Zhong Xing Investment (SI) Ltd v CP Homes Ltd [1997] SBHC 21; HC-CC 243 of 1996 (21 April 1997)

HIGH COURT OF SOLOMON ISLANDS
Civil Case No. 243 of 1996

ZHONG XING INVESTMENT (SI) LIMITED
TRADING AS DALSOL LIMITED

v

C P HOMES LIMITED,
JOHN WALLRATH
(TRADING AS ISLAND TROPICAL TIMBERS)

High Court of Solomon Islands
Before: Lungole-Awich, J
Civil Case No. 243 of 1996

Hearing: 26/3/1997
Judgment: 21/4/1997

Counsel: G Suri for the plaintiff;
A Radclyffe for the Defendants

JUDGMENT

(LUNGOLE-AWICH, J): This case, filed at court on 23.8.1996, was a direct result of dereliction of duty by the persons who were Commissioners of Lands during the years 1995 and 1996. Two persons were Commissioners during the period; one replaced the other. By the time of trial of the case, the replacement Commissioner had ceased to be Commissioner.

The subject of the suit, land parcel No. 192-010-124 (lot 2073) was first alienated by the Commissioner of Lands by grant of fixed term estate for 50 years, to one Peter Henrix Kwanae. It was common cause, the instrument of grant was not put in evidence. The grant was registered on the 7 December 1992. The 50 year period was stated in exhibit No. PWH ZL1 and PWH ZL2 as running "from 1.3.1990". Mr. Kawanae, the grantee was to pay rent of $300 per year. It was a condition that he would not in 5 years commencing on 7.12.1992 transfer, lease or sublease the parcel. Another condition required him to develop the land for industrial use by putting up a building valued at "$A80,000," or more. Upon grant Mr. Kwanae was to pay, in addition to that year's rent of $50, sums of money for premium, survey fees, registration fees and stamp duty. The total sum payable upon grant was $2,939. He was notified in the letter of the Commissioner dated 5.3.1992. Mr. Kwanae completed paying the sums on 19.5.1992 and only after a final letter of demand dated 8.5.1992 had been sent to him. On 20.5.1993, just 5 months after the grant had been registered, Mr. Kwanae applied for cancellation of the condition not to transfer. At that time he was in arrears in the payment of the annual rent. On 28.5.1993, 8 days after, he had the land transferred to Zhong Xing Investment (SI) Limited, the plaintiff in this case, for consideration of $60,000. Mr. Kwanae made a huge profit out of his total expenditure of just $3,239. The land had on it a small house which the plaintiff used for storing machinery and as sleeping house for its workers. One wonders whether the Commissioner ever tried to assess the ability of Mr. Kwanae to pay the modest annual rent of $300 or to develop the land as required. Did it ever occur to the Commissioner that it might have been the intention of Mr. Kwanae to simply obtain the grant and sell the estate at huge profit as indeed he did? It seems to me that there were facts that showed that Mr. Kwanae wanted the land for sale for profit and not for development for industrial purpose as required in the grant, and the Commissioner simply turned blind eye on those facts.

Worse dereliction was to come. After the transfer on 28.5.1993, to Zhong Xing Investment (SI) Limited, the Commissioner did not bother to find out whether the condition to developed the land was complied with or whether effort was being made to develop the land so as to comply with the condition. His attention was only drawn to the land by an application by the first defendant, CP Homes Limited, in March 1996 for the same land. The first defendant thought that the land was vacant and could be allocated to it. That was, some 50 months after the initial grant and some 46 months after the transfer to the plaintiff. In fact even the annual rent was in arrears; the Commissioner had not demanded the arrears. The plaintiff, according to official receipts, exhibits No.'s PWH ZL3, 4 and 5, paid the arrears only on 4.11.1996, 14.11.1996 and 28.1.1997, after this case had commenced. If the Commissioner was conscious of his duty he would have at least enforced the condition to develop in early 1995 or would have ended the grant on account of failure to develop the land and or failure to pay the annual rent.

