Vakasilimiratu v Cokanavalu [2010] FJHC 363; Civil Action 152.2010 (27 August 2010)

IN HIGH COURT OF FIJI]
AT SUVA
CIVIL JURISDICTION

Civil Action No. 152 of 2010

IN THE MATTER of an application under section 169 of Part XXXIV of the
Land Transfer Act, Cap 131 for an Order for immediate vacant possession

BETWEEN:

MIKAELE VAKASILIMIRATU and MARAIA VAKASILIMIRATU
of Lot 3 Wainivula Road, Nasinu –
Senior Education Officer and Investment Registration & Monitoring Officer respectively.
Plaintiff

AND:

ALUMITA COKANAVALU
of Lot 2 Avon Place, Raiwaqa.
1st Defendant

AND:

ANDREW
of Lot 2 Avon Place, Raiwaqa.
2nd Defendant

Before: Master Anare Tuilevuka

Counsels:
Ms. N. Matanitobua for the plaintiff
Mr. A. Seru for the defendant

Date of hearing: 26th August 2010
Date of decision: 27th August 2010

RULING

PRELIMINARY

[1]. Just to clarify at the outset because this point was queried by counsels, the Master’s Court now has jurisdiction to hear contested section 169 applications pursuant to an extension of jurisdiction conferred by the Honourable Chief Justice in December 2009.

BACKGROUND

[2]. This is an application under section 169 of the Land Transfer Act (Cap. 131 - “the Act”). By the originating summons filed on 13th May 2010, the plaintiffs are seeking an order for immediate vacant possession of the property comprised in Certificate of Title No. 10955, Lot 2 DP 2583 situated at Avon Place Raiwaqa (“propertry”).

[3]. Section 169 of the Act provides as follows: -

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

(a) the last registered proprietor of the land;

(b) a lessor with power to re-enter where the lessee or tenant is in arrear for such period as may be provided in the lease and, in the absence of any such provision therein, when the lessee or tenant is in arrear for one month, whether there be or be not sufficient distress found on the premises to countervail such rent and whether or not any previous demand has been made for the rent;

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

[4]. Sections 171 and 172 of the Act provide as follows:

“s.171. On the day appointed for the hearing of the Summons, if the person summoned does not appear, then upon proof to the satisfaction of the Judge of the due service of such summons and upon proof of the title by the proprietor or lessor and, if any consent is necessary, by the production and proof of such consent, the judge may order immediate possession to be given to the plaintiff, which order shall have the effect of and may be enforced as a judgment in ejectment.”

“s.172. If the person summoned appears he may show cause why he refuses to give possession of such land and, if he proves to the satisfaction of the judge a right to the possession of the land, the judge shall dismiss the summons with costs against the proprietor, mortgagee or lessor or he may make any order and impose any terms he may think fit.”

[5]. Under the section 169 summary eviction procedure, once it is shown that the defendants are the last registered proprietors of the property, the onus shifts immediately to the defendant to show cause as to why vacant possession should not be given.

PLAINTIFF’S CASE

[6]. The affidavit of Mikaele Vakasilimiratu sworn on the 10th day of May 2010 annexes to it and marked “A” a copy of the Certificate of Title. It is memorialized on the Title that the property was transferred to the plaintiffs by mortgagee sale on the 09th of March 2010.

[7]. The affidavit sets out in detail how the plaintiffs acquired the property following their successful tender in response to a Fiji Development Bank advertisement in August 2009. The property has since been transferred to them and registration was effected on 9th of March 2010.

[8]. There is no issue raised about the validity or otherwise of the eviction notice issued on behalf of the plaintiffs by their solicitors.

DEFENDANT’S CASE

[9]. The 1st defendant’s affidavit in reply sets out how she and her late husband had acquired the property on 14th March 2006 from FDB. They had acquired the property for $250,000 on mortgagee sale and had paid an equity contribution of $60,000 with FDB financing the balance of $190,000. The property of course was mortgaged to FDB as security for the loan. However, barely two weeks after they acquired the property, her husband, who was the sole breadwinner passed on. She could not thereafter keep up with the monthly repayment of $1,600 per month. She alleges that the sale to the plaintiffs was improperly conducted and that FDB had failed to properly consider her interest in not even reviewing the loan agreement or restructuring the loan. She has in fact filed a claim against FDB (Civil Action 16 of 2010) which is pending in Court. She also highlights that as the property was sold to the plaintiffs at $155,000-00, it has been sold well below its proper value which is prejudicial to her interests. She alleges that the transaction was done in bad faith.

[10]. She highlights also that she paid an additional $36,650,000 to FDB after her husband’s death which means that, in total, they have paid the sum of $96,650.00.

[11]. She opines in paragraph 25 of her affidavit that

“The issue of bonafide purchasers holding good title is tainted with the unclean hands of the Mortgagee in ignoring the interests of the Mortgagor, the 1st Plaintiff (should read 1st Defendant)."

