Terikirake Co Ltd v Commissioner of Lands [2017] SBHC 96; HCSI-CC 234 of 2016 (12 July 2017)

TERIKIRAKE COMPANY -V- COMMISSIONER OF LANDS,
LIMITED REGISTRAR OF TITLES,
(Claimant) MEREAN NANTARA
(1^st 2^nd 3^rd Defendants)

HIGH COURT OF SOLOMON ISLANDS
(BROWN J)
Civil Case No. 234 of 2016

Date of Hearing: 7 June 2017
Date of Judgment: 12 July 2017

Mr. M. Ipo for claimant
Mr. L. Kwaiga for defendant
Attorney General for 1^st and 2^nd defendant

JUDGMENT

Brown J:

1. This Category “A” Claim seeks rectification of the Register of Fixed Term Estate parcel nos. 191-001-39 and 191-001-47 in favour of the claimant on the grounds of mistake with a consequential order for possession.

2. The statement of case may shortly be summarized. In 1969 the claimant purchased both parcels from the Commissioner of Lands who granted a lease to expire on or around 1 August 1999. The claimant built on both parcels. In about March 2016 the claimant became aware that title to the land had passed to the 3^rd defendant in or around 26 January 2016. The claimant pleads in its Case that the 3^rd defendants registration as owner of the lease-hold estates was a mistake.

3. The mistake was a consequence of the failure to prefer the claimants’ application for the grant of lease over the land, made on 18 February 2008 and again on 19 June 2010. The value of the building on the land exceeded the premium paid by the 3^rd defendant to the Commissioner for the grant. This is relevant since it goes to the issue of mistake; whether or not the 3^rd defendant, Merean Nantara was cognizant of the Commissioners “understanding” that he was dealing with “undeveloped” land at the time of his grant of the fixed term estate on the 26 January 2016. For by valuation carried out by Solutions Appraisal^[1], both buildings had been valued at $ 95,000 while the premium paid the Commissioner was in total $6,880.

4. Since the expiry of the leases in 1999, the claimant has continued to pay annual rentals due to the Commissioner and also Honiara City Council Rates. It is asserted the fact of sending to the claimant rental statements, the Commissioner had impliedly granted renewal of the leases.

5. The claimant also relies on a letter of direction by the Registrar of Companies of 16 August 2013 where the Registrar directs the claimant that properties of the claimant shall be disposed of “according to its memorandum of association....”.
The claimant implies that the act of the Commissioner in granting the fixed term leases to the 3^rd defendant had placed the claimant in breach of its obligations under the Companies Act. The claimant did not contribute to these mistakes. This plea has no merit for the company had been then unregistered and any act of the Registrar of Titles or Commissioner of Lands did not constitute or become reason subsequently for the company to claim the Registrar or Commissioner of Lands were constrained from following their statutory obligations or powers under the land Act.

6. As well the claimant says the 3^rd defendant is not a bona fide purchaser for value in possession of the land.

7. By defence the 3^rd defendant admits that the previous leases of the claimant had expired on 1 August 1999, but denies the “structure is rented by (the claimants) members.”
The defence in answer to the claim that the applications for grant of lease were first in time says that the claimant was not then a valid entity and had no legal status. Consequently any person was free to approach the Commissioner for a grant.

8. The defendant admits the company was re-registered in April 2016. The defendant did not plead to the case in relation to the land or council rentals, but admits she obtained title on 26 January 2016. Further the 3^rd defendant says she was given an offer, after application, for the leases of the land parcels, in 2015. She paid all relevant fees before the grant of the leasehold estates. She denies the estates were granted her by mistake, for the lands were lands of the Commissioner after the earlier leases expired in 1999. Prior to re-registration in April 2016, the claimant had no legal status and its actions by way of approaches to the Commissioner of Lands before then “was illegal”.

9. The defence by the Commissioner and Registrar of Titles relied on the failure of the claimant to;
a) File annual returns and
b) Was listed to be de-registered;
and thus was not a valid entity. By effect of the coming into force of the Companies Act 2009, the claimant company became de-registered. [But the company remained a legal entity for restricted purposes and should not be classified as an invalid entity. Determination of the purposes prior to re-registration for which recognition of the company applied in the circumstances of this case is unnecessary].

