Perogolo v Laugana [2011] SBHC 103; HCSI-CC 152 of 2009 (3 October 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)
Civil Claim No. 152 of 2009

BETWEEN

FRANCIS PEROGOLO, MICHAEL LILIAU
MICHAEL BEN, HILDA KII and PAULA ARUHURI
(Representing the Kakau Valimauvo sub tribe)
Claimants

And

SAVINO LAUGANA and THOMAS BOTU
(Representing the Gaubata Tribe)
First Defendants

And

BILLY FIUTA
Second Defendant

And

PETER SASA
Third Defendant

And

MRS HANNAH LUVULE
Fourth Defendant

And

FREDSON WASI
Fifth Defendant

Mr Ipo for the Claimants
Mr Tegavota for the Defendants

Date of Hearing: 20th July 2011
Date of Judgment: 3rd October 2011

Decision

1. This case involves land that was customary land but which is now registered land. It involves trustees and beneficiaries. The first issue for the court to decide is whether this case is about land which is held in trust by the First Defendants. There is no doubt about that. There can be no question the First Defendants hold the land as trustees, they admit as much in their defence. They agree the land is trust land and to put the matter beyond any doubt whatsoever there is a copy of a statutory declaration made by them in July 1993 in the court book at page 6. In order to deal with the remaining issues it is necessary to establish the nature of a trust and how that affects the First Defendants

2. To do that we can go to the archaic or to the modern. For example Coke on Littleton (which legal scholars will no doubt remember dates from about the year 1620) describes a trust as, "A confidence reposed in some other, not issuing out of the land, but as a thing, collateral, annexed in privity to the estate of the land, and to the person touching the land, for which cestui que trust has no remedy but by subpoena in Chancery" [1]. Of course left like that very few people would understand what a trust is or was. In more modern and simple language a trust is a proprietary interest held by one person (a trustee) for the benefit of another (the beneficiary). A person who becomes a trustee places himself in an onerous position because he has a fiduciary duty of the highest order, that is, a trustee has a binding obligation to always do what is right and proper for others (the beneficiaries) and to act in utmost good faith towards them. This is the case even if he is both trustee and beneficiary. The criminal law even recognises the very strict nature of the duties and obligations involved:-

"Any person who, being a trustee of any property for the use or benefit either wholly or partially of some other person, or for any public or charitable purpose, with intent to defraud converts or appropriates the same or any part thereof to or for his own use or benefit, or the use or benefit of any person other than such person as aforesaid, or for any purpose other than such public or charitable purpose as aforesaid, or otherwise disposes of or destroys such property or any part thereof, is guilty of a misdemeanour, and shall be liable to imprisonment for seven years:" [2]

3. So what is clear is that the First Defendants are the registered owners of land which they hold as trustees and they owe a duty to the beneficiaries to deal with the land as the beneficiaries direct. There does not seem to be any dispute the First Defendants are also traditional leaders in custom so they not only owe a duty under the law to the landowning tribes, the beneficiaries of the trust, but they have duties and responsibilities in custom as well to exactly the same people.

4. At this point it is essential to bring to mind the nature of the claim in this matter. The Claimants do not say they own or have an interest in all the land which is registered in the names of the First Defendants. This is generally known as Tasahe land. The Claimants are only concerned with a portion of Tasahe land. The area is shown on the map attached to a survey initiation form produced by Hilda Kii in evidence and marked as Exhibit 2. The Claimants say the Kakau Valimauvo tribe were the original owners. They would like the land registered in the names of trustees who would hold it for the benefit of the tribe. This is not something which has just arisen; it has been talked about for some time. There is clear evidence of that in the court book. The Claimants say there was an agreement; it is shown at pages 2, 8 and 120 of the court book. There is another "memorandum of understanding" at page 14. There are documents signed by one trustee but not the other. The claim is based on those agreements and those documents. Even if I were competent to do so, I do not have to decide who the original land owners were. It is not necessary for the court to come to any decision about customary ownership. The court is being asked to make a decision about specific performance or the completion of those agreements. That is an issue of law, not of custom.

