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High Court of Solomon Islands |
HIGH COURT OF SOLOMON ISLANDS
Civil Case No. 281 of 2003
BEST DISTRIBUTORS AND SERVICES LIMITED
Plaintiff
-v-
PREMIER OF GUADALCANAL PROVINCE
First Defendant
AND:
JAMES TETEA TUVA
Second Defendant
AND:
WINNER PROPERTIES LIMITED
Third Defendant
AND:
THE REGISTRAR OF TITLES
Honiara: Brown PJ
Date of Hearing: 14th May 2003
Date of Judgment: 29th May 2003
John Sullivan for the Plaintiff
James Apaniai for the First Defendant
In person the Second Defendant
Andrew Nori for the Third Defendant
No appearance for the Registrar of Titles
REASONS FOR DECISION
The plaintiff company sought relief, pursuant to Sections 139 and 157 of the Land and Titles Act (Cap 133) against the Premier's forfeiture of the plaintiff's lease of the vacant land in Honiara in August 2002 and consequent orders for rectification of the Land Register to have the company reinstated as lease owner.
The Cause was originally set down for hearing on the 24th April when, having regard to the fact that Mr. Sullivan for the plaintiff informed the Court that Mr. Presley Watts, a lawyer, had telephoned him to say that he had been consulted by Mr. Tuva, the 2nd defendant and that Mr. Tuva sought an adjournment, I stood the matter over to today. I particularly warned Mr. Tetea Tuva that his lawyer would need to appear on the next occasion, if he wanted to be heard, but that in any event, he would need to come to court. Mr. Tetea Tuva came today. He was not represented, he again asked for an adjournment for he said his lawyer was not available this morning. Well, at some point the convenience of the Court and the other parties had to be considered (especially since the cause had already been adjourned, for Mr. Tetea's convenience, at cost to all the other parties) so I refused the application, telling Mr. Tuva he could address me on the material that I heard later, when everyone had finished. He understood English.
He had filed no material, the case revolved about the actions of the Premier forfeiting the plaintiff's lease and the act of the Registrar of Titles accepting the forfeiture and subsequent registration of a fresh lease by the Province as Perpetual Estate holder to the 2nd defendant, and a sub-lease to the 3rd defendant, so the cause rested very much on documentary material. At the conclusion of the case for other parties, in an attempt to be particularly fair to Mr. Tetea, I asked him to tell me what he wanted to, having heard counsels argument. He then embarked on a history of his recollection of the land transactions back in 1992 whereupon Mr. Sullivan rose to object. I ignored his objection at first, but it quickly became apparent that the 2nd plaintiff was seeking to raise matters, which should properly be on oath. He was then sworn and recommenced telling me about his initial dealings over the land. Mr. Sullivan pressed his objection, for the case was closed, the evidence was heard and to allow (what in effect was a reopening) would cause the plaintiff harm, for he was not available, in Court to hear this evidence, and consequently Mr. Sullivan would be unable to properly address this new material.
It also sounded a warning, that the Court should prevent material, which offended the rule in Brown -v- Dunn. In the circumstances, since the 2nd defendant had already embarked on a story which addressed none of the plaintiffs material, I prevented the 2nd defendant from continuing, and asked him to resume his place at the Bar table.
With the assistance of Mr. Nori, who proposed a form of words, he was asked in pidgin whether he wished to respond to the arguments he had heard, and he again sought an adjournment so that "his solicitor could come".
I was somewhat bemused and nonplussed by the turn of events for despite offering a mistrial; all counsel agreed that I continue, on the material already before the Court. On reflection, my suggestion to abort the trial, was contrary to the interest of justice, for all the other parties would again, have had their interests subordinated to those of the 2nd defendant, who had been afforded every opportunity to put any relevant matters to the Court in accordance with the practice and procedure of the Court. The case proceeded by way of affidavits, yet without warning, I proceeded to hear viva voce evidence, after the case for all ocher parties had closed, and after final addresses.
To be blinded to the importance of being impartial, (while insisting on compliance with rules by those represented) by a misguided sense to favour an unrepresented litigant, who has had time and opportunity to obtain representation, had he wanted it, is a mistake by a judge. Tending to patronize a litigant, does not body well for impartiality.
The case for the plaintiff
The plaintiff's case was clearly set out in the affidavit of Mr. Robert Goh, the secretary of the plaintiff company filed on the 18th November last and read without objection. I propose to reproduce the relevant parts, and describe the annexed document
The lease of the fixed term estate dated 10 May 1993 to J. T. Tuva was registered, it appears from the photocopy lease, on the 22 July 1993. The lease of the FTE acknowledged receipt of the sum of $10,000.00 for the grant, and yearly rent of $2000.00 The lease provided for particular conditions in the second schedule.
