Prasad v Prasad [1993] FJHC 30; Hbc0401j.91s (22 March 1993)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

ACTION NO. 401 OF 1991

IN THE MATTER of the Property Law Act, Cap. 130

AND

IN THE MATTER of Certificate of Title No. 7602,
being allotments 2 & 3 Section XXI on D.P. 1681

BETWEEN:

CHANDRIKA PRASAD
f/n Halka of Suva, Taxi Driver.
Plaintiff

AND

JAGDISHWAR PRASAD
of New Zealand,
SANTA PRASAD
of Flat No. 4, 32 Disraeli Road, Suva and
SHIU PRASAD
of Flat No. 5, 32 Disraeli Road, Suva
all sons of Halka.
Defendants

Mr. G.P. Lala: For the Plaintiff
Mr. R. Singh: For the Defendants

Date of Hearing: 11th, 16th and 25th February 1993
Date of Interlocutory
Judgment: 22nd March 1993

INTERLOCUTORY JUDGMENT

I have before me an Originating Summons dated 27th August 1991 and a Summons for extension of Caveat issued on 10th September 1992 on behalf of the Plaintiff. In this action the parties are all brothers and hold various shares as tenants in common of a property situate in Suva on which there are ten flats erected which are either held by the parties or rented out with the proceeds of rental agreed to be shared pro-rata between the parties.

The land in question is freehold and is comprised in Certificate of Title No.7602.

The Plaintiff is the owner of one-sixth interest in the property. The First-named Defendant is also the owner of an undivided one-sixth share but he has sold his share to the Second-named Defendant Santa Prasad. They are unable to register the transfer of the First-named Defendant's share because the Plaintiff lodged a Caveat against the land on 17th July 1992 the same day on which the First-named Defendant signed in Suva and had stamped a transfer of his share to the Second-named Defendant. The First-named Defendant has made application to the Registrar of Titles for removal of the Caveat. In an affidavit sworn on 24th July 1992 the First-named Defendant states that as a result of the Plaintiff's action in lodging a Caveat the Second-named Defendant is being put to a considerable expense and has had to delay his return to New Zealand where he has been living for some thirty years. The Second-named Defendant who presently holds three-sixths of the shares in the land is prepared to buy the Plaintiff's one-sixth share at a fair market price.

On 11th February 1993 by consent of counsel for all the parties I ordered that a Mr. David Ragg of Raine & Horne Ragg & Associates (Fiji) Limited be appointed to make a sworn valuation of the property in question by 25th February to be filed in this Court no later then 26th February, the costs of such valuation to be borne by all the parties. It would appear that such valuation has not yet been filed.

In support of his request to have the Caveat extended counsel for the Plaintiff submits that each tenant as a tenant in common has an equal right with the others to the possession of the whole land. As a matter of law this is not correct. It was held long ago that each tenant in common has a distinct share in property which has not yet been divided among the co-tenants - Fisher v. Wiggs (1700) 12 Mod. 296 at 302. Those tenants in common have quite separate interests: the only fact which brings them into co-ownership is that they all have shares in a single property which has not yet been divided among them - See Megarry and Wade, The Law of Real Property, Third Edition p.408.

The Plaintiff contends that he is entitled to his share on the land being sold, and this will be on the total proceeds. It is submitted that a sale would be the benefit of the parties interested by reason of:

(1) the nature of the land;

(2) the number of the parties interested; and

(3) the whole property has erected on it large buildings divided into a number of flats.

It is therefore submitted that if the property is sold as a whole, it is likely to fetch a higher price than as single flats since physical division of the whole building is not possible.

Pemberton v. Barnes (1861-73) All E.R. 1328 is relied on for this proposition. This was a case for partition under the Partition Act 1868 in which Hatherley, L.C. held that under Section 4 of the Partition Act 1868, where the parties interested to the extent of one moiety asked for a sale, the Court was imperatively bound to give effect to such request, unless the objecting parties would purchase, under s.5, the shares of the parties asking a sale, or the Court saw some good reason why a sale should not take place.

In reply to these submissions the Defendants submitted that the Plaintiff has no right to lodge a Caveat over the five-sixth shares owned by the Defendants. They submit that the Plaintiff is entitled to lodge a Caveat only over his one-sixth undivided share. It is further submitted that the ground on which the Plaintiff seeks an extension of the Caveat namely that there is a dispute regarding the rental of the property and the Defendants not giving accounts is not a valid ground for lodging a Caveat.