5. The biggest problem to deal with in this case is the divergence of "evidence" as between the First Defendants, the trustees. As mentioned, there are agreements and documents signed by Savino Laugana but not by Thomas Buto. It is clear from the paperwork that there may be a real difference of opinion as between the two. It is clear Mr Buto's appointment as trustee has long been problematic. The letter dated 12th April 1993 at page 4 of the court book is evidence of that. It is surprising, given the conflict of interest, that the two were not separately represented. Be that as it may, the case has to be determined on the basis of the evidence properly before the court.

6. That evidence has been confusing, contradictory and, it must be added, deliberately vague. There is very little that can be taken, on the face of it, as actual fact. What can be reasoned from the evidence, both that set out in the court book and that given as oral evidence, is there were land acquisition proceedings affecting the whole of Tasahe land. There was an appeal against the Land Acquisition Officer's determination which was heard by a Magistrate, the late Mr Stanford-Smith. His judgment, at page 104, is most helpful. Of particular assistance are his comments at paragraph 5. He cites Paramount Chief Kalisto Houma's view that, Pego and Buto have "forced themselves to be trustees". He also deals with a local court decision held out by Mr Buto in the appeal to be proof of ownership and still held out to be so today. Magistrate Stanford-Smith said of it, "I have deliberately avoided that document [the record of the Local Court case] as it is the subject of a criminal investigation". I have heard no evidence about the result of those criminal investigations. If Magistrate Stanford-Smith was of the view that the Local Court record was extremely suspect then, in the absence of any comment or evidence about the result of the criminal investigation now, I should not give it any credence either.

7. There is no evidence from Mr Laugana. It is said he is too ill or infirm to attend court. The evidence from the other trustee, Mr Buto, came in the form of a sworn statement handed in at the conclusion of the trial. It was explained that Mr Buto is also elderly and infirm and being unable to walk he too had difficulty getting to court. The Claimants wanted to cross examine Mr Buto. They were not able to. I do not accept his written evidence as being very credible. Apart from the fact it was untested by cross examination, it contradicts much of what was said and found to be fact in the land acquisition appeal before Magistrate Stanford-Smith. For example, Mr Buto in his sworn statement says that his co-trustee was held to be entitled to be included as one of the trustees to represent the Gaubata sub-tribe called Haniquana. What the judgment actually found was, "Savino Laugana is the key leader of the Ghaubata". Later it is said, "The persons clearly entitled to the rent and profits of this land are the Ghaubata. The Headman of that tribe is Savino with Tomy". I have presumed that Tomy is a reference to Thomas Botu. The Magistrate also said the original determination by the acquisition officer that Lawrence Pego (who was the Deputy Registrar of Titles at the time) and Thomas Buto should be trustees was, "...unsatisfactory as there may have been a conflict of interest, and only a small sub-section within Ghaubata was represented".

8. Eventually the land was transferred into the names of the First Defendants. The evidence as to when that was is a little confusing. The process of creating registered titles seems to have started in 1993. It is also important to note this was a process initiated by way of what is the present Part V of the Lands and Titles Act. The first "registered owner" of the land was the Commissioner of Lands. That is as it should be under Part V. It is probable the land vested in the Commissioner in March 1993. The Commissioner then transferred the land to the First Defendants. This was in all probability in July 1993, interestingly; after the letter referred to earlier (at paragraph 5) dated April 1993 and a declaration dated February 1993. Why the Commissioner transferred all of Tasahe land to the First Defendants is left unexplained but it is probable he was relying on the findings flowing from the acquisition process. In any event it is abundantly clear the Claimants were asking for the land in question to be transferred to trustees nominated by them from the very beginning.

