to this is because the response of the 1^st Respondent to the fourth ground of appeal is similar to the position taken by the 1^st Respondent court below at the time the application for the injunction was considered.

[79] In regard to the issue of indefeasibility of title, this Court in its Judgment delivered on 3 July 2008, held that; -

“18. The appeal was heard on 25^th June, 2008 at the hearing, Ms Narayan, counsel for the appellant submitted that the appellants became the new registered proprietors from the date the Registrar of Titles accepted the transfer for registration which in this case occurred on 22^nd June 2006 and for that reason the balance of convenience was in their favour.

19. ............
20. ...........
    
21. A search of title to the property shows Bibi to be the registered proprietor and after that the only other recording of any dealing affecting the title is the caveat lodged on her behalf. Thus, the last two recordings in the memorial of the title are the name of the registered proprietor which is Bibi and the caveat.
    
22. If the appellant’s submission were correct and they were to be regarded as the registered proprietors from the date of the Registrar’s acceptance of the transfer, one may legitimately ask what would happen to the interest of the original registered proprietor, namely, Bibi.
    
23. Havoc would follow in the administration of titles in the Torrens system which is designed to protect the registered proprietor.
    
24. In the Torrens system of title, registration is the central plank upon which ownership of land is based. Section 21(1) of the Land Transfer Act Cap 131 shows the importance of registration. It provides:
    

“21. (1) Every instrument of title shall be deemed and taken to be registered under the provisions and for the purposes of this Act as soon as the same has been signed by the Registrar and marked with a serial number in the register, and every instrument purporting to transfer or in any way to affect land subject to the provisions of this Act, or any estate or interest therein, shall be deemed to be so registered as soon as memorial thereof as herein described had been entered in the register upon the folium constituted by each existing instrument of title affected by such dealing.”

25. In effect, s.39 provided that the title of the registered proprietor is only subject to those matters recorded in the register or in the exceptions contained in paragraphs (a), (b) and (c). There are no contrary interests recorded on the register and the exceptions in paragraphs (a), (b) and (c) do not apply. Therefore, Bibi’s title is unaffected by any other interest.

26. Provisions such as s. 39 are regarded as giving the registered proprietor indefeasibility of title and are common in all jurisdictions where the Torrens system of title operates: for example, see s. 42(1) of the Real Property Act 1900 (NSW)
27. That title is only created by registration is clear from the provisions of s. 37 which pes:

"37. No instrument until registered in accordance with the provisions of this Act shall be effectual to create, vary, extinguish or pass any estate or interest or encumbrance in, on or over any land subject to the provisions of this Act, but upon registration the estate or interest or encumbrance shall be created, varied, extinguished or passed in the manner and subject to the covenants and conditions expressed or implied in the instrument."

28. If it were otherwise, the system of title administration would be thrown into utter chaos.
    
    29. In the present case, the transfer which had been lodged for registration on 22nd June, 2006 was not signed by the registrar nor did it bear any serial number. It was not entered in the memorial.
        
    30. At the time of the lodgement of the transfer the memorial of title to the property disclosed that the transfer by which Bibi became the registered proprietor was signed by the registrar and numbered 145035.
        
31. No grounds were submitted to the court upon which the appellants could impeach Bibi’s registered title other than the fact that a transfer in favour of the appellants had been lodged and accepted by the Registrar on 22nd June, 2006. This is not a valid ground upon which Bibi’s title could be impugned.
    
    32. It is unfortunate that the first defendants paid $130,000.00 by reason of Nazir Hussein’s fraud and are not able to enjoy ownership of the property. Regrettably, there is invariably an innocent victim in a fraudulent scheme and in this case, they are the first defendants
        
    33. Be that as it may, we are of the view that Bibi’s registered title enjoys the indefeasibility afforded to it by the fact of registration pursuant to the relevant provisions of the Land Trr Act Cap 131 a160;and cannot beated by a by any equitable interest of the appellants arising from the unregistered transfer.” (Emphasis adder>

The 1^st Respondenondent’s position

[8

[80] The Appellant relies on the doctrine of indefeasibility to protect her title. In reply the 1^st Respondent states that although the Appellant did have indefeasible title to the property, when she then gave the 2^nd Respondent a Power of Attorney to deal with her title to the property, and the 2^nd Respondent then dealt with the title to the Property and sold the Property to the 1^st Respondent, the Appellant’s title ceases. The 1^st Respondent therefore contends since the dismissal of the Appellant’s claim in the lower court, the 1^st Respondent was registered as proprietor of the property and now has an indefeasible title to the property pursuant to Section 39 of the Land Transfer Act [Cap 131]. The 1^st Respondent therefore contends that the Appellant’s remedy is to pursue the Default Judgment she obtained against him. In my view, this is not only a convenient and simplistic rebuttal, but is an incorrect reflection of the relevant law.

