Forum Hotels v Native Land Trust Board [2010] FJHC 369; HBC274.2005L (31 August 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 274 of 2005L

BETWEEN:

FORUM HOTELS
Plaintiff

AND:

NATIVE LAND TRUST BOARD
1st Defendant

AND:

REGISTRAR OF TITLES
2nd Defendant

AND:

ATTORNEY GENERAL OF FIJI
3rd Defendant

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr Sudhakar for the Plaintiff
Mr Tuifagalele for the 1st Defendant
Mr R Green for the 3rd Defendant

Solicitors: AK Lawyers for the Plaintiff
In house solicitors for the 1st Defendant
AG’s Chambers for the 2nd Defendant

Date of Hearing: 26 April 2010
Date of Judgment: 31 August 2010

INTRODUCTION

[1] This is a dispute over an alleged unlawful re-entry by the 1st Defendant, NLTB. The Plaintiff, Forum Hotels became the registered lessee of native land with the NLTB on 2 May 2000. By notice dated 7 February 2005 pursuant to s 105 of the Property Law Act, the NLTB informed Forum Hotels that it was in breach of the lease and gave the company 30 days to rectify the breaches failing which the NLTB would re-enter.

[2] The company did not rectify the breaches so by notice dated 8 March 2005, the NLTB advised Forum Hotels that it had re-entered. The NLTB then applied to the Registrar of Titles who cancelled Forum Hotel’s lease upon re-entry on 14 March 2005.

[3] Forum Hotels then filed its Writ of Summons on 22 September 2005 seeking various orders including a declaration that the re-entry by the NLTB was unlawful, void and of no effect. The granting of other relief sought in the Writ will depend on whether Forum Hotels is entitled to such a declaration.

CASE HISTORY

[4] The case was tried before a Judge who is no longer on the Bench. She heard the case over 4 days finally completing on 21 August 2007. As not uncommon, there were considerable delays in counsel filing their written submissions after trial, the last of which was not filed until 3 April 2009 when the trial Judge informed the parties that her judgment would be delivered on 17 July 2009. The matter eventually came before me on 14 August 2009 for the parties to inform me whether they agreed for me to deliver Judgment on the trial Judge’s notes, which were very comprehensive, or the matter be heard de novo. The Defendants wanted a hearing de novo. The Plaintiff’s representative was overseas so could not give instructions to its counsel on what the company preferred.

[5] However, its solicitors filed a Summons on 30 September 2009 pursuant to O 33 Rules 3 and 7 of the High Court Rules 1988 for me to rule on certain preliminary issues which were:

[i] Whether the application for cancellation of the Plaintiff’s Native Lease 24345 by the 1st Defendant and registration thereof by the 2nd Defendant was unlawful, void and/or ineffectual due to non compliance with the procedure for cancellation required under section 57 of the Land Transfer Act [Cap 131].

[ii] If the issue above determines in favour of the Plaintiff the Court proceed to grant such reliefs consequential thereon including assessment of damages.

[iii] Evidence for the trial of the above issue or preliminary issue be by way of affidavits with the liberty of the parties to call oral evidence limited to the trial of the above preliminary issue.

[iv] Costs of this application be costs in the cause.

[6] I gave directions for the filing of affidavits and submissions which counsel duly complied but I was not able to hear the application until 26 April 2010. I was to give my judgment on notice which I now deliver.

[7] Because of the nature of the application I not only read the affidavit material, I also read the trial transcript.

FACTS NOT IN DISPUTE

[8] The original lessee was issued on 5 January 1998 to a company called Enormous Investments Limited. Clause 2(k) of the lease required the company “within 2 years from 1 January 1996 to erect on the land to the satisfaction of and in accordance with plans approved in writing by the lessor a building for industrial purposes.”

[9] Forum Hotels bought the property through mortgagee sale and became the registered lessee of Native Lease No 24345 on 2 May 2000. The company engaged an architect and a surveyor to put together a hotel concept. They started in 2001, the survey was done in 2002 and the concept was eventually completed in 2005 and given to the company. The company’s architect was told that rezoning of the land was in progress because a hotel could not be built on the land, it being zoned “industrial” at the time.

[10] The company did not build any building on the land, so on 7 February 2005, the NLTB gave notice of impending re-entry under s 105 of the Property Law Act to the company. The notice said the company was in breach of clause 2(k) of the lease by not having built a building for industrial purpose as was required by the clause. The notice also said that the company was in breach of clause 2(o) in that it failed to keep the land clear of refuse, weeds and unsightly under growth to the satisfaction of the NLTB. It gave Forum Hotels 30 days to remedy these breaches. Forum Hotels’ solicitors wrote to the NLTB on 16 February 2005 and asked for re-entry to be deferred for 90 days. On 8 March 2005, the NLTB re-entered. On 14 March 2005 the NLTB applied to the Registrar of Titles to cancel the lease which the Registrar did and registered the cancellation on that day.

