Arnold v Foanaota [2012] SBHC 104; HCSI-CC 206 of 2010 (10 September 2012)

IN THE HIGH COURT
OF SOLOMON ISLAND
(Civil Jurisdiction)

Civil Case no. 206 of 2010

Christina Arnold
The Claimant

v.

Moses Foanaota
The First Defendant

And

Nick Maena
The Second Defendant

And

Emily Abana
The Third Defendant

Hearing: 23 – 24 July 2012
Judgement: 10 September 2012

A. Radclyffe for the Claimant
G. Fa'aitoa for the First Defendant
J. Iroga for the Second Defendant and Third Defendant

Palmer CJ.:

1. The claimant, Christina Arnold is the registered holder under the Land and Titles Act (cap. 133) of the Perpetual Estate in parcel number 191-078-7 containing an area of 5.0429 hectares, located at Mataniko Village, behind Choviri and Mbokonavera(IV) areas.
   
2. She had acquired this property by way of transfer from the original title holders, Savino Laugana ("Laugana") and Thomas Botu ("Botu"), who held that property in trust for and on behalf of their tribal communities, the Ghaubata Haniquana and Ghaubata Taonavua tribes. The transfer was effected on 29 December 1995 and registered on 7 June 1996.
   
3. The original parcel, 191-078-1 was created following registration of Laugana and Botu as the representatives of the landowners on or about 31st August 1993 when the perpetual estate was transferred to them in their capacity as joint owners on the statutory trusts. Parcel 191-078-1 was in turn subdivided in 1995 into four Parcels, 191-078-2, 191-078-3, 191-078-4 and 191-078-5. Parcel 191-078-3 was further subdivided in 1998 into the current two Parcels, 191-078-6 and 191-078-7.
   
4. Sometime in 2010 or thereabouts the defendants entered the property of the Claimant and constructed a pig pen and buildings. Despite issuing notices to vacate her property the defendants have not left. She comes to court inter alia for the following orders:
   
   1. an order for possession of Parcel No. 191-078-7;
   2. an order for damages for trespass limited to $100,000;
   3. an order for vacant possession and for the defendants, their servants and agents to remove their buildings from the land;
   4. an order that if the defendants refuse to remove their property that they shall become the property of the defendant and may dispose of them as she considers fit;
   5. a restraining order; and
   6. any such order as may be appropriate.
      

The First Defendant's case.

5. The First Defendant claims to have acquired a prior interest in custom in the land which subsists although it is now registered land. It is not disputed that the land was purchased in custom for the sum of $25,000 from a landowner, Mariano Toki ("Toki"), now deceased in 1991. It is also not disputed that on or about 23rd July 1992 he performed a customary ceremony called the "chupu" in Guadalcanal, which involved the provision of food and goods to mark the transaction. There is sufficient material on the facts of this case to establish the proof of this customary ceremony and the crucial attendance and presence of Laugana, one of the land trustees at that ceremony.
   
6. The First Defendant claims this transaction in custom is binding on the land and continued to exist as an overriding interest or fetter on the land which the registered trustees, Laugana and Botu were obliged to take cognizance of. He says the transfer of the land to the Claimant is a mistake and the registration ought to be rectified in his favour.
   
7. He also says the registration of the transfer was done in breach of the statutory trusts which required those beneficially interested in the property to be consulted. He says no such consultation was done in this case and therefore the registration was also done in mistake.
   
8. He says he is entitled to remain on the land and counter-claims for rectification of the Perpetual Estate Register, possession, damages and costs.
   

The second and third defendants' claims

9. The second and third defendants claim they acquired title to the land in custom in 2005 and 2009 by virtue of custom purchase of a block of land within Parcel 191-078-7 from Susan Pegoa and her mother, Konila Luvusi.
   
10. They say the Claimant acquired title by fraud. They say the signatures of Laugana on the transfer instruments were forged. They also say the requirement on the statutory trusts had not been complied with, no consultation was done with those who hold the beneficial interests and therefore the transaction was fraudulent.
    

The issues in dispute.

11. The first issue in this case is whether registration of the Claimant had been obtained, made or omitted by fraud or mistake. If this is shown to the satisfaction of the court on the balance of probabilities the Court may order rectification. Section 229(1) of the Land and Titles Act (cap. 133) authorizes the Court to order rectification on two limited grounds, fraud or mistake.
    
12. Subsection 229(2) protects the interest of an owner that is in possession and had acquired the interest for valuable consideration, unless it is shown he had knowledge of the omission, fraud or mistake or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default.
    
