Umaria v Umaria Holdings Ltd [2012] FJHC 1027; HBA24.2011 (18 April 2012)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Appeal No HBA 24 of 2011

CHANDRA KANT UMARIA
APPELLANT

v

UMARIA HOLDINGS LIMITED
RESPONDENT

Submissions of the appellant filed on 9 December,2011
Submissions of the respondent filed on 19 January,2012

JUDGMENT

1. This Appeal is concerned with a judgment of the Master granting vacant possession of the property occupied by the appellant to the respondent, upon its application under section 169 of the Land Transfer Act .
   
2. The appellant appeals to this Court on the following six grounds of appeal:
   
   1. The Learned Master of the High Court erred in law and in fact and/or misdirected himself in law and in fact in holding that the Appellant was not entitled to continue occupation of the family owned property registered under Umaria Holdings Limited of which he is a shareholder.
      
   2. The Learned Master of the High Court erred and/or misdirected himself in law and in fact in holding that the Plaintiff failed to adduce evidence as to the nature of renovations carried on in the property.
      
   3. The Learned Master of the High Court erred in law and in fact in not considering the fact that a Constructive Trust existed between the parties upon which the Appellant had a right to occupy the said flat.
      
   4. The Honourable Master of the High Court erred in law and in fact in failing to hold that an oral contract existed between the parties for occupation of the Plaintiffs flat by all the shareholders including the Plaintiff and that all shareholders were obliged to pay rent and not the Appellant alone.
      
   5. That the Honourable Court erred in law and in fact in holding that the deponent Pushpa Kantharia had authority to institute proceedings on behalf of the Respondent.
      
   6. That the Honourable Master of the High Court erred in law and in fact in holding that the onus was on the Appellant to show that Pushpa Kantharia had the right to pursue this action.
      
3. On 20th September,2011, Mr Naidu, counsel for the respondent consented to the stay of proceedings, until the final determination of this appeal.

At the hearing on 14th November, 2011, Mr Nandan, counsel for the appellant, stated he was not pursuing grounds ii), v) and vi).Both counsel moved to file written submissions on the remaining grounds.

4. The determination

The appellant, in his affidavit in reply to the application for vacant possession as filed before the Master, had admitted that the respondent was the registered proprietor of the property in issue and that he was in arrears of rent

1. The 1st ground of appeal

The 1st ground of appeal appears to take issue with the Master's finding that the appellant was not entitled to continue occupation of the property registered under Umaria Holdings Limited, despite being a shareholder of the respondent company.

It suffices to state that a company is a distinct legal entity separate from its shareholders: Salmon v A Salmon & Co Ltd [1897] AC 22. The submissions filed on behalf of the respondent, refer to Ten Pin Properties Ltd v Bolwlarama(N.Z)Ltd,(1989) High Court of NZ, where Tipping J stated that:

"(it is a) well established rule that a shareholder has no proprietary interest, either legal or equitable, in the assets of the company in which the shares are held in respect of which he holds his shares".

This dismisses the first ground of appeal.

b) The 3rd ground of appeal

This ground of appeal provides that the Master had failed to consider the fact that a constructive trust existed between the parties, upon which the appellant had a right to occupy the said flat.

I find this assertion factually incorrect, since the Master had considered this matter. At the commencement of his Ruling, the Master states the appellant had "allege(d) constructive trust, but fails to describe it satisfactorily..".
In my judgment, the Master was correct in reaching this conclusion, as the affidavit in reply of the appellant, contained an unsubstantiated assertion that the "managing director of the (respondent company)holds the control of the plaintiff in constructive trust for members of the Umaria family,.... of (which the appellant is) one".

In this context, the respondent, in its submissions, has cited Paul Nagaiya v James Subhaiya, 15 FLR 212, where Justice Marsack at page 216 stated that "if 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". The Master also held that it was "contrary to the accepted legal norms in company law" to allege constructive trust, being a minority shareholder of the company,.

The appellant, in the submissions filed on his behalf, has addressed this ground of appeal. It is contended that the issue of constructive trust could only be determined by viva voce evidence. I do not find that an application had been made in this regard to the Master. The respondent, submits in reply, that this is the first time this point has been raised in appeal.

In any event, since there were no complicated issues of fact before the Master, the respondent was entitled to have his application decided according to the summary procedure provided in the Land Transfer Act: Gould VP in Ram Narayan v Moti Ram (Civ. App. No. 16/83 FCA) .

In my judgment, the Master correctly held that the appellant has not established any right to stay in the property and cannot as a minority shareholder, remain in possession. I accordingly, dismiss this ground of appeal .

The 4th ground of appeal

The final ground contains two assertions.

The first is that the Master failed to hold that an oral contract existed between all the shareholders, including the respondent as regards the occupation of the flat by the respondent. I find the appellant's affidavit in reply filed before the Master did not even adumbrate that there was an oral contract.

The second assertion has less merit. The Master was concerned with the occupation of a portion of the property by the appellant, and not whether "all shareholders were obliged to pay rent and not the Appellant alone", as provided in this ground of appeal. The Master thus stated that the fact that another director has not paid rent cannot constitute a ground for the appellant to stay in the property.

The appellant's appeal is dismissed with costs summarily assessed in a sum of $ 2500 payable by the appellant to the respondent within 14 days of this judgment. The respondent is granted immediate possession of the property occupied by appellant

18th April, 2012

A.L.B. Brito- Mutunayagam
Judge