Carpenters Properties Ltd v Te Arawa Ltd [2011] FJHC 728; HBC178.2011 (14 November 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 178 of 2011

BETWEEN:

CARPENTERS PROPERTIES LIMITED a limited liability company incorporated in accordance with the laws of Fiji with its registered office at Carpenters Building, Robertson Road, Suva, P. O. Box 2999, Suva.
PLAINTIFF

AND:

TE ARAWA LIMITED formerly known as Petford Limited, a limited liability company incorporated in accordance with the laws of Fiji with its registered office at Level 10, FNPF Place, 343 Victoria Parade, G.P.O Box 855, Suva.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSEL: Mr. S. Sharma for the Plaintiff
Mr. J. J. Udit and Mr. V. Prasad for the Defendant

Date of Hearing: 8th September, 2011
Date of Ruling: 14th November, 2011

RULING

1. INTRODUCTION
   

1. The Plaintiff sought extension of Caveat in terms of Section 110 (3) of Land Transfer Act Cap. 131 of the caveat No; 741169 'A' affecting the land comprised in iTaukei Lease No: 43478 Lot 1 SO 3706 Denarau on ex parte summons filed on 20th June, 2011 and the extension was granted for limited period till 4th July 2011 and on that date the Defendant appeared through its lawyer and the extension was granted inter partes with consent, till the final determination of this summons and the matter was fixed for hearing of this summons for extension. In the meantime on the 1st of July 2011, a further application was filed by the Plaintiff by way of Summons to Consolidate with the Action no. 239 of 2010 stating that Action No. 178 of 2011(this action) being the application ancillary to High Court Civil Action No. HBC 239 of 2010 .The Defendant has filed Civil Action No 239 of 2010, an action for specific performance of the agreement entered between two parties for the sale and purchase of the said land and in alternate for forfeiture of the deposit paid by the Plaintiff in terms of the said agreement. The Plaintiff is opposing the said action for specific performance and also relies on its letter of cancellation of the said agreement, but has placed a caveat on the property again relying on the same agreement. The Defendant has terminated the said sale and purchase agreement by a notice of termination on 27th July, 2010, allegedly, in terms of the said agreement to purchase. The Plaintiff objected to said application for consolidation and stated that they will not file any affidavit in opposition but rely on the materials already provided, so the Plaintiff's contention that the application for consolidation is unopposed, is not the correct position of this case. The correct position is that there is no additional materials filed by way of an affidavit in opposition but the Defendant is opposing the application relying on the already filed affidavit in regard to removal of the caveat and the High Court Rules and relevant law. The main issue is whether the Plaintiff has a caveatable interest over the property, because of the refusal of the Defendant to pay the deposit the Plaintiff paid for the purchase of the property. Defendant has sought by way of a writ to forfeit the said deposit or specific performance of the agreement. The alleged interest as per the caveat is 'by virtue of Sale & Purchase Agreement dated 26th March, 2010 and Deposit paid thereunder '. The said sale and Purchase Agreement was cancelled by the caveator according to the Plaintiff (caveator), by its letter dated 27th July, 2010 and it cannot be relied upon by the same party that cancelled it to justify caveatable interest. The Deposit is liable for forfeiture in terms of clause 3.3 of the sale and purchase agreement and there is no lien over the property in terms of the agreement. It is also not equitable to stop any dealing on the land by virtue of payment 10% of the sale price as a deposit as the Plaintiff is opposed to any specific performance. The said deposit is only 10% of the sale price and the time is also the essence of the agreement in terms of clause 3.1 of the said agreement.
   

2. FACTS
   

2. The Defendant and the Plaintiff consented to sell and purchase respectively all that piece and parcel of land comprised in iTaukei Lease No: 434878, Lot 1 SO3706, situated in Denarau, Nadi. On 26th March, 2010 the parties entered into a written sale and purchase agreement. The total consideration was $11,000,000.00. A deposit of 10% was required to be paid by the Plaintiff as the purchaser. A sum of $1,100,000.00 was duly paid to the Defendant. The Plaintiff has also agreed to that sum being released to the Defendant instead of it remaining in to the Solicitor's trust account until settlement at the Registrar of Title's office.
   
3. One of the conditions subsequent to the execution of the Agreement was the obtaining of the consent of iTaukei Land Trust Board's (TLTB) by 26th July, 2010 .The purchaser (the Plaintiff) cancelled the agreement on the 27th of July, 2010. The Defendant had not rejected the purported cancellation and sought specific performance of the agreement. However, the Plaintiff has repeatedly denied the same alleging non – fulfillment of the condition subsequent to the execution of the agreement.
   
