Kumar v Prakash [2012] FJHC 915; HBC354.2011S (6 March 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 354 of 2011S

IN THE MATTER of the Land Transfer Act 1971, Section 109

AND

IN THE MATTER of an application to remove Caveat No. 734597 lodged by John Prakash against Housing Authority Sub – lease No. 580830, the property of Dalip Kumar.

BETWEEN:

DALIP KUMAR of Nasinu, Fiji, Businessman.
PLAINTIFF

AND:

JOHN PRAKASH of Vatudina Road, Muanikoso Housing, Nasinu, Occupation unknown to the Plaintiff
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSEL: Mr. S. Singh of Parshotam & Co. for the Plaintiff
Defendant In Person.

Date of Hearing: 9th February 2011
Date of Ruling: 6th March, 2012

DECISION
(Removal of Caveat)

1. INTRODUCTION
   

1. The Plaintiff who is the last registered proprietor has filed the summons seeking removal of the caveat lodged by the Defendant. The Defendant has to establish caveatable interest. He has failed to do so. What can be understood from the affidavit in opposition is that the Defendant is claiming equitable right to the property based on the improvements to the land, but he has failed even to prove such a caveatable interest based on equity, and has not fulfilled the onus on him to prove a caveatable interest.
   

2. FACTS
   

2. The Plaintiff has filed this summons seeking removal of the caveat lodged by the Defendant.
   
3. The Defendant objected to the caveat being removed and filed an affidavit in opposition.
   
4. The Defendant has lived on the property for a long period of time, but the owner of the property was his late father, who excluded the Defendant from his estate by his will. The beneficiary of the estate has transferred the property to the Defendant's step mother who transferred it to the Plaintiff.
   
5. The Plaintiff has obtained the transfer recently and no caveat was lodged at that time and has also proceeded to obtain vacant possession of the property through a court order.
   
6. The Defendant has lodged a caveat, though he no longer in the possession of the property. No evidence of any permanent improvements on the property as per the affidavit in opposition filed by the Defendant.
   

100. THE LAW AND ANALYSIS.
     

7. At the outset it is important to note that the 'caveatable interest' has to be described in the affidavit in opposition filed clearly. The Defendant has not filed the said caveat which should describe the caveatable interest, but going through the contents of the affidavit in opposition it can be understood that the caveator is claiming equitable interest, for the improvements that he carried out to the property. 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] 2 NZLR 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."

8. The Defendant should have filed a certified copy of the caveat which would clearly indicate his caveatable interest but the Defendant has chosen not to do so. The Defendant appeared in person and has neither tendered a copy of the caveat that he lodged nor clearly indicated a caveatable interest or details of alleged improvements. The statutory requirement is also mandatory under section 107 of 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." (Emphasis is added)

It is a mandatory provision and the interest in the property has to be described in the caveat with certainty which means that it cannot be vague or incomprehensible for a reasonable person.

9. 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)

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."

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)

10. Since there is no clearly expressed caveatable interest, which the Defendant could have easily done by filing the copy of the lodged caveat I cannot determine a caveatble interest, but I am not inclined to remove the caveat on the said preliminary ground alone.
    
11. I have considered the affidavit in opposition and deduced the alleged caveatable interest from that, and the main allegation is based on the long possession and improvements to the property, but no supporting evidence is filed. So, what the Defendant has to establish is an equitable interest on the property as he is unable to establish other interest in the property. The only averment in his affidavit in opposition is a mere statement of improvement to the land in issue, without specifying what those improvements are. Already, he has lost the possession and the Plaintiff is in possession after litigation to obtain possession. The Defendant has failed to mention the alleged improvements to the property with sufficient clarity to establish equitable right. The Defendant has not established proprietary estoppel or promissory estoppel on the evidence before me as analysed below.
    

