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High Court of Fiji |
IN THE HIGH COURT OF FIJI AT LABASA
CIVIL JURISDICTION
Civil Action No. 12 of 2008
BETWEEN:
Krishna Dutt
Plaintiff
AND:
Mohammed Shamsud Din Sahu Khan Barrister & Solicitor.
1st defendant
Jagat Singh
2nd defendant
Jai Ram Sharma
3rd defendant
Philip Jagdishwar Singh
4th defendant
Fashad Ali
5th defendant
Registrar of Titles
6th defendant
The Attorney General
7th defendant
Appearances : Mr Sunil Kumar for the plaintiff
Mr M.A.Khan for the 1st defendant
The 2nd to 7th defendants were absent and unrepresented
Date of hearing: 2nd May,2012
JUDGMENT
This matter was first called over before me on 5 May, 2011. Miss A. Latha, counsel for the 1st defendant sought a call over date to engage the services of a solicitor, to represent the 1st defendant. The hearing was fixed for 21 September, 2011 .
On 21 September, 2011, counsel for the 1st defendant on that occasion, Ms T. Colati moved for an adjournment on the basis that she does not have proper instructions from the 1st defendant. Mr I.Samad, counsel for the 2nd defendant stated that he relied on the affidavit in opposition filed by his client. I made order granting costs to the plaintiff, as prayed for by his counsel, Mr Sunil Kumar and wasted costs.
On the next date of hearing, 9 February,2012, Mr Sunil Kumar moved for an adjournment. Meanwhile, M.A.Khan Esq solicitor had written to the Chief Registrar, on behalf of the 1st defendant, seeking a three months adjournment of the hearing for the reasons, that that the 1st defendant has been "advised to remain in Sydney for a while until the full results of his angiography are received and discussed..(and) has not been able to locate his court files". I re-fixed the hearing for 2 May, 2012.
In the circumstances, I refused the adjournment of the hearing sought on behalf of the 1st defendant, on the third consecutive occasion, on 2 May, 2012. Mr M.A Khan then, withdrew from the proceedings.
The plaintiff, Krishna Dutt brings this action by way of originating summons, as Attorney of his mother, the administratix of the estate of his father, in respect of state land in the Tikina of Labasa leased to the plaintiff's father, by State lease no. 8165.
The underlying facts, as I have found them in the plaintiff's affidavit in support and affidavit in reply can be summarised as follows.
(i) The plaintiff's father had executed Mortgage no.210439 dated 27 February,1984 with Jagat Singh, the 2nd defendant, in consideration of a sum of $ 30,000 lent to the plaintiff's father.
(ii) The plaintiff's father had then made arrangements with the Bank of Baroda and obtained a loan of $ 20,135 from the Bank by Mortgage no 210438 also dated 27 February,1984 to purchase mortgage no 210439.
(iii) The plaintiff states that since the Bank wanted settlement of its dues of $ 30,000,,he had sought advise from the 1st defendant .The 1st defendant had advised the plaintiff that he will dispute the matter in court and free the lease from the mortgages. The plaintiff appears to have seen this as a means of alleviating his financial difficulties and engaged the 1st defendant's services to act as his solicitor and paid his fees. In due course, the plaintiff was advised by the Bank and the 1st defendant that the amount due to the Bank was a sum of $ 30,000 together with interest in a sum of $ 24,975.20. The 1st defendant had then informed the plaintiff that he would arrange funds from a private source and transfer the lease in the plaintiff's name.
(iv) That was the setting for the primary transfer of mortgage No 428466 registered on 11 August, 1997, from the Bank to Jai Ram Sharma, the 3rd defendant.
(v) This was followed by the secondary transfer of mortgage from the 3rd defendant to the fourth defendant by Mortgage no 503510 registered on 17 December, 2001.
(vi) Finally the 4th defendant then transferred the mortgage to Fashad Ali, the 5th defendant on 9 October, 2007.
Copies of Mortgage no 210439, Mortgage no 210438, Transfer of Mortgage no 428466 and Transfer of Mortgage no 503510 to the 4th defendant have been attached to the plaintiff's affidavit in support.
The plaintiff states that he believes that no monies passed, when these mortgages were transferred between the "purported mortgagors", the 3rd, 4th and 5th defendants.
