IN THE SOLE SOLOMON ISLANDS
COURT OF APPEAL
Civil Appeal No. 2 of 1989
ON ISLANDS HOUSING AUTHORITHORITY
Appellant
FIELDER ONIO
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Respondent
Conolly P, Kapi J.A., Savage J.A.
Delivered the 11th day of December 1989.
JUDGMENT OF THE COURT
The respondent brought an action for specific performance of an
agreement for the sale of registered land the property of the
appellant. The parcel in
question is identified as 191-034-76 at Baranaba on which was erected or to be erected an
L3 /B
- type house. The parcel was shown to the respondent's husband early in 1985 and on
19th April, 1985 the respondent wrote to
the appellant expressing interest. Her letter
continued- "Grateful if you could take necessary action to finalise arrangements
so
that I may arrange payments at this end."
The respondent had been informed that the price would be in the range
$26-28,000.00 but in 1986 the price appears to have been
increased to the range
$28-30,000.00. The respondent, her husband and their three children were living at the
relevant
time in a house at Mbokonavera. In 1986 there was a temporary separation between
husband and wife and the respondent and her
children moved out of that house. She
successfully tendered for a parcel of land which was also at Mbokonavera. On 19th
September, 1986 the appellant wrote to her employer Solomon Islands National Provident
Fund (which had been willing to assist
her with a loan under its Staff Housing Loans
Scheme, acknowledging that the L3/B type house at Baranaba had been allocated
to the
respondent. The writer, who was Mr. Leta, the Property/Development Manager and who wrote
on behalf of the General
Manager, went on to state that:
"Unless their current house at Mbokonavera is sold out and
transfer of fixed term estate is effected to the next owner
. . . and surrender of the
tendered land, I shall not be prepared to say anything on the L3/B as Board Policy is 'one
family per house'".
On 18th November, 1986 it was urged on the respondent's behalf by
S.I.N.P.F., that the appellant should agree in principle "to
approve the house currently
allocated to her and family at Baranaba" on confirmation that she had surrendered the
land she had won through
tender. The reply of the appellant of 21st November, 1986 however
insisted that the purchase of the L3/B house could only be
effected when transfer/sale of
the Mbokonavera fixed term estate had also been finalised.
Soon after this the appellant's Board allocated the Baranaba land to an
officer of the appellant to whom it has been transferred,
the transfer being duly
registered. The learned Chief Justice, who tried the action, accepted that there was no
suggestion
that the transferee was anything but a bona fide purchaser. He is not a party
to the litigation, and there is no suggestion that his conduct in any way made it
inequitable for him, as between the respondent and himself, to have taken
the transfer and
that nothing in his conduct could have called for an order of the High Court requiring him
to divest himself
in favour of the respondent.
The learned Chief Justice refers in his reasons for judgment to the
contention of the respondent that there was an oral agreement
for sale recorded in writing
about April 1985. This accords with the statement of claim which, by para. 1, set up an
oral
agreement "partly confirmed in writing made in or about April 1985 whereby the
present appellant agreed to sell and the
plaintiff agreed to buy a property situated at
Baranaba, Honiara being the fixed term estate in parcel no. 191-043-75."
It will be
noted that the description in the pleadings does not accord with that set out above.
However the error was noticed
and application was made by counsel for the respondent at
trial to amend the writ and the statement of claim. There was no objection
by counsel for
the appellant and, although the amendment has not been made, it may be taken that leave to
amend was given.
The pleading is barely satisfactory. A pleading which sets up a
contract for the sale of land, whether oral or in writing, should
identify the parties,
the land the subject matter of the alleged agreement, and the price, for these are the
essentials
of such a contract. See for example Megarry and Wade, The Law of Real Property
(4th Ed. ) at p. 543. In this state of the evidence,
counsel for the appellant, Miss
Corrin, had urged that no agreement was ever finalised. She referred to the conditions
referred to in the pleadings, and indeed in the correspondence, and she urged that the
price was uncertain, as also was the completion date. In our view the completion
date may be put to one side, that not being an essential term of the
contract, but the
uncertainty of the price ought to have been seen as a formidable obstacle to specific
performance, or
indeed to any finding that a contract of sale of the land in
question ever came into being. The learned Chief Justice correctly directed himself that
the test is, in general, an objective one, whether the parties have, to outward
appearance, agreed in the same terms.
His Lordship went on to make what appears to us to be the critical
finding, which is that on the balance of probabilities, the
respondent believed her offer
to buy at a price to be fixed within the range named, had been accepted. This may appear
to be a curious approach, but it was a response to the assertion by the appellant, that no
agreement could be made until its
Board had made the decision and it may be accepted that
if the Board of the appellant arms its officers with authority to negotiate,
they cannot
be heard to say that this ostensible authority will not lead to a concluded
contract. The fact remains that ultimately what must
be found is a concluded contract and
it is essential to that that the consideration be agreed. Before us, however, Miss Corrin
was concerned to contend, as indeed she had before the High Court, that the conditions
which are referred to in the correspondence,
namely the disposal of the house at
Mbokonavera and the surrender of the land within the same area, which the respondent had
won by tender, were not conditions of a concluded contract of sale, but rather were
conditions of the making of a contract
at all. While the correspondence lends weight to
the latter view, it is unnecessary to resolve the question.