The 2nd schedule provided:
1. The rent shall be revised every five years based on the unimproved value of the land.
2. No consent shall be required from the Premier or the owner of the perpetual estate for the time being if the lessee decide to transfer, lease, sublease, charge or subdivide his lease of part.
3. No development shall take place on the land without the prior approval of the appropriate Town and Country Planning Board.
This Transfer, photocopied from the records of the plaintiff company, has not recorded details of the Registrar of Titles actions on registration. The details of the registration come from another copy document annexed to this affidavit, but the original of which is in the custody of the proper officer at the Honiara Land Registry. This other copy document is of the Lease Register, annexure RG13, which shows Best Distributors Services Limited as Entry No. 2 in the ownership section of the fixed term lease affecting parcel 191-023-136/1 (the subject land).
The transfer document, in the 1st schedule, states "subject to the terms and conditions in the original lease agreement between Premier for and on behalf of Guadalcanal Provincial Assembly and James Tetea Tuva dated 10th May 1993."
The transferor's (J.T. Tuva) signature was witnessed by Becky Olofia, PO Box 261, Honiara, yet the certification or verification of execution, required by S.203 of the Lands and Titles Act to a transfer required to be registered (such was the case here) was by Robert Goh, Commissioner of Oaths, (the deponent in this affidavit before me) and the Secretary of Best Distributors Ltd, the plaintiff. The company seal was affixed in the presence of one signatory, the words, Director/Secretary having not been scored through to identify the office of the witness. Nevertheless, a transfer was subsequently registered and, in the absence of objection, the maxim omnia praesumuntur rite essee acta (it is presumed that the usual formalities have been complied with) must presume to apply. Certainly time has passed since the date of registration. The Registrar of Titles may well be faced with latches [sic], now.
(a) the transfer of the lease from the Second Defendant to the Plaintiff (ex. RG2) had been affected without the written consent of the First Defendant; and
(b) the Plaintiff was in arrears of rental of $2000.00 per annum in that the last rent received from the Plaintiff was for 1995.
The letter to the Premier of 6 August 2002 deals with two mistakes, which Mr. Sullivan stated invalidated the purported notice to rectify before forfeit. He referred to the 2nd Schedule of the original lease by the Premier to Mr. Tuva which recited that no consent from the premier was required for a transfer by the lessee, and secondly, the period of 5 days followed for rectification was unreasonably short. Mr. Sullivan, for abundance of caution, also pointed out that the lease rent payment has been made and were up to date. His second letter, to the Registrar of Titles was as follows:
"The Registrar of Titles
Ministry of Home Affairs
PO Box G15
Honiara
Dear Sir,
RE PARCEL NO 191-023-136/1
We act for Best Distributors and Services Limited, the registered lessee of the above parcel. We refer to the letter to you from the Premier of Guadalcanal Province dated 31st of` July 2002. We enclose a copy of our letter to the Premier dated 6th August 2002 and draw your attention to the Second Schedule of the lease.
In the circumstances we trust that you will take no steps to register any instrument of forfeiture without adequate notice to this firm. In the meantime we shall endeavour to get the Premier to accept our client's position, failing which our client will have to seek relief under s.139.
Yours faithfully
SOL-LAW
John Sullivan
cc: Best Distributors and Services Ltd
Premier, Guadalcanal Province"
12 Notwithstanding that correspondence, by a document dated 8 August 2002 entitled "Notice of Re-entry", the First Defendant purported to re-enter and take possession of the land. Now produced and shown to me and marked "RG10" is a true copy of that notice. The Fourth Defendant registered ex. RG10 on the same date. I note that ex. RG10 purports to rely non-compliance with a notice dated 13 April 2002 (presumably ex. RG3 as there is no other notice bearing that date) notwithstanding that I was expressly told in ex. RG4 to ignore ex. RG3 and notwithstanding ex. RG7 refers to ex. RG6.
13. On the same date, 8 August 2002, the First Defendant purported to grant a fresh lease of the Land to the Second Defendant for a term of 50 years commencing 1 January 2002 at an annual rental of $2000.00. Now produced and shown to me and marked "RG11" is a true copy of the lease instrument.