When the first defendant draw the attention of the Commissioner to the land, which by then had been transferred to the plaintiff, and the Commissioner decided to have the grant forfeited, he did not do a good job of it. Evidence about giving notice before forfeiture, required under section 128 of the Land and Titles Act was unreliable. The office of the Registrar General to which it was copied, did not receive a copy and there was no receipt acknowledging that the notice was sent to the plaintiff by registered mail as required. The Registrar General and not the Commissioner of Lands is responsible for registering interests in land and for maintaining the register, notice to him is required. Learned counsel Mr. Radclyffe for the defendants conceded that there was no proof of the notice having been sent. The Commissioner therefore proceeded to make offer of grant to the first defendant before the forfeiture had been effected and the interest of the plaintiff had been effectively cancelled in terms of section 100 of the Act. Learned counsel Mr. Suri for the plaintiff rightly submitted that registered interest in land can only be defeated in manners stated therein. It is in evidence that unto 20.3.1997, the date of the affidavit of Pelu Haelo, Deputy Registrar General, the plaintiff was shown on the Fixed Term Estate Register as the registered owner of the estate in parcel No. 192-010-124. That would have been the position on the date of the new grant made by the Commissioner to the first defendant by instrument of grant dated 16.9.1996, now exhibit No. DWET13. The grant to the first defendant cannot have any legal effect whatsoever. Moreover, it requires explanation as to whether that second grant was made without impropriety. A copy of it was not left on the Commissioner's office file nor was a copy sent to the Registrar General. The first defendant has no title whatsoever to defeat that of the plaintiff. That means he had no authority to allow the second defendant to enter upon the land parcel. The plaintiff had not lost title, and had not lost possession of the land. It had a house or hut on it even if it were to be suggested that the house or hut had been built by the first grantee, Mr. Kwanae.

In contrast to the dereliction of duty by the last two Commissioners of Lands, the present Acting Commissioner, Mr. Eliam Tanirono who is also the Permanent Secretary, and was witness No.DW1 in court, portrayed high sense of responsibility. He related with ease and clarity what he understood to be the duties of the Commissioner and practices in the office of the Commissioner of Lands. Important in this case, he stated that the fact of sending out a document by registered mail would be recorded on the file. I add that post office acknowledgment receipt would have been issued and the proper place to keep it would be on the file.

The plaintiff has alleged trespass on the port of the two defendants for the plaintiff's claim for restoration of possession of the land, permanent Injunction against the defendants not to enter the land and mense profit or damages. The defendants in their pleadings do not deny that they have entered upon the land, parcel 192-010-124. In fact they admitted. The first defendant says it has entered the land by reason of superior title because it has obtained a recent grant of estate from the Commissioner. It has now erected boundary fence around the land. The second, in his pleading, says he is on the land by authority of the first defendant. I have already decided that the instrument of grant to the first defendant is defective and that the first defendant has no right whatsoever in the land. That means that the first defendant could not lawfully authorise the second defendant to enter upon the land. Both defendants ore trespassers. Action for trespass is founded in possession by the plaintiff. It con also be founded in title which gives the plaintiff right to possession, see the cases of Marine (Emsworth) Limited -v- Gilford [1968] 1 All ER 979 and Townend v. Askern Coal and Iron Co [1934] Ch. 463. In the latter case, the plaintiff founded his claim of trespass in the fact that he owned fee simple in the land from which coal was extracted. In this case the plaintiff is entitled to compensation against both defendants and to order of court evicting both defendants.

Trespass is actionable per me. The plaintiff need not prove damages. A plaintiff who proves damages is of course better off because he obtains award of damages beyond the usual. In this case, land parcel No. 192-010-124 is at Ranadi in Honiara Town. It is designated as an industrial land. Trespass upon it cannot be met by award of only nominal damages as submitted by counsel for the defendants. There was evidence that the second defendants were on the land and fenced it off thereby keeping the plaintiff out of the land. The plaintiff could have used it for gain. There was also evidence that the second defendant was using the land for keeping some machinery, a commercial purpose. I do not think that a trespasser should be allowed to derive value from trespassed land and escape paying in damages, compensation sum that would take into account the value unlawfully gained by the trespasser. I agree with counsel for the defendants that mesne profit is a terminology applicable to a landlord that would have rented his land, but for the occupation in issue. I however think that rental value of land is not totally irrelevant in the consideration of damages in the event of trespass. It represents prospective loss to the plaintiff. In the Townend v. Askern case cited above, the plaintiff was awarded the value of the coal extracted. In my view that represented the loss to the plaintiff. It was not a punitive award, the trespass of the defendant was treated as inadvertent trespass. I regard the trespass here not as fraudulent but inadvertent, nonetheless the award that I make must represent the loss to the plaintiff. Rent value of parcel 192-010-124 is between $1,000 to $1,500 per month as shown in the valuation certificates. That represents the monthly earning the plaintiff would have made had the parcel been rented from him. It therefore represents the loss to him. The defendants hove been upon the land for almost 13 months and continued in occupation even after this case had commenced and they knew that the plaintiff remained the registered estate holder on the register. They have erected fence, although the fence might have improved the value. The damages I consider appropriate here is $18,000. I have given thought to ordering that the defendants' liability be joint and several. I have been unable to decide so because there are insufficient facts about the relationship between the two defendants. They did not testify and did not call witnesses except the Acting Commissioner of Lands who was not in the office during the transactions that are in issue, his evidence was only about general procedure. A fair order in the circumstances is that each defendant is to pay $9,000 of the $18,000 awarded to the plaintiff. The defendants are required to vacate the land parcel immediately. Further they are enjoined not to enter the land except with the consent of the plaintiff.