13. The second issue, which is directly related, is the effect of the sale of the land in custom to the First Defendant by Toki.
    

Sale in custom and effect in law.

14. What is the status of that sale in custom? It is common knowledge that land sales are a common occurrence, especially in relation to customary land around the vicinity of Honiara City and so this is not a new phenomenon. I take judicial notice of this fact that land is commonly sold for value followed by a custom ceremony called the "chupu", which involves the provision of goods, perhaps some more money and food to the landowners and members of the tribe to seal the transaction. Once that is performed, it would seem that it completes the recognition and acceptance of the land transaction by other members of the tribe and cannot be undone by them.
    
15. In the draft sworn statement of Laugana, attached as Exhibit "MF4-2" to the 4th Sworn Statement of Moses Foanaota, at paragraphs 7-9, he purported to explain the meaning and effect of a chupu. I paraphrase his explanations as follows. A chupu is a customary ceremony and is like a custom feast. It is used to seal and mark the acquisition of land. In other words, it is a demonstration to the tribe or community that rights had been conferred on a "purchaser" or "transferee" of land in custom.
    
16. The second aspect to the chupu is the public significance attached to it. It is a ceremony done in public and witnessed by many people in particular members of the tribe. A message normally would be relayed or conveyed to members of the tribe or community about the chupu. It can be likened to a notice to the community or tribe at large to "take note" of the transaction, that by this chupu, members of the tribe are made aware of the land dealing. It would seem too that the chupu is an opportunity for objections to be raised and to be dealt with there and then.
    
17. For purposes of this transaction I make the following findings of fact. I am satisfied on the evidence before me it had been proven that such a transaction occurred in respect of the said land in 1992 and that it binds the parties, the community and tribe who witnessed this transaction. I am satisfied a valid sale was effected over the said land in 1991 and perfected on or about 23rd July 1992 by a "chupu". I am satisfied this sale in custom confers a beneficial interest on the First Defendant which subsists and acts as a fetter on the land. I am satisfied too that one of the current trustees, Laugana, recognized as the paramount chief of his tribe and community, was present at the ceremony and that no issue had been raised regarding the authority of Toki to sell that land.
    
18. I find that his presence at the ceremony and approval of the transaction to be central to the subsequent dealings purported to be done over the same land.
    

Knowledge of the land to be imputed to the Trustee, Savino Laugana.

19. Laugana has been referred to and recognized throughout these proceedings as the Paramount Chief of the Ghaubata tribe or the community he oversees and has responsibility over. For that reason he was included as one of the trustees and registered as a joint owner over the original parcel of land described as 191-078-1.
    
20. As a chief and land custodian, it is inconceivable that he would not have intimate or sufficient knowledge of the location of particular lands within his responsibility. One of the features of a chief in Melanesian society is that the chief is often regarded as the repository of custom knowledge over the land, including boundaries, history of their tribe, knowledge of their sacrificial places, tambu sites, settlement sites, genealogy etc.
    
21. It is incredulous he did not know where or what the land boundaries were, that was the subject of the sale to the First Defendant. Late Toki, who sold the land, is his nephew, whose mother is his sister. Surely he must have known what land they had or be informed of the boundary or area of land that was being "chupu-ed". I find it unbelievable he did not know; I reject his evidence that he did not know or was aware of the area of land that had been sold to the First Defendant. But even if he did not know, he was obliged not only in custom but morally as well, as a leader, chief and land custodian of his people, to ascertain the boundaries of the land. In so far as he did not, he was negligent and failed in his customary duties to protect the integrity of the customary practices and processes of the chupu so that it did not become ridiculed and/or compromised, including his integrity and credibility as a paramount chief. Had he performed his customary duties, this court case would not have eventuated.
    

Subsequent gifting of the same land to the Claimant.

22. By now it should be clear what has happened. There was a purported gifting or dealing of the same land in custom to the Claimant in December 1992 by Laugana. I have heard evidence of the family meetings, discussions and agreement for the gifting of that land to the Claimant, she being a member of the tribe and related as well to Laugana and hardly any dispute is raised regarding those meetings other than the suggestion that the land was already registered land for it was not registered until about August 1993 although the process for registration would have occurred much earlier by as much as 2-3 years earlier, when the decision to acquire the land for registration in the first place would have been made and the process initiated under Part V of the Land and Titles Act (cap. 133) ("LTA"); judicial notice can be taken of this. It appears the process of registration was conducted round about the same time as the customary sale and ceremony of the disputed land were being done in 1991 and 1992. It would have been all the more important that Laugana took particular note of those transactions and excluded them from any future dealings of the land, even when registered.
    
