Pachamma v Logessa [1979] FJSC 99; Civil Action 88 of 1978 (14 September 1979)

IN THE SUPREME COURT OF FIJI
(WESTERN DIVISION)
AT LAUTOKA
CIVIL JURISDICTION

Action No. 88 of 1978.

BETWEEN:

PACHAMMA
d/o Madan Naiker
(Plaintiff)

AND:

LOGESSA
S/o Kuppan
(Defendant)

Messrs R.D. Patel & Raj Kumar, Counsel for the Plaintiff
Dr. Khan, Counsel for the Defendant.

JUDGMENT

The plaintiff is the widow of one Sukhramani who died intestate on 19th August 1976. On 28.3.77 letters of administration were granted to the plaintiff.

The deceased's (Sukhramani's) estate comprised a 10 acre farm on Crown land at Ba, inherited from his mother and which is subject matter of his action.

No formal lease appears to have been issued by the Director of Lands in respect of the land. The deceased occupied under an "Approval Notice of Lease" issued by the Director of Lands which indicates the rent payable and the duration of the lease. It is Ex. P.17 bears the number 75950 and was issued on 18th December 1974 to Sukhramani as administrator of his mother's estate. He was also the sole beneficiary under her will.

The deceased's mother had died in 1972 and it seems that she also occupied under an "Approval Notice" issued by the Director of Lands.

During his lifetime, on 25th April, 1975, Sukhramani (deceased) had entered to a written agreement, Ex. P.6, with the defendant agreeing to sell the land to the defendant for $8000. By Clause 13 of the agreement the sale was to be subject to the consent of the Director of Lands. That Clause appears to accept a declaration in the "Approval Notice of Lease", Ex. P.17, in Clause 2 which reads as follows:-

"This is a protected lease under the previsions of the Crown Lands Ordinance".

Under S. 13(1) of that Ordinance any dealing with land held under a "protected" lease requires the consent of the Director of Lands and any dealing with the land in the absence of such consent is null and void.

The defendant said in evidence that in pursuance of that agreement he entered the land about 12.4.75, i.e. about a week after making the agreement, built a house on it and began to farm it. Indeed Clause 5 allows for part of the purchase money to be paid from the proceeds of the cane cultivated by the defendant from one year to year by making the proceeds payable by the F.S.C. to Sukhramani. However, the defendant only farmed it for about 2 years due to differences which arose between him and the plaintiff after Sukhramani's death in August, 1976.

At the time the defendant took over the cultivation of farm about 12.4.75 no application had been made by Sukhramani to the Director of Lands for his consent to the transfer. By a letter dated 23rd April, 1975 (Ex.D1) that Mr. Gordon, the Solicitor for both parties, sent in the application for consent along with the agreement Ex.P.6. It is not known on what date the Director received that agreement but on 20.5.76 the Director returned the agreement, Ex.P.6 requesting some slight amendments to it which now appear therein Ex.D3 the Director's said letter ExD3 intimates that the application would be considered when the amendments had been made. For various reasons the amended application was never despatched to the Director in Sukhramani's lifetime.

Before the request for consent was renewed the Director again wrote to Mr. Gordon the letter Ex.D4 of the 9th July 1975 pointing out that Sukhramani was still on record as holding the "Approval for Lease" as administrator of his mother's estate and requesting that he apply to be recorded as holding in his own name. That request was tardily complied with as is evidenced by Ex.P.3, an official form entitled "TRANSFER OF CROWN LAND" dated 9th July 1976 which commenced as follows:

"I SUKHRAMANI..............of Raviravi, Ba, Cultivator, as administrator of the estate of Anama, deceased, hereinafter called the transferor, being proprietor subject to such leases, Mortgages and Encumbrances as are notified by Memorandum endorsed hereon, of the following land........." It describes the land and transfers it to Sukhamani his own right. The Director of Lands endorsed his consent to that transfer (I do not see why a transfer to Sukhramani in his own right was necessary in that S.13(2) of the Crown Lands Ordinance, Cap. 113 enables administrators to assign any protected lease with the Director's consent.)

On 3rd May 1977 although Sukhramani had died in 1976 Messrs Gordon, under a letter Ex.D2 re-submitted Sukhramani's request to transfer. The Director's reply Ex.D6 dated 18th May 1977 pointed out that since Sukhramani had died on 19.8.76 the Director wished to see probate relating to his estate.

