Challenge Engineering Ltd v Ali's Civil Engineering Ltd [2011] FJHC 40; HBC 215.2008 (9 February 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 215 of 2008

BETWEEN:

CHALLENGE ENGINEERING LIMITED a limited liability company having its registered office at Lautoka in Fiji.
Plaintiff

AND:

ALI'S CIVIL ENGINEERING LIMITED a limited liability company having its registered office at C/- Estate of Umar Building, Nanuku, Labasa.
1st Defendant

AND:

VITIANA TIMBERS (FIJI) LIMITED a limited liability company having its registered office at c/- Estate of Umar Building, Nanuku, Labasa.
2nd Defendant

AND:

BANK OF SOUTH PACIFIC LIMITED a limited liability company having its registered office at Corner Douglas and Musgrave Street, Port Moresby, Papua New Guinea.
3rd Defendant

__________________________________________________________________________________
Before: Master Anare Tuilevuka
Counsels: R. Patel Lawyers for the Plaintiff
Kohli & Singh for the Defendants

Date of Ruling: 09th February, 2011

RULING

[1]. At the outset, let me just point out that the Master of the High Court's jurisdiction was extended by the Honorable Chief Justice in December 2009 pursuant to Order 59 Rule 2(l) to hear contested applications under section 169 of the Land Transfer Act (Cap 131). Previously – our jurisdiction was limited to uncontested applications only (see Order 59 Rule 2(k)).

[2]. There are two applications before me. First is the plaintiff's ("CEL") application dated 9th July 2008 seeking an order against the 1st and 2nd defendants to immediately give vacant possession to the plaintiff of the property in Approval Notice of Lease L/D 26630 ("approval notice") (sic). It also seeks an Order that the defendants be restrained from causing any damage to and from removing any fixtures or buildings or fittings from Approval Notice of Lease L/D 26630. Curiously, the application only mentions Order 29 of the High Court Rules which deals with Interlocutory injunctions, Interim Preservation of Property, Interim Payments, Etc. I do not have jurisdiction to deal with Order 29 applications.

[3]. It is not clear to me whether I should treat the application for eviction under section 169 or under Order 113 of the High Court Rules. In any event, the application is supported by the affidavit of Suresh Patel sworn on the 23rd June 2008 and filed on 9th July 2008. Bahadur Ali's affidavit sworn on 11th of August 2008 is filed herein opposition to the application. Patel has responded to Ali's affidavit. Second is the 1st and 2nd defendants' ("ACEL" and "VTFL" respectively) application filed on 21st January 2009 to dismiss the plaintiff's claim for abuse of process. In the alternative, the defendants seek that this matter be amalgamated with Court Action No. 94/2006. This application is supported by the affidavit of Bahadur Ali sworn on 31st December 2008. It is opposed by the affidavit of Suresh Patel sworn on 19th January affidavit in response.

[4]. By way of background, in January 1994, ACEL acquired Approval Notice LD 60/511 by sale. This land had a total area of 3,500 square meters. Following that acquisition, ACEL and VTFL occupied the land and conducted business thereon for some years. Then - sometime in 1996, VTFL applied to the director or lands to amalgamate LD 60/511 with an adjoining land. That amalgamation was approved in 1999. Needless to say – the amalgamation was to increase the total acreage to 2.2938 h.a.

[5]. An Approval Notice over the amalgamated lands was then issued to VTFL for a 99-year term commencing 1st December 1999. It is important to note that - at the time of the amalgamation in 1999 – there was an existing mortgage over LD 60/511 in favour of Habib Bank. That Habib-Bank-mortgage was the security for a loan of $700,000-00 (seven hundred thousand dollars) that ACEL had taken. The mortgage was in fact registered in November 1999 – a month before the amalgamation.

[6]. Meanwhile, in June 2000, VTFL borrowed a further $550,000-00 (five hundred and fifty thousand dollars) from Habib Bank. A mortgage over the amalgamated land was drawn up as security for this loan. What this meant of course was that the existing mortgage over LD 60/511 had to be varied and up-stamped to $1.25 million.

[7]. Habib Bank did obtain the director of lands' consent over the variation and up-stamping of the mortgage and then got these registered in June 2004.

[8]. As it turned out, ACEL defaulted in its loan repayments. And Habib Bank called for tenders to a mortgagee sale under both mortgages 6993 and 8465.

