Estate Management Services Ltd v Lakshman [2017] FJHC 183; HBC301.2007 (9 March 2017)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No.: HBC 301 of 2007

BETWEEN : ESTATE MANAGEMENT SERVICES LIMITED a duly incorporated limited liability company having its registered office in Suva.

PLAINTIFF

A N D : PRINCE VYAS MUNI LAKSHMAN of GPO Box 17459, Suva, Businessman.

DEFENDANT

Counsel : Mr. P. Knight for the Plaintiff
Mr. F. Haniff for the Defendant

Date of Hearing : 2^nd August, 2016
Date of Judgment : 9^th March, 2017

JUDGMENT

INTRODUCTION

1. The Defendant had approached the Plaintiff and requested for a vacant land, in an area maintained and developed by the Plaintiff, in order to establish a ‘Landscaped Park and Rest Area’ in memory of for his dead parents he also said that existed structure on the said land , would be converted to a museum. This land was allocated for a park and later its zoning changed to ‘civic education’, considering the requirement for an international school for the residents. The said change of zoning was not recorded in the title and both the Plaintiff and Defendant had acted initially under the presumption that the zoning had remained as ‘Private Open Space’. The land was transferred to the Defendant for a sum of $20,000. There were no restrictive covenants entered on the title. Later the zoning of the land got changed to development, and the Defendant was planning to construct commercial apartments in the said land. The Plaintiff is seeking damages for the breach of contract or alternatively for specific performance and or for entering a restrictive covenant on the title.

THE FACTS
2. The Amended Statement of Claim dated 1 February 2011, relates to the purchase of a land by the Defendant from the Plaintiff. This freehold land is situated at Pacific Harbour being Lot 5 on DP 3954 comprised in Certificate of Title 35021 containing an area of 4 acres 0 roods 17 perches.

3. There was no formal sale and purchase agreement but, prior to the transfer of the land by the Plaintiff to the Defendant.

4. The Defendant wrote letters to the Plaintiff dated 19 February 2003, (marked ‘P5’) and this is the first communication that is found in this dispute and it states as follows

‘Please urgently confirm whether your company is willing to sell the above mentioned property to me in order to enable me to create and maintain a landscaped park and rest area in memory of my mum and dad.

For your information, since the subject property will be sold without any change in its present zoning status of ‘Private Open Space”, the Town and Country Planning Department will not have any objections to the proposed change of ownership’

5. Again on 22 February 2003 a letter was written (marked ‘P6’) and in that letter indicated a phone conversation and stat as follows;

‘a) that I am willing to pay full purchasing price of 15,000 for the subject property.

b) That, as an alternative to (a) above I am willing to transfer title to scheme lot 1138 being CT15392 Lot 26 on DP 4054 in exchange for the subject property.

c) That, because the subject property will be sold to me as “Private Open Space” no rates or any other assessment will be levied on the same by EMS or any successors.

d)That no substantial buildings or structures will be erected on the subject property except for suitable improvements to house and maintain the memorial statues and historical artifacts of my mum and dad in order to protect same from the weather and other elements....’

6. On 25^th February, 2003 an email was sent (marked ‘P7’) to Carolyn Schunerie by Joe Lee, regarding the sale of the land and this email communication was also faxed to the Plaintiff on 27.2.2003 and it stated as follows

‘I have reviewed our fax for the sale of lot 5 DP 3951- CT14-135. First, I feel the purchase price should be no less than $F 25,000 due to the size and as there will be no rates on the property. Maybe a little or less could be considered, if a contract was given to maintain the lot. We will be responsible for doing that if it remains private open space. Also all costs to process it through Town and Country, and Navua Rural Authority Including legal, Stamp Duty and any associated costs. I am sure they will require something permanent where no structure will be built, other than maybe the protectice one referred to....’

