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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION
Civil Action No: HBC 107 of 2006L
BETWEEN:
VIJAY CHANDRA NAIR
of Alberta, Canada.
PLAINTIFF
AND:
JANKI RAMAN
of Nakurakura, Nadi
DEFENDANT
FINAL JUDGMENT
Judgment of : Ms Dias Wickramasinghe J.
Counsel : Mr K. Qoro for the plaintiff.
Mr E. Moapa for the defendant.
Solicitors : Messrs Qoro Legal for the plaintiff.
Babu Singh & Associates for the defendant.
Date of Judgment : 13 April 2012
Keywords: Constructive Trust, section 39 and 40 of the Land Transfer Act; section 168 of the Land Transfer Act;
INTRODUCTION
[1] By writ of summons dated 19 April 2006, the plaintiff seeks (1) a declaration that the defendant holds Housing Authority Sub-Lease No. 148781 in trust for the plaintiff and (2) an order that the defendant re-transfer the property back to the plaintiff or in the alternative thereof the Deputy Registrar, High Court, Lautoka to execute the necessary papers to re-transfer the property in the name of the plaintiff.
[2] The defendant denies the claim and states that she received the property from the plaintiff as a gift and counter-claims to forbid the plaintiff from entering and interfering with the tenants and the defendant, on the grounds that the plaintiff has no legal, equitable or proprietorship rights to the property.
BACKGROUND
[3] It is common ground that the plaintiff and the defendant are siblings. On 30 April 1980 their father willed the property at 12 Adam Street, Lautoka (Housing Authority property sublease no 148781) (property) to the plaintiff. Subsequently through probate no. 18908 the property was transferred to the plaintiff on 22 April 1983.
[4] Since 1973, the plaintiff has resided in Canada. Their mother has also lived in Canada with the plaintiff since their father's death in 1984.
[5] The property comprised of a two-storey house where the upper flat was rented to the government and the lower flat was occupied by the eldest sibling who was also the caretaker of the property. Both the plaintiff and his mother resided in the bottom flat whenever they came on holiday to Fiji.
[6] In 1995, the plaintiff transferred the property into the name of the defendant.
[7] Admittedly, there is no written trust. The court is thus required to determine whether the parties' intention and their conduct would constitute a constructive trust.
EVIDENCE
[8] At the trial, PW1, - the plaintiff, Vijay Chandra Nair, and his sister PW2, - Radha Nandan, gave evidence: marked as evidence documents P1 to P10. The defendant DW1,-Janaki Raman, DW2,- Jagdish and DW3 - Anand Shri Raman gave evidence on behalf of the defendant and produced in evidence two documents marked D1 and D2. As ordered under 0.38 r.2 of the High Court Rules, 1988, the affidavits containing evidence–in-chief of these witnesses were filed before the trial. The plaintiff's evidence-in-chief was produced and marked Exhibit P1 and PW2,- Radha Nandan's was marked P10. The defendant's witnesses DW1,-Janaki Raman, DW2,- Jagdish and DW3 Anand Shri Raman's affidavits containing evidence-in-chief were marked as D Exh.3, D Exh. 4, and D Exh. 5 respectively.
[9] The evidence of both parties established that the conversation relating to the transfer of the property was private and was known only to them. It appears neither party wanted the other siblings to know about it.
[10] Both siblings who gave evidence before the court i.e. PW2 & DW2, confirmed that they found out about the transfer only in 2005, when a family dispute arose due to the defendant withdrawing some money from their mothers pension account. The evidence of the siblings vented their grievances surrounding this family dispute. I observed that the dispute had reached the heights of dividing the family, some supporting the plaintiff and others the defendant. I will not consider the evidence of these witnesses any further as none assist either party and will only rely on the evidence of the parties to the action.