[12]. She then deposes in paragraph 26 that

“...the Defendants are not refusing or failing to give up vacant possession of the property as they need a Court’s decision, especially the 1st Defendant, as to whether the mortgagee sale process transferring the property to the Plaintiffs were made in good faith and that the interests of the mortgagor were not overlooked”

[13]. I note having confirmed from Mr. Seru in Court that the current plaintiffs are not a party to that other case (Civil Action 16 of 2010).

THE LAW/ANALYSIS

[14]. That the plaintiffs are the registered proprietors of the property is not disputed. I gather from the 1st defendant’s affidavit that there is a pending Civil Action 16 of 2010 in which the 1st defendant is suing the Fiji Development Bank. It is not clear what exactly the cause of action is as no copy of the Writ or Summons or Statement of Claim has been produced in Court. However, from the 1st defendant’s affidavit and Mr. Seru’s submissions in Court, it appears that the claim would have to be premised on an allegation of bad faith and/or fraud on the part of FDB in orchestrating the mortgagee sale to the plaintiffs. The allegation of bad faith and/or fraud would have to be premised on the fact that the property was sold at a gross undervalue. It would also have to be premised on an allegation that FDB had blatantly disregarded the 1st defendant’s interests in pursuing to conclusion the mortgagee sale to the plaintiffs despite the 1st defendant being willing and prepared to commit to a restructured loan facility and considering the circumstances of the case.

[15]. I ask whether the pendency of Civil Action 16 of 2010 should be a bar to this current section 169 proceedings.

[16]. That issue was dealt with by the Fiji Court of Appeal case of Dinesh Jamnadas Lalji and Anor v Honson Limited F.C.A. Civ. App. 22/85 where Mishra J.A. said:

“At the hearing, the appellants’ main submission was that, as proceedings relating to the same matter were already before the Supreme Court, the application should be dismissed. The learned Judge, quite correctly in our view, held that existence of such proceedings was, by itself, not a cause sufficient to resist an application under section 169 of the Land Transfer Act.” (emphasis added).

[17]. Also in Muthusami s/o Ram Swamy v Nausori Town Council (Civ. App. No. 23/86 F.C.A.) Mishra J.A. expressed the same view as above in the following words:

“.....that mere institution of proceedings by Writ did not by itself shut out a claim under section 169 of the Land Transfer Act in a proper case. It was for the appellant to show, on affidavit evidence, some right to remain in possession which would make the granting of an order under section 169 procedure improper.”

Although the defendant has alleged fraud, and which is also the subject matter of the said action instituted by the defendant, there are no complicated questions of fact to be investigated. The procedure under s 169 is most appropriate here. On this aspect in Ram Narayan s/o Durga Prasad v Moti Ram s/o Ram Charan (Civ. App. No. 16/83 FCA) Gould J.P. said:

“... the summary procedure has been provided in the Land Transfer Act and, where the issues involved are straight forward, and particularly where there are no complicated issues of fact, a litigant is entitled to have his application decided in that way.”

(my emphasis)

[18]. The Supreme Court in Morris Hedstrom Limited v. Liaquat Ali (Action No. 153/87 at p2) said as follows on the requirements of section 172:

“The Defendants must show on affidavit evidence some right to possession which would preclude the granting of an order for possession under Section 169 procedure. That is not to say that final or incontrovertible proof of a right to remain in possession must be adduced. What is required is that some tangible evidence establishing a right or supporting an arguable case for such a right, must be adduced.”

[19]. The question then is whether or not the defendant has discharged that burden?

[20]. Because the plaintiffs are the last registered proprietors, the only way the defendants can discharge that burden is if they were to adduce some tangible evidence which might support an arguable case that the plaintiffs’ title is impeachable or defeasible still.

[21]. And, the only way the defendants could discharge that burden is if they were to, firstly, make some allegation of fraud against the plaintiffs and secondly, adduce some documentary evidence to support that allegation. Wallington –v- The Directors of the Mutual Society (1879) 5 App Cas at 697 is authority that general allegations of fraud are insufficient even to amount to an averment of fraud of which any Court ought to take notice.

[22]. As it is, in this case, there is not even any general allegation of fraud against the plaintiffs. The law is that what must be established is actual fraud and not just constructive or equitable fraud. Furthermore, the fraud to be proved by the defendant must be that of the registered proprietor (i.e. the plaintiffs) and not just Fiji Development Bank.

[23]. Section 38 of the Land Transfer Act provides: (registered instrument to be conclusive evidence of title).

“No instrument of title registered under the provisions of this Act shall be impeached or defeasible by reason of or on account of any informality or in any application or document or in any proceedings previous to the registration of the instrument of title”.

