Savusavu Airport Heights Ltd v Fong [2011] FJHC 707; HBC281.2010 (3 November 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 281 of 2010

IN THE MATTER OF THE LAND TRANSFER ACT

AND

IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 109 OF THE LAND TRANSFER ACT

BETWEEN:

SAVUSAVU AIRPORT HEIGHTS LIMITED a duly incorporated limited liability company having its registered office in Nadi.
PLAINTIFF

AND:

ELI FONG Trustee of the Estate of Tom Nabong c/- Messrs R Patel Lawyers, Barristers & Solicitor, 5th Floor, Development Bank Centre, 360 Victoria Parade, Suva.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSELS: Mr. D. Sharma for the Plaintiff
Mr. H. Ram for the Defendant

Date of Hearing: 27th January, 2011
Further Submissions on points raised at the hearing filed on 21st and 23rd February, 2011

Date of Ruling: 3rd November, 2011

RULING

1. INTRODUCTION
   

1. The Plaintiff is seeking to remove the caveat No 710334 lodged by the Defendant on 6th October,2008 on the land comprised in certificate of title no 18863 known as a 'Nacekoro'(part of) having an area of 25A 2R and 21.5P being Lot 1 on DP 4786 situated at Savusavu, Vanua Levu. The present Registered owner is the Plaintiff and the Defendant is relying on nemo dat quod non habet rule and state that the said transfer of land was subject to a fraud, and a judgment delivered on 12th May, 2006 has held certain land transfers including this land were effectuated after 1974 by one Edmund March who acted as power of attorney of Tom Nabong, were done in a fraudulent manner. This land was also included in the said fraudulently transacted deals according to the said judgment and any subsequent purchasers have not obtained a better title due to the alleged fraud, according to the argument put forward by the Defendant. The Defendant is also alleging that present transfer that is depicted in the title is also subject to a fraud in the land registry. The Defendant has failed to produce a copy of caveat that was filed which is the best evidence for the ascertainment of the details of his covetable interest. Since the Defendant has failed to file that vital document the caveatable interest has to be deduced from the affidavit in opposition and states 'I clearly have an interest in the land since I am the Trustee of the Estate of Tom Nabong and his land was one of the lands that Edmund March fraudulently transferred.' This clearly falls short of stating caveatable interest, but what can be ascertained from the affidavit in opposition as caveatable interest are dealt in this ruling. The Defendant has also alleged fraud to the Defendant regarding the registration in paragraph 5[c], and the affidavit in opposition at paragraph 5[a] state 'that the number given to the Memorial (said land transfer to the Plaintiff) was highly suspicious because of the letter "A" is inserted in handwriting by someone.' The affidavit in opposition at paragraph 5[e] goes further and state that 'the said memorials are worthless'. It is clear that apart from the said allegation there is no allegation against the Plaintiff. The alleged fraud against the Plaintiff is that he and Mr. Kuver, who was the predecessor in title, had colluded to fraudulently enter a memorial in the land registry denoting the ownership to the Plaintiff. This allegation was refuted and the Plaintiff has produced the relevant documents relating to the transaction between Plaintiff and said Kuver in 2008. The judgment delivered on 12th May, 2006 by Justice Coventry, decided that the transactions after 1974 where Mr. March was involved as fraudulent, but the Defendant has failed to file a caveat or action against the Plaintiff to recover this land for more than two years and filed this caveat when the land is being developed for subdivision for sale. The said judgment reveals the interest and dedication that Defendant had regarding the said land sales done by Mr. March, but the Defendant strangely waited more than 2 years from the said judgment to file this caveat and no action is filed against the Plaintiff or its predecessor on this land. The long delay of more than 2 years from the said judgment would also be a ground for removal of the caveat. If the Defendant was concerned about this land, he needs to explain the inordinate delay for more than two years, specially when the same lawyer had represented him in this case as well as in the case decided in 2006, where much reliance was made. No caveatable interest shown by the Defendant on the evidence adduced in the inquiry.
   

2. PRELIMINARY ISSUE
   

ORDER 41 RULE 9 (2)

2. In paragraph of Eli Fong's Affidavit sworn on the 23rd day of November 2010 the Defendant has raised the objection that the Affidavit of Mohammed Hassan sworn on the 23rd day of September 2010 contravened the requirements of Order 41 Rule 9 (2).
   
3. Order 41 Rule 9(2) requires every affidavit to be indorsed with a note showing on whose behalf it is filed and the date of swearing and filing the deponent had failed to complete the note .The date of swearing and filing is clearly disclosed in the Affidavit of Mohammed Hassan. The Affidavit was sworn on the 23rd day of September 2010 as stated on the last page of the said Affidavit. It was filed on the 24th day of September 2010 as shown on the backing sheet of the Affidavit. The failure to complete the endorsement note is an irregularity, the Court under Order 2 Rule 1 has the discretion to allow the Affidavit of Mohammed Hassan sworn on the 23rd day of September 2010 to be used in evidence.
   
4. In Rajendra Prasad v Wali Mohammed Lautoka High Court Civil Action No. HBC 272 of 1999L the then Justice Gates(as his lordship then was) granted leave for the use of an affidavit in evidence which was not in compliance with Order 41 Rule 3(4)(a) which makes the jurat defective, but his lordship had admitted the evidence in the affidavit and stated as follows
   

'[10] Though I am urged to strike out the affidavit in this form, I am prepared to grant leave for the use of it in evidence pursuant to Order 41 r 4 and r. 9(2)'

5. I have granted the Plaintiff to regularize any defect in the affidavit, but the Plaintiff did not file a fresh affidavit instead the endorsement part of the affidavit was filed with the supplementary affidavit filed by the Plaintiff, and also sought leave of the court in paragraph 3 of the said affidavit. I am prepared to grant leave under the circumstances and I will consider the affidavit for this application and decide on its merits.
   

