Solomon Islands Resorts Ltd v Tuimaka [2010] SBHC 51; HCSI-CC 79 of 2009 (3 August 2010)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN:

SOLOMON ISLANDS RESORTS LIMITED
Claimant

AND:

FRANCIS TUIMAKA
CATRIONA SILLETT
First Defendant

AND:

ATTORNEY GENERAL
(representing the Commissioner of Lands) Second Defendant

AND:

ATTORNEY GENERAL .
(representing the Registrar of Titles) Third Defendant

Dates of Hearing: 21 and 22 June 2010
Date of Decision: 3 August 2010

Ms. N. Tongarutu for claimant
Mr. A. Radclyffe for first defendant
Mr. D. Damilea for second and third defendants

DECISION ON APPLICATION
FOR RECTIFICATION OF LAND REGISTER

Cameron PJ:

1 The claimant seeks an order cancelling the registration of the first defendants as the joint owners of the fixed term estate in parcel no. 191-017-69.

2 That parcel of land immediately adjoins various parcels of land owned by the claimant and from which the claimant operates its hotel, the King Solomon Hotel.

3 The ground for the application is an assertion that the parcel now owned by the first defendants had previously been purchased from the Commissioner of Lands by the Hibiscus Hotel (which operated from the site now occupied by King Solomon Hotel), although registration of that dealing had never occurred. The claimant says that when subsequently the first defendants became interested in acquiring that same parcel of land, they knew or ought to have known of that previous sale in favour of the Hibiscus Hotel (through which the claimant now claims title).

4 The background is that in 1993 the Hibiscus Hotel expanded the site originally occupied by it by purchasing from the Commissioner of Lands an adjoining parcel known as Lot 922. The stated purpose was for the building of hotel staff houses although it was subsequently used to expand hotel guest accommodation.

5 The claimant asserts that in 1995 the Hibiscus Hotel wished to expand the hotel grounds further by acquiring Lot 960, which adjoins Lot 922. It says that the Hibiscus Hotel was then offered Lot 960 by the Commissioner of Lands for $14,224.50, which offer was accepted and the purchase price paid. In support of this the claimant produced a copy of a letter dated 11 November 1994 from John Hikimae to the Hibiscus Hotel advising that its application for Lot 960 had been approved by the Commissioner of Lands. The claimant also produced two copies of a letter dated 30 January 1995, in which on the face of it the Commissioner of Lands offered the fixed term estate in Lot 960 to the Hibiscus Hotel. One of the copies was on Solomon Islands Government letterhead, whereas the other was on plain paper. One contained a handwritten correction to the total amount payable for the land, together with a handwritten notation referring to 'Chq. 333410'.

6 The copies of the letters of 30 January 1995 bear the signature of Mr. John Hikimae, who made a sworn statement for the claimant and was cross examined at trial. At that time, it is undisputed that he was a senior lands officer employed in the Ministry of Lands. His evidence was to the effect that the transaction was a bona fide one and that the offer contained in his letter of 30 January 1995 was accepted by the Hibiscus Hotel and that the purchase price was paid. In support of the contention that the transaction was genuine, he pointed to a document being a 'Consent for Land Excavation Works for Lot 960/1' dated 15 December 1994 issued by the Planning Division of the Honiara Town Council in favour of the Hibiscus Hotel. In that document, consent was given for land excavation works on the land for 'road access to hotel for development purposes'. The claimant says that the obtaining of this consent is consistent with the Hibiscus Hotel needing that land at the time, and lends some weight to the assertion that it wished to and in fact did then purchase it.

7 Another factor claimed to support the genuineness of the transaction was the fact that Lot 960 was included in the professional valuation of the lands obtained by the claimant prior to its purchase of the hotel lands in 2002 (Shane Kennedy's sworn statement dated 13 May 2010, para 4). This is consistent with the assertion that there was a belief on the part of the claimant as purchaser and the previous hotel operators that Lot 960 was in fact part of the hotel properties.