Mean while the plaintiff as administratrix of Sukhramani's estate had intimated that she was not prepared to perform the agreement Ex.P.6. The Director of Lands has issued to the plaintiff, as administratrix, a fresh Approval Notice of Lease dated 11th February 1978 Ex.P4.

The plaintiff seeks a declaration that the Ex.P.6 of 5th April 1975 is null and void on the ground that it was acted upon before the Director's consent was obtained. She also asks for possession and an injunction restraining the defendant from trespassing on the land.

P.W.1, who is employed in the Lands Department states that the Director will consent to the transfer if the plaintiff were to apply for it.

The statement of defence proclaims the validity of the said sale and purchase agreement and the Director's readiness to give his consent. It pleads that the plaintiff is bound to apply for the Director's consent and is estopped from relying upon S.13(1) by reason of her own conduct. It seeks a declaration that the agreement is binding order for specific performance and a prayer for damages.

Dr. Sahu Khan for the defendant submitted that the plaintiff is not a true lessee of Crown land. He pointed out that no formal lease has been executed; and that the Approval Notice for a lease does not make her a lessee. He cited Ganpati v. Somasundram, App. 26/76, F.C.A. as holding that an Approval Notice for a lease will not give rise to "a lease" or "protected lease". With respect to Dr. Sahu Khan that case does not support such a wide generalisation. The Court of Appeal was considering an approval notice which was peculiar to that case and they referred to portions of it. Thus Gould J.A at p.1634, cyclostyled reports, says that it contained the words-

"Lease to be subject to the conditions set out in the Crown Lands (Leases & Licences Regulations) This is a protected lease under the provisions of the Crown Lands Ordinance".

Spring J.A. at p.1638 quoted from the approval notice a statement that the applicant was authorised "to occupy as a tenant-at-will" and a statement that "this letter shall not operate to create a tenancy in respect of the said lands".

Dr. Khan reminded me that I was bound to follow the law as interpreted by the Fiji Court of Appeal in that case. Of course one has to be very careful in elucidating what was the ratio decidendi in any particular case if the court itself has not specifically set it out. In my view it is correct to say that Ganpati's case was decided on whether that particular approval notice created or gave right to a "protected lease" and it was held that it did not although it contained the words "This is a protected lease under the provisions of the Crown Lands Ordinance". I think it would be useful if I referred to the judgment in Ganpati's case and to statutory provisions governing approval notices and Crown leases.

The Crown Lands Leases and Licences Regulations under Cap. 114 provide for "approval" to issue to intended lessees who have applied for leases of Crown land. Regulations 4 to 7 inclusive require an application for a lease to be made in the prescribed form and set out the way in which it must be dealt with by the Lands Department. Under R. 8 the Minister may "approve" or refuse the application for a lease. Regulation 9 provides that the applicant shall be notified of the decision. However, there appears to be no prescribed form of a notice of approval indicated that it is the Minister's intention to grant a lease to the applicant subject to the applicant's agreement to abide by the proposed terms which it appears are set out in the approval notice which is sent to him.

I referred to the decision of the F.C.A. in Ganpati's case (supra) in my judgment in CHANDRIKA PRASAD v. GULZARA SINGH Civ. Action 76/1976 reported at p. 935, Vol. 2 of the 1977 cyclo-styled reports. It is a Labasa case decided on 8.2.77 in which I held that a person occupying native land under an approval notice issued by the Native Land Trust Board was, in equity, a lessee on the terms of that particular notice of approval. I expressed the view in that judgment that the holder of an approval notice in relation to Crown land could be in a similar position depending on the circumstances. I am still of the opinion for the reasons following.

R. 35(1) states that following the Minister's provisional approval the Director is obliged to obtain an estimate of the survey fee of the land to be leased and the applicant is obliged to pay that fee. Of course if the land has already been surveyed and the exact boundaries established the question of survey may not arise if it simply allocates an already ascertained area.

R. 35(2) & (3) state that the applicant shall not be let into possession until the survey fee has been paid along with the first 6 months rent and failure of the applicant to pay may cause cancellation of the provisional approval. It would seem then where the applicant has been in possession of the land for more than 6 months that the stating statutory requirement of R. 35 (2) & (3) has probably been complied with.