4. The Agreement, in clause 2 of the Agreement which stipulated the "Conditions Precedent" according to the Plaintiff.
   

The Clause 2.1 states as follows:

'This agreement is subject to and conditional upon the parties obtaining all Approvals for the transfer of the Native Lease from the Vendor to the Purchaser on terms and conditions that are acceptable to both parties(acting reasonably). Both parties will use all reasonable endeavors to obtain the approvals as quickly as possible after the date of this agreement.

The clause 2.2 of the Agreement statedthat "this Agreement will not become an Agreement to acquire or dispose of any land until such time as the approvals are obtained".

The clause 2.3 states 'The purchaser will provide Vendor with all information and forms (duly signed where necessary) required by the Vendor for obtaining any of the Approvals required for the satisfaction of the Condition.'

5. The Agreement further stated that "if the condition is not satisfied before 4.30pm on condition date (26th July 2010) (time being of essence) the Purchaser may, at any time after the condition date but before the condition has been satisfied, cancel this Agreement by giving written notice to the other party."
   
6. The Clause 3.4 states as follows:
   

'Entire Deposit: The Purchaser acknowledges that the entire Deposit is in all respect to be regarded as a deposit and does not include any penalty component with the intention that in the event of cancellation entitling the Vendor to forfeit and retain the Deposit, the entire Deposit may be forfeited and retained. If at the time of cancellation only part of the Deposit had been paid, the Vendor may forfeit and retain the part and sue the Purchaser for the balance of the Deposit.

7. The Plaintiff allegedly, exercised its said right and issued Cancellation Notice to the Defendant on 27th of July 2010
   
8. The Clause 2 of the said agreement contains the conditions precedent and clause 2.2 states as follows
   

'This agreement will not become an agreement to acquire or dispose of any land until such time as the Approvals are obtained (until the Approvals are obtained the only obligation and agreements of the parties will be those contained in this section 2)

9. The said sale and purchase agreement also stated that in the event of cancellation of the agreement as follows:
   

"On cancellation of this Agreement the Vendor will immediately refund the deposit to the Purchaser (but for avoidance of doubt, excluding any interest earned on the deposit)"

10. The Defendant did not return the money as per the said clause in the agreement and on the 6th of August, 2010 filed a Writ of Summons against the Plaintiff seeking specific performance of the said agreement and alternate has sought to forfeiture of the deposit. It is to be noted that what the Defendant is seeking in that action is specific performance as to the enforcement of the conditions in the said agreement and in the alternate for the forfeiture of the deposit .The Plaintiff is opposing the application and by way of counter claim is seeking the refund of the deposit. The said action was filed on 22nd September, 2010 and all the pre trial stages were also completed and now it is with the judge to fix a hearing of that action. In that action, the Defendant states that the condition could not be met simply due to the acts or omissions deliberate or otherwise of the Plaintiff.
    
11. The Defendant states as consequence thereof the Plaintiff has breached the said contract and under the circumstances, the Plaintiff claims that in pursuant of the contract the Plaintiff specially performs the agreement or in the alternate for forfeiture of the deposit paid for beaching the contract.
    
12. The Defendant, state as follows:
    
    • (a) The Defendant has duly compiled its obligations under the agreement.
      
    • (b) The Plaintiff has breached the Sale and Purchase Agreement by failing to obtain consent of TLTB after having taken the responsibility to do so.
      
    • (c) The Plaintiff has forfeited the deposit unless it rectifies the breach by specifically performing the Contract.
      
13. In the alternate the Defendant also seeks to forfeits the deposit of $1,1000,000.00 pursuant to clause 10.3 (a) of the agreement and other liquidated damages.
    
14. From the above facts what can be safely deduced is that the Plaintiff has lodged caveat to secure its deposit which the Defendant has failed to pay and obliged to pay according to the Plaintiff. The Plaintiff has failed to show any other interest in the land caveat and the main issue is whether the non-payment of deposit creates a caveatable interest. If the answer to the above question is answered in negative the caveat should be removed forthwith. So, the issues regarding consolidation raised by the Plaintiff and the issues relating to the alleged non compliance with the procedure will be dealt separately, and the main issue of caveatable interest in the Plaintiff is the crux of this action and I will decide on that issue first.
    

