Deo v Chand [2013] FJHC 684; HBC09.2013 (12 December 2013)

IN THE HIIGH COURT OF FIJI
AT LAUTOKA
WESTERN DIVISION

HBC 9 of 2013.

BETWEEN:

RAJ DEO of Kennedy Avenue, Nadi, Bank Officer.
PLAINTIFF

AND:

SALESH CHAND of Nasau, Nadi
DEFENDANT

RULING

INTRODUCTION

[1]. Before me is a summons for ejectment filed by the plaintiff pursuant to section 169 of the Land Transfer Act (Cap 131) against the defendant to show cause why he (the defendant) should not give up immediate vacant possession of Certificate of title No. 30588 Lot 1 on DP No. 7758 situated at Nasau, Nadi.

[2]. The plaintiff also seeks judgement in the sum of $3,850 being rental arrears plus costs on a solicitor-client basis.

[3]. The application is supported by an affidavit sworn by the plaintiff.

[4]. The plaintiff is the last registered proprietor of the property in question. A copy of the title is annexed to his affidavit marked RD1. According to the plaintiff, he entered into a Tenancy Agreement on 01 September 2012 with the defendant to occupy a shop and flat situated at Nasau in Nadi on a monthly rental of $350-00. A copy of the said tenancy agreement is annexed to his affidavit. The plaintiff alleges that the defendant had defaulted in his monthly payment.

[5]. Initially, the plaintiff had instructed his solicitors to levy a Notice of Distress on the defendant. Pursuant to that instruction, a registered bailiff did levy a Notice of Distress dated 12 September 2012. The plaintiff says that despite the Notice of Distress, the defendant has remained on the property. The plaintiff therefore is seeking a Court Order for eviction under section 169.

[6]. A Notice of Eviction was duly issued against the defendant by the plaintiff’s solicitors on 13 September 2012 and again on 25 October 2012. As of 23 January 2013, which was the date the plaintiff swore his affidavit, the defendant has accumulated rental arrears in the sum of $3,850-00.

DEFENDANT’S POSITION

[7]. By his affidavit sworn on 14 March 2013, the defendant says that

1. ..................
   
2. ..................
3. Paragraphs 3 & 4 are admitted. However the agreement term for shop tenancy is 5 years from 1st September 2010 but the flat is for 10 years. I annex herein copies of the consent to operate shop and the tenancy agreement marked respectively as Annexure SC 1 & SC 2.
   
4. That I disputed the tenancy agreement annex by the plaintiff marked as AR 3. However the agreement I have (refer to annexure SC 2) has the expiry date of 30th September 2020 of which I have the original. That the plaintiff may have temper (sic) with the said tenancy agreement.
   
5. Paragraphs 5, 6, and 7 are denied. However I agree receiving distress notices from the plaintiff’s bailiff. I did not move out as there was no court order for giving vacant possession.
   
6. I moved out of the flat and occupy the shop. The landlord gave the flat to his caretaker to occupy. I deny the allegation of threatening contain (sic) therein.
   
7. I expanded money on the property by putting/spreading gravel around the compound, fencing the rear fence of the property, making the taps and shower and fencing the compound with barbed wires. I also erected my garage on the property as verbally agreed to by the plaintiff. I annex herein photos of my garage during and after the March 2012 flood marked as annexure SC 3.
   
8. As to paragraph 8 I no longer occupy the flats. The plaintiff gave the flat to his caretaker to occupy. I occupy the shop with my family. I deny that I do not have any interest in the property.
   
9. As to paragraph 9 (a) I refused to give vacant possession the reason being that I made improvement on the property. I reiterated paragraph 7 above. That I was informed by my counsel and verily believed that the plaintiff is estopped from evicting me from the said property.
   
10. As to paragraph 9(b) I deny receiving any formal or verbal revocation on the tenancy from the plaintiff. I rely on the advice of my counsel on the doctrine of estoppels.
    
11. As to paragraph 9© the plaintiff consented and verbally allowed me to erect and work on my garage.
    
12. As to paragraph 9(d) I deny it (sic) content.
    
13. I deny the content of paragraph 10. I the plaintiff is stopped from evicting me from the property. I urge the court to dismiss the application with cost.
    

PLAINTIFF’S RESPONSE

[8]. The plaintiff responded to the defendant’s affidavit as follows:

1. That I refer to my earlier affidavit filed on 24th January 2013.
   
2. That I annex herein mark as annexure “RD1” a certified copy of CT No. 30588.
   
3. That I had on 13th of September 2012, 25th October and 16th of November 2012 served Notices to vacate on the Defendant. Annexed herein and marked “RD2”, “RD3” and “RD4” are copies of the Notices.
   
4. That in any event the Defendant has failed to pay rental since March to November 2012 and is still in arrears of $3,500.00 to date but continues to forcibly remain in occupation of the premises.
   
5. That the Contract of Tenancy has been terminated/or rescinded due to the various breaches by the Defendant including to pay rental.
   
6. That I deny the contents of paragraph 7.
   
7. That I deny the contents of Paragraph 8 of the Defendant’s affidavit as the caretakers flat is separate since the shop is adjoined to the flat which the Defendant has been in occupation.
   
8. That at no time was there any agreement for the Defendant to operate a garage and this is a fundamental breach of the tenancy agreement.
   