A Brief Facts

6. The Plaintiff is the last registered owner of the property in issue and it has obtained the transfer from one Mr. Anirudh Kuver in 2008
   
7. Mr. Anirudh Kuver, brought this land in pursuant to a sale and purchase agreement in 1979 where in both sale and purchase agreement as well as in the said transfer the signature of the vendor was the Mr. March, who signed on behalf of the owner Tom Nabong.
   
8. The Defendant is a nephew of said Tom Nabong, who was substituted in the High Court civil action against said March for fraudulent dealing in said land transfers that were done on behalf of said Tom Nabong who died while the said action was proceeding.
   
9. In the said action when it was heard, Tom Nabong was dead and Defendant who was substituted gave evidence on behalf of late Tom Nabong and Justice Coventry in his judgment held that the land transfers which were done by Mr. March as the power of attorney holder of Tom Nabong was done fraudulently, including the initial transfer in 1979 to Mr. Kuver, but the court did not cancel these transactions which were completed, but ordered Mr. March to furnish audited accounts of all the said land deals.
   
10. The Defendant after obtaining that judgment in 2006 waited for more than 2 years and lodged a caveat against the Plaintiff after the property was transferred to the Plaintiff in 2008, and when the land was about to be subdivided and developed for sale.
    

100. THE LAW
     

11. At the outset it is important to note that the 'caveatable interest' has to be described in the affidavit in opposition filed clearly. The Defendant has not filed the said caveat which should describe the caveatable interest, by the Defendant and at paragraph 8 of the affidavit in support the Plaintiff clearly states that the Defendant lacked a caveatable interest.
    

'8. That on the 6th day October, 2008 the Defendant registered a Caveat No 710334 against the Plaintiff's said Certificate of Title even though the Defendant does not have any caveatable interest in the land.

12. So, in reply to the said allegation of lack of caveatable interest the Defendant should have filed the caveat which would clearly indicate his caveatable interest but the Defendant has chosen not to do so, but he has replied to this paragraph in the following manner and the said reply is reproduced in full below
    

'10. As to paragraph 8 of the said Affidavit,

[a]. I confirm that I lodged a caveat against CT 18863, this being Caveat No 710334.

[b] I clearly have an interest in the land since I am the Trustee of the Estate of Tom Nabong and this land was one of the lands that Edmund March fraudulently transferred.

[c] Since the Title was transferred under fraud I have every right to seek the Title back into the Estate of Tom Nabong.

[d]. It is the fact Plaintiff who has no right or lawful Title to the property.'

13. So, in reply to the lack of caveatable interest the Defendant is stating is that he is having an interest in the land as opposed to a caveatable interest and without describing his caveatable interest the caveat cannot remain on the title. In the absence of annexed copy of the caveat filed by the Defendant, he state that Plaintiff does not have right or lawful title to the property. It is clear that Plaintiff's name appears as the last registered proprietor of the said property, but the Defendant state that the entry is worthless but his argument is based on some alleged irregularity in the internal administration at the land registry, and tries to impute that to Plaintiff as well as to the previous owner Mr. Kuver. This is what the 'deeming provision' contained in Section 21 of the Land Transfer Act specifically prevents and that is dealt in this ruling.
    
14. Since there is no clearly expressed caveatable interest, which they could have easily done by filing the copy of the lodged caveat which should denote the alleged caveatable interest, I have to consider the affidavit in opposition and deduce the alleged caveatable interest from that and the main allegation is fraud .
    
15. At the outset it should be noted that fraud in a registered land transaction is described by Justice Pathik in Satna Wati& Another v Ambika Prasad an judgment of the High Court of Fiji at a Labasa Civil Action No. 44 of 1992 stated as follows
    

'Mere knowledge on the part of the Ps of D's occupation is insufficient to constitute fraud in them (but fraud is not alleged against them but against Charn). However, it is not even sufficient to enable D to attack the principle of indefeasibility of title for it was said by DENNISTON, EDWARDS, COOPEER, & CHAPMAN JJ. IN FELS AND ANOTHERE V KNOWLES AND ANOTHER ( 1907 26 NZLR 604) that;

"The cardinal principle of the Land Transfer Acts in that the register is everything, and that, except in cases of actual fraud on the part of the person dealing with the resisted proprietor, such person, upon registration of the title under which he takes from the registered proprietor, has an indefeasible title against all the world. Everything which can be registered gives, in the absence of fraud, and indefeasible title to the estate or interest registered, or in the cases in which registration of a right is authorized – as in the case of easements or incorporeal rights- to the right registered"

16. At paragraph 7[i] of the affidavit in opposition filed by the Defendant state as follows
    

'[i] It is my position that Mr. Kuver acquired the title from Mr. March who fraudulently transferred the title to him, Mr. March did not have ownership of the title and his actions were designed to fraudulently divest my late uncle and grand aunty of ownership of their land . This being so, I believe that Mr. Kuver could not have acquired a good title to the property.'