[9]. The plaintiff, CEL tendered for L/D 26630 – the amalgamated land with a total acreage of 2.2938 h.a for $2.5 million. ACEL wrote to Habib Bank endorsing the sale to CEL at $2.5 million. Habib Bank then accepted CEL's bid. In February 2006, CEL paid Habib Bank the $2.5 million which it borrowed from NBF/Colonial. The Director of Lands had consented to this sale.

[10]. However, it appears that whilst all that was happening, ACEL and VTFL obtained an ex-parte injunction in HBC 94 of 2006. That injunction – for some time – prevented the registration of the Transfer by Mortgagee Sale in favour of CEL. However, on 24th May 2007, Byrne J discharged the ex-parte injunction and ordered the Registrar of Deeds to register the transfer to CEL.

[11]. Since the granting of that Order, CEL has moved swiftly and taken steps to evict the defendants off the land. On 08th February 2008, the director of lands granted consent for eviction proceedings against the defendants. On 27th May 2008, CEL vide its solicitors sent notices to the registered offices of the two defendant companies in Labasa. And then in July 2008, CEL filed a Writ of Summons seeking immediate vacant possession from the defendants and also for damages for loss of opportunities.

[12]. I observe that in the affidavit of Bahadur Ali filed for the defendants, Ali makes certain allegations of fraud. The allegations however are directed against the Habib Bank and/or its solicitors. No such allegation is made against the plaintiff. General allegations of fraud are insufficient even to amount to an averment of fraud of which any Court ought to take notice (see Wallington –v- The Directors of the Mutual Society (1879) 5 App Cas at 697) – and even where the Court takes notice, it will only defeat indefeasibility of title if it is against the registered proprietor.

[13]. Given that the summons seeks vacant possession but does not state which Order of the High Court Rules is being relied upon, it is difficult for me to make a ruling on the application. I am aware that under Order 113, an application should normally be made by Originating Summons though Order 113 Rule 6(2) seems to allow the Court to make an order for possession to be given on a specified date, in the exercise of any power which could have been exercised if possession had been claimed in an action begun by writ.

[14]. But the fundamental hurdle in this case is that the Transfer By Mortgagee in Exercise of Power of Sale which is annexed and marked "I" on the affidavit of Suresh Patel merely confirms that the document had been consented to by the Director of Lands. There is nothing on my copy to confirm that it had been registered. In paragraph 22 of the affidavit of Bahadur Ali, he deposes that "the Order of Mr. Justice John Byrne was further stayed until further Order of the Court dated 15th day of June 2007 and further say that office of the Registrar of Titles confirmed that the documents had not been executed as all the original documents were returned to plaintiff solicitors. There is a letter dated Tuesday July 17 2007 annexed to Ali's affidavit purportedly by the Registrar of Titles to R. Patel & Co advising that the "transfer by mortgagee sale has not been executed by this office due to the fact that all original transfer and mortgage documents returned to your office". I note also that in his affidavit in reply, at paragraph 10 (e), Patel replied that the "High Court of Fiji at Suva authorized the completion of all registration formalities to the Plaintiff as Purchaser of approval Notice No. 26630".

[15]. Frankly – I am in no position to determine if the plaintiff is now effectively the registered proprietor of Approval Notice of Lease L/D 26630. Had that been clear – I would have had no hesitation in granting an Order for vacant possession.

[16]. As to the defendants' application to strike out under Order 18 Rule 18, I dismiss that also. There is clearly a cause of action and it is not an abuse of process for the plaintiff to have filed this action separately from the one pending.

[17]. I see some merit though in their argument for amalgamation (see The Supreme Court Practice 1988 Volume 1 at footnote 4/9/1). The main purpose of consolidation is to save costs and time - but – where the plaintiff in one action is the defendant in another, an Order for consolidation may be refused, unless one action can be ordered to stand as a counterclaim or third party proceedings in another action OR, alternatively - an order can be made that one action shall follow the other in the same list and be heard before the same Judge so as to save the expense of two attendances of witnesses. This allows the Judge to try the actions in such order as may be convenient or even at the same time (see also Housing Authority v Penioni Bulu FCA No. 26/01, the Fiji Court of Appeal).

[18]. Accordingly, I order that this matter be adjourned to the same date as the other related pending matter and that the two matters henceforth follow each other on the same list so as to ensure that they will be heard before the same Judge to save costs.

[19]. Costs in the cause.

Anare Tuilevuka
Master

At Suva
09th February 2011.