100. LAW AND ANALYSIS

1. Caveatable Interest.
   

15. The Plaintiff purchaser, after purporting to cancel the agreement lodged the said caveat on 3rd November, 2010, forbidding registration of any transfer or other instrument affecting the land.
    
16. On 3rd June, 2011 the Defendant sought the removal of the caveat and the Plaintiff has filed the summons for extension in pursuant to the said application for removal that was made to the registrar.
    
17. 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.'

Though the said decision stated that conflict of evidence on an affidavit cannot be decided on an application for extension of the caveat the evidence presented before the court needs to be analyzed and can be critically appraise them. The dispute is whether the Defendant could forfeit the deposit in terms of the said agreement and issues relating to this cannot be decided on affidavit evidence and this will be the issue for substantive action relating to specific performance, that is instituted by the Defendant. The issue is whether the Plaintiff has a caveatable interest in the property and for that the evidence before me has to be critically analysed.

18. 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 be protected by the lodging of a caveat.'

19. The Plaintiff who cancelled the sale and purchase agreement cannot rely on the same cancelled agreement, to lodge this caveat. So, in terms of the above judgment of the Fiji Court of Appeal the Plaintiff does not have unregistered instrument. The alleged 'unregistered instrument' was also cancelled by the Plaintiff, according to his own action and he relies on the said cancellation and objects to the specific performance of the said contract.
    
20. The Court of Appeal in the said case Cambridge Credit (Fiji) Ltd v. W.F.G. Ltd Vol. 21 FLR 182 at 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.

i. That it is a person claiming to be entitled to or to be beneficially interested in any land estate or interest under the Act; and

ii. 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."

21. The Plaintiff in this case could not fulfill any of the said requirements. His reliance on the sale and purchase agreement cannot be accepted as he is denying the existence of the sale and purchaser agreement after 27th July, 2010 and it has maintained the same position in the said action for specific performance filed by the Defendant. The only issue is the payment of 10% of the sale price as the deposit to the Defendant. It is common sense that if the Plaintiff is relying on the deposit for the caveatable interest that it should consent to the specific performance of the contract and should be willing to purchase the land, if not there cannot be a caveatable interest in the land, though it might have a cause of action for recovery of the of the said 10% of the sale price that was paid to the Defendant. Since the Plaintiff is refusing to purchase the said land and opposed to specific performance, it cannot lodge a caveat and hold the land as 'ransom' till the payment of said deposit. It is also noted that said forfeiture is now an issue for the hearing of the action filed by the Defendant's application for specific performance and the statement of the defence filed by the Plaintiff in that case annexed as 'E' to the affidavit in support does not seek the transfer of the land and only seeks the recovery of the deposit with interest, clearly excluding any caveatable right over the land.
    
22. 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 the Plaintiff does not have such an interest as the said agreement that he cancelled and objects for any specific performance cannot be relied upon. So his claim is purely a claim for recovery of money from the Defendant without seeking any transfer of the said land. This position is very clear from the statement of Defence that was filed in the action filed by the Defendant for specific performance. The Plaintiff is asserting its position that the agreement was cancelled in terms of the provisions of the agreement and also seeking the recovery of the said deposit that was paid to the Defendant with interest. It is to be noted though the said statement of defence was filled in August, no caveat was lodged till November, 2010. If he had a caveatable interest he would have filed a caveat much earlier, and the delay also indicates that grant of the extension of the caveat is not equitable.
    
23. 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."

24. It is for the caveator to establish that the "...claim must, in fact and law, be more than merely frivolous or vexatious and it must appear from evidence and Originating Summons that the caveator might ultimately succeed in establishing his caveatable interest"; Midland Brick Co Pty Ltd – v – Walsh Anor [2002] WASC 248 (31st October, 2002) (see para 30 of report).
    
25. The general principle is that a person seeking to lodge and maintain a caveat must have an interest in land, Holt– v – Anchorage Management Ltd [1987] NZCA 5; [1987] NZLR 108 at 117 per Somers J. It is for this reason caveat must state with sufficient certainty the nature of interest or estate claimed by the caveator; NZ Mortgage Guarantee Co Ltd – v –Pye [1979] 2NZLR 188. Vautier J at page 195 of the report after referring to and following from the Australian cases stated the following:-
    

"...a caveator who fails to comply fully with the statutory requirements and fails to state accurately the nature of interest claimed which he claims by caveat will not succeed in securing assistance of the Court to maintain such a caveat."

