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Facciola v Nasau [2011] FJHC 156; HBC64.2010L (10 March 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION


Civil Action No: HBC 64 of 2010L


BETWEEN:


ROBERT MAURICE FACCIOLA
Plaintiff


AND:


RATU TIMOCI NASAU
1st Defendant


AND:


PROFESSIONALS WEST REALTY FIJI LTD
2nd Defendant


FINAL JUDGMENT


Judgment of: Inoke J.


Counsel Appearing: Ms M Muir for the Plaintiff
Mr S Nacolawa for the First Defendant
Mr E Maopa for the Second Defendant


Solicitors: M K Sahu Khan for the Plaintiff
Nacolawa & Co for the First Defendant
Babu Singh & Assocs for the Second Defendant


Date of Hearing: 12, 13, 14 October 2010
Date of Judgment: 10 March 2011


INTRODUCTION


[1] Robert Facciola and his partner came to Fiji to buy their dream island home. They have been to Fiji several times before and liked the people and the country which is not surprising at all. They were put on to the Defendants. That was when their nightmare began.

[2] He was shown an island by Timoci Nasau, the First Defendant, with the assistance of the Second Defendant, Professionals West Realty Fiji Ltd, sometime in September 2009. He signed an agreement to buy the island on 5 November 2009 and paid close to $1.0m into the Second Defendant’s trust account as the “deposit” but which was in fact the full purchase price for the island, minus the statutory charges. He was promised that he would have his island and could start building by Christmas. The island however turned out to be reserve native land which meant that it had to be de-reserved, a process which could take at least two years.

[3] The settlement and possession dates of 21 December 2009 came and went without Robert Facciola getting his island. He now sues for the return of all of his money.

CASE HISTORY


[4] The Writ of Summons and Statement of Claim was filed on 8 April 2010. On the same day the solicitors for Robert Facciola also filed an ex-parte application for an order that the balance of the “deposit” of $940,000 then held in the Second Defendant’s trust account be paid into Court pending final resolution of this action. Sixty Thousand dollars of the purchase price had by then been retained in the USA as commission due the American partner of the real estate agent, the Second Defendant.

[5] I heard the application on the same day and granted the order sought. My judgment is reported in Facciola v Nasau [2010] FJHC 119; HBC064.2010L (8 April 2010). The Order was taken out on the same day and served on Ms Carol West at around 5.00 pm. She is one of the directors of the company. She did not pay the money as ordered. Ms West gave her excuse for non compliance with the Court order in her affidavit sworn on 13 April 2010. She said she had incurred expenses out of her own pockets of $1,980 for trips to the island and her commission of $100,000 was owing and if the “Vendor’s solicitor agrees to repay the money in my trust account to the courts but less my commission and less the loan to be borrowed which equates to a sum of $101,980 then I am in agreement.”

[6] On 14 April 2010, solicitors for the Second Defendant filed an application to have my order of 8 April 2010 stayed and their client be allowed to deduct the sum of $101,980 from the balance of the moneys still held in their trust account. The application was first called on 16 April 2010. I refused to hear the First and Second Defendants because they had not complied with my order for the money to be paid into Court. I adjourned the matter to 23 April 2010. On 23 April 2010 counsel for the Second Defendant confirmed that the money had been paid into Court. I then set the Second Defendant’s application and the Plaintiff’s ex-parte application for hearing inter-partes on 17 May 2010. On the morning of the hearing counsel for the Second Defendant informed the Court that his client wished to withdraw its application and to pursue settlement. There being no further orders to be made I directed the matter take its normal course.

[7] The Second Defendant filed its Defence and Counter-claim on 9 June 2010. The First Defendant having failed to file his Defence, the Plaintiff entered Default Judgment against him on 26 May 2010. On 8 June 2010 solicitors for the Plaintiff filed an application pursuant to Order 22 rules 8 and 9 of the High Court Rules for payment out of Court the moneys then held in Court as satisfaction of the Default Judgment entered against the First Defendant. The application was called on 2 July 2010. It was set down for hearing on 27 July 2010. On the same day the Second Defendant filed an application for security for costs to be paid into Court by the Plaintiff, he being a foreigner. That latter application was called on 9 July 2010. By consent the parties agreed that $5,000 of the moneys held in Court was to be retained as security for costs. On the hearing of the Plaintiff’s payment out of court application on 27 July 2010, the First Defendant did not appear either in person or by counsel so I gave directions for substituted service by advertisement in the two newspapers that the matter would be called on 2 August 2010 to set a date for hearing. On 2 August 2010, the First Defendant appeared in person and informed me that he would try and look for a lawyer. Previously, two solicitors had appeared for him on separate occasions and each withdrawing subsequently. To avoid further delays and at counsel’s request I set the matter down for substantive hearing on 12 October 2010. Subsequently on 6 October 2010 Nacolawa & Co Solicitors filed a Notice of Appointment as solicitors for the First Defendant.