R. 35 (4) & (5) require the Director to have the land surveyed once the fee has been paid. Of course this is bound to depend on whether the leasehold has already been surveyed.

R. 36 (1) is, in my view, very important. It does not simply give the Director a discretion as to whether or not he will execute a lease but it requires him to do so when Reg. 35 has been complied with.

It reads:-

"R. 36(1) A lease embodying the approval terms and conditions SHALL then be prepared in duplicate by the Director, and the completed memorandum of lease SHALL be sent to the Commissioner in duplicate for execution by lessee, and the Commissioner SHALL enter the full particulars of the lease in his Crown Lease Rent Register. The lessee shall at the time he executes the lease pay all sums due for premium, rent, stamp duty and fees."

It seems that if the holder of an "Approval Notice" is in possession and has paid 6 months initial rent and any necessary survey fees he is entitled under the regulations to receive his lease. If the Director fails in his duty under R. 36(1) to execute a lease it appears to me that the holder of the approval notice could require him to do so. In other words the holder of a notice of approval who has complied with R. 35 appears to be in as good a position as if he holds a lease on the terms of the approval notice and he does not have to rely upon equity to enforce his rights.

The effects of Regulations 35 & 36 were not the subject of argument and submissions before their Lordships in Ganpati's case. Although Marsack J.A referred to them in his judgment he was merely recapitulating and accepting the comments of my learned brother (as he then was), Stuart J., in Damodoran v. Raghwan (Civil Action 3.1972) in regard to a "Notice of Approval". Marsack J.A. stated in his judgment that Stuart J. in Damodoran's case had held that an "approval notice of lease" in the same terms as Ganpati's approval notice did not constitute a lease. With the very greatest respect to his lordship, Marsack J.A., I think that what Stuart J. said was that the 'approval notice' in the case before him did not constitute a "protected lease", as opposed of course to a normal lease. It is sufficient for the purpose of this judgment if I say that under the Crown Lands Ordinance there are 2 types of lease viz. protected and the usual form of lease. A lease is protected if it falls within the provisions of S. 13(1), and not otherwise. The reason for Stuart J.'s decision is set out in the third page of his cyclo-styled judgment as follows:-

"I am of the opinion that since the approval did not contain the words which alone create a "protected" lease, it does not fall within the Ordinance and the intention to create a protected lease does not suffice."

What are the words which are necessary to create a "protected" lease? They are, as Stuart J. pointed out, contained in S. 13(1) of the Ordinance and read as follows:-

"This lease is a protected lease under the provisions of the Crown Lands Ordinance."

What Stuart J. held was that unless those exact words were reproduced in a Crown lease it could not be a 'protected' lease. The approval notice before Stuart J. stated that the proposed lessee was to receive 'a protected lease', and these are not the exact words set out in S.13(1). Therefore that "approval notice" could not be the basis of a claim to receive a "protected" lease.

Had the statutory words "This is a protected lease under the provisions of the Crown Lands Ordinance" been put into the "approval notice" (instead of the abbreviated version "This is a protected lease") Stuart J's approach may have been different. I say this because at p.5 of his judgment, after reviewing the steps to be taken under R. 35 and 36 in creating a lease he said at p.7 of his judge with reference to those regulations.

"At first sight this view of the matter may appear to elevate the holder of a contract to lease Crown Land (i.e. approval notice) to a position superior to that held by the holder of a lease."

Moreover, he said that S.13 did not apply to the case before him because the "approval notice" before him was not capable by virtue of his aforesaid decision of giving rise to a protected lease. With respect, I think it would be erroneous to conclude that Stuart J. held that an approval notice could not equate to a lease.

Again, and with apologies to Marsack J.A., Stuart J., in Damodoran's case, was not and his lordship stated considering a "notice of approval" in the same terms as the notice of approval before F.C.A. in Ganpati's case. In the latter case, the 'approval notice' did use the exact words required by S.13(1) whereas the 'approval notice' before Stuart J. did not use the exact words and for that he reason, as I have said, the learned judge held that it could not give rise to a "protected" lease.