THE LAW & DISCUSSION

[9]. Section 169 of the Land Transfer Act provides as follows: -

The following persons may summon any person in possession of land to appear before a judge in chambers to show cause why the person summoned should not give up possession to the applicant:-

(a) the last registered proprietor of the land;

(b) a lessor with power to re-enter where the lessee or tenant is in arrear for such period as may be provided in the lease and, in the absence of any such provision therein, when the lessee or tenant is in arrear for one month, whether there be or be not sufficient distress found on the premises to countervail such rent and whether or not any previous demand has been made for the rent;

(c) a lessor against a lessee or tenant where a legal notice to quit has been given or the term of the lease has expired."

[10]. Once it is shown that the plaintiff is the last registered proprietor under the first limb, or is a lessor with power to re-enter because the lessee is in arrears of rent under the second limb, or is a lessor who has issued a legal notice to quit or whose lease to the defendant has expired under the third limb, the onus then shifts to the defendant to show cause as to why vacant possession should not be given (see section 172 of the Land Transfer Act).

[11]. In discharging that burden, the defendant must show on affidavit evidence some right to possession which would preclude the granting of an order for possession under section 169. This does not mean that he has to prove conclusively a right to remain in possession. On the contrary, it is enough to show some tangible evidence establishing a right or at least supporting an arguable case for such a right (see Morris Hedstrom Limited v. Liaquat Ali (Action No. 153/87 at p2).

[12]. In this case, the plaintiff’s summons does not state which specific limb under section 169 he applies under. He simply files the proceedings under section 169. By his affidavit though, he clearly relies on the fact that he is the last registered proprietor (first limb) and also on the fact that the defendant has been in arrears on rent (2nd limb) However, he has also issued a Notice to Quit which suggests that he also relies on the third limb.

[13]. As a sidenote, generally, a fixed-term lease cannot be determined by a notice to quit other than to enforce a forfeiture for non-payment of rent (2nd limb) or if there is a clause in the lease to that effect (in which case, the plaintiff would be applying under the third limb I imagine).

[14]. The following extract from the Fiji Supreme Court decision in Central Rentals Ltd v Patton & Storck Ltd [2008] FJSC 30; CBV004.2008 (17 October 2008) appears to support this position.

12 The section is only available to enforce a forfeiture for non payment of rent. A lease for a fixed term cannot be determined by a notice to quit. Proceedings to enforce a forfeiture for breach of any other covenant cannot be bought under this section, and the dictum of the Court of Appeal in its 1996 decision cannot prevail against the clear words of the section. As Williams J said of a similar section in Town v Stevens (1899) 17 NZLR 828, 831:"an action for ejectment would be equivalent to re-entry; but no action of ejectment ... can be brought under this section". The Court of Appeal in 2008 followed this decision in holding, correctly in our view, which an action for ejectment could not be brought under s 169 except for non payment of rent.

[15]. The defendant states at paragraph 7 of his affidavit that the reason he refuses to vacate the shop is because of the improvements he has made thereon. He mounts an argument based on estoppel on the basis of monies he had spent on improving the property.

[16]. What the defendant says in paragraph 7 is that the plaintiff verbally agreed to his (defendant's) erecting a garage on the property.

[17]. The general rule of law is that a person who spends money on improving the property of another cannot claim for reimbursement. Nor does it confer any proprietary interest on him. Otherwise, as Master Amaratunga (as he then was) in Nand v Kumar [2013] FJHC 266; HBC271.2012 (1 March 2013) said, to confer any right for reimbursement or a proprietary interest would be to force liability upon the registered owner behind his back.

The general rule, however, is that "liabilities are not to be forced upon people behind their backs"

[18]. However, equity may step in to provide an exception to the above rule of law, depending on the circumstances of any particular given case. In Snell's Principles of Equity (27th ed) 565, the learned authors point out that proprietary estoppel 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.

[19]. As an equitable remedy, proprietary estoppel operates to prevent a party relying unconscionably on his or her strict legal rights. Hence, where a registered proprietor (A) creates in another (B) an assumption that he (A) will be granted an interest in property, either by representation or by encouragement, and (B) relies to her detriment upon that assumption by, for example, spending money on improving the property, equity will either fulfil the reasonable expectations of (B) or may recompense (B) in some other way. It is important to note that equity may even grant a proprietary interest in appropriate cases, notwithstanding that the statute of fraud provisions are not met.

[20]. Hence, in Plaimmer v Wellington City Corporation (1884) 9 App Cas 699; NZPCC 250, the Privy Council states:

...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).

........................................

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).

[21]. Madam Justice Wati resonated the four conditions of proprietary estoppel in Wilfred Thomas Peter V Hira Lal and Frasiko:

'I must analyse whether the four conditions have been met for the defense of proprietary estoppel to apply. The four conditions are:

1. An expenditure;
2. A mistaken belief
3. Conscious silence on the part of the owner of the land; and
4. No bar to the equity
   

[22]. The problem with the defendant's case is that he does not say that he built that garage on the assumption that the resulting improvement in the capital value of the property that he thereby caused, would be offset against rental dues – or would result in some other interest of a proprietary nature accruing to him – let alone – that any such assumption was created by representation and/or by encouragement of the plaintiff.

CONCLUSION

[23]. After taking all into account, I am of the view that the defendant has not shown cause to remain in possession. This is without prejudice to any claim he might mount later against the defendant to be recompensed with the costs of improvement he has made. Accordingly, I grant order in terms of plaintiff's Summons. The defendant is to vacate the premises within 28 days of the date of this Order.

[24]. I have decided that parties should bear their own costs.

......................................
Anare Tuilevuka
JUDGE
12 December 2013.