THE AGREED FACTS


[8] According to the Minutes of the Pre-Trial Conference signed by the solicitors for the Plaintiff and solicitors for the Second Defendant the agreed facts are as follows:
  1. The Plaintiff is an American citizen and business man residing in the City of Woodside, State of California, United States of America.
  2. The First Defendant alleges he is the Turaga ni Mataqali for a mataqali on Naviti Island, Yasawa Islands, Fiji.
  3. The Second Defendant is a limited liability company doing business as estate agents with a business office at 10 Denarau Road, RD 47, Denarau, Fiji Islands and having its registered office at 18 CAAFI Compound, Newtown, PO Box 1094, Nadi Airport.
  4. On or about the 15th day of September 2009, the Plaintiff consulted with the Second Defendant through its officers/employees/agents at its Denarau office in respect of the purchase of a suitable estate property in Fiji. The Second Defendant subsequently introduced the Plaintiff to the First Defendant and advised the Plaintiff that the First Defendant had a property in the Yasawa Islands available for purchase.
  5. On or about the 5th day of November 2009, the Plaintiff and the First Defendant entered into a sale and purchase agreement (hereinafter referred to as “the said Agreement”) for the Plaintiff to lease an island in the Yasawas known as Nanuya Sesara island and its foreshore (hereinafter referred to as “the said Property”) for the purchase price of FJD$1,000,000.00.
  6. The said Agreement was prepared by the Second Defendant and/or its officers/servants/agents.
  7. The said Agreement named the Native Land Trust Board as a Vendor, but the Native Land Trust Board did not execute the said Agreement. The said Agreement stipulated that there would be an annual Native Land Trust Board Administration fee of FJD$2,500.00.
  8. The said Agreement further stated that the Vendors are the proprietors of the said Property, and stated that the said Property was native lease.
  9. The said Agreement stipulated settlement and possession date of 21st December 2009.
  10. On or about the 5th day of November 2009, the Plaintiff transferred the sum of FJD$940,000.00 to the trust account of the Second Defendant as a deposit towards the purchase price (hereinafter referred to as “the said deposit monies”).
  11. The (said) deposit monies were transferred in US dollars converted to Fiji dollars upon receipt thereof by the Second Defendant.
  12. The Plaintiff retained FJD$60,000 on instructions of one Mark Slattery.
  13. A copy of the said Agreement was provided to the Plaintiff’s solicitors by the Second Defendant on or about the 9th day of November 2009.
  14. The Plaintiff executed Application to lease on or about the 16th day of November 2009.
  15. By letter dated 17th November 2009 from the First Defendant’s then solicitors to the Plaintiff’s solicitors, the First Defendant notified the Plaintiff that time is of the essence.
  16. By email correspondence dated 30th day of November 2009, the First Defendant’s solicitors informed the Second Defendant that de-reservation of the said Property should be completed within 6 months.
  17. Settlement did not take place on 21st December 2009.
  18. At all material times the said Property was native reserve land.
  19. The prior consent of the Native Land Trust Board to the said Agreement was not applied for or obtained by the Defendants.
  20. By email correspondence dated 19th day of November 2009 the Plaintiff notified the Second Defendant he did not want to proceed with the said Agreement and requested return of his deposit monies.
  21. The Defendants did not return the said deposit monies to the Plaintiff.
  22. The Second Defendant sent an email to the Plaintiff on 15th December 2009 requesting extension to the contract, which extension was refused by the Plaintiff.
  23. On or about 22nd day of January 2010, the Plaintiff’s solicitors sent a written demand letter for refund of the said deposit monies to the then solicitors for the First Defendant.
  24. On or about the 5th day of February 2010, the then solicitors for the First Defendant wrote to the Plaintiff’s solicitors refusing to refund the said deposit monies.

THE STATEMENT OF CLAIM


[9] The Plaintiff pleaded two causes of action. The first is that at the time the First Defendant entered into the Agreement, he had no title to the island and could not convey it at the date of settlement. In the alternative, the Plaintiff repudiates the Agreement for breach of contract by the First Defendant and claims repayment of the deposit money together with interest thereon. He also claims special damages of FJD$4,950 for solicitors costs and expenses to search the title.

[10] The second cause of action is that the Plaintiff was induced into entering into the Agreement by misrepresentation and negligence by officers of the Second Defendant. The Plaintiff alleges that he relied upon the advice given to him by the Second Defendant’s officers as professional real estate agents.

DEFENCE AND COUNTER-CLAIM OF THE FIRST DEFENDANT


[11] The First Defendant defence was that because the NLTB was made a party to the Agreement, the Plaintiff should have been put on notice that there were certain consents which had to be obtained and should have sought legal advice before signing it. He was fully aware that the island was reserve native land. The First Defendant also counter-claimed against the Plaintiff for damages for negligence and for failing to take the necessary steps to secure the Native lease.

DEFENCE AND COUNTER-CLAIM OF THE SECOND DEFENDANT


[12] The Second Defendant’s defence was that the Plaintiff was fully aware that the island was native reserve and was informed of the process of obtaining a lease from the NLTB and it was his and the First Defendant’s duty to legalise the Agreement. It was the Plaintiff and his solicitors that were negligent. The Second Defendant counter-claimed against the Plaintiff and the First Defendant for $1,980 as expenses for the island trips and for $100,000 as commission.

THE FIRST DAY OF THE HEARING


[13] On the morning of the hearing, 12 October 2010, Mr Nacolawa appeared as counsel for the First Defendant and sought leave to file his client’s Defence. The application was opposed. His Defence had actually been accepted by the Registry on 5 October 2010 without leave. I then adjourned Mr Nacolawa’s application for hearing later that afternoon.

THE FIRST DEFENDANT’S APPLICATION FOR LEAVE TO DEFEND


[14] The First Defendant’s Defence was on the basis that there was no dealing in land because the Native Land Trust Board (“NLTB”) was not involved. The First Defendant also counter-claimed for damages on the basis that the Plaintiff and his solicitors were negligent in not carrying out the necessary steps to secure the native lease over the island.

[15] His counsel submitted that the contract was null and void so the purchase price should be held in trust pursuant to a constructive trust pending approval by the NLTB. The money was to be held by the Second Defendant until the First Defendant landowners got their title from the NLTB.

[16] I granted leave for the First Defendant to defend the Plaintiff’s claim and adjourned the hearing for continuation on the next day. Ms West was not able to attend at the trial on the next day as she was to return to New Zealand and I also gave her leave not to attend.

THE SECOND DAY OF THE HEARING


[17] All counsels agreed that despite the lack of any express reference in the pleadings to the provisions of the Native Land Trust Act [Cap 134], the Court could refer to them, in particular sections 3, 4, 5, 7, 9, 12 and 16. The question of jurisdiction and the application of those provisions were matters for the Court to decide as part of the issues in this case.

