Development Bank of Kiribati v Taukaban - judgment [2005] KIHC 161; Civil Case 59 of 2005 (23 December 2005)

IN THE HIGH COURT OF KIRIBATI
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

High Court Civil Case No. 59 of 2005

Between:

DEVELOPMENT BANK OF KIRIBATI
Applicant

And:

TAATE TAUKABAN
1st Respondent

TERETIA TEKEE FOR BROTHERS AND SISTERS
2nd Respondent

For the Applicant: Mr Birimaka Tekanene
For the respondents: Mr Glenn Boswell & Mr Aomoro Amten

Date of Hearing: 20 December 2005

JUDGMENT

The first respondent, Nei Taate Taukaban, gave a “Landowner Legal Charge” over her land Nanoiaki 771i to the applicant Bank as security for a loan of $28,879 to Ereata Teuru. The South Tarawa Lands Court in CN 119/00 confirmed the transaction on 10 August 2000.

On 21 September 2000 in CN 230/00 Nei Taate was again before the South Tarawa Lands Court: this time to distribute the same land among her 10 issue. No mention was made of the encumbrance to the DBK approved in CN 119/00. The Court confirmed the distribution.

The applicant according to paragraph 5 of the affidavit of Batitea Tekanito (unsworn but admitted by consent) took no action until 2004 or may be earlier this year, to recover its loan (or the outstanding balance – I do not know which). Search was made in the Archives and the purported distribution to Nei Taate’s issue discovered. [Ironically one of Nei Taate’s issue, Marewenteraoi Tekee, had in CN 346/03 given security over his 1/10 share of his mother’s land to the DBK but even then the DBK did not find out about the earlier dealings.]

The DBK has now applied for orders:-

(a) An order for certiorari to quash the decision of the Single Magistrate Court in C230/00 sitting at South Tarawa Land Magistrate Court on 21st September 2000.

(b) That the decision in C119/00 is restored and that the land Nanoiaki 777i which is subject to a security agreement and which is now fragmented into 10 plots remain the security until the loan is recovered.

(c) A declaration that the transfer of title to the Second Defendants made in subsequent proceedings is null and void pursuant to DBK Act section 38.....

Section 38 of the Development Bank of Kiribati Act 1986:-

No property over which the Bank has a security under this Act may be assigned, transferred, sold, leased, subleased, mortgaged ------ or otherwise dealt with without the written approval of the Bank, and any assignment, transfer, sale, lease, sublease or dealing entered into contrary to this section is void and of no effect.

Mr Tekanene relied on the section.

Messrs Boswell and Amten for the respondents argued that the proceedings in CN 119/00 miscarried and based their argument on sections 5(3) of the Native Lands Ordinance, sections 4 and 14 of the Native Lands Code and section 58 of the Magistrates Court Ordinance. The proceedings, they argued, having miscarried the judgment in CN 119/00 was void and there was nothing to which section 38 of the DBK Act could apply.

The crux of their argument lay in these relevant parts of section 4 of the Native Lands Code:-

4(i) An owner’s order disposing of his property during his lifetime may be allowed by the court if it complies with this Lands Code.......

(ii) The court shall first enquire into the opinion of the other children or next-of-kin of the owner before approving such a distribution or gift.

Mr Boswell argued that all issue of Nei Taate should have been asked their opinion before the court in CN 119/00 confirmed the encumbrance of the land in favour of the Bank. He could not give any authority to support the argument.

The answer to Mr Boswell’s argument lies in the words “disposing of” in section 4(i) of the Code.

The Concise Oxford Dictionary gives as one meaning of “dispose” to “get rid of”.

Stroud’s Judicial Dictionary (4th edition) in its definition of “incumbrance” cites Romer J in Jones v Barnett ((1899) 1 Ch 620), “In Wharton’s Law Lexicon I find ‘incumbrance’ defined as being, a Claim, Lien, or Liability, attached to property’:- ....” Not a disposition.

Nei Taate did not “get rid of” the land by giving an encumbrance over it. She did not “dispose of” her land. What she did and what was confirmed in CN 119/00 was to give an encumbrance to the DBK over her title to the land. That was not a disposition of the land at all: the land still remained hers.

Section 14 of the Code does not apply. Nei Taate was not “disposing” of her land when she went to the court in CN 119/00.

Mr Amten argued that section 58 of the Magistrates Court Ordinance prohibits “every attempt to transfer, transmit or otherwise deal with native land” unless “in accordance with the provisions of the Lands Code” or “the local customary law”. This, submitted Mr Amten, reinforced the argument that, as all the issue were not consulted, then the transaction purported to be confirmed in CN 119/00 was prohibited.

I suggest the answer to Mr Amten’s argument is that section 58 is procedural, not substantive: it merely sets out the procedure to be followed in a land transaction: land transactions are to be considered at the magistrates’ court.

I am glad to have been able to come to this conclusion as otherwise it would have made more complicated every loan for which land is a security: all issue of the person giving the security would have to be consulted by the court before the loan could be approved: a most cumbersome process.

The proceedings in CN 119/00 were in order.

This takes away the respondents’ argument that section 38 of the DBK Act does not apply because the proceedings in CN 119/00 were a nullity. The proceedings were not a nullity. Section 38 does apply.

The result is that pursuant to section 38 the distribution of the land to Nei Taate’s issue in CN 230/00 “is void and of no effect” because it was “without the written approval of the Bank”.

The application for certiorari is granted. I shall hear the parties on the order I should make.

Dated the 23rd day of December 2005

THE HON ROBIN MILLHOUSE QC
Chief Justice