Paza v Sivoro [2018] SBCA 2; SICOA-CAC 16 of 2017 (11 May 2018)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION:	Appeal from Judgment of The High Court of Solomon Islands (Faukona J)
COURT FILE NUMBER:	Civil Appeal Case No.16 of 2017 (On Appeal from High Court Civil Case No. CC 298 of 2011)
DATE OF HEARING:	2 May 2018
DATE OF JUDGMENT:	11 May 2018
THE COURT:	Goldsbrough P Hansen JA Young JA
PARTIES: FIRST APPELLANT: SECOND APPELLANT: RESPONDENT:	MAMU HEBALA PAZA & ZOME ENTERPRISES LIMITED AND BARNEY SIVORO
ADVOCATES: APPELLANT: RESPONDENT:	J. Sullivan QC R. Kingmele Mr. G. Fa’aitoa
KEY WORDS:	Effect of S114(g) and S117 (1) and (2) of Lands and Titles Act
EXTEMPORE/RESERVED:	RESERVED
ALLOWED/DISMISSED	ALLOWED
PAGES	1- 9

JUDGMENT OF THE COURT

Introduction

1. Barney Sivoro is the registered proprietor of the land at 192-004-627 near Henderson Airport. Mr Paza and Zome Enterprises Ltd occupy part of this land along with adjacent land and have constructed a building on the land.
   
2. In the High Court Mr Sivoro obtained an order for possession of the land and removal of the Paza/Zome building.
   
3. The appellants’ case at trial was that, prior to the registration of Mr Sivoro’s interest in the land, the Commissioner of Lands had already agreed to transfer the land to them. The appellants therefore disputed Mr Sivoro’s right to possession and by way of counter claim said Mr Sivoro had obtained title by fraud and thus sought rectification of the title and registration in their name.
   
4. The Judge in the High Court found the appellants were trespassers and rejected the appellant’s counterclaim.
   

This Appeal

5. The appellants in this appeal submit the Judge in the High Court;
   
   • (a) failed to consider the appellants’ evidence that they had lawful possession of the land as a result of the consent and permission of the owner. Mr Sivoro knew the appellants were, in possession of the land and had constructed a building on the land, when he took the fixed term estate.
     
   • (b) The Judge erred when he concluded that without a written contract the Commissioner could not lawfully allow the appellants to enter and develop the land.
     
   • (c) The Judge failed to consider that the claim for rectification was based on mistake as well as a rejected allegation of fraud.

Background

6. In December 2005 the appellants’ evidence was that they were offered land, by way of a fixed term estate, by the Commissioner of Lands, behind the Honiara Secondary School. The offer was accepted and fees paid. Shortly afterwards, in early 2006, the appellants say the Commissioner asked them to surrender this site and identify an alternative site for development. The Commissioner said the appellants could transfer the fees paid on the school site to the new site.
   
7. In April 2007 an alternative site was identified. The appellants say the site was approved by the Guadalcanal Local Government and the Planning Division for commercial development. The Commissioner of Lands also approved the development of what was then Lot 1961 and Lot 1965 as the alternative to the Honiara Secondary School site. The appellants then took possession of the two lots and constructed four buildings across the two lots. They believed the two lots would be combined into one title. They say they waited for this amalgamation before a FTE was completed. Subsequently the two lots became Parcel Numbers 192-004-627 and 192-004-1061.
   
8. In April 2009 the Commissioner offered Mr Sivoro a Fixed Term Estate in Parcel Number 192-004-627. Mr Sivoro paid the required fee and on 24 January 2011 he became the registered owner of the FTE. It seems clear from Mr Sivoro’s own evidence that, from as early as 2009 he knew the appellants were occupying the land.
   
9. In their pleadings the appellants said they had been offered the land by the Commissioner and they had taken possession based on that offer and acceptance well before any contract between Mr Sivoro and the Commissioner. Further they said the person who purported to act on behalf of the Commissioner and to transfer the fixed term estate to Mr Sivoro had no authority to do so and that transfer was fraudulent.
   
10. The appellants sought rectification of the title by cancellation of Mr Sivoro’s interest in the land. They defended Mr Sivoro’s claim for possession on the basis they were not trespassers.
    

Judgment Appealed Against

11. The Judge in the High Court concluded that there was no lawful arrangement between the appellants and the Commissioner relating to Parcel 627. He said the appellants were not entitled to take possession of crown land based on verbal advice from the Commissioner. The process that had to be followed was an application, if accepted a formal offer by the Commissioner with relevant fees paid. This process had not been followed and the Commissioner had not followed the process provided for under S4(4) of the Land and Titles Act.
    
12. The Judge therefore concluded the appellant’s had no right to occupy the land. Mr Sivoro had complied with the statutory process when he obtained the FTE. Thus he was entitled to possession of the land. The appellants’ entry onto and the construction on the land without title was a trespass.
    
13. The Judge rejected the claim Mr Sivoro had obtained the title by fraud. He said there was no evidence to support the claim in relation to the transfer of Parcel 627 to Mr. Sivoro.
    
14. The respondents supported the Judge’s decision. They submit there was no evidence that the appellants received a grant of 627 from the Commissioner. The appellants’ claims were mere assertions. They were squatters on the land and the respondent was the registered owner and entitled to possession of the land. Nor was there any evidence the Commissioner ever offered the land in Parcel 627 to the appellants. As to the counterclaim the only ground of challenge was fraud. The appellants did not prove fraud.
    

