Jagessar v Commissioner of Inland Revenue [1987] FJSC 10; SC Review 10.1987 (20 November 1987)

IN THE SUPREME COURT OF FIJI
Court of Review
Income Tax No. 10 of 1987

Between:

VISHNU DEO JAGESSAR
Appellant

And:

COMMISSIONER OF INLAND REVENUE
Respondent

Mr. K. Lakshman for the Appellant
Mr. M. J. Scott and Mrs Sharma for the Respondent

JUDGMENT

Vishnu Deo Jagessar father's name Jagessar whom I shall call the appellant was born in Fiji and has resided in Australia and at Nadi in Fiji, and is currently in Australia practising as a pharmaceutical chemist. In 1970 he entered into separate leases with the Public Trustee of Fiji affecting two blocks of agricultural land lots 1 and 2 on deposited plan no. 3370. The term of the lease in each case was sixty years from 1st October 1967. Each lease contained an option in the lessee to purchase the land and such option was duly exercised on 5th day of June 1973. The leases provided for a survey to be done by the Public Trustee at the expense of the lessee, and as a result it was not until 22nd September 1980 that the transfer from the Public Trustee to the appellant was registered, although a transfer had been executed as far back as 26th February 1974. On 30th July 1985 the appellant sold the land, or at least executed a transfer of the land to a company called Tui Delana (Fiji) Ltd for the price of $100,000. The Commissioner of Inland Revenue claimed that the sale was subject to land sales tax under the Land Sales Act Cap. 137.

Now the scheme of the Land Sales Act is that by section 3 tax is imposed on all profits from dealings in land unless exempted by the provisions of Section 5. The latter section exempts dealings affecting inter alia agricultural land which has been in the seller's ownership for not less than twelve years immediately preceding the sale.

The appellant submits that the land had been in his ownership since he signed the leases of the two blocks on 12th March 1970. If this submission is to be accepted, then the land had been in his ownership for over fifteen years when he sold it to Tui Delana (Fiji) Ltd in July 1985.

Counsel for the Commissioner, on the other hand, submits that the period of the leases should be ignored. Then he says that because 'owner' is not defined in the statute, it refers to the legal owner, and hence the registered proprietor is meant. Furthermore, dealings refer to formal documents lodged with the Commissioner of Stamp Duties. He also points out that section 13 provides that Part IX of the Income Tax Act applies, and that thus the onus of proof is upon the appellant.

'Owner' and 'ownership' are not defined by the Act, but definitions are provided of both 'dealing' and 'land'.

A dealing means:-

"any transaction of whatsoever nature, including an option to purchase, by which land is affected under the provisions of the Land Transfer Act and shall include an agreement to enter into any such transaction, but shall not include the original grant of any lease or licence by the Native Land Trust Board.

'land' includes land messuages, tenements and hereditaments, corporeal and incorporeal of every kind and description in Fiji together with all buildings and other fixtures, liberties, privileges, easements, plantations, gardens and quarries, and all trees and timber lying or being thereon or thereunder unless any such are specifically exempted and any estate or interest therein but does not include a mortgage."