[11] The plaintiff admits that the defendant assisted him to take care of the property from 1983 as the defendant herself had a property close by. Both parties agree that the plaintiff gave money to the defendant to carry out repair and pay the utility bills. The arrangement carried on until 1995. The plaintiff then says that the maintenance of the top flat which was rented to the government became cumbersome and he therefore decided to transfer the property to the defendant to hold it in trust. Both parties are at variance, as to how the transfer of the property originated. The plaintiff says during one of his visits to Fiji, he made the proposal to the defendant and asked her to organize the necessary legal papers. The defendant says that the plaintiff called her from Canada and told her that he wanted to transfer the property and had sent her the key to the cabinet so she could retrieve the lease document to prepare the deed of transfer. Both parties agree that the plaintiff signed the deed of transfer in Canada. The plaintiff states that by omission the details of the trust are not included in the recital. The property was transferred by the plaintiff to the defendant on 29 August 1995. Ex facie the deed of transfer, is a deed of gift where the property had been transferred on a consideration of $10 and for natural love and affection. [Exhibit P (b)]
[12] I must place on record that I doubt the credibility of the evidence of the defendant. She was evasive, contradictory, and watchful of her answers and was simply untrustworthy most of the time during cross-examination. On the other hand, the plaintiff was truthful and credible and appeared to be giving forthright answers.
ISSUES BEFORE THE TRIAL
[13] The parties submit the following two issues to be determined by Court:
- (i) Whether the transfer of the property from the plaintiff to the defendant was in trust in favour of the plaintiff?
- (ii) Was the transfer a gift from the plaintiff?
[14] I requested the parties to satisfy me on the following issues.
- (a) Does the transfer of the property require the consent of Director of Land under section 13 of the Crown Lands Act?
- (b) Does section 59 of the Indemnity and Bailment Act apply relating to the Trust?
- (c) Does section 40 of Land Transfer Act apply?
[15] Issues (i) and (ii) in paragraph 13 above are co-related and I will therefore consider them together.
Trust or Gift
[16] Both parties agree the onus of proving the existence of the trust, and its terms, lies on the person propounding it, which in this case is the plaintiff. Nagaiya v Subhaiya [1969] 15 FLR 212 (7 November 1969).
[17] In Gissing v Gissing [1970] UKHL 3; 1971 AC 886 at 904 Lord Diplock examined the existence of a trust and said:
Any claim to a beneficial interest in land by a person, whether spouse or stranger, in whom the legal estate in the land is not vested must be based upon the proposition that the person in whom the legal estate is vested holds it as Trustee upon trust to give effect to the beneficial interest of the claimant as cestiu que trust...."
[18] The principles relating to existence of the trust applied by Marsack J.A. in Nagaiya vs Subhaiya [1969] 15 FLR 212 (7 November 1969) (majority decision) are:
- Who provides the money for the payment of the property?
- The actions or the conduct of the members of the family in respect of the property in dispute
- The existence of a trust; and lastly
- Any trust said to have been set up was in favour of certain particular person
[19] In Din v Kumar [2008] FJHC 187; Civil Action 62.2006 (25 August 2008) Justice Singh at paragraph 18 stated that:
"[18] Very convincing evidence is required to establish a trust. In Nagaiya v Subaiya 15 FLR 212 Justice Marsack at page 216 stated that where "it is sought to establish that the registered proprietor is in fact holding as trustee, then, in my view, there must be cogent and compelling evidence of the existence of such a trust. This evidence should prove how the trust came into existence and who are the persons on behalf of whom the property is held by the trustee" In Stack v Dowden – [2007] UKHL 17; 2007 2 ALL ER 929 the House of Lords held that in considering the beneficial interest one has to consider all the relevant circumstances to discern the common intention of the parties with respect to the property in light of whole course of conduct in relation to it."
[20] Justice Shameem in Nisha v Munif [1999] FJHC 133; 45 FLR 246 (13 October 1999), discussing the leading local case on the creation of equitable trusts in property in Sheila Maharaj v Jai Chand [1986] 1 AC 898 stated at page 5 that:
"The Defendant claimed an equitable trusts and estoppel. At page 125 of the Judgment, the Privy Council said:
"The authority now classic is the speech of Lord Diplock in Gissing v Gissing [1970] UKHL 3; [1971] AC 886, 902 -911 and later reviewed in the judgments of the Court of Appeal in Grant v Edward [1986] EWCA Civ 4; [1986] 2 All ER 426 which concerned an unmarried couple. In such cases a contract or an express trust as at the time of the acquisition may not be established, because of lack of certainty or consideration or non-compliance with statutory requirements of writing; but a constructive trust may be established by an inferred common intention subsequently acted upon by the making of contributions or other action to the detriment of the claimant party. And it has been held that, in the absence of evidence to the contrary, the right inference is that the claimant acted in the belief that she (or he) would have an interest in the house not merely out of love and affection. (Emphasis added)
[21] Justice Shameem in the same case at page 6 said:
"In the early case of Bannister v Bannister [1948] 2 All ER 133, the Plaintiff sold a house at a low price to the defendant on terms that she be permitted to live there rent free so long as she liked. The property was then transferred to the defendant. It was held that the defendant held the property on trust during the life of the plaintiff to allow her to live in it as long as she liked. The Court of Appeal held that in equity a constructive trust existed to prevent a legal owner from defeating a beneficial interest belonging to another.
