Solomon Island Home Finance Ltd v Waki [2014] SBHC 1; HCSI-CC241 of 2008 (3 January 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

Civil Case 241 of 2008

BETWEEN:

SOLOMON ISLANDS HOME FINANCE LIMITED
Claimant

AND:

JAMES WAKI
1st Defendant

AND:

ERIC WAKI
2nd Defendant

AND:

ATTORNEY GENERAL (representing the Registrar General And Commissioner of Lands)
3rd Defendant

Mr. M. Tagini for the Claimant.
Mr. B. Etomea for the 1st Defendant.
No appearance for the 2nd and 3rd Defendants.

Date of hearing: 25th November 2013
Date of Judgment: 3rd January 2014

JUDGMENT

Apaniai, PJ:

Introduction.

1. In this claim, the Claimant, Solomon Islands Home Finance Limited ("Home Finance"), seeks the following orders:-
   

[1] An order that the 3rd Defendant rectifies PN 191-041-182 and transfer PN 191-041-182 to Mark Sura'a.

[2] An order to evict the 1st and 2nd Defendants, their relatives, friends, invitees, agents or servants from PN 191-041-182 within 30 days from the date of receipt of such order.

[3] Any other orders the court deems meet.

[4] Costs.

2. The claim was filed on 29 July 2008, approximately 10 years after the title to PN 191-041-182 ("Land") was transferred to the 1st Defendant ("James Waki") by the 2nd Defendant ("Eric Waki") on 20 June 1996. It is said that the transfer to James Waki was made by fraud and mistake and the register should therefore be rectified by removing James Waki as registered owner of the Land and transferring the Land to Mr. Sura'a.
   

The facts.

3. The facts are not seriously disputed and can be briefly stated as follows.
   
4. Home Finance was the previous owner of the Land. On or about 24 July 1992, Home Finance offered the Land to Eric Waki for a sum of $2,013.00 which was paid on 12 July 1994. The title to the Land was then registered in the name of Eric Waki on 9 February 1995. The validity of that transfer to Eric Waki is not the subject of these proceedings.
   
5. Eric Waki then offered the Land to James Waki in or about early February 1995 for the sum of $10,000.00. James Waki is the brother of Eric Waki. The transfer document necessary for transferring the Land to James Waki was executed between James Waki and Eric Waki on 21 February 1995 and the Land was registered in the name of James Waki on 20 June 1996. It is this transfer that is the subject of the dispute in this claim.
   
6. The dispute arose because on 8 September 1995, Eric Waki went to Home Finance and requested Home Finance to refund his $2,013.00 with a promise to return the title to Home Finance if his money was refunded. Home Finance refunded the $2,013.00 to Eric Waki on 11 September 1995.
   
7. Eric Waki never returned the Land to Home Finance. He had already sold the Land to James Waki in early February 1995 and had already signed the transfer documents with James Waki on 21 February 1995. Furthermore, James Waki had already lodged the transfer with the Registrar of Titles for registration that same day. However, the title to the Land was not registered in the name of James Waki until 20 June 1996.
   
8. Since the registration of the title to the Land in his name, James Waki had returned home to Malaita. He has never settled on the Land and has not even constructed any houses or structure on the Land. He said he wanted to build a house on the Land but was prevented from doing so by Mr. Sura'a who has then occupied the Land.
   
9. The occupation of the Land by Mr. Sura'a happened because of the promise by Eric Waki to return the Land to Home Finance upon the refund of his money. In the hope that Eric Waki would honour his promise, Home Finance had offered the Land to Mr. Sura'a and requested that Mr. Sura'a pay the necessary fees to have the Land transferred to him. Mr. Sura'a had paid the fees and then went and settled on the Land.
   

The Claim.

10. As stated earlier, Home Finance is claiming for rectification of the register on the ground of fraud and mistake. To succeed in its claim, Home Finance must prove on the balance of probabilities that the transfer by Eric Waki to James Waki was made through fraud or mistake and that James Waki knew about the fraud or mistake at the time of registration or had caused or contributed to the fraud or mistake through his act, neglect or default[1]. Furthermore, home Finance must prove that James Waki had known about the fraud or mistake at, or prior to, the time of his registration as owner of the Land. Knowledge of the fraud or mistake after the fact of registration will not affect the validity of his registration as owner of the Land[2].
    

Was there fraud or mistake?

11. In Assets Co. Ltd -v- Mere Roihi & Others [3], Lord Lindley interpreted fraud as meaning "actual fraud, dishonesty of some sort,...". In Waimiha Sawmilling Co. Ltd -v- Waione Timber Co. Ltd[4], Lord Buckmaster said that "It is not, however, necessary or wise to give abstract illustrations of what may constitute fraud in hypothetical conditions, for each case must depend on its own circumstances. The act must be dishonest, ...". What is clear from these two cases is that dishonesty is a necessary ingredient of fraud.
    
12. In Walter Billy -v- Paul Daokalia[5], the Court of Appeal held that, where mistake is alleged, the mistake must necessarily be confined to the exercise of the functions of the Commissioner of Lands under the Land & Titles Act because registration was made in exercise of those functions.
    
13. So the question is whether fraud or mistake was committed when Eric Waki transferred the Land to Eric Waki. If so, what was the fraud or mistake?
    
14. Unfortunately, the evidence before me does not disclose any fraud or mistake having been committed in relation to the registration of the Land in the name of James Waki. The evidence shows that Eric Waki was the registered owner of the Land when he sold it to James Waki and that at the time of the execution of the transfer document in favour of James Waki, he was still the registered owner of the Land.
    
15. Indeed, fraud may have been committed by Eric Waki in requesting home Finance to refund his money when he knew that he had already sold the Land to James Waki and had already signed the transfer document necessary for the transfer of the Land to James Waki. Unfortunately, that fraud was committed on Home Finance who, at that time, was no longer the registered owner of the Land. The fraud on Home Finance cannot be a basis for a case for rectification against the transfer of the Land to James Waki. Furthermore, the fraud was committed on home Finance after the completion of the sale and purchase transaction between Eric Waki and James Waki. It was not that fraud which caused the transfer to, and registration of the Land in the name of, James Waki. It therefore follows that the transfer of the Land by Eric Waki to James Waki cannot be said to be fraudulent. This does not mean that Home Finance has no possible cause of action against Eric Waki. On the evidence before the court, there appears to be a strong cause of action in favour of Home Finance against Eric Waki but such action is not one for rectification under section 229(1) of the Land & Titles Act.
    

Decision & orders.

16. In the premises, it is my view that no case lies against the Defendants for rectification under section 229(1) of the Land & Titles Act.
    
17. Accordingly, the claim against all the Defendants is dismissed. In regards to costs, Eric Waki shall pay the costs of the Claimant as well as those of the other Defendants on indemnity basis for the reason that it is the fraudulent conduct of Eric Waki that has brought about these proceedings.
    
18. Orders accordingly.
    

THE COURT

James Apaniai
Puisne Judge

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^[1] Section 229(1) and (2) of the Land & Titles Act (Cap. 133).
^[2] Billy v Daokalia [1995] SBCA 5; CA-CAC 001 of 1995 (27 October 1995).
^[3] [1905] UKLawRpAC 11; [1905] AC 176, at p. 210.
^[4] [1925] AC 101, at p. 107.
^[5] [1995] SBCA 5; CA-CAC 001 of 1995 (27 October 1995).