26. His Lordship referred to the decision of the High Court of Australia in Leros Pty Ltd – v – Terava Pty Ltd [1992] HCA 22; [1992] 174 CLR 407 at 422 – 423 per Mason CJ, Dawson and McHugh JJ.
    
27. This statutory requirement is also mandatory under S107 of our Land Transfer Act (Cap 131). It states:-
    

"Every caveat shall state the name, address and description of the person by who or on whose behalf the same is lodged and, except in the case of a caveat lodged by order of the court or by the Registrar, shall be signed by the caveator or his agent and attested by a qualified witness and shall state with sufficient certainty the nature of the estate or interest claimed and how such estate or interest is derived."

It is a mandatory provision and the interest in the estate has to be described in the caveat with certainty.

28. The interest described in the caveat form by the Plaintiff is as follows:
    

"...claiming an interest by virtue of the Sale and Purchase Agreement dated 26th March, 2010 and Deposit paid thereunder"

It is to be noted that proper description of the caveatable interest in the caveat is necessary and in Francis – v – Taradale West End Ltd [1998] 3 NZ Conv. C 1921762stated as follows:

'If the basis for claiming the caveat is changed then it complies neither with the Statute nor the Regulation and therefore should not be extended Ball v Fawcett [1997] 1 NZLR 743.'

29. In Re The Estate of Kumar [1998] FJHC 34; HPC0021.1997& HPP0023.1997(18 March 1998) Justice Byrne in regarding a caveat that was lodged against the probate held

'This makes common sense as the person filing a Warning to Caveat must be entitles to know the interest in the estate claimed by the Caveator.'

Though it is not regarding a caveat in terms of the Land Transfer Act, the rationale can be applied since the Land Transfer Act Section 107 clearly requires the caveator to provide the caveatable interest, with sufficient certainty.

30. The interest claimed in the Caveat is based upon the sale and purchase agreement which was cancelled by the Plaintiff on its own accord and the said notice of cancellation dated 27th July, 2010 is annexed to the affidavit in support by the Plaintiff. At the time when this caveat was lodged, according to the Plaintiff there was no agreement in place, as it had already cancelled the sale and purchase agreement. So, it is clear that the Plaintiff in this action is taking a complete opposite of what it had done, and relied on till filing of the caveat, and has not deviated from that position to date. In order to rely on the agreement to claim a covetable interest, it has to accept that the agreement was not cancelled. If it is a limited interest then surely it needs to be described succinctly as the Section 107 requires the interest to be described clearly with sufficient clarity. It cannot rely on the entire agreement unless it waives its purported cancellation or it holds itself to be bound by it.
    
31. In Francis – v – Taradale West End Ltd [1998] 3 NZ Conv. C 1921762. a caveat was lodged claiming an interest based on a sale and purchase agreement which was cancelled. The caveator claimed that the caveat was as to the deposit only. The decision of Master J. Faire held as follows
    

'In my view therefore, the particular caveat that is the subject of this application could not have been sustained and therefore I cannot uphold the submission made by Mr. Schmrth in paragraph 3 of his memorandum of 11 March that is implicit in the return of the deposit that a caveatable right did exist. '

32. It is clear that since the agreement was rescinded by the Plaintiff he cannot be relied upon the same "cancelled agreement". Interest should have been specific to deposit only this is the very reason that the Plaintiff did not lodge the caveat soon after the Plaintiff filed the writ for specific performance. Here the caveator, had 'cancelled' the agreement as far back on 27th July, 2010, but again relies upon the same to lodge a caveat on 17th August, 2010. It is to be noted that the interest is not described as a purchaser's lien over the deposit and in any event there is no lien over the property in terms of the said agreement, which is elaborative on the issue of the deposit as well as on the cancellation. It should also be noted that time is an essence of this agreement.
    
33. The caveat must be lodged by a person who has an interest, being "legal interest", in the land. His or her capacity must be accurately described in the Caveat Form. The New Zealand Court of Appeal in Gordon – v – Freadwell Stacey Smith [1996] NZCA 110; [1996] 3 NZLR 281 held that under the Act, the caveator may include Solicitors executing the caveats as "duly authorized solicitors or agents" and there is no such description of the person who had lodged 'on behalf ' of the Plaintiff.
    