THE COURT’S FINDINGS OF FACT & LAW

[11] Although the time to comply with the building covenant, clause 2(k), in the original lease had expired by the time Forum Hotels became the lessee, it is to me clear that Forum Hotels held itself bound by the clause to build on the land. No specific time was agreed to by the company and the NLTB so I hold that the building was to be built within a reasonable time.

[12] The original lease negotiations with the previous lessee, Enormous Investments, commenced in 1996 and the period of the lease commenced on 1 January 1996. The building covenant required the company to complete the building within 2 years. I therefore find that the new building covenant required Forum Hotels to build within the same period, that is to say, by 2 May 2002.

[13] The company’s directors wanted to build a hotel but were not prepared to pay the extra premium that NLTB wanted if the lease was to be changed to “tourism purposes”. The directors knew all along that the lease was for industrial purposes and took the risk without having the lease amended.

[14] I do not think the NLTB should be bound by representations of its estate officers that a new lease would be issued. To hold otherwise would mean that the Board itself would have no knowledge or control over the issue of new leases of native land under its trusteeship. A prospective tenant does not get a new lease unless the Board itself grants its approval under seal. Having come to this view I therefore find that the doctrine of promissory estoppel formulated by Lord Denning in Central London Property Trust Ltd v High Trees House Ltd [1946] EWHC KB 1; [1947] KB 130 does not apply in this case.

[15] I therefore find that Forum Hotels not only did not, but could not, have complied with clause 2(k) by building an “industrial” building as opposed to a “tourism” building because it had no intention of doing so when it acquired the lease with full knowledge of the existence of the clause.

[16] In Rapchand Holding Ltd v Native Land Trust Board [2010] FJHC 208; HBC438.2003L (16 June 2010), a decision on the adjoining land, I held that the Registrar of Titles in dealing with an application for re-entry under section 57 of the Land Transfer Act [Cap 131] was acting administratively and all he needs to be satisfied with is that the documents put before him on their face show compliance with the requirements of that section:

18] ... I think the exercise of power by the Registrar of Titles under s 57 is not a judicial act but simply an administrative act which requires him to be satisfied, as the section says, that the re-entry was "in conformity with the provisions of re-entry contained or implied in the lease". That, in my view, is not an inquiry into the merits of the re-entry. All that the Registrar needs to be satisfied with is that the application shows that there was a lease, there was a provision for re-entry and the requirements for that provision had been met. A statutory declaration or other sworn testimony deposing to those matters would suffice. He is not, in my view, required to inquire whether the requirements were in fact met or whether in law they entitled the lessor to exercise his rights under the re-entry provision. As was said in Kali v Bayly [1954] 4 FLR 139, 141 by Hyne CJ: "All that he need do is to be satisfied that the declaration was right on the face of it".

[19] Further, I respectfully agree with the observations of Hyne CJ in Kali v Bayly as cited in Patton & Stork Limited that the lessee had no right to be heard before the Registrar. The need to give notice in cases where there is no court order for possession is to enable the lessee to either remedy the breach or to take appropriate court proceedings for relief, for example, under s 168 of the Land Transfer Act. Obviously, in the case of a court order for possession no notice is required because the order itself is notice and the lessee would have or should have vacated by then.

[20] Further, as I indicated to counsel for the Defendant at the hearing, surely the Registrar is not expected to search out the truthfulness or the merits of each such application, or for that matter, in every other application where he is given powers to do certain acts subject to him "being satisfied upon proof"[2]? As was pointed out by Hyne CJ in Ram Kali, the applicant need not provide evidence of lack of fraud or misrepresentation. The Registrar is busy enough without having to conduct hearings and inquiries as to merits of applications.

[17] I so find that in this case the requirements of re-entry under s 57 by way of re-entry under the provisions of the lease, namely clause 2(k), have been complied with. The re-entry was lawful and the Registrar of Titles was correct in registering re-entry and cancelling the Plaintiff's lease.

[18] It is not necessary for me to make a finding in respect of clause 2(o) so I make no finding accordingly.

COSTS

[19] The Plaintiff having lost should pay the Defendants' costs. This case had dragged on for too long. It appears from the trial transcript that Phillips J thought the trial was unnecessarily prolonged by the way the Plaintiff's counsel ran his case. I summarily assess costs as $5,000 to each of the First and Second Defendants.

ORDERS

[20] The Orders are as follows:

1. The Plaintiff's claim is dismissed.
   
2. The Plaintiff shall pay to the First Defendant and the Second Defendant their costs of $5,000 each within 28 days.
   

Sosefo Inoke
Judge