Section 106 of the Land Transfer Act Cap.131 states so far as relevant that any person -

(a) "claiming to be entitled or to be beneficially interested in any land subject to the provisions of this Act, or any estate or interest therein, by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise howsoever;"

may at any time lodge with the Registrar a Caveat in the prescribed form forbidding the registration of any person as transferee or proprietor of, and of any instrument affecting such estate or interest.

In Ahmed Hussain v. Kulsum Bi and Haliman Bi, Action Nos. 384 and 385 of 1989 in a judgment which I delivered at Labasa on 30th March 1992 I discussed the nature of caveatable interests and quoted with approval some remarks of Lord Brougham in Keppel v. Bailey [1834] EngR 448; (1834) 2 My. & K. 517 at 535; 39 E.R. 1042:

"It must not be supposed that incidents of a novel kind can be devised and attached to property at the fancy and caprice of any owner. It is clearly inconvenient both to the science of the law and the public weal that such a latitude should be given. There can be no harm in allowing the fullest latitude to men in binding themselves ... to answer in damages for breach of their obligations ... but great detriment would arise and much confusion of rights if parties were allowed to invent new modes of holding and enjoying real property."

The Defendants submitted that no person has any right to lodge a Caveat unless he is "entitled to" or "beneficially interested" in the land itself. Reliance is based on the decision of the New Zealand Court of Appeal in Guardian Trust and Executors Co. of New Zealand Ltd. v. Hall (1938) N.Z.L.R. 1020 at p.1027. The facts of that case were different from those of the instant case in that the Plaintiff had claimed a beneficial interest as a beneficiary under the Will of his father. The Court held that the interest conferred upon the Caveator by the Will of his father was a right to a share in the residue, and the residue was to be arrived at by sale, realization, and a discharge of liabilities.

The Court held that the legatee of a share in residue has no interest in any of the property of a testator until the residue has been ascertained and that this did not constitute a caveatable interest.

The Court remarked however at p.1025 that it is not enough to show that the lodging and continued existence of the caveat would be in some way advantageous to the caveator.

The Plaintiff's principal argument is based on Section 119 (2) and (3) of the Property Law Act Cap. 130 which reads as follows:

"(2) The court may, if it thinks fit, on the request of any party interested, and notwithstanding the dissent or disability of any other party, direct a sale in any case where it appears to the court that, by reason of the nature of the land, or of the number of the parties interested or presumptively interested therein, or of the absence or disability of any of those parties, or of any other circumstance, a sale of the land would be for the benefit of the parties interested.

(3) The court may also, if it thinks fit, on the request of any party interested, direct that the land be sold, unless the other parties interested, or some of them, undertake to purchase the share of the party requesting a sale, and, on such an undertaking being given, may direct a valuation of the share of the party requesting a sale."

In Pemberton v. Barnes at p.1130 Lord Hatherley, L.C. said:

"Secondly, if the court finds that the parties entitled to a moiety or upwards desire a sale, the court must order it, unless some good reason is shown to the contrary, or unless the persons objecting to a sale offer to purchase the shares of the parties desiring it, in which case the court has a discretion to authorize them to do so."

In my judgment that remark is apposite to the facts of the present case. I have little doubt that the Plaintiff by virtue of his one-sixth share in the land has a caveatable interest in that he is entitled to protect as far as possible that share from being in any way rendered nugatory or valueless but where, as here, he has agreed to a valuation of the property being obtained and one of the other co-tenants has agreed to buy his share at a fair market price in my view it would be inequitable to allow the Plaintiff to maintain his Caveat and thus prevent for some indeterminate time any dealings with the land, particularly the proposed sale by the First-named Defendant of his interest to the Second-named Defendant.

I therefore order that the Caveat be removed within seven days from the date of the delivery of this judgment. This will in no way prevent the Plaintiff from obtaining accounts relating to rentals of the property from the Defendants. However I direct that the purchase of the Plaintiff's one-sixth share be deferred until such time as the valuation of the property as ordered by me has been obtained. There will be no order for costs.

JOHN E. BYRNE
J U D G E

HBC0401J.91S