Janardhan v Khan [2009] FJSC 12; CBV0012.2008 (3 December 2009)

IN THE SUPREME COURT OF FIJI ISLANDS

Civil Appeal CBV0012.2008

BETWEEN:

JANARDHAN
Applicant

AND:

MOHAMMED NASIR KHAN AND ANOR
Respondents

17^th November, 3^rd December 2009

Gates, P.
Mr Suresh Maharaj for the Petitioner [Applicant]
Ms Natasha Khan for the Respondents

RULING

Petitioner's summons for interlocutory stay order pending special leave application; second application; consent order stay already in place; Respondents in apparent breach; Director of Lands, a litigant at the High Court trial, issuing fresh lease to 2^nd Respondent in conflict with Court of Appeal's orders; whether circumstances of issuance of fresh lease a separate matter; whether petition now irrelevant.

[1] The applicant Petitioner seeks interlocutory relief pending the hearing of his appeal to the Supreme Court. He says the land in dispute is being dealt with by the Respondents in breach of an earlier stay order of this court. He seeks to protect that land from the Respondents' development works, in breach of the rights which the Petitioner hopes to secure from the Supreme Court.

[2] In this court the parties agreed to an interim order restraining the Respondents from entering the land or carrying out bulldozing works until the determination of this application.

[3] The Respondents' case is that the petitioner never applied for or secured renewal of his Crown lease over the property. The lease expired on 31^st December 1995. The petitioner was a cane farmer and farmed on the property. But prior to expiry, on 11^th September 1995, Mr Janardhan and Mr Khan entered into a sale and purchase agreement for Mr Khan to buy Mr Janardhan's lease. A year or so earlier the Divisional Surveyor Western, acting for the Director of Lands, provided the ANZ Bank upon request with a letter of comfort on behalf of Mr Janardhan. In it the Divisional Surveyor, in a letter in standard form for this purpose, stated "In accordance with the provisions of Agricultural Landlord and Tenant Act, it (Crown Lease 7893 - Mr Janardhan's lease) will be renewed for a further term of 20 years from 1^st January 1996".

[4] Meanwhile the land was re-zoned as "General Industrial", within Lautoka city's boundary, Mr Khan had applied for and been granted a change of use of the land from "agricultural/residential B" to "commercial’’. The Director of Lands subsequently issued a new lease, but of a different category, and to the second Respondent, Khan Buses Ltd, not to the petitioner.

[5] Mr Suresh Maharaj, Counsel for the petitioner, argues that the Crown (now State) Lease is still in place. On 7^th November 2005 the High Court found that the rescission of the sale and purchase agreement by Mr Janardhan had occurred validly. That decision was reversed in the Court of Appeal, which assumed that the sale would thereafter proceed in pursuance of its appellate orders.

[6] Ms Natasha Khan for the Respondents argues the appeal to the Supreme Court has become irrelevant in view of the expiry of the subject matter of that agreement, the Crown Lease, and in view of the industrial lease now issued in its place by the Director of Lands to Khan Buses Ltd, the 2^nd Respondent to this appeal. Any disagreement over the issue of the new lease could only be disputed by fresh litigation. Ms Khan said the land was irrelevant to the monetary compensatory orders made by the courts to date.

[7] Besides finding that the petitioner had validly rescinded the contract, the High Court found that the sums paid by Mr Khan to the Petitioner were to be forfeited as liquidated damages. The trial judge made no order for payment of balance monies by the purchaser Mr Khan, nor for repayment of the deposit or purchase monies on account by Mr Janardhan.

[8] The Court of Appeal gave its judgment on 7^th November 2008. It allowed Mr Khan's appeal, finding as a matter of law that rescission had not taken place. The contract was still extant. Amongst others, it made the following two orders:

"(3) The 1^st respondent Janardhan to take all steps required of him to bring about settlement of the sale and purchase agreement dated 11 September 1995 entered into between the appellants and the 1^st respondent, such settlement to take place within 90 days of the date of the handing down of this judgment; (Emphasis added)

(4) .......

(5) .......

(6) The appellants to pay to the 1^st respondent compound interest at the rate of 10% per annum on the sum of $70,700.00 from 8 December 1995 until the date of settlement of the sale and purchase agreement dated 11 September 1995 entered into between the appellants and the 1^st respondent."

[9] On 9^th December 2008 Mr Janardhan filed his petition with this court seeking special leave to appeal. The appeal was filed in time, that is within the 42 days stipulated by Rule 4(4) of the Supreme Court Rules.