[81] Whilst this court is aware that the judgment of this court in respect of the interim injunction was delivered before the court had the benefit of hearing the evidence of the parties, for the reasons I have set out, the evidence that was before the lower court unequivocally established fraud on the part of both the 1^st and 2^nd Respondents. Registration may give indefeasibility, but that is only when the events leading to the act of registration were unimpeachable. Fraud unravels everything. Therefore, if registration was sought to be effected based on fraud, as was the case here, then registration will not give indefeasibility, and this is a well-known exception. Therefore, the 1^st Respondent’s contention that indefeasibility flows from the act of tendering the transfer documents for registration is untenable in law.

[82] The evidence reveals that when the 1^st Respondent was asked whether he was a tenant in the said property, he did not answer clearly, but he said that he moved into the property in May 2006 after he paid the deposit of $40,000.00 (RHC 600). He said that the flat upstairs was occupied by a tenant, and that he moved into the flat downstairs.

[83] On his own evidence, the 1^st Respondent had begun to occupy the property even before the ‘settlement’ of the property in his name, which he claimed had taken place on 22 June 2006. This is a factor that reflects the knowledge and constitutes fraud on the part of the 1^st Respondent.

[84] When asked whether he is in contact with the 2^nd Respondent, the 1^st Respondent replied that they are in continued contact:

“Mr. Niubalavu: Now witness when you, did you, when was the last time you contacted Mr. Nazir?

Mr. Kwon: We are in continue contact.

Mr. Niubalavu: You continued to contact him?

Mr. Kwon: Yes. He’s my brother.”

[85] An analysis of the 1^st Respondent’s evidence reveals that he knew that the Appellant was the owner of the house. According to him, the Appellant came to his office, with the 2^nd Respondent on 25 April 2006. On 28^th April 2006, the 2^nd Respondent and he went to the office of Lateef and Lateef Solicitors (RHC 594) and entered into a Sale and Purchase Agreement. The 1^st Respondent testified that he paid the deposit of $40,000.00 to the 2^nd Respondent in cash and with that money, the 2^nd Respondent and the Appellant flew to New Zealand at that time (RHC 596). The fact that he intentionally refrained from inquiring into fundamental matters such as why the 2^nd Respondent was executing the transfer when he had met the Appellant just two days prior to the transfer ( in his office on 26 April 2006) and was yet in Fiji at the time (having come over from New Zealand), she was the owner of the house, and why he had to pay the deposit of $40,000 to the 2^nd Respondent, and transfer the balance due to the 2^nd Respondent’s bank account in Australia, clearly indicated fraud on the part of the 1^st Respondent as well.

[86] In my judgment, the conduct of the 1^st Respondent both before, and after the purported transfer amount to fraud. He knew that the property was being sold to him at a grossly undervalued sum because he testified that the 2^nd Respondent told him to purchase the property at a ‘bargain’, which he did. In the light of the allegation of fraud on the part of the 1^st and 2^nd Respondents, and the conspiracy between the 1^st and 2^nd Respondents, it was incumbent on the 1^st Respondent to have produced evidence of payment. The answer for not having produced such evidence was that it was recorded as an admission in the PCM. In my view the lack of bona fides on the part of the 1^st Respondent was evident by the failure to produce such evidence, and this entitles this court to draw an adverse inference against the 1^st Respondent in this regard.

[87] Since the Power of Attorney was obtained by fraud, the 2^nd Respondent had no lawful authority to deal with the Appellant’s property, and therefore all acts and deeds of the 2^nd Respondent purported to have been done by him under the said Power of Attorney are of no force or avail in law.

[88] In the result, I am convinced that on the evidence that was before the court below, the conduct of the 1^st Respondent comes clearly within the scope of fraud. I therefore allow ground four of the appeal.

The fifth ground of appeal – the Statutory Declaration

[89] The fifth ground of appeal is that the Learned Trial Judge erred in law and in fact in relying and accepting the Sale and Purchase Agreement and the Statutory Declaration of the Second Respondent as evidence of sale, without giving the Appellant an opportunity of cross-examining the Second Respondent on the statutory declaration. In any event, in view of my finding that the Power of Attorney was obtained by the 2^nd Respondent fraudulently, and that the 2^nd Respondent had not participated in the proceedings in either the lower court or this court, negates the need for me to say anything further on this.

The sixth ground of appeal – failure to find fraud

[90] The essence of this ground is that the learned Judge erred in law and fact when:

he failed to consider the default Judgment previously entered against the 2^nd Respondent, failed to arrive at a finding of fraud on the part of the 2^nd Respondent with regard to the obtaining of the Power of Attorney No. 45175; and failed to find the existence of conspiracy or fraud between the 1^st and 2^nd Respondents.