34. In paragraph 9(e) of the Affidavit in Reply, Daniel Whippy has deposed that the plaintiff "...further explicitly denies that Patel Sharma Lawyers on any occasion held itself out as an agent of the Plaintiff". In the caveat form, the person lodging the caveat is Ronal Jaswindra Singh, a solicitor and employee of Patel Sharma Lawyers. However, he has not executed nor lodged the caveat as "authorized solicitor or agent" of the Plaintiff." The requirement in terms of Section106 specifically lays down that the caveat "...shall be signed by the caveator or his agent" .The Defendant submitted that the person lodging caveat was neither an authorized solicitor nor agent of the Plaintiff. As such, it is argued by the Defendant,that the caveator is not the purchaser, plaintiff or person having a caveatable interest in the land. I cannot less agree on this point, though it is a technical irregularity, still an equally important issue. I totally agree with the submissions of the Defendant on that point, though I am not inclined to decide on the said irregularity for removal of caveat lodged by the Plaintiff in this action.
    
35. The second alleged the interest claimed in the caveat is for a deposit. The deposit constitutes only 10% of the consideration. However, the caveat "forbids the registration of any transfer or other instruments affecting the said land absolutely." That comprises the whole land. Tomkins J in Taylor – v – Coleman [1995] 3 NLR 336 at 341 said:-
    

"it is my opinion that based on the authorities to which I have referred to,a person claiming to be entitled to an interest in part of the land I certificate of tile, is entitled to lodge a caveat to protect that interest only in respect of that part of its land ..."

36. A "caveatable interest" was defined by Griffith CJ Municipal District of Concord v Coles [1905] HCA 35; (1906) 3 CLR 96, Griffith CJ at P. 107 said:
    

"Under the Torrens system, a caveatable interest amounts to a proprietary interest in land". (emphasis added)

37. A caveat can thus only be lodged by a person who has legal or equitable interest in the land. Griffith CJ in Municipal District of Concorde v Coles supra said:-
    

"I am of the opinion that it is only a person who has a legal or equitable interest in land, partaking the character of an estate in it, or an equitable claim to it, who can lodge a caveat."

38. In Staples & Co. Ltd v Corby [1900] NZGazLawRp 157; [1900] 19 NZLR 517 the word "interest" was explained as follows:-
    

"The word 'interest', last used, shows that legal interest is meant, and this section was meant to guard equitable interest." (emphasis added)

39. In Featherstone Park Developments Ltd – v – Hu, Auckland High Court Civ – 20111 – 404 – 001041 [2011] NZHC 591 (20th June, 2011) at para 16, citing from Joy – v – Roskam HC Hamilton Civ, 2003 – 419 – 331 [Decided on 12TH June 2003]. In paragraph 9 of that Judgment which reads as follows:-
    

"...the particular problem in this case, however, is that the caveat is not drawn claiming a lien against land. Rather it alleges that an interest is claimed as purchaser under the sale and purchase contract. In my view, D W McDonald, Sale of Land (2 ed. 2000) 2002 is correct when he says:-

"after cancellation of contract to buy the purchaser no longer has a caveatable interest based on the contract; any such caveat must be withdrawn and replaced with a caveat based in lien". (emphasis added)

40. In this action the caveat was lodged by the purchaser after the purported cancellation of the agreement itself. The description of the interest claimed has to be precise and cannot claim an interest based on the agreement it had cancelled.
    
41. As a general rule will not be sustained for an ulterior motive. In Ali v Chaudhary Lautoka High Court Civil Action No:- HBC0061/2001 (29 March 2004) the court stated the following:-
    

"I conclude that the Accused contemnor had no valid or caveatable interest to protect to permit him to lodge caveats against Lots 19 and 21. By lodging them he was seeking to advance his interests either to pressure the company to allocate him the Lots or to meet his demands for repayment of his loan and interest ahead of the others."

42. The caveator must establish that it has a caveatable interest, that is, legal or equitable interest in the land. S106 of the Land Transfer Act provides the same. It is submitted that after having purportedly cancelled the agreement the Plaintiff has brought an end to having any interest in the land in terms of S106. Since the Plaintiff is opposed to specific performance and has not sought transfer of the property there cannot be a caveatable interest on the land. The caveat is a warning (its Latin meaning) to the whole world against the dealing with that land, and if the Plaintiff is not interested about the said land and does not intend purchasing it, what is the purpose of the 'warning' and what is the right that the Plaintiff has to 'warn' others regarding the title to the said land? The answer should be there cannot be any such right and clearly the Plaintiff does not have a caveatable right. The Plaintiff cannot seek extension of the property merely because it is advantages to its affairs as held in the case of Eng Mee Yong V Letchuman [1980] AC 331 (Privy Council). It should also be noted that the right to transfer and to deal with the property is an inherent right of the owner of the property and that can be curtailed by a caveat, only according to the law and if not irreparable damage will cause to the Defendant.
    