Two things are notable, first that the dealing apparently is intended to affect only land under the provisions of the Land Transfer Act, but perhaps that is not very limiting after all, seeing that all land in Fiji which is not native or Crown land is subject to the Land Transfer Act. Secondly, the definition of 'land' does not include a mortgage. But it does include any estate or interest apart from a mortgage. There is, I think, no doubt, that the dealing with which this appeal is concerned affects land under the Land Transfer Act, and the question which arises is whether that land is agricultural land which has been in the seller's ownership for not less than twelve years immediately preceding the sale. Again there is no dispute that this is agricultural land. But, for how long had it been in the seller's ownership. It is this expression 'ownership' which causes the difficulty. The appellant supports his case with reference to several cases, none of which however, give him very much assistance. Stroud's Dictionary gives seventy definitions of 'owner', most of them depending upon particular statutes. One reference in Stroud refers to the judgment of Barmwell L.J. in Eglington v. Norman (1877) 46 L.J.Q.B. 559 as supporting a definition of owner as a lessee during the term of his lease'. But not only can I find nothing in the report to suggest that the learned Lord Justice said anything about leases, but the decision itself was overruled by Arrow Shipping Co. v. Tyne Improvement Commissioner [1894] UKLawRpAC 41; (1894) A.C. 508 63 L.J.P. 140. It was a case where ownership of a wreck was in dispute. Likewise in the Baumwoll Manufacture Von Carl Sheibler v. Furness A.C. 8 62 LJQB 201 a dispute arose between the owners and the charterers of a British ship, and the master who signed the bill of lading was held to be the agent of the charterers. Russell v. Shenton [1842] EngR 72; (1842) 3 Q.B. 449; 114 E.R. 579 was an action for nuisance in which the defendant was the owner or proprietor, but not, it would seem, the occupier and the action failed. I could not see that Mr. Lakshman could derive any comfort from that case. Then he referred to Patchett v. Leathem (1948) 65 T.L.R. 69 where the owner of a house was to be served with a notice of requisition, and Streatfield J. held that 'owner' included not only legal owner but equitable owner. But that, again, was a decision on the meaning of 'owner' in a particular statute. So far as the option to purchase is concerned, the citation of Cockwell v. Romford Sanitary Steam Laundry (1939) 4 A.E.R. 370 and perusal of the leases themselves convinces me that the leases ceased as soon as the option to purchase was exercised.

Mr. Scott supported his argument with citations mainly from Australian cases. Stefanetto v. Forestry Commission of New South Wales (1975) N.S.W.L.R. 332 is a case involving a roadmaking contract under which the contractor had admittedly made default and now sought a declaration as to his rights. There is reference in that case to a decision of Griffith C.J. in Union Trustee of Australia v. Federal Commissioner of Land Tax (1915) 26 C.L.R. 526, 530 in which the learned Chief Justice described a legal owner as one who had 'entire dominion' over the thing owned. Then there is a citation from the judgment of Windeyer J. in Kostrzewa v. Southern Electric Authority of Queensland [1969] HCA 32; (1969) 120 C.L.R. 653, 659 where the learned Judge said:-

"Moreover the word owner has no definite legal meaning except in relation to chattels and choses an action."

It is to be noted that both the Land Sales Act Cap. 137 and the Land Transfer Act Cap. 131 contain no definition of owner.

The Property Law Act Cap. 130 defines 'owner' to mean the owner of any property or any estate or interest therein and includes a proprietor. 'Proprietor' is defined in the Land Transfer Act to mean the registered proprietor of land or of any estate or interest therein. Mr. Scott seeks to differentiate this from the definition in the New Zealand Land Transfer Act in which 'proprietor' is defined as meaning any person seized or possessed of any estate or interest on land, at law or in equity, in possession or expectancy. Perhaps it is not irrelevant at this stage to refer to the words of Barwick C.J. on Breskyar v. Wall (1971) 126 C.L.R. 376, 385.

"The Torrens system of registration is not a system of registration of title, but a system of title by registration."

Mr. Scott submits that in Fiji there is no difference between 'owner' and 'registered proprietor'. I do not think that I can accept that. In the Property Law Act Cap. 130, 'owner' is defined as including a proprietor, and 'proprietor' is defined as meaning the person who is registered as proprietor. Equally in the Land Transfer Act 'proprietor' means the registered proprietor. In this case the appellant was registered as proprietor of the estate in leasehold and thus the owner of the same from 1970 until he exercised his option to purchase in 1973. Following Cockwell v. Romford Sanitary Steam Laundry cit. supra, I hold that when the option was exercised, a contract to purchase the freehold came into existence, and the appellant became registered as proprietor of the freehold when the survey was completed. I cannot see that the appellant who has continued to hold the same land for fifteen years can be said not to have had the ownership of it. I do not accept that he must have been registered as proprietor on a document of title, which is, after all only the evidence of title. The appeal will be allowed, and the appellant will be entitled to the costs of the appeal.

K. A. STUART
COURT OF REVIEW

20th November, 1987

Solicitors: Munro, Leys & Co.
The Solicitor to the Inland Revenue