17. It is to be noted that according to the record of the title registry in relation to this title, the ownership was never transferred to Mr. March, and it remained with Tom Nabong, and there was a sale and purchase agreement between Tom Nabong and March regarding CT 5482 and the actual transfer was registered on 27thAugust, 1979 between Tom Nabong and Kuver the alleged fraud was that Mr. March as the power of attorney holder of Tom Nabong has signed these transfer as well as the sale and purchase agreement. The fraud according to the said judgment of Justice Coventry was that Mr. March has not paid money that was obtained from those land transfers to Tom Nabong. So, clearly the fraud in the said judgment does not involve other parties except Mr. March to invalidate the titles.
    
18. The fraudulent land transactions were done after the power of attorney was granted to Mr. March, by Tom Nabong in 1974, the said sale and purchase agreement between the Plaintiff and Tom Nabong which was executed in1975 was signed by Mr. March and the actual transfer was also signed by Mr. March in 1979 as the power of attorney holder of Tom Nabong. So, the alleged fraud was according to justice Coventry was done by Mr. March, by not repaying the values stated in the said transactions including this land transaction.
    
19. The allegation of fraud is clearly directed to Mr. March and cannot be imputed to any of the purchasers including Mr. Kuver. It is clear that non possession or some other party in possession cannot be considered as attributes of frauds as stated in said judgment of justice Pathik in Satna Wati & Another v Ambika Prasad an judgment of the High Court of Fiji at a Labasa Civil Action No. 44 of 1992.
    
20. The allegation of fraud between the Plaintiff and Mr. Kuver is contained in the affidavit in opposition at paragraph 5[c], and also states that predecessor to the Plaintiff, namely Mr. Kuver would have known the consequences of the judgment delivered in 2006. The said paragraph 7[h] states as follows
    

'[7][h] After the judgment was delivered Mr. Kuver appears to have embarked on a course of action to give the impression that he has divested himself of ownership of the land in CT 18863 since he would have known or was aware of the implications of the judgment delivered by the High Court on 12th may 2006. Prior to this Mr. Kuver had never come onto the land because the land was still occupied by the Nabong family members.'

21. It is to be noted that there is no action filed against the Plaintiff or against the said Mr. Kuver by the Defendant, for fraud and or for cancellation of the said transfers and there was no finding against Mr. Kuver in the said judgment, though it was held that money received from the transactions were not paid to the owner by Mr. March.
    
22. SECTION 109 OF LAND TRANSFER ACT states as follows
    

109.-(1) Upon the receipt of any caveat, the Registrar shall give notice thereof to the person against whose application to be registered as proprietor of, or, as the case may be, to the registered proprietor against whose title to deal with, the land, estate or interest, the caveat has been lodged.

(2) Any such applicant or registered proprietor, or any other person having any registered estate or interest in the estate or interest protected by the caveat, may, by summons, call upon the caveator to attend before the court to show cause why the caveat should not be removed, and the court on proof of service of the summons on the caveator or upon the person on whose behalf the caveat has been lodged and upon such evidence as the court may require, may make such order in the premises, either ex parte or otherwise as to the court seems just, and, where any question of right or title requires to be determined, the proceedings shall be followed as nearly as may be in conformity with the rules of court in relation to civil causes.

23. The Plaintiff being the last registered proprietor has instituted this action in terms of Section 109(2) of the Land Transfer Act.
    
24. In The Fiji National Provident Fund Board v Vivrass Holdings Limited and Registrar of Titles Office Justice Jitoko's decision of the High Court of Fiji at Suva Civil Action No. HBD 325D of 2002S in dealing with an application by the Plaintiff by originating summons under section 109 (2) of the Land Transfer Act for the First Defendant to show cause as to why the caveat lodged by the First Defendant should not be removed the Court held that "In order for the First Defendant to sustain its caveat, it must show that it has a caveatable interest in C.T.24128".The said Fiji National Provident Fund Board case determined that the Fiji equivalent to New Zealand's section 146 (now NZ section 137 (a), and has quoted section 106 of the Land Transfer Act in the said decision.
    
25. Justice Jitoko in the said case stated that the essential requirement in caveatable interest is that the right base on statute confers an estate or interest in land. It is this interest in land that gives a person the locus standi to caveat. It was quoted with authority "Guardian, Trust and Executors Company of New Zealand, Limited v. Hall [1938] NZLR 1020 at 1025 where it held in Gallan J's judgment as follows
    

"A caveat is the creature of statute and may be lodged only by a person upon whom a right to lodge it has been conferred by the statute. It is not enough to show that the lodging and continued existence of the caveat would be in some way advantageous to the Caveator. He must bring himself within section 146 of the Land Transfer Act."(emphasis is added)

26. So, the alleged interest as the executrix of the estate of late Tom Nabong cannot create a right over a property which was already transferred in 1979.This clearly falls short of caveatable interest and even if the Defendant could show that lodging and continued existence of the caveat would be in some way advantageous to him to secure to title for the land is not sufficient to order the extension of the caveat. Even if said transfer to Mr. Kuver was done fraudulently by Mr. March, the transfer cannot be cancelled unless the said fraud is imputed on to Mr. Kuver. It is to be noted the alleged fraud is not the under valuation of the land or any collusive action with the purchasers at that time, but nonpayment of money received by Mr. March to the owner late Tom Nabong. There were no findings in the said judgment relating to collusion on the part of the people who purchased the lands in pursuant to the said power of attorney that was granted to Mr. March. In Eng Mee Yong &Ors [1980] AC 331 Lord Diplock stated that bona fide purchaser will obtain a title free from any infirmity in Torren system. Not only there was no fraud established against Mr. Kuver, but also there is no action filed against Mr. Kuver for the said transfer of property, there was no finding against Mr. Kuver or any undervaluation of the land transfers. So, clearly the Defendant cannot rely on Nemo dat rule in this system of land registration which favours indefeasibility of the title. It is to be noted the alleged fraud in the judgment only confined to non-payment of money received by Mr. March to late Tom Nabong and this cannot be imputed to other parties including Mr. Kuver and in any event this determination against Mr. March cannot have an effect on the transfer of the property to the Plaintiff in 2008.
    
