Tiva v Director of Lands [2004] FJHC 188; HBC0121.2003 (29 March 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: 121 OF 2003

BETWEEN:

ATUNAISA TIVA
PLAINTIFF

AND:

THE DIRECTOR OF LANDS
NATIVE LAND TRUST BOARD
THE ATTORNEY-GENERAL OF FIJI
FIJI HARDWOOD CORPORATION
DEFENDANTS

Mr. I. Fa - For Plaintiff
Mr. S. Banuve with } - For 1st and
Mr. Sahu Khan } 3rd Defendants
Mr. T. Bukarau - For 2nd Defendant
Ratu J. Madraiwiwi - For 4th Defendant

JUDGMENT

ISSUE:

At issue in these proceedings is whether the Native Land Trust Board (NLTB) had the powers to issue 99-year approval notices or leases for mahogany plantation over land known as Korovono in Serua.

By consent of parties civil action 94 of 2003 and 121 of 2003 were heard together as issues in both were same and the parties also agreed that affidavits and material filed in one could be used interchangeably in arguments in the other action. In the two actions the plaintiffs are seeking numerous declarations and orders against the first, second and fourth defendants.

The effect of the orders sought is to challenge the validity of an approval notice issued to the first defendant by the second defendant in 1974 and which was in 1998 transferred to the fourth defendant. It was for a term of 99 years.

FACTS:

There is little dispute as to facts. In the province of Serua there is land known as Korovono comprising some 2250 acres owned by three Mataqalis being Mataqali Naua, Mataqali Ketenarukusara and Mataqali Sema. The land is not surveyed. It is planted with mahogany plantations by the Government of Fiji and which are ready for harvesting or will be ready for harvesting in the near future. It is worth substantial sum of money and so attracts a lot of interest.

Atunaisa Tiva who is plaintiff in civil action 121 of 2003 is a member of Mataqali Naua while Sainivalati Niudamu who is plaintiff in civil action 94 of 2003 is a member of Mataqali Ketenarukusara. They have sued both in their personal capacity and in representative capacity for and on behalf of the members of the Mataqali. There is no separate action filed on behalf of Mataqali Sema who are probably awaiting the outcome of these actions.

The second defendant is sued as it is vested with the control of all native land in Fiji. The plaintiffs have sued the second defendant as they allege that it is not permitted to issue a 99-year lease to the first defendant. They have sued the fourth defendant as it is alleged that any lease issued to it by the first defendant is null and void. The third defendant is sued as being the representative of the State.

APPROVAL NOTICES:

From the affidavits filed and the exhibits I note that four approval notices have at one time or another been issued in respect of this land as follows:

1. On 1st July 1964 an approval notice was issued to the Director of Lands for a period of 25 years with effect from 1st July 1964 over an area of 2400 acres. It was in respect of Class I lease which is special forestry. An earlier tenancy at will was cancelled on issue of the approval notice.
   
2. On 12th March 1969 approval notice issued on 1st July 1964 was cancelled and a fresh approval notice issued for the same period but the area was reduced to 2250 acres. The class of lease was again class I special forestry.
   

100. On 17th August 1970 the approval notice issued on 12th March 1969 was cancelled and another approval notice issued to the Director of Lands. The term of lease was increased to 99 years commencing from 1st July 1964. The area was 2250 acres. The class of lease was class I special forestry.
     

4. On 6th December 1974 approval notice dated 17th August 1970 was cancelled and a fresh approval notice issued to the Director of Lands for the same period of 99 years from 1st July 1964. The area was 2250 acres. The class of lease was class I special forestry. The rental was changed.
   

PLAINTIFF’S SUBMISSIONS:

Mr. Fa submitted that Korovono has not been surveyed and that the approval notice issued to the Director of Lands ceases to have effect on the basis of Regulation 12 of Native Land Trust (Leases and Licences) Regulations. He submits that Regulation 12 requires that the lessee must have the land surveyed within three months of issue of approval notice failing which the approval notice becomes void. He submitted that since the approval notice issued to the Director of Lands ceased to have effect, the Director himself had no interest which he could transfer to the fourth defendant.

