Wati v Kumar [2019] FJSC 5; CBV0011.2017 (26 April 2019)

IN THE SUPREME COURT OF FIJI
[CIVIL APPELLATE JURISDICTION]

CIVIL PETITION No: CBV 0011 of 2017
[On Appeal from Court of Appeal No: ABU 0011 of 2014]

BETWEEN:

BHAN WATI
Petitioner

AND:

1. VIJAY KUMAR
2. FIJI DEVELOPMENT BANK
Respondents

Coram : Hon. Mr. Justice Saleem Marsoof, Judge of the Supreme Court
Hon. Mr. Justice Suresh Chandra, Judge of the Supreme Court
Hon. Mr. Justice Brian Keith, Judge of the Supreme Court

Counsel: Mr. A. Ram for the Petitioner
Mr. A. Sen for the First Respondent

The Second Respondent was not represented and did not appear.

Date of Hearing: 10 April 2019

Date of Judgment: 26 April 2019

JUDGMENT

Marsoof, J:

1. I have read in draft the judgment of Keith J and I would respectfully agree with his reasoning and conclusions. I also agree with the orders proposed by him.
   

Chandra, J:

2. I agree with the reasoning and conclusion of Keith J.
Keith, J:

Introduction

3. This appeal concerns a small plot of land in Qila on the island of Taveuni. The dispute over the land has been going on for years, and has pitted one side of a family against the other. It generated a long judgment in the High Court, and even longer judgments in the Court of Appeal. The apparent complexity of the case was highlighted by the fact that it took the Court of Appeal over 16 months to produce its judgments, including a dissenting judgment.
   
4. The Plaintiff was Bhan Wati (“Bhan”). The First Defendant was Vijay Kumar (“Vijay”), her brother-in-law. She sought a declaration against Vijay that she was the rightful beneficial owner of the land, and Vijay counterclaimed for vacant possession of the land. Vijay had obtained a loan from the Fiji Development Bank (“the Bank”) which was secured by a charge over the land, and the Bank was joined as the Second Defendant to the claim to prevent the Bank from selling the land or evicting Bhan. In the High Court, Balapatabendi J gave judgment for Bhan on her claim and dismissed Vijay’s counterclaim, but he dismissed Bhan’s claim against the Bank.
   
5. Vijay appealed to the Court of Appeal. A majority of the Court of Appeal (Calanchini P and Amaratunga JA, with Prematilaka JA dissenting) reversed the decision of the trial judge. It allowed Vijay’s appeal, with the effect that Bhan’s claim was dismissed and Vijay’s counterclaim was allowed. It ordered Bhan to vacate the land, but it stayed that order for 30 days. Bhan now applies for leave to appeal to the Supreme Court. She seeks the restoration of the order of the High Court. I assume that the stay on the order for possession has been continued pending the outcome of her application for leave to appeal.
   

The undisputed facts

6. The land to which the dispute relates is part of an estate of 68 acres which is registered under Certificate of Title 6864 (“CT 6864”). The land comprised in CT 6864 was owned by Bhagirathi, son of Panna (“Bhagirathi”). He had six sons and five daughters. Three of the sons feature in the story. They are Vijay, Shiu Prasad (“Shiu”) and Hari Prasad (“Hari”). Bhagirathi and his family all lived together in a house on the estate.
   
7. Shiu was married to Bhan. Eventually there came a time when Shiu and Bhan wanted to live in their own home, so Shiu asked his father for permission to build a house for himself and his family away from the family home but still on his father’s estate. Bhagirathi agreed, and permission was sought from the local authority for the construction of a small house on a part of the estate which had not previously been surveyed. Permission was granted in 1970, but neither the precise dimensions of the construction nor its precise position were defined in the application form. There was only a rough sketch which showed that the new building was not to be that far from the family home. The house was nevertheless built, at least at some expense to Shiu^[1], and that was where Shiu and Bhan lived with their children. No rent was ever paid by Shiu for it. In 1980, permission was sought from the local authority for the construction of an extension to the house. That was granted. A rough sketch attached to the application form showed that the extension would almost double the size of the house. It was not disputed that this extension was built, and it looks as if Shiu paid for it. We do not know whether there were other extensions to the house over the years, but the house now is a substantial one with 7 bedrooms.
   

8. Bhagirathi died on 6 August 1977. By his will, which had been made in 1975, he appointed Vijay as the sole executor of his will, and bequeathed the whole of his estate on trust for Vijay “for his own use and benefit absolutely”. The will contained instructions for Vijay to maintain and support Bhagirathi’s widow and daughter, allowing them to live in the family home – in the case of his widow until she died, and in the case of his daughter until she married. In due course, Vijay was granted probate, and he became the registered proprietor of CT 6864.