Gould V.P. of the F.C.A. in his judgment in Ganpati's case also referred to the judgment in Ganpati's case also referred to the judgment of Stuart J. (supra) and he said at p.2 of his judgment.

"........... Stuart J. had to consider whether 'an approval notice', similar to the one before this Court had in equity the status of a lease. He held that it did not, as no action for specific performance could have been brought against the Director of Lands."

Gould V.P. was referring to p.4 of Stuart J's judgment where he said that specific performance could not be ordered against the Crown unless statutory authority existed to institute such an action. Stuart J. said that he could find no such authority in the Crown Lands Ordinance. However, Stuart J. had overlooked the provisions of S.17 of the Crown Proceedings Ordinance which enable a court in lieu of an order for specific performance to make a declaration that specific performance would lie if the Crown were not a party. I have discussed this with him and he agrees that he overlooked these provisions and that his judgment in that respect was erroneous. His decision in Damodoran's case may well have been different had he been reminded of the said S.17.

Their Lordships in Ganpati's case were referred by the appellant's counsel therein to the judgment of Stuart J. in Damodoran's case, and they say he relied heavily upon it. Counsel for the appellant did not draw their lordship's attention to the fact that the "approval notice" in Damodoran's case on which their lordships were invited to rely differed materially from that in Ganpati's case which they were considering; nor did he point out that Stuart J. was in error in holding that the rule in Walsh v. Lonsdale could not be relied upon against the Director of Lands to establish an equitable lease; nor did he point out that Stuart J's decision was confined to stating that the "approval" did support the existence of a "protected lease" as opposed to a lease. The mandatory provisions of Regs. 35 & 36 requiring the Director to draft and execute a lease following issue of an approval notice, where the "lessee" has compiled with the requirements, were not pointed out to their lordships and therefore the effect of Regs. 35 & 36 was never likely to be considered by the learned appellate court.

It appears to me that Stuart J. took the view that the holder of an approval notice might be able to demand a tenancy, because as I have said after reviewing Regulations 35 & 36 he said as I have quoted supra:

"At first sight this view of the matter may appear to elevate the holder of a contract to lease Crown land to a position superior to that held by the holder of a lease"

He also said continued further down that page:

"It appears then that the Director of Lands, can, in fact, exercise at least the same measure of control over the holder of a more approval as he can exercise over the holder of a registered lease. My conclusion then is that the transaction between the appellant and the consent of the Director of Lands and was therefore neither void nor illegal."

He did not hold that the approval did not give rise to a lease.

For the aforesaid reasons I do not accept Dr. Sahu Khan's submissions that Ganpati's case supports his condition that "approval notices" cannot give any right to a tenancy. It must in my respectful view depend upon the contents of the particular approval notice and the conduct of the parties i.e. the applicant and the Director of Lands in connection therewith. There may well be a statutory right as well as an equitable right to require a formal lease to be executed.

Turning now to consider the effect of a "notice of approval" I quote from the judgment of Stuart J. in Damodoran's case (supra). He said it is-

" ........... an agreement on the part of the Director of Lands on behalf of the Crown to grant the (person named) a lease of the land referred to in the approval. That is there is contract for a lease .............."

I concur in that approach.

Such a contract will create the relationship of landlord and tenant as soon as the latter is allowed to enter into possession and if he pays the required rent the tenant is entitled to specific performance of the agreement and in equity he holds as a tenant under the terms agreed upon or implied.

In the instant case Sukhramani received an approval notice dated 18.12.74 which is stated to run from 1.4.73 at a rent of £53.00 per annum for 10 years. Since he took as administrator it seems that the date 1.4.73 is the date on which the original lease to his mother had commenced.

Sukhramani was in possession as administrator when that approval notice Ex.P.17 was issued. It seems that the approval notice Ex.P.17 was necessary to vest his deceased's mother's rights in him as administrator because no lease had by that time been executed; had there been a formal lease it would only have required the Registrar's endorsement thereon that the title had passed on death to the administrator Sukhramani. There is no statutory provision for such endorsement of approval notices.

There is no suggestion that the Director was simply granting a tenancy-at-will from year to year as in Ganpati's case. The approval notice Ex.P.17 is expressed to be for 10 years from 1.4.73.

