Nagaiya v Subhaiya [1969] FJLawRp 38; [1969] 15 FLR 212 (7 November 1969)

[1969] 15 FLR 212

COURT OF APPEAL OF FIJI

PAUL NAGAIYA

v.

JAMES SUBHAIYA

[COURT OF APPEAL,* 1969 (Gould V.P., Hutchison, J.A., Marsack J.A.), 3rd, 7th November]

Civil Jurisdiction

Trusts and trustees - land - claim that registered proprietor is a trustee - substantial onus on those asserting trust - whether discharged - Land (Transfer and Registration) Ordinance (Cap. 136-1955) s.14.

Appeal - registered proprietor of land - whether trustee - findings of fact of trial judge partly inference and partly based on credibility - position of appeal court.

Land - registered proprietor - substantial onus on those alleging land held in trust - evaluation of evidence - position of appeal court - Land (Transfer and Registration) Ordinance (Cap. 136-1955) s.14.

In the Supreme Court the trial judge held that real properly purchased in the name of the appellant in 1939 was held by him as trustee for the appellant and his brothers.

On appeal-

Held: 1. Where it is sought to establish that a registered proprietor of land is in fact holding it as a trustee there must be cogent and compelling evidence of the existence of the trust.

2. An appellate tribunal is reluctant to interfere with findings of fact made in the court below, particularly those based on the credibility of witnesses; but it is less reluctant to interfere when the findings, or some of them, are inferences drawn from accepted evidence.

3. (per Marsack and Hutchison JJ.A. - Gould V.P. dissenting) The evidence before the trial judge was insufficient to establish with reasonable certitude either that the property was purchased on terms that the appellant was a trustee only, or who were the beneficiaries under any such trust.

Appeal from a judgment of the Supreme Court granting a declaration that a registered proprietor of land was a trustee.

(*In Appeal No. 4 of 1972 (unreported) the Privy Council upheld the majority judgment of the Court of Appeal.)

F. M. K. Sherani for the appellant.
K. C. Ramrakha for the respondent.

The facts are set out in the judgments of Gould V.P. and Marsack J.A.

The following judgments were read:

GOULD V.P. [7th November 1969]-

This is an appeal from the judgment of the Supreme Court of Fiji in an action between two brothers in which the learned Judge made a declaration that certain property purchased in the name of the defendant was held by him in trust for the plaintiff, the defendant and their brothers. The appellant in this appeal was the defendant in the action and I shall continue to refer to the parties as "plaintiff" and "defendant".

It is not in dispute that land, upon which there was a house, was bought in the defendant's name in the year 1939. The price was £125 of which £30 was paid to the vendors as a deposit and the balance by monthly instalments of £4 each. The receipts were in the name of the defendant and the freehold title under the Land (Transfer and Registration) Ordinance (Cap. 136 - Laws of Fiji; 1955) was also in his name.

After the purchase the whole family, consisting of the father and mother of the parties, five brothers and three sisters, and the wife of the defendant occupied the house for about 10 years. The defendant then left, built a house for himself on other hand belonging to him and lived there until about 1963-65. The other members of the family continued to live in the house in question in the suit and some, including the plaintiff, were still doing so at the time of the death of the father in 1962 or 1963 and the mother in 1965. The defendant said that after the mother's death he told the others they would have to move out, and he moved back himself into part of the house.

It was common ground that between 1942 and 1952 the plaintiff and his brothers paid a substantial amount, at least £900, in respect of repairs carried out to the house. In 1965 the plaintiff carried out work to fill part of the land at his own expense; and in 1965 the defendant subdivided the land into two parts, erected a building on the part which the plaintiff had filled, and has since sold that part of the Levuka Club. There have been disputes between the plaintiff, his other brothers, and the defendant over a considerable number of years. The plaintiff claimed not to have known until 1967 that the title to the land was in the defendant's name alone.

This is a most unsatisfactory case in which patently the whole of the facts has not been disclosed and the learned Judge was constrained to find that lies had been told on both sides. There was conflict of evidence about where the money came from to make the original purchase: the defendant said that he borrowed the £30 deposit from his wife's father and paid the instalments out of his own earnings, it being common ground that he was employed at 9/- per diem. The plaintiff said that a substantial sum was given to the defendant from the family savings and that the house was to be bought for all the brothers. He was vague about the amount of the deposit but said his elder sister counted out the money to the defendant; he said the defendant may have paid monthly instalments but got the money from their parents. At the same time he admitted the defendant was in employment and gave his earnings to the mother "as she controlled the household affairs" retaining 1/- or 2/- for his own expenses.