7. On 1^st March, 2003 the Plaintiff wrote another letter (marked P8) and it stated as follows. This is presumably a reply to the faxed email of Joe Lee to the Plaintiff stated above. It stated inter alia

‘Thank you for your fax 27/2/2003I still feel that my offer of $15,000 is very fair and equitable sum and beg to submit the following for your consideration

1. Lot 5 DP 3954 is a parcel of land which is basically the sloping sides of a valley between two hills. It is covered by natural bush and trees and has always remained in this state since before the commencement of the Pacific Harbour Development Project and up to date. It has never been maintained or serviced like other lots in Pacific Harbour because of its terrain.
   
2. Upon sale of Lot 5 DP 3954 to me, I will beautify and landscape the same in order to transform it into a suitable and fitting environment to house the life size memorial statues of my mum and dad together with some other artefacts of significant historical interest. All refuse resulting from this continuing process of beautification and landscaping will be systematically composed for future use. Hence the question of a service and maintenance contract does not arise.
   
3. Lot 5 DP 3954 is a declared “Private Open Space” with very strict restrictions as to its use. For this reason, it has never been assessed for any kind of rates. Upon sale of Lot 5 DP 3954 to me, it will remain a declared ‘Private Open space’ because its zoning does not merge with the transfer of title. Therefore, I feel that the status quo should be maintained and no rates should be assessed and levied to me for the same.
   
4. Lot 5 DP 3954 being sold to me would essentially and for all intents and purposes only involve the transfer of ‘Custodial Responsibility’ for the same from EMS to me. Such transfer, in general terms, should not carry any price tag.
   
5. However, in the particular case, you are demonstrating a very deep sense of goodwill by allowing me to acquire the ownership of Lot 5 DP 3954 and opening the way for me to proceed without interference or hindrance in realising my heartfelt desire to create a fitting place of honour for my mum and dad. I recognise your goodwill and humbly offer you $15,000 in sincere and genuine attempt to reciprocate. Please accept it.’
   

8. At the end of said letter P8 the Plaintiff also requested the same to be submitted to Mr. Joe Lee, who sent the email P7.This email was faxed to the Defendant by Carolyn Schunerie. (see ‘P7’)

9. After this series of written communication between the Plaintiff and the Defendant the next document marked ‘P9’ is a letter of 14 August 2013 by the Defendant to the Director of Town and Country Planning. This letter reiterated his desire to create a ‘Nature Park to house the memorial statues’ of his parents. In that letter the Defendant stated that he will landscape, beautify and continuously maintain the land for a suitable Nature Park.

10. The Acting Director of Town and Country Planning had written a letter on 3^rd October, 2003 to the Defendant, and had indicated that the zoning of the land was Civic (Education) and not ‘Private Open Space’ as thought by the Plaintiff and the Defendant till that time. It also stated that said zoning would not prohibit a construction of memorial statues or the proposed park.

11. Three days later on 6^th October, 2003 the Lot 5 of DP 3954 which consists of 4 acres and 17 purches was transferred to the Defendant by the Plaintiff as evidenced in document marked ‘P11’. The Defendant had on 29^th December, 2003 had written a letter to the Director of Lands to include the change of zoning which was not recorded in the title till that time.

12. After the transfer there is no evidence of Defendant making any effort to establish a memorial park, but had requested the Director of Town and Country Planning for change of zoning to ‘Special Use(Tourism Development)’, namely to set up 30, two bedroom units and for new access to the said land. The document marked ‘P14’ was a letter of Director of Town and Country Planning seeking comments on the said proposed development, from the Plaintiff. The development was expected to be carried out by the Defendant in Land.

13. On 15^th July, 2005 (P15) the Plaintiff had replied to the document marked ‘P 14’ to the Director of Town and Country Planning and said inter alia ;

‘We wish to advise that we have since met with Mr. Lakshman, and he has now proposed a Condominium type of building for rent or sale as Apartments, rather than Hotel Development. Once these plans have been reviewed, we will then be in a position to comment on the same.’

14. On 20^th September, 2005 the Plaintiff had written to the Acting Director of Town and Country Planning (marked P16) where inter alia stated

‘We have no objection to the rezoning of this property, on condition that the property is re-valued for the assessment of rates. Initially, the property,was sold for a fraction of its value, due to the original understanding, that the land would be used, for the construction of a museum. This was later changed, to Civil Education.