14 Earlier on 6 August 2002, the Second Defendant purported to grant a sub-lease of the Land to the Third Defendant also for a term of 50 years commencing 1 January 2002 for a grant premium of $750,000. Now produced and shown to me and marked "RG12" is a true copy of the sub-lease instrument.
15. I am informed by Dennis Kwan of the Third Defendant and verily believe that the Third Defendant has so far paid only $100,000.00 of the grant premium to the Second Defendant and that the Third Defendant has not yet entered into possession of the Land.
16. I say that for some years the Plaintiff has been trying to eject the Second Defendant from the Land and that this has been subject to litigation in Civil Case 332 of 1996. I say that both the First and Second Defendants were at all times aware that the consent of the First Defendant to the transfer of the lease to the Plaintiff was not required as it was an express term of the lease to which both were parties. I say that the various notices issued by the First Defendant were issued without any basis in fact and that there was no default as alleged and that the notices were issued for the improper purpose, to which the Second Plaintiff was a party and had notice, of depriving the Plaintiff of its leasehold interest in the Land and conferring the Plaints interest on the Second Defendant so that the Second Defendant could profit by his dealing with the Third Defendant.
When queried about the outcome of the civil case no. 332/96, Mr. Sullivan said that it "petered out" in about 1998. I do not propose to consider that matter further, for it has not been raised in these proceedings for any other purpose. The latter part of this paragraph are matters which are properly objectionable and whilst the point was not taken by other counsel, Mr. Sullivan could not expect the court to accept the opinions on their face.
Both the lease and sub-lease copies are apparently from the source of the Registrar of Titles. The lease register shows, after the cancelled entry no. 2, that of Best Distributors Services Ltd as owner, a cancelled caveat entry (3) by Paul Yee, PO Box 398, Honiara, a cancelled re-entry by Premier of Guadalcanal Province with effect 8th August 2002 and lastly (5) that entry of James Tetea Tuva, Farmer of PO Box 1891, Honiara by transfer dated 8 August 2002 presented for registration on the 8 August 2002 and current. The sub-registry shows the sub-lease to the 3rd defendant, Winner Properties Ltd, PO Box 1818, Honiara (showing consideration of $750,000) registered on the same day, pursuant to instrument dated 6th August 2002. Mr. Kwan for the 3rd defendant says only $100,000.00 of the consideration has been paid. I mention this for later on I deal with the nature of the Registrar of Titles correspondence, and her urging to have the whole consideration paid by Winner Properties.
That, then was the evidence of the plaintiff, and Mr. Sullivan pointed to the filed affidavit of service of the process on the Registrar of Titles. I am satisfied service has been properly effected and consequently the court may make orders, if appropriate, affecting the Registrar.
It was also agreed by counsel that the land in question was vacant land and no one was in occupation.
I accept that state of affairs.
Mr. Apaniai said the Premier had no material for the Court.
Mr. Tuva had no material and Mr. Nori proceeded to read the affidavit of Dennis Kwan, the Managing Director of the 3rd Defendant company. His affidavit was short and I reproduce it here.
I Dennis Kwan, of Honiara, businessman, MAKE OATH and say as follows:
1. I am the Managing Director of the Third Defendant Company
2. I purchased the land now under dispute based on advice I received from the Fourth Defendant, after having being approached many times by the Second Defendant.
3. Annexed hereto and marked "DK1" are a bundle of correspondences sent to me by the Fourth Defendant which I ask the Court to take into consideration.
4. I purchased the land for the sum of $444,630.80
5. Consent for the Second Defendant's sub-lease to me was made by the Premier of Guadalcanal Province by letter dated 21st November 2001, which is annexed hereto and marked "DK2". The consent was specifically given in respect of the sublease to the Third Defendant.
The annexure being those letters by the Assistant Registrar of Titles, Irene Vaukei are also reproduced in full and annexed to this judgment, to show the extent of her interest in the particular transaction involving Winners Properties Ltd. Apart from that letter dated 5th August 2002, they were hand written.
Then the Premier's letter of the 21st November 2001 was annexed, addressed to Mr. Tetea.
I then called upon Mr. Sullivan to address on the close of the defendant's cases even though the 3rd defendant had gone into evidence, a course which Mr. Sullivan was gracious to accept. He handed up an outline of the plaintiff's submissions.
The plaintiff comes by way of S.139 of the Land and Titles Act (Cap 133)
S.139. The owner of an estate upon whom a notice has been served under section 138, or against whom the Commissioner is proceeding, by action or re-entry, to enforce his right of forfeiture, may apply to the High Court for relief, and the Court may grant or refuse relief, as the Court, having regard to the proceedings and the conduct of the parties and the circumstances of the case, thinks fit, and, if it grants relief, may grant it on such terms as it thinks fit, and may, under section 229, order rectification of the land register.