8 Against this, on behalf of the Commissioner of Lands there were various sworn statements filed which took the position that there was never any genuine offer by the Commissioner of Lands to the Hibiscus Hotel to purchase Lot 960. Henry Kala, a legal officer employed by the Ministry of Lands, stated that from the Ministry's records there was no record in any of the Ministry's files of the John Hikimae correspondence of 11 November 1994 and 30 January 1995. His evidence was that there was also no record of any instruction to John Hikimae from the Commissioner of Lands authorising him to write the letters of 11 November 1994 and 30 January 1995.

9 Joyce Galo, a chief valuer employed by the Ministry of Lands, made a sworn statement in which she stated that the valuation of premium and rental fees contained in the John Hikimae letter of 30 January 1995 (and forming part of the overall purchase price) were "excessive and inconsistent with the valuation principles and standards" of the time (para 5 statement). This is consistent with the claim that John Hikimae was not authorised to make any offer as to Lot 960 in the terms contained in the 30 January 1995 letter.

10 Then there is the evidence of Jackson Vaikota, the Surveyor General employed by the Ministry of Lands. He also made a statement, and was cross examined on that statement. This was to the effect that the extension the Hibiscus Hotel applied for and was granted in 1993 was for Lot 922 alone, and not Lot 960. He challenged Nick Nuia's evidence (a surveyor engaged by the claimant), and in particular Nick Nuia's assumption that pegs marking the boundary of Lot 960 and identified as "HB" denoted that the survey of that Lot was carried out for the hotel. Mr. Vaikota stated that another lot further west of Lot 960 (and in different ownership) also had the same 'HB' labeling, suggesting that it could be a reference to Hibiscus Highway (which runs alongside the relevant lots). He further stated that Lot 960 had already been surveyed under Instruction to Survey 32/91, prior to its acquisition in 1997 by the first defendants.

11 Mr. John Hikimae was cross examined on his sworn statement. While he denied acting without the authority of the Commissioner of Lands, he offered no satisfactory explanation as to why there was no record of his letters of 11 November 1994 and 30 January 1995 contained in the Ministry of Lands files. He did not satisfactorily explain why there was no official receipt produced for the purchase fees of $14,224.50 (the 30 January 1995 letter simply referred to 'chq 333410'). He also admitted that in 2009 he had been dismissed from the employment of the Ministry of lands for unauthorised land dealings. He further admitted that prior to that and during the term of his employment with the Ministry of Lands, he had been suspended for alleged unauthorised dealings, which he said were false allegations made against him at this time.

12 I am not satisfied on the balance of probabilities that it has been established that Lot 960 was sold by the Commissioner of Lands to the Hibiscus Hotel. I accept the evidence of Henry Kala and Jackson Vaikota that there is no record at all in the Ministry's files of the alleged dealings in respect of Lot 960 between the Commissioner of Lands and the Hibiscus Hotel in late 1994, early 1995 or at any other time. I also accept that a proper search for those records has been made. Had there been a legitimate sale at that time, one would have expected documentation noting the approval of the Commissioner of Lands to the sale and other relevant documentation pertaining to it. No satisfactory explanation has been given for its absence. I note that the second copy of the 30 January 1995 letter is not on Solomon Islands Government letterhead, lending weight to the assertion that this was an unauthorised dealing by Mr. Hikimae. I also note that Mr. Hikimae admitted to being involved in an unauthorised dealing which led to his dismissal from the Ministry of Lands in 2009, and that on a prior occasion he had been suspended for alleged unauthorised dealing. I do not consider that there was any bona fide sale of Lot 960 by the Commissioner of Lands to the Hibiscus Hotel in 1995 or at any time. I find that the dealing in Lot 960 in 1994 and 1995 was an unauthorised one and was at the instigation of John Hikimae alone, without the knowledge or authority of the Commissioner of Lands.

