You v Shi Wei Chen [2007] SBHC 147; HCSI-CC 226 of 2004 (1 August 2007)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 226 of 2004

TONY YOU

-v-

SHI WEI CHEN
1st Defendant;

SAM LEUNG
2nd Defendant;

NELLY LEUNG
3rd Defendant;

PATRICK ZHANG SHAO QUAN
4th Defendant;

and

LI SHAO E
5th Defendant.

Date of Hearing: 26 July 2007
Date of Ruling: 1 August 2007

A Nori for the Plaintiffs
C Hapa for the 1st Defendant
No appearance of the 2nd, 3rd, 4th & 5th defendants

RULING on claim for specific performance of agreement for sale of real estate

Brown, J:

1. By amended statement of claim the plaintiff seeks an order for specific performance claiming entitlement as purchaser of the fixed term estate in real property at Ranadi. Consequential orders seek injunctions directed to the 2nd to 5th defendants "from entering into any dealings affecting the property" and an order (directed to the Registrar of Land and Titles) for rectification of the land register (for that registration was obtained by fraud or mistake).

2. The plaintiff pleads in terms of s. 117 of the Land Titles Act (Cap. 133) that the agreement to purchase the land from the 1st defendant was partly oval and partly written.

3. The written "memorandum or note" on which the plaintiff seeks to rely is that letter signed by the owner Mr. Shi Wi Chen addressed to Mr. Sulala of the Development Bank of Solomon Islands dated 10 September 2003. That letter states-

"I wish to advise that I have agree to sell the above named property to Mr. Tony You for $480,000. Settlement is to occur one month from today. If the money is not paid to me by this time then the contract is terminated".

The property is that at Ranadi being 192-002-158.

4. The contract then for the disposition of the interest has 3 conditions. The first is that settlement "is to occur one month from today". The second is that the whole amount of the money need be paid and the third is that failing payment, the contract is terminated.

5. It is, then a note or memorandum in terms of s. 117(2) giving rise to a cause of action upon a contract. Mr. Hapa, says, however, the equitable remedy of specific performance is not available for that the plaintiff’s remedy was extinguished when he failed, in terms of the Act, to take proceedings to protect his interest under the contract.

6. The plaintiff did lodge a caveat claiming an interest "over fixed term estate 192-002-158 as I have already paid the owner and he is yet to transfer the Title to me". On the evidence before me, the plaintiff can be said to have conceded that he did not pay the owner although he says be offered to pay. The fact is that no payment was accepted or consequently made as alleged in his claim to a caveatable interest.

7. By virtue of s. 223(5) the Registrar of Titles gave notice to the plaintiff to substantiate his claims by instituting High Court. proceedings and notice to the Registrar by way of certified copy of such proceedings. In the absence of such evidence the Registrar removed the caveat (exhibit "3").

8. Subsequent to the removal of the caveat, the transfer to the 2nd, 3rd, 4th & 5th defendant was registered. It is consequently not correct as Mr. Nori seeks to argue that those purchasers took with notice, for the notice or caveat had been with drawn.

9. There is no evidence of fraud or mistake. Mr. Nori properly concedes no fraud but says a mistake has been made. I fail to see any mistake. The 1st defendant says he sold to these other purchasers for that the plaintiff had not paid him. The sale to the others (for valuable consideration as evidenced by exhibit 3) was without notice as I have explained. Those purchasers then are entitled to an indefeasible title as against this plaintiff and the protection of registration of their transfer.

10. The Court then, cannot make orders in terms of s. 229 for rectification of the register for no fraud or mistake has been shown and the registration cannot be cancelled for no other power has been called to aid under the Act.

11. It must follow, then that the plaintiff cannot in the light of his fallacious claim to a caveatable interest and failing those steps for redress to be afforded him under s. 223(5), expect the court to make an order for rectification, and hence specific performance of the contract which would have the effect of unseating the registered proprietors’ indefeasible title..

12. The plaintiff cannot obtain an order for specific performance for that would, as a concomitant, carry with it the right to rectification of the land register. As I have said, the registered proprietors’ rights are indefeasible. (Assets Co v- Mere Roi).

13. What the plaintiff is alleging is plain. He says the defendant has breached his contract. If that be the case his cause of action is in damages for breach. While that has not been pleaded, I should say, with a view to avoiding further litigation that on balance the plaintiff has not made out his case on the evidence before me.

14. To complete the purchase, "settlement" implies the tender of a transfer document with the purchase money. There is no evidence of such tender.

15. The 1st defendant denies having been given a cheque for the purchase price. The plaintiff swears it was given the defendant in a car outside the HK Garden.

16. The defendant says he had approval for a loan from his own bank, Westpac and he had no need to sell. If that was the case, as evidenced by Annex PS 2 (to affidavit of Patrick Suti dated 5 June 2007) it supports Mr. Shi Wei Chan’s claim that was plain to Mr. Tony You For that letter PS "2" by Westpac Mr. Patrick Suti also said-

"We have found Mr. Chen to be honest and reliable with all his business dealings and we do not believe that he would commit himself that to any engagements which, at the outset, he did not believe he could fuilfill".

17. I accept Mr. Chen’s evidence on that point. I do not accept the evidence of Mr. You where he says Mr. Chen accepted his cheque in a car outside the HK Garden. Mr. You’s cheque (a photocopy of which was given in evidence) was drawn on an account which was not detailed in court to support Mr. You’s assertion that moneys sufficient to cover the cheque were there. His assertion to this effect does go to proof by documentary evidence and the statement of account, exhibit "8" does not afford that proof.

18. The period allowed to complete; one month, suggests either the last day to settle was the 8 October, in which event a tender of transfer and moneys need be made on that day, or on the 9th October which is the plaintiff’s case. In the 1st case, the plaintiff is out of time and in the 2nd case, I am not satisfied on balance that the plaintiff would be entitled to a verdict.

19. There shall be a verdict then for the defendant. The plaintiff shall pay the defendants costs.

THE COURT