Housing Authority v Qio [2000] FJHC 11; Hbc0367j.99s (20 January 2000)

Fiji Islands - Housing Authority v Qio - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

CIVIL ACTION NO: HBC 367 OF 1999

BETWEEN:

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Plaintiff

AND:

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JOSEFA QIO

Defendant

COUNSEL: Mr V. Maharaj for Plaintiff

Mr T. Fa ffendant

Hearing: 26th November 1999

Judgment: 20th January 2000

JUDGMENT

On 5^th August 1999, the Plaintiff issued summons to the Defendant, to show cause why he should not hand over possession of Native Lease No. 21084 at Naveiwakau to the Plaintiff, under section 169 of the Land Transfer Act. The ns were supported by t by the affidavit of Jagdish Prasad, Manager Legal Services of the Housing Authority.

p class=MsoNormoNormal style="margin-top: 1; margin-bottom: 1"> In that affidavit, Jagdish Prasad sets out the basis for the summons. Thsing Authority is the tehe tered proprietor of the Leae Lease. The Dant is a former proprproprietor who had executed a mortgage with the Authority and whomade lt in payment of instalments under the mortgage.&age. nbsp; Under thes of the more mortgage and the Land Transfer Act, the Authority proceeded to apply to foreclose, and the Registrar of Titles ordered foreclosure under the Land Transfer Act.

On 26^th February 1999, the Defendant was served Notice to Quit but he refused to vacateproperty.

The Defendant, Josefa Qio has filed an affidavit “showing cause”.; In his affidavit sworn on 10^th September 1999, he says that the consent of thef the Native Land Trust Board was necessary for the registration of the Authority’s title, and for foreclosure of the mortgage. He shat the Notice to Quit Quit is therefore invalid and that the Plaintiff cannot now demand vacant possession.

The Plaintiff filed an affidavit in reply. The affidavit of Jagdissadrasad sworn on 16^th November 1999, states tha Authority had informed thed the Native Land Trust Board on 18^th June 1999 that the land was vested in the Authority when pplication for foreclosure sure was made under section 73 of the Land Transfer Act, and that foreclosure under the mortgage (to which the NLTB had consented) did not require the consent of the NLTB. The letter, which was sibyed by Jagdish Prasad (Annexure A) said that foreclosure was not a “dealing in land” under the Land Transfer Act, and therefore did not require the consent of LTB.

The summons was heard on 26^th November 1999. Mr T. Fathe Dant submitteditted that the only issue was whether NLTB consent was required before fore foreclosure. He said that foreclowas aidealing in land under section 12 of the Native Land Trust Act. He agreed that that the NLTB had consented to the mortgagesaid that foreclosure required further consent.

Mr V. Maharaj disagreed. He subd that when the NLTB NLTB consented to the mortgage, it also consented implicitly, to each of the clauses of the mortgage includlause 15 which provided the right to foreclosure. Moreover, the consented toed to theo the assignment of the lease to the new proprietors (Annexure C of Jagdish Prasad’s affidavit of 16^th November), and that their consent could in any event be ed. He finally submitubmitted that foreclosure was not a dealing in land requiring NLTB consent, that the Defendant did not deny the debt, the default or that all procedures had been followed under section 169 of the Land Transfer Act.

Section 169 of the Land Transfer Act Cap 131 provides as follows:

“The following persons may summon any person in possession of la appear before a judge in c in chambers to show cause why the person summoned should not give up possession to the applicant :-

(a) &nnbsp;; &nsp;&nbsp lasp last registered proprietor of the land.....

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(b) a lessor against a lesseeeor tenant where a legal notice to quit has been given or the term of the lease has expired.”

Section 172 of the Act provides:

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“If the person summoned appears he may show cause why he refuses te possession of such land aand and, if he proves to the satisfaction of the judge a right to the possession of the land, the judge shismiss the summons....”

The question therefore is whether the Defenhas “a right to the possession of the land.” The basis of the Dant’s cl’s claim that that he has such a right, is the failure of the Plaintiff to obtain NLTB consent before foreclosing. If hright, then the Noticeotice to Quit is invalid.

The Native Land Trust Act Cap 134 provides that native land shall not be alienable except to thee.