The Plaintiff’s Case
PW1


[18] The Plaintiff Robert Facciola gave evidence first. He relied on his affidavit in support sworn on 30 March 2010 and filed on 8 April 2010 and his second affidavit sworn on 14 July 2010 and filed on 21 July 2010. In his first affidavit he said he was interested in purchasing a home in Fiji. He searched the internet and eventually contacted a person by the name of Mark Slattery. He arranged to meet Mark Slattery at the office of the Second Defendant in Denarau. He and his companion, Marie Peyman, flew to Fiji and met with Mark Slattery on 15 September 2009 and with both Mark Slattery and Carol West of the Second Defendant on 16 September 2009. Over the course of the next two weeks Mark Slattery showed them several properties located in various areas of Viti Levu but they could not find anything they liked. Two days before they were scheduled to leave, while meeting with Mark Slattery they were told that something new had become available in the Yasawa group of islands. Mark informed them that if they wanted to look at it they would have to hire a boat to take them there. They agreed to do it. On the next day they met Mark at the boat dock. The First Defendant was there and they were introduced to him. On the next day after visiting the island they met with Mark and Carol at their office and discussed the pros and cons of purchasing the island. He said he was wrongly told that the only requirement was the approval of 60% of the Chiefs and then they would get their lease, do a survey, obtain plans, hire a builder and then build their home. Mark and Carol set up a meeting at their office with a builder and they discussed building on the island. He was assured they would obtain their lease within a short period of time. Based upon these representations, on 3 October 2010, which was the date of their departure from Fiji, he decided to enter into a two week option to purchase with a closing and possession date of 2 February 2010. After returning home to the USA and thinking about it, Robert Facciola decided not to exercise the option because of the remoteness of the island given the US$1.0m price tag. He notified Mark by phone that he was not exercising the option but agreed to reconsider if he could get the island for FJD$1.0m and conclude the transaction in a short period so he could start building their home. He agree to put the entire purchase price less Mark Slattery’s commission, at his request, into the Second Defendant’s trust account to show his good faith and commitment to purchase the island. He entered into a sale and purchase agreement with the First Defendant dated 6 November 2009 which was prepared by Carol West and he wired FJD$940,000 to the Second Defendant’s trust account and held back FJD$60,000 for Mark Slattery’s commission. He entered into the sale and purchase under considerable pressure from the Second Defendant. He was assured that the island would be conveyed to him by 21 December 2009.

[19] In his second affidavit he said that he informed the First Defendant’s consultant that he would not agree to an extension of the settlement date. That was contained in his email to the consultant dated 13 December 2009. He also informed Carol West by email on 18 November 2009 that Professionals did not disclose many issues, including the two year turnaround in having such leases issued and the need for an Environment Impact Assessment Report to be done, his experience in America was that these took a long time to be done at great expense, so he was not going forward with the agreement.

[20] His oral testimony was that he filed this action because he was supposed to get possession on a particular date but did not get it so he wants his money back. He went to see the island – Nanuya Sesara. He was told he had to hire a boat and he agreed to pay $1,800 for the boat hire. Ratu Timoci, the First Defendant, Keshwa Nand, Mark Slattery and another person from Professionals went with him and his friend to the island on the boat. They got back late. He gave a two week option to purchase the island for USD$1.0m. He decided not to exercise that option and notified Mark Slattery. He intended to live on the island but it was too far away so he decided to buy it as a holiday home and offered FJD$1.0m. He was told by Mark Slattery to withhold FJD$60,000 for his commission. He He He wired the money. A few days after that he started to hear that he was not likely to get the island. He had to do environment studies and so on. He advised Professionals that none of this was told to him. He wanted his money back. The possession date of December 12th 2009 came and went. He decided to wait for the possession date to pass before asking for his money back.

[21] Nothing much was discussed with Ratu Timoci on that trip to the island. He had no discussions with Keshwa Nand or with Faiyaz. Most of his discussions were with Mark Slattery. The Agreement was signed when he was in California. It was done through fax and phone. He met Mark Slattery through the internet. He had come to Fiji on several occasions before. He sent an email to Mark Slattery and made an appointment to meet him at Professionals office. He entered into an agreement with him – a Buyer Agency Agreement. The agreement was dated 8 July 2009. Mark Slattery sent him an email to hold 6% for commission and not to give him that money until after settlement. But on 21 November 2009 Mark Slattery sent him an email releasing him from all responsibility after the purchase Agreement looked like it was not going to go ahead. The email read in part:

Despite the agreement between you and I which Carol acknowledges, understands and has a copy of, and despite her verbal agreement with me to split 50/50, she still refuses to confirm how much I would get paid. I called her and spent over two hours going back and forth over this to no avail just the day before my advice to you over remittance of funds. I have spoken to her many times since to no avail.


As I said to you I was Carol’s business partner, I helped purchase and set up the office, move the property from residential to commercial, get approval and consent for the signage, develop marketing tools – including the fijihomesforsale website which I funded and still own 100% myself. I believed Carol and I had a strong and honest relationship – I see now this is not the case.


To further her cause in this instance Carol has painted a picture of me as operating greedily, unethically and now outside the laws of Fiji – All of which is untrue.


I apologise that both you and Ratu got dragged into the middle of it.


My contract with you has set commission clauses and remedies for non payment of commission to me – rest assured I do not intend to use them.


I would rather discharge you of any and all obligations under this agreement so you can continue with your purchase unheeded by Carol’s refusal to honor agreements over commission.


Please consider my buyers agency contract with you and any obligations there to – now discharged – you are now free to act with the balance of funds you are holding as you see fit.


[22] On the next morning after visiting the island, they met at the Professionals office – Robert Facciola, Mark Slattery, Carol West, possibly Keshwa Nand and Faiyaz, and Ratu Timoci. They told him that he could lease the island and he told them that he wanted a 99 years lease with option to renew. He was shown the Agreement dated 6th November 2009[1] and acknowledged that it was the agreement which he signed on 5 November 2009.

[23] He was told later by email that he might have to wait for two years because of the environment impact study and other requirements. He sent an email to Carol West saying he did not want to wait 2 years or do other things before he got his lease. He was not told that he had to do all these things before. Shortly after that he asked for his money back. He had no response from Carol West. He signed the application to lease[2] the island on 16 November 2009. The document was signed in California. He believed Carol West lodged the application. He paid the application fee. He paid the $940,000 in two payments. He has made other payments; two payments to Azeem Khan, his solicitor; totalling $19,000; $4-5,000 for the agreement. Up to now he had paid $8,000 US to come to Fiji for this trial.