It will be convenient at this stage to recapitulate the matters contained in the affidavits filed by the defendants.
A detailed affidavit sworn to by one Prem Chand has been filed on behalf of the 1st, 4th and 5th defendants. Letters of authority from the 1st, 4th and 5th defendants to depose to those affidavits have been attached to the affidavit . These letters have been signed by the 1st, 4th and 5th defendants,but their signatures have not been witnessed.
This affidavit sets out the following sequence of events. Upon the plaintiff making representations to the 1st defendant,Messrs Sahu Khan and Sahu Khan made arrangements for a private loan to be paid by Jai Ram Sharma, of Sydney to the plaintiff's mother to pay the Bank of Baroda. Jai Ram Sharma is presumably the 3rd defendant in this case. The Bank was paid $ 55,757.50 by Jai Ram Sharma . The 1st defendant states he envisaged that instead of preparing a new mortgage to the lender, that a transfer of the mortgage be made as security for the loan by Jai Ram Sharma. The Bank then transferred the mortgage to Jai Ram Sharma. In the events which happened, that loan was not repaid and it was agreed that the land be sold to the plaintiff by way of mortgagee sale, which was consented to by the Director of Lands. The affidavit proceeds to state that Jai Ram Sharma then transferred the mortgage in consideration of $ 60,000 to the 4th defendant. The property was advertised for sale again, but the sale did not proceed. The 4th defendant then transferred the mortgage to the 5th defendant, in consideration of a sum of $ 90,000.The following documents are attached to the defendants' affidavit:
(a) Letter from the plaintiff's mother to Messrs Sahu Khan and Sahu Khan admitting receipt of demand notice of the 3rd defendant and consenting to transfer the mortgagee sale to her son, the plaintiff in a sum of $ 90,000 without advertising the property for sale.
(b) A similar letter from the plaintiff's mother to the Registrar of Titles.
(c) Letter from the Dept of Lands consenting to the transfer to the plaintiff.
(d) The plaintiff's letter to Messrs Sahu Khan annexing the above consent letter and authority from his mother.
(e) Copies of advertisements for mortgagee sale in April, 1999.
(f) The Transfer of Mortgage no 694615 from the 4th defendant to Eshad Ali, the 5th defendant in consideration of the sum of $ 45,000.
The plaintiff, in his affidavit in response, states the 4th defendant had signed discharge of mortgage and hence there was no necessity to transfer the mortgage, which provides it was transferred in consideration of $ 90,000, when the mortgage document states it was $ 45,000.
The 4th defendant, in his affidavit, filed on his behalf by Messrs Sahu Khan and Sahu Khan, denies he signed discharge of mortgage and states that the amounts due under the mortgage had not been repaid.
I will first clear the subsidiary contentions advanced by the 1st, 3rd, 4th and 5th defendants in their "skeletal submissions", filed on their behalf by Messrs Sahu Khan and Sahu Khan, solicitors.
It was contended that the plaintiff has no locus standi to institute these proceedings on three grounds. The first was that an action in respect of a deceased person must be brought by the personal representative of the estate, not a beneficiary. The plaintiff has attached to his affidavit in support, copies of the letters of administration given to his mother and the Power of Attorney given to him by his mother. This disposes of this trifling argument.
The second argument was that a receiving order was made against Ram Baran, the plaintiff's father. The submission then elaborates on the consequences of a receiving order, in terms of the Bankruptcy Act. This is a dishonest contention. The receiving order was made against the 2nd defendant, not the plaintiff's father.
The final argument is pertinent and centres on section 13(1) of the State Lands Act(cap 132). I read the relevant section.
"Whenever in any lease under this Act there has been inserted the following clause:-
"This lease is a protected lease under the provisions of the Crown Lands Act"
(hereinafter called a protected lease) it shall not be lawful for the lessee thereof to alienate or deal with the land comprised in the lease of any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever, nor to mortgage, charge or pledge the same, without the written consent of the Director of Lands first had and obtained, nor, except at the suit or with the written consent of the Director of Lands, shall any such lease be dealt with by any court of law or under the process of any court of law, nor, without such consent as aforesaid, shall the Registrar of Titles register any caveat affecting such lease.