9. On 3 June 1985 Vijay and Shiu signed a deed whereby Vijay agreed to transfer to Shiu seven acres of land out of the land included in CT 6864. The land to be transferred was to be identified and described in a plan annexed to the deed. However, the actual plan which was annexed to the deed was no more than a sketch. It was not drawn to scale, and it did not show whether the land which was being transferred included that part of CT 6864 on which the house in which Shiu lived with his family was. In fact, the house in which Shiu lived with his family was in another part of CT 6864.

10. The consideration for this transfer was $1.00 and the natural love and affection of Vijay for Shiu.^[2] Indeed, Vijay entered similar arrangements by deed with his other brothers.^[3] His intention was to divide CT 6864 into 10 separate lots, and to transfer to each of the brothers one of the lots. A plan setting out his scheme was prepared and shown by Vijay to his brothers including Shiu, though it was never produced at the trial. The agreement with Shiu provided that the costs of preparing the deed, of surveying CT 6864 and of producing a plan for the subdivision of CT 8684 into 10 lots, and any other legal costs and disbursements, were to be paid by Shiu (though presumably the surveying costs would be shared with Shiu’s other brothers who were getting their own lots from Vijay). The transfer was to be effected, and the title to the land registered in Shiu’s name, as soon as the land had been surveyed at Shiu’s cost. The plan was for Shiu to move to the new plot once he had acquired title to it. This plot was to be lot 4.
    

11. Following the execution of this deed, the firm of Deepak and Govind, consultant surveyors, were engaged to survey the land comprised in CT 6864 with a view to dividing it up into the 10 lots in accordance with the scheme plan. One of the exhibits before the trial judge (exhibit P4) was Shiu’s instructions dated 21 September 1985 to carry out the survey. Presumably Vijay’s other brothers who were to be given their own lots gave similar instructions to the surveyors.

12. Shiu died intestate in December 1986 but Bhan did not move out of the house she had shared with Shiu. She continued to live there until this day. She has never paid any rent for living there. She now lives there with many members of her extended family. As I have said, it was not on the plot which was to be lot 4. Part of it was on what was to be lot 10, and the other part of it was on the plot which was to be transferred to Hari as lot 9. Something was agreed between Bhan and Hari about that in 1987. What was actually agreed is in dispute. The document recording the agreement was exhibit P4 – the instructions to the surveyors. Someone wrote under those instructions:

“Special notes

23/4/87

The second payment of $375 plus all other expenses incurred for Mr Hari Prasad s/n Bhagirathi’s title to be completely processed shall be borne by the power of attorney (executor of will) of Shiu Prasad s/n Bhagirathi – Mrs Bhan Wati Shiu Prasad – for the exchange of the land on which Mrs Bhan Wati’s existing occupation is erected. This land is 40.63 metres wide onto the road frontage and is 100.10 metres deep.

This usage of the land shall be in force up till the time that the present occupation is removed, also until this piece of land is sold to any other party.”

Following these words were the signature of Bhan and the thumbprint of Hari together with the signature of Vijay as a witness. The background to this agreement was that Bhan had sought to demarcate the boundary to the land she was occupying by pegging the land in a way which showed that it encroached on part of the plot which was to be transferred to Hari. I shall come later to what each of the parties say was the effect of that agreement, but whatever its effect was, shortly after it Bhan paid $760 to the surveyors. A receipt dated 25 April 1987 confirmed that.

13. Sometime after that, new surveyors were engaged in place of Deepak and Govind. They were Inoke Consultants. It took some time for the survey to be completed, and a plan dated 14 August 1996 shows the configuration of each of the 10 lots into which CT 6864 was divided. The lots were of different sizes, and leaving aside lots 4 and 10, and any lots which Vijay may have retained for himself, the remaining lots were transferred to Vijay’s brothers.
    

14. The critical lot for present purpose was lot 10 – which by then included that part of lot 9 to which the agreement of 23 April 1987 related. The longer side of lot 10 was 100.10 metres long, and the common border between lot 10 and what had by then become a slightly smaller lot 9 was 40.63 metres long. These measurements matched those in the agreement of 23 April 1987 and represented about half of lot 10. It is lot 10 whose ownership is disputed in this case. As for lot 4 – the lot which was to be transferred to Shiu, but which following his death was to be transferred to his estate for the benefit of his beneficiaries – the survey shows that lot on the other side of CT6864 from lot 10. That lot was subsequently transferred to Bhan, and no issue arises about that. Shortly after the completion of the survey, Bhan paid Inoke Consultants $300. A receipt dated 13 September 1996 confirmed that. The receipt recorded that the payment was in respect of that part of the survey which resulted in the delineation of lots 4 and 10.