Mr. Fa has argued on basis on Native Land Trust (Leases and Licences) Regulations made in 1984. However, the approval notices were issued before 1984 so the earlier regulations which appear in the 1967 revised edition of the Laws of Fiji (Volume 8 Cap. 115) apply. I invited counsels to make further submissions as a result. What Mr. Fa canvassed in his arguments is subject of Regulation 16 and 17 of these Regulations. Regulation 16 requires the Board upon approval of a lease to an applicant to obtain costs of estimated survey fee and then inform the applicant of the approval. The applicant has six months to pay the survey fees. The instructions for survey would be issued by the Board. The regulations required that the lease could not be executed until survey fee was paid. Finally Regulation 17 stated that if the applicant failed to execute the lease within “six months of receipt of notice that the lease is ready for execution the Board may cancel its approval of the lease”.

It is evident that the land in issue has not been surveyed even till now nor does it appear from affidavits that the costs of survey were informed to the Director of Lands. I note that approval notice dated 6th December 1974 has been signed by the Director of Lands. One could therefore presume that the necessary fee had been paid. The approval notice itself bears the stamp “PAID” on it.

The approval notices issued in respect of Korovono are in the form of a letter. They contain basic information like area, term, rental and state that the lease will be subject to conditions set out in Native Land (Leases and Licences) Regulations.

Regulation 16 of the Regulations sets out the procedure the Board has to follow once it has agreed to lease. The transaction initiated by this letter as approval notice would ultimately result in issue of a registrable lease under the provisions of Land Transfer Act.

Justice Williams in CHANDRIKA PRASAD v. GULZARA SINGH – Civil Action 76 of 1976 (Labasa High Court) held that a person occupying native land under an approval notice issued by the Native Land Trust Board was in equity a lessee on the terms as set out in that particular approval notice. Mr. Fa relied on CHALMERS v. PARDOE 1963 3 ALL ER 552 in submitting that equity cannot grant relief to parties who act on an illegal document.

I have already ruled that there is nothing illegal about the issue of approval notice. Chalmers v. Pardoe applies where the Board has not granted consent to a dealing and parties have carried out acts which amount to a dealing in land. The issue of Board’s consent does not arise in present proceedings.

Mr. Fa submitted that in light of the fact that the approval notice had ceased to have effect since survey was not done, there was no interest under the approval notice which the Director of Lands could transfer.

In light of my earlier conclusion on this matter, I need not comment any further.

TERM – 25 YEARS versus 99 YEARS:

The plaintiff submitted that the landowners had only agreed to a lease for a term of 25 years over their land. Reliance is placed on two approval notices for term of 25 years and the comment by the Conservator of Forests in his report to the Bose Levu Vakaturaga Sub Committee on mahogany in which he concluded that the lease had expired in 1989 – annexure M to the affidavit of Sainivalati Niudamu sworn on 24th March 2003 and annexure 3 (application for consent to assign). In the affidavit of Emosi Toga sworn on 8th July 2003 again a term of 25 years is stated commencing from 1st July 1964.

The plaintiffs allege in both cases that in 1964 the elders had agreed to lease the land for a period of 25 years for purpose of establishing a mahogany plantation. An event of such significance would be well known among the landowners. They would well know that the agreed term would expire in 1989. Sainivalati Niudamu in paragraph 13 of his affidavit dated 24th March 2003 states that they have become very concerned since the commencement of the mahogany plantation by the silence of the second defendant. Yet there is no correspondence from the plaintiffs expressing or ventilating this concern until 2002 or in any way asking the second defendant or the Director of Lands to hand possession of land back to the landowners. They remained silent for over a decade after 1989.

I am of the opinion that it was Conservator of Forests report in September 2000 which led the plaintiffs to pursue the allegation that the initial lease was for 25 years. The Conservator had concluded that the lease was for a period of 25 years from 1st July 1964. The Conservator had probably seen either the approval notice dated 1st July 1964 or 12th March 1969 both of which are for 25 year term and based his conclusions from there. I am not bound by Conservator’s conclusions.

The silence of the landowners from 1989 onwards confirms that they had agreed to a lease for 99 years as the fourth defendant submits. There are two approval notices to that effect. The fourth defendant’s submissions on page 9 contain extracts from material referred to in the appendices to Conservator’s report. The Burns Commission Report Chapter 15 – Forestry February 1960 at paragraph 550 recommends a 99-year lease for tree crops. The Colonial Secretary’s reply of 19th June 1961 says that “in Fiji, the forest crop will take up to 45 years to mature”.

