Native Land Trust Board v Naidu [2011] FJHC 110; HBC156.2010 (4 February 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION HBC 156 OF 2010

BETWEEN:

NATIVE LAND TRUST BOARD
Plaintiff

AND:

KRISHNA SAMI NAIDU
First Defendant

AND:

REGISTRAR OF TITLES
Second Defendant

Ms L Macedru for the Plaintiff
Mr N Nawaikula for the First Defendant
Ms L Baleimatuku for the Second Defendant

JUDGMENT

By Originating Summons dated 25 May 2010 the Plaintiff sought an order from this Court that Native Lease No 28167 registered on 12 June 2007 to the First Defendant be cancelled forthwith.
The application was supported by an affidavit sworn by Savenaca Ralagi on 13 May 2010. The First Defendant filed an answering affidavit sworn by Krishna Sami Naidu on 22 June 2010. The Plaintiff filed a reply affidavit sworn by Savenaca Ralagi on 2 July 2010.

Counsel for the Second Defendant indicated that the Second Defendant did not intend to file any affidavit material and would abide the Court's decision.

By Summons dated 17 August 2010 the First Defendant sought the following orders by way of counterclaim:

"1. A Declaration that the Defendant is owner of registered lease No. NL 28167.

2. An Order that the Plaintiff release NL28167 to the First Defendant in lieu of the Defendant paying to the Plaintiff the sum of $25,340.00.

3. An Order that the Plaintiff pay to the Defendant damages for unlawfully withholding his title since June 2006 such damages to be assessed."

In support of his counterclaim the First Defendant swore an affidavit filed on 12 August 2010. The Plaintiff filed an answering affidavit sworn on 8 November 2010. The First Defendant filed a reply affidavit sworn on 15 January 2011.

The hearing of legal submissions took place on 18 January 2011.

The lease in question was made on 6 June 2007 between the Plaintiff and the First Defendant. The land area was just over 5 acres at Sauniwaqa subdivision Stage 1 being Lot 79 on R1692 in the Province of Naitasiri (the demised land). The consideration stated in the lease was $21,963.00. The lease commenced on 1 January 2007 and was for a term of 50 years with the yearly rent of $300.00 half yearly in advance payable on the first day of January and July each year and subject to re-assessment as specified in the lease.
The lease was registered in the office of the Registrar of Titles on 12 June 2007 as Native Lease No 28167.

As early as November 2003 the Plaintiff had attempted to grant a lease over the demised land to Isoa Tuwai who happened at that time to be an employee of the Plaintiff. Although the history of the dealings between the Plaintiff and Tuwai are set out in some detail in the Plaintiff's supporting affidavit, they are of relevance to the applications before me in only a very limited sense.

First, the dealings indicate that the Plaintiff was prepared to vary its terms in relation to payments that were required to be made to confirm acceptance of the lease conditions by an applicant.

Secondly, the dealings show that the Plaintiff, at least in relation to dealings with its employees, was prepared to continue to renew a lease offer (more than once) in the event that the initial offer had not been accepted within the prescribed period by payment of the required fees and rental.

Thirdly, the dealings established that there existed a practice whereby a lease was executed by the parties and registered by the Plaintiff before the prospective tenant had paid the amount specified in the letter offering the lease.

The lease to Mr Tuwai was registered as Native Lease No 27067 and had been registered some time prior to 29 September 2004. It had been cancelled some time prior to 11 May 2005 by the Plaintiff.

By letter dated 7 May 2007 the Plaintiff offered a lease over the demised land to the First Defendant for a term of 50 years from 1 January 2007 at an initial annual rental of $300.00. It was a condition of the offer that if the First Defendant did not pay the sum of $24,643.51 and sign the documents within six weeks from the date of the letter, it would be assumed that the application was withdrawn and that the First Defendant did not wish to pursue the lease arrangement. The six weeks period would have expired on about 18 June 2007.
It should be noted that although the Plaintiff's letter offering the lease to the First Defendant was dated 7 April 2007, it was conceded by the parties that the date should be read as 7 May 2007.

I accept that the First Defendant sent a note dated 9 May 2007 described as an "undertaking" to the Plaintiff setting out an alternative arrangement in respect of the payment of the required fees. This was apparently prompted by a realization by the First Defendant that he could not raise the required amount within six weeks. The note is headed "undertaking" and is simply addressed "To whom it may concern". The note states:

"I Krishna Sami Naidu will pay the following fees:

- Lease Admin Fees - $ 56.25
- Stamp Duty - $489.00
- Registration fees - $ 2.25

_______

Total $547.50

_______

so that my lease documents to be stamped and registered. The balance of the offer will be paid once it's registered from the Registrar of Titles Office."

In his answering affidavit the First Defendant deposed that he paid this amount of $547.50 to the Plaintiff and expected to be advised when the lease had been registered.

These matters are set out in paragraphs 14 and 15 of the First Defendant's answering affidavit. In paragraphs 6 and 7 of its reply affidavit the Plaintiff did not deny receiving either the undertaking dated 9 May 2007 nor subsequently receiving the amount of $547.50 from the First Defendant.