15. At the trial, Bhan produced copies of two undated documents which purported to be transfers of these two lots by Vijay to her. They are on the printed form approved by the Registrar of Titles, and the details of the lots, together with the names of the transferor and transferee (Vijay and Bhan respectively), have all been typed on the documents. The part of the document where the consideration for the transfers was to be inserted was left blank. Each document purported to be signed by each of them, and a registered surveyor purported to witness their signatures. They were exhibits P9 and P10. Exhibit P9 related to lot 4. Exhibit P10 related to lot 10. The transfer relating to lot 4 was subsequently lodged with the Registrar of Titles, and in due course Bhan was named as the registered proprietor of lot 4. However, the transfer relating to lot 10 was never lodged with the Registrar of Titles, and so when on 20 November 2002 the Registrar of Titles issued the certificate of title to lot 10, Vijay was named as the registered proprietor of the lot. The part of the survey plan showing lot 10 was annexed to Vijay’s certificate of title to lot 10, and that showed the house in which Bhan was living hatched within lot 10.

16. It was in July 2005 that matters came to a head. Vijay required Bhan to leave the lot, and when she did not do so, he issued proceedings seeking an order for possession of lot 10. She resisted Vijay’s claim on the basis that he had agreed to transfer the lot to her. On 29 March 2006, the claim was withdrawn, but a few months later, as the registered proprietor of lot 10, Vijay charged lot 10 to the Bank as security for a loan of $15,000. That was on 23 July 2006. The current proceedings were commenced by writ on 3 October 2009.
The parties’ respective cases

17. Bhan’s case on the facts at the trial had two important components. First, it was said on her behalf that by the agreement of 23 April 1987 Hari had agreed to transfer to Bhan the part of what was to be his lot, ie lot 9, in return for her paying the balance of the sum due by Hari for his share of the survey. That was said to be consistent with the first sentence of the agreement which talked of the “exchange” of the land. It was argued that this was not merely an agreement which permitted her to use that part of the lot. Since the house in which she was living was in what became lot 10, the agreement when implemented would have entitled her to land adjacent to the land on which she was living.

18. Secondly, and much more importantly, Bhan’s evidence was that it had always been understood while Bhagirathi was still alive that Shiu would get the land on which the house he had built was when the estate was eventually divided up into separate lots.^[4] Accordingly, it was said that there came a time when Vijay was prepared to put that understanding into effect, and to transfer to her the whole of what had become lot 10. That was why (a) the plan prepared by Inoke Consultants following the survey included in lot 10 that part of lot 9 which Hari had agreed to transfer to Bhan – or at least to let Bhan use – by the agreement of 23 April 1987, and (b) exhibit P10 came into existence, by which the whole of lot 10 was to be transferred to Bhan. Her evidence was that Vijay brought exhibit P10 (as well as exhibit P9) for her to sign. She did that, Vijay took them away and she was eventually provided with copies of them. She left it to Vijay to lodge the transfer in exhibit P10 relating to lot 10 with the Registrar of Titles together with the transfer in exhibit P9 relating to lot 4, but he only lodged the transfer relating to lot 4, and never told Bhan that he had not lodged the transfer relating to lot 10. That was why she became the registered proprietor of lot 4 but not lot 10. She only discovered that she was not the registered proprietor of lot 10 when Vijay sought to evict her from the lot in 2005.
    
19. The case asserted on Vijay’s behalf at the trial was that by the agreement of 23 April 1987 Hari was simply agreeing to let Bhan use the part of what was to be his lot, ie lot 9, until either she moved out of her house or Hari sold the part of what was to be lot 9 which Bhan was being allowed to use. That was consistent with the last sentence of the agreement which talked about Bhan’s “usage” of the land. Hari was not agreeing to transfer that part of what was to be lot 9 to her. And Vijay denied that he was ever prepared to add this part of lot 9 to lot 10, and to transfer the whole of lot 10 to her. There was no need for him to transfer lot 10 to her since Shiu, her late husband, and then her following his death were always going to have lot 4. Vijay claimed that it was not his signature on exhibit P10 – the document by which he purportedly transferred lot 10 to her. Indeed, it was not his signature on exhibit P9 either – the document by which he purportedly transferred lot 4 to her – even though he accepted that he had agreed to transfer lot 4 to her and had later arranged for exhibit P9 to be lodged with the Registrar of Titles so that Bhan could be named as the registered proprietor of lot 4. It was because she was the registered proprietor of lot 4 that he wanted her to move there from the house on lot 10 in which she had been living. It was only when she refused to do that that he reluctantly issued proceedings for her eviction from lot 10. Although he acknowledged in his evidence that the claim had been withdrawn, he said that he had never given his lawyers instructions to withdraw it.
    

20. Both Bhan and Vijay gave evidence in accordance with their respective factual cases. The only other witnesses were called on behalf of Bhan. Most of those witnesses did not add anything to the judge’s understanding of the case. They either gave evidence about what Bhan had told them which was not capable of supporting her case because it offended the rule against self-corroboration, or about what Shiu and Hari had told them which should have been ruled as inadmissible hearsay, or about things which were not in dispute. But one witness was important. That was Inoke Bulivou. He was the surveyor trading as Inoke Consultants. His evidence supported Bhan’s case in three important respects. First, he said that Vijay had intended to transfer to Bhan, not just lot 4, but lot 10 as well. Secondly, he said that it had been Bhan who had paid for the surveys, not just of lot 4, but also lot 10 (as the receipt of 13 September 1996 had said). Thirdly, he said that it was he who had witnessed the signatures of Bhan and Vijay on exhibits P9 and P10. Indeed, it was he who had prepared the documents for their signature.