23. Registration of the land does not extinguish the acquired customary rights of the person(s) who had been conferred those rights lawfully, a fortiori, where the registered land is held on the statutory trusts. I do not agree with the submission that registration extinguishes customary rights conferred in this case. Schedule 3 to the Constitution at paragraph 3(1) and (2) states that customary law shall have effect as part of the law of Solomon Islands save to the extent that it is inconsistent with the Constitution or any Act of Parliament. I do not find any inconsistency with any provisions of the LTA or any other Act or the Constitution.
    
24. In his evidence, Laugana admitted in Court that he told late Toki to have the appropriate instruments prepared and lodged for registration. The failure or delay on the part of late Toki, (according to the evidence it appears he died sometime after), is not fatal to the beneficial interests which had already been conferred and held by the First Defendant. Laugana had no authority to deal with that same portion of land without due notice. The requirements of the statutory trusts set out in section 195(3) of the LTA would have fulfilled that purpose, only then could he conduct further dealing on that land. Where he fails to do that, an error of law has been committed.
    
25. I take note also of the statement of the First Defendant in his 2nd Sworn Statement at paragraphs 26-30 in which he was told by Laugana that he thought the transfer he was effecting to the Claimant was in respect of a different portion of land. In any event, the effect of registration of that land in or about August 1993 is that the joint owners held that part of the land in trust for and on behalf of the First Defendant.
    
26. There are two fundamental reasons why the purported gifting or dealing of the same land was invalid and ineffective. First, Laugana could not confer what he did not have or no longer had. Having accepted the chupu over the said land he is estopped from asserting any form of customary rights over the said land so as to re-confer fresh rights on the Claimant in December 1992. He cannot approbate and then reprobate without notice to the First Defendant. The sale having occurred prior in time must prevail.
    
27. The second reason is that he failed to comply with the statutory requirements imposed on him and Botu under section 195(3) of the LTA.
    
28. As joint owners they held the interest in the land on the statutory trusts as set out in section 195(1) and section 214 of the LTA. Subsection 195(3) provides that:
    

"No interest in land shall be registered in the names of more than one Solomon Islander as joint owners, unless there is produced to the Registrar a statutory declaration made in public by each of the joint owners setting forth the names, description or group name and, so far as is practicable, the interests of the persons beneficially interested; and where any interest is so registered no disposition of the interest shall be registered unless there is similarly produced to the Registrar a statutory declaration made in public by each of the joint owners that the persons beneficially interested have been consulted and that those of such persons in favour of the disposition of the interest are entitled to the major portion of the beneficial interests in the said interest of which the disposition is sought to be registered:"

29. It has never been in issue that Laugana and Botu held the beneficial interests on behalf of their tribes, more specifically the Ghaubata Haniquana and Ghaubata Taonavua tribes and not as the sole beneficiaries. Accordingly they were required by law to consult with the persons beneficially interested in the land. In this instance, they were obliged to consult with Toki, his mother and or any family members, in particular those who were present at the Chupu and including the First Defendant. It is clear on the evidence he did not do so. Had he done so, they would have objected or would have alerted the First Defendant about the purported gifting of the same land and would have objected.
    
30. The failure to consult in this instance is fatal to the purported gifting, subsequent transfer and registration of the interest in favour of the Claimant. The purpose and intent of such legislation is to protect the interests of members of the tribe who hold beneficial interests in the land, the subject of the intended dealing. The wording of the legislation is precise "...no disposition of the interest shall be registered unless there is similarly produced to the Registrar a statutory declaration made in public by each of the joint owners that the persons beneficially interested have been consulted ....".
    
31. The evidence in the trial is that no consultation took place other than the signing of the statutory declaration at Mataniko and the signing of the Transfer Instrument at the Lands Office on the same date and before the same Commissioner for Oaths.
    
32. In so far as this omission may have been deliberate, or as a means to evade communication with the beneficial owners of the said land, that is dishonest. In so far as it was done in ignorance, giving the benefit of a doubt, it was clearly a mistake.
    

The defence under section 229(2) of the LTA.

33. Subsection 229(2) of the LTA provides a defence to the interest of a person who has acquired the interest for valuable consideration and is in possession of the land if they had no knowledge of the omission, fraud or mistake or did not cause it or substantially contribute to it by any act, neglect or default.
    

"(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."