With this new proposal, it will be necessary to re-assess rates, in respect of Garbage collection, clearance of Garden Clippings, the anticipated influx of people, who would be purchasing these Apartments, thus the need for employing additional, staff for the above services etc.

It will therefore be necessary, for us to formulate an agreement with Mr. Laksman, prior to giving our consent to this proposed re-zoning.’

15. The document marked ‘P17’ was a letter written by the Defendant on 19^th December, 2005 to the Director of Lands and the said indicated that the zoning of the Land had been changed from Civic Education to Comprehensive Development Area by a letter dated 25^th October, 2005. The Defendant had requested for entry of the said change in the title.

16. Subsequently the Plaintiff had written a letter to the Registrar of the Titles on or about 31^st January, 2006 for the purpose of entering the new zoning in the title (marked as ‘P18’).

17. In his negotiations with the Plaintiff over his purchase of the Land, the Defendant dealt with Carolyn Schnuerle, the then Manager of the Plaintiff. Carolyn Schneuerle subsequently died before the trial and was therefore not available to give evidence.

18. Without prior reference to the Plaintiff, the Defendant on or about July 2005 applied to the Department of Town and Country Planning for a change of zoning and use of the property from Civic (Education) to Special Use (Tourism Development) as shown in document marked ‘P 14’ and subsequently to Multi Residential Development as shown in document marked ‘P20’. The Department of Town and Country Planning had granted to the Defendant for a change of zoning to Comprehensive Development Area on or about 25 October 2005 according to the letter of 19^th December, 2005 marked as ‘P17’.

19. In or about 30^th March 2007, the Plaintiff registered a caveat on CT 35021, caveat reg. no. 605028.

20. The Plaintiff seeks an extension of the caveat lodged by them and for an order that Defendant is bound by the conditions contained in the statement of claim, an injunction restraining Defendant from using the land other than Civic (Education) purposes and alternatively restrictive covenant be entered to give effect to the alleged conditions and damages for the breach of contract.

21. In his Defence and Counterclaim dated 2 July 2015, the Defendant seeks the removal of Caveat No. 605028, damages for wrongful registration of the caveat and interest.

ANALYSIS
22. The above facts are not in dispute and most of them are reiterated in the agreed facts contained in the pre-trial conference minutes and I do not wish to reiterate the same in the analysis.

23. The Plaintiff called on witness, Seth Maharaj and the Defendant gave evidence for himself.

24. Seth Maharaj gave evidence that he was employed by the Plaintiff from about July 2005, initially as a Manager and subsequently as the Managing Director. So, by the time he was employed by the Plaintiff, the Land had already been transferred to the Defendant and he could not state what transpired between the parties prior to his employment and his evidence was to rely on the documents marked at the trial.

25. He said that he was not privy to the negotiations between Carolyn Schnerleand the Defendant as he was not employed by the Plaintiff at that time.

26. He said that if the Land had been zoned for commercial development in 2003, the market price for the property would have been around $250,000.00 and assumed that the price of $20,000.00 for the property was agreed on the basis that the property would remain for use as a private open space and future public reserve or for Civil (Education) purposes as otherwise it would not have been sold for that price. Apart from his oral evidence there was nothing to prove that position. No valuation of the property at the time of the transfer or even later was presented at hearing. In 2003 the zoning was ‘Civic (Education)’ hence the Land could not have been sold for commercial development without change of zoning.

27. It should be noted that ‘zoning’ of the Land is done by an executive action by a competent authority, hence it could be changed in future and this would have impact on the price of the land. The Plaintiff was fully aware of this fact and had not taken any steps to restrict the activities of the Defendant by registering a restrictive covenant on the title so that the Defendant would be bound to comply with his representation to build a memorial park, irrespective of any change in the zoning. Having not done what they ought to have done, the Plaintiff is now complaining that the Land was sold to a fraction of its value to the Plaintiff at that time.