The case sought to be made out for the respondent was, as has been
seen, that a concluded contract of sale came into existence in 1985. This, on the
evidence, could only have resulted from a discussion
between the respondent and Fugui, who
was then the Loans Officer. A Loans Officer does not seem, to us at least, a likely person
to have the authority of the appellant to make contracts of sale, but, putting that to one
side, if an agreement was. made
in 1985, it was at a price of $26-28,000.00. The
probability is against there having been such a contract, however, because
in
cross-examination the respondent agreed that, towards the end of 1986, the price was
nominated to her by Fugui as $28-30,000.00.
It is, of course, possible for the parties to
vary an existing agreement for sale. This case, however, is not one in which there
is
direct evidence of an agreement. Rather, the agreement found by the learned Chief Justice
is one to be inferred from
the circumstances. To us, at least, the fact that the price
changed without demur from the respondent, suggests that there was,
in truth, no
enforceable agreement. What his Lordship has found is a valid agreement between the
appellant and the respondent
for the transfer of the property, subject to the respondent's
ability to pay, which his Lordship found to be demonstrated, and
subject to her disposal
of the tendered land and the Mbokonavera house. At the time of trial she had already
surrendered
the first and was found to be clearly willing and ready to dispose of the
latter. It was therefore held that she succeeded.
The learned Judge found that damages
would not provide an adequate remedy, and realised that the position of the present owner
of the property, who had been in occupation for two years, must be taken into account. The
submission for the respondent
was that the present occupant was an employee of the
appellant, "in a better position to accommodate their employee"
if pressed for
specific performance. Counsel for the appellant pointed out that the present occupant was
the registered
owner, and that his title "should not be disturbed." The
submission is more likely to have been that it could not
be disturbed. In the result, a
decree for specific performance was pronounced, at a price of $33,724.00. Two months for
completion was ordered, with the specific object of allowing the respondent time to
complete the sale of the Mbokonavera land.
In our respectful opinion there are two objections to this
decree. The first is that it is not even suggested that there was a contract of sale
at an
agreed price of $33,724.00. The price in 1985, which is the date of the alleged contract,
was $26-28,000.00 and,
even if the statement of claim had been amended, to set up 1986
rather than 1985 as the date of the contract, the price in that
year became $28-30,000.00.
It is unnecessary to express any view as to whether a price range can be regarded as a
sufficiently
certain statement of the consideration. It is possible, and we express no
concluded opinion on the subject, that such an agreement
would be regarded by the Courts
as an agreement to sell at a maximum price of the that the price stipulated in the decree
was ever agreed. The learned Judge was informed by counsel for the appellant that the
price at which the present owner bought was the figure we have mentioned, and his Lordship
replied "That is clearly the price it should be sold for." Now, with all
respect, the remedy of specific
performance exists to enforce a contract made between the
parties. It is not a remedy in which the Court is free to invent a
contract or to vary the
terms of the contract of the parties in order to do what it thinks to be just.
The second objection which, to our minds, is fatal, is that it requires
the appellant to transfer to the respondent land to which
it has no title. The assumption
made by counsel for the respondent at the trial, was that in some fashion the appellant
would be able to persuade its employee to surrender the land, but, even if that were
correct, it is simply not right for a
Court to decree, as between two parties in
litigation, that the interest of a third should be sacrificed, unless there is a
reason,
at law or in equity, why the interest of the third party should be subordinated to
that of one of the litigating parties. For that to occur, it would, at the very least, be
necessary for the third party to be joined in the action. It would then be necessary for a
case to be pleaded and proved against
the third party. The finding to which we have
earlier alluded, that the present owner could not be regarded as other than a
bona fide
purchaser, means that there was no prospect of any such case being made out against the
present owner.
As Miss Corrin pointed out, the problem usually arises where a third
party has some rights over the subject matter of the contract.
Where the vendor has legal
authority, either to terminate the rights of the third party, or to compel his concurrence
or
co-operation, specific performance may obviously be decreed. Wroth v. Tyler
[1973] 1 All E.R. 897, a decision of Megarry J., is authority for the proposition that
where the vendor's right to require the concurrence of the
third party involves his
engaging in difficult and expensive litigation, specific performance is unlikely to be
decreed.
Where, however, the vendor has no legal right, even by engaging in litigation, to
compel the concurrence of the third party,
specific performance will not be decreed. In
the case to which we have just referred, Megarry J. at p. 911, accepted the correctness
of
the following statement from Fry on Specific Performance (6th Ed.) at p. 466:-
"As the consent of the third party is, or may be a thing
impossible to procure, a defendant who has entered into a contract
for the performance of
which such a consent is necessary, will not, in case such consent cannot be procured, be
decreed to obtain it and thus perform an impossibility."
The only way in which the present owner of this land could be compelled
to make it available for conveyance by the appellant
to the respondent would, in the
circumstances of this case, be by an exercise of the appellant's influence over the owner,
as his employer. This would obviously be quite improper, and the Court would not lend
itself to a decree which might have
this consequence.
It follows that, in our respectful opinion, the decree cannot be
supported.
There was no alternative claim for damages in lieu of specific
performance and no evidence which would have enabled such damages
to be assessed. In any
case the decision of the High Court means that a contract for sale at a price was not
found. There
was therefore no basis for an award of damages.
We would allow the appeal, and set aside the judgment of, the High Court. In lieu,
thereof, judgment should be entered in the
action for the Appellant with costs to be
taxed.
BY THE COURT
per P.D. CONNOLLY P.