The first defendant has erected fence on the property. I raised the question as to whether it would have become a fixture on the parcel of land and therefore part of the land in accordance with the doctrine of quicquid plantatur solo solo cedit. Both counsel seemed not prepared for that. It was therefore not an issue in the case. Since the defendants did not enter the land fraudulently, although once the plaintiff demanded that they vacate they should have, I order that defendants may remove the fence, but without causing damage to the land. They are given 30 days to do so. After 30 days from today the plaintiff may keep the fence. The defendants' entry upon the land for the purpose of removing their belongings and fence within 30 days will not be regarded as trespass.

The decision in this case does not stop the Commissioner of Lands from commencing forfeiture action against the plaintiff should the Commissioner consider that a condition in the grant has been breached. In that event the Commissioner will have to comply with the requirements in the Land and Titles Act.

The office file of the Commissioner of Lands, of reference No.2073/VI/H for land parcel 192-010-124, now exhibit No.DWET14 in court is to be returned to the Commissioner.

The plaintiff has succeeded in its case, it is entitled to costs against both defendants.

Dated this 21 at day of April 1997

S. Lungole-Awich
JUDGE

LIST OF EXHIBITS

CIVIL CASE NO. 243 OF 1996
ZHONG XING INVESTMENT (SI) LTD -V- CP HOMES LIMITED
AND JOHN WALLRATH

1. Transfer Instrument - PWHZ L1.

2. Certificate of title (Copy of Fixed Term Estate Register for Parcel No. 192-010-124) - PWHZ L2.

3. Official Receipt No. B578563 dated 4.11.96 for $676.80-Rent for 1994 - 1995.

4. Official Receipt No. B578564 dated 14.11.96 for $374.05-Rent for 1996.

5. Official Receipt No. B586524 dated 28.1.97 for $1,205.43-Rent for 1997.

6. Letter dated 16.7.96 signed by J. W. Naghe for Commissioner of Lands, addressed to the Manager, CP

Homes, P.O. Box 251, Honiara.

7. Copy of drawing of plan on land parcel No.192-010-124, lot 2073, bearing stamp of Dalsol.

8A. Valuation letter dated 6.2.97 written on letterhead of S C Saunders O'Connor and Co. Ltd; signed by M R O'Connor, addressed to Dalsol Ltd.

8B. Valuation letter dated 26.2.1997 written on letter head of CC Stevenson Architects, signed by Steven Vanzetto, addressed to Dalsol Ltd.

9. Letter dated 26.3.96 signed by John M Hikimae on behalf of Commissioner of Lands, addressed to CP Homes Ltd, P.O. Box 251, Honiara.

DWET 10. Notice Before Forfeiture, Lot 2073/VI/H signed on 13.12.94 by someone described as Commissioner of Lands.

DWET 11. Letter dated 27.3.96 written by CP Homes to Commissioner accepting offer of Parcel No. 192-010-124 Lot 2073/VI/H.

DWET 12. Official Receipt No. B533268 dated 28.3.96 for sums of $2,800, $300,$50.00 $200 and $4.75, totalling $3,354.75.

DWET 13. Grant of a Fixed Term Estate by Commissioner of Lands to CP Homes Ltd, dated 16.9.96.

DWET 14. Office File, reference 2073/VI/H for parcel No. 192-010-124.