The judgment of the trial judge

21. The trial judge made two important findings of fact in his judgment. One of them went to the heart of the case. That was the finding in para 54 of his judgment where he found that Vijay had indeed signed exhibits P9 and P10, despite his denial that he had done so. That finding was not surprising in view of Mr Bulivou’s evidence. It had not been suggested in the trial that he would have had a motive to lie, and it is difficult to see how his evidence might have been mistaken. Again, although the judge did not deal with how Bhan came to know about exhibit P10, his rejection of what Vijay had had to say about it meant that the only credible account of how Bhan came to know about it came from Bhan. In those circumstances, the judge must be treated as having accepted Bhan’s evidence that Vijay had brought exhibit P10 for her to sign, that after she had done so Vijay had taken it away, and that she had subsequently been provided with a copy of it. Although the judge did not say so in so many words, Vijay’s signing of exhibit P10, purporting as it did to transfer lot 10 to Bhan, and subsequently providing Bhan with a copy of exhibit P10, is the clearest indication of his willingness to transfer lot 10 to Bhan, leaving aside the question whether there had been an obligation on him to do so. That is what the judge must have found. It is entirely consistent with the other aspects of Mr Bulivou’s evidence – namely that Vijay had intended to transfer lot 10 to Bhan and that she had paid for the survey of it.
    

22. That finding led the judge to a far less important finding of fact, but it fitted into Bhan’s narrative as a whole. That was the finding in paras 64 and 65 of his judgment about exhibit P4 – at least that part of exhibit P4 which contained the agreement of 23 April 1987. The judge said that he was rejecting Vijay’s case on the effect of that agreement in the light of Mr Bulivou’s evidence, as well as Vijay’s intention as evidenced by exhibits P9 and P10 to transfer lots 4 and 10 to Bhan. The effect of that can only have been that the judge was finding that the effect of the agreement was as had been contended on Bhan’s behalf – namely that Hari had agreed to transfer to Bhan the part of what was to be his lot, ie lot 9, in return for her paying the balance of the sum due by Hari for his share of the survey. That finding ceased to have the importance it would otherwise have had if the judge had not made the more important finding in para 54 of his judgment. I say that because once the judge had found that Vijay had been prepared to transfer the whole of what became lot 10 to Bhan, it hardly mattered whether previously Hari (as opposed to Vijay) had agreed (as opposed to being prepared) to transfer part of what became lot 10 (as opposed to the whole of it) to Bhan.

23. On these facts, the judge found in para 51 of his judgment that an equitable trust in respect of lot 10 had been created in favour of Bhan. He did not explain the route by which he came to that conclusion. He merely cited passages from a number of authorities but did not explain how those passages led to the conclusion he reached. It will be necessary to return to that later. He also dealt with and rejected two defences raised by Vijay’s lawyers – namely that the action was barred by section 59 of the Indemnity, Guarantee and Bailment Act (Cap 232) as well as by the Limitation Act (Cap 35). Since there has been no challenge so far as I can tell to that part of the judgment, I say no more about these defences. Finally, the judge dealt with another defence raised on behalf of Vijay – namely that (a) since exhibit P10 had never been lodged with the Registrar of Titles for registration, the effect of section 37 of the Land Transfer Act (Cap 131) was that it was ineffective to create any interest in the land in favour of Bhan, and (b) since Vijay’s title to lot 10 had been registered by the Registrar of Titles, the effect of section 39 was that in the absence of fraud that registration could not be impeached. There is no doubt that section 37 prevented exhibit P10 from creating any interest in lot 10 in favour of Bhan, but the judge rejected the contention that section 39 defeated Bhan’s claim to have acquired an interest in lot 10 on the basis that section 39 did not defeat the creation of a beneficial interest in equity.
    

24. In giving judgment for Bhan on her claim against Vijay, and in dismissing Vijay’s counterclaim, the trial judge declared Bhan to be the rightful beneficial owner of lot 10. Vijay was ordered to repay to the Bank the loan which it had made to him, so that the lot could be transferred to Bhan free from encumbrances. He ordered Vijay to transfer the lot to Bhan – presumably by lodging exhibit P10 with the Registrar of Titles – and in the event of Vijay failing to do that within two months, he ordered the Registrar of Titles to do whatever was necessary to register Bhan’s title to the lot. These were the remedies, aside from injunctions and damages, which Bhan had sought. Although the order which the judge made shows that he rejected Bhan’s claim for damages, he did not deal in his judgment with the allegations of fraud which Bhan made against Vijay.