[24] In cross examination by counsel for the Second Defendant, Robert Facciola confirmed that the agency agreement[3] between him and Mark Slattery was signed by him on 15 July 2009 and which was to expire on 14 March 2010. He said he visited the island with Ratu and his brother. He did not take any pictures but he believed Mark Slattery and Keshwa Nand took some pictures.

[25] At the meeting on the next day in Professionals office, Carol West, his girlfriend, Keshwa Nand, Faiyaz were present but there was no rep from the NLTB. He was not aware at the time of the procedural steps. He left Fiji on 3 October 2009. Mark Slattery stayed behind. All that time he was not aware of Mark Slattery meeting with the NLTB. He was not told about any such meetings. No one advised him not to exercise the option. He was shown the sale and purchase Agreement of 5 November 2009. He confirmed he paid $940,000 and not $1.0m based on Mark Slattery’s instructions. He signed the Agreement on 5 November 2009 in California. He did not fill in the Agreement. He did not consult his solicitor Mr Khan whom he believed was in England at the time. He did not know him before. Mr Khan was introduced to him by Ms West later.

[26] He was shown a letter from Mishra Prakash & Associates, solicitors for the Vendor, to Mr Khan dated 17 November 2009[4] advising that Mr Khan as solicitor for Robert Facciola had not confirmed on the day before that the terms of the Agreement were acceptable to his client and that not all of the purchase price had been paid and making time of the essence. He said he had not seen that letter at the time; only recently.

[27] He confirmed that he sent an email[5] on 19 November 2009 to Carol West saying that he was not going forward with the lease. The reasons were that he had to do the EIA report and other things. Mark Slattery did not inform him of the procedures. He found out the hard way; after the fact. He only became aware when his solicitor and Ms West informed him. He believed it was the duty of Mark Slattery to inform him under the buyer’s agreement.

[28] He emailed Carol West on 16 December 2009[6] advising that he was wiring to Professionals trust account USD$300 to cover the application to lease fee of FJD$562.80 payable to NLTB. He also sent an email to Carol West on 21 December 2009[7] advising her that as she knew his solicitor was out of the country and that he could not make decisions until after he got back and had time to review everything. The email also said that it was his understanding that if a valid lease was not delivered by December 21, 2009 then the purchase agreement would expire and that the vendor would have no claim to the money in Professionals trust account.

[29] Robert Facciola said that he had been in Fiji on vacation before mainly visiting the outer islands but had never looked to buy land here. He had never heard of native land or native lease.

[30] Under cross examination by Mr Nacolawa, counsel for the First Defendant he admitted that he was experienced in buying property in the USA but he did not know who finalised documents. He came to Fiji in September 2009 for this purchase. He was interested in buying property in Fiji not necessarily an island. He met Mark Slattery. Carol West was not there. They looked but could not find any property he liked. Two days before he was to leave Fiji, Mark Slattery told him that a “leasehold” had come up. Mark told him that he had to hire a boat. He hired it and paid the captain and so forth. They went and looked. It was a beautiful location. He and his partner liked it. But he needed time to consider. He wanted freehold but the island was leasehold. That’s why he came up with the option idea.

[31] Robert Facciola was shown a second Agreement[8] with the same date as the first, 6 November 2009. He said he never signed this agreement. He said it was altered by someone after he had signed it. He never resigned it. The difference between this one and the first Agreement was the alterations. He could not recall what date he engaged Mr Khan as his lawyer but he recalled that since 21 December 2009, the date of possession, he called Mr Khan and asked him to get his money back. He did not engage a lawyer up to then because the lawyer was out of town and he pretty much relied on Mark Slattery for advice. Later on in his evidence he admitted that he did not consult Mr Khan before he signed the Agreement.

[32] He first met Ratu at the dock before they left for the island. He did not expect him to be there. He did not know about him. He did not know that he was the chief. He paid $900 to Mark Slattery and when they came back from the island he gave the balance to the boat people.

PW2


[33] The second witness for the Plaintiff was the acting manager tourism section of the NLTB, Ms Taylor. She sent an email on 17 November 2009[9] in answer to queries by the solicitor for Mr Facciola, Mr Khan, about the process by which the NLTB issues leases for tourism purposes. The island in question is reserve native land and still is. She also wrote a letter to Robert Facciola dated 15 April 2010[10] regarding his application to lease the island which was received on 21 December 2009. The letter was to inform him at what stage his application was at. At that stage, verification of the Land Owning Unit signatures had been completed. The next stage was to consult the landowners and complete the other steps for leasing out. She had not met Mr Facciola in 2009. She was visited by a real estate agent, a gentleman named Azeem and Ratu Timoci. Basically they came to ask about the leasing process for the island. She told them that a tourism lease would take a year or longer.

[34] In cross examination by Mr Maopa, she said the island had to be de-reserved before leasing out. The NLTB is a party to the de-reservation process. The matter is taken to the Native Lands Commission for verification. Then back to the NLTB for approval of de-reservation. Officer Peceli Kivicaki was with her when they, the realtor and Ratu, came to see them about the subject. She could not put a time frame on the process because of the need for consultations with the landowners. For a normal lease it would take about 6 months. The consent form signed by the landowners[11] is sent with the application as was done in this case. The Agreement between the landowners and the prospective lessee, Facciola in this case, is not recognised by the NLTB because they see it as a “goodwill” agreement.

[35] In cross examination by Mr Nacolawa, counsel for the First Defendant, she said the responsibility for lodging the application depended on the situation. Often the application is from overseas. They advise them to ensure that the name of the lessee is put in the application. The application in this case was lodged by the realtor. She was not aware that the realtor was the agent for the buyer.

[36] In re-examination, she confirmed that Ratu visited them with the realtor two weeks before the application for lease was lodged in December. The application fees were paid. The agreement is not recognised by the NLTB at all.

