| Fiji Islands - Rasul v Native Land Trust Board - Pacific Law Materials |
THE SUPREME COURT OF FIJI
CIVIL JURISDICTION
ACTION NO. 91 OF 1975
:
GULAM RASUL
s/o Ramzan
Plaintiff
AND:
NATIVE LAND TRUST BOARD
Dant
JUDGMENDGMENDGMENT
The plaintiff's claim against the defendant is for specific performance of an agreement to lease land or alternatively for damages
for breach of contract. The defendant denies there was any enforceable contract and alleges (inter alia) that the offer was not accepted,
that the plaintiff failed to comply with a condition precedent and the offer lapsed and counterclaims for damages for trespass and
for possession of the land occupied by the plaintiff.
It was agreed that the question of damages be deferred until the issue of liability was determined.
The following facts were not in dispute and I find them established.
The plaintiff has been in occupation of a block of native land in Nausori Town known as Lot 8 Nailagobokola containing 6.7 perches
for about 40 years and he is still in occupation.
He was formerly the tenant of Alexander George Ross under Native Sublease 38/29A which expired on 9th July, 1966.
On 8th April, 1965 the plaintiff formally applied to the defendant for a commercial lease of the said Lot 8. On 15th November, 1966,
the defendant granted the plaintiff a tenancy at will of the said Lot 8 with effect from the 14th day of July, 1966 on terms and
conditions which are not relevant to this action. By written notice dated the 5th day of September, 1973 the defendant purported
to determine the tenancy at will with effect from the 31st day of December, 1973.
This notice did not call on the plaintiff to vacate the land.
By letter dated 14th December, 1973 the defendant advised the plaintiff that his application to lease an allotment of land in the
Nailagobokola commercial subdivision had been approved.
The text of the letter is as follows:
"
14th December, 1973.
4/14/5384
Gulam Rasul f/n Ramzan,
C/- Branch Manager Central/Eastern,
Native Land Trust Board,
NAUSORI.
Dear Sir.
re: Nailagobokola Commercial Subdivision
Nausori Township
-----------------------------------------------------
Your application to lease an allotment in the above subdivision has been approved by the Board. The particulars of the allotment allocated
to you is as follows and is allocated under Condition (l) to (8) listed hereunder.
| Land: | Lot 8 Nailogobokola |
| Area: | 6.7 perches |
| Rent: | $300.00 per annum |
| Owning Unit: | Mataqali Nailogobokola |
| Purpose: | Commercial |
| Term: | 99 years w.e.f. 1/1/74 |
Conditions:-
(1) You may not occupy the above Native Land until the sum of $6,000 (development cost) is paid to the Office of the Native Land Trust
Board in Suva.
(2) If the development cost is not paid in full a minimum of 25% thereof is payable on receipt of this allocation notice.
(3) A further 25% is payable on receipt of Provisional Approval Notice.
(4) The balance of 50% of development cost is payable in full on the execution of the lease document.
(5) A new building of not less than 2,000 square feet must be erected and completed within 4 years from the date of execution of lease
document.
(6) Full development charge or 25% thereof should be paid within seven (7) days of receipt of this Notice, failing which the Board
will cancel without further notice and re-allocate.
(7) This Notice is not transferable.
(8) The Board reserves the right to withdraw this allocation in the event of your not complying in part or in full the foregoing conditions
with no prejudice or loss to the Board.
Yours faithfully,
(N.T. DRAUNA)
Acting Secretary
Native Land Trust Board."
NTD/Mks
There was some argument as to when this letter was delivered to the plaintiff. The file copy of the letter (Exhibit 3) from the defendant's
file bears thereon the signature of the plaintiff and a date which could be either 23/12/73 or 28/12/73. Mr. Sherani argued that
the date was 28/12/73. The evidence of the plaintiff is clear however that he received the original letter "2 or 4 days before
Xmas". The date is immaterial because the plaintiff did not pay any money to the defendant within 7 days of either date.
On 10th January, 1974 the plaintiff went to see Niko Bulai the then Branch manager of the defendant Board stationed at Nausori and
procured from him a note on the defendant's official letterhead reading as follows:
"
NATIVE LAND TRUST BOARD
Suva, Fiji.
10/1/74
Mr. Rasul Gulam,
You can pay $l,500 or 25% of $6,000 within 7 days when receive allocation.