The judgments in the Court of Appeal

25. Calanchini P’s succinct judgment contained a basic and accurate summary of the undisputed facts^[5], but he took a different view about the two important findings of fact which the trial judge made. First, he said in para 13 of his judgment that even if Hari had acquired an equitable interest to the plot to which the agreement of 23 April 1987 related, there was no question of him having obtained a legal title to the land, and there was therefore no interest in the land which he was capable of transferring to Bhan. Amaratunga JA said much the same thing in paras 181 and 189 of his judgment. For that reason, the agreement was no more than an arrangement under which, in return for Bhan paying Hari’s share of the costs of the survey, he would let her continue to occupy that part of the land on which her house was.
    

26. Prematilaka JA took a different view in para 36 of his dissenting judgment. He agreed with Calanchini P and Amaratunga JA that Vijay was the legal owner of that part of the land to which the agreement of 23 April 1987 related: only Vijay could transfer that land. The consequence of that, he thought, was that although Vijay had purported to sign the agreement as a witness, he had to be regarded as a party to it. As I understand it, Prematilaka JA was saying that it was therefore Vijay who had been the principal contracting party with Bhan, and by that agreement, Vijay had agreed to transfer that land to Bhan. On this issue, I agree with Calanchini P’s and Amaratunga JA’s analysis of the agreement. There was no need for Vijay to be treated as a contracting party (despite being called a witness in the agreement) if Hari was merely letting Bhan occupy the land. Not that this really matters, since I regard the agreement of 23 April 1987 as little more than part of the narrative.

27. The much more important aspect of Calanchini P’s judgment was that he regarded as decisive the fact that Vijay had not agreed to transfer lot 10 to Bhan. His reasoning was that when Shiu left the family home to live in a house elsewhere on the estate, he did not acquire any equitable interest in that part of the estate. Indeed, Vijay could have required Shiu to leave that part of the estate – which was in what eventually became lot 10 – and move to what became lot 4. That was because the whole of the estate, under his father’s will, was for Vijay’s “use and benefit absolutely”. Vijay was entitled to be registered as the sole proprietor of each of the 10 lots before transferring such of them as he chose to his brothers by a deed of the kind between him and Shiu. The only agreement between Vijay and Shiu had been about the transfer of lot 4 to Shiu, and so the only rights which Shiu had in respect of lot 10 was to remain in occupation of the house on that lot as a licensee until such time as Vijay terminated his licence. That applied to Bhan after Shiu’s death because she could acquire no greater title to the land than her late husband.

28. Calanchini P went on to say that there had never been any agreement for the transfer of the land to Shiu or any similar agreement with Bhan after Shiu’s death. That is correct, but it could not have been successfully suggested on behalf of Bhan that there had been an agreement about lot 10 either with Shiu or her: as both Calanchini P and Amaratunga JA pointed out, what was recorded in P10 could not have amounted to an enforceable agreement under which Vijay was obliged to transfer lot 10 to Bhan because there was no consideration recorded for the transfer, and there was no evidence of any. Bhan’s case has to have been only that Vijay was prepared to transfer lot 10 to her – on her case to honour the understanding that there had been while Bhagirathi was still alive that Shiu should get the land on which his house had been built. Why else did Vijay sign exhibit P10 – the transfer of lot 10 to her?

29. Calanchini P did not think that it was necessary to address that. He said in para 25 of his judgment: “For whatever reason [Vijay] might have signed the ... transfer for lot 10, it was not pursuant to any agreement between [Vijay] and Shiu or between [Vijay] and [Bhan].” It may not have been pursuant to any agreement with Bhan, but Vijay would only have signed exhibit P10 if he had been prepared to transfer lot 10 to her. At the very least, that was what the judge was entitled to find. Having said that, the fact that Vijay had never agreed to transfer lot 10 to Bhan meant, in Calanchini P’s view, that Bhan’s claim had to fail.
    

30. Amaratunga JA also did not address why Vijay had signed exhibit P10. He said in para 202 of his judgment said that since exhibit P10 was no more than an agreement without any consideration, Vijay’s signing of it was a “voluntary act” on the part of Vijay. That is the same thing as saying that for one reason or other Vijay was prepared to transfer lot 10 to Bhan, even though he was under no contractual obligation to do so. Amaratunga JA equated the proposed transfer of lot 10 to Bhan to a gift. He concluded that no equitable interest could in law have been created by such a proposed gift unless Bhan had changed her position to her detriment in the expectation that the proposal to transfer lot 10 to her would be honoured, presumably by Vijay lodging the transfer with the Registrar of Titles for registration. Amaratunga JA said that there was no evidence of Bhan having changed her position – let alone changed it to her detriment – as a result of being given exhibit P10 by Vijay.

