Phillips v Washington [1995] FJHC 172; Hbc0582j.93s (7 December 1995)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 0582 OF 1993

Between:

LLOYD PHILLIPS
Plaintiff

- and -

JULIE ROSE WASHINGTON
Defendant

Mr. P. Knight for the Plaintiff
Mr. G. Prasad for the Defendant

JUDGMENT

This is an application "... for an order that the Defendant deliver to the Plaintiff a transfer from the Defendant to the Plaintiff, and duly stamped and signed by the Defendant, of the Defendant's one undivided half share in the property situated at Wakaya and described as Lot 2 on D.P. 4482 as comprised in Certificate of Title 22992."

The background to the present application is relevant and bears some examination. The parties were at one time husband and wife. During their marriage of 5 years duration they acquired in their joint names various properties in different parts of the world including a property at 9 Holly Park Road, London, England and a property at Wakaya Island in Fiji (hereafter referred to as 'the London property' and 'the Wakaya Island property' respectively).

In June 1986 the marriage between the parties was dissolved and in 1987 as part of a 'matrimonial property settlement' the parties entered into an agreement which provided for the transfer of the London property to the sole ownership of the defendant and the Wakaya Island property to the plaintiff.

The agreement also provided for the payment to the defendant of a sum of "£8,000 from any proceeds of sale of Wakaya by way of reimbursement for loss of salary during her supervision of construction on Wakaya."

It is common ground that in terms of the agreement the plaintiff has transferred his half share of the London property to the defendant, but the defendant has not transferred her half share of the Wakaya Island property to the plaintiff. In the result the plaintiff issued an Originating Summons in October 1993 seeking (as amended): "an order for transfer of the defendant's half share in the property ... situated at Wakaya Island ..." (See: Civil Action No. 582 of 1993).

After several adjournments however the plaintiff's action was settled and the terms of settlement were incorporated into an undated Deed of Settlement (referred to as the Deed) executed by the defendant on the 5th of September 1994. On the same date the defendant also executed pursuant to the terms of the Deed, a registrable transfer of her undivided half share in the Wakaya Island property in favour of the plaintiff.

The transfer although stamped for duty purposes has been retained by the defendant's solicitor's as a result of differences between the parties as to the meaning and intent of the terms of settlement.

The circumstances giving rise to this later 'difference' is undisputed and arises in the following manner - the plaintiff in order to carry out repairs to the house on the Wakaya Island property looked to borrow the necessary finance in Fiji. The local financier however would only lend to a 'Fiji resident' and in order to fulfil this requirement the plaintiff sought to transfer an undivided half share of the Wakaya Island property to the locally-resident architects who were involved in the construction of the dwelling house on Wakaya Island.

It is this proposed transfer to the architects which has given rise to differences between the parties. The defendant's position is that the proposed transfer constitutes 'a sale' of the Wakaya Island property and as such "the full sum of £8,000 becomes payable to the defendant." Counsel for the plaintiff for his part submits equally forcefully that the proposed transfer is not a 'sale' of the Wakaya Island property within the strict terms of the Deed nor is such a conclusion supported having regard to the conditional nature of the proposed transfer.

Needless to say in order to resolve this dispute it is necessary to consider more closely the Deed of Settlement which appears to have emanated from the chambers of the defendant's Brisbane Solicitors, Corrs Chambers Westpath.

The Deed begins by identifying the parties and reference is then made to the earlier-mentioned 1987 'matrimonial property settlement' and to the plaintiff's Civil Action No: 582/93 (op.cit at p.2) and finally, to the parties desire of "..settling (the) action on terms and conditions herein contained."

I make particular reference to the most relevant terms which are set out in the Deed as follows:

"1. In this Deed the following Definitions have been used:

"The property": Certificate of Title No. 22922.

"Date of Settlement": The date of transfer to Lloyd of Julie's interest in the property.

2. Lloyd shall make payment of £8,000 to Julie as follows:
   

(i) No less than £2,000 within 12 months of the Date of Settlement.

(ii) No less than a further £2,000 within 24 months of the Date of Settlement.

(iii) The balance (plus any interest as hereinafter provided) within 36 months of the Date of Settlement.

3. In the event Lloyd sells the property to a Third Party, then the whole sum then owing (including any interest as hereinafter provided) shall be paid at the time of settlement of the said sale.
   

Clause 4 deals with the interest chargeable.

5. Contemporaneous to this agreement, Julie shall sign a transfer of her interest in the property in favour of Lloyd and shall register the same against the title to the property with her caveat as hereinafter provided."
   

Clause 6 deals with the plaintiffs right to mortgage the property and the defendant's right to caveat.