Any sale, transfer, sublease, assignment, mortgage or other alienation or dealing effected without such consent shall be null and void." (emphasis added)
The land granted to the plaintiff's father is a protected lease. The written consent of the Director of Lands is therefore, required to institute legal proceedings. It does not appear that his consent has been obtained by the plaintiff. The section under review, does not render null and void, the institution of legal proceedings without the consent of the Director of Lands, as it does, in respect of an alienation or dealing effected on the land. Accordingly, his consent may be obtained subsequently.
Justice Lyon in Parvati Narayan vs Suresh Prasad, (HBC 0275 of 1996 L) in interpreting this section in a different context, stated as follows:
"A Court does not deal with any land, in the sense of finality, until any order is sealed. I thus think it is reasonable to say that, if the Director's consent, is needed, then the order could be made conditional on obtaining the consent ... I doubt that there would be any difficulty in getting it."
Mortgage No 210439 to the 2nd defendant
The plaintiff charges that his late father was procured by the undue influence of the 1st and 2nd defendants to execute mortgage no 210439 on behalf of the 2nd defendant, when his father, was in a state of intoxication.
The 2nd defendant, in his affidavit in opposition, denies that he induced the plaintiff's father to execute the mortgage, and states that the plaintiff's father, was advised of the relevant implications. The 2nd defendant also states he never instructed the 1st defendant, nor did he have any dealings with the other defendants.
In order to set aside a transaction on the ground of undue influence, a mortgagor must prove that the mortgagee exerted undue influence on the mortgagor to induce the mortgagee to execute the mortgage. The mortgagor in the present case, the plaintiff's father has passed on and there is no evidence before me that he was so influenced.
There is insufficient evidence before court, as to the transaction between the plaintiff's father and the 2nd defendant, except that a receiving order was thereafter, admittedly made against the 2nd defendant. Consequently, I am not disposed to make a finding in respect of memorial No 210439, since it would be inequitable to do so.
Transfers of Mortgages to 3rd, 4th and 5th defendants
I shall now consider seriatim each of the three transfers of mortgages that were swept across this lease by the 1st defendant. The impugned transactions are the transfer of the mortgage by the Bank of Baroda to the 3rd defendant and thereafter the successive transfers made by the 3rd to the 4th defendant and the 4th to the 5th defendant.
The plaintiff's father as stated above, had obtained a loan of $ 20,135 from the Bank of Baroda to purchase mortgage no 210439, which was then transferred to the 3rd defendant by Mortgage no.428466. The signature of the attorney of Bank was witnessed by Mr Jiten Singh, Barrister and Solicitor.
The professional misconduct ascribed to the 1st defendant in regard to the Transfer of Mortgage No. 428466 was the witnessing of the signature of the 3rd defendant, in his presence.
Mr Sunil Kumar rested his case on the decision of the Independent Legal Services Commission (Commission) in Chief Registrar v Muhammad Shamshud-Dean Sahu Khan & Sahu Khan & Sahu Khan (No. 001/2011). The complaint to the Commission emanated from the plaintiff in the case before me, with regard to the 1st defendant' s professional misconduct as a solicitor, in executing the mortgages in favour of the 3rd to 5th defendants, in conflict of the plaintiff's interests.
The 1st defendant did not attended the hearing before the Commission, but was represented by counsel. It was contended on behalf of the 1st defendant,that Albert Goundar, who was not a resident of Fiji, had advanced funds to the plaintiff's father for transfer of the mortgage from the Bank of Baroda. Albert Goundar had instructed Jai Ram Sharma to act as his trustee in the first instance and when Jai Ram Sharma migrated, the 1st defendant arranged for Philip Jagdishwar to be the new trustee. It was acknowledged that there was no deed of trust .
Albert Goundar however, was not called to give evidence, as noted by the Commissioner, in his judgment, though it goes to the heart of the 1st defendant's defence. Interestingly, Albert Goundar did not feature as a dramatis persona in the affidavit in reply filed on 17 April, 2008, by the 1st, 4th and 5th defendants, in these proceedings.
It was implicit in the evidence of Jai Ram Sharma,the 3rd defendant, in his affidavit filed before the Commission, that he had not instructed the 1st defendant to act on his behalf and that he neither executed Transfer of Mortgage No. 428466 nor Transfer of Mortgage No 503510 to the 4th defendant, where his signatures were purportedly witnessed by the 1st defendant. He said that the signatures on the transfer of mortgages are not his.