27. In Cambridge Credit (Fiji) Ltd v. W.F.G. Ltd Vol. 21 FLR 182 the Fiji Court of Appeal stated that section 106 is concerned with the protection of unregistered instruments in land, and added, (p.185).
    

" Section 106 of the Fiji Act is designed to protect unregister instruments in land .For instance an agreement for sale and purchase, an unregistered mortgage, an agreement to give a mortgage or an option to purchase land are just a few examples of unregistered instruments which are capable of being protected by the lodging of a caveat.'

The Court of Appeal in the said case p 184 at paragraph [H]stated,

"That the respondent must however, bring itself within the provisions of section 106 and in order to do this must satisfy the Court that the following are fulfilled.

(1)That it sis a person claiming to be entitled to or to be beneficially interested in any land estate or interest under the Act; and

(2)That it is so claiming by virtue of an unregistered agreement or other instrument or transmission or any trust expressed or implied or otherwise howsoever."

28. The Plaintiff as caveatee can rely on its registered title as prima facie evidence of an unfettered right to deal with the land, but in this case the Defendant without indicating its caveatable interest in the land challenges the entry in the memorial and state in paragraph 5[e] as follows
    

'[e]. In the absence of any official record of these documents being presented at the proper place in the Titles Office and in the absence of proper independent verification and explanation of the said Transfer and mortgage I believe that the said memorials are worthless.'

29. It is to be noted that the section 21of Land Transfer Act makes specific provisions on this issue and states as follows
    

Registration of instruments of Title

21.-(1) Every instrument of title shall be deemed and taken to be registered under the provisions and for the purposes of this Act as soon as the same has been signed by the Registrar and marked with a serial number in the register, and every instrument purporting to transfer or in any way to affect land subject to the provisions of this Act, or any estate or interest therein, shall be deemed to be so registered as soon as a memorial thereof as herein described has been entered in the register upon the folium constituted by each existing instrument of title affected by such dealing. (emphasis is mine)

30. The title presented for this application denotes a memorial of the transfer to the Plaintiff and the said memorial is signed, but the Defendant contends that only a person on behalf of the registrar has signed the memorial. If a person on behalf of the registrar has signed the memorial that cannot invalidate the memorial or the transfer, which clearly is beyond the Plaintiff's control and it cannot be responsible for any act done by the land registry and their internal arrangements and distribution of the authority. That cannot be challenged in this proceeding and should have been challenged in a proper judicial review application, which the Defendant has failed to do. Again the said objection of memorial being not signed by the registrar himself is an objection taken in this proceeding without any serious interest being shown by the conduct of the Defendant as it confined only to this application which is an interim in nature. The provisions contained in Section 21 will be applicable for the Plaintiff's title and the entry in the memorial is deemed conclusive evidence of registration and clearly not open for any challenge now.
    
31. In paragraph 5 and its subparagraphs of his Affidavit Eli Fong has in considerable detail analysed the entries made by the Registrar of Title and concluded that the memorial of the Certificate of Title No. 18863 are fraudulent entries and that they 'were only done by the Plaintiff and Mr. Kuver in concert with someone from the Titles Office to give the impression that the title has been transferred to a bona fine purchaser for value'. If such a fraud was actually happened and Defendant believes so, why he did not complain that to criminal investigation authorities and or to any internal investigation of the land registry needs to be considered in the evaluation of the said allegation. This amply demonstrate the nature of the allegation, which is confined only to this proceedings as in the earlier objection regarding the signature of the memorial which I dealt earlier. The Defendant has not even filed a civil action against the Plaintiff and or against Mr. Kuver and or against any employee of the land registry, for the alleged fraud. So the allegation of fraud as stated in the paragraph 5[c] of the affidavit in opposition cannot be accepted. In paragraph 6 of his Affidavit Eli Fong has again questioned the arrangement entered into between the Plaintiff and the predecessor in title Mr. Kuver but the Plaintiff has filed the sale and purchase agreement and the mortgage document in his affidavit in reply marked as MH3 and state that 'in accordance with the sale and purchase agreement the company had paid the sum of one thousand dollars upon execution of sale and purchase agreement and a further sum of fifteen thousand dollars was paid into the bank account of Mr. Kuver by a cheque No 017 on the 29th day of March 2008. That the balance of the purchase price has been secured under mortgage in favour of Mr. Kuver.' This type of dealing in a business venture does not by itself reveals any fraudulent activity, but a method of financing without actual money being paid on a project at the beginning, till the money is generated from such a venture and 'leverage buying' is not an unusual phenomenon in the financial transactions in the world today and this kind of arrangement in a land development project where the money would not be generated till the actual sale happens cannot be considered an act of fraud. A such financing cannot be considered as a mode of acquiring control over the land, but in actual fact the financing of the deal is done with an arrangement with the previous owner to delay the payment through a mortgage for a certain period for the development and sale of the land and to generate funds to pay for the purchase of the land. So, again the allegation contained in paragraph 6 cannot be accepted as a fraud.
    