Balance of Convenience

43. The Plaintiff must establish that the balance of convenience lies in favour of preserving the caveats; Whallin v Baibart Investments Pty Ltd, (1987) 47 SASR 198, Commercial Bank of Australia Limited v Scheirholter & Anor [1981] VicRp 32; [1981] VR 292; and Jerambak Holdings Pty Ltd &Ors v Austral-Asean Pty Ltd [2005] NTSC 38
    
44. In Pacific Homes Ltd v Consolidated Joineries Ltd [1996] 2NZLR 652 Blanchard J in NZ Court of Appeal authoritatively stated that balance of convenience is a consideration to be taken in to account in the exercise of the residual discretion in determining an application for removal of extension of caveat. His Lordship said:
    

"we are of the view that in the dictum in Sims v Lowe, - Somers and Gallen JJ were concerned with the situation which was then before the Court and were not putting their minds to a situation in which there is no practical advantage in maintaining a caveat lodged by someone who could properly claim a caveatable interest. In such circumstances the Court retains discretion to make an order removing the caveat, though it will be exercised cautiously. An order will be made for removal only where the Court is completely satisfied that the legitimate interests of the caveator will not thereby be prejudiced. If, on the facts of the case, it can be seen that the caveator can have no reasonable expectation of obtaining benefit from continuance of the caveat in the form of the recovery of money secured over the land or specific performance of an agreement or if the caveator's interest can be reasonably accommodated in some other way, such as by substituting a fund of money under the control of the Court, then it may be appropriate for the caveat to be removed notwithstanding that the right to the claimed interest is undoubted".

45. The caveat prohibits any transaction to be registered in the land registry, and this also warns any prospective interested party that intends purchasing this land. Since the Plaintiff is not seeking the transfer of the land in the related action, and only concern is the return of the deposit with interest, no purpose will be served by this caveat other than to 'warn' and 'prevent' others from dealing with land. This land is located in a highly commercial area and by having the caveat in place would certainly reduce the number of investors attracting to this land for any future deal and or will loose or reduce its potential commercial value and this will directly affect the Defendant and clearly the balance of convenience is with the Defendant.
    

PROCEDURAL IMPROPREITARY

46. The objection relating to the procedural improprietary is dealt separately since I have already decided to dismiss this application for the extension of the caveat. Since the said objection was taken by the Defendant at the argument it is dealt below.
    

(a) No originating process

47. An application for removal of a caveat is made pursuant to S110 (3) of the Land Transfer Act (Cap 131), which states as follows:
    

"110.-(3) The caveator may either before or after receiving notice from the Registrar apply by summons to the court for an order to extend the time beyond the twenty – one days mentioned in such notice, and the summons may be served at the address given in the application of the caveatee, and the court, upon proof that the caveatee has been duly served and upon such evidence as the court may require, may make such order in the premises either ex parte or otherwise as the court thinks fit."

48. The Act requires a summons to be filed for extension of caveat. However, any application to the Court has to be in compliance with the High Court Act (Cap 13) and High Court Rules 1988. Order 5 rule 1 provides that:-
    

"Subject to the provisions of any Act and of these rules, civil proceedings in the High Court may be begun by writ, originating summons, originating motion or petition."

49. Order 5 rule 3 provides that all proceedings which are brought pursuant to an Act must be brought by Originating Summons, unless specifically prescribed by any such Act. It states:-
    

"Proceedings by which must be begun an application is to be made to the High Court or a judge thereof under any Act by originating summons except where by these rules or by or unless any Act the application in question is expressly required or authorized to be made by some other means.

50. The Order 5 Rule 4 further provides for commencement of action under a Writ of Summons or Originating Summons depending on the nature of the claim. Rule 4(2) provides for the following actions which may be commenced by write or originating summons:-
    

"(2) Proceedings –

In which the soles or principal question at issue is, or is likely to be, one of the construction of an Act or of any instrument made an Act, or of any deed, will, contract or other document, or some other question of law, or

In which there is unlikely to be any substantial dispute of fact,

are appropriate to be begun by originating summons unless the plaintiff intends in those proceedings to apply for judgment under Order 14 or Order 86 or any other reason consider the proceedings more appropriate to be begun by writ." (emphasis added)

51. The rules also allow summons to be filed in a pending action. They are chamber applications made under Order 32 rule 1. Ordinarily these are captioned as summons. They are not Originating Summons. In this case the Plaintiff has used the interlocutory summons to commence this proceeding which is defective, this may be the reason for them to make an application for consolidation of this action, but since the said application is also before me and also argued that also needs to be dealt separately.
    
