Lee v Waikalou Developments Ltd [1996] FJHC 147; Hbc0294.95s (13 September 1996)

IN THE HIGH COURT OF FIJI
AT SUVA

CIVIL ACTION NO. HBC 0294 OF 1995

BETWEEN:

JOE EDWARD LEE
Applicant

AND:

WAIKALOU DEVELOPMENTS LIMITED
Respondent

P.I. Knight for the Applicant
A.H.C.T. for the respondent

DECISION

The Applicant claims to he beneficially interested in land situated at Deuba of which the registered owner is the Respondent and which is comprised in Certificates of Title 3904, 3906 and 7693.

On 28 March 1994 the Applicant registered a caveat in respect of the land which the Respondent has sought to have removed. This is an application to have the caveat extended until further Order brought pursuant to the provisions of s.110(3) of the Land Transfer Act - Cap. 131.

The basis of the Applicant's claim to a beneficial interest is contained in his affidavit filed on 17 April to which he exhibits documents which, it is said, show that some time prior to 20 December 1994 the Applicant had sold his 60% interest in a Vanuatu registered company namely Peninsula Investments Limited of which the Respondent is a wholly owned subsidiary. The purchaser of the Applicant's 60% interest is said to have been one Darrell Lee who already owned the other 40% of Peninsula, together with four other persons.

The Applicant's case is that it being the intention that he should be paid for his 60% from the proceeds of sale of the land in question, clause 5 of the Deed of Sale between the Applicant and Darrell Lee specifically provided that the Applicant should "be entitled to and have the right to register a charge against (the land) to protect his beneficial interest" (see exhibit JEL 5).

The Respondent's case is that the right to register a charge does not include a right to register a caveat, that the continued existence of the caveat was serving to prevent the land being sold, that the Applicant has no beneficial interest in the land and that the caveat should not be extended on the ground of material non disclosure.

In my opinion a person who has an equitable charge upon land also has a right to protect that charge by lodging a caveat (see Butler v Fairclaugh [1917] HCA 9; (1917) 23 CLR 78, 91. Furthermore by statute a person who claims to be beneficially interested in land, whether or not the claim is soundly based, is entitled as of right to lodge a caveat over the land (Cap. 131 - s. 106 (a)). As I see it, the obvious purpose of clause 5 of the Deed is to protect the Applicant's claim interest. I cannot believe that some alternative means of protecting this interest cannot be devised between the parties legal advisers to allow sales of the land to proceed. Whether or not the Applicant in fact has a valid equitable interest in the land is a matter to be argued fully at trial; no Action has been commenced. Finally, it is said that the existence of the caveat frustrates the implementation of paragraph 3 of the agreement of sale dated 24 October (see exhibit A to Satendra Chand's affidavit filed 16 March 1996). It is however clear to me that this agreement must be subject to the Deed since the four parties referred to in paragraph 3 do not come into existence until the sale of the 60% by the Applicant to Darrell Lee.

Although there has unarguably been some lack of disclosure by the Applicant it must be borne in mind that the Applicant is resident overseas and that there was an element of emergency involved. I do not find that the Applicant intended to mislead the Court by withholding relevant information and I accordingly decline to set aside the extension for the caveat on this ground.

On the papers before me and without the benefit of hearing the parties and their witnesses I do not think I would be justified in removing the protection which the Applicant was apparently granted by agreement by clause 5 of the Deed. Accordingly the application succeeds and the caveat and the caveat is extended until further Order.

M.D. SCOTT
Judge

13 September 1996

HBC0294.95S