Discussion

15. We are satisfied the Judge was wrong to conclude that the only process by which an interest in land could be transferred from the Commissioner was a formal offer, acceptance and payment of fees as described by the Judge.
    
16. S4 (4) of the Lands and Titles Act gives the Commissioner power to deal in land on behalf of the government.

It provides:

The Commissioner shall have power to hold and deal in interest in land for and on behalf of the Government, and, subject to any general or special directions from the Minister, to execute for and on behalf of the Government any instrument relating to an interest in land.

17. The Commissioner held the land in question by way of perpetual estate. S112 (2) authorises the owner of a perpetual estate to dispose of it in any manner he thinks fit. Section 113 authorises fixed term estates. Section 114 considers interests which may override the interests of the registered owner of the land.
    
18. S114 provides (in part)
    

The owner of a registered interest in land shall hold such interest subject to such of the following overriding interests as may, for the time being, subsist and affect the same, without their being noted on the register.

[g] the rights of a person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and the rights are not disclosed.

19. Finally S117 (1) and (2) provides
    
    • (1) No registered interest in land shall be capable of being created or disposed of except in accordance with this Act and every attempt to create or dispose of such interest otherwise than in accordance with this Act shall be ineffectual to create, extinguish, transfer, vary or affect any such interest.
      
    • (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.
      
20. The Judge in the High Court proceeded on the basis that the appellant’s evidence as to the arrangement with the Commissioner regarding the two sections was truthful and accurate given there had been no challenge to that evidence at trial. Mr Paza’s evidence was that the Commissioner had agreed to the development of Lot 1961 and Lot 1965. These lots became parcels 192-004-627 and 192-004-1061. The Judge accepted that the Commissioner had given authority for the appellants to develop the two lots 1961 (now 1061) and Lot 1965 (now 627). We proceed on the same basis as the Judge in the High Court.
    
21. The Judge’s view was that this arrangement had no lawful effect because the Commissioner simply could not enter into such an arrangement.
    
22. The Judge’s factual conclusions however meant that at the time Mr Sivoro became the FTE owner of the land the appellants were in occupation of the land with the agreement of the Commissioner. Indeed by then the appellants had constructed a building on part 627.
    
23. The evidence of the appellants established a contract between them and the Commissioner. The fact that they did not have a registered interest over the land does not, as S117 (2) provides, prevent this arrangement operating as a contract. The limitation in S117 (2) is on actions on a contract for sale of the land where the contract is not in writing. For reasons we will give we are not concerned in this judgment as to whether the contract between the Commissioner and the appellants could result in the appellants obtaining a FTE in the land. We note as to this aspect the appellants have said they can bring themselves within S117 (2) (i) as someone who is in possession of the land and therefore has partially performed the contract. What S117 (2) does do, as relevant in this case. is ensure the oral contract between the appellants and the Commissioner continued to operate as a contract despite S117 (1).
    
24. Section 114 (g) of the Land Titles Act makes the rights of the registered owner of land subject to the rights of a person in actual occupation. Self evidently the occupation in (g) must be lawful occupation. Subsection (g) would not protect unlawful occupation of land. Here the evidence establishes lawful occupation by the appellants, an occupation approved by the owner of the perpetual estate.
    
25. In those circumstances Mr Sivoro’s interest as registered owner of a FTE was subject to the appellants’ prior occupation rights. And so Mr Sivoro was not entitled to have the appellants declared trespassers and to possession of the land. Nor was he entitled to an order that required the appellants to remove the building. This building, on the uncontested evidence of the appellants, was authorised by the Commissioner.
    
26. It follows therefore the appeal will be allowed as to the orders for possession of the property and removal of the buildings. We set aside the orders of the High Court declaring the appellants trespassers and ordering the removal of the building.
    
27. As to the counter-claim we agree with the appellants this will have to be reheard by the Court. The appellant’s case before us was that they had an enforceable contract for a FTE estate in the land before Mr Sivoro’s FTE. If this is established then they say the registration of Mr Sivoro’s interest was obtained by mistake and that the Court should rectify the land register under S229.
    
28. The Judge in the High Court did not directly deal with this issue. This was hardly surprising given his conclusion that the appellants had no lawful interest in the land and given that mistake was not pleaded as now alleged by the appellants.
    
29. The counter claim must be repleaded making it clear the grounds on which the appellants say they had an enforceable contract for an FTE interest with respect to the land. They will need to specify the basis on when they say Mr Sivoro’s interest should be rectified. The Commissioner of Lands as an interested party should also be joined to the proceedings.
    
30. In this case the Commissioner’s arrangement with the appellants were oral. We do not consider that was appropriate. The problems that have arisen in this case illustrate the dangers. The approach by the Commissioner in this case appears to be contrary to his own process of requiring written applications for FTEs and written notification of success or otherwise. Further where there is more than one applicant for an FTE with respect to the same piece of land, this Court has noted this has often resulted in litigation. We consider it may be wise for the Commissioner to follow his own formal process and ensure that any such process and decision as to who can take the FTE is transparent.
    

Result

31. The appeal is allowed.
    
    • (a) The orders in the High Court that the appellants are trespassers is quashed.
      
    • (b) The Judge’s order giving judgment for the respondents on the counterclaim is set aside.
      
    • (c) The counterclaim is reinstated and should be repleaded and then reheard in the High Court with the directions as set out in 28.
      
    • (d) The appellants are entitled to one set of costs as agreed or assessed with certification for Queens Counsel.
      

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Goldsbrough P
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Hansen JA

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Young JA