52. On behalf of the Defendant it is submitted that this action is irregularity commenced and issued by the registry for the following reasons:-
    

There is no originating process before the Court. An action under S110 (3) must be issued under Order 5 rule 3 o 4 as submitted above.

53. The defect manifests in the relief which is sought by the summons. It only seeks an extension of the caveat without any substantive relief as to the determination of the caveatable. In Ba Town Council v Fiji Broadcasting Commission [1976] 22 FLR 91 Kermode J in dismissing an application for an injunction, where the sole relief sought was injunction without any substantive relief, held at page 99 as follows:-
    

"Quite apart from the merits of the application the law pertaining to injunctions would also dictate that the applications be dismissed. Although each writ also seeks a declaratory judgment in effect the soles relief claimed in each writ is the injunctions.

It is not the practice of the court to grant an interlocutory injunction which will have the practical effect of granting the sole relief claimed. (Dodd v. Marine Workers Union (1923) 93 L.J. Ch 65)." (emphasis added).

54. Extension of caveat is similar to an interim injunction application in certain aspects but not in all aspects. For example the caveat is lodged in terms of the provisions contained in the Land Transfer Act and is a statutory relief as against the injuction at the same time the caveat is granted ex parte at the land registry opposed to injuctions that are granted either inter partes or ex-parte before a court of law after considering established rules of granting injunction as opposed to administrative act of lodging a caveat before the registrar. It is only an interim procedure to allow the caveator to notify the position by lodging the interest; Miller v Minister of Mines [1963] AC 484 at 497. Once a caveat is lodged the caveator must proceed to establish the so called equitable or beneficial interest. Since the right to lodge and maintain a caveat is provided for by an Act of Parliament, final relief, and without final relief concerning the land the extension of caveat serves no purpose. The application for consolidation post filing of the action does not cure the defect as the statement of defence in that action has not sought any relief pertaining to land, but only seeks the recovery of the Deposit with interest.
    
55. Section 110 (3) provides that an Order extending the caveat can be granted on an ex-parte basis. It states:-
    

"The caveator may either before or after receiving notice from the Registrar apply by summons to the court for an order to extend the time beyond the twenty – one days mentioned in such notice, and the summons may be served at the address given in the application of the a caveatee, and the court, upon proof that the caveatee has been duly served and upon such evidence as the court may requires, may make such order in the premises either ex parte or otherwise as the court thinks fit.

It only relates to the Order as such the originating summons (the applications) must be served to the caveatee. The word "ex parte" refers to the order of the Court and not the caveator's Application. This position was comprehensively stated by Fatiaki J in Mahendra Vijay Anganu – v – DayaWati& Robin RavindraAnganu, Suva High Court Civil Action No: HBC 0629/1993 (unrep) (29th June, 1994). His lordship after citing Section 110 stated that as follows:

"it will be seen at once that the subsection may be invoked "either before or after receiving notice from the Registrar", secondly, the court has a discretion to extend the time within which a caveat will lapse "as the court thinks fit", and thirdly (and this is a feature upon which there appears to be some variance) the application for extension in my view must come by way of inter partes summons and be supported with "proof that the caveatee has been duly served.

In my considered opinion the use of the word "may in the sentence" ...and the summons may be served at the address given in the application of the caveatee," merely provides an instance where service of the summons would suffice. It does not in any way alter or obviate the requirement for service of the summons seeking the extension of the caveat.

Similarly the use of the term "ex-parte" in the last sentence of Section 110(3) refers to the order of the Court and NOT to the nature of the caveator's application." (emphasis added)

56. His Lordship Mr. Justice Singh in Raghwan Construction Ltd – v – Endeavour Youth Investment Corporation Society & Another, Suva High Court Civil Action No: HBC 322/205 (unrep) [18th August, 2005] at page 7 of the Judgment summarized the procedures under S 110 (3) as follows:-
    

"(a) Registrar sends notice of removal, to the caveator.

i. He can remove the caveat after twenty – one (21) days of service of notice.

ii. Caveator can apply for extension at any time either before or after service of such notice.

iii. The application must be by summons inter – parte and not ex-parte.

iv. The summons must be served either personally or sent by post to the address shown.

v. There should be proof of service of summons by affidavit."