PW3


[37] The third witness for the Plaintiff was Ms Marie Peyman, Robert Facciola’s partner. She said they hired a boat to go to the island a day or two before they were to leave for the USA. Ratu, Keshwa, Mark Slattery and two others went on the boat with them. First the boat travelled around the island then they went to the big island Naviti and spent some time in the village there then back to the island and toured it then back to Denarau. They talked about how beautiful the island was and where they would build their house. On the following morning they met with Mark Slattery who arranged a builder and they, Mark and Carol, went and met the builder. They talked about how to get things on the site. It could take a year to build. Nothing else was discussed.

[38] When cross examined by Mr Maopa, she said at the time they went out to the island Mark Slattery told them the island was for lease but she did not recall them saying that they would lease it. She did not recall discussing the terms of the lease. But she did recall discussions with the builder and that the process of leasing and building would take about a year.

[39] When cross examined by Mr Nacolawa she said she did not recall any discussions on the leasing process. The first time she met Ratu was on the boat. She did not know that he was going to be there. She and Robert Facciola left Fiji on the evening of October 3.

[40] In re-examination she said did not recall meeting with anyone from the NLTB at the realtor’s office.

THE FIRST DEFENDANT’S EVIDENCE
1DW1


[41] Ratu Timoci Nasau gave evidence. He knew Robert Facciola very well. The first time he met him was on 3 October 2009. He was taken to Professionals office. Carol West and other officers - Faiyaz and an English woman named Tor - were there. Keshwa, his consultant, was there too, as were Facciola and his friend. They asked him if he had an island for sale and he said yes. He told them it was best if they went out to see the island for themselves. They said it was best to go on the following morning. On the next day he went to Professionals office and told Carol West and Faiyaz and Keshwa that he had to go to the island. He left Nadi on 5 October 2009 and spent three days there. He took Fijian items, tabua and kava and presented them to the landowners. He also took with him a de-reservation form. After his presentation, the landowners agreed to give the island to Facciola. He confirmed that the form was signed by the landowners. He returned from the island on the 12th and on the 13th he gave the form to Carol West and Faiyaz. He confirmed that he signed the Agreement of 5 November 2009 and witnessed by Keshwa. He said he was working on this deal on behalf of Professionals. They paid for his fare to the island. He told his consultant that he needed a lawyer and was directed to Mr Nacolawa whom he asked to find out about the status of the application to lease. He found out that the form was still at Professionals so he went and got it and took it to the NLTB.

[42] In cross examination by Ms Muir, Ratu Timoci said that he met Robert Facciola for the first time at the office of Professionals. It was not true that he met Facciola for the first time on the boat. He agreed that the trip to the island was on 30 September 2009. He also changed his story that Professionals paid for the first trip to the island and admitted that Facciola paid for it. Professionals paid for the second trip and not the first. He said he told Facciola that the island was not native lease but owned by Mataqali Sualevu; the island was owned by the people. He did not tell Facciola that the island was native reserve. H

[43] He was shown the option agreement. He confirmed that he signed it and NLTB did not sign it nor did they authorise it. When asked why he sold the “foreshore” Ratu Timoci said: “the island is mine and I can sell it.” When it was pointed out to him that he had just said earlier that the island belonged to the people he answered: “That is true but the procedure I followed I took (the document) to the island; it is my duty”. When asked why he sold a “native lease” when it was not true he answered: “This agreement had been done by my agents and the lawyer who was working with them. Professionals were my agent. We did this with the lawyer, Mr Vipul Mishra. The witness is my consultant, Keshwa. The only thing I know is when I went to their office they told me to sign”. He agreed that the Agreement was neither signed nor approved by the NLTB. When asked whereabouts in the Agreement did it say that he was acting for the Mataqali, he answered: “After I signed this I told Facciola and my agent that I would go and see the landowners”. He agreed that he did not provide a 99 year lease on the settlement date of 21 December 2009 and that he did not do his part under the Agreement.

[44] The Listing Authority and Agency Agreement[12] with Professionals was shown to him. He agreed that the island was listed for sale at USD$1.0m and that he agreed to pay 10% commission to Professionals. He said this was entered into before he met Facciola. The agreement was a sole/exclusive agency agreement signed on 2 October 2009. He was very tentative in his answers to questions on the agreement and the payment of commission. The NLTB needed 60% of the landowners to consent. He only obtained 50%. He could not get the remaining 10%.

[45] Under cross examination by Mr Maopa, he said he engaged Keshwa as his consultant. Keshwa is his neighbour in Nadi. He also asked Keshwa to look for a buyer for the island. No one lives on the island. The landowners live on a nearby island. Keshwa told him that he had found a prospective buyer and they went to Professionals. They met Facciola and Mark Slattery and Faiyaz and planned the trip to the island. On the next day they left for the island. There were no landowners on the island when they got there. They returned to the mainland and discussed the sale with Facciola and Mark Slattery. Facciola’s partner was not present. He later went to the island to meet the landowners. Professionals paid for his expenses which will be reimbursed from the commission. He asked for $1,000 for expenses. He used the money to buy a tabua, kava, food items and pay for travelling expenses. He signed[13] for expenses of $980. He also signed the Listing Authority and Agency Agreement in which he agreed to pay the 10% commission on sale. Professionals was his agent. He recalls going to the NLTB office in Nadi with Keshwa to ask about the leasing process. They met Ms Taylor who explained it to them. He could not remember whether he met Mark Slattery after that.

THE SECOND DEFENDANT’S EVIDENCE
2DW1


[46] Ms Carol West was not able to attend and give evidence because she had to return to New Zealand. With the consent of all counsel, the Second Defendant relied on her affidavits, the first affidavit sworn on 13 April 2010 and filed on 14 April 2010, the second affidavit sworn on 17 May 2010 and filed on 3 June 2010 and the third affidavit sworn on 30 June 2010 and filed on 2 July 2010 (the third affidavit).