28. Document marked ‘P11’ is the transfer of the Land and it stated

‘The transferor hereby transfers to the transferee all its rights, powers, title and interests in the said land absolutely’.

29. The land was transferred to the Defendant absolutely without any restrictions as to its use and or any right of the Land, in terms of the document marked ‘P11’. This fact cannot be disputed by parole evidence. The Plaintiff is bound by the said written condition, as there is no written evidence to the contrary at the time of the execution of document marked ‘P11’ by both parties.

30. There were representations made by the Defendant to the Plaintiff where the Defendant had maintained that he required the Land to establish a memorial park for his parents. This fact was evidenced from the documents marked ‘P5’, ‘P6’, ‘P8’ written to the Plaintiff and also document marked ‘P9’ written to the Director of Town and Country Planning, by the Defendant.

31. The Plaintiff’s claim is breach of contract. This can be deduced from paragraphs 6 and 13 of the amended Statement of Claim contained in the Copy Pleadings. Paragraph 13 states that the Defendant had breached ‘the terms and conditions of the transfer’.
    

32. As stated earlier the document marked ‘P11’ transfer of the Land to the Defendant was done ‘absolutely’ and there was no written contract between the parties restricting the usage of the land by the Defendants and or his successors in title. (see Section 59 of the Indemnity, Guarantee and Bailment Act Cap 232)

33. There is no proof of breach of contract as pleaded in the paragraph 13 of the amended statement of claim. As that is the only claim against the Defendant, the other reliefs that are based on the said claim fails. The facts contained in the paragraph 6 of the Statement of Claim cannot override the document marked ‘P11’ which was a signed by both parties, transferring the land absolutely.

34. The Defendant in the written submission stated that the offer of the Defendant for the Land for a memorial park, was not accepted as by the Plaintiff. His offer price was for $15,000 was rejected by the Plaintiff. Though the price was not agreed between the parties the communications prior to transfer indicated that other conditions of the initial offer remained unchanged. At the time of the transfer it was transferred absolutely. The offer and acceptance cannot be gleaned, without considering the circumstances of the case. This approach was applied by Lord Denning MR in Butler Machine Tool Co Ltd v Ex-Cell O Corporation(England)Ltd [1979] 1 All ER 965 .

35. In Butler Machine Tool Co Ltd v Ex-Cell O Corporation (England) Ltd [1979] 1 All ER 965 Lord Denning MR held,

‘I have much sympathy with the judge's approach to this case. In many of these cases our traditional analysis of offer, counter-offer, rejection, acceptance and so forth is out-of-date. This was observed by Lord Wilberforce in New Zealand Shipping Co Ltd v A M Satterthwaite ([1974] UKPC 1; [1974] 1 All ER 1015 at 1019–1020[1974] UKPC 1; , [1975] AC 154 at 167). The better way is to look at all the documents passing between the parties and glean from them, or from the conduct of the parties, whether they have reached agreement on all material points, even though there may be differences between the forms and conditions printed on the back of them’.

36. Though there were evidence prior to the transfer that the Defendant had requested the Land for a specific purpose, at the time of the transfer it was executed granting the Defendant absolute right, so there is no conflicting ‘forms’ as stated by Lord Denning in that case. The final document executed by both parties, is document marked ‘P11’ which transferred the land absolutely.

37. So, I reject the contention of the Defendant that the variation of price contained in the initial offer of the Defendant, had released him from his initial purpose, namely to build a memorial park. This intention was stated in the communications to the Plaintiff as well as to the Director of Town and Country Planning. The change was at the time of the transfer recorded in document marked ‘P 11’.

38. The conduct of the parties at the transfer and after that shows contrary. Document marked ‘P11’ transferred the land absolutely to the Defendant. If a bargain was made on the basis of future performance of an act, the Land could not have transferred absolutely. At the same time no restrictive covenant being registered on the property at the time of the transfer.