The general findings of the learned Judge are summarised in his judgment as follows:-

"In view of the fact that the father of the parties had bought a car and was operating it as a taxi in 1939, I do not accept the evidence of the defendant that he was a very poor man. I consider it likely that the plaintiff, possibly due to the effluxion of years and the fact that he was a mere youth at the time, has inflated the amount of money that was in the house as savings in 1939, but I accept his evidence that there was a sum of money available, and that the defendant was given money from those savings to pay the £30 lump sum at the time when the property was bought. Thereafter, during the time when the instalments were being paid off the whole family was living in the house together and no doubt the instalments were part of the joint family expenses, although possibly paid by the defendant.

The defendant has said that he required the plaintiff and his brothers to spend the money on the house because they were living in it. Even allowing for inflation of property values between 1939 and the date when the repairs were carried out, I am satisfied that the amount spent by the plaintiff and his brothers was very large in proportion to the total value of the property. It is unlikely that they would have spent so much if they had not believed that the property belonged to them. The defendant has given no explanation why the plaintiff should have spent money on filling part of the land if he had no interest in it, or did not at least believe that he had. I accept the plaintiff's evidence, corroborated as it is by that of the labourer, that a great deal of work was done. Again I regard it as most unlikely that the plaintiff would have done that work if he had not believed that the property belonged to himself as well as to the defendant.

Having carefully weighed all the evidence and notwithstanding my finding that the plaintiff has not told the truth in denying that he offered to buy the defendant's share in the house, I am satisfied that the plaintiff's evidence that the defendant bought the house for all the brothers and made the first payment for the house with money which his parents gave him for that purpose is true. I disbelieve the defendant's evidence in this respect and also in respect of the circumstances in which the plaintiff carried out the repairs to the house and filled the land."

On the appeal the main argument of counsel for the defendant was that the judgment was unreasonable and ought not to be supported having regard to the evidence. He called attention to the evidence of the plaintiff that after their marriage each brother ran his own family and life as he liked. If the defendant had been married when the property was bought the father would have refrained from interfering in his affairs. He also said that the defendant got married after the property was purchased. The defendant, however, put his marriage certificate in evidence showing that he was married in January 1938 - the date of the agreement for sale in the defendant's favour was the 13th November, 1939 - almost two years later.

Counsel submitted also that it lay upon the plaintiff to call the elder sister who, the plaintiff alleged, counted out the purchase (or deposit) money to the defendant. Equally of course it lay upon the defendant to substantiate his version of where he got the deposit. Counsel also pointed to the evidence that in 1939 the father was an active man, he had bought a second hand car after the property was purchased (though subject to a bill of sale), earned a substantial living as a fisherman and had paid the rent for the house the family had previously occupied. He argued from those circumstances that there was no reason at all for the father not to have acquired the new property in his own name unless the defendant had in fact provided the money.

Counsel further criticised the case for the plaintiff by comparing his pleadings with various portions of his evidence. The general endorsement of claim describes the property as "communal family property"; the statement of claim states that the defendant "did in fact purchase the said property either as a nominee for himself, his parents, and other immediate members of his family, or as their agent or trustee". Then in the plaintiff's evidence are the various statements that the property was bought for all the brothers, that it was a joint family property and thirdly that he expected the property to be in the name of his father and his brothers. It is fair to add that the plaintiff explained that he thought that "family house" meant that it belonged to the brothers.

There is one other point, raised by the Court and not by counsel. It appears strange, if the plaintiff's claim is genuine, that in his evidence he disclaimed any interest in the part of the land which had been sold by the defendant to the Levuka Club. In the passage in his judgment quoted above the learned Judge commented that the defendant had given no explanation why the plaintiff should have spent money on filling part of the land if he did not believe he had an interest in it. Yet this part is that which was sold to the Levuka Club, presumably to the benefit of the defendant. It was excluded from the declaration made by the learned Judge, though title has not yet been transferred, presumably on the strength of the disclaimer by the plaintiff. I think I can only assume that the learned Judge would otherwise have supported the plaintiff's claim to the whole but was giving effect to his desire to maintain his claim to the house property only.

