Kuper v Matai [2013] SBCA 13; SICA CAC 08 of 2013 (8 November 2013)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION:	Appeal from Judgment of the High Court of Solomon Islands (Mwanesalua J)
COURT FILE NUMBER:	Civil Appeal Case No. 08 of 2013 (On Appeal from High Court Civil Case No.159 of 2010)
DATE OF HEARING:	31st October 2013
DATE OF JUDGMENT:	08th November 2013
THE COURT:	Williams JA, Acting President Sir John Hansen, JA Sir Gordon Ward, JA
PARTIES:	Chris Kuper Sally Kuper Appellants -V- Martin Matai Rose Matai Respondents
ADVOCATES: Appellant: Respondent:	Mr Dwane Tigulu Mr Philip Tegavota
KEY WORDS:	Oral contract for sale of land; specific performances;
ALLOWED/DISMISSED:	Allowed
PAGES:	1 - 5

JUDGMENT OF THE COURT

1. The order for specific performance is set aside.
   

B. the registration of the title in the names of the respondents as owners of Fixed Term Estate Parcel Number 191-017-48 is hereby rectified by cancelling the names of the said respondents from the register, and registering the names of both appellants as joint owners of the said property.

C. The appellants are to repay to the respondents money in the sum of $230,000 together with interest on $200,000 from 9 October 2007 until 29 September 2010; on $10,000 from 15 June 2007 to 29 September 2010; and on $20,000 from 26 February 2008 to 29 September 2010. The interest will be at the rate set by the Solomon Islands Courts (Civil Procedure) Rules 2007.

4. There will be interest on $230,000 from the date of the handing down of this appeal until payment.
   
5. Costs in the High Court and on the appeal to the appellants.
   

[1] This is an appeal against the decision of Mwanesalua J, entered on 17 May 2013 in favour of the respondents.

Background

[2] The appellants, through Mrs Kuper’s employment, had the opportunity to purchase a property. This led to discussions with the respondents. The respondents allege that an oral contract was entered into whereby they would fund the purchase price of $200,000, and once the property had been registered in the appellants’ name it would be transferred to the respondents. They further allege that they agreed to pay a commission to the appellants of $30,000 for the transaction.

[3] The appellants contended that the $200,000 was an advance to enable them to purchase the property and that the $30,000 was made up of a $10,000 Christmas present and the balance was for assistance on certain small projects of Mrs Kuper.

[4] In their proceedings the respondents’ sought specific performance of the oral agreement, rectification of the register and, in the alternative, a money judgment of $230,000.00 together with interest thereon.

The judgment

[5] The Judge accepted the evidence of the respondents and confirmed the oral contract. He rejected the evidence of the appellants. He ordered in favour of the respondents specific performance of the oral agreement; rectification of the title in the name of the appellants by cancelling the names of the appellants from the register and registering the names of both respondents as joint owners of the said property; alternatively a money judgment in the sum of $230,000.00: and costs

[6] He failed to address the appellants’ submission that this was an oral contract for the sale of land that could only be enforceable in the limited circumstances of part performance provided by the Lands and Title Act. He also found fraud on the part of the appellants.

Decision

[7] This is a relatively straightforward case, and we are obliged to counsel for the sensible concessions made. The matter is governed by s 117(2) of the Lands and Titles Act, which reads:

(2) Nothing in this section shall be construed as preventing any unregistered instrument from operating as a contract, but no action may be brought upon any contract for the disposition of any interest unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and is signed by the party to be charged or by some other person thereunto by him lawfully authorised:

Provided that such an action shall not be prevented by reason only of the absence of writing, where an intending purchaser or lessee who has performed or is willing to perform his part of a contract –

(i) has in part performance of the contract taken possession of the property or any part thereof; or

(ii) being already in possession, continues in possession in part performance of the contract and has done some other act in furtherance of the contract.

[8] It is common ground this was an oral contract for the disposition of an interest in land. Mr Tegavota responsibly conceded that neither of the matters set out in the proviso to s 117(2) above that could give rise to part performance existed on the evidence in this case. He submitted that his clients had attempted to gain possession, but because the appellants were in possession, this proved impossible.

[9] It follows the Judge, who failed to address s 117(2) in his judgment, had no power to order specific performance. In fact, the matter goes further, because there was no evidential basis to bring the action for specific performance, the absence of a written agreement or part performance being a complete bar to such an action for disposition being brought.

[10] There is an also an allegation of fraud in the pleadings, based on the failure of the appellants to transfer the title to the respondents. In this case, there is simply no evidence of fraud. A failure to comply with the terms of an agreement, on its own, does not establish fraud. It will be an extremely rare case where the breach of an agreement, or alleged agreement, amounts to fraud. Certainly, in the circumstances of this case, fraud was not proved.

[11] The appellants acknowledged in their amended defence that the respondents were entitled to their money back. The appellants further plead that they were prepared to repay at least $200,000.00, but the respondents refused, insisting on a transfer of title instead. Mr Tigulu responsibly accepted that in this case there was a total failure of consideration of the oral contract, and on that basis the money judgment was properly entered against his client.

[12] There was a discussion in relation to interest, and again we are grateful to the responsible concessions made by counsel. Mr Tigulu accepted that there should be interest on the various sums from the date of payment to the appellants until the date of the amended statement of defence. Mr Tegavota accepted that on behalf of his clients.

[13] Even on the best case for the respondents, there was no basis to bring proceedings for specific performance. Fraud was never available on the evidence. Payment of the money was offered to the respondents. It follows that the appellants must be entitled to costs in the Court below and in this Court.

[14] Accordingly, the appeal will be allowed, and:

1. The order for specific performance is set aside.
2. The registration of the title in the names of the respondents as owners of Fixed Term Estate Parcel Number 191-017-48 is hereby rectified by cancelling the names of the said respondents from the register, and registering the names of both appellants as joint owners of the said property.
3. The appellants are to repay to the respondents money in the sum of $230,000 together with interest on $200,000 from 9 October 2007 until 29 September 2010; on $10,000 from 15 June 2007 to 29 September 2010; and on $20,000 from 26 February 2008 to 29 September 2010. The interest will be at the rate set by the Solomon Islands Courts (Civil Procedure) Rules 2007.
4. There will be interest on $230,000 from the date of the handing down of this appeal until payment.
5. Costs in the High Court and on the appeal to the appellants.
   

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Williams J A,
Acting President of the Court of Appeal

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Sir John Hansen JA
Member

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Sir Gordon Ward JA
Member