[10] The main plank of the grounds is that the Court of Appeal's statement of the law on rescission was incorrect.

[11] With the petition was filed a summons seeking an unconditional stay order until the determination of the petition. Mr Janardhan filed a supporting affidavit. When the matter came on before me, sitting as a single judge of appeal, there was no real contest as to the stay. Counsel for the Respondents applied orally to stay the order for computation of compound interest whilst the Supreme Court dealt with the appeal. There was no cross-petition filed challenging that part of the Court of Appeal's judgment nor a stay sought by the Respondents. Accordingly the application was denied. The petitioner's stay order could have been sealed as a consent order. It was not.

[12] There was therefore in place a Supreme Court order for stay made on 19^th January 2009.

The salient parts of the order read:

"1. That the Judgment of the Court of Appeal delivered on 7^th November, 2008 be stayed forthwith until the final determination of the Petition for Special Leave.

2. All further proceedings of the Court of Appeal be stayed until final determination of the Petition for Special Leave."

[13] It was unusual therefore for a Respondent to have sought to circumvent a stay order by moving ahead with developments on a disputed property. After the stay was granted, the Respondents appeared to have walked away from the litigation, and indeed from the orders they had sought and obtained in the Court of Appeal.

[14] For the time being, till the determination of the special leave application, the orders of the Court of Appeal remain intact though stayed. Those orders quoted above recognise that the vendor had title to pass on to the Respondents. As Lord Chancellor Lord St. Leonard observed in Birch v Joy [1851-52] 111 HCC 565 at 578 "That which is unappealed from remains as before." That is the position now facing the Respondents. Having come to the Court of Appeal and pressed for orders in their favour they cannot now fail to acknowledge the effect of those orders without obtaining the consent of the other party who is similarly bound by those orders.

[15] There is perhaps understandably very little evidence presented by the Respondents with such orders in place as to how they managed to secure from the Director of Lands over Mr Janardhan's title a fresh lease on the same property. There is no explanation provided by the Director, who was one of the original Defendants in the High Court trial. With the emphatic "will be renewed" in his letter, it is surprising the Director, through his agent, the Divisional Surveyor Western, did not first approach the existing lessee Mr Janardhan to ensure he did not wish to continue with the renewal. After all the Divisional Surveyor's letter of explanation of 4^th November 2008 in explaining the volte face, referred to the fact that the transfer of the property to Khan Buses Limited was consented to and stamped on 28.10.98. This appeared to recognise continuing rights of Mr Janardhan on the property after the expiry in 1995. He wrote "The transfer was from you, Janardhan to Mohammed Nasir Khan," But was this not to be a fresh lease altogether upon the expiry?

[16] The Director recognised Janardhan's continuing rights and capacity to renew, and his ability to transfer his lease to Mr Khan.

[17] Mr Janardhan believes the obtaining of an industrial lease over the property to be a breach of the stay order. He deposed "That the industrial lease has been issued and the entire process appears to be a "foul play" against me."

[18] The new lease was executed on 4.5.09, the Commissioner of Stamp Duties endorsed on the lease that stamp duties were paid on 4.5.09, and the lease was registered with the Registrar of Titles also on 4.5.09. Mr Janardhan said it was surprising that all these things happened on one day. This comment was not answered by the Respondents.

[19] The full court may ultimately agree with the Respondents that the two matters, the Court of Appeal's orders on the sale of the land and the issuance of the industrial lease, are separate matters. Without more, I would not be so bold as to be convinced of the correctness of that conceptual approach.

[20] Long after the expiry, the Director of Lands as a litigant, never argued that Mr Janardhan had lost his rights to renewal of the lease. Nor did the Director appeal the High Court decision on the basis that the judge had wrongly found that Mr Janardhan had a remaining interest in the lease to pass on.

[21] At this stage, the issue is live, and the Petitioner is entitled to preserve his ability to resume the lease. The trial judge was not satisfied of the bona fide nature of the Respondents' dealings, a conclusion upheld by the Court of Appeal. The breach of the existing stay and the manoeuvres over the new lease may be further manifestations of that approach.

[22] As a matter of caution, I grant the Petitioner the further orders he seeks pending determination of the appeal.

A.H.C.T. GATES
President

Solicitors for the Petitioner: Messrs Suresh Maharaj & Associates, Lautoka
Solicitors for the Respondents: Natasha Khan & Associates, Suva