I assume that since the original grantee was in possession when she died and had been in possession for at least a year that the survey fee referred to in R. 35 had been paid by her and that she paid her rent as required by R. 35. Perhaps the area had been leased and surveyed on a prior occasion and no survey fee remained to be paid. Accordingly at the time of her demise the Director was obliged under Reg. 36 to execute and register a lease in her favour embracing the terms of the notice of approval which had been issued to her.

However, that may be Ex.P.17 is signed by the Director's agent and it also bears Sukhramani's signature "accepting the lease" on the terms and conditions set out in the approval notice.

It appears that Sukhramani as administrator must have paid the annual rent because, as I have already stated, on the 9th July 1976 the Director of Lands, in Ex.P.3, consented to the land described in the approval notice Ex.P.17 being transferred to Sukhramani in his own right. The Director probably regarded Sukhramani's deceased mother as his predecessor in title and as entitled to a protected lease and was transferring this right to Sukhramani under S. 13(2) of the Ordinance. The 'lease' had then been in existence since 1.4.73 having run 3 years of its 10 year term.

When Sukhramani entered into the sale and purchase agreement Ex.P.6 with the defendant on 5th April 1975 he and his mother must have complied with the terms of the approval notice because P.W.1 says that the Director was always ready to approve the transfer. If my approach to Reg. 35 & 36 is correct Sukhramani was able to require the Director to execute the necessary lease. If a "notice of approval" conveys no rights one may wonder how the Director could purport to agree to the transfer of "nothing". In my view Sukhramani was in possession under a contract of tenancy i.e. the notice of approval Ex.P.17; he had performed his side of the bargain and apart from his statutory right under Regs. 35 & 36 he was entitled to be treated in equity as a tenant under the terms of Ex.P.17.

The lease to which he was entitled was by virtue of S. 13(1) a protected tenancy because that is one of the terms of the approval notice Ex.P.17. Therefore any dealing with the land between Sukhramani and the defendant under the agreement for sale Ex.P.6 would render the transaction null and void if the prior consent of the Director had not been obtained.

It is accepted that the defendant was allowed to enter the land, build a house on it and to commence cultivating it before the Director's consent had even been applied for. I cannot accept Dr. Khan's contention that in such circumstances the defendant was not in possession.

Under the terms of the sale and purchase agreement the defendant was to pay part of the purchase price of $8000 from the monies earned by the defendant on the land in question. The defendant grew cane on the farm in order to pay for it under the terms of Clause 5 of the agreement. In my view that behaviour clearly amounted to a dealing with the land. In fact the defendant's own evidence is that he spent his own money bulldozing part of the land and in improving the drainage.

Unfortunately it was a dealing in the land which arose before the consent of the Director had been obtained; in fact the dealing with the land took place before consent had even been requested.

It is unfortunate that when Sukhramani, through his solicitor, Mr. Gordon, sent his transfer request, Ex.P.1, dated 23.4.75, to the Director along with the agreement Ex.P.6 dated 5.4.75 the Director was not satisfied with the terms of the agreement. At the date the defendant had been on the farm for about 10 days and had built his house on it. The defendant's occupation clearly preceded the attempt to obtain the Director's approval. The Director's reply Ex.D3, dated 20.5.75 required that the agreement for sale be slightly amended and the Director's consent was deferred. For various reason's, to which I have referred, before the amended agreement reached the Director he required Sukhramani to be recorded as holding in his own right and not as administrator of his mother's estate. Shortly after this further requirement was complied with, as evidenced by Ex.P.3. dated 9.7.76, Sukhramani died. The plaintiff, according to her evidence had always been opposed to sale, stepped into Sukhramani's shoes.

The defendant's acts in performance of the agreement Ex.P.6 contravened S. 13(1) in that the Director had not consented to the transfer, and therefore the agreement null and void unless there is anything which saves it.