[91] On the evidence that was available before the lower court, this ground of appeal is well-founded. The email dated 23 May 2015 (RHC 303) is telling, and establishes knowledge, and fraud on the part of the 1^st Respondent. It says:

“Thank you very much Mr. Roneil, I’ll highly appreciated your works and sort it out before the date of the case on the 1^st July 2015.

I would like to inform you that Mr. Nazir Hussain will be available to come to Fiji and do settlement with us and if any disputing among their family then that will be to their problem not me.

Whatever money received form me then share each other according to mothers will but they have transfer the ownership on my name same time.

Plz send email and keep up date my case and I’ll pay your bill when is ready.

Thanks again and hope you consider my case to settle as soon as possible.

Kind regards,

Richard Kwon.”

[92] The undisputed evidence of the long-standing friendship spanning twenty seven years between the Appellant’s family and the 1^st Respondent, the Respondent’s own admission that he was treated as a family member by the Appellant’s family, the preceding business relationship between the 1^st and 2^nd Respondents who were partners of a business they operated in New Zealand, the continuing communications and relationship between the 1^st and 2^nd Respondents even after the purported transfer was effected, and failure of the 2^nd Respondent to appear in court up to date despite a default judgment operating against him, the payment of the entire purchase price directly to the 2^nd Respondent’s bank account in Australia, are facts, which in my view establish fraud on the part of both, the 1^st and 2^nd Respondents.

[93] This ground of appeal has been substantially answered by me in the process of answering the preceding grounds of appeal. I reiterate that there was sufficient evidence before the lower court to have arrived at a finding that the impugned Power of Attorney was obtained by fraudulent means, and that there existed evidence of fraud on the part of both the 1^st and 2^nd Respondents, and that they conspired to unlawfully deprive the Appellant of her property. I therefore, and allow ground the six of appeal.

The seventh ground of appeal – procedural unfairness

[94] The Appellant contends that the Learned Trial Judge erred in law and in fact in not allowing the Counsel for the Appellant to cross-examine the 1^st Respondent on the Receiving Order advertisement disclosed in the Plaintiff’s Bundle of Documents (RHC 364), and the e-mail of 19 September 2006 from Mere Tabuya disclosed in the 1^st Respondent’s Bundle of Documents.

[95] Although the conduct of the proceedings in court is a matter for the discretion of the presiding Judge, in order for the adversarial system to operate effectively, justice and procedural fairness require that the neutral role of the Judge be the governing guideline in the conduct of court proceedings. Thus, if a party is not allowed to present its case as sees fit, subject of course to the limit that it must not abuse the process of court that could, it could, in substance amount to procedural unfairness.

[96] I observe that the in RHC 613, the questions attempted to be asked by the Appellants Counsel in respect of the emails to the 1^st Respondent, were not finally put to the witness. In my view, the said emails (RHC 303- 307), were relevant to the fact sought to be established by the Appellant, that is, the conduct of the 1^st Respondent; his continuing communications with the 2^nd Respondent. In my view, this ground of appeal is well founded and I therefore allow ground seven of the appeal.

Conclusions

[97] The conduct of the 1^st and 2^nd Respondents amounted to fraud. The Power of Attorney given to the 2^nd Respondent was obtained fraudulently. The said Power of Attorney did not correctly reflect the instructions of the Appellant. The Appellant did not intend to grant the 2^nd Respondent the authority to transfer the property. The 1^st Respondent did not acquire legal title upon tendering the transfer document for registration on 22 June 2006. As a result of this court holding that the Power of Attorney given to the 2^nd Respondent was obtained by fraud, and is void and of no force or avail in law, the transfer and the registration of the said transfer effected after the conclusion of the judgment of the High Court dated 3 March 2017, is also declared null and void and of no force or avail in law. The Appellant’s title remains unaffected, and is good and valid. For the foregoing reasons the appeal is allowed.

The Orders of the Court are:

1. The appeal is allowed.
2. The Power of Attorney No.45175 dated 27 March 2006 is declared null and void.
3. The Sale and Purchase agreement /Deed of transfer executed by the 2nd Respondent to the 1^st Respondent is declared null and void, and is set aside.
4. The registration of the subject property in the name of the 1^st Respondent is declared null and void and set aside.
5. The 3^rd Respondent is directed to remove the registration of the transfer of the subject property, in the name of the 1^st Respondent, within one month from the date of this judgment, from the Register of Titles.
6. The 1^st Respondent is ordered to vacate the subject property within three months from the date of this judgment.
7. The 1^st Respondent is ordered to pay mesne profits in a sum of $1000 per month from 1^st June 2006 until the date on which the property is vacated.
8. The 1^st Respondent shall pay to the Appellant a sum of $5000 as costs of this appeal, and $2500 as costs in the court below.
   

Hon. Justice E. Basnayake

JUSTICE OF APPEAL

Hon. Justice Almeida Guneratne

JUSTICE OF APPEAL

Hon. Justice Farzana Jameel

JUSTICE OF APPEAL