31. So why was Vijay prepared to transfer lot 10 to Bhan, which he must have been prepared to do in the light of exhibit P10? The trial judge made no express finding about that, but neither he nor either of the judges in the majority in the Court of Appeal referred to Bhan’s evidence about the understanding during Bhagirathi’s lifetime that Shiu would get the land on which his house was. Looking at the evidence as a whole, and such findings of fact which the trial judge did make, there can only have been one reason why Vijay was prepared to transfer lot 10 to Bhan, and that was because Vijay had wanted to honour the understanding (an understanding which Vijay never in terms denied) which Bhan said there had been while Bhagirathi was still alive that Shiu should get the land on which his house was.
    
32. It might be asked: why did Bhagirathi not mention that in his will? The answer to that might be that he did not think it necessary to do that because he thought that Vijay would honour the understanding. That, though, is speculation, and as Calanchini P rightly said, there was no evidence to support the existence of a secret trust. What is not speculation – because there is no other reason for him to have done so – is that Vijay was prepared to transfer lot 10 to Bhan because once the survey had been completed Vijay either wanted, or thought that he ought, to honour the understanding that Shiu should have the land on which his house was.
    

33. Prematilaka JA did not doubt that an understanding of the kind referred to by Bhan in her evidence had been reached. In para 73 of his judgment, he thought that it was clear that Shiu had incurred the expense of building the house and then extending it because of “some kind of understanding, if not an informal agreement or meeting of minds” that the land on which the house was built would one day be his. Prematilaka JA thought it “highly unlikely” that Shiu would have spent the amount of money he did without “some form of assurance” from Bhagirathi. Shiu would have been reassured that the understanding would be honoured by his continued occupation of the land even after what became lot 4 had been transferred to him, and both Bhagirathi before his death and Vijay after it had stood by and not protested when Shiu incurred the expenditure which he did. And in para 74 of his judgment, Prematilaka JA said that the agreement of 23 April 1987 would also have reassured Bhan that lot 10 would one day be hers.^[6]

The correct factual scenario

34. In the light of all this, the correct factual scenario was that which Prematilaka JA had in mind. There was indeed an understanding while Bhagirathi was alive that Shiu would get the land on which his house was.^[7] He paid at least for the materials when it was originally constructed in 1970, and it looks as if he paid the construction costs when it was extended in 1980. He never paid any rent for it either to Bhagirathi or to Vijay after Bhagirathi died. Following his own death, Bhan remained living in the house rent free. There was a dispute in 1987 when it was realised that the land on which the house was encroaching on the lot which was going to be transferred to Hari, but that was resolved by Bhan being allowed to continue to occupy that part of the lot in return for her paying the survey fees for that lot. All this time, Bhan’s occupation of the house, though perhaps not positively encouraged by Vijay as the new legal owner of the land, was at least tolerated: he made no demands for rent from her and did not ask her to leave. It must have been the case that all this gave her a good measure of reassurance that following the survey the land on which the house was would be transferred to her.
35. Neither Bhan nor Shiu ever had legal title to the land on which the house was, nor was there ever an enforceable agreement for the land to be transferred to her. But exhibit P10 was a document which, when lodged with the Registrar of Titles, would have given Bhan the legal title to lot 10. So by signing exhibit P10 and giving her a copy of it, Vijay made it clear to her that he was prepared to transfer the legal title to lot 10 to her. It was only in July 2005 – 35 years after moving into the house – that Bhan was informed that her occupation of the land was no longer tolerated. The question is whether, on that factual scenario, Bhan acquired an equitable interest in lot 10.
    

The legal principles to be applied to the correct factual scenario

36. The law in this area was explained by Prematilaka JA. Calanchini P understandably did not need to address the law in any detail because for him the absence of any enforceable agreement between Vijay and Bhan disposed of the case. Similarly, Amaratunga JA’s discussion of the law proceeded on a factual scenario which did not take into account the understanding that Shiu was to have the land on which on which his house was. Although I have considered the cases cited by Premalitaka JA, I prefer to discuss the law in my own words.
    
37. A constructive trust will arise where it would be unjust to allow the legal owner of an estate to deny that a particular member of his family has a claim to part of the land on the estate. One of the circumstances in which it might be unjust to do that is when there was, to use the words of Lord Bridge in Lloyds Bank PLC v Rosset [1990] UKHL 14; [1991] 1 AC 107 at p 132E, “any agreement, arrangement or understanding” that the land would be owned one day by the family member in question. Such an understanding does not have to be based on actual discussions between them. It may be inferred from what they actually did. Both the owner of the estate and the family member has to have had this understanding. In other words, the understanding needs to have reflected their common intention.
    
38. Even if such an understanding is established, a constructive trust will not necessarily have arisen. It will only have arisen if the family member has either acted to his detriment or changed his position significantly in reliance on that understanding. If the understanding was inferred from what the parties actually did rather than from any actual discussions between them, the parties’ conduct which gave rise to that inference may well be the same conduct which constituted the detriment which the family member suffered or his change of position.
    