Dr. Khan submits that Clause 13 of the agreement which expressly declares that it is the subject of the consent of the Director of Lands prevents the contract from being illegal. He relied upon MacGregor Investments v. Sheraton, F.C.A 62/1976, which is found in the 1977 cyclostyled reports. Dr. Khan did not refer to any passage in the judgments in that case which support his contention and I see none on referring to it. The judgments therein follow the established rule that a party to a contract should not be allowed to benefit his own wrongdoing. I agree it is possible that Sukhramani and his successor (the plaintiff) would not be entitled to rely on an absence of the Director's consent if Sukhramani had deliberately and intentionally failed to apply for it provided that the defendant had gone into possession before consent was granted. If the defendant occupied the land without the Director's consent would amount to dealing with the land and notwithstanding the condition that the agreement was subject to the Director's consent one could not say that he had entered on the land other than as a result of the agreement.

I do not think that Clause 13, in making the contract subject to the Director's consent created a condition precedent whereby occupation by the defendant could not be a step in the fulfilment of the agreement. It merely repeats S. 13(1) of the Ordinance. By including clause 13 the parties were only stating that they would abide by the law. If they subsequently contravened the law their declared lawful intentions cannot avoid the consequences of the contravention.

Frequently one refers to the effect of S. 13(1) as explained in the judgment of Gould J.A. in Jai Kissun v. Sumintra No. 18/1974 F.C.A. at p.7.

"If any agreement is signed and held to be inoperative and inchoate while the consent is being applied for I fully agree that it is not rendered illegal and void by S. 12. I think on a strict reading of S. 12 in the light of its object, an agreement for a sale of native land would become void under the section as soon as it was implemented is some way touching the land, without the consent having been applied for".

S. 12 referred to by his lordship appears in the N.L.T. Ordinance but is a parallel to S. 13(1) of the Crown Land Ordinance.

In Imam Hussain v. Shiu Narayan, Civil Appeal 16 of 1978, F.C.A. (reported in the 1978 cyclostyled reports) at p.14 of their judgment Henry and Spring JJA said that where the transaction was subject to a condition precedent with no act of performance no difficulty arises. They took the statement no further in that case but later considered the effect of a condition precedent in Phaladu Sukh Ram Civil Appeal 43/78 reported in the 1978 cyclostyled reports. Henry J.A. in delivering the judgment of court at p.6 of the judgment considered the effect of a clause similar to that of clause 13 in the present agreement.

He said:

"Whether or not the condition was a condition precedent or a condition subsequent depends not on technical words, but on the plain intention of the parties to determined from the whole instrument."

On the 7th page he added that "acts done in performance of the agreement, may in cases such as the present also be relevant a topic although not a necessary factor in determining whether S. 12 had been breached".

In my view that acts done by the parties in letting the defendant into possession, in allowing him to build a house and cultivate cane and in proposing that the cash proceeds for cane crops in 1975 and 1976 be received as part payment of the purchase price and were acts in performance of the contract and undoubtedly touched and concerned the land. The defendant says that in the event of an order in his favour for specific performance he will pay the $8000 less value of the crops which he cultivated as agreed in clause 5. His statement reveals that he cultivated the farm in performance of the contract expects to be credited.

At the end of his evidence-in-chief he said:

"Deceased had agreed to sell to me, that's why I came to live on it."

That seems to be a clear statement that he came on to the land in pursuance of the agreement especially when viewed in relation to his conduct under the agreement.

I am not satisfied that Clause 13 was intended as a condition precedent. The parties have not referred to it as such in the evidence not has it been pleaded as such. It has, in my view, been treated as a condition subsequent.

The consent of the Director had not been obtained up to the time of Sukhramani's death and the substantial acts of performance touching and concerning the land must, in my view, render the transaction between Sukhramani and the defendant null and void. I regret so finding because had it not been for the unfortunate mishaps to which I have referred the Director would have consented within a few weeks of the signing of the agreement Ex.P.6.

There was no lawful agreement for sale obliging the plaintiff, as administratrix of the estate of Sukhramani, to apply for the Director's consent thereto.

The agreement having been rendered unlawful no rights or obligation accrue thereunder. There is no legal obligation on the plaintiff to render an account to the defendant. However, she said in evidence that she had offered the defendant some payment for his work and expenditure during the period he was cultivating. It is to be hoped that she will not forget that offer.

The defendant will give up possession of that part of the land which he at present occupies. Since this will necessitate the dismantling of his house I consider that possession of that part should be delivered up within three months.

The defendant will pay the costs thereof.

(Sgd.) J.T. WILLIAMS
JUDGE

Lautoka
14th September, 1979.