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High Court of Solomon Islands |
HIGH COURT OF SOLOMON ISLANDS
Civil Case Number 361 of 1999
JESSIE TIARE, CATHERINE TIARE AND ANTHONY TIARE
V.
Y. SATO COMPANY LIMITED
High Court of Solomon Islands
(Palmer J.)
Date of Hearing: 2nd July 2003
Date of Judgment: 2nd September 2003
Crystal Lawyers for the Plaintiffs
A. Radclyffe for the Defendant
PALMER J.: On 31st August 1999 his Lordship Kabui J. in Y. Sato and Company Limited v. Jessie Tiare, Catherine Tiare, Anthony Tiare and Another, Civil Case 133 of 1997 (“Y. Sato’s Case”) dismissed Y. Sato and Company Limited’s (“Y. Sato”) application for rectification of the Lands Register under section 209 of the Land and Titles Act (Cap. 133) and confirmed the title of the fixed-term estate in Parcel No. 191-035-134 (“the Property”) as having been correctly vested on Jessie Tiare, Catherine Tiare and Anthony Tiare (“the Tiares”) on 28th December 1983. His Lordship held that the Property had legally vested on the Tiares as joint owners by the law of succession as applicable in Solomon Islands. Y. Sato had challenged that registration as having been obtained by mistake. It claimed that the Property had been sold by the registered holder then Charles Tiare (deceased) to David Lenga who in turn sold it to them sometime in 1991 for $24,000-00. Shortly after selling the Property to David Lenga in 1983 Charles Tiare (deceased) passed away. In his judgment Kabui J.[1] had determined that the purported sale to David Lenga had never been completed. Any purported sale therefore by David Lenga in turn was a nullity and void and could not confer any valid title to Y. Sato.
After successfully beating off the challenge to its title in August 1999, the Tiares now come to court by Writ and Statement of Claim filed 2nd November 1999 to claim for “damages for the value of rental of the property since 1991 to the date the Defendant vacated the property on 11th October 1999” as amended. It was not in dispute Y. Sato had possession of the property from as early as 1991 after it had been “purchased” from David Lenga. During the hearing the Tiares confined their claims to the period from January 1994 to October 11th 1999. Y. Sato vacated the Property on or about 11th October 1999.
The Claim for the value of rental of the property
The first objection raised by learned Counsel Mr. Radclyffe against the claim of the Plaintiffs is that a claim for damages for rent does not exist in law. Learned Counsel also argues that there could not be any periodic tenancy either as there was no evidence of the existence of a prior lease between the parties. He asked the court to dismiss the action on that basis.
Unfortunately I cannot agree to that submission. Whilst the claim of the Plaintiff has not been pleaded in correct legal terms, the purpose, object and intention of the claim was fairly obvious. As early as February 1994 the Plaintiffs had notified the Defendant of their claim of right to possession of the Property as the holder of the registered title to the said Property. Defendant therefore has had notice (express knowledge) of the adverse legal claim of the Plaintiff and the very strong possibility/great risk that its own equitable claim may be defeated. But more importantly, having been registered as the legal owner of the estate on 28th December 1993, the Defendant was deemed by law to have had notice that is, put on inquiry regarding ownership of that title. Had the Defendant searched the Lands Registry Office, it would have ascertained the title of the Plaintiffs over the said Property. On 31st August 1999, Kabui J. had settled that issue once and for all; that the title of the Plaintiff was secure.
It was for that intervening period of 5 years and 9 months (69 months), in which the Plaintiffs had been deprived of use or possession of the said Property that they now apply to this court for relief. It was for that wrongful possession by the Defendant that they seek what they have described in their statement of claim, as damages for the value of rental of the Property. In reality, the Plaintiffs claim is for the value for the use or occupation of the said Property during that intervening period. In law, the value of such use or occupation of land is normally measured in terms of rents or profits. It appears that this was what was meant by the Plaintiffs in their claim for damages for rent. The proper legal term for such claims is a claim for mesne profits. A person that has been in wrong possession of a property over an intervening period is deemed in law to have profited from the use or occupation of that property in that period. And the way those profits are often measured is by way of rents foregone; that is, rental which the Plaintiffs could have received had the property been retained in their possession. Of-course if the Plaintiffs had not rented the property out, they could have resided in it. So it is the value of the loss of use or occupation of the said property that is in issue in this case. That was basically the claim of the Plaintiffs and so though I accept it has not been accurately pleaded in law I am not satisfied it can be described as having no basis in law.