In this regard, the Commissioner, Mr Connors remarked as follows;
"To the untrained eye the signatures purporting to be Jai Ram Sharma on the transfer of mortgage are very different in the two places they appear. The witness to the signature is the ( 1st defendant)".
The 1st defendant had maintained that it was a different Jai Ram Sharma. However, as the Commissioner commented the other Jai Ram Sharma was not called as a witness.
The fifth defendant, in his evidence, had said he did not instruct the 1st defendant to transfer the mortgage to him, nor did he pay any money to the 3rd defendant, Jai Ram Sharma, nor did he give instructions to the 1st defendant to make demand . He stated however, that signature at the bottom of the. Transfer of mortgage from the 3rd defendant to him, was his.
The Commission charged the 1st defendant with several Counts of professional misconduct and unsatisfactory professional conduct contrary to section 82(1)(a) of the Legal Practitioners Decree 2009, including the following, namely,
COUNT 1
Dr Muhammad Shamsud-Dean Sahu Khan a legal practitioner, on or about the 23rd day of June 1997 in his purported capacity as solicitor for one Jai Ram f/n Ram Kissum the purported transferee in respect of the transfer of Mortgage number 210438 held in favour of the Bank of Baroda and registered against CL 8165, represented that he had witnessed the signature of the said Jai Ram Sharma ..affixed on the Transfer of Mortgage (document) No. 428466, when the said Jai Ram Sharma .. did not instruct the said Dr Muhammad Shamsud-Dean Sahu Khan to act on his behalf and did not sign the Transfer of Mortgage (document) No. 428466 purportedly witnessed by the said Dr Muhammad Shamsud-Dean Sahu Khan, which conduct, involved a substantial failure to reach a reasonable standard of competence and diligence.
COUNT 2
Dr Muhammad Shamsud-Dean Sahu Khan a legal practitioner, between the 23rd day of June 1997 and the 7th day of December 2001, having been initially instructed by Ram Baran .. and the Estate of Ram Baran to challenge the validity of Mortgage Numbers 210438 and 210439 registered on CL 8165, subsequently purported to act on behalf of Jai Ram Sharma ..to whom Mortgage number 210438 had been transferred and sought to advance the said Jai Ram Sharma's ..interests pursuant to the Transfer of Mortgage (document) 428466 in respect of Mortgage number 210438, against the Estate of Ram Baran, thereby creating a conflict of interest, which conduct involved a substantial failure to reach or maintain a reasonable standard of competence and diligence.
COUNT 3
Dr Muhammad Shamsud-Dean Sahu Khan a legal practitioner, on or about the 7th day of December 2001 in his purported capacity as solicitor for one Jai Ram Sharma f/n Ram Kissun the purported transferor in respect of the transfer of Mortgage number 210438 held in the said Jai Ram Sharma's ..favour registered against CL 8165, represented that he had witnessed the signature of the said Jai Ram Sharma ..affixed on the Transfer of Mortgage (document) No. 503510, when the said Jai Ram Sharma ..had not instructed the said Dr Muhammad Shamdud-Dean Sahu Khan to act on his behalf and had not signed the Transfer of Mortgage (document) No. 503510 purportedly witnessed by the said Dr Muhammad Shamshud-Dean Sahu Khan, which conduct, involved a substantial failure to reach a reasonable standard of competence and diligence.
COUNT 5
Dr Muhammad Shamsud-Dean Shu Khan a legal practitioner, between the 7th day of December 2001 and the 9th day of October 2007, having been initially instructed by Ram Baran . and the Estate of Ram Baran to challenge the validity of Mortgage Numbers 210438 and 210439 registered on Cl8165, subsequently purported to act on behalf of Philip Jagdishwar Singh ..to whom Mortgage number 210438 had been transferred and sought to advance the said Philip Jagdishwar Singh's ..interests pursuant to the Transfer of Mortgagee (document) 503510 in respect of Mortgage number 210438, against the Estate of Ram Baran, thereby creating a conflict of interest, which conduct involved a substantial failure to reach or maintain a reasonable standard of competence and diligence.