9. The reason why can be best gleaned from the evidence submitted on behalf of the First Defendants. There was a sworn statement from Mr Kavichavu. It was filed on 30th March 2011 and is in the court book beginning at page 170. He says (at paragraph 16 (b) (i) to (iv)), "My Haubata tribe gave lands to the claimants sub-tribe because members of my tribe married into their tribe". He goes on to say, "The portions of land herein stated were taken back by the Haubata sub-tribe in the 1973 court case referred to herein and subsequently registered in the names of the first defendants as trustees for our sub-tribes". The 1973 case appears to be a reference to the Local Court case Magistrate Stanford-Smith described as being the subject of a criminal investigation. The sworn statement also refers to Haubata and Gaubata. Those names seem to be used interchangeably and it can be assumed they are one and the same thing. There is no indication when the land was given to the Claimants, but logically it must have been before 1973. Returning to Mr Kavichavu's sworn statement he says (at paragraph 16 (c) (ii)) he did sign a declaration dated 17th February 1993. The declaration is seen at pages 2, 8 and 120 of the court book and was originally exhibited by the second named Claimant in his sworn statement filed 4th March 2011. Mr Kavichavu confirms the declaration was signed on the understanding that, "land was to be given to the Claimants' tribe". From the declaration itself it can be seen the "handover" was conditional upon a custom ceremony being held.

10. Whilst I cannot make a decision on ownership of customary land and need not do so in this case, I can see nothing in what Mr Kavichavu swears to as contradicting what Magistrate Stanford-Smith found as fact back in 1987. Mr Kavichavu says, in simple terms, Ghaubata owned the land in question. It was given at some time in the past, to the Claimants sub-tribe because of inter-marriage. The Ghaubata tribe (according to Mr Kavichavu) somehow "took it back" in 1973. That accords with the Magistrate's finding. Subsequent to the Magistrate's decision, a consensus appears to be reached that the Claimants' tribe had some ownership claim in custom. Whether that was right or wrong in custom is not the issue in this case. The declaration signed on 17th February 1993 was acknowledgement of the Claimants' sub-tribes interest in the land and an agreement to transfer the land. What is important in this case is the majority of "trustees" agree in the declaration to have the land excised from Tasahe land as a whole and transferred to the Claimants' sub tribe. The Claimants' part of the bargain was to arrange a custom ceremony.

11. There is clear evidence a custom ceremony, a tsupu, was held. A document was tendered by the second named Claimant Mr Liliau (Exhibit marked 1). It details who attended and what was said. Mr Buto states he knew nothing of the custom ceremony in 2006. Another "trustee of Tasahe land" Mr Renato Kavichavu certainly did. There was evidence members of the Taonavua sub tribe (of which Mr Buto is said to be the head) attended. Six names were mentioned; Damaso Roko, Elizabeth Iro, Claudette Liliau, Joachimo Rava, Sipilsio Lonqa and Vincent Kurilau. There is ample evidence that other Tasahe "trustees" were aware of the ceremony and its purpose and many members of the Ghuabata tribe were likewise aware of the tsupu. It is hardly credible that Mr Buto was unaware of it. He knew about it but deliberately stayed away. However, it must be remembered he is a trustee and must do what the beneficiaries require of him. Whilst he may personally not have agreed to the claims by the Claimants he was bound to do what the majority of beneficiaries wanted. I bear in mind the Magistrate's finding set out above [3], Mr Buto represents only a small sub-section of the Ghaubata tribe.

12. From the notes tendered as Exhibit 1 (and the contents were not seriously challenged) it can be seen three persons who signed the 1993 declaration mentioned at paragraph 9 were at the ceremony. Mr Laugana, Mr Simon Mavi and Mr Vincent Kurilau. There is no dispute they are members of the Ghuabata tribe. No one has disputed they are "trustees" of Tasahe land although it must also be pointed out, apart from Mr Laugana, they are not trustees of the Registered land. Put another way, they are not the Trustees registered as owners of the Registered Land. They do appear to be acknowledged as trustees by all the beneficiaries in some way, entitled to speak and act on behalf of all the beneficiaries. The reason why they are termed "trustees" probably stems from the comments made in the Magistrate's decision. He reports what Paramount Chief Kalisto Houma recommended namely, "Savino (Mr Laugana) should nominate five Trustees to represent the various interests within the Ghaubata tribe".