[22] Let me now consider whether the inferred common intention of the parties provide me with cogent and compelling evidence to conclude the existence of a constructive trust in equity.
[23] It is admitted that all rental proceeds received from the government for the top flat were paid into the plaintiff's Westpac Account No. 0051940930 Suva Branch and maintenance and other expenses relating to the property including payments on utilities were met from the rent money. The defendant admits that the plaintiff made her a signatory to his Westpac Bank Account No. 0051940930 Suva Branch and Westpac Account No. 0363650430 Lautoka, when the property was transferred in 1995. (P1b, P3, and P4)
[24] The plaintiff enjoyed the balance of the rental income from 1995 until the defendant cancelled the tenancy with the government sometime in 2006. Clearly, the defendant accepted that the plaintiff exercised financial control over the property. The defendant did not explain why she permitted the plaintiff to recover the balance of the rent if she truly believed that she was the legal owner of the property and if she believed that it was gifted to her by the plaintiff. To me the defendant's above admissions and conduct fortifies the plaintiff's claim that the defendant was holding the property on trust and the defendant just paid the bills and looked after the property. The plaintiff who lived in Canada, no doubt would have faced difficulties in maintaining the property in Fiji.
[25] The defendant unequivocally admits that from time to time the plaintiff withdrew the balance of the rental money deposited in the Westpac account. Both parties admit that this was the financial arrangement between the parties from 1995 to 2005 i.e. from the time the property was transferred into the name of the defendant. The following evidence of the defendant merits reproducing as it is self evident of the common intention of the parties relating to the financial control over the rental proceeds.
Q: Who took the balance money of the rent from 1995 – 2006?
A: Vijay, I only paid the bill and Vijay took the money. When he came on holiday he took the money. He leave some money to pay for bills. He used to take all the money. I never took the rental money for my personal use.
[26] In 2005 when the family dispute arose relating to the mother's pension, the relationship between the parties became strained and the plaintiff requested the defadement to retransfer the property. The defendant refused as it was a gift and says she cancelled the tenancy with the government and rented the house to a private party.
[27] On consideration of the evidence in total, I am satisfied that the defendant held the property in trust for the plaintiff and not as a gift as claimed by the defendant. The cogent and compelling evidence of this case permits me to conclude the existence of a constructive trust in favour of the plaintiff.
Section 59 of Indemnity, Guarantee & Bailment Act – Is it a bar to equity?
[28] Section 59 of the Indemnity, Guarantee and Bailment Act reads:
No action shall be brought
(a)...
(b)...
(c) ...
(d) upon any contract or sale of lands, tenements or hereditaments or any interest in or concerning them; or
(e) unless the agreement upon which such action is to be brought or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorised.
[29] Justice Singh in Din v Kumar [2008] FJHC 187; Civil Action 62.2006 (25 August 2008) considered section 59 and said at paragraph 30 and 31:
"The Plaintiff is claiming a beneficial interest. I am of the view that the word "interest" is confined to disposition of a legal interest in the land not to claim equitable interest. Hence I conclude that section 59 does not apply and it does not affect the equity in favour of the plaintiff.
[31] Accordingly I declare that the defendant holds Certificate of Title Number 28088 in trust for the plaintiff and himself in equal shares and in the event of sale both are entitled to share the proceeds of the sale equally."
[30] The defendant cited Rafiq vs Mohammed [2004] FJHC 296; HBC 00378J; (6 May 2004) and Narayan vs Shah [1975] FJCA 5; 21 FLR 139. I find both these cases do not support the defendant's argument.
[31] I agree with Singh J's decision in Din's case, that the word 'interest' in section 59 is confined to a legal interest and not to a claim on equitable interest. The principles of constructive trust are established by an inferred common intention and conduct by the parties unlike other forms of trust. In the circumstances, constructive trust will not fall within the ambit of section 59 of the Indemnity, Guarantee & Bailment Act.
