Fongs Holding Ltd v Harifam Ltd [1996] FJHC 71; Hbc0458d.96s (14 November 1996)

Fiji Islands - Fongs Holding Ltd v Harifam Ltd - Pacific Law Materials

IN THE HIGH COURT OF FIJI

At Suva

Civil Jurisdiction

CIVIL ACTION NO. 0458 OF 1996

BETWEEN:

FONGS HOLDING LIMITED

Plaintiff

AND:

1. HARIFAM LIMITED

2. SUVA CITY COUNCIL

Defendants

Mr. K. Muaror for Plaintiff

Mr. H. Nagin for Defendants

RULING

On the 4th of October 1996 this Court granted the plaintiff company an interim injunction restraining the 1st defendant company from continuing further with construction work it was then undertaking over a strip of land comprised within the boundaries of Certificate of Title (C.T.) No. 11073 of which the 1st defendant company is the registered proprietor.

The plaintiff company in its Writ of Summons and affidavit in support of the injunction claims to be entitled to an easement 'right-of-way' over the said strip of land whereas the 1st defendant company in seeking the dissolution of the injunction, insists that its title over the strip of land is unencumbered and 'indefeasible' in the absence of fraud or a proper endorsement of such an easement on the title.

The particular strip of land in dispute measures 21.24 feet wide and runs along the north/eastern border of the 1st defendant's land and provides a rear accessway to the plaintiff's land from Cumming Street.

It appears from the annexures filed, that the plaintiff's and the defendant's land were originally contained within a single title document C.T. No. 7986 owned by Bhanabhai & Co. Ltd.

On or about 14th January 1963 the land comprised in C.T. 7986 was subdivided into three (3) separate and adjoining lots pursuant to a plan of subdivision Deposited Plan (D.P.) No. 2733 accepted by the registered proprietor and registered with the Registrar of Titles. Furthermore on 4th of February 1963 the Registrar of Titles issued two (2) certificates of title in place of the original C.T. 7986 and allocated the subdivided lots as follows:

(1) C.T. 11072 being for an undivided half share of Lot 1 on D.P. No. 2733 (the plaintiff's land);

and

(2) C.T. 11073 being the whole of Lots 2 & 3 on D.P. No. 2733 (the 1st defendant's land).

The relevant D.P. No. 2733 clearly and plainly marked in colour, the 'disputed strip' of land in C.T. 11073 as an 'Access and Drainage Reserve'. The D.P. also contained the following entry:

"Easements over areas coloured green and yellow to be granted in favour of Lots 1 and 2 respectively."

Despite the clear future intention expressed in the above note, it is common ground that no such easements were ever formally created by the original owners of the land, Banabhai & Co. Ltd. nor has the same been registered by a separate 'memorial' on C.T. 11073 and neither has the same been protected by the entry of a 'caveat' on the 1st defendant company's title.

I note however that the diagram of the land contained on the 1st defendant company's C.T. 11073 clearly and plainly delineates the disputed 'strip of land' and describes it as: "Access Dr. Reserve". Similarly the defendant company's land is described on the C.T. with reference to and in terms of D.P. 2733.

In this regard Windeyer J. in Permanent Trustee Co. of N.S.W. Ltd. v. Campbelltown Corporation [1960] HCA 62; 105 C.L.R. 401 in referring to the lodgment with the Registrar of Titles of a plan of subdivision showing a strip of land as a road said at p.420 that the lodgment:

"... gave those who purchased and took transfers of lots by reference to the plan, and their successors in title, a right to use as a way of access any road shown on the plan on which their lots abutted ... Whether it was formed or unformed as a road, they got a lawful right of way over it."

(See also: The judgment of the High Court of Australia in Dabbs v. Seaman [1925] HCA 26; (1925) 36 C.L.R. 538)

In those circumstances counsel's submission that in considering the present application regard should not be had to the Deposited Plan cannot be sustained.

Even so, counsel for the defendant company forcefully submits that a legal easement on land subject to the Land Transfer Act can only be created by complying with the requirements of Section 49 of the Act, and, in the absence of such compliance no legal easement can be said to exist upon the defendant company's title. I agree but the matter does not end there and notwithstanding the absence of a statutory exception dealing with 'omitted easements'.

The learned author of Torrens Title in Australia (Vol.1) at p.510 identifies five (5) methods by which easements may be created, namely:

"(1) By express grant;

(2) By express reservation;

(3) By implied grant or reservation;

(4) By prescription; and

(5) By statute."

What's more the law recognises that easements may be created by estoppel, or by an agreement for valuable consideration, or even an informal document thereby giving rise to an 'equitable interest' or 'equitable easement' specifically enforceable in equity by a court acting 'in personam'.

The Privy Council in the leading case of Frazer v. Walker (1973) N.Z.L.R. 1069 in preferring the immediate indefeasibility theory to that of deferred indefeasibility under the Land Transfer Act (N.Z.) said at p.1075:

"... indefeasibility of title ... is a convenient description of the immunity from attack by adverse claims to the land or interest in respect of which (a registered proprietor) is registered (and) enjoys. This conception is central in the system of registration. It does not involve that the registered proprietor is protected against any claim whatsoever; as will be seen later, there are provisions by which the entry on which he relies may be cancelled or corrected, or he may be exposed to claims in personam."

