B. Prasad & Sons Ltd v Kumar [2011] FJHC 691; HBC172.2011 (31 October 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 172 of 2011

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

BETWEEN:

B. PRASAD & SONS LIMITED a limited liability company having its registered office at Lot 2 Kaua Street, Industrial Sub – Division, Laucala Beach Estate, Suva.
PLAINTIFF

AND:

RAJ KUMAR (father’s name Kissun) of Lot 1, Main Navua Commercial Centre, Navua Town, occupation unknown to the Plaintiff.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSEL: Ms. Swasthika Narayan for the Plaintiff
Mr. Suresh Chandra for the Defendant

Date of Hearing: 15th September 2011
Date of Ruling: 31st October, 2011

RULING

1. INTRODUCTION
   

1. The Plaintiff purchased the land described in the title attached to this summons for eviction in 2008. The Plaintiff has allowed the Defendant to remain in the property for two years. The Defendant has built substantial structures on a part of the land and even had made arrangements to purchase the said portion with a partition plan prepared , approved , and also registered, but was unable to execute the partition. The Plaintiff has tried to obtain a rent for the said occupation, but the Defendant has refused any such payments and the letter dated 16th November, 2010 from the Plaintiff to the Defendant’s lawyer state ‘we do not have any objections for Mr. Kumar to stay however he will need to pay our monthly rental of $300 that has been in effect from October, 2010.’ The Defendant did not accept the said offer and did not pay any rent as requested. Substantial improvements were done in a portion of the property and allege occupation for well over 56 years on the property. Summary procedure contained in Section 169 is not suitable for eviction as the Defendant has built substantial structures on the land and has even placed a caveat on the portion of the land he is residing which comprised of 1936 square meters for which a partition plan was drawn and the approval was also obtained and it was also registered with the registrar of land in 1994. The Defendant has shown a right to remain possession on equitable grounds due to improvements on the land passive acceptance by the Plaintiff for more than two years and his predecessor for more than 50 years.
   

2. FACTS
   

2. The Plaintiff pursuant to Sale and Purchase Agreement dated 13th February, 2005, the amendment thereof dated 14th April, 2008 purchased CT25631 Lot 3 on DP 7658 on 22nd April 2008.The Defendant state that his father Ram Kissun and his family were invited on the land 56 years ago by the previous owners Bhutia Shankar and B.S.Shakar & Co. Ltd. Said Shankar being the brother of Defendant’s father.
   
3. The Defendant continuously occupied it with his family and parents and B.S. Shankar & Co. Ltd transferred the Land including the portion occupied by the Defendant to the Plaintiff on or about 22nd April 2008 and the Defendant state that it was done without their knowledge.
   
4. The Defendant state that B.S. Shankar & Co. Ltd and Bhutia Shankar before transferring had agreed to sell the portion of the land to the Defendant and made application to relevant authorities to subdivide the land and then sell it to the Defendant . A registered DP 7658 attached as annexure “B” of the Defendant’s affidavit in opposition.
   
5. On or about 30th April 1994 B.S. Shankar & Co. executed the subdivision plan (DP 7658) in the Defendant’s favour. The Defendant alleges that he paid all the cost of the subdivision plan being $1,200.00.
   
6. The Defendant state that on or about 22nd August 1996 the subdivision plan (DP 7658) was approved in favour of the Defendant that Lot 2 on DP 7658 being 1936m2 be allocated for transfer to the Defendant. Separate title to Defendant’s portion was not executed and without that the land was transferred to the Plaintiff by said B.S. Shankar & Co. Ltd.
   
7. The Defendant lodged a Caveat on 4th April 2011 to protect his interest and the Defendant continued to carry out developments on the land even after the Plaintiff purchased it for more than two years.
   

100. ANALYSIS
     

8. The Plaintiff when purchased the land would have noticed the presence of the Defendant and his family on the land as the structures on the land where the Defendants possess are clearly separated from the other buildings that Plaintiff gained possession subsequent to the transfer of the property in his name. The Defendant alleges that they had two permanent structures on the land at that time. The Plaintiff has not explained why he did not inquire about the separate portion where the Defendant resides before purchasing the property from the previous owner. Even after purchasing he had let the Defendant to remain possession for over two years.
   