Section 40 of Land Transfer Act
[32] Sections 39 & 40 of the Land Transfer Act provide that an instrument of title is conclusive evidence that the proprietor is the absolute and indefeasible owner unless fraud or misrepresentation is proved against the legal owner.
[33] The defendant says in the present case the plaintiff does not plead fraud in the Writ therefore the property cannot be retransferred. In support Mr Maopa for the defendant cites Prasad vs Devi [2001] 1 FLR 430 (22 November 2001) where it was held that in the appellant failed to establish a case of fraud and dismissed the appeal.
[34] Mr Qoro says that actual fraud, personal dishonesty or moral turpitude must be established from the facts of this case as held in Prasad v Wati [2001] FJCA 50; [2001] 1 FLR 430 (22 November 2001).
[35] In Nandan v Datt [1984] FJCA 5; Civil Appeal No. 29 of 1982 (21 March 1984), the Fiji Court of Appeal dealt with the issue of fraud on page 8 stating that:
"A few quotations from authorities relied on by him are of relevance:
"If the defendant acquired the title, said Prendergast C.J in Merrie v McKay (1897) 16 NZLR 124 intending to carry out the agreement with the Plaintiff, there was no fraud then, the fraud is in now repudiating the agreement and endeavouring to make use of the position he has obtained to deprive the plaintiff of his rights, under the agreement. If the defendant acquired his rights registered title with a view to depriving the plaintiff of those rights, then the fraud was in acquiring the registered the title. Which view is accepted, he must be held to hold the land subject to the plaintiff's rights under the agreement, and must perform the contract entered into by the Plaintiff's vendor. (our underlying for emphasis)
At page 9, the Court of Appeal held:
"Merrie v Mackay went to the Court of Appeal and as Turner P points out nothing was said in that Court to derogate from this statement and he refers to observations of Hosking J in Waimiha case (supra) to the same effect.
"There is the suggestion that Wilson took his transfer subject to the rights of the plaintiff and had then turned round and refused to give effect to those rights"(Our underlying for emphasis)
Hosking J then all udes to Thomson v Finlay (1866) N.Z.l.R 5 SC 203 and says:
"In... such cases the intention of the disposition on both sides was that the purchaser should take subject to the specified outstanding rights of a third party, and it was held to be fraud on the part of the transferee for him, when he became registered, to turn round and refuse to give effect to those rights on the contention that he was an absolute title under the Act." (our underlying for emphasis)
[36] Mr Qoro says in this case the plaintiff and defendant entered into an arrangement whereby the plaintiff agreed to transfer the property to the defendant to enable the defendant to manage and administer the property more efficiently, whilst he was in Canada and retransfer upon request. He states that the transfer was subject to the rights of the plaintiff. Mr Qoro further says in light of Nandan's case, (supra) the defendant's refusal to retransfer and restrain the plaintiff entering the property on the ground that she is the legal owner and therefore holds absolute title, is itself tantamount to fraud.
[37] I have already concluded the existence of the constructive trust. I agree with Mr Qoro's argument. Accordingly, I conclude that the defendant is not entitled to claim the statutory protection granted under the absolute and indefeasible rule.
[38] In Prasad v Devi [2000] 1 FLR 34 (25 February 2000) Shameem J said:
"The 2nd and 3rd Defendants submit that the power under section 168 should be exercised in the most exceptional circumstances because of the need to protect indefeasibility of title upon registration. I agree."
[39] I conclude that this is a fit case for property to be transferred under section 168 of the Land Transfer Act.
Consent of Director of Lands
[40] Mr Qoro says that clause 10 of the Housing Authority Sub-Lease No 148781 is under CL 5037 and requires the approval of the Director of Lands. Therefore the transfer is invalid.
[41] I have considered paragraphs 10 to 15 of the written submissions filed by the defendant and carefully considered section 15 and 16 of the Housing Authority Act and section 13 of the Crown Lands Act. I agree with Mr. Maopa's submissions that the sub lease of crown land leased to Housing Authority only requires the consent of the Housing Authority. The defendant had obtained such authority. The plaintiff's argument on this issue thus fails.
[42] On 14 October 2010, I ordered that the second defendant deposit the rent received from the property in court. Due to the above findings, I direct the Registry to refund the said rent money to the plaintiff.
ORDERS
............................................................
D. Dias Wickramasinghe
Judge
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