The question is whether the aspects of the evidence upon which counsel has relied provide a basis upon which this court should interfere with the decision of the learned Judge in the Supreme Court. It is a case in which the questions of fact had to be decided partly by inference (an area in which this Court might more readily interfere) but more by the assessment of the credibility of the witnesses by the Judge based upon his observation of them and the impression he gained from their evidence as it was given. I think, after full consideration, that the challenge by counsel for the appellant to the evidence falls rather in the latter category than the former. It might be said that the matter of the date of the marriage of the defendant raises an inference in favour of the defendant but that would have to be weighed against the rest of the evidence including both inference and direct assessment of credibility. Though the learned Judge did not mention the point it cannot be assumed that he overlooked it. I have given thought to the fact that the defendant had the title in his name for a substantial period of years unchallenged, but, on the other hand, no earlier occasion for challenge appears to have arisen while the residence of the plaintiff in the suit property continued unqueried. Again, I have kept in mind that there is a substantial onus upon one seeking to establish a trust after so many years, and this I consider is the strongest point in the appellant's favour.

Nevertheless, having considered those factors, I am of opinion that the case is one in which this Court would not be justified in interfering with the judgment in the Supreme Court. There was a great deal of evidence and I take the view that the advantage enjoyed by the learned Judge of hearing and seeing the witnesses outweighs any considerations which counsel for the appellant has been able to raise by his argument.

I would advert only briefly to another argument of counsel for the appellant. It is based on the fact that in cross-examination the plaintiff said he was bringing the action on behalf of his brothers (presumably excluding the defendant) and not for himself alone. Counsel claimed that it was therefore a representative action and that as the writ was not so endorsed it should have been struck out. This episode in the evidence was fully explained by the trial Judge in his judgment and he found that it was not a representative action. In this I need only say that I agree with him. It was not framed as a representative action and the result binds nobody but the two parties. The other interested parties ought undoubtedly to have been joined either as plaintiffs or defendants but it is too late to remedy this, and their absence does not render the proceedings a nullity.

I would dismiss the appeal with costs: as my opinion is in the minority the appeal will be allowed and there will be the order proposed by Marsack J.A.

MARSACK J.A.:

I have had the advantage of reading the careful judgment of the learned Vice President and do not find it necessary to set out again a statement of the facts. I agree with the learned Vice President that this is a most unsatisfactory case in which the whole of the facts had obviously not been disclosed and lies had been told on both sides. With regard to the conclusions reached in that judgment I regret, however, that I am of a different opinion.

It is common ground that the title to the land in question was registered in the name of appellant under the Land (Transfer and Registration) Ordinance, Cap. 136, in 1939. It is also common ground that for 28 years no claim was made by any other person against the appellant that he was not the beneficial owner of the land but held it as trustee for others as well as himself.

Although under section 14 of the Land (Transfer and Registration) Ordinance, Cap. 136, an instrument of title upon a genuine dealing is conclusive evidence that the proprietor is the absolute and indefeasible owner unless fraud or misrepresentation is proved against him, yet it is no doubt perfectly competent for the Court to decide that the registered proprietor is holding the lands as trustee and not as beneficial owner. That is the basis of respondent's claim which was upheld by the learned trial Judge. But if it 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. This evidence should prove how the trust came into existence and who are the persons on behalf of whom the property is held by the trustee. In my view the evidence falls far short of establishing these two facts with reasonable certitude.

As to the facts surrounding the creation of the alleged trust, the evidence is thoroughly unsatisfactory. It must be emphasized that the onus of proving the existence of the trust, and its terms, lies on the person propounding it, the respondent. The first question that arises is this: who provided the moneys paid by way of deposit on the purchase in 1939? Respondent says in his evidence-

"My mother gave the money to the Defendant to purchase the property ..............................
My eldest sister, Ram Rattan's wife, gave the money to the Defendant to buy the property .....................................
The Defendant had no money of his own to buy the property. My father provided the money. Ram Rattan's wife kept the money ...........................
My father knew that my mother had given the defendant the money to buy the house. The amount was £250. My sister counted it ...............................
She did not give the whole amount to the Defendant, only part of it ............................................
I have no idea how much of it was handed to the Defendant."

That is the whole of the evidence for respondent as to the source of the money comprising the deposit. As against that appellant deposed that he paid £30 down and this sum he had borrowed from his father-in-law.

On this evidence the learned trial Judge said that, notwithstanding the lies told by respondent in other parts of his evidence, he was satisfied that appellant had made the first payment for the house with money which his parents gave him for that purpose.