57. The compliance with the procedure under S110 (3) is needed and failure to do so is fatal. Any exercise of jurisdiction by judicial officer in making an order as to the caveat exceeds his/her jurisdiction. The Court of Appeal in ANZ v Oline Maya Maharaj Civil Appeal No: ABU 49/1983 at page 7 of the Judgment held:-
    

"...the procedure following a notice pursuant to Section 110 (1) is prescribed, step by step, by the subsection, and such steps not having been taken, we are compelled to conclude that the Judge in making the order as to the caveat exceeded his Jurisdiction."

58. On behalf of the Defendant, it was submitted that the Plaintiff failed to follow the well established procedure under S110 (3) and the extension of the caveat should be dismissed, but what the Defendant has failed to realize is that the caveat that was extended without notice to the Defendant was a limited extension that expired on 4th July, 2010 and on the extension that is operational is the extension granted with consent of the parties till final determination of this action on 4th July, 2011. No such irregularity of the said limited extension was raised in terms of the provisions contained in Order 2 rule 2 of the High Court Rules. So the said objection for the non compliance is overruled.
    

Consolidation Application by the Plaintiff

59. It is to be noted that though this consolidation application indicates that it was filed and issued by the registry on 1st July 2010 neither it was brought to my notice by the Defendant's counsel nor it was filed on the case record by 4th July 2011.there is no affidavit of service to determine the date of service to the Defendant. It is also be noted that the summons for consolidation indicate identical date and trial of the hearing of extension of caveat which I decided on 4th July, 2011, after considering the availability of the counsel. This shows that the said summons for consolidation was not issued on 1st July, 2011, though the seal shows that date.
    
60. The Plaintiff has filed this action for extension of the caveat and both parties have by consent decided to extend the caveat till the final determination of this action. After obtaining that order by consent the Plaintiff is seeking to consolidate this action to the action filed by the Defendant for specific performance. If that is done the extension of the caveat will prevail till the final determination of that action by virtue of the extension that was granted by consent. Such tag – on should not be allowed, as the action for extension of the caveat is an interim measure .If the caveat is extended till the final determination of the substantive action filed by the Defendant, without consent that will not be grossly unfair by the other party to the action, which agreed only for the extension only till final determination of the action for removal of the caveat. It should also be mindful of the nature of the caveat and its effect on the other party and if interim applications are to be postponed till the final determination, as in this application for consolidation the purpose of the interim relief is lost and irreparable loss will incur to one party who will be aggrieved by such an order for extension beyond this action. In any event the extension of the caveat has to be decided on the affidavits and annexed documentary evidence, without delaying till final determination of the substantive matter. The Plaintiff who filed this summons as a separate action now cannot cure that defect and also obtain an indefinite extension of the caveat till the final determination of the writ action filed by the Defendant, if such an order is granted that is grossly unfair for the Defendant.
    

D. CONCLUSION

61. The Plaintiff cannot rely on the extension of the caveat on the sale and purchase agreement that was cancelled on 27th July, 2010 on its own volition. The Plaintiff is opposed to the specific performance of the said agreement and has only sought deposit and interest for the said deposit in the statement of defence that was filed in the said action filed by the Defendant. It is clear that Plaintiff cannot have an interest in the land to lodge a caveat to 'warn' the whole world and prevent any dealing with this action since his only claim is for the Deposit that was paid in pursuant to the said sale and purchase agreement. The Deposit is a security and or a further assurance of the purchaser to commit to the dealing and as such the purchaser cannot cancel the agreement unilaterally and also place a caveat to stop any dealing on the land till his deposit is paid. The issue regarding the deposit cannot be elevated to a caveatable right over the land in this case as it relates to the said agreement and specific elaborative provisions are made in the agreement regarding the deposit, the right of the vendor to forfeit and the right of the purchaser for cancellation etc. No lien can be over the land, merely because of the non payment of the deposit which the Defendant claims in the alternate in the action for specific performance in any event there is no such caveatable interest state din the caveat.. The Plaintiff has not shown caveatable interest and the caveat should be removed forthwith and the Defendant is also granted a cost of $1,500 assessed summarily.

5. FINAL ORDERS
   

62. The caveat is ordered to be removed forthwith.

63. The cost of this application assessed summarily at $1500 to be paid by the Plaintiff to the Defendant within 21 days.
    

Dated at Suva this 14th day of November, 2011.

Mr. Deepthi Amaratunga
Master of the High Court
Suva