32. The burden is for the Defendant to satisfy the court that there are sufficient grounds in fact and law for continuing in force the caveat. The Plaintiff only needs to satisfy the Court that it is the registered proprietor of the land. The Plaintiff has attached a copy of the Certificate of Title No. 18863, which is marked as "MH1" in the Affidavit of Mohammed Hassan and, pursuant to section 38 of the Land Transfer Act the Plaintiff's registered certificate of title is the conclusive evidence of title.
    
33. Once the Plaintiff satisfies the Court that it is the registered proprietor then the burden of proof shifts to the Defendant to show cause why the Caveat should not be removed. In Eng Mee Yong &Ors [1980] AC 331 Lord Diplock stated that
    

'The Torrens system of land registration and conveyancing as applied in Malaya by the National Land Code, has as one of its principal objects to give certainty to title to land and registrable interests in land . Since the instant case is concerned with title to the land itself their Lordships will confine their remarks to this, though similar principles apply to other registrable interests. By S. 340 the title of any person to land of which he is registered as proprietor is indefeasible except in cases of fraud, forgery or illegality, and even in such cases a bona fide purchaser for value can safely deal with the registered proprietor and will acquire from him an indefeasible registered title.' (emphasis is added)

34. So, in the absence of mala fide of the Plaintiff on this transfer of land from Kuver to the Plaintiff should obtain its indefeasibility. The transfer from Mr. Kuver to the Plaintiff was effected more than two years after the delivery of the judgment of justice Coventry, that dealt with fraudulent transfers of Mr. March and the Defendant has not placed a caveat on this land when it was transferred to the Plaintiff in 2008.
    
35. In the said Eng Mee Yong &Ors [1980] AC 331 judgment of Lord Diplock further held
    

"This is the nature of the onus that lies upon the caveator in an application by the caveatee under s 327 for removal of a caveat: he must first satisfy the court that on the evidence presented to it his claim to an interest in the property does raise a serious question to be tried; and, having done, so he must go on to show that on the balance of convenience it would be better to maintain the status quo until the trial of the action, by preventing the caveatee from disposing of his land to some third party."

36. In paragraph 10 (b) of his affidavit the Defendant is claiming that he has an interest in the land since he is the Trustee of the Estate of Tom Nabong and that the land in issue was fraudulently transferred by Edmund March. However he has failed to provide evidence to support his claim that the Estate of Tom Nabong is entitle so or is beneficially interested in the land that was transferred in 1979 and furthermore he has not provided any evidence to claim that the purported interest in the land. If at all there will be a claim for the sale value from Mr. March as per judgment of Justice Coventry. The Judgment of Coventry J in the Court in Civil Action No. 127 of 1994 between Eli Fong and Edmund March the Court noted
    

"...that the plaintiff in that case has been practical and realistic in this matter. In opening to the court counsel made it clear that the plaintiff had, regrettably, realized that it would be futile to try to pursue the return of lands now registered in the named of persons other than the defendant'.

37. So, it is clear that even at the hearing of the said action, the Defendant has decided to confine his reclaim only to the lands that were not transferred, though that judgment specifically dealt with all the transactions and ordered Mr. March to provide audited accounts of all the transactions since 1974 which dealt with late Tom Nabong's lands. So, the judgment clearly distinguished the lands that were transferred to third parties who were not parties to the said action. So, if the Defendant required to nullify any of the said transfers that were already registered he could have even placed a caveat before the transfer to the plaintiff, two years after the said judgment was delivered. If this caveat is allowed this would make indefeasibility further erode its authority. The exception to the indefeasibility is fraud but that should be the fraud of the Plaintiff which the Defendant has failed to establish as a serious question to be tried.
    
38. As stated in Cambridge Credit (Fiji) Ltd v W.F.G. Ltd Vol. 21 FLR 182 it was held that the Defendant must bring himself within the provisions of 106 and in order to do so he must satisfy the court that the following conditions are fulfilled:
    

That he is a person claiming to be entitled to or to be beneficially interested in the land, estate or interest in the land under the Act; and

That he is so claiming by virtue of an unregistered agreement or other instrument or transmission or any trust expressed of implied or otherwise howsoever.

In Cambridge Credit (Fiji) Ltd case the Court on page 185 paragraph[E] in the judgment read by Spring JA stated "Section 106 of the Fiji act is designed to protect unregistered instruments inland. For instance an agreement for sale and purchase, unregistered mortgage, and agreement to give a mortgage or an option to purchase land are just a few examples of unregistered instruments which are capable of being protected by the lodging caveat" and clearly the Defendant do not have such a right and the Defendant has failed to establish a caveatable right over this land. Though in the absence of the finding that there is no caveatable right I need not venture to find out other requirements for the extension of caveat I have briefly considered the other requirements.

4. SERIOUS QUESTION TO BE TRIED
   

39. The Defendant must establish that his evidence before the Court shows a serious question to be tried in respect of his claim to a caveatable interest in the property in issue. The Defendant's contention is that Plaintiff is not a bona fide purchaser for value and that it and its predecessor in title Mr. Anirudh Kuver acquired the Certificate of Title by fraudulent means in concert with someone from the Registrar of Titles Office. He further states that Mr. Kuver and the Plaintiff transaction is not bone fide. The Defendant's claim for a caveatable interest in the land is based on the allegation of fraud on the part of the Plaintiff and the Plaintiff's predecessor in title.
    
40. Subject to the exception of fraud section, 39 and 40 of the Land Transfer Act affords protection to the registered proprietor by guaranteeing a good title upon Registration. The law and the effect of registration under the Torres System are well settled. The relevant section in the Land Transfer Act are quoted below.
    