[47] In her first affidavit, Carol West said she is a director of the Second Defendant. There were two contracts signed by the Plaintiff and the First Defendant for the purchase of the island, Nanuya Sesara, at Naviti Yasawa. The first sale and purchase agreement was signed on 3 October 2009 without any deposit and the second agreement was signed on 6 November 2009 which is the subject of this dispute. Mark Slattery, a freelance agent who lives in USA but not employed by the company introduced the Plaintiff to her office. The sales and purchase agreement was then prepared and executed by the Plaintiff and the First Defendant on their own free will. They were explained the content and the process involved in obtaining NLTB consent by our sales agent and the consultant. The Plaintiff was given all the facts precisely. The Plaintiff paid the first part of the deposit of $925,812.17 into the company’s trust account on 10 November 2009 and the second payment of $14,275.82 was made on 13 November 2009. She complained that the deposit was short so the Purchaser was in breach. Over the past 3 months (up to April 2010) the Plaintiff through his solicitor repeatedly asked for refund of the deposit from her trust account. She had incurred expense from this land dealing and was yet to be paid. She paid $1,000 and $980 cash to the First Defendant for trips to the island from her own pocket. She has spent weeks/months facilitating this contract. It has cost her considerable amount of money and time. According to her, this deal has been deemed unconditional, as per the listing authority signed by the First Defendant. She is legally owed her 10% commission in full – whether or not this deal settles. This amount is $100,000. Ms West’s second and third affidavits added nothing of significance to her first.

[48] The Listing Authority and Authority to Sell[14] stated that “if the property is sold” to anyone introduced through their Agency, then the vendors agreed to pay the agreed commission.

2DW2


[49] Keshwa Nand gave evidence for the Second Defendant. His evidence was that Ratu Timoci is his neighbour. They have known each other since 2005. Ratu Timoci told him that he had islands in Naviti, Yasawas and that Keshwa could arrange to sell them. He was introduced to a buyer through Professionals by their sales consultant, Faiyaz, who introduced him to Mark Slattery and his clients, Robert Facciola and Marie Peyman. They met at Professionals office on the Monday after meeting Mark Slattery on the Saturday before. Mark Slattery told him that he was looking for land with white sandy beaches. From the description that Mark gave him thought of Ratu’s island and gave him the contact. They discussed about going to see the island. Mark Slattery, Professionals officers and Ratu and Robert Facciola and he were present during this discussion at Professionals office. Their trip to the island was delayed because on the day before, there a tsunami struck Samoa so they had to wait for the tsunami warning to be lifted. The people that went were Mark Slattery, Professionals sales consultant, Ratu Timoci, Robert Facciola, Marie Peyman, the boat captain and a boat crew member. They did a sevu sevu at Naviti then they went to Nanuya Sesara. He was not aware of any discussions between Robert and Ratu Timoci; they were holding on to it. He sent a few emails to Professionals telling them to give the application form to Robert Facciola.

[50] They had discussion on the next after the visit to the island and after that the Agreement of 6th November 2009 was done on that day. Present were Mark Slattery, Ratu, Keshwa and a sales person from Professionals. Then Mark Slattery gave the Agreement to Ratu Timoci. After signing, he had discussions with Mark Slattery about the process. Keshwa, Mark Slattery, the Professionals sales consultant, Ratu and officer Peceli had a meeting at the NLTB Nadi office to discuss the purchase of the island. After receiving advice from the NLTB, Ratu and him made arrangements for them to take the landowners consent form to the island to get their consent. Ratu Timoci then went to the island. He took some gifts with him. After two or three days he spoke with Ratu Timoci over the phone who told him that he had the form signed. On the next day they went to the NLTB and handed in the form. According to Keshwa, the delay was Professionals not getting the form from Robert Facciola.

[51] In cross examination by Ms Muir, Keshwa said the Agreement was given by Carol West to Ratu Timoci to sign. The consent forms were given to Professionals. They never told him that they were insufficient. He reluctantly agreed that he was Ratu Timoci’s consultant. He said they had an agreement but he was not going to get paid. But he was to get a portion of Professionals commission. He said Professionals pay him money to refer people to them. He also said he discussed the leasing of the foreshore with Ratu and Ratu agreed. That was why he sent an email to everyone on 10 October 2009[15] confirming that leasing of the foreshore and waters was “icing to the cake”. After some hesitation he said he recognised the option agreement[16] dated 3 October 2009 and his signature as witness on it. The Agreement dated 6th November 2009[17] was the second agreement.

[52] When cross examined by Mr Nacolawa he said he had not known Mark Slattery before this. He only came to know him from the meetings at Professionals and the NLTB and the trip to the island.

[53] In re-examination Keshwa said that he used the term “icing on the cake” because in most cases, landowners would not sell the foreshore.

[54] When asked by the Court, he said Carol West agreed to pay him a portion of her commission which he assumed to be 4% which was what she had done in a previous case. He knew of native leases but not of native reserves and the process that was why they had meetings with the NLTB.

THE AGREEMENT OF 6TH NOVEMBER 2009


[55] Under the Agreement dated 6th November 2009, Ratu Timoci Nasau, the First Defendant, and the NLTB were the vendors and The Robert Maurice Facciola Trust was the Purchaser. The Agreement was signed by Robert Facciola on 5 November 2009 in the USA and signed by Ratu Timoci on 6 November 2009 in Fiji.

[56] The “Property” being sold was described as “Nayanua Sesara (indicated as per Google Earth attachments “A” and also referred to as Nanuya Sesara island – Naviti – Yasawas – The Fiji Islands. The “Estate” was marked as “Native Lease” and the “Legal Description” was noted as “99 year Tourism/Residential” with an area of approximately 11 acres.

[57] The “Purchase price” was $1,000,000 FJD plus VAT, Stamp Duty and NLTB Lease/Admin Fee. The “Deposit” was also $1,000,000 FJD. The Deposit “must be paid to Professionals West Realty Fiji Ltd Trust Account within 5 working days of execution of this agreement by both parties on the 6th of November 2009”. The Deposit is “fully refundable until this contract becomes unconditional”.