Section 157 of the Act applies the provisions of both S.138 and S.139 to leases. Section 138 says:
The Commissioner shall not be entitled to exercise the right of forfeiture until he has served on the owner of the estate and on every other person shown by the land register to be interested a notice -
(a) specifying the particular breach complained of; and
(b) if the breach is capable of remedy, requiring the owner to remedy the breach within such reasonable period as is specified in the notice; and
(c) in any case other than non-payment of rent, requiring the owner to make compensation in money for the breach, and the owner has failed to remedy the breach within a reasonable time thereafter, if it is capable of remedy, and to make reasonable compensation in money.
[The Premier stands in place of the Commissioner in the legislation, having the Perpetual Lease estate]
Mr. Sullivan says that the notice specifying breach referred to in S.138 must relate the breaches to those of kind specified by S.155.
Section 155(1) gives a lessor the right to forfeit the lease if the lessee commits any breach of, or omits to perform, any agreement or obligation on his part express or implied in the lease.
The right of forfeiture may be -
(a) exercised, where neither the lessee nor any person claiming through or under him is in occupation of the land comprised in the lease, by entering upon and remaining in possession of the land; or
(b) enforced by action in the High Court.
The right of forfeiture shall be taken to have been waived if -
(a) the lessor accepts rent which has become due since the breach of the agreement or obligation which entitled the lessor to forfeit the lease or has by any other positive act shown an intention to treat the lease as subsisting; and provided that the acceptance of rent after the lessor has commenced an action in the High Court under subsection (2) shall not operate as a waiver.
Mr. Sullivan says that the plaintiff is entitled to relief against forfeiture by the Provincial Government because:
(i) there was no breach of the terms of the lease for the rent was paid and the Provinces consent to the sale of the FTE way not required since the original grant of the FTE to Mr. Kuva expressly waived, in the 2nd Schedule, the need for consent.
(ii) the time nominated by the Province to rectify the alleged breaches was unreasonable.
(iii) the lessor did not enter upon the land and remain in possession and
(iv) there is no High Court order of forfeiture.
Mr. Sullivan goes on to say that the notice ultimately relied upon as founding cause for forfeiture, was that Premier's notice of forfeiture dated 15th April (exhibit RG3) despite the various substituted notices sent the plaintiff, including one asking the plaintiff to ignore that notice of the 15th April 2002. That notice alleged only one breach of the lease, the failure by the lessor, Mr. Tuva to obtain the Premier's consent to the transfer to the plaintiff.
The plaintiff therefore relies upon the express terms of the 2nd Schedule to the grant by the Premier of a FTE of 50 years to Mr. Tuva which specifically states that the Premier's consent is not required for a subsequent transfer, and says that there was no breach sufficient for the purposes of the notice.
He goes on to say that the Premier did not in fact, re-enter and take possession of the land despite his Notice of Re-entry dated 8th August 2002 (and registered on the same day) for the 2nd defendant purported to re-enter and take possession (for the sublease to the 3rd defendant was, by transfer dated two days earlier, registered on the same day as the Notice of Re-entry by the Premier.)
Clearly no power rested in the 2nd defendant on the 15th August to sublease the property by instrument, yet he purported to do so. Mr. Sullivan also pointed to the 5 days allowed by the notice to comply sent by the Premier as wholly unreasonable.
It was obvious that the Premier had no intention of giving consent. On the 21st November 2001, the Premier wrote to James Tetea in the following terms (DK7).
James Tetea Ref LOT 907 PN 191-023-102/1
PO Box 941
Honiara Date: 21st November 2001
Dear Sir,
CONSENT TO TRANSFER LOT 107 PN 191-023-102/1
Thank you for your letter dated 21/11/01.
Your request for consent to transfer your lease interest is hereby granted.
Please help the office of the Premier informed of the progress as fresh surveys and sub-divisions will be made on the whole land area.
Yours faithfully
RT. HON. E. ALEBUA
Premier
cc: Commissioner of Lands
Coming to the matters complained of by Mr. Sullivan, I am satisfied that the eventual notice relied upon to ground the purported forfeiture by the Premier, was the one which the Premier has specifically asked the plaintiff to ignore, for the Premier had gone on to send substitute notices in lieu of that of the 15th April 2002.