Registered instrument to be conclusive evidence of title

38. No instrument of title registered under the provisions of this Act shall be impeached or defeasible by reason or on account of any application or document or in any proceedings previous to the registration of the instrument of title.

Estate of registered proprietor paramount, and this title guaranteed

39. – (1) Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which but fir this Act might he held to be paramount or to have priority, the registered proprietor of any land subject to the provisions of this Act, or of any estate or interest therein, shall, except in case of fraud, hold the same subject to such encumbrances as may be notified on the folium of the register, constituted by the instrument of title thereto, but absolutely free, from all other encumbrances whatsoever except.

The estate of interest of a proprietor, claiming the same land, estate or interest under a prior instrument of title registered under the provisions of this Act, and

So far as regards any portion of land that may be wrong, description or parcels or of boundaries be erroneously included in the instrument of title of the registered proprietor not being a purchaser or mortgagee for value or deriving the title from a purchaser or mortgagee, for value, and

Any reservations, exceptions, conditions and powers contained in the original grant.

Subject to the provisions of Part XIII, no estate or interest in any land subject to the provisions of this Act shall be acquired by possession or user adversely to or in derogation of the title of any person as the proprietor of any estate or interest in such land under the provisions of this Act.

Purchaser not affected by notice

40.Except in the case of fraud, no person contracting or dealing with or taking or proposing to take a transfer from the proprietor of any estate or interest in land subject to the provisions of this Act shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such proprietor or in any previous proprietor of such estate or interest is or was registered, onto see to the supplication of the purchase money or any part thereof, or shall be affected by notice, direct or constructive, of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud."

41. Fraud in the context of the Torrens system was interpreted by the Privy Council in Assets Company Limited v Mere Roihi & Others [1905] UKLawRpAC 11; (1905) A.C 176 at 210. Lord Lindley in the judgment said:
    

" by fraud in these Acts is meant actual fraud, i.e. dishonesty of some sort, not what is called constructive or equitable fraud – an unfortunate expression and one very apt to mislead by often used, for want of a better term, to denote transaction having consequences in equity similar to those which flow from fraud. Further, it appears to their Lordships that the fraud which must be proved in order to invalidate the title of a registered proprietor for value, whether he buys from a prior registered owner or from a person claiming under a title certified under the Native Land Acts, must be brought home to the person whose registered title is impeached or to his agents. Fraud by persons from whom he clams does not affect him unless knowledge of it is brought home to him or his agents. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not in itself prove fraud on proposing to take a transfer from the proprietor of any estate or interest in land subject to the provisions of this Act shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such proprietor or in any previous proprietor of such estate or interest is or was registered, or to see to the application of the purchase money or any part thereof, or shall be affected by notice, direct or constructive, or any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud"

42. In considering the 'fraud' aspect of the Defendant's allegations the Court has to consider the "test of fraud" as stated by Salmon J in the following passage in the New Zealand Court of Appeal case of Waimiha Sawmilling Co Ltd v Waqione Timber Co Ltd [1923] N.Z.L.R.1137 at p. 117 this was cited in Shah v Fifita [2004]FJHC 299 HBC0392.2003s (23June 2004) by Justice Pathik in his judgment, and the Defendant has relied on this authority in his supplementary affidavit
    

"The true test of frau is not whether the purchase actually knew for a certainty the existence of the adverse right, but to make further enquiries before purchasing, or to obtain from the purchase, or to purchase subject to the claimant's rights rather than in defiance of them. If, knowing, as much as this, he proceeds without further inquires or delay to purchase an unencumbered title with intent to disregard the claimant's, if they exist, he is guilty of that willful blindness or voluntary ignorance which, according to the authorities, is equivalent to actual knowledge, and therefore amounts to fraud ..."

43. It is to be noted there is not willful blindness on the part of the Plaintiff, the Plaintiff has bought this land after two years from the judgment and the Defendant if interested had ample time to lodge a caveat against the land. It is clear that the judgment of justice Coventry did not make any finding against Mr. Kuver though said land transaction was also included in the bundle of fraudulently transferred lands that belonged to late Tom Nabong. The said fraud was the non payment of money to late Tom Nabong by his power of attorney holder Mr. March. There were no finding regarding undervaluation of land or any collusive acts of the buyers at that time. So, no fraud can be imputed on the said judgment to the plaintiff or its predecessor. I have dealt in detail about the other alleged fraud regarding the memorial on the title need only to state that the said allegation cannot be accepted.
    
44. In paragraph 5 of the Affidavit of Eli Fong the Defendant has alleged that the memorial noted on the Certificate of Title states that on 25th August 2008 the Plaintiff became registered as proprietor of the land. Further that the mortgage in favour of Anirudh Kuver is "highly suspicious" because the letter "A" is inserted in handwriting by someone. The Defendant state that the memorials on CT 18863 are "fraudulent entries and were only done by the Plaintiff Mr. Kuver in concert with someone from the Titles Office" this issue I have dealt earlier in this ruling and had found without merits and need only to say that this cannot be a ground for fraud on evidence before me.
    
45. In Eng Mee Yong V Letchuman [1980] AC 331 (Privy Council)
    

'It is not appropriate for a judge to attempt to resolve conflict of evidence on affidavit, this does not mean that he is bound to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement on an affidavit however equivocal, lacking in precision, inconsistent undisputed contemporary documents or to her statements by the same deponent, or inherently improbable in itself it may be .In making such order on the application as he may think just the judge is vested with a discretion which he must exercise judicially.'