13. We can move on from any custom considerations and look at the law. The right of the "five trustees", and for the sake of completeness they are, Savino Laugana, Thomas Botu, Vincent Kurilau, Renato Kavichavu and Simon Mavi to speak for the Ghaubata tribe is not challenged. Mr Kavichavu makes some distinction between Tasahe West LR910 and Tasahe East LR951 but he does not explain why he allowed all five to be named in the 1993 declaration to which he put his name. Mr Botu simply says Mr Laugana has no power to give away any land within Tasahe East except with his consent and the consent of the Haniguana and Taonavua sub-tribes. He does not comment on the authority of the "five trustees". The Amended Defence filed on 18th August 2010 does not take the matter further. It re-iterates what is said about the Haniguana and Taonavua sub-tribes by Mr Botu but does not say the "five trustees" do not speak for the whole of the Ghaubata tribe.

14. It is necessary to say again that the only registered trustees are the First Defendants. Whilst it may assist in deciding what was or was not "agreed" the undeniable fact the majority of the Tasahe land "trustees" agreed to the transfer to the Claimants is not conclusive in this case. The reason for this is section 200 of the Lands and Titles Act. It says:

1) Where a registered interest in land is owned jointly the joint owners shall hold on the statutory trusts.

(2) Where two or more persons are joint owners of a registered interest in land—

(a) a disposition of the interest shall be made only by all the joint owners; and

(b) on the death of a joint owner the interest shall vest in the surviving owner or owners.

Mr Laugana and Mr Buto are joint owners; the declaration at page 6 is clear proof of that fact. Any disposition of trust property must be made by them both. This follows the "old" rule in Ebsworth and Tidys Contract [4]. A transfer is a disposition. The RT Form 4 shown at page 12 of the court book is only signed by Mr Laugana. It could not on its own be effective in transferring title.

15. However, the First Defendants hold the land upon the statutory trusts. They are set out at section 214 of the Lands and Titles Act. Apart from the general principals affecting all trusts (see paragraph 2 above), the First Defendants are obliged to comply with the specific requirements of the statutory trusts set out in the section. The statutory trust directs the Trustees to hold the property on behalf of the beneficiaries with a view to selling it (or part of it) but they have absolute discretion when any sale is to take place. If a sale does take place the Trustees hold the net proceeds of sale on behalf of the beneficiaries. Any beneficiary is entitled to a full account of the proceeds. A sale or transfer to beneficiaries is specifically provided for in section 214(2). Other beneficiaries can object (section 214(3)). The Commissioner has to agree to the sub-division (section 140). It is certainly within the scope of the statutory trust for the First Defendants to transfer the land to the Claimants.

16. In the English Law of Property Act 1925 (section 39) there is provision allowing the courts to make a vesting order in some or all of the beneficiaries if the Trustees cannot agree. This put into statutory effect what had been decided in old English authorities from the Courts of Equity [5]. There is no similar provision in the Lands and Titles Act. It is doubtful there is power for this court to make such a vesting order. However, we must return to the actual claim in this case which is for specific performance of various agreements for sale or transfer of part of Tasahe land to the Claimants. Whether an order is made for specific performance or whether a vesting order is made, the practical effect is the same.