As I indicated during the hearing, the affidavit material is unsatisfactory. The First Defendant does not specify when, how, where or to whom exactly the payment was made. He made no reference to having received a receipt in respect of the same. The Plaintiff does not refer to the payment at all in its affidavit, let alone deny its receipt.

About a month later the lease document dated 6 June 2007 is executed and then registered on 12 June 2007.

I am prepared to find that the Plaintiff received the undertaking and subsequently accepted payment of $547.50 pursuant to the undertaking. The acceptance of that payment in my opinion constituted acceptance of a counter offer put forward by the First Defendant in the undertaking dated 9 May 2007. As a result the Plaintiff accepted that the balance of the amount required would become payable upon registration of the lease.

The lease was registered on 12 June 2007 and under the new arrangement the balance was payable at that time. It should be noted that this was earlier than the date upon which the six weeks period would have expired.

Perhaps another point to note at this stage is that the consideration stated in the lease document is less than the consideration in the offer letter dated 7 May 2007. There was no explanation for this discrepancy.

I accept that following registration of the lease, the Plaintiff failed to advise the First Defendant that the lease had been registered. The First Defendant did not know this fact and as a result was not aware that the balance of the undertaking was now due and payable.

As the First Defendant had not paid the balance when the lease was registered, and well after the six weeks requirement, the Plaintiff wrote a letter dated 6 August 2007 to the First Defendant in the following terms:

"We refer to our lease offer dated 7 May 2007 and wish to inform you that, as you have failed to accept the offer by paying the required fees within the prescribed time, the offer has now lapsed.

Your case has been closed accordingly. The said land has been re-offered to other interested applicants."

It should be noted that this letter did not inform the First Defendant that the lease had already been registered by the Second Defendant.

By letter dated 16 August 2007 the First Defendant replied to the Plaintiff's letter in the following terms:

"I refer to your letter dated 6 August 2007.

I wish to advise that I had discussions with one Inia Qole of your office regarding this matter and I also advised him to advise me when the lease is ready. I had also written to your office on 9 May 2007 to pay the required fees for issuance of the lease (copy attached)

I am willing to pay all costs provided you issue me with the lease document duly stamped and registered

Your early reply will be appreciated."

It would appear that not only was there no prompt reply, but that the Plaintiff did not reply at all to the letter. In paragraph 10 of its reply affidavit (sworn 2 July 2010) the Plaintiff does not deny that the letter was received by it. The contents of the paragraph suggest that the deponent has ignored the fact that by its earlier acceptance of the amount of $547.50, the Plaintiff had accepted the First Defendant's counter offer of paying the balance when he was provided with the registered lease.

By letter dated 2 November 2007 legal practitioners instructed by the First Defendant wrote to the Plaintiff stating in part:

"We have been instructed by our said client to write to you in reply to your letter to him dated 6 August 2007 regarding your withdrawal of his lease application.

We believe that our client has written to you on 16 August 2007 in response to your letter and stated therein his discussion with one Inia Qole from your office and further he has written to your office on 9 May 2007 that all required fees will be paid once the lease is issued to him.

In light of the above we kindly request if your withdrawal of offer to our client be withdrawn and the lease processed as our client is interest in the said land and will pay all the necessary fees.

Take notice, therefore if no response is forthcoming from your good office after 14 days of your receipt of this letter, we have been instructed, in the alternative, to seek redress in Court."

It would appear that the Plaintiff did not respond within 14 days or at all. It would also appear that the First Defendant did not commence proceedings after the 14 days had elapsed. If the First Defendant was concerned about any loss that he may be suffering as a result of the Plaintiff's failure to respond or to act on his legal practitioner's letter, he should have instructed his legal practitioners to launch legal proceedings as soon as practicable after the 14 days had elapsed. This he apparently did not do. There was no further communication or activity in the matter until July 2008.

The position was appropriately summarised by the First Defendant in paragraph 19 of his answering affidavit (sworn 22 June 2010) which stated:

"19. That for one whole year NLTB never replied nor informed whether my title has been stamped or registered."

What he did not go on to explain was why the legal proceedings that had been threatened in the letter dated 2 November 2007 were not commenced after the expiration of 14 days.
In fact the First Defendant took no further action until his legal practitioners wrote to the Plaintiff by letter dated 14 July 2008. The event that prompted that letter was explained by the First Defendant in paragraph 20 of his answering affidavit (supra) as follows:

"20. That by chance I was passing through NLTB in July of 2008 when I was told that my lease had been stamped and registered as agreed but was just sitting here in NLTB file. I immediately instructed my solicitor to effect settlement and my solicitor wrote to NLTB on 14 July to effect settlement by payment through a Bank of Baroda cheque in the sum of $25,340.00."

A copy of the letter was exhibited to the First Defendant's answering affidavit and it was not disputed that a cheque in the sum of $25.340.00 was enclosed with the letter and subsequently received by the Plaintiff.

