Queens Road Properties Ltd v Vikash [1979] FJSC 3; Civil Action 100 of 1976 (29 March 1979)

Fiji Islands - Queens Road Properties Ltd v Vikash - Pacific Law Materials

IN THE SUPREME COURT OF FIJI

CIVIL JURISDICTION

ACTION NO. 100 OF 1976

BETWEEN:

:

QUEENS ROAD PROPERTIES LIMITED
Plaintiff

AND:

ANAND VIKASH
s/o Mahabir
Defendant

Mr

Mr. F.Gl for thor the Plaintiff
Mr. F.S. Lateef and Mr H. Lateef for the Defendant

JUDGMENT

The plaintiff's claim, as amended at thring of this action, is for the sum of $4,950 alleged to beto be due and owing by the defendant to the plaintiff for rent of commercial premises at Nadi let to the defendant under an agreement to lease.

The statement of claim alleges the lease is dated the 1st day of January, 1974 but in fact the lease (Exhibit A) is undated. It purported to grant the defendant a lease of the premises for a period of 5 years from the 1st day of January, 1974 at a monthly rental of $450 payable in advance.

The plaintiff's title to the land on which it has erected commercial premises is Native Land held under Native Lease No. 8282. The plaintiff pleaded that the Native Land Trust board had consented to the lease.

The defendant in his Defence admits executing the lease document but denies owing any rent thereunder. He alleges that he vacated the premises at the specific request and with the consent of the plaintiff and he was thereby discharged from further performance of his contractual obligation to pay rent. In the alternative he claims that the Native Land Trust Board's prior consent to the lease transaction had not been obtained and that the purported lease is null and void.

As to his substantive defence, the defendant offered no evidence and he relies entirely on his alternative defence of illegality.

I am concerned only with his alternative defence of illegality.

It is not necessary to consider all the evidence as it is quite clear that the defendant went into occupation and was paying rent some 20 months before the Native Land Trust Board endorsed its approval on the lease. The law is clear that the plaintiff cannot succeed on its claim based on the agreement to lease which by virtue of section 12 of the Native Land Trust Ordinance is null and void.

While I could briefly refer to the facts which establish that the agreement is illegal this is a case, and the first as far as I am aware to come before this Court, where the Board's lessee did apply for consent before there was any implementation of the agreement by performance and the Board some 20 months after the defendant went into occupation then purported to approve the transaction.

The facts surrounding the application for consent and the purported granting of consent disclose quite inexcusable delay by the Board in processing the application and an unlawful attempt to reassess the rent on the head lease as a condition precedent to granting consent. These facts I consider should be disclosed in this judgment although not necessary to determine the issue of illegality.

Messrs. Cromptons prepared the lease and forwarded it with the standard Native Land Trust Board Application for Consent to Dealing form to the defendant with their letter of the 22nd November 1973. The defendant signed and returned the documents.

The application for the Board's consent to the dealing was forwarded to the Board by Messrs. Cromptons on the 11th December, 1973. Their letter of that date enclosed their cheque for $ 2.10 in payment of the consent fee. The plaintiff had done all that was required of him in seeking such consent.

The Board had adequate time to deal with the application before the term of lease commenced. The secretary of the Board was called as a witness. He stated that in subleases of commercial premises of the nature granted to the plaintiff the Board would not be concerned that the term of the lease commenced on 1st January, 1974 before its approval of the lease was endorsed on it.

If this expression of the Board's lack of concern still represents the Board's view I would say it is time the Board did show concern and act responsibly and with appreciation of the legalities involved. The Privy Council in the leading case of Chalmers v. Pardoe (1963) 3 All E.R. p. 552 at p. 557 stated :

"It would seem to their Lordships that this is one of the things that s.12 was designed to prevent. True it is that confronted with the new buildings, the Board as lessor extracted additional rent from Mr. Pardoe: but whatever effect this may have on the remedies the Board would otherwise have against Mr. Pardoe under the lease, it cannot make lawful that which the ordinance declares to be unlawful."

