Wati v Nand [1997] FJLawRp 40; [1997] 43 FLR 289 (21 November 1997)

[1997] 43 FLR 289

HIGH COURT OF FIJI ISLANDS

JAI WATI

v

BASWA NAND, SOHAN SINGH & FSC LTD

[HIGH COURT, 1997 (Scott J) 21 November]

Civil Jurisdiction

Land- crop liens- whether lienee acquires interest in the land- whether an encumbrance- Crop Liens Act (Cap 226) Sections 3, 4 & 10 - Land Transfer Act (Cap Section 30 (1).

The High Court explained the effect that a mortgagee sale has on existing crop lrop liens. It ed out that crop liensniensnot an encumbrance as defined by the Land Transfer Act&#160must be registered and may be searched.

No caso case was cite>&

J. Singh her taintiff
&#1i> for thet irst & Second cond Defendants
No appearance by the Third Defendant

Scott J&#160This0This n hased two questions of law which the parties haes have byve by consent agreed, pursuant to Order 33er 33 r 3 should first be answered. The quns are:

“1)҈ &160; &#160 the mortgagee’s217;s sale under mortgage number 1297 expunge the two crop liens given by the first defendant to the second defendant under the provisions of 23/">Crop Crop Liens Act Cap 226 and in particule efhe effect of Section 4 of the said Act; and

&#16>

2) Wha; Ws t i efhect oe Sect Sections 3 and 4 of the Crop Liens Act on liens given by trst defe defendant to the second defendant.”

On 18 a statement of a of a facts was filed as followsllows:

.  &#16AT the First Defendant dant Baswa Nand Lessee of native Land known as Waibogibogi Lot 19 having aing an area of 32 acres and which land was covered by cane contract 7357.

<60;2.&##160; &<&#160 THAT THAT on the 10th daypof April, 1986 the First Defendant had executed a Mortgage in favour of Ausa andZealankingp Limited being Mortgage Number 1297 (annexure A of the PlainPlaintiff&tiff’#8217;s af;s affidavit) to secure certain advances.

3. &##16;&ـ< < THAT on the dayh f Januarynuary, 1991 the First Defendant had executed a Crop Lien in favour of Australia and New Zealand Banking Group Limited collateral to above Mortgage Crop Lien 91/206 (annexure B ofntiff7;s Affidavit).

4. & TnAT o 28he dayh day of Apof April, 1993 the First Defendant executed a Crop Lien in favour of Sohan Singhg Crop Lien Numn Number 93/1833 (annexure C of Second Dent&#8 Affi).

5. #1660   THAT on27he day of July, 1ly, 1993 the First Defendant gave a Crop Lien bcrop Numbe1614 vour of Second Defendant (annexure D of Second Defendant̵’s A7;s Affidaffidavit).vit).

6. ;¦ < THAT the Austrand New Zeal Zealand Banking Group Limited exercised its powers of sale under Mortgage Number 1297 dateh daypril and terredland ugar Cane Cont Contract to the Plaintiff by transfer datr dated 25ed 25th dath day of y of May, May, 1995 under Transfer Number 1535 (annexure C of Plaintiff’s Affidavit).

7.&  thATPlai tiff is now the lthe lessee of land in question and contract holder and the Second Defendant holds two Crop Liens over Farm Number 7357&#160Counsr both paralso helpritten submissbmissions&ions #160; for whichwhich I am I am I am grateful.

At the start it isrtantrtant to be clear just what a crop lien is&#16 what it is&#1is not. Se 3 (2) of the Crop Liens Act(Cap. 226-t226-the Act) is as follows:-

“The Lienee, whether the advanceade o debtncurredurred or t or the goods be supplied before, at or afor after the date of the agreement, shall from the date of the registratiothe agreement as aforesaid have a preferable lien upon and and be entitled to the whole of the crop or crops given as security, whether the same be then or be intended to be thereafter sown or grown and the produce thereof or the proceeds thereof if and when sold and converted into money and until the repayment of the advance or liquidation of the debt with interest (if any) the possession of the crop or crops and the produce or the proceeds thereof as aforesaid by the lienor or by any person or persons on his account of for his use or benefit shall, for all intents and purposes, be deemed to be the possession of the lienee.”

A lien is “a charge or security or encumbrance upon property” (Black’s Law Dictionary) and Section 3 (2) means that the lienee in the case of a crop lien has a lien over crops produced by the lienor or on his behalf. WhatSection does not mean mean is that the creation of a crop lien results in the lienee obtaining any interest in the land on whichcrops are grown. A crop lien isa prprofit a prendre a not anot an encumbrance wnce within the meaning of that term as it appears in the Land Transfer Act (Cap 131).
A crop lien once cd hasd has to be registered (Section 10) and a copy kept by the Registrar of Deeds (Section 3 (1)). The register may be searched under the provisions of Sn 30 (1) of the Land Transfer Act. The crop lien eithpires by reason of satisfaction i.e. repayment of the loan loan (Section 6 (2)) or by effluxion of time i years ears after its creatSection 6 (1)).

In my view thwer to theo the questions posed is as follows: Ons: On 25 May 1995 when the land was sold trst Defendant’s debt to the Third Defendant was dischdischarged and with it the mortgage and the crop lien dated 30 January 1991. As provided by Section 4 of the Act the sale of the land did not affect the two crop liens held by the Second Defendant and accordingly all such crops planted by or on behalf of the First Defendant as were awaiting harvest at the time of the sale continued in “the possession of the (remaining) lienee” - the Second Defendant - who was entitled to their proceeds.

Once the crop which was standing on the land at the time of sale had been harvested the remaining lienee, the Second Defendant, lost all further interest in the crops produced on the land for the simple reason that the following crops planted upon it planted not by the former lienor but by the Plaintiff and tand therefore were not crops produced by the former lienor “on his account or for his use or benefit”.

An intendirchaser of laof land should always have a search made under the provisions of Section 30 (1) of the Land Transfer Act der to avorchasing lang lang land, chattels upon which (including crops) may be the subject of a lien or other charge or encumbrance.#160;hether the Third hird Defendant has paid the proceeds of cane planted by the Plaintifintiff to ehe Second Defendant is not clear. If it has then it has done so in error. In any event it wilnoted tted the two remaining liens in favour of the SeDefendant expire on 28 April and 27 July next.
(Ruling deld oned on preliminary issues.)