It may be noted at once that two (2) principal changes were effected by the Deed in the parties earlier 'matrimonial property settlement'. The first, was to introduce, a time frame of 3 years for the payment of the sum of £8,000 with time running from the date of transfer of the defendant's undivided half share in the Wakaya Island property to the plaintiff (See: Clause 1).

The second change was that whereas originally the £8,000 was payable from any "proceeds of sale of Wakaya", now in terms of the Deed, the whole sum became payable at the time of settlement of any sale of the Wakaya Island property whether any profit was realised therefrom or not.

The defendant was also given the right to register a caveat against the title "to protect her interest for the monies payable to her" subject however to any mortgage that may be given by the plaintiff to a financial institution in Fiji for advances up to (but not exceeding) a sum of $F250,000.00.

Most importantly for present purposes the Deed defines "the property" as: "Certificate of Title No. 22992" and Clause 3 specifically provides:

"In the event (the plaintiff) sells the property to a third party, then the whole sum then owing (including any interest as hereinafter provided) shall be paid at the time of settlement of the said sale."

It is plain in my view that the payment of the £8,000 has been a continuing 'bone of contention' between the parties, with the defendant seeking to link it to the transfer of her undivided half share in the Wakaya Island property and the plaintiff maintaining that it is wholly unrelated to the defendant's obligation to transfer her share in the Wakaya Island property to him.

The Deed of Settlement however changed the original position and directly linked the payment of the £8,000 to the transfer to the plaintiff of the defendant's undivided half share albeit that payment was spread over a period of 3 years. In other words whereas originally the £8,000 was only payable upon a sale of the Wakaya Island property, now under the Deed the money was payable to the defendant whether the Wakaya Island property was sold or not. The sale of the Wakaya Island property merely became a circumstance which accelerated the date when payment of the £8,000 had to be completed.

The fairly simple straightforward question that is posed to be answered is: 'whether the proposed conditional transfer by the plaintiff of one undivided half share of the Wakaya Island property is a sale within the terms of Clause 3 of the Deed?'

In seeking to persuade the Court that any transfer for monetary consideration of the Wakaya Island property amounted to 'a sale', counsel for the defendant submitted that that must have been the intention of the parties since any such dealing with the property would not only seriously prejudice the defendant's ability to caveat 'the property' as provided for in the Deed but any transfer would also substantially reduce the plaintiff's interest in the property, and counsel rhetorically asks: "What if the plaintiff were to transfer 99% of the property?"

Counsel for the plaintiff countered this argument by referring to the actual words used in the Deed namely: "...sells the property..." and the definition of "the property" which merely refers to a Certificate of Title and makes no mention of "any part thereof", as the clearest evidence of the parties actual intentions. Furthermore emphasis was laid on the conditional nature of the protection afforded the defendant by her right to caveat the property which counsel submits was merely intended to secure the plaintiff's personal obligation to pay the £8,000 and not, to be a legal 'charge' on the property, or be a means for the defendant to control the manner in which the plaintiff chooses to give a mortgage over the property as he is clearly entitled to.

In In re Westminster Group (1984) 1 WLR 1117 Nourse J. in considering the meaning of the word 'sale' in the phrase 'sale or purchase' in Order 14A RSC (UK) (cf: Order 86 rule 1 of our High Court Rules 1988) said at p. 1122:

The authorities establish that in legislative language and in the absence of a special context the word 'sale' denotes an exchange of property for cash and not for other property."

In somewhat similar view and in rejecting the agreement in that case as a 'sale of land', Finnemore J. said in Simpson v Connolly (1953) 1 WLR 911 at p.915:

"... the general principle of English law in regard to sale is that a sale means the exchanging of property for money. That applies - to a sale of land and to a sale of chattels equally.

The real problem is whether it is still a sale if no money passes but one person says to another, to take this case, if you give me a piece of land, I will excuse you your debt which you owe me."

In this present action counsel for the plaintiff has similarly stressed the absence of any money passing between the plaintiff and the third parties in the proposed transfer of an undivided half share of the Wakaya Island property and the clear understanding between them that the land was to be transferred back to the plaintiff upon the loan being repaid.

Having carefully considered the matter and mindful that the Deed has considerably strengthened the defendant's entitlement to the £8,000 payment and the clear common intention of the parties discernible from their earlier 'matrimonial property settlement' that the Wakaya Island property should become the "sole and separate property of (the plaintiff)", I am satisfied that the plaintiff is entitled to the order sought.

However in the light of counsel for the defendant's admission that "(his) office holds the original signed and stamped transfer", and bearing in mind the defendant's apparent readiness and willingness '... to release the said Instrument of Transfer to the plaintiff (or his solicitors),' the Court's order is that the defendant's solicitors do within 14 days of the date hereof deliver to the plaintiff's solicitors the aforesaid Transfer.

(D.V. Fatiaki)
JUDGE

At Suva,
7th December, 1995.

HBC0582J.93S