Laches
The defence of laches was raised by the Defendant as an alternative argument. It was based on the equitable claim of a purported sale and purchase of the Property from David Lenga who in turn had purportedly purchased it from the original registered holder, Charles Tiare (deceased). It was based on the assumption that the sale was capable of conferring a valid title to the Property.
The Defendant says that during that intervening period, the Plaintiffs had been guilty of prolonged, inordinate and inexcusable delay in bringing this action and therefore should not be permitted to disturb the equitable possessory rights of the Defendant; that is be permitted to recover any form of relief for the period it was dispossessed of its Property.
The “doctrine of laches” is based upon the maxim that equity aids the vigilant and not the indolent or those who slumber on their rights. It is defined as neglect to assert a right or claim which, when taken together with lapse of time and other circumstances causes prejudice to an adverse party and operates as a bar in a court of equity (Black’s Law Dictionary[2]).
The Defendant relied on the case of Nwakobi v. Naked[3] in support of its defence of laches. The brief facts of that case are as follows. The Government of Nigeria held the radical title to a disputed land from 1900 to 1948. During that period two groups of people, the Onitshas and the Obosis settled on the land. During that period, the Obosis had carried out large scale occupation and building operations despite having been warned not to by the Government. In 1948 title to the land reverted to the original landowners, the Onitshas, who naturally required the eviction of the Obosis from the land. The Obosis resisted arguing that while the land was vested in the Crown, the Onitshas were debarred by the laches or acquiescence of their predecessors, the Crown from maintaining a suit for the purpose of disturbing the possession of the Obosi community. They argued that the Onitshas had delayed in challenging any usufructuary rights arising from their occupation over the said land and accordingly those rights could not be disturbed.
This was more or less the same argument raised in this case by the Defendant, that whilst the Defendant was in possession of the Property, the Plaintiffs had been guilty of laches (prolonged inordinate and inexcusable delay) in bringing this action and therefore they were debarred from asserting any relief (claim for mesne profits) in this action.
When the matter [Nwakobi v. Nzakwu (ibid)] came before the Federal Supreme Court of Nigeria, the Court held that the doctrine of laches did not apply as the Obosis had failed to establish the rights they claimed. When it came on appeal to the Privy Council, it endorsed the judgment of the Federal Court. They held that the Obosis had failed to establish an equitable right which outweighed the Onitshas’ right.
“The relative positions of the two parties to the present suits appear from the facts to be as follows. On the one hand are the Onitshas who, after protracted litigation, have established themselves to be the owners of the radical title to the disputed land. In course of time, through no fault of theirs, it has been subjected to large scale occupation and building operations in the name of the Obosi community. The Onitshas have always been vigilant to assert their rights in the land to evict those who could not claim an interest as their own tenants. During the period when they were powerless actively to assert their rights, because the Crown would not let them, they did what they could to preserve their position by protests to the Crown. So much for the Onitshas. On the other hand are the Obosis who have failed to prove any legal rights in the land, either by way of radical title or by way of usufructuary possession under customary law. All that their community can say is that, with its eye wide open to the existence and nature of the dispute, it has for years been putting people and buildings on the land, and this despite the Crown’s injunction that the land was not to be interfered with.
Laches is an equitable defence, and to maintain it and obtain relief a defendant must have an equity which on balance outweighs the plaintiff’s right. The Obosis have no such equity in this case.”
For the Obosis to successfully rely on the doctrine of laches as a defence, it was necessary they showed that they had equitable rights which outweighed the rights claimed by the Onitshas. By failing to show/establish such rights in equity, its defence of laches could not be maintained.
In the matter before me, the same difficulty confronts the Defendant. It has failed to prove/establish that it has equitable rights which outweigh the rights of the Plaintiffs. During that intervening period, the Defendant had no better title whether in law or equity, to that of the Plaintiffs. It was not open to it therefore to rely on the equitable doctrine of laches when it had not established any legal or equitable right that was better than that of the Plaintiffs.