9. The Plaintiff purchased it on “as is where is” basis in terms of the Sale and Purchase Agreement dated l3th February, 2008 this was annexed as RAP3 of Ronald Prasad’s affidavit dated 14th September, 2011 indicating that there was no obligation on the part of the vendor to provide vacant possession.
   
10. According to the Defendant’s affidavit in opposition the Defendant’s father’s brother, who was the majority shareholder of the previous owned company had continued to promise to the Defendant to have a conveyance of a piece of land for the 2 houses on the land. The Defendant continued to live on the land and the preparation of the partition plan which was approved by the Director of Town and Country Planning and was registered with the registrar of land as evidenced from the said plan which was marked as “B” and annexed to the affidavit in opposition. The Defendant has subsequently lodged a caveat on to the said portion of land where he is in possession. This clearly indicates that the Defendant has established a right to remain in possession in terms of Section 172 of the Land Transfer Act.
    
11. In the case of Morris Hedstrom Limited –v- Liaquat Ali CA No: 153/87, the Supreme Court said that:-
    

“Under Section 172 the person summonsed may show cause why he refused to give possession of the land if he proves to the satisfaction of the Judge a right to possession or can establish an arguable defence the application will be dismissed with costs in his favour. The Defendants must show on affidavit evidence some right to possession which would preclude the granting of an order for possession under Section 169 procedure. That is not to say that final or incontrovertible proof of a right to remain in possession must be adduced. What is required is that some tangible evidence establishing a right or supporting an arguable case for such a right must be adduced.” (emphasis is mine)

12. The Plaintiff continued with the possession of the rest of the land leaving the Defendant as it is, but after two years he had requested the Defendant to quit the premises or to pay rent at the rate of $300 per mensum and he has refused to pay rent clearly indicating non acceptance of the offer and the issues between the pretties are complex and cannot be decided only through affidavits.
    

4. ADVERSE POSSESSION
   

13. The Defendant also claims adverse possession. Defendant relies on the doctrine of adverse possession as contained in the Land Transfer Act Cap. 131. The Defendant has been in possession of the land for a period exceeding 20 years as stipulated in the Act with the previous owner.
    
14. Section 78 of the Land Transfer Act states as follows.-
    

78.-(1) Where-

Any person is in possession of any land subject to the provisions of this Act, for which a certificate of title has been issued or a Crown grant registered under the provisions of this Act; and such possession has been continuous for a period of not less than twenty years, and is such that he would have been entitled to an estate in fee simple in the land on the ground of possession if the land had not been subject to the provisions of this Act,

he may apply to the Registrar in the manner hereinafter provided for an order vesting the land in him for an estate in fee simple or for such other estate or interest as may be claimed by him:-

Provided that, unless such person has been in possession of such land for a continuous period if not less than thirty years, no such application may be made in respect of any land or any part thereof, if the registered proprietor of, or any person appearing by the register to be entitled to the benefit of, any estate or interest therein is under any disability.

(2) For the purposes of this Part, possession of any land by any other person through or under whom any person making application under the provisions of this section (hereinafter in this Part referred to as "the applicant") claims, shall be deemed to be possession by the applicant.

15. The provisions regarding the method of application is contained in Section 79 of the Land Transfer Act.
    
16. Lesuma v Thaggard [2007] FJHC 135; HBC 243.2006 (16 February 2007) justice Singh held as follows:-
    

‘The defendants states that their grandparents lived on the land, their parents lived on the land and have placed the term of possession as being for 60 years. They also allege the plaintiffs were aware the occupation. In his affidavit in support the plaintiff stated that the defendant chased him out of the property. Normally this is how an owner of property would behave. It shows the paper owner (the registered proprietor) was on this occasion at least excluded from the land. On the other hand the plaintiff also deposed that they were willing to buy the land from Mr. Wong which is a recognition of Mr. Wong's title by the plaintiffs and therefore shows a lack of intention of making a title against the registered owner.

The question therefore is what constitutes a sufficient degree of exclusive physical control would depend on the circumstances. Such facts would need to be tested by oral evidence. I cannot on the affidavits alone come to any firm conclusion one way or other but I am satisfied that the defendant has raised a realistic arguable case sufficient to convince me that this is not an appropriate case for summary procedure under Section 169 of the Land Transfer Act.’