[58] The “settlement date” was 21 December 2009 and so was the “possession date”. The following terms were defined:

Balance sum means the Purchase price less the Deposit.


The Deposit means the sum of FJ$1,000,000.


Purchase Price means the sum of FJ$1,000,000 plus VAT, if applicable.


Registerable Transfer means an instrument of transfer in respect of the Property from the Vendor to the Purchaser in the prescribed form for the purposes of section 44 of the Land Transfer Act (Cap 131) on which the Commissioner has denoted payment of the Stamp Duty.


Settlement date means the day agreed upon by both the parties on the date of execution of this agreement and a written notice within 10 days from the stamped transfer (excluding the date of written notice” issued by the Vendors or its solicitors to the Purchaser or its solicitor which confirms to the Purchaser that the Vendors hold a registerable Transfer and requires the Purchaser to settle in terms of this Agreement.


Transfer means an instrument of transfer in respect of the Property from the Vendor to the Purchaser in the prescribed form for the purposes of Section 44 of the Land Transfer Act (Cap 131).


[59] Clause 3 of the Agreement provided that “the deposit must be payable as stipulated on page 1 of this agreement and the balance of the purchase price must be paid as stipulated on page 1 of this Agreement”. Payment of the Deposit was stipulated in page 1 as mentioned above. But there was no stipulation in respect of the date for payment of the balance of the purchase price. Its absence is obvious because the full purchase price, even though described as the deposit, was to be fully paid up within 5 working days of execution.

[60] Clause 10 of the Agreement provided that:

[61] The Agreement also had the following special conditions:

1. Contract is unconditional upon clear title. Clear title being a 99 year renewable transferrable lease – zoned Tourism/Residential being issued for said property on or prior to settlement.

.

.

4. This Contract is further conditional upon the purchaser’s solicitor approving the form and content of this agreement by 4.0pm on Monday 16 November 2009 (Fiji Time). This clause is inserted for (the) sole protection of the purchasers.


[62] Time was of the essence.

[63] Under clause 14 if the vendors defaulted in the performance of any term and such default continued for seven days the Purchaser may give notice and rescind the Agreement upon which rescission all monies previously paid (including the Deposit) shall be refunded to the purchaser without deduction.

[64] The Agreement was not made subject to the consent of the NLTB. However it contained clauses referring to the consent of dealings under the Land Sales Act 1974 but because this was native land the provisions of that Act do not apply.

ANALYSIS OF THE EVIDENCE AND FINDINGS OF FACT AND LAW


[65] Having observed the demeanour of Ratu Timoci and Keshwa Nand in giving their evidence I find them unreliable witnesses. Both were very reluctant answerers of questions and gave conflicting answers when they did. Carol West did not give evidence at the trial because she had to go back to New Zealand so her affidavit evidence, not having been subject to cross examination, carries very little weight in my judgment in so far as her evidence was of facts and circumstances in her favour.

[66] On the other hand, I find Robert Facciola and his partner Marie Peyman credible witnesses and I accept their evidence almost in their entirety.

[67] I find the following relevant facts as established. Robert Facciola and Ratu Timoci entered into an Agreement to buy and sell the island of Nanuya Sesara on 6th November 2009. Robert Facciola was not told prior to entering into the Agreement that the consent of the native landowners and other requirements had to be met. He was not told that the island was a native reserve and the process could take at least two years before he could take possession. Instead he was led to believe that he would get possession of the island by 21 December 2009 from which date he could start to build the dream home for him and his partner. Settlement and possession did not take place on that date. It was not extended and Robert Facciola was entitled to rescind the Agreement upon which event all monies previously paid shall be refunded to him (or the Trust to be specific) without deduction.

[68] I think both Robert Facciola and Ratu Timoci were ignorant of the process for obtaining a lease of native reserve land and its significance at the time they signed the Agreement and relied on the expertise of the real estate agents. It is also my view that Mark Slattery and Carol West were ignorant of the process at the time of contract, or if they knew, disregarded its importance and significance. Carol West, as a professional real estate agent in Fiji should have known or at least taken steps to ensure that the contract that she was putting forward for her client, Ratu Timoci, to sign could be performed by him. So too was Ratu Timoci’s consultant. It seems that all the agents and consultants and Ratu Timoci were concerned with was having Robert Facciola signed up for their commissions than having a realistically performable contract in place.

[69] I do not accept Carol West’s proposition that the Agreement was unconditional and therefore she was entitled to her commission. It is true that the Agreement on its face was “unconditional” but the vendors, her clients, could not possibly fulfil the requirements for settlement by the settlement date. Indeed, her clients did not meet them. In that respect, the island was not “sold” by her as a precondition to her entitlement to her commission. Further, the monies held in her trust account could not under the circumstances of this case be said to belong to the vendor. The money still belonged to the purchaser. It was the vendor that was to pay her commission from the purchase price but the vendor would not be entitled to it until he had fulfilled his end of the bargain; payment was not to come from the purchaser’s money. In her haste to secure her commission Carol West produced a legal document that was very unprofessionally drawn up and which I would say done negligently. This is obvious from the subsequent attempt to make changes to the Agreement[18] after the parties had signed it. I do not think Robert Facciola should be the one to suffer the consequences.

[70] Even if the contract was unconditional, that is significant only as between her and Ratu Timoci. It is he that should be paying for her commission and from his money and not from Robert Facciola’s.

[71] As for the First Defendant’s defence that because the NLTB was made a party to the Agreement, the Plaintiff should have been put on notice that there were certain consents which had to be obtained, I think it has no basis, factually or at law. Firstly, the Agreement could not bind the NLTB because the Board did not sign it, and secondly, no such consents or requirements were put in the Agreement as terms or conditions. The terms and conditions of the contract are contained in the Agreement and cannot be varied or added to by parol evidence.

[72] Lastly, and I think more crucially, counsel agreed that I should apply the provisions of the Native Land Trust Act [Cap 134] if I saw fit, despite the issue not being raised in the pleadings. I think that is permissible and consistent with the decision of the Court of Appeal, of which I was a sitting justice, in Sitamma v Kumar [2007] FCA; ABU 6 of 2007; (19 July 2010).