The Defendant had had notice/express knowledge from February 1994 of the registered interest of the Plaintiffs and constructive notice (deemed by law by virtue of public records in the Lands Registry) from January 1994, that any rights in equity
it was asserting to possession of the said Property had been dislodged by the registration of the Plaintiffs as legal owners of the said property on 28th December 1993. The evidence was clear, that at no time did the Plaintiffs ever concede their title to the Property. Despite this, the Defendant persisted in its claim for possession and registration as the rightful owner of the Property. “With its eyes wide open to the existence and nature of the dispute” it had insisted on retaining possession of the Property and this despite the protests of the Plaintiffs that it vacate the Property. Just as the Privy Council in (Nwakobi v. Nzakwu (ibid)) had determined that the Obosis had no equitable rights, I too find in this case that the Defendant had failed to establish any such equitable rights which could sustain the defence of laches. Any reliance on the defence of laches therefore must fail.
To the contrary, any delays rather lie more on the shoulders of the Defendant. Having been registered as the legal owners to the said Property, the Plaintiffs were not obliged to take any further action against the Defendants other than perhaps an action for ejectment. Rather the ball was more or less in the court of the Defendant who was obliged to take such remedial action as was required to get its claim determined in a court of law as soon as possible. It did not file action however, until 4th June 1997 (a delay of three years).
I am satisfied in all the circumstances that judgment should be entered in favour of the Plaintiffs for mesne profits.
Calculation of Mesne Profits
The Plaintiffs have quite correctly confined their claim for mesne profits to the period from January 1994 to October 1999. Their claim is set out in the Amended Statement of Claim as follows:
1994 @ $1500 per month for 12 months = $ 18,000.00
1995 @ $1500 per month for 12 months = $ 18,000.00
1996 @ $1500 per month for 12 months = $ 18,000.00
1997 @ $2000 per month for 12 months = $ 24,000.00
1998 @ $2000 per month for 12 months = $ 24,000.00
1999 @ $2000 per month for 9 months 10 days = $ 18,493.15
Total amount claimed: $120,493.15
Learned Counsel for the Defendant objects to this calculation on the grounds that no evidence had been adduced in support of the rental figures pleaded and that these were based more or less on the estimates by the Plaintiffs as to what would be a reasonable rental for such property during that period. In the circumstances the figures pleaded by the Plaintiffs should not be accepted by the Court.
Unfortunately the Defendant has failed to adduce evidence to show on the balance of probabilities either that those figures were unreasonable and unfair, or in lieu thereof, to show what rate should have been used that would assist the court reach decision as to what is a fair and reasonable rental in the circumstances.
I have taken time to consider the rental figures claimed by the Plaintiffs. Whilst acknowledging that the rental rates cited have no supporting evidence from a valuer or someone with expertise and experience in that field to justify their existence, I am satisfied on the other hand that there is sufficient evidence in the materials before this court which would tend to justify their use to a certain extent.
For instance at paragraph 12 of their Amended Statement of Claim, the Plaintiffs had pleaded that in or around 1983 the Property was rented out to David Lenga for $800-00 per month. Since this rate is not disputed, it can be used as the base rental for estimating what might be reasonable figures for the period from 1994 to 1999.
Using that rental figure as the base, it will be seen that there was an overall increase of $700-00 from the rental of $800-00 in 1983 to $1,500-00 in 1994 used by the Plaintiffs. That works out to an annual increase in rental of $63.63. In my respectful view that is a very conservative and extremely low rental increase per year. I accept therefore the rental figures of $1,500-00 for the years 1994 to 1996 as being very reasonable and fair, on the balance of probabilities. The only anomaly is in the sudden increase or jump from $1,500-00 in 1996 to $2,000-00 in 1997. No evidence has been adduced to support this sudden increase of $500-00 over the one year period. Having said that however, all is not lost because it is my respectful view that by using the same increases of $63.63 per year it is still possible to calculate what the possible rentals could be for 1997 – 1999. This works out to $1,690.89 for 1997. This figure is arrived at by simply adding $63.63 to $1,500-00 starting in 1994 and thereafter each year. Using the same method the rental for 1998 is $1,754.52 and for 1999 $1818.15.