34. This defence or shield is reiterated in another way in the earlier provision, section 118 of the same Act. That section provides:
    

"(1)No person dealing or proposing to deal for valuable consideration with an owner of a registered interest in land shall be required or in any way concerned-

(a) to enquire or ascertain the circumstances in or the consideration for which such owner or any previous owner was registered; or

(b) to see to the application of any consideration or any part thereof; or

(c) to search any register kept under any previous written law relating to the registration of documents relating to land.

(2) Where the owner of such an interest is a trustee, he shall, in dealing therewith, be deemed to be the absolute owner thereof, and no disposition by such trustee to a bona fide purchaser for valuable consideration shall be defeasible by reason of the fact that such disposition amounted to a breach of trust.

35. There are two qualifying requirements for the defence to be operative in section 229(2). First, a person is in possession or residing on the land and secondly, had acquired the interest for valuable consideration. There is no dispute that the Claimant does not fulfill those two requirements and so the shield provided by that subsection cannot be relied on.
    
36. In section 118 of the LTA, the condition is that she is a bona fide purchaser for value. Again she does not meet that condition. The effect of this is significant for it imposes an obligation on her to enquire into the circumstances in which such owner or any previous owner was registered and in particular to search the register and determine the ownership of that particular land. This is all the more important where the Claimant is a member of the tribe and related to Laugana; she should or ought to have known that his registration could not have been in his private or personal capacity but on behalf of the tribe. As a member of the tribe or a relative, it is most improbable that she would not be informed or aware of the happenings in the tribe or community.
    
37. But even given the benefit of a doubt, that she was not aware of the earlier sale and chupu, had she exercised due care and diligence and complied with the requirements of the statutory trusts to conduct a meeting in public, or give notice to those members of the tribe within the vicinity of the purported gifting of the land, no doubt she would have been notified of the earlier transaction. The biggest hurdle is the fact that one of the trustees, Laugana, had knowledge or ought to have known all along that this piece of land could not be gifted. To the extent this was done, it was dishonest or fraudulent, if not, clearly a mistake. The Claimant contributed to this in any event by the fact she did not exercise due diligence to enquire into or ascertain the circumstances of registration, and whether or not there was any application of any consideration and to determine whether a statutory trust applied. Had she done that she would have realized that registration ought not to be done without a public meeting, which in essence meant notice to those landowners and other members of the tribe who had an interest in the land.
    

The Second and Third Defendants' Claims.

38. Their claims or defence can be dealt with together. They also claim interests in custom pursuant to a sale of the two blocks of land from the same landowners, Konila Luvusi and Susan Pegoa in or about July 2005 and June 2009 respectively.
    
39. In so far as their defence is based on a challenge of the registration of the original title of the joint owners over the perpetual estate in parcel no. 191-078-7, this must fail on the evidence in that I am not satisfied it had been shown the registration of the joint owners was fraudulent or a mistake. Their case had been premised on the signatures of Laugana on the transfer instrument dated 29 December 1995 being forged. Adequate evidence to the contrary had been adduced which render this assertion baseless and must be dismissed.
    
40. On the issue of the purported sale of those two blocks of land in custom, these must be weighed against what may be prior dealings in custom over the same areas of land. The first prior dealing in custom is the sale by Toki to the First Defendant. If those two blocks of land are also included under that sale, then rights would have been transferred over the said land. If not, it would still be caught under the second dealing in custom between Laugana and the Claimant and subsequent registration in favour of the Claimant.
    

Conclusion

41. The claim of the Claimant therefore must be dismissed, on the other hand, grant the orders sought in the counter-claim of the First Defendant with costs against the Claimant. As to the claim against the 2nd and 3rd Defendants, where those blocks of land had also been included in the first sale then the claim of the Claimant against them should also be dismissed. In lieu thereof, the register should also be rectified in favour of the First Defendant. Where they were not included, then the claim should be allowed as against them with costs.
    

Orders of the Court:

1. Dismiss claim of the Claimant against the First Defendant.
   
2. Allow counter-claim of the First Defendant as follows:
   
   1. Grant order for rectification of the perpetual estate register in parcel number 191-078-7 in his favour;
   2. Grant order for general damages to be assessed if not agreed; and
   3. Costs against the Claimant.
      
3. Dismiss the claim of the Claimant against the 2nd and 3rd Defendants where those two blocks of land were also included in the original sale by Toki with costs against the Claimant, otherwise allow the claim of the Claimant with costs against the 2nd and 3rd Defendants only. The register to be rectified to reflect this order.
   

The Court.