39. If a constructive trust is to arise in connection with the ownership of land, the understanding in question will usually have to have been reached at the time when the property was acquired. But that is just a reflection of what usually happens. That is not a requirement for a constructive trust to be established. Thus, in cases where the land in question is part of an estate, the trust may arise as a result of the conduct over a sustained period of time of the legal owner towards the family member who is being permitted to occupy the land. Moreover, if there has been a change in the legal owner of the land at some stage that will not necessarily bring the understanding in question to an end. Thus, in such cases it is possible for the trust to have arisen as a result of the conduct of both the old owner and the new one, as well as the conduct of the family member both before and after the transfer of the legal title.
    

The application of these legal principles to the correct factual scenario

40. There was an understanding while Bhagirathi was alive that Shiu would get the land on which his house was. That is the only proper inference to be drawn from Bhan’s unchallenged evidence on the topic and the primary facts which the trial judge found. That understanding would have been between both Bhagirathi and Shiu – Bhagirathi because only he could bring it about and Shiu because it was in his favour. Other members of the family would have been aware about it – certainly Bhan because it was she who gave evidence about it, and Vijay because he was prepared to put the understanding into effect when he signed exhibit P10 and ensured that Bhan got a copy of it. Indeed, Vijay’s signing of exhibit P10 and ensuring that Bhan had a copy of it are – in addition to Bhan’s own evidence about the understanding – the most significant pieces of evidence from which such an understanding can properly be inferred. As I said earlier, why else would Vijay have been prepared to transfer lot 10 to Bhan?
    
41. This was an understanding which Vijay was prepared to go along with after Bhagirathi’s death. As the new legal owner of the land, he could have required Bhan to leave the house and move to what was to become lot 4 which had already been transferred to Shiu. But he did not. Instead she remained in the house on what became lot 10. Vijay must have tolerated her continued occupation of the house because he did nothing to remove her from it until very many years later. Indeed, far from seeking her removal from the house he was prepared to transfer the whole of lot 10 to her without seeking anything in return from her when he signed exhibit P10 and gave her a copy of it. In these circumstances, he was adopting the understanding which Bhagirathi had reached with Shiu and seeking to honour it by transferring lot 10 to Shiu’s widow. For the reasons which Prematilaka JA gave and which I have summarised in para 33 above, it was an understanding which Bhan thought would be honoured.
    
42. The next question is whether Shiu and subsequently Bhan acted to their detriment or changed their position significantly in reliance on that understanding. I think that they did. The undisputed evidence was that Shiu had paid at least the materials for the construction of the house in 1970, and it looks as if he paid the cost of extending it in 1980. Moreover, after Shiu’s death, Bhan (who presumably inherited what became lot 4) did not move her family to what became lot 4 either. Bhan wanted to keep the house on what became lot 10 as her home. That was capable of amounting to a significant change of position on her part. But for the understanding that the land on which the house was would be transferred to her as Shiu’s widow and the mother of his children, she may have moved elsewhere, whether to what became lot 4 or off the estate.
    
43. The final question, then, is whether in these circumstances it would be unjust to allow Vijay to deny that Bhan has a claim to lot 10. I have no doubt that it would. By the time Vijay first required Bhan to leave her home, she had been living in it for 35 years, and she had had the use of that part of lot 10 which was originally to be in lot 9 for almost 20 years. It had become her home and that of her children and her extended family. Her eviction from her home is not what Bhagirathi would have wanted in the light of the understanding he had reached with Shiu. In these circumstances, a constructive trust arose in which Bhan had an equitable interest lot 10. And since the trust arose as a result of an understanding between Bhagirathi and Shiu that Shiu would “get the land”, that was tantamount to an understanding that the legal title to the land would be transferred to him (or to his widow if he predeceased her). It means that Bhan’s remedy was for the legal title to lot 10 to be transferred to her.
    

The indefeasibility of Vijay’s title

44. But that is not the end of the story. Fiji has adopted the Torrens system of registration of title. Save where certain limited exceptions apply, registered title to land is indefeasible. Thus, the registration of Vijay’s title to lot 10 cannot be defeated by the constructive trust in favour of Bhan unless any of those exceptions apply. That is the effect of section 39(1) of the Land Transfer Act which provides, so far as is material:

“Notwithstanding the existence in any other person of any estate or interest ... which but for this Act might be held to be paramount or to have priority, the registered proprietor of any land ... shall, except in the case of fraud, hold the same subject to such encumbrances as may be notified on the folium of the register, constituted by the instrument of title thereto, but absolutely free from all other encumbrances whatsoever ...” (Emphasis supplied)

There then follows three exceptions, none of which are relevant to the present case. In these circumstances, Vijay’s registered title to lot 10 will have been defeated by the constructive trust in favour of Bhan if Vijay obtained its registration by fraud.