(SGD) N. Bulai"
On the 14th January, 1974 the plaintiff paid to the defendant at its office in Suva the sum of $1,500 which was received by the defendant
"on account of Development charge on N.L. Nailagobokola Lot 8 4/14/5384".
A receipt No. 615 was issued at the time of payment. At the same time the plaintiff paid a further $150 being "rent to 30/6/74"
in respect of the said Lot 8 and a receipt was issued by the defendant for this payment.
No lease of Lot 8 was granted to the plaintiff and by lease No. 14965 registered on the 4th June, 1976 the defendant leased Lot 8
containing 09.1 perches (which it is agreed contains the 6.7 perches originally contained in Lot 8 occupied by the plaintiff) to
Ishwar Lal f/n Bhika and his two sons Shanti Lal and Manohar Lal trading as Ishwar Lal and Sons.
Before dealing with the facts which were in dispute it is necessary to determine whether there was an enforceable contract to grant
the plaintiff a 99 year commercial lease of Lot 8 Nailagobokola containing 6.7 perches.
The plaintiff's application dated the 8th April, 1975 to lease Lot 8 on the terms therein contained was an offer by the plaintiff
to lease the land. This offer lapsed when the defendant wrote to the plaintiff on 14th December, 1973 setting out particulars of
the land and the terms of a proposed lease which differ from the terms offered by the plaintiff. There can be no doubt this letter
was a counter offer. Paragraph 2 of the Amended Defence admits the defendant by this letter offered to grant a lease of the land
to the plaintiff.
It was not pleaded by the defendant that there was any uncertainty about the offer and in my view all the terms and conditions of
the lease which it was proposed to issue to the plaintiff can be ascertained from the letter dated 14th December, 1973 and from the
Native Land (Leases and Licences) Regulations which governs the issue of leases by the defendant. The fact that the lease would be
for commercial purposes indicates that the lease would, when issued. contain the special conditions referred to in Regulation 27
of the Native Land (Leases and Licences) Regulations and the general conditions in Regulation 34.
I find as a fact that the letter of 14th December, 1973 was an offer by the defendant to the plaintiff to lease the said Lot 8 for
a term of 99 years with effect from 1st January, 1974 at an annual rental of $300 on commercial terms.
The letter of 15th December, 1973 is not couched in the form of an offer but it is nonetheless an offer. It purports to advise the
plaintiff that his application to lease an allotment was approved. The application was never approved. Instead new terms were laid
down by the defendant in a counter offer which was subject to conditions. The letter does not specify how or in what manner the plaintiff
was to signify his acceptance of the counter offer.
Acceptance of the offer is necessary before an enforceable contract can come into existence. There would also have to be communication
to the defendant of the plaintiff's acceptance of the offer and since no mode of communication is specified in the offer there must
be an external manifestation of assent, some act done by the plaintiff which can be regarded in law as being communication to the
defendant of the plaintiff's acceptance of the offer.
The first act required of the plaintiff in compliance with the expressed conditions in the offer was payment to the defendant either
of $6,000 development costs or 25% thereof. Payment of the whole or 25% of the development cost by the plaintiff to the defendant
and acceptance by the defendant would be an act which indicated acceptance by the plaintiff of the offer.
In issue in this instant case is whether there was any acceptance of the offer and also whether on failure by the plaintiff to pay
development charges or 25% thereof within the time specified in the offer, the offer lapsed or was effectively revoked.
The defendant alleges that the plaintiff was in breach of condition 6 of the offer which reads as follows:
"(6) Full development charges or 25% thereof should be paid within seven (7) days of receipt of this Notice, failing which the
Board will cancel without further notice and re-allocate."
This is the only condition the defendant alleges the plaintiff did not comply with.
I can at this stage reject the defence raised in para 3(d) of the Amended Defence. Payment of $1,500 by the plaintiff to the defendant
was 25% of the development charges as referred to in condition 6 and was not a counter offer by the plaintiff to pay this sum in
lieu of $6,000 and rejection of the defendant's offer.
Condition 6 conflicts with condition 2 which latter condition requires payment on receipt of the notice but it is failure to comply
with condition 6 which is in issue in this case.
It is to be noted that condition 6 does not state that the offer lapsed if full development charges or 25% thereof was not paid within
7 days of the receipt of the notice. It is not expressed in clear mandatory terms. It expressly states that on failure to pay "the
Board will cancel without further notice and re-allocate". "Cancel" can only refer to cancellation of the offer by
revoking the allocation of the lot. On my interpretations of condition 6 the offer would lapse not when the 7 days elapsed but when
the defendant cancelled the allocation.