The revised rental figures therefore should read as follows:
1994 @ $1,500.00 per month for 12 months = $ 18,000.00
1995 @ $1,500.00 per month for 12 months = $ 18,000.00
1996 @ $1,500.00 per month for 12 months = $ 18,000.00
1997 @ $1,690.89 per month for 12 months = $ 20,290.68
1998 @ $1,754.52 per month for 12 months = $ 21,054.24
1999 @ $1,818.15 per month for 9 months 10 days = $ 16,969.40
Total value of mesne profits: $112,314.32
I am satisfied in the circumstances the sum of $112,314.32 is a reasonable and fair amount for the mesne profits claimed by the Plaintiffs. I grant judgment for mesne profits for $112,314.32 .
Counter-claim of the Defendant
The Defendant counter-claims for (i) the value of the purchase price of $24,000-00 calculated at today’s current rate. According to the estimates of the Defendant, the Property is now valued at around $100,000-00. (ii) Rent and rates expended to maintain possession of the Property at $2,702-34; and (iii) the cost of maintenance and repairs carried out during that intervening period totaling $12,000-00.
Is the Defendant entitled to claim for the value of the Property as at today’s market value, having acquired the property for only $24,000-00 in 1991? It is not in dispute Defendant had kept the Property in good repair and condition throughout. It is also not in dispute the Property is now worth more than what it was when sold in 1991. Unfortunately what comprises the subject matter of the counter-claim of the Defendant is not so much the value of the Property, as the value of the money it had expended as at today’s rate! I think there is difference between the two. The Property does not belong to the Defendant; that is clear. Defendant’s primary concern is that its moneys worth as at today’s rate is recouped. Money does have or acquire value over time; this is measured by the interest that commercial banks charge on an annual basis. In its counter-claim, the Defendant seeks interest to be charged on the $24,000-00 at the applicable lending rate for the period 15th July 1991 till date of payment by the Plaintiffs. Unfortunately, that cannot be right as the said sum was not lent in anyway to anyone. That the Plaintiffs have benefited out of this outright payment of the purchase price of $24,000-00 cannot be denied. The immediate benefit received obviously was that the loan which Charles Tiare (deceased) initially took out with the Solomon Islands Housing Authority (“SIHA”) as it then was known had been cleared. When recourse is had to the agreement dated 11th September 1978 between Charles Tiare (deceased) and SIHA, it becomes plain that the interest rate charged on the rate of repayments he had to make on a monthly basis to SIHA was 5%. Had the purchase price of $24,000-00 not been paid, the Tiares would have been obliged to pay up loan repayments to SIHA at the rate of 5%. It is my respectful view that that is the percentage rate by which they had benefited from the payment of the sum of $24,000-00 from the Defendant. The payment of that sum immediately cleared any loan repayments and accrued interest which otherwise they would have been obliged to repay from Charles Tiare’s (deceased) loan with SIHA. The percentage rate therefore by which the sum of $24,000-00 should be valued in my respectful view is by that rate of 5% from 1991 to 2003.
But even if that percentage rate is not accepted, Order 45 rule 15 of the Rules imposes a rate of 5% on interest which may be charged on any judgment sum being recovered. On this basis as well, I am satisfied the rate of 5% should be used as the interest rate for calculating the value of $24,000-00 as at today’s rate. This brings the value of the said money to $43,100-00 as at year 2003. I allow that sum, plus $2,702-34, being for rent and rates and $12,000-00 being for maintenance and repair costs. These should be offset from the judgment sum of $112,314.32 awarded as mesne profits to the Plaintiffs. The Defendants therefore are only obliged to pay the Plaintiffs the sum of $54,511.98 being the remainder.
Orders of the Court:
The Court.
[1] Y. Sato and Company Limited v. Jessie Tiare, Cathering Tiare, Anthony Tiare and Another CC 133 of 1997, 31st August 1999 per Kabui J.
[2] Henry Black, sixth edition, 1990
[3] [1964] 1 W.L.R 1019
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