17. In that regard section 117 (2) of the Lands and Titles Act is relevant. Any agreement for sale or transfer must be in writing. The declaration dated 17th February 1993 is in writing and is effective as an agreement for sale. It identifies the parties, the land and the consideration required. The agreement is not bound by the same requirement that it must be "made" or signed by both Mr Laugana and Mr Buto as must a transfer (paragraph 14 above). It is not a "disposition"; that is clear from the definition of disposition set out in section 2(1) of the Lands and Titles Act. Even if only signed by one trustee it can still be effective if it is signed by one trustee with the authority of all. The only question is whether Mr Buto authorised the signing of the agreement.

18. The evidence for that comes from Mr Perogolo. There is a sworn statement from him filed on 17th May 201. He states he was with his late brother, Albino Damusi, when they met Mr Buto at Town Ground. The transfer to the Claimants tribe was discussed and agreed to by Mr Buto. There was another meeting in 2003 when, in the company of his late uncle Kalisto Voka at the former Solomon Airlines office at Point Cruz, he spoke with Mr Buto again. Mr Buto confirmed the arrangement to transfer title to the Claimants Tribe. He suggested they wait for law and order to be restored. Mr Perogolo attended court on the second day of the trial. He confirmed his sworn statement. He was cross examined about it and was steadfast in his evidence about the meeting. It was put to him that Mr Buto had also made a sworn statement in which he denied the meeting. Of course Mr Buto did not attend court and was not subjected to cross examination. I prefer the evidence of Mr Perogolo because nothing in his cross examination led to any doubts about his credibility. I find as fact there were two meetings as stated by Mr Perogolo. The evidence establishes that in all probability Mr Buto knew about the proposed transfer, agreed with it at the time but for some reason decided not to sign. The first meeting was prior to the signing of the declaration in 1993 and the second after it had been signed. The evidence of Mr Perogolo is sufficient to substantiate Mr Buto's consent to the signing of the declaration both before and after it was made. It is ample and more than adequate evidence of both trustees "authority" to sign and satisfies the requirement of section 117 (2) even though only one actually signed.

19. The Claimants have done all that is required of them as set out in the agreement as evinced from the February 1993 declaration. There is no question of limitation in this case. The evidence establishes Mr Buto re-affirmed the agreement in 2003 well within the 12 year period applicable. There is also the 2006 Memorandum of Understanding. It is signed on behalf of the Claimants as well as Mr Laugana. There is clear evidence of a binding contract to transfer the land. The Claimants have satisfied the need for a custom ceremony and no other consideration has been mentioned or required. There is no doubt that the tsupu can be sufficient consideration in law. It has probably far more significance and worth in custom than it does in law. The Claimants are entitled to an order for specific performance of the contract or agreement to transfer the land.

20. That is not an end to the case. There are claims made against the Second, Third, Fourth and Fifth Defendants. The claims are based on the fact they are said to be occupying portions of the land. The orders sought, in the interests of justice, will not be made. In reaching that decision I bear in mind the Second to Fifth Defendants are in a similar position to the Claimants. It is possible only one trustee was involved and the consideration for the disposition was a custom ceremony. I also acknowledge the "gifts" of land following tsupus appear to be a breach of trust by the First Defendants or at the very least, one of them. That which occurred in 2010 was more than likely a contempt of court as well as it was completed after the commencement of these proceedings. It is not clear whether any of the Second to Fifth Defendants have registered their "titles". It is difficult to see how they could have done because there is no evidence of any declarations by the trustees as required by section 195(3) of the Lands and Titles Act. In passing, it is noted there is no evidence of any declarations in respect of any disposition affecting Tasahe land. That is not to say the Registrar of Titles did not sight the necessary declaration before registering any change but if he did not call for and/or did not note any, his non-observance of the law may well place the present registered title holders in a difficult position. However, that said each of the Second to Fifth Defendants probably has an overriding interest by virtue of actual occupation.