Revocation of an offer is usually ineffective unless it has been communicated to the offeree, but condition 6 does provide a mode
of revocation without notice. In issue therefore is whether the defendant did in fact cancel the allotment of Lot 8 and re-allocate,
before the plaintiff paid 25% of the development charges to the defendant on the 14thJanuary, 1974.
There was argument as to the interpretation of the letter which Niko Bulai gave to the plaintiff dated 10/1/74. Niko Bulai was called
into Court by Mr. Koya and was identified by the plaintiff as being the person he saw to get an extension of time to pay the development
charges and who gave him the letter. Niko Bulai was not called as a witness for the defence and the plaintiff's evidence that he
went to Niko Bulai the defendant's Area Manager at Nausori on 10th January, 1974 to ask for time is unchallenged. The defence did
seek to establish that Bulai was not authorised to grant time. The evidence of Nemia Drauna then Acting Secretary of the defendant's
Board indicates that other tenants in the subdivision did telephone and ask for time to pay and time was freely granted. This witness
granted time on occasions to other tenants and he said he had authority to do so.
Bulai's letter of 10/1/74 is in my view merely a partial paraphrase of condition 6. On the face of it the letter indicates that Bulai
did not know or had forgotten that the plaintiff had already received notice of allocation although the notice was addressed to the
plaintiff c/o The Branch Manager, Nausori and Bulai should have known when the plaintiff received the letter.
The plaintiff is illiterate although he can sign his name. I believe he did go and see Bulai and raise the question of an extension
of time. It was for the plaintiff to establish that he was in fact granted time by Bulai. His evidence on this issue was not satisfactory
and I am not satisfied that Bulai in fact granted the plaintiff any extension of time to pay. The plaintiff may have believed the
defendant would not have been strict about time. I hold as a fact that the plaintiff has not established that the defendant through
Branch Manager Bulai granted extension of time to pay the development charges or 25% thereof. However in my view the failure by the
plaintiff to pay any money to the defendant within seven days of his receiving the offer did not result in the defendant's offer
lapsing.
The evidence by the defence witnesses indicates that at the time the sections were being allotted and thereafter the defendant through
its officers had little conception of what was involved in a subdivision. Its records even today can only be described as being in
a chaotic condition.
The defendant and some of the witnesses called by the defence were far from frank and open with the Court. There were several instances
of this attitude which went so far as to making deliberate untrue statements. An early example of an untrue allegation and known
to be untrue by the defendant is contained in the Amended Defence para 3(h) which alleges that on the 7th January, 1974 the defendant
allocated Lot 8 to Ishwarlal and offered to lease the said land to him.
The true position was disclosed by Nemia Drauna who was acting secretary of the defendant Board in 1973/4 who checked his memory by
reference to the defendant's files. The land in question, Lot 8, was some time early in 1974 allotted to a T.C. Dayabhai and Lot
9 was allotted to Ishwarlal. Letter No. 15 dated 4th March, 1974 in the agreed correspondence erroneously describes Lot 8 as Lot
7 and informs the plaintiff that the lot was re-allocated to K. Patel and K. Nathubhai as executors. Whether T.C. Dayabhai was alive
at the time and allocation of the lot to K.Patel and K. Nathubhai as executors was yet another mistake by the defendant, I am unable
to determine from the evidence. Patel and Nathubhai may have been his executors. Lot 9 happened to be the section occupied by T.C.
Dayabhai. When this error was pointed out to the defendant the defendant left it to Dayabhai and Ishwarlal to sort out the matter
themselves and suggested they exchange sections. An exchange was apparently effected but when this happened is not clear. An approval
notice dated 16th January, 1974, was sent to Ishwarlal but when it was sent to him was not established. He had originally been allotted
Lot 16 and had paid the balance of $4,500 development charges on 7th January, 1974 for Lot 16. The figure 16 in the approval notice
was later erased and the figure 9 substituted. Drauna admitted that the defendant could not have issued an approval notice of Lot
8 to Ishwarlal on 16th January, 1974. The evidence does not disclose when Ishwarlal was allotted Lot 8 but it was certainly not on
7th January, 1974 as pleaded.