Gould J.A. in Jai Kissun Singh v. Sumintra Civil Appeal 18 of 1970 said:

"I do not think that by an administrative granting of consent the Board could revive what was by law already a nullity."

It behoves the Board as a responsible statutory authority to act expeditiously when an application for consent to a dealing is sought. In the instant case the Board displayed ignorance of the law and acted in a most dilatory manner.

The secretary admitted that the Board expected a lessee of a lease of the nature granted to the plaintiff to sub-let - there was very little the Board had to take into account in considering the application for consent. It is clear from his evidence that consent could have been given, and should have given, before the lease became operative.

It was not until the 22nd July, 1974 more than 7 months after the Board received the application for consent, that the Board decided to reply to Messrs. Cromptons letter of 11th December, 1973 forwarding the application. The letter raised some queries but the real cause of the delay is disclosed in the last paragraph where the Board intimates it reserved the right to enhance the rental of the leased premises - that is the head lease rental.

The secretary of the Board in his evidence frankly admitted that the cause of the delay was because the Board sought to increase the head lease rent before giving its consent.

This attitude adopted by the Board gave rise to protests from Messrs. Cromptons challenging the legality of the Board's proposed action. They wrote a number of letters and there was also a discussion with the Board's secretary on the 5th August, 1975. Consent was on the 18th August, 1975 then endorsed on the lease.

Reassessment of rent as a prerequisite to granting consent to a dealing is clearly not lawful. Section 94 of the Property Law Act 1971 makes this quite clear.

The situation regarding consent to the lease in the present action is that, due entirely to the Board's inordinate delay and ignorance of the law, consent was not forthcoming for 21 months after it was first applied for.

While the plaintiff cannot be blamed for the situation in which it finds itself and is deserving of every sympathy as the law now stands and in view of the authorities binding on this Court this Court is not in a position to assist the plaintiff.

The plaintiff's claim is based on the agreement to lease and claims arrears of rent alleged to be owing thereunder. The evidence is clear that the defendant went Into occupation and was paying rent from the 1st day of January, 1974. Consent was not obtained until the 18th August, 1975.

Section 12 of the Native Land Trust Ordinance is as follows:

"12. (1) Except as may be otherwise provided by regulations made hereunder, it shall not be lawful for any lessee under this Ordinance to alienate or deal with the land comprised in his lease or any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever without the consent of the Board as lessor or head lessor first had and obtained. The granting or withholding of consent shall be in the absolute discretion of the Board, and any sale, transfer, sublease or other unlawful alienation or dealing effected without such consent shall be null and void:

Provided that nothing in this section shall make it unlawful for the lessee of a residential or commercial lease granted before the twenty-ninth day of September, 1948, to mortgage such lease.

(2) For the purposes of this section "lease includes a sublease and "lessee" includes a sublessee."

The plaintiff did not obtain the consent of Board before the defendant went into occupation and the purported agreement is null and void.

The purported approval by the Board is not a consent at all - it cannot consent to an agreement which does not legally exist as an agreement.

I have already quoted from the leading case of Chalmers v. Pardoe and Jai Kissun Singh v. Sumintra. These cases contain dicta which indicate that the Board cannot by its later consent make lawful a dealing which, the law declares to be unlawful or a nullity.

Had the plaintiff appreciated its legal position it could in my view have entered into a fresh agreement any time after the 1st January, 1974 and applied for consent of the Board to that agreement. The then occupation by the defendant of the premises would have been occupation under the prior unlawful agreement and not performance of the second agreement.

Where an application is made in ample time for the Board to consider it the Board should deal with it expeditiously and in a businesslike manner. Unless it does so, or if it is still of the view that it is not concerned whether consent is given until after there is implementation of the contract, then the only answer to that situation is for the legislature to consider suitable amendment to section 12 of the Native Land Trust Ordinance. As the authorities and law now stands this Court cannot render any assistance to an innocent plaintiff.

The plaintiff's claim is dismissed. In view of the circumstances this is not a case where the successful party should be given any costs. I make no order as to costs.

R.G. Kermode
JUDGE

Suva,
29.3.79