Promissory estoppel

Promissory estoppel according to Snell's Equity (29th Edi-3rd impression 1994) at page 570 state as follows

'During the nineteenth century equity extended the doctrine of estoppel to cases where instead of a representation of an existing fact there was a representation of intention or promise. More recently, this extension became prominent in a sequence of cases following the obiter statement by Denning J in Central London Property Trust Ltd v High Tree House Ltd, though these cases "may need to be reviewed and reduced to a coherent body of doctrine by the courts."

The doctrine

(a) The rule, Where by his words or conduct one party to a transaction freely makes to the other an unambiguous promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise) a, and before it is withdrawn, the other party acts upon it, altering this position to his detriment, the party making the promise or assurance will not be permitted to act inconsistently with it. It is essential that the representor knows that the other party will act on his statement. Yet the conduct of the party need not derive its origin only from the encouragement of representation of the first; the question is whether it was influenced by such encouragement or representation." (emphasis is added)

12. There is no allegation of any promise by the Plaintiff or by the predecessor to the title and no promissory estoppel established from the facts of the case before me.
    

Proprietary estoppel

In Denny v Jessen [1977] 1 NZLR 635 at 639 Justice White summarized the proprietary estoppel as follows:

"In Snell's Principles of Equity (27th ed) 565 it is stated that proprietary estoppel is "... capable of operating positively so far as to confer a right of action". It is "one of the qualifications" to the general rule that a person who spends money on improving the property of another has no claim to reimbursement or to any proprietary interest in the property. In Plaimmer v Wellington City Corporation (1884) 9 App Cas 699; NZPCC 250 it was stated by the Privy Council that "...the equity arising from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated."(ibid, 713, 29). After referring to the cases, including Ramsden v Dyson [1866] UKLawRpHL 7; (1866) LR 1 HL 129, the opinion of the Privy Council continued, "In fact the court must look at the circumstances in each case to decide in what way the equity can be satisfied" (9 App Cas 699, 714; NZPCC 250, 260). In Chalmers v Pardoe [1963] 1WLR 677; [1963] 3 All ER 552 (PC) a person expending money was held entitled to a charge on the same principle. The principle was again applied by the Court of Appeal in Inwards v Baker [1965] EWCA Civ 4; [1965] 2 QB 29; [1965] 1 All ER 446. There a son had built on land owned by his father who died leaving his estate to others. Lord Denning MR, with whom Danckwerts and Salmon L JJ agreed, said that all that was necessary;

"... is that the licensee should, at the request or with the encouragement of the landlord, have spent the money in expectation of being allowed to stay there. If so, the court will not allow that expectation to be defeated where it would be inequitable so to do." (ibid, 37,449).

The general rule, however, is that "liabilities are not to be forced upon people behind their backs" and four conditions must be satisfied before proprietary estoppel applies.

There must be an expenditure, a mistaken belief, conscious silence on the part of the owner of the land and no bar to the equity ..."Conscious silence" implies knowledge on the part of the defendant that the plaintiff was incurring the expenditure and in the mistaken belief that here was a contract to purchase and that here defendant "stood by" without enlightening the plaintiff. In short the plaintiff must establish fraud or unconscionable behavior. The rule based on the cases cited, is stated in Snell (op cit) 566 as follows:

"Knowledge of the mistake makes it dishonest for him to remain willfully passive in order afterwards to profit by the mistake he might have prevented. The knowledge must accordingly be proved by "strong and cogent evidence"

This passage was adopted by Megarry J in Re Vandervell's Trusts (No 2)[1974] Ch 269,301[1974] 1 All ER 47, 74".

13. The Defendant alleges that he had done some improvements to the property, but fails to specify them in detail to establish a proprietary estoppel. Only on a bare statement in the affidavit in opposition where the Defendant stated as follows
    

'10. That until that time I had made lots of improvements and maintenance on the said land on that basis the executor and trustee....'.