Letter 21 in exhibit No. 1 indicates that it was not until the meeting of the defendant Board prior to the date of the letter 20th
November,, 1974 that the defendant actually withdrew its letter of allocation of Lot 8 to the plaintiff. Yet the defendant in para
3(g) of the Amended Defence alleges the offer was withdrawn on 7th January. 1974. Since this letter of 20th November, 1974 was written
by the defendant's secretary it is clear that until the meeting referred to the defendant Board had not in fact formally invoked
condition 6 of the offer, withdrawn its offer and cancelled the allotment of Lot 8. to the plaintiff.
The onus was on the defendant to establish that on breach of condition 6 by the plaintiff the defendant Board cancelled the allotment
before the 14th January, 1974 when the defendant accepted payment from the plaintiff.
Nemia Drauna did testify that when the plaintiff did not pay by 7th January, 1974 he issued instructions that Lot 8 had been re-allocated.
This was not factual and in any case I doubt whether he did issue any such instructions.
This witness wrote letter No. 12 dated 7th February, 1974. The penultimate paragraph refers to automatic cancellation of the allocation.
In answer to a question from the Court this witness explained what was done. He instructed the accountant not to collect rent. "Nobody
else took any action. Board did not meet to formally cancel the allotment." This witness did not impress me but I am unable
to decide whether he was being deliberately untruthful or whether the defendant's files which he frequently referred to were in such
a confused state that he could not ascertain what had happened and could not recollect himself what had happened.
The defendant is a statutory corporate body and can only act through its Board or through officers empowered by the Board to act on
its behalf. To effectively cancel the offer to the plaintiff the defendant through its Board must re-allocate the lot or authorise
its manager to do so. On the evidence it is clear the Board took no action until shortly before the 20th November, 1974. I find as
a fact that the defendant did not prior to the 14th January, 1974, cancel the allotment of Lot 8 or allocate Lot 8 to anybody else
which would have operated as a withdrawal of its offer. I find as a fact that on the 14th January, 1974 as the defendant Board had
not acted to cancel the allocation of Lot 8 to the plaintiff the offer was still open for acceptance by the plaintiff.
The defendant sought to establish that the plaintiff between the 7th and 14th January, 1974 had actual knowledge of the withdrawal
of the offer, but was unable to establish this alleged fact.
The defence called Ameni Soqowatu who was the defendant's head cashier on the 14th January, 1974 when the plaintiff made his two payments.
This witness did not impress me and I consider he was not a truthful witness. He alleged he was instructed by the then accountant
not to receive development charges from the plaintiff and he did not do so. He said he told the plaintiff he was not to accept any
money. The secretary of the Board, Laisiasa Bulamaibau, who was the accountant at the time, was called by the defence and in evidence
in chief said "I gave no specific instructions to accept or refuse payment from plaintiff. I did not know plaintiff had paid
money in." This witness was frank and open and I accept him as a truthful witness. I also believe the plaintiff when he said
he was not told that his allocation of Lot 8 had been cancelled and that he did not know the lot had been re-allocated when he made
payment to the defendant.
If I had any doubt about the lack of veracity of Ameni Soqowatu, which I have not, it would be resolved by Mr. Koya's application
(which was refused) to recall this witness to admit he wrote the receipt for the money paid by the plaintiff on the 14th January,
1974. On the evidence before me I find as a fact that on the 14th January, 1974 when the plaintiff paid $1,500 to the defendant at
its offices in Suva being 25% of the development charges for Lot 8 this payment constituted notice to the defendant of acceptance
of the defendant's offer to lease Lot 8 to the plaintiff on commercial terms and on terms contained in the offer and such offer had
not then been revoked by the defendant. I find that on payment of the $1,500 and acceptance of this sum by the defendant an enforceable
contract to grant a lease of Lot 8 came into existence. I further find as a fact that when the plaintiff made payment he did not
know that Lot 8 had been re-allocated to someone else.
I also find as a fact that some time. in 1974 and prior to the issue of the writ in this action in breach of its agreement to grant
the plaintiff a lease of Lot 8 the grant purported to allot Lot 8 to Ishwarlal and has now leased the land contained in Lot 8 and
additional land to Ishwarlal and his two sons. The plaintiff has established a breach of contract by the defendant and is entitled
to judgment.