17. In this case the Defendant is alleging adverse possession, and the Defendant claims adverse possession for over 50 years through his predecessors and this cannot be established through affidavit evidence and there is clear evidence of making a partition plan which was also approved and registered, but the registration of the partitioned portion did not effectuate either by the previous owner or by the present owner.
    
18. In Chute v Wati [2009] FJHC 247; HBC049.2008 (30 October 2009). Master Tilivuka quoted in paragraph 34 an article by Peter Butt on ‘Conveyancing and the Rights of Persons in Occupation’ in Volume 55 ALJ (1981) 119 at 122as follows:-
    

[34] In addition to what I have said here above on the subject of fraud for the purposes of the present action, I would like to quote the following extract from an article by Peter Butt on ‘Conveyancing and the Rights of Persons in Occupation’ in Volume 55 ALJ (1981) 119 at 122:

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

19. So, when the Defendant is alleging that he was unaware of the transfer of the title from the previous owner to the Plaintiff that would have done deliberately to extinguish the rights of the Defendant and his predecessors. This may be so when there was a partition plan approved and registered for the purpose of demarcating the separate portion of the Defendant’s occupation. Defendant also state that he had spend money for the preparation of said partition plan, which is not denied. The predecessor in title knew the intension of the Defendant and the Plaintiff should be aware of the said partition plan, before the purchase, since it was approved and registered with the registrar of title. So, the transfer to the Plaintiff, without finalizing the said partition, cannot be considered as a bona fide transfer under the circumstances of this case. It is also noted that the said transfer was done without any intimation to the Defendant and the circumstances which led to such transfer cannot be determined through affidavits. It is clear that any adverse possession that Defendant claimed against the previous owner, changed its character after the transfer to the Plaintiff.
    
20. In Gir v Attorney General of Fiji [2008] FJHC 372; HBC 297.2002 (25 July 2008) justice Finnigan at paragraph 20 quoted Lord Denning M.R as follows:-
    

Lord Denning M.R in Inwards & Ors -v- Baker [1965] EWCA Civ 4; [1965] 1 All ER 446, at 448G;

"It is quite plain from those authorities that, if the owner of land requests another or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises any equity in the licensee such as to entitle him to stay. He has a licence coupled with an equity. Counsel for the plaintiffs urged before us that the licensee could not stay indefinitely. The principle only applied, he said, when there was an expectation of some precise legal term; but it seems to me, from Plimmer's case (5) in particular, that the equity arising from the expenditure on land does not fail.

Merely on the ground that the interest to be secured has not been expressly indicated.... the court must look at the circumstances in each case to decide in what way the equity can be satisfied.

So in this case, even though there is no binding contract to grant any particular interest to the licensee, nevertheless the court can look at the circumstances and see whether there is an equity arising out of the expenditure of money. All that is necessary is that the licensee should, at the request or with the encouragement of the landlord, have spent the money in the expectation of being allowed to stay there. If so, the court will not allow that expectation to be defeated where it would be inequitable to do so".

5. CONCLUSION
   

21. The Defendant has remained in the property after the transfer to the Plaintiff for more than 2 years and even after that the Plaintiff has indicated to let the Defendants remain on the property subject to a monthly payment of $300 which the Defendant has rejected. It can safely deduce that the Plaintiff was aware of the existence of the partition plan as it was approved and registered in the land registry. So, the position of the plaintiff is that if the Defendant pays $300 per month he is willing to let him remain on the property. It is also clear that even after purchasing the property the Defendant has remained on the property and the Defendant's possession has not affected the possession of the rest of the land and buildings by the Plaintiff or its predecessor. The Plaintiff as well as its predecessor had possessed the land in harmony with the Defendant he had made substantial improvements to the property and had also obtained electricity connection and also a land line telephone connection, with modern amenities of life. As quoted in the judgment of Lord Denning in Inwards & Ors -v- Baker [1965] EWCA Civ 4; [1965] 1 All ER 446, at 448G, above considering the circumstances of this case a summary eviction of the Defendant from the premises with substantial improvements would be inequitable and this summons for eviction is dismissed without cost.
    

6. FINAL ORDERS
   

22. The summons for eviction is dismissed.
    
23. No cost.
    

Dated at Suva this 31st day of October, 2011.

Mr. Deepthi Amaratunga
Master of the High Court
Suva