[73] It is common ground that the Agreement is caught by the provisions of the Act. In particular, sections 4(1), 5 and 16 which provide:

Control of native land vested in Board


4.-(1) The control of all native land shall be vested in the Board and all such land shall be administered by the Board for the benefit of the Fijian owners.

.

.

Native land alienable only to Crown


5.-(1) Native land shall not be alienated by Fijian owners whether by sale, grant, transfer or exchange except to the Crown, and shall not be charged or encumbered by native owners, and any native Fijian to whom any land has been transferred heretofore by virtue of a native grant shall not transfer such land or any estate or interest therein or charge or encumber the same without the consent of the Board.

(2) All instruments purporting to transfer, charge or encumber any native land or any estate or interest therein to which the consent of the Board has not been first given shall be null and void.

.

.

Land in native reserve not to be alienated


16.-(1) Subject to the provisions of the Crown Acquisition of Lands Act, the Forest Act, the Petroleum (Exploration and Exploitation) Act, the Mining Act, and to the provisions of this section, no land in any native reserve shall be leased or otherwise disposed of.

.

.


[74] The attempt to lease or otherwise dispose of the island in question is not one authorised under section 16 of the Act. The consent of the NLTB had not been obtained before the entering into the Agreement. The word "instrument" is not defined in the Act or the Interpretation Act [Cap7] but it is clear from the section that it is to be given a wide interpretation. In my view, the Agreement in this case is an "instrument" caught by s 6(2). Ms Taylor of the NLTB is quite correct in saying that agreements such as the one in this case are not recognised by the Board. They are prohibited by the above provisions. The result is therefore the Agreement is null and void ab initio. The parties are to be put back in their respective positions prior to entering into it which means that the money paid by Robert Facciola under the Agreement is to be repaid to him in full without deduction or retention.

[75] It also follows that Mr Nacolawa's submission that the money should be held in trust for the First Defendant is unsustainable. There cannot be any contractual or other relationship, fiduciary, agency or otherwise, which could support such a trust.

[76] The Plaintiff claims special damages for solicitor's costs and gave oral evidence in support. I will not grant them as such but will take them into account when assessing the overall costs.

[77] There is no merit in the First or Second Defendants' counter-claims against the Plaintiff for the reasons I have given above so I dismiss them.

[78] As for the respective counter-claims between the First and Second Defendants I make no order and give them leave to pursue them elsewhere if they so wish.

[79] Put simply, the problem for the defendants in this case is that the First Defendant is claiming money that cannot possible belong to him because he could not and has not performed his contract that would give him the purchase price and the Second Defendant is claiming a commission, whether it is entitled to it or not is another question, from moneys which do not belong to its client, the First Defendant. The money belongs to the Plaintiff.

INTEREST


[80] The Plaintiff asks for interest on the $940,000 paid into Professionals trust account. This was a commercial case so I will apply a rate higher than the 6% pa normally used under the Law Reform (Miscellaneous Provisions)(Death and Interest Act). I think 10% pa is fair (the current lending rate is about 12%) to be calculated from the date the contract came to an end, around 21 December 2009, to the date of this judgment which is approximately 15 months. That computes to $940,000 x 10% x 15/12 = $117,500.

COSTS


[81] This matter should have never come to Court. I do not know whether both the Defendants have been wrongly advised or just mere stubbornness but in any case both of them are fully responsible for firstly, this matter coming to Court and secondly, for dragging it out. The deliberate refusal of Ms Carol West to pay the money into Court when first ordered is another factor which I take into account in deciding costs. It necessitated several court appearances and argument by counsel as set out above. Had the Plaintiff asked for indemnity costs I would have granted it in line with the cases cited in my judgment in Lok v Singh [2010] FJHC 7; HBC321.2000L (20 January 2010). In any event, I think costs on the high side of the party-party scale is warranted.

[82] Robert Facciola has given evidence the he spent $19,000 on his previous lawyer. I assess the costs of his current solicitors based on the attendances and the history as outline above. I will include also a third of the cost of airfares and accommodation for the Plaintiff and his partner to attend this trial. Taking all these into account I assess costs as $20,000 to be paid by both Defendants, jointly and severally, within 28 days.

THE ORDERS


[83] The Orders are therefore as follows:
  1. The sum of $940,000 paid into Court and held by the Court shall be released to the Plaintiff, Robert Maurice Facciola, or at his direction, forthwith without deduction or retention.
  2. The First and Second Defendants, jointly and severally, shall pay to the Plaintiff, Robert Maurice Facciola, or at his direction, the sum of $117,500 as interest on the above sum.
  3. The First and Second Defendants, jointly and severally, shall pay to the Plaintiff, Robert Maurice Facciola, or at his direction, the sum of $20,000 as costs within 28 days.
  4. The First and Second Defendants' counter-claims against the Plaintiff are dismissed.
  5. The First and Second Defendants have leave to pursue their respective claims against each other elsewhere and as they see fit.

Sosefo Inoke
Judge

[1] Doc 1 of the Agreed Bundle of Documents.
[2] Exhibit P5.
[3] Exhibit P3.
[4] Document 4 Agreed Bundle of Documents.
[5] Doc 6 Agreed Bundle of Documents.
[6] Exhibit 2D1.
[7] Exhibit 2D2.
[8] Document 2 Agreed Bundle of Documents.
[9] Document 5 Agreed Bundle of Documents.
[10] Document 13 Agreed Bundle of Documents.
[11] Exhibit 2D3.
[12] Annexure CW8 to the Affidavit of Carol West filed 14 April 2010 and later tendered as Exhibit 2D5.
[13] Exhibit 2D4.
[14] Annexure CW8 to her affidavit filed on 14 April 2010.
[15] Exhibit P7.
[16] Exhibit P6.
[17] Document 1 of Agreed Bundle of Documents.
[18] Document 2 of Agreed Bundle of Documents.

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