More telling is letter of Ratu Penaia Ganilau to Roko Tui Serua/Namosi of 15th February 1965 which says term of lease was 99 years. This is a note from the very person who the plaintiff’s say spoke to the clan. The letter is written to the Roko Tui of the area where the plaintiffs are from. Yet there is no evidence or letters to suggest that plaintiffs disagreed with contents of Ratu Penaia Ganilau’s letter.

The fourth defendant also referred to excerpts from to Analysis and History of Reforestation Lease Conditions by Director of Lands 1998. These pieces of documentary evidence written about the time of issue of the lease conclusively point to a long term lease and not a 25-year term. They are far superior form of evidence than allegations of plaintiffs unsupported by any document except doubtful opinion of the Conservator of Forests.

In addition I take note of the fact that the land in question was to be leased for purposes of mahogany plantation. It is common knowledge that mahogany takes more than 25 years to mature so it would be absurd for the state to agree to a 25-year term which would give the state no opportunity to test the viability of the project unless it harvested the forests. The fourth defendant correctly summed it up in its submission saying

“to suggest that the second defendant merely planted the mahogany forests to hand them over wholesale to the plaintiff and his mataqali without any further government involvement is an astounding proposition”.

I therefore conclude that the term of 25 years was expressed in the original approval notice and the Conservator of Forests duplicated that error in his conclusion. The real intention of the parties was always to issue a ninety-nine year lease and this intention has been expressed in two of the latter approval notices.

IS NINETY-NINE YEAR LEASE PERMISSIBLE:

At the time when approval notices were issued over Korovono, the Native Land Trust (Leases and Licences) Regulations which appear in 1967 edition of Laws of Fiji applied.

One of the powers of the Native Land Trust Board is expressed in Section 8(1) of the Act. It reads:

“8(1) Subject to the provisions of the next succeeding section, it shall be lawful for the Board to grant leases or licences of portions of native land not included in a native reserve for such purposes and subject to such terms and conditions as to renewals or otherwise as may be prescribed.”

The prescription for issue of leases or licences is contained in the Regulations. The relevant part is part 2 of the Regulations which deal with application for lease, survey fees, execution and term of leases.

The relevant provisions of these regulations are 16, 17, 19 and 20 and these are separately attached as an appendix to the judgment.

Mr. Fa has submitted that these provisions of the Regulations must be strictly complied with and failure to issue leases or licences in accordance with the Regulations renders the lease invalid.

The fourth defendant submits that the court ought to look at the intention of the parties and to look at the words used in the context of the entire regulations. It submits that the Korovono leases could be classified as special purpose lease under Regulation 33 or alternatively these leases could be classified as lease in a properly designed area and therefore the Board had the powers to grant a 99-year lease.

Under Regulation 16 once the Board has decided to issue a lease to an applicant it informs the applicant of the estimate survey fee. The applicant has six months to pay the survey fee. If the applicant fails to pay survey fees in six months, “the approval of the application by the Board may be revoked”. Regulation 17 provides that if an applicant fails to execute the lease within six months of notice that the lease is ready for execution, the Board may cancel its approval. The statutory provisions are very clear. They give the Board discretion to cancel or not to cancel. The provision is not mandatory.

The word “may” in the context of these regulations cannot be interpreted as “shall”. Mr. Bukarau I believe correctly stated that strict compliance with the timetable may prove an impediment to commerce. The power lies with the Board; it may or may not insist on strict compliance.

Regulation 19 classifies leases into ten categories. Of these ten classifications, three have their maximum terms fixed – 99 years for tramway leases by Regulation 20(5); 50 years for grazing leases by Regulation 20(6) and 30 years for leases granted to native Fijians in a native reserve.

The other seven classifications have to be slotted in one of the categories specified in Regulation 20(1) which for ease of reference I rewrite here:

“Leases, other than tramway and grazing lease, shall for the purpose of determining the maximum terms thereof be classified as follows:

(a) leases in properly designed areas in which due provision has been made for roading, commercial areas, school sites, cemetery and recreation reserves, etc.;

(b) leases of isolated unplanned areas outside the margins of settled areas;

(c) leases in settled areas requiring replanning and reparcelling.”

The maximum term for category (a) is 99 years; for category (b) is 50 years and for (c) is 30 years.