45. Having said that, there is another route by which Vijay’s registered title to lot 10 will have been defeated by the constructive trust in favour of Bhan, and that is by the “rights in personam” exception to indefeasibilty.^[8] Since the trial judge made no findings about the allegations of fraud on the part of Vijay, this has to be what he had in mind when he held that section 39 did not defeat the creation of a beneficial interest in equity. In brief, the rights in personam exception arises where (a) the registered proprietor knew of the facts which gave rise to someone else having an equitable interest in the land, and (b) he proceeded to register his title to the land despite that in circumstances in which it would be unconscionable for him to retain his registered interest in the land.
    

46. When one looks at (a) the undisputed facts, (b) such findings of fact as the trial judge made, and (c) such inferences as can properly be drawn from (a) and (b), it is, in my view, plain that Vijay knew of the facts which gave rise to Bhan’s equitable interest in lot 10. He knew of the understanding which Bhagirathi had reached with Shiu, he had been prepared to put that understanding into effect, he had been aware of the “contributions” made by Shiu and Bhan over the years (the cost of materials for the construction of the house, the cost of the extension to it, and the survey fees for lot 10 paid by Bhan), he had stood by and tolerated Bhan’s occupation of the house with her children and her extended family, and he had never required her to leave the house until 2005. It was in the light of all that that the trial judge found in para 63 of his judgment that “[i]n equity it is now unconscionable for [Vijay] to retain the legal title to [lot 10]”. There is no basis for challenging that conclusion: it was plainly one which was reasonably open to the trial judge to reach on the undisputed facts along with the judge’s findings of fact and the inferences which could properly be drawn from them. That meant that both of the elements necessary for the creation of the rights in personam exception were present here. In those circumstances, Vijay’s registered title was not indefeasible.

Conclusion

47. For these reasons, I would grant the Petitioner (Bhan) leave to appeal to the Supreme Court. I would do so on the basis that the case raises far-reaching questions of law – namely identifying the relevant legal principles which should govern the determination of the questions whether a constructive trust arose in favour of the Petitioner and whether the registered title of the First Respondent (Vijay) was indefeasible. In accordance with the Supreme Court’s usual practice, I would treat the application for leave to appeal as the hearing of the appeal. I would allow the appeal, I would set aside the order of the Court of Appeal, and I would restore the order of the trial judge. I would also order the First Respondent to pay to the Petitioner her costs of the appeals both to the Court of Appeal and the Supreme Court, which I would summarily assess overall at $10,000.
    

The Orders of the Court are:

(1) Application for leave to appeal granted.
(2) Appeal allowed.
(3) Order of the Court of Appeal set aside.
(4) Order of Balapatabendi J restored.
(5) First Respondent to pay to the Petitioner her costs of the appeals to the Court of Appeal and the Supreme Court summarily assessed at $10,000.

Hon. Mr. Justice Saleem Marsoof

Judge of the Supreme Court

Hon. Mr. Justice Suresh Chandra

Judge of the Supreme Court

Hon. Mr. Justice Brian Keith

Judge of the Supreme Court

---

^[1] It is unclear to what extent Shiu paid for the building of the house. There were references to him just paying for materials, and others not confining his expenditure to that.
^[2] In para 30 of his judgment, Prematilaka JA said that it had been common ground at the trial that despite what the deed had said Vijay had been paid $3,000 for the transfer of this land. I have not seen anything in the evidence about that – or anywhere else for that matter.
^[3] That is said by Bhan to have been in accordance with Bhagirathi’s wishes that the estate be divided up between his six sons. Vijay claims that it was simply a gesture of goodwill on his part on condition that the costs of dividing up the land would be borne by his brothers. His defence also said that it was on condition that they would make no further demands on him, but he did not actually say that in his evidence. I mention this only as part of the narrative but nothing turns on it.
^[4] The trial judge’s note of her evidence on this topic was: “Since 1970-1971 Understanding was that Shiu Prasad should get the land”.
^[5] There was a minor issue of fact on which Calanchini P disagreed with the trial judge. In para 14 of his judgment he said that in his evidence Mr Bulivou had admitted that he had never received any instructions from Vijay to survey that part of the land which became lot 10. I have not been able to see anything of that kind in the judge’s note of Mr Bulivou’s evidence. Mr Bulivou is recorded as having said that he did not get any written instructions from Vijay – presumably to carry out the survey – but that does not mean that Vijay did not give him such instructions. And if those instructions were to survey the whole of the land, that would have included that part of the land which became lot 10.
^[6] That would be so even if Vijay had signed the agreement of 23 April 1987 as a witness only.
^[7] Prematilaka JA thought that Bhan’s evidence had been that it was a representation from Bhagirathi which had given rise to this understanding: see para 85 of his judgment. I have not found that in the judge’s note of Bhan’s evidence. Indeed, I do not think that she ever said what it was that had given rise to that understanding.
^[8] See the discussion on the topic in, for example, Peter Butt, Land Law, 6^th ed (2010), paras 20 102-20 107. There may be a later edition of this work, but this is the latest edition in the Supreme Court library.