By letter dated 2 September 2008 addressed to the First Defendant's legal practitioners the Plaintiff indicated that it would not accept payment because it had withdrawn the lease offer by letter dated 6 August 2007. The cheque was returned with the letter.

The only proceedings commenced by the First Defendant seeking to recover damages for any loss suffered by him as a result of the Plaintiff's actions were by way of a counterclaim dated 17 August 2010.

As previously indicated I am satisfied that both the undertaking and the $547.50 were accepted by the Plaintiff as a counter offer from the First Defendant. As a result the counter offer varied some of the terms of the lease offer made by the Plaintiff. The terms of the counter offer, having been accepted by the Plaintiff, must be taken to have varied the payment conditions. The Plaintiff was bound, as a result, by the arrangement set out in undertaking which it had received and accepted.

I am fortified in the conclusion that the Plaintiff had accepted the arrangements set out in the First Defendant's undertaking and the payment of $547.50 by the events that subsequently transpired.

The Plaintiff subsequently prepared a formal lease document that was executed by the parties on 6 June 2007 and then subsequently registered on 12 June 2007. The copy lease exhibited the First Defendant's answering affidavit (sworn 22 June 2010) showed clearly that stamp duty had also been paid on 12 June 2007.

These events are, in the absence of any evidence to the contrary, consistent with the Plaintiff having accepted the First Defendant's undertaking and having received $547.50, an amount that was forwarded by the First Defendant to pay for (amongst other things) stamp duty on the lease.

It followed that, pursuant to the accepted undertaking, the Plaintiff should have informed the First Defendant that the registered lease was ready and that settlement should take place by payment of the balance owing to the Plaintiff. This the Plaintiff, for reasons that were not explained in the affidavit material, did not do. Instead the executed lease remained in the possession of the Plaintiff with no written communication to the First Defendant other than the letter 6 August 2007 and the letter dated 2 September 2008.

The purported withdrawal of the lease offer by letter dated 6 August 2007 by the Plaintiff was ineffective. The First Defendant was unaware that he should have forwarded the balance of the money due. When the First Defendant did become aware of the existence of a registered lease he forwarded the balance of the money by cheque. The Plaintiff should have accepted the cheque under those circumstances and completed the settlement.

As a result I decline to make the order sought by the Plaintiff in the Originating Summons.

In respect of the relief claimed by the First Defendant in his summons dated 17 August 2010, the first observation I make is that the additional affidavits filed in respect thereof do not add anything to that which was already covered by the initial affidavits.

The first order is granted as a consequence of the order made in respect of the Plaintiff's claim. This is, of course, subject to the payment of the balance owing.

The second order is rejected. The First Defendant is required to pay the balance owing to secure the registered lease and lease title.

The third order has not been dealt with in the affidavit material and it may be necessary to hear evidence on the claim for damages. However I do make this observation. Any claim for damages may well be restricted to the period from 12 June 2007 to a date within a reasonable time after the letter dated 2 November 2007. The First Defendant should have instructed his solicitors to commence legal proceedings shortly after the fourteen days had elapsed as he had indicated would be the case. Instead he sat on his rights until August 2010. He cannot benefit from that conduct. He has failed to take measures to mitigate any loss that he might have suffered.

I shall hear the parties on the question of damages on a date to be advised.

Before concluding I intend to make some comment about the discrepancy in the amounts involved in this dispute. The letter dated 7 May 2007 (although it reads April, all parties concede it should be read as May) indicated that a total amount of $24,643.51 was required to be paid. The lease dated 6 June 2007 stated that the consideration was $21,963.00 to be paid to the Plaintiff. Then by letter dated 14 July 2008 the First Defendant forwarded a cheque in the sum of $25,540.00. These discrepancies were not identified or explained in the affidavit material. Then the First Defendant offered the sum of $547.50 on 9 May 2007 in respect of a lease admin. fee ($56.25), stamp duty ($489.00) and registration fees ($2.25). Neither the total nor the individual amounts in respect of those items replicated the amounts listed in the letter dated 7 May 2007. Despite this, as I have already found, the Plaintiff has appeared to have accepted the amount offered without question.

These proceedings have once again indicated that the task of the Court in making findings of fact is that much more difficult when such findings must be made on the basis of inadequate and incomplete affidavit material and where no evidence has been tested by cross-examination under oath.

I make the following orders:

1. The Plaintiff's application that Native Lease No 28167 be cancelled is dismissed.
   
2. The First Defendant is entitled to be issued the appropriate lease title documents upon payment of the balance of the monies owing pursuant to the letter dated 7 May 2007.
   
3. The First Defendant and the Plaintiff are to arrange a mutually convenient date, time and place to complete settlement of this transaction. Such settlement is to take no later than 30 days from the date of this decision.
   
4. The First Defendant's application for damages is listed for mention on 18 February 2011 at 9.30am.
   
5. The costs of the application are reserved till the question of damages has been determined.
   

W D Calanchini
JUDGE

4 February 2011
At Suva