46. The affidavit evidence has to be considered critically and in the process the Defendant's allegation of fraud against the Plaintiff is not substantiated.
    
47. In Satna Wati& Another v Ambika Prasad judgment of the High Court of Fiji at a Labasa Civil Action No. 44 of 1992 Pathik J on page 4 said:
    

"Mere knowledge on the part of the Ps of D'S occupation is insufficient to constitute fraud in the (but fraud is not alleged against them but against CHARAN). However, it is not even sufficient to enable D to attach the principle of indefeasibility on title for it was said by DENNISTON, EDEWARDS, COOPER& CHAPMAN JJ. IN FELS AND ANOTHER V KNOLES AND ANOTHER (1907)26 NZLR 604) that:

i. "The cardinal principle of the Land Transfer Act s is that the register is everything, and that, except in the cases of actual fraud' on the part of the person dealings with the registered proprietor, such person, upon registration of the title under which he takes from the registered proprietor, has an indefeasible title against all the world. Everything which can be registered gives, in the absence of fraud, an indefeasible title to the estate or interest registered, or, in the cases in which registration of a right is authorized - as in the case of easements or incorporeal rights – to the right registered".

48. Thus under the Land Transfer Act the Defendant has to show evidence of actual fraud on the part of the Plaintiff in order to set aside its title. The Defendant has not disclosed evidence that even suggest the Plaintiff had any actual knowledge of any interests of any third party when it dealt with Mr. Kuver and the allegation against the plaintiff is that the land is still in actual control of Mr. Kuver because of the mortgage . This cannot establish any fraud.
    
49. In the above mentioned case of Satna Wati& Another v Ambika Prasad judgment of the High Court of Fiji at a Labasa Civil Action No. 44 of quoted the following passage INTRODUCTION TO LAND LAW by PETER BUTT as follows.
    

"In this regard and generally on this aspect I refer to the following passage from INTRODUCTION TO LAND LAW by PETER BUTT at p. 298:

"It has been held that it is not fraud to purchase with notice of an unregistered lease, become registered as proprietor and then evict the lease relying on the indefeasible title conferred by registration (Oretel v. Horden [1902] NSWStRp 21; (1901) 2 S. R. (N.S.W.) (Eq.) 37; Wicks v. Bennett (1021) [1921] HCA 57; 30 C.L.R. 80, at 91, 94 – 95; R. M. Hosking Properties Pty. Ltd v. Barnes [1971] S.A.S.R. 100, at 103; Achatz v. De Reuver [1971] S.A.S.R. 240, at 250); it is always open to the holder of an unregistered interest to protect his interest by caveat, and "a purchaser may shut his eyes to the fact of there being an unregistered interest, and need not take any consideration of the persons who claim under the unregistered interest: (Munro v. Stuart [1924] NSWStRp 54; (1924) 41 S.R. (N.S.W.) 203, at 206. In the words of Kitto J., "merely to take a transfer wit notice or even actual knowledge that its registration will defeat an existing unregistered interest is not fraud" (Mises v. Stokman [1967] HCA 15; (1967) 116 C.L.R. 61, at 78). Nor is it fraud to register promptly with the purpose of defeating a claim over the land which may be established be pending litigation: that is not cheating a person of a known existing right (Waimiha Sawmilling Co. Ltd. v Waqione Timber Co. Ltd. [1926] A.C. 101). On the other side of the line, a registered title is defeasible for fraud where the purchase takes not merely with notice of the unregistered interest but having given an assurance that the interest will be preserved (Loke Yew v. Port Swettenham Rubber Co. Ltd. [1913] UKLawRpAC 11; [1913] A.C. 491, at 501 – 502)."

50. It is clear that no fraud can be imputed to the Plaintiff from the above quoted passage and the Defendant has failed to disclose any issue to be tried for his claim to a caveatable interest in CT 18863.If the Estate of Tom Nabong not received any money for the transfer of the property from then as in the case of Cambridge Credit (Fiji) Ltd the Defendant may have a claim against Mr. March or the unpaid monies. However just as the case of Cambridge Credit (Fiji) Ltd has established the Estate of Tom Nabong does not have any interest in the land in issue, which is now registered in the Plaintiff's name.
    

5. BALANCE OF CONVENIENCE
   

51. The inconvenienced to the Plaintiff far outweigh any alleged injury to the Defendant and the Plaintiff would suffer loss and damages if the caveat was not ordered to be removed. It is clear that Defendant has waited for more than 2 years from the judgment of justice Coventry and lodged the caveat only when the land is being partitioned for sale and the said sale is jeopardized and even the value of the land will get effected if there are encumbrances to the title and if the sale is delayed there will be loss of faith to the prospective buyers and they will not invest in this land. The plaintiff who purchased this land in 2008 should not further encumbered as it will seriously affect its cash flow. Plaintiff's major investment is this land and any delay would affect its financial status drastically. So the balance of convenience favours the dissolution of the caveat.
    
52. The Defendant has failed to provide a copy of the caveat he has lodged the title. He only evidence is then contained in his affidavit sworn on the 23rd day of November 2010. Whether this was an oversight on the part of the Defendant is not clear, but why the Defendant failed to indicate a caveatable interest in reply to the paragraph 8 of the affidavit in support which alleged absence of caveatable interest cannot be an oversight. In paragraph 10 of the affidavit in opposition which dealt with the said paragraph 8 in the affidavit in support only speaks about the interest in the property as opposed to caveatable interest, as I have indicated before in this ruling.
    