Before dealing with the relief claimed by the plaintiff I will dispose of the other issues raised in the counterclaim. By its counterclaim
the defendant claims damages for trespass and possession of Lot 8 from the plaintiff on the grounds that the plaintiff is illegally
occupying the land and is a trespasser.
The plaintiff's tenancy at will was determined on the 31st December. 1973, but on the 14th January, 1974 the plaintiff paid to the
defendant the sum. of $150 which was accepted by the defendant as being rent for Lot 8 for six months from 1st January to 30th June
1974. After the 30th June, 1974, the defendant refused to accept any further rent from the plaintiff. Payment of and acceptance of
rent created a tenancy and this tenancy has not been determined by the defendant. The plaintiff has been lawfully in occupation of
the land since 1st January, 1974 and on the facts I find he is not a trespasser or in unlawful occupation of the land. There is the
further aspect that the defendant by its own actions has placed itself in a position where it cannot claim possession of the land.
With full knowledge that the plaintiff had paid rent for six months and was still in occupation of the land the defendant by Native
Lease 14965 leased the land to Ishwarlal and his two sons for a period of 99 years from 1st January, 1974.
Ishwarlal and his two sons are not parties in this action but it is they who would have a right to seek an order for possession and
not the defendant once the plaintiff's right to occupy the land has been terminated. The defendant should not have proceeded with
the lease to Ishwarlal and his two sons until it could give them vacant possession of the land and Ishwarlal and his two sons should
not have accepted and registered the lease until the plaintiff was off the land. Having accepted the lease Ishwarlal and his sons
were in a position to take steps to terminate the plaintiff's occupation and seek possession of Lot 8 but have not done so.
The defendant has not made out a case on its counterclaim which is dismissed with costs to the plaintiff.
There remains the relief to which the plaintiff is entitled.
The plaintiff by seeking an order that the defendant do grant a lease of Lot 8 to the plaintiff is seeking an order for specific performance.
Mr. Sherani was severely critical of the defendant's actions in granting the lease to Ishwarlal. The lease was executed on the 31st
May, 1976, 14 months after the writ was issued in this action in which the plaintiff sought specific performance of the agreement
to lease. Mr. Sherani's criticism was justified.
The defendant, however, as a result of quite inexcusable incompetence on the part of its officers had also contracted to lease Lot
8 to Ishwarlal and his sons who had paid the full development charges. When the lease was issued the defendant believed erroneously
that it was entitled to re-allocate Lot 8 to Ishwarlal and his sons. No injunction was sought by the plaintiff to restrain the defendant
from issuing a lease of Lot 8 to anybody else. The registered lease to Ishwarlal and his sons makes it impossible for this Court
to make an order for specific performance. There is in any event a further complication which would make such an order impossible.
Lot 8 leased to Ishwarlal and his sons is not the same land as the Lot 8 the plaintiff applied for. The area of the present Lot 6
not only includes the area in the former Lot 8 but also includes an additional area. Obviously there has been a re-survey of the
land and further subdivision since the offer to lease Lot 8 to the plaintiff.
In the circumstances the only remedy this Court can grant is damages. I am fully conscious of the fact that damages defeats the just
and reasonable expectations of the plaintiff. Instead of a very valuable long term commercial lease in the main street of Nausori
Town to which the plaintiff would have been entitled, because of defendant's actions his only remedy now lies in damages.
The present situation can only be described as a mess fraught with further possible actions. Now that the defendant is aware that
it is liable for breach of contract it may consider it is morally bound to unscramble the mess it has created if that is possible.
A just solution would be for the defendant to negotiate a settlement involving Ishwarlal and his sons, the plaintiff and the defendant
to the end that Native Lease 14965 is transferred to the plaintiff and the lease varied to permit the plaintiff a further four years
within which to comply with the building covenant in the lease. Such a settlement will, if achieved, cost the defendant money but
it may prove cheaper then paying damages to the plaintiff. Morally the plaintiff as a tenant of the defendant has a better claim
to the lot than Ishwarlal and his sons who were not previously tenants.
There will be judgment for the plaintiff on its claim with damages for breach of contract to be assessed by this Court when an order
as to costs will be made.
To enable the parties to seek a settlement, this action to hear evidence for the purpose of assessing damages is adjourned sine die
to be brought on for hearing on the application of the plaintiff's counsel when a date for hearing will then be fixed by the Registrar.
If no application is made within three months for a date for hearing the action is to be listed for hearing by the Registrar at the
first available opportunity.