This is the only averment that indicates any improvements to the property, but this falls short establishing any caveatable interest based on proprietary estoppel due to lack of clarity and description of the improvements. The said averment and the facts alleged in the affidavit in opposition clearly do not satisfy the one or all of the four requirements that needed to establish proprietary estoppel. The court cannot consider the averments in the affidavit in opposition, as establishing a caveatable interest on the property.

14. SECTION 109 OF LAND TRANSFER ACT states as follows
    

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

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

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

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

17. So, what the Defendant has to establish is not a mere convenience or an advantageous position, but only a person that comes within the preview of the Section 106 of the Land Transfer Act may lodge a caveat. The Section 106 of the Land Transfer Act states as follows.
    

"106. Any person-

(a) Claiming to be entitled or to be beneficially interested in any land subject to the provisions of this Act, or any estate or interest therein, by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise howsoever; or

(b) Transferring any land subject to the provisions of this Act, or any estate or interest therein, to any other person to be held in trust,

may at any time lodge with the Registrar a caveat in the prescribed form, forbidding the registration of any person as transferee or proprietor of, and of any instrument affecting, such estate or interest either absolutely or unless such instrument be expressed to be subject to the claim of the caveator as may be required in such caveat."

The Defendant has not satisfied the requirements in the said provision of law, hence no caveatable interest, real or equitable, established.

18. In EngMee Yong & Ors [1980] AC 331 Lord Diplock stated that bona fide purchaser will obtain a title free from any infirmity in Torren system. In EngMee Yong & Ors [1980] AC 331 Lord Diplock stated that
    

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

The Plaintiff has obtained a transfer, from the step mother of the Plaintiff who obtained the property from the beneficiary of the will of the Defendant's late father. The caveat was lodged after the Plaintiff obtained the transfer and there are no permanent improvements on the property.

19. In Cambridge Credit (Fiji) Ltd v. W.F.G. Ltd Vol. 21 FLR 182 the Fiji Court of Appeal stated that section 106 is concerned with the protection of unregistered instruments in land, and added, (p.185).
    

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

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

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

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

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

The Defendant has not only described such an interest, but also failed to establish any interest based on equity as discussed earlier in this decision.

20. In the said EngMee 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."

21. In Eng Mee Yong V Letchuman [1980] AC 331 (Privy Council) dealt with the issue of the affidavit in opposition and the analysis of such evidence as follows
    

'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.'

22. The onus is on the Defendant to show that there is a caveatable interest. The mere allegation of improvements to the land is not sufficient to affirm caveatable interest. 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 in land. For instance an agreement for sale and purchase, unregistered mortgage, and agreement to give a mortgage or an option to purchase land are just a few examples of unregistered instruments which are capable of being protected by the lodging caveat" and clearly the Defendant do not has such a right and the Defendant has failed to establish a caveatable right over this land even on equitable interest.
    

4. CONCLUSION
   

23. The Defendant has not established any unregistered caveatable interest as defined in the case of Cambridge Credit (Fiji) Ltd v. W.F.G. Ltd Vol. 21 FLR 182. The caveat is removed forthwith due to lack of caveatable interest in the said property in favour of the Defendant. The Defendant has lived in the said property for a long time. His father has not made him a beneficiary to the estate and the property in issue did not inherit to the Defendant as per the will of his late father. The property was transferred to the Plaintiff and as the last registered proprietor his title is indefeasible. The Defendant did not lodge a caveat prior to the transfer to the present owner, and the Plaintiff has also obtained possession of the property after litigation. There are no permanent improvements on the property and the Defendant is unable to specify any improvements to the said property in his affidavit in opposition. The caveat is ordered to be removed forthwith, but considering the circumstances of the case I would not award any cost to the Plaintiff for this application.
    

5. FINAL ORDERS
   
   1. The caveat No 734597 lodged against Housing Authority Sub-lease no 580830 is ordered to be removed forthwith.
      
   2. No cost
      

Dated at Suva this 6th day of March, 2012.

Mr. Deepthi Amaratunga
Master of the High Court
Suva