53. In Fels v Knowles [1906] NZGazLawRp 66; (1906) 26 NZLR 604 the Privy Council in describing the Torrens system described the legislation in the following terms:
    

"The object is to save persons dealing with registered proprietors from the trouble and expenses of going behind the register, in order to investigate the history of their author's title, and so satisfy themselves it its validity. That end is accomplished by providing that everyone who purchases, in bona fide and for value, from a registered proprietor and enters his deed of transfer or mortgage on the register shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author's title."

54. Section 40 of the Land Transfer Act reflects what is stated by the Privy Council in the above mentioned case. In Breskver v Wall (1971) 126 CLR 376 at page 381 BarwickCj stated that the Torrens system is a system of "title by registration', as distinct from the system of "title by registration" under the old system. Under the Torrens system, title rests upon the act of the Registrar of Titles in registering an instrument rather than upon the acts of the party executing the instrument.
    
55. The Judgment of High Court Civil Action No 0127 of 1994 Eli Fong v Edmund March the Defendant was the substituted as plaintiff in the said case as the sole executor of Tom Nabong and he is a nephew of the said Tom Nabong and the said judgment was delivered on 12th May, 2006,
    
56. At paragraph 87 of the said judgment of Justice Coventry sates as follows
    

[87] It is possible to say precisely when this fraud commenced. Events followed fairly quickly after the February 1974 grant of power of attorney. However there is a gap of some two years and three months between the first sale and the granting of the power of attorney. I cannot be satisfied beyond reasonable doubt that the first sale of 20 acres for the sun of $2,650.00 on 2nd November 1971 was part of this fraud. I do find that by the time of the signing for the power of attorney in February 1974 Edmund march had realized the gullibility of Tom Nabong and Tomanita Nabong and had set forth his fraudulent course of conduct to divest them of all the lands in their name.

[88] I find that the fraud was continuing throughout until and including the final transfer of four acres of land in December, 1992.

57. The Court also held at paragraph [91] "...that the plaintiff in that case has been practical and realistic in this matter. In opening to the court counsel made it clear that the plaintiff had, regrettably, realized that it would be futile to try to pursue the return of lands now registered in the named of persons other than the defendant'. So, the said judgment has to be applied only to the said order of the case which reads as follows
    

[94] Accordingly I make orders as follows

A declaration that the defendant obtained Certificate of Title No 1899 in his name fraudulently and in breach of trust,(this in itself is not to be taken as impugning the titles of others who are on the register as being the owners of titles derived from CT 1899).

An order that the defendant do convey transfer and assign to the plaintiff all the unsold titles and balance of land in or deriving from the original three blocks that remain in the defendant's name and executed a registrable transfer in favour of the plaintiff. This is to be completed by 3 pm on 27th of June 2006.

i. The mortgage debts on the remaining land can be ascertained fairly quickly. It might well be that the plaintiff sill seek to examine Edmund march on oath as a judgment debtor. It might well be that land has to be sold or transferred to meet the damages award.

ii. (c) An order requiring the defendant to produce an audited account of the sale of each and every property pertaining to the plaintiff's three original certificates of title. This order is stayed until further order of the court. I will hear counsel for the plaintiff and the defend as to whether there is any real efficacy in this order.

iii. ................'

58. It is clear that this judgment cannot use against the present plaintiff who obtained title from Kuver. It is also clear that Plaintiff has obtained the title from Mr. Kuver in 2008and that was more than 2 years after the said judgment was delivered where the Defendant was the substituted plaintiff and the only witness. Neither a caveat nor an action was filed by the Defendant and if he had an interest why he did not do so needs to be explained and any purchaser including the Plaintiff, cannot be subject to a caveat since the said transfer was executed on 28th May, 2008. It was clear that above judgment specifically exclude all the properties that were already transferred to others and it only confined to the orders given in the said judgment though the judgment generally state all transactions after execution of power of attorney to Mr. March in 1974, were done fraudulently.
    

6. CONCLUSION
   

The Defendants attach on the title of the Plaintiff is two fold and both on the grounds of fraud. Fist is based on the alleged irregularities in the land registry. The Defendant state that the memorial in the title is worthless, but I have analysed the said allegation in the light of the express provision contained in Section 21 of the Land Transfer Act. The Plaintiff has also submitted the said sale and purchase agreement and the mortgage document which, Defendant denied their existence. The Defendant also state that signature of the registrar is not placed on the memorial and a delegated person has signed on behalf of the registrar which again cannot vitiate the registration. The second ground for the fraud is based on the judgment of justice Coventry and the said judgment determined the fraud of non payment of money received by Mr. March and this cannot be imputed to the said buyers of the land including Mr. Kuver, irrespective of the allegation of that he was a friend of Mr. March . In any event the present owner is the Plaintiff according to the title and its memorial and it is indefeasible.

59. In the circumstance the Defendant has not shown caveatable interest and the caveat should be removed forthwith. I have also ordered a cost of $1000. Assesses summarily for the Plaintiff to be paid by the Defendant.
    

7. FINAL ORDERS
   

60. The caveat No 710334 lodged by the Defendant on 6th October, 2008 comprising in certificate of title no 18863 having an area of 25A 2R and 21.5P being Lot 1 on DP 4786 is removed forthwith.
    
61. The Defendant to pay the Plaintiff a cost of $1000.00
    

Dated at Suva this 03nd day of November, 2011.

Mr. Deepthi Amaratunga
Master of the High Court
Suva