39. When the Plaintiff for the first time realized that the Defendant had requested for change of zoning for the land in order for the development of it as opposed to memorial park, the reply to the Director of Town and Country Planning (See document marked ‘P15’) stated inter alia,

‘We wish to advice that we have since met with Mr. Laksman (the Defendant) and he has now proposed a Condominium type of building for rent or sale as Apartments, rather than Hotel Development. Once these plans have been re-viewed, we will be in a position to comment on the same.’

40. Again the Plaintiff had on 20^th September, 2005 had written a letter to the Acting Director of Town and Country Planning and The said letter stated that

‘we have no objection to the re-zoning of this property, on condition that the property is re-valued for the assessment of rates....’.

41. So the Plaintiff was only concerned with collecting rates after rezoning. This along with their no objection to rezoning can only prove that the Plaintiff did not consider the building of memorial park as a breach of any condition by the Defendant even at that time. The conduct of the Plaintiff indicates that they have acted in contrary to their position in this matter and had even acted in collusion with the Defendant giving passive approval for the said development in the Land as opposed to establishment of a memorial park cum museum.

42. The Plaintiff and had not taken any action to compel the Defendant to build a memorial park, either. So, this behavior of the Plaintiff proves that the land was transferred to the Defendant in accordance with document marked ‘P11’, absolutely. This is what can be deduced from their own actions at the time of the transfer from ‘p11’ and also from ‘P16’ and also other circumstances of this case.

43. For the reasons given, the statement of the claim is struck off. I need not consider all the prayers as they all are based on the proof of breach of contract by the Defendant. It is need not to state that the caveat (P2) placed on the property by the Plaintiff, should be removed forthwith.

Counter Claim
44. The Defendant in the counter claim sought removal of caveat. The caveat marked ‘P2’ lodged on or around 30^th March, 2007 should be removed forthwith since the Plaintiff could not establish a breach of contract by the Defendant.

45. The Defendant in the counter claim stated that he was denied of development of the land by lodgment of the caveat. This was not proved. He could prove that there were investors for his proposed development and they had backed up due to the caveat of the Plaintiff.

46. Though the counter claim stated that full particulars would be provided at the hearing no such poof of alleged damage proved on the balance of probability. Only the Defendant gave evidence, and in his cross-examination he was asked why he failed to create a memorial park for his parents on the property, he said that he had still not decided on the type of development he was going to carry out and that the registration of the caveat by the Plaintiff prevented him from dealing with the property. He also said, that he had not given up the idea of park, but was looking for sustainability of such a charitable venture after creation. He also said that some income should be generated for the maintenance of such a park, hence development of the land was part of the said idea. When asked why he did not do anything in the period between his purchase of the property in October 2003 and the registration of the caveat in March 2007 he said that he did not have sufficient finance although he admitted that when he purchased the property he had $300,000.00 set aside. This was not proved that on the balance of probability, and the evidence of the Defendant on that cannot be relied upon without corroboration.

47. He acknowledged that there was legal impediment by the registration of the caveat to him developing the property as a memorial park for his parents or for any other development. The Defendant alleged that because of the registration of caveat No.605026 by the Plaintiff over CT 35021, he could not get an investor hence he suffered financial loss. There is no proof of that fact on the balance of probability. He did not quantify the alleged loss in order to prove and or quantify the damages he has allegedly suffered by registration of the caveat. So the counter claim for damages is also not proved by the Defendant and it is accordingly struck off.

CONCLUSION
48. The Plaintiff failed to prove a breach of contract by the Defendant after the Property was transferred absolutely in accordance with document marked ‘P11’. The caveat lodged by the Plaintiff on 30^th March, 2007 should be removed forthwith. The Defendant had failed to prove damages from the said lodgment hence his counterclaim is struck off. The cost of this action is summarily assessed at $5,000.

FINAL ORDERS

1. The statement of claim is dismissed and struck off.
2. The caveat No 605028 on CT 35021 lodged by the Plaintiff is removed forthwith.

100. The cost of this action is summarily assessed at $5,000 to be paid by the Plaintiff to the Defendant.
     

Dated at Suva this 9^th day of March, 2017

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

Justice Deepthi Amaratunga

High Court, Suva