13 I have not overlooked the document granting consent to excavate Lot 960 provided to the Hibiscus Hotel by the Honiara City Council in December 1994. However, that was for the specific purpose of an access road to the hotel for development purposes i.e. construction of the extension, and does not establish that there was a legitimate sale of Lot 960 to the hotel.

14 I note that it was not contended that Mr. Hikimae had ostensible authority to bind the Commissioner of Lands in the event of a finding that the dealings with Lot 960 were not authorised, so it is not necessary for me to consider that point.

15 Accordingly, for reasons given, I am of the view that there was no impediment to the Commissioner of Lands offering Lot 960 to the first defendants in 1997.

16 There is an independent ground as to why the claimant cannot succeed in its application for rectification of the register. That is that even had there been a legitimate sale of Lot 960 to the Hibiscus Hotel in 1995, then I consider the first defendants were bona fide purchasers without notice of any adverse interest in the land, and so outside provisions of section 229 of the Land and Titles Act.

17 There was an attempt to argue that they should have been put on notice that the land belonged to the claimant because of the existence of water tanks on the land, an access road, and an assertion that the land was fenced at the time. However, I accept the evidence of Mr. Tuimaka, one of the first defendants, that when he inspected the land prior to purchase it was covered in bush and that the fencing was along what appeared to be the boundary between hotel land and the Lot 960. I reject the argument that because Lot 960 had already been surveyed, the first defendants should have been on notice that it was already sold. There was simply nothing on the Ministry's files that pointed to a sale. I also have regard to the fact that on his written application for the lot dated 16 December 1996, an official from the Ministry of Lands has written the following handwritten notation:

"I think the site remains vacant, though an access road may have been put in by King Solomon Hotel to transport material during construction of the new complex. The road now closed up. I am in the opinion to allocate site to F. Tuimaka."

This corroborates the evidence of Mr. Tuimaka that there was no access road over Lot 960 at the time he inspected it, which evidence I accept, and also demonstrates that the Ministry of Lands from its files saw no impediment to its sale.

18 I also accept the submission that the first defendants are in possession of the land by virtue of its occupation by Mr. Tuimaka's brother, and are therefore entitled to the protection afforded to innocent purchasers by section 229(2) of the Land and Titles Act.

19 I therefore consider that even had the previous dealing in Lot 960 been legitimate, the first defendants were innocent purchasers without actual notice of any adverse interest, and did not cause or contribute to any mistaken offer of the property to them.

20 In view of my findings, it is not necessary to deal with any other arguments raised in defence of the claim.

21 I mention that it was argued on behalf of the first defendants that the claim was statute barred, in that it was not brought within 6 years of the date of registration on the title of the first defendants as owners of parcel no. 191-017-069. Reliance was placed on section 5 of the Limitation Act, providing that no action shall be brought after 6 years from the date on which the cause of action accrued. Mr. Radclyffe for the first defendants steadfastly maintained this position despite this court expressing reservations about its correctness.

22 In fact section 32(2)(c) of the Limitation Act provides that where a claim in an action is based on a relief from the consequences of a mistake, time for the bringing of an action does not begin to run until the claimant has discovered the mistake, or could with reasonable diligence have discovered it. This is such a case, the claim relying as it does on the rectification provisions of section 229 of the Land and Titles Act. In this case I accept the evidence of Shane Kennedy for the claimant that the mistake was discovered on about 20 April 2004, when the claimant lodged a caveat against the title to protect its position. I also find there is no evidence that the claimant with reasonable diligence ought to have discovered the mistake earlier. Proceedings were then filed on 12 March 2009, within the 6 year period which began to run on 20 April 2004. Therefore Mr. Radclyffe's submission is without any foundation.

23 The result of these findings is that I dismiss the claim and enter judgment in favour of the defendants. I also order that any caveat on the title in favour of the claimant be removed. The first, second and third defendants are awarded costs against the claimant on a standard basis in amount to be agreed or taxed, and payable in any event within 28 days.

BY THE COURT

__________________________
Justice IDR Cameron
Puisne Judge