21. Once title has been registered in the names of the trustees nominated by the Claimants there should be a formal registration of the Second to Fifth Defendants' titles. They will have to agree with the trustees exactly what land is to be transferred to each one. The beneficiaries, that is all the members of the Kakau Valimauvo tribe, will also have to agree. This should be at a public meeting arranged by the trustees. If no agreement is possible the matter will have to return to court and the court will impose an agreement on the parties. Each of the Second to Fifth Defendants will have to pay the costs of any survey and transfer. If they fail or refuse to do so their interests in the land are likely to be extinguished and they will become trespassers and subject to eviction. If they are evicted any buildings they have erected will become the property of the registered owners.

22. As mentioned earlier, the duties of a trustee are onerous. It is suggested each nominated trustee considers those duties very carefully before agreeing to take them on. They can, as trustees, take no personal benefit from the trust property (the land) and every dealing or disposition involving the trust property must be agreed by the majority of beneficiaries at a public meeting (see section 195 (3) of the Land and Titles Act). If they fail to obtain the beneficiaries' agreement or if they acquire a personal benefit in the trust property, not only will they be liable in civil proceedings to account to the beneficiaries they may also be the subject of a criminal prosecution. It is also possible any transaction could be set aside by the court so they may end up liable to transferees as well. They should consider forming a committee by means of which they can both inform the beneficiaries of what is going on and be informed of the beneficiaries' wishes. They should also open a trust bank account so that the net proceeds of any sale or any income raised from the trust property can be accounted for.

23. I have also taken note of the age and infirmity of the First Defendants. It may be they should consider enlisting the help of younger members of the Ghaubata landholding group in managing Tasahe land as trust property and even encouraging them into becoming new or replacement trustees. Perhaps a public meeting could be held to discuss that possibility. No order is sought in that regard and no order is made, it is a comment merely made in passing.

24. The formal order of the court shall be:-

1. The Claimants are entitled to an order for specific performance of the agreement dated 17th February 1993 for the transfer of land within Tasahe to trustees nominated by them.

2. The area of land to be transferred is that delineated in the map tendered and marked as Exhibit 2 in these proceedings, being the plan attached to a Survey Initiation Form and signed by the first named First Defendant and dated 11th March 2006.

3. The costs of any survey and any fees payable to the Commissioner of Land or Registrar of Titles resultant from the transfer are to be paid by the Claimants.

4. If the First Defendants, or either of them, fail to execute any formal document to give effect to the agreement or this order, the Registrar of the High Court is authorised to execute such document in their place.

5. Before the registration of the trustees nominated by the Claimants as joint owners of the land each and every one of the trustees shall execute or join in a statutory declaration as provided for in section 195 (3) of the Land and Titles Act [Cap.133] stating they hold the land as trustees for the members of the Kakau Valimauvo tribe. Any public meeting required to put this part of the order into effect shall be advertised in the locality by posting public notices and by the publication of such notice in a newspaper regularly circulating within Solomon Islands.

6. Upon the registration of the trustees nominated by the Claimants as joint owners of the land they shall transfer to the Second to Fifth Defendants such area or areas of land as shall be agreed by the said Defendants and members of the Kakau Valimauvo tribe and in the default of such agreement the matter shall be referred to the High Court. Each of the said Defendants shall be responsible for any survey or transfer fees payable to the Commissioner of Lands or Registrar of Titles.

7. Pending completion of the transfers set out in paragraph 6 above these proceedings are to be adjourned generally with liberty to apply on 2 days written notice. Upon completion of the last of the transfers referred to in paragraph 6 above these proceedings shall be deemed to have been concluded.

8. The Defendants shall pay the costs of the Claimants, such costs to be agreed or in default of agreement, taxed on a standard basis.

Chetwynd J

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^[1] Co Lit 292 b
^[2] Section 304 of the Penal Code [Cap. 26]
^[3] See paragraph 7
^[4] Ebsworth and Tidy’s Contract 42 ChD 23 (CA)
^[5] See Messeena v. Carr L.R. 9 Eq.260; Brazier v. Camp 63 L.J. Q.B. 257 and Lee v. Sankey [1873] UKLawRpEq 6; L.R. 15 Eq. 204