[24]. Section 39 provides:

Section 39(1)

“Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which but for this Act might be held to be paramount or to have priority, the registered proprietor of any land subject to the provisions of this Act, or of any estate or interest therein, shall except in case of fraud, hold the same subject to such encumbrances as may be notified on the folium of the register constituted by the instrument of title, thereto, but absolutely free from all other encumbrances whatsoever except:-

(a) the estate or interest of a proprietor claiming the same land, estate or interest under a prior instrument of title registered under the provisions of this Act; and so far as regards any portion of land that may be by wrong description or parcels or of boundaries be erroneously included in the instrument of title of the registered proprietor not being a purchaser or mortgagee for value or deriving title from a purchaser or mortgagee for value; and any reservations, exceptions conditions and powers contained in the original grant.

(b) 39(2) Subject to the provisions of Part XIII no estate or interest in any land subject to the provisions of this Act shall be acquired by possession or user adversely to or in derogation of the title of any person registered as the proprietor of any estate or interest in such land under the provisions of this Act.” (emphasis added)

[25]. Section 40 states: (purchaser not affected by notice):

“Except in the case of fraud, no person contracting or dealing with or taking or proposing to take a transfer from the proprietor of any estate or interest in land subject to the provisions of this Act shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such proprietor or in any previous proprietor of such estate or interest is or was registered, or to see to the application of the purchase money or any part thereof, or shall be affected by notice, direct or constructive, of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.”

(emphasis mine)

[26]. The 1st defendant’s gripe is really against the way FDB had proceeded with the mortgagee sale to the plaintiffs. I note that even in the pending civil action Civil Action 16 of 2010, the plaintiffs are not even named as a party let alone is there any allegation of fraud against them.

[27]. The following passage from the judgment of Lindley L.J. in Asset Co’s case is pertinent in the context of this case showing the strength of the plaintiffs as having a better title than that of the vendor:

“In dealing with actions between private individuals, their Lordships are unable to draw any distinction between the first registered owner and any other. A registered bona fide purchaser from a registered owner (and that is the case here) whose title might be impeached for fraud has a better title than his vendor, even if the title of the latter could be impeached by the Crown.

[28]. Peter Butt on ‘Conveyancing and the Rights of Persons in Occupation’ in Volume 55 ALJ (1981) 119 at 122:

“This narrow meaning of the term “fraud” in the Real Property Act has been evident in pronouncements of the High Court also. For example, in Butler v Fairclough (1917[1917] HCA 9; [1917] HCA 9; , 23 CLR 78 at 97), Issacs J. said that what was contemplated by “fraud” was “actual fraud, moral turpitude (ibid at 90)”, and Griffith C.J. said that it imported “personal dishonesty or moral turpitude”. A few years later, in Wicks v. Bennett (1921, [1921] HCA 57; 30 CLR 80 at 91) Knox C.J. and Rich J. said that “fraud”, as that term was used in s.43 of the Real Property Act 1900 (N.S.W.) meant “something more than mere disregard of rights of which the person sought to be affected had notice”. In Stuart v. Kingston [1923] HCA 17; (1923, 32 CLR 309 at 359) Starke J. said: "Fraud will no longer be imputed to a proprietor registered under the Act unless some consciously dishonest act can be brought home to him. The imputation of fraud based upon the reinforcements of the doctrine of notice has gone." And the Privy Council, in a later case, expressed the view: "If the designed object of a transfer be to cheat a man of a known existing right, that is fraudulent, and so also fraud may be established by a deliberate and dishonest trick causing an interest not to be registered and thus fraudulently keeping the register clear..... The act must be dishonest, and dishonesty must not be assumed solely by reason of knowledge of an unregistered interest (Waimiha, supra)."

CONCLUSION

[29]. Whilst the 1st defendant may or may not have a fairly strong arguable case against the FDB in Civil Action 16 of 2010, the relative strength or otherwise of her case in Civil Action 16 of 2010 has absolutely no bearing on the security of title of the plaintiffs as bona fide purchasers for value of the property in question, in the absence of any allegation of actual fraud against the plaintiffs on substantial grounds.

[30]. Nor is the strength of her case against FDB a triable issue worthy of postponing a summary determination of this application.

[31]. What the defendant says (see paragraph 11 above) is simply wrong in law. The security of the plaintiffs title as bona fide purchasers for value cannot be tainted with the unclean hands of FDB as mortgagee in ignoring her interests of the 1st defendant as mortgagor.

ORDERS

(i) the defendants are to vacate the property comprised in Certificate of Title No. 10955, Lot 2 DP 2583 situated at Avon Place Raiwaqa within 21 days of the date of this ruling.

(ii) costs to the plaintiffs which I summarily assess at $350-00 (three hundred and fifty dollars) to be paid within 21days of the date of this ruling.

(iii) no order as to meisne profits as sought by the plaintiffs.

Anare Tuilevuka
MASTER

At Suva
27th day of August 2010.