Khan v Bibi [2009] FJHC 253; HBC288.2008 (14 January 2009)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC 288 OF 2008

BETWEEN:

JAHANGIR KHAN
Plaintiff

AND:

KULSUM BIBI
First Defendant

REGISTRAR OF TITLES
Second Defendant

Ms B. Narayan for Plaintiff
Mr. V. Maharaj for Defendant

Date of Hearing: 13^th January 2009
Date of Ruling: 14^th January 2009

DECISION

[1] Sada Akbar died in interstate in 1979. The defendant is his widow. She is the administratrix of his estate. A grant of letters of administration was made to her in 1980. The plaintiff is deceased's son and a beneficiary in the estate. The defendant is plaintiff's step mother.

[2] The deceased left behind him a piece of land comprised in Crown Lease 1841. Its area is 3 roods and 22 perches. It is known as Lot 25 Wainibuku. The term of lease is 75 years from 1^st July 1948. It has therefore about fourteen and half years of term left.

[3] There are three old timber and iron structures on the land as appears from valuer's report. One lean to house is occupied by defendant's grandson, one by deceased's nephew namely Faizal Khan who operates a car wash facility from the site. The third is occupied by some unknown person.

[4] The defendant wants to sell the property to one Mohammed Sadik for $300,000.00. He is a cash buyer. The parties entered into a sale and purchase agreement on 17^th November 2008. That agreement has been consented to by the Director of Lands.

[5] The transfer of property was held because the plaintiff had lodged a caveat against the title. The defendant gave the plaintiff notice to remove the caveat. The plaintiff applied for extension of caveat. The extension was granted pending determination of this action.

[6] A trustee has statutory power to sell trust property: Section 23 of the Trustee Act. This is accepted by the plaintiff. However this power to sell must be subject to implied condition that the trustee will use all reasonable diligence to obtain the best price and that the trustee will pay fair attention to interests of all parties concerned. A trustee must not sell a property at an undervalue. If the trustee acts in good faith, then the court does not interfere with the trustee's discretion as to the mode and time of sale.

[7] Ms Narayan for the plaintiff submitted that the sale is at an undervalue. She relies on a valuation report which puts the value of property at $405,000.00. The valuation report was prepared by Sanjays Kirpal.

[8] The defendant did not produce a valuation report of the property in question. However in a final affidavit filed on her behalf a valuation of Lot 29 not too far from Lot 25 was attached. The valuation in respect of Lot 29 was carried out by the same valuer namely Sanjays Kirpal in May 2007. Lot 29 is about the same size as Lot 25 but it has at present about 18 years term of lease left compared to fourteen and a half years for the lease under discussion. It has a residential dwelling and a bulk warehouse erected on it. Kirpal valued Lot 29 at $332,000.00. The plaintiff also attached a transfer in respect of Lot 28 with similar area as Lot 25. This transfer was done in June 2007. The consideration shown is $320,000.00. Lot 28 is also very close to Lot 25.

[9] Mr. Maharaj submitted that unlike Lot 29 and Lot 28, the present Lot namely Lot 25 is not rectangular but narrows at the rear end and therefore not ideal for construction of premises for commercial use and hence not as valuable as the other lots. Mr. Maharaj relied on letter written to the defendant by Navin's Real Estate outlining shortcomings of Lot 25. He had been authorized to find a buyer for the land. The real estate agent could only find purchasers willing to offer from $250,000.00 to $280,000.00 for Lot 25.

[10].Crown Lease 1841 is the only asset owned by estate. According to the defendant it is not generating any income. There would be rent to be paid to the Lands Department and there would be municipal rates. The lease has only fourteen and a half years to run. As the term of lease progressively reduces with passage of time, both its attraction to potential buyers and those who finance such purchase and its value are going to diminish.

[11] The defendant is selling the land for $300,000.00. She has a cash buyer in hand. An agreement has been made and consent obtained.

[12] A valuation is a subjective exercise. It is not an exact science so no two valuations are likely to be same. A valuation is not a guarantee that someone will buy the property for that value. The plaintiff has not produced a buyer offering cash over $300,000.00. What the plaintiff has produced is an expectation as opposed to a certain sum presently offered by the purchaser.

[13] The defendant is prepared to give the plaintiff his due share. I see no good reason why this sale should not proceed. Delay could result in the present buyer pulling out of the deal. Accordingly I order that caveat number 351180 over C .L. 1841 be removed forthwith.

[JITEN SINGH]
JUDGE

At Suva
14th January 2009