Wati v Nand [1997] FJHC 179; Hbc0029j.97 (21 November 1997)

Fiji Islands - Wati v Nand - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT LABASA

CIVIL ACTION No. 29 OF 1997

BETWEp>:

JAI WATI
(f/n Uma Dutt)
Plaintiff

AND:

BASb>BASWA NAND
(f/n Soam Datt)
1st Defendant

SOHAN SINGH
(f/n Jora Singh)
2nd Defendant

FIJI SUGAR CORPORATION LTD
3rd Defendant

Counse Singh for ther the Plaintiff;
A. Sen for the First & Second Defendants;
No appearance by the Third Defendant.

JUDGMENT

This Action has raised two questions of law which the parties have by consent agreed, pursuant to Order 33 r 3 should first be answered. The questions are:

"1) Did the mortgagee's sale under mortgage number 1297 expunge the two crop liens given by the first defendant to the second defendant under the provisions of Crop Liens Act Cap 226 and in particular the effect of Section 4 of the said Act; and

2) What is the effect of Sections 3 and 4 of the Crop Liens Act on liens given by the first defendant to the second defendant."

On 18 July a statement of agreed facts was filed as follows:

1. THAT the First Defendant Baswa Nand was a Lessee of native Land known as Waibogibogi Lot 19 having an area of 32 acres and which land was covered by cane contract 7357.

2. THAT on the both day of April, 1986 the First Defendant had executed a Mortgage in favour of Australia and New Zealand Banking Group Limited being Mortgage Number 1297 (annexure A of the Plaintiffs affidavit) to secure certain advances.

3. THAT on the 30th day of January, 1991 the First Defendant had executed a Crop Lien in favour of Australia and New Zealand Banking Group Limited collateral to above Mortgage Crop Lien 91/206 (annexure B of Plaintiff's Affidavit).

4. THAT on the 28th day of April, 1993 the First Defendant executed a Crop Lien in favour of SOHAN

SINGH being Crop Lien Number 93/1833 (annexure C of Second Defendant's Affidavit).

5. THAT on the 27th day of July, 1993 the First Defendant gave a Crop Lien being crop Lien Number 93/1614 in favour of Second Defendant (annexure D of Second Defendant's Affidavit).

6. THAT the Australia and New Zealand Banking Group Limited exercised its powers of sale under Mortgage Number 1297 dated 10th day of April 1986 and transferred the land and Sugar Cane Contract to the Plaintiff by transfer dated 25th day of May, 1995 under Transfer Number 1535 (annexure C of Plaintiff's Affidavit).

7. THAT the Plaintiff is now the lessee of land in question and contract holder and the Second Defendant holds two Crop Liens over Farm Number 7357.

Counsel for both parties also filed helpful written submissions for which I am grateful.

At the start it is important to be clear just what a crop lien is and what it is not. Section 3 (2) of the Crop Liens Act (Cap. 226-the Act) is as follows:-

"'The Lienee, whether the advance be made or the debt be incurred or the goods be supplied before, at or after the date of the agreement, shall from the date of the registration of the agreement as aforesaid have a preferable lien upon and be entitled to the whole of the crop or crops given as security, whether the same be then or be intended to be thereafter sown or grown and the produce thereof or the proceeds thereof if and when sold and converted into money and until the repayment of the advance or liquidation of the debt with interest (if any) the possession of the crop or crops and the produce or the proceeds thereof as aforesaid by the Lienor or by any person or persons on his account of for his use or benefit shall, for all intents and purposes, be deemed to be the possession of the Lienee.''

A lien is "a charge or security or encumbrance upon property" (Black's Law Dictionary) and Section 3 (2) means that the lienee in the case of a crop lien has a lien over crops produced by the lienor or on his behalf. What the Section does not mean is that the creation of a crop lien results in the lienee obtaining any interest in the land on which the crops are grown. A crop lien is not a profit or prendre and is not an encumbrance within the meaning of that term as it appears in the Land Transfer Act (Cap 131).

Under Section 4 a crop lien is not extinguished by the sale of the land "whereon the crop or crops is or are growing" but of course the only crops which are subject to the lien are those crops "'the produce or proceeds" of which are the lienor's or "any person or persons on his behalf".

A crop lien once created has to be registered (Section 10) and a copy kept by the Registrar of Deeds (Section 3 (l). The register may be searched under the provisions of Section 30 (1) of the Land Transfer Act. The crop lien either expires by reason of satisfaction i.e. repayment of the loan (Section 6 (2) ) or by effluxion of time i.e. 5 years after its creation (Section 6 (1).

In my view the answer to the questions posed is as follows: on 25 May 1995 when the land was sold the First Defendant's debt to the Third Defendant was discharged and with it the mortgage and the crop lien dated 30 January 1991. As provided by Section 4 of the Act the sale of the land did not affect the two crop liens held by the Second Defendant and accordingly all such crops planted by or on behalf of the First Defendant as were awaiting harvest at the time of the sale continued in "the possession of the (remaining) licensee" -the Second Defendant - who was entitled to their proceeds.

Once the crop which was standing on the land at the time of sale had been harvested the remaining lienee, the Second Defendant, lost all further interest in the crops produced on the land for the simple reason that the following crops planted upon it were planted not by the former lienor but by the Plaintiff and therefore were not crops produced by the former lienor "on his account or for his use or benefit".

An intending purchaser of land should always have a search made under the provisions of Section 30 (1) of the Land Transfer Act in order to avoid purchasing land, chattels upon which (including crops) may be the subject of a lien or other charge or encumbrance.

Whether the Third Defendant has paid the proceeds of cane planted by the Plaintiff to the Second Defendant is not clear. If it has then it has done so in error. In any event it will be noted the two remaining liens in favour of the Second Defendant expire on 28 April and 27 July next.

M.D.Scott
JUDGE

21 November 1997.

HBC0029j.97