Section 10 of the Act provides that all native leases shall be recorded e Registrar of Titles in a “Register of Native Leases.” Section) of the Act prov prov provides:

p class=MsoNormal stal style="margin-left: 36.0pt; margin-r 72.0pt; margin-top: 1; mar; margin-bottom: 1"> “When a lease made under the provisions of this Act has been rered it shall be subject toct to the provisions of the Land Transfer Act, so far as the same are not inconsistent with this Act, in the same manner as if such lease has been made under that Act, and shall be dealt with in a like manner as a lease so made.”(my underlining)

Section 12(1) of the Native Land Trust Act provides:

ass=MsoNormal stal style="margin-left: 36.0pt; margin-right: 72.0pt; margin-top: 1; margin-bottom: 1"> “E as may be otherwise provided by regulations made hereunder, it shall not be lawful for anyr any lessee under this Act to alienate or deal with the land comprised in his lease or any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever without the consent of the Board as lessor or head lessor first had and obtained. ranting or withholding of g of consent shall be in the absolute discretion of the Board, and any sale, transfer, sublease or other unlawful alienation or dealinected without such consent shall be null and void.”

p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> It is clear, from the letter annexed to the affidavit of Josefa Qio (Annexure AA) that the NLTB considered the eviction of the Defendant to be null and void. The Board SecretMr N. Nawa Nawaikula, in his letter to the Plaintiff stated:

ass=MsoNormal stal style="margin-left: 36.0pt; margin-right: 72.0pt; margin-top: 1; margin-bottom: 1"> “concerned however, that onat on 15/7/1998, under dealing no289 there is an endorsementement on the title to say that the whole of this land is now vested under Housing Authority. I under thise clearly unla unlawfulawful as I cannot see from our files any consent granted by the Board entitling Housing Authority to be v with the whole of this land.”

The NLTB position is plain. The Deft is the Board’s te’s tenant not the Housing Authority’s. The oelationship between teen the Plaintiff and the Defendant isMortgage dated 25^th January 1994. That mortgage does not,rdicording to theo the Board, entitle the Authority to evic Defendant without the cons consent of the Board.

The questions for the Court are as follows: Firstly is foreclosure a “dealing in land” for which the consent of the NLTB is required? Secondly, if it is, can that consent be implied by the NLTB’s consent to assign the lease to the new proprietors of the lease namely Makalesi Radinivitilevu and Mereadani Nakalesi? Th, if the consent of the the NLTB is not necessary, has the Defendant shown that he has a right to remain on the land?

I turn to the first question. What is a “dealing in”? Mreferred me to the Privy rivy Council case of Chalmers v. Pardoe [1b> [1963] 3 All ER 552 which discussed therds i context of development on native land without consent. On the l from from the Fthe Fthe Fiji Court of Appeal, the appellant claimed he had an equitable charge on the land that had been leased to the respondent to the value of buildings he had erected.&nbhe appellant had later been been evicted by the respondent. They Council held that a dt a dealing with land had clearly taken place for the purposes of section 12 of the old Native Land Trust Ordinance because “the Board found itself with six more buildin the land without having thng the opportunity of considering beforehand whether this was desirable. It would seem ... that this is one of the things that s.12 was designed to prevent.”

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In Jai Kissun Singh v. Sumintra [1970] 16 FLR 165, a native leasehold had been held by the respondent and her son the appellant as tenants in common in equal shares. Btue of a panchayat ayat agreemee rehe respondent agreed to sell her half of the interest in the land and the cane contract to her son, the appellant. The appe then took over maer management of the farm. The queswas whetheater conr consentnsent to the NLTB was valid when the terms of the panchayat agreement (which had not been signed by the reent) the appellant asnt as the respondent’s agent.

The Court of Appeal held (Marsack JA dissenting) that the agreement was a dealing in land within the meaning of section 12 of the Native Land Trust Ordinance, and that the agreement was null and void.

In Fong Lee v. Mitlal and Ram Kissun [1966] 12 FLR 4, an application by the purchaser for the consent of the NLTB for the purchase of leasehold, was made after the sale and purchase agreement had been executed. I held by the Court of Appf Appeal that the appellant was entitled to specific performance of the contract, despite the fact that consent had not been obtained until after execution of the cont

What then, is the mischief that section 12 is intended to prevent? Ims cln a reading of the sthe section, and of the Privy Coun Council decision in Chalmers v. Pardoe (supra), that it is ded to prevent alienation or dealing with land which the Native Land Trust Board should be d be able to prevent, and certainly to know about.