COUNT 6
Dr Muhammad Shamsud-Dean Sahu Khan a legal practitioner, on or about the 12th day of January 2009, purportedly acting on behalf of Philip Jagdishwar Singh's ..interest, falsely represented to the Native Land's Trust Board that the said Philip Jagdishwar Singh ..was the Mortgagee under Mortgage numbered 210438 registered against CL8165 when in fact Transfer of Mortgage No. 69415 of the Mortgage number 210438 lodged by Sahu Khan & Sahu Khan had been registered on the 16th of October 2007 effecting the transfer of Mortgage number 210438 to one Eshad Ali f/n Jaffar Ali, which conduct involved a substantial failure to reach or maintain a reasonable standard of competence and diligence.
Under Count 1 and Count 3, the Commissioner found that the 3rd defendant had not instructed the 1st defendant to act on his behalf and did not sign the Transfer of Mortgage No. 428466 nor Transfer of Mortgage No 503510 to the 4th defendant, both documents purportedly witnessed by the 1st defendant. The Commission found that the 3rd defendant's passport records depicted that he was not in Fiji, at the date the transfer and mortgage was executed.
The judgment of the Commissioner concluded that:
"If the only matters before me were the allegations in counts 1 and 3 then it would be conceivable to conclude that another Jai Ram Sharma could in fact be the Jai Ram Sharma who purportedly executed the documents.
I find however that the total conduct of the (1st defendant)makes his evidence less acceptable than that given by Jai Ram Sharma of New Zealand and the passport and travel records.
If there was another Jai Ram Sharma and as the(1st defendant)says that he has contact with Albert Gounder and that Jai Ram Sharma was his trustee then why was there no further evidence to support the evidence of the (1st defendant)".
It seems to me to be the inescapable truth that in the versatility of human ingenuity, the 3rd defendant was a fiction created by the 1st defendant. By first registering a fictitious Jai Ram Sharma( the 3rd defendant) as transferee, the 1st defendant then executed transfers of mortgages to the 4th and 5th defendants.
The 1st defendant was found guilty under Count 2 and 5 for acting in conflict of interest, since the 1st defendant had been initially
instructed by the plaintiff's father and then, his estate to challenge the validity of Mortgage Numbers 210438 and 210439. Subsequently
the 1st defendant purported to act on behalf of the 3rd and 5th defendants and advance their interests pursuant to the Transfer of
Mortgage 428466 and Transfer of Mortgage 503510.
The particulars of Count 6 deals with the transfer of the mortgage from the 4th defendant to the fifth defendant.
As the pinochle of transfers came to a close, the plaintiff and his mother received an eviction notice and a demand from the 1st defendant, on behalf of the 5th defendant, as the registered mortgagee of the lease claiming a sum of $ 124,060.27 .The 1st defendant's flagrant betrayal of his duty as a solicitor to the plaintiff was unmasked.
On 6 October, 2011 the Commissioner delivered "JUDGMENT ON SENTENCE" and made order that the 1st defendant shall cease to engage in legal practice and not apply for a practising certificate for 10 years .On his return to Fiji, he was ordered to surrender his passport to the Secretary of the Commission, till the expenses incurred by the Commission are paid.
Mr Sunil Kumar drew my attention to the Privy Council case of Gibbs v Meser, [1891] UKLawRpAC 2; (1891) AC 248 where similar facts arose. In that case, it was held that where a fictitious and non-existing transferee was put on the register, as a result of a forged transfer, the mortgage was invalid and did not constitute an encumbrance on the plaintiff's title.
In my judgment there is a substratum of evidence produced before the Commission, which establishes that the transfers of mortgages nos 428466,503510 and 694615 purported to be effected on State Lease No.8165 have been fraudulently executed by the 1st defendant. In my view, these transfers consequently, do not constitute valid encumbrances on that title.
I make order that memorials nos 428466,503510 and 694615 be expunged from State Lease No.8165, upon the plaintiff receiving the written consent of the Director of Lands.
I make order that, upon the plaintiff obtaining the consent of the Director of Lands under 13(1) of the State Lands Act(cap 132), .
A.L.B.Brito-Mutunayagam
Judge
At Suva
9th October, 2012
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