(my underlining)

In Ba Town Council v. Becharbhai Holdings Ltd. Civil Appeal No. 112 of 1985 (unreported) the Fiji Court of Appeal (Holland J.A.) in upholding the contractual right of the respondent company to use a strip of land as a rear lane to its 'lot' despite it not being registered as an easement on the servient tenement said at p.6:

"In Fiji as in New Zealand an easement over land under the Land Transfer Act can only be created by easement certificate procedure under Section 159 or by way of formal memorandum of transfer. However a registered proprietor can create an equitable easement in favour of another or others as was demonstrated in Carpet Import Co. Ltd. v. Beat & Co. Ltd. [1926] NZGazLawRp 101; (1927) N.Z.L.R. 37;"

and later at p.7 the Court said:

"... the indefeasibility of title of the registered proprietor given by the Land Transfer Act does not affect the right of the respondent and others to bring against it a claim in personam founded in law or in equity for such relief as a Court acting in personam may grant. See: Frazer v. Walker (1967) N.Z.L.R. 1069 at 1078."

I accept at once that the case of Sutton v. O'Kane (1973) 2 N.Z.L.R. (cited by learned counsel for the defendant company), presents a formidable hurdle for the plaintiff company to overcome, but I am inclined to the view that the dissenting judgment of Turner P. on the question of 'fraud' within the meaning of the Land Transfer Act is, in the circumstances of this case, persuasive and requires closer investigation. (See also: The dissenting judgment of Eichelbaum J. in Bunt v. Hallinan [1984] NZCA 98; (1985) 1 N.Z.L.R. 450 at 465 ff)

Suffice it to say that having considered the various affidavits and annexures I am satisfied that the plaintiff company's claim raises potentially serious and complex factual and legal issues that ought to be further investigated at a full trial.

I turn next to consider the adequacy of damages as a remedy and the 'balance of convenience'.

In this regard bearing in mind that the plaintiff company's 'lot' is not land-locked, it having a street frontage onto Renwick Road with a designated loading zone immediately in front of the plaintiff company's building, counsel for the defendant company submits that damages would be adequate compensation for the loss (if any) of the accessway to the rear of the plaintiff company's building.

Counsel for the plaintiff company submits however that the plaintiff's building is a two-storey building comprised of a dwelling house on the first floor and a retail and wholesale shop on the ground floor, and it is the latter premises that has access to the street frontage and not the upstairs premises for which the proper access is through a set of stairs leading out onto the disputed accessway. In other words the closure of the accessway would effectively render the plaintiff's 1st floor premises land-locked.

Counsel also submits that the 'balance of convenience' plainly supports the dissolution of the injunction insofar as construction works on the disputed accessway have progressed to such a degree as to render it unusable by the plaintiff company. In counsel's words the injunction was 'futile' and in any event the plaintiff company had been dilatory in protecting its 'interests' in the accessway.

I am satisfied however that the plaintiff company took every reasonable non-legal measure open to it, to notify the defendants of it's 'interests' in the accessway and also its opposition to the defendant company's proposed building works over it, which works was not due to commence until on or about the 14th of September 1996.

Indeed the solicitors acting for the plaintiff company had informed the defendant company before it began serious construction works, of the plaintiff company's intention to take legal proceedings "to restrain ... any construction work", and further warned "... that any works you have done or continue to do will be at your own risk".

In this latter regard it is noteworthy that in the 2nd defendant Council's Statement of Defence dated 3rd October 1996 there is an express averment:

"... that the (defendant company's) construction work commenced without the prior approval of the second defendant but approval for the works has now been granted."

which is in stark contrast to the claim of the 1st defendant company in its Statement of Defence that:

"... (it) only commenced construction on the site after obtaining the prior approval of the 2nd defendant."

Having regard to the particular 'interest' claimed by the plaintiff company I am of the opinion that damages would not be an adequate remedy.

Equally I am more than satisfied that the temporary cessation of the defendant company's building works over the disputed accessway would be more than adequately compensated by an award of damages in the event it should ultimately prove successful in the action. Furthermore having regard to the 'balance of convenience', I am satisfied that the injunction should continue until the final determination of the plaintiff's claim.

In this latter regard there is not the slightest doubt in my mind that the relevant 'status quo' that the Court ought in its discretion to seek to preserve is one where there was no building works on the disputed 'strip of land' which the plaintiff company had used as a vehicular accessway to the rear of its premises.

Needless to say in my view, an order temporarily restraining the defendant company from carrying out building works on the disputed strip of land until such time as the rights of the parties are finally determined is much more 'convenient', than an order which would have the effect of allowing the situation to change and then being obliged to order the demolition of a completed building in the event of the plaintiff succeeding.

In light of the foregoing, in the exercise of the Court's discretion the defendant company's application to dissolve the injunction is dismissed with costs to the plaintiff company. The injunction granted to the plaintiff company on 4th October 1996 is hereby extended "until the final determination of the action".

D.V. Fatiaki

JUDGE

At Suva,

14th November, 1996.

Hbc0458d.96s