It is not disputed that the Board consented to the mortgage. is itispute that the Board oard consented to the assignment of the lease to the new proprieoprietors.

Clause 14 of the mortgage provides:

“THAT the power of and all other powers conferred on a Mortgagee by the Property Law Act 1971 may be exercised by the Mortgagee immediately upon or at any time after default in payment of any of the moneys hereby secured ......”

Clause 15 provides that upon the power of sale becoming exercisable the Mortgmay take possession. There is npute that the Auhe Aute Authority satisfied the requirements of the Land Transfer Act before proceeding to bring the application under section 169.

If Clauses 14 and 15 of the mortgage between the plaintiff and the defendant were to be read subject to the consent of the NLTB under section 12 of the Native Land Trust Board Act, it would clearly render the mortgagee’s right to foreclose uncertain.

Indeed, I would go further and say that the inability of the mortgagee to realise its security by taking possessithout further consent, woul would frustrate the mortgage itself.

p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> In Shaukat Ali v. Abdul Razak and Others Civil Appeal No. ABU 0033 of 1998S, the Court of Appeal said that where the consent of the Director of Lands was required in respect of a mortgage, further consent was not required in respect of a transfer of that mortgage to another person.

The relationship between section 12 of the NLTB Act antgages was discussed in Chandra Kant Pala v. ANZ Savings Bank Civil Appeal Noal No. 517 of 1983. The Court of Appaid that ihat it was arguable that section 12 “does not apply to mortgages which do not purport to do anything more than charge in favour of a mortgagee.”

However for the purpose of that decision, the Coccepted that a mortgage was a dealing in land. In that case, thrd had cond consented nted to the mortgages. The appellant arguat the tthe terms of the mortgages were ineffective. The Court at page 10:

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1"> “Unless by operation of law the two mortgages could not be effective (were deait were), there is no way iway in which the appellant could possibly argue that they were now not binding him and effective. Heelf signed applications ions for consent to mortgage in respect of those two mortgages, and after obtaining it, they were regist There is no suggestion that the parties intended fresh mortgages .... of course the the parties intended that they should become operative.”

In this case the Defendant himself applied for consent tcute the mortgage. The land, thtgagee, the amhe amount of the principal sum of $50,0050,000 and the term of the mortgage were specified in the application. ThB consented. The mThe mortgage igned byed by the parties. It is clear that the parties intended to give effect to the mortgage. The Defendant received his money.

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It woulquite wrong, in my view to w to now claim, as the Defendant claims, that the clauses of the mortgage have no effect without further consent.

As Fatiaki J said in National Bank of Fiji v. Abdul Kadeer Hussein/b> Civil Action No. 0331 of 1994, the mortgagee has a right not only under the terms of thof the mortgage but also by virtue of section 75 of the Property Law Act Cap 130, to claim possession of the security. He referred tkley LJ’s juds judgment in Western Bank Ltd v. Schindler (1977) 1 Ch 1 when he said:

“A legal mortgagee’s right to possession is a common law right which is an incident to his estate in the land. It should nolightly treatereated as abrogated or restricted. Although it isaps most comt commonly exercised as a preliminary step to an exercise of the mortgagee’s power of sale, so that the sale may be made with vacant possession, thinot its only value to the mortgagee. The mortgagee maee may wish to protect his security .... He might wish to take possession for the purpose of carrying out repairs or to prevent waste.”

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The purpose of section 12 of the NLTB Act is to prevent land being dealt with without the knowledge and consent of the NLTB. I find that purpose was fuas fulfilled when the NLTB consented to the mortgage.

The purpose for the mortgage was to give the Plaintiff security for the money advanced. The Plaintiff and tfendantndant were willing parties to this agreement, and I find that the mortgage and the right to foreclose valid. The act of losure per se i se is not aing in land for the purpose of section 12. The consenonsent of the NaTB was not required.

It follows therefore,fore, in answer to the second question, that there is no need to consider whether the NLTB impliedly conseto foreclosure by its subsesubsequent consent to re-assign the lease.

It also follows in response to my third question, that the Defendant has not shown that he has any right to remain on the land over and above the rights of the legal mortgagee.

For these reasons I find that the Defendas failed to show cause under section 169 of the Land Transfer Act.

The Defendant must pay the Plaintiff costs of this application to be taxed if not agreed.

Nazhat Shameem

1"> JUDGE

At Suva

20^th January 2000

HBC0367J.99S