This scattergun approach cannot avail the Premier, where the Act expects a degree of fairness in relation to acts likely to adversely affect ownership rights. The Premiers act, in relying on the notice of the 15th April 2002 in the face of the expressed direction to ignore it, breaches the Wednesbury principle, as to fairness (Associated Provincial Picture Houses Ltd -v- Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223)
It is a breach of such a nature, that the purported act of re-entry by the Premier is void, based as it is on a notice that the plaintiff had been told to ignore.
Mr. Nori addressed me. He said that there had been no mistake in terms of S.229 of the Act, because the 3rd defendant is protected by S.229(2).
S229 (1) Subject to subsection (2), the High Court may order rectification of the land register by directing that any registration be cancelled or amended where it is so empowered by this Act or where it is satisfied that any registration has been obtained, made or omitted by fraud or mistake.
(2) The land register shall not be rectified so as to affect the title of an owner who is in possession and acquired the interest for valuable consideration, unless such owner had knowledge of the omission, fraud or mistake in consequence of which the rectification is sought, or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default.
I have appended to this judgment copies of the correspondence annexed to the affidavit of Dennis Kwan, for that correspondence satisfies me the purchaser, Winner Properties Ltd was on notice that Best Distributors had an interest in the parcel of land. Neglect or default to enquire into and seek proper legal advice in the face of the warnings on the Land Register cannot afford the 3rd defendant any protection envisaged by S.229. As well, he is not, consequently able to rely on S.229(2) to avoid rectification for the transfer under which he took the sublease was defective, for that it predated the grant of the FTE to the transferor, Mr. Tuva.
The purported "advice" contained in the Registrar of Titles letter of, the 5th August 2002 (see the annexure to these reasons) to Mr. Dennis Kwan was wrong in fact, as well as law. No rental arrears existed, and the purported notice of forfeiture did not rely on arrears of rent as a ground. Section 155(1) deals with the right of forfeiture. The Registrar of Titles knew of this change of grounds in the Premier's purported notice of forfeiture and re-entry, knew of the denial by Best Distributors of any breach of covenants or agreement in the lease (by reason of Sol-Laws letter of 7th August 2002, set out earlier) and ignored S.155(l) when purporting to "advise" Mr. Kwan on the law.
Yet on the 8th August, the Registrar, in the face of a set of circumstances, which clearly called for caution, purported to register a sub-lease which predated ownership of an estate in the transferor, Mr. Tuva.
A prudent purchaser of the sublease cannot turn a blind eye to these warnings on the register.
Mr. Nori's submissions went on to suggest the Registrar of Titles held herself out as acting for Mr. Tuva and persuaded Mr. Kwan to complete the purchase of the sublease from Mr. Tuva.
I need make no finding on the proprietary or otherwise, of Mr. Kwan's act in seeming to adopt the Registrar's course of advice (except to say that he neglected or defaulted to heed the warnings on the Register) but clearly the Registrar's acts of registering the forfeiture, the subsequent lease immediately to Mr. Tuva and sublease to Winner Properties, in the face of the caveat, warnings in letters by Sol-Law and the requirements of the Act affecting forfeiture do lead me to find such a series of errors as to amount to serious mistake giving rise to a suggestion of fraud by the Premier of the Province and the Registrar, on the registered owner Best Distributors and Services Ltd.
I prefer to base the order for rectification on the clear ultra vires act of the Premier of the Provincial Government in relying on a defective notice of forfeiture (which had been specifically disregarded) and purported re-entry to extinguish the plaintiff's right of ownership in the Fixed Term Estate. Registration of the Re-entry by the Registrar of Titles had been obtained by mistake of the Premier in terms of S.229(1) of the Act. His mistake cannot be allowed to stand.
In any event, after some 8 years, the Premier of the Province would appear to be estopped from acting against the plaintiff under the principle of latches. It was the Premier's original grant of a Fixed Term Estate to Mr. Tuva which had, by the 2nd schedule contained an express provision not requiring the Premier's subsequent consent to transfer of lease.
But the basis for rectification of the Register, and the consequent orders, is the complete absence of procedural fairness in the Premier by virtue of the use to which he had put the defective notice of forfeiture dated 13th April 2002 to ground re-entry.
I accordingly make orders in terms of the prayer for relief, as follows:
I order in terms of paragraphs 1 and 2 of the originating summons. I further order the 1st and 4th defendants to pay the costs of the plaintiff.
BROWN PJ
Annexure: The material forming part of and annexed to the affidavit of Dennis Kwan filed and read in these proceedings.
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