The key words in Regulation 20 are “for the purpose of determining the maximum terms thereof”

Category (a) applies to fully developed urban or semi urban areas. Korovono is a vast tract of forest land. It cannot fit into category (a). Nor is Korovono a ‘settled area’ which requires replanning and reparcelling. The only conceivable group into which Korovono can be placed is category (b). The fourth defendant submits that Regulation 33 provides for a lease for special purposes which has special conditions to it. Regulation 33 reads:

“A lease for such special purposes as are not hereinbefore mentioned shall specify the purpose for which the land shall be used, the special conditions applicable thereto, and the nature and value of the improvements required to be effected thereon.”

The underlined words suggest that there may be classes of lease in addition to those provided in Regulation 19 so classification in Regulation 19 would not be exhaustive.

The “special conditions” stated in Regulation 33 cannot encompass or include the term of lease. The words “special conditions” also appears in Regulations 26, 27, 28, 29 and 31. They outline what are special conditions in particular types of leases and none of the special conditions in Regulations 26, 27, 28, 29 and 31 refers to term of lease. The special conditions must be conditions other than the term of the lease. The terms are fixed by Regulation 20. The repetition of the word “shall” and “shall be” in Regulation 20 show that the legislature considered these to be mandatory leaving the board no discretion to issue leases in excess of those terms for various categories.

Hence I conclude that the maximum term of leases which could be issued for land known as Korovono under the Native Land (Leases and Licences) Regulations in existence at the time of grant of such leases was 50 years.

SEVERANCE OF EXCESS TERM:

The next issue is does the non compliance with the Regulation render the approval notice issued first to the Director of Lands and its subsequent assignment to the fourth defendant void or is it possible to sever the term of years beyond the 50 years so the 99 years term is reduced to 50 years. Generally speaking in the cases which have come before the courts one of the parties to a contract raises the issue of illegality or non compliance to avoid liability. The circumstances in the present case are quite different. None of the defendants is attempting to avoid the lease. They very much want the agreement for lease to remain intact.

The legal position in respect of severance was explained by Wills J in Pickering v. Infracombe Railway Co. (1863) LR 3 as follows:

“The general rule is that, where you cannot sever the illegal from the legal part of a covenant, the contract is altogether void; but, where you can sever them, whether the illegality be created by statute or by the common law, you may reject the bad part and retain the good.”

Anson’s Law of Contract 25th edition at page 400 says the present approach of courts is to

“concentrate more distinctly upon the nature of the illegality involved and whether it accounts with public policy that severance should be allowed”.

Regulation 20 allows leases up to a maximum of 50 years in isolated unplanned areas. Anything in excess of 50 years is unlawful. The defect can be cured by reducing the term to 50 years. Severance of term beyond the 50 years is not going to change the nature of the lease but only its extent as the fourth defendant submits. I am also mindful of the substantial injustice which would result if the approval notice were declared void as the first and third defendants would lose all the efforts and expenditure they put into Korovono for last forty years and another party would get unjustly enriched as a result.

Accordingly applying the doctrine of severance, I read down the term of 99 years to 50 years so as to bring the term of approval notice within the term permitted by the Regulations which were in force at the time of the issue of the approval notice.

Mr. Fa had sought 13 orders many being repetitions or in effect asking the same result. Prayer (i) for example was seeking declaration of law. Prayers (d) and (f) are virtually identical. It is far more desirable that prayers for relief are expressed concisely instead of in multitudes which only makes it very difficult for parties to make submissions and remain focussed on the main issues. Order 7 Rule 3 asks for a “concise statement of relief” sought.

CONCLUSIONS:

The final result or orders are that under the Native Land (Leases and Licences) Regulations which applied prior to the 1984 regulations the NLTB could not issue leases in excess of term of 50 years for isolated unplanned areas outside the margins of settled areas and properly designed areas. Korovono is an isolated unplanned area and therefore the Korovono lease could only be for maximum of 50 years. Applying the doctrine of severance, the term of Korovono lease is read down to 50 years.

COSTS:

The case is of immense significance to the landowners and the Board. I understand there are other similar cases before the courts as well. Neither party has totally succeeded. Therefore I consider each party should bear its own costs.

[ Jiten Singh ]
JUDGE

At Suva
29th March 2004