The second branch of the evidence relating to the creation of the trust concerns the actions of the different members of the family in respect of the property in dispute. The evidence of respondent was that he and his brothers understood all along that the property really belonged to all the brothers. It is thus necessary to examine the evidence for the purpose of finding if their conduct throughout had been consistent with that understanding.

The evidence as to the repairs carried out by respondent and his brothers may, I think, be regarded as inconclusive. It might be held to support the claim by respondent that he and his brothers really owned the house despite the claim by appellant that the expense incurred by respondent and his brothers on the repairs amounted merely to a payment in return for their use and occupation of the premises.

But it can in no sense be regarded as consistent with the fact, as found by the learned trial Judge, that in 1967 respondent offered to buy the house from appellant but they were unable to agree on a price. There is considerable evidence, obviously accepted by the learned trial Judge, that the offer to buy the house had come from respondent - without any qualification that he was acting on behalf of his brothers as well as himself - and that after a certain amount of negotiation the deal fell through on one point only, that of price. The obvious inference from that evidence is that respondent regarded appellant as the sole owner, in his own right.

Furthermore it cannot be regarded as consistent with the fact that part of the land was sold by appellant to the Levuka Club to the knowledge of the other members of the family; and neither respondent nor any other member of the family had made, or now makes, any claim to the purchase price or any part of it. It is recognised that the purchase price will be paid solely to appellant.

No direct evidence as to the existence of a trust was given by any other witness.

I turn now to the further question of the proof that any trust said to have been set up was in favour of certain particular persons. In my view, the creation of a trust cannot be said to have been proved unless the evidence establishes with certainty, inter alia, on whose behalf the registered proprietor is holding the lands comprised in his title. Here again it is necessary to look at the evidence on this aspect of the matter in dispute. In his Statement of Claim respondent alleges that "the defendant knew and understood, and did in fact purchase the said property either as nominee for himself, his parents, and other immediate members of his family or as their agent or trustee". His claim is for a declaration that the property is "joint family property". In the course of his evidence, however, he said that appellant bought the property "for all the brothers". Further on in his evidence respondent say "when my mother gave the money we expected the property to be in the name of my father and my brothers".

Ram Rattan, brother-in-law of the parties, said in evidence that he regarded the property as belonging to his parents-in-law and his brother-in-law; but this statement is of no evidential value as proving what persons were the cestuis que trust.

No other evidence was tendered on behalf of respondent on this point. In his judgment the learned trial Judge says-

"It is unsatisfactory that the claim should be so loosely worded; possibly the term "joint family property" has a precise meaning, in Hindu family law but that was not proved and, in any case, it is a very loose term to use in pleadings. However, in view of the evidence of the plaintiff, it is clear that it was his intention that his solicitors should plead that it was the joint property only of a limited number of male members of the family. The defendant was not misled or prejudiced in any way."

He then proceeded to make a declaration that the property was held in trust for respondent, appellant and "his other brothers".

With the greatest respect to the learned trial Judge and to the care with which he prepared his judgment, I am of opinion that the evidence was insufficient to establish in the first place that the property was purchased on terms that appellant would be a trustee only, and in the second place who were the beneficiaries under any such trust. In saying this I am mindful of the advantages the learned trial Judge had in hearing the witnesses and observing their demeanour. I am fully aware of the reluctance of an appellate tribunal to interfere with the findings of fact made in the Court below, particularly when those findings are based upon the opinion of the Court as to the credibility of the witnesses. Even so an appeal Court must sometimes do so as a matter of justice and of judicial obligation; and the Court is less reluctant to interfere when the findings, or some of them as is the case here, are inferences drawn from the accepted evidence. Keeping these principles in mind I would hold that the existence of a trust in favour of respondent and his brothers has not been established; and that therefore the title of appellant to the land is not subject to any such trust.

For these reasons I would allow the appeal and order that judgment be entered in favour of appellant with costs here and below.

HUTCHISON J.A.:

I have had the opportunity of reading the judgments of my brethren in this case. I am aware of the caution required on the part of an appellate tribunal before it interferes with the judgment of the trial Judge on matters of fact, and I confess that, bearing that in mind, my opinion has, during my consideration of the case, swung from side to side. However, I have finally come to the view taken by Marsack J.A. and for the reasons which he gives. I therefore agree with him that the appeal should be allowed with costs here and below.

Appeal allowed.