10. Since there was no renewal of the leases on expiry, the land reverted to the Commissioner who was able to accede (in fact) to the application by the 3^rd defendant who sought a grant of lease. Any mistake in these circumstances was denied.
11. A court book, restricted to the pleadings was filed together with a statement of agreed facts.

12. The Reply of the claimants joined issue with the defendants in respect of most of the paragraphs under rely, but pleaded that the claimant was always capable of being re-registered once annual returns were filed. More importantly the claimant says “non-renewal of the fixed term estates and the awarding of the said lands to the 3^rd defendant was premised on” a series of “erroneous and untrue information supplied to the 1^st defendant (Commissioner of Lands) relied upon to enable the 3^rd defendant to obtain her grant.”

13. The agreed facts are

a. The claimant had the land parcels to 1 August 1999.

b. Since September 1969, a permanent building was erected on the lands.

100. The claimant company was de registered by the Registrar of Companies and was restored to the Register on 22 April 2016.
     

4. On 26 January 2016, the fixed term estates to both parcels were granted the 3^rd defendant who became registered on the land register.
   
5. The claimants Claim was posed as questions, was the claimant entitled to rectification on the grounds of mistake. A supplementary issue was posed, “whether or not the de registration affects its prospects of renewal of Fixed Term Estate titles in parcel nos etc currently held by the 3^rd defendant”.

The answer to this latter issue in bound up with the reasons given in relation to the Claim.

14. The reversion of the land to the Commissioner on expiration of the term of the lease is dealt with in S.141 of the Land and Title Act.

“S.141-(1) A Fixed term estate shall cease to subsist when the Commissioner has under section 136(2)(a) lawfully reentered and recovered possession of the land comprised there-in or for any other reason has become entitled to be registered as the owner there-of”

Mr. Kwaiga has argued, relying on the failure of process required by S.141 (6) that the Commissioner of Land has consequently made a mistake. For by S. 141(6), where a fixed term estate cease to exist, the Commissioner “shall give notice of such fact to the Registrar... and the Registrar shall make the appropriate entries in the Land Register”.

15. As evidenced by the claimant, by sworn statement of Anthony Tepano (filed 11 August 2016) exhibit “AT-15” the valuation report of Value Solutions Appraisal, dated 3 October 2012 included copies of the FTR titles 191-001-39/49, both showing Te Ribirake Company Ltd as owner. By “AT-2” the same copies of fixed term estate register showed ownership of the company to the fixed term leasehold for 20 years from 1 September 1969. Neither copies of the Register show any endorsement by the Registrar to the effect that the Commissioner of Lands had taken possession of the lands for that the fixed term estate had expired by effusion of time, and ceased to exist. No evidence has been given the court that the Commissioner had entered into possession of the properties built on the land and collected the rents.

16. The wording of s.141-(1) relates the expiry of the lease to the need to give notice of the fact (of expiry of the lease) to the Registrar of Titles as evidence of the Commissioners entitlement to be registered as owner (S.141 (6)). On the material before the Court, there has been no evidence of any appropriate entry to the land register to that effect. For by “AT-2”^[2], copy fixed term estate registers for both parcels showed registration of a charge, and a discharge by the ANZ Bank on 17 March 2009, well after any right in that Commissioner to become registered as owner of the two parcels then in the name of Te Rikirake Co Ltd. There were registered dealings on the land parcels.

By virtue of s.109 of the Act, the registration of a person as owner;

(b) of a fixed term estate, shall vest in that person the fixed term etc and any other persons may expect to deal with such “owner” accordingly. The purpose of S.141 (6) is to provide for certainty when the Commissioner purports to deal with such land by grant and in this instance, I am satisfied the Commissioner has not produced evidence to satisfy the requirement incumbent upon him to become registered, for at the time of the supposed offer by the Commissioner on the 10 December 2015, there is no evidence he was the registered owner. Only by conforming to the provision of the Act, in this case S.141 (6), may the Commissioner acquire the right of an owner of the fixed term estate which had ceased to subsist under Part X.

17. I accept Mr. Kwaiga’s argument on this point and find at the time of the grant by the Commissioner on 1 January 2016 to the 3^rd defendant, no evidence of his ownership of the parcels. By virtue of s. 132 the parcel need be deemed to be “public land” but the evidence shows the company as the registered owner (irrespective of its status, under the Companies Act).

18. By letter dated 16 August 2013 under hand of the Registrar of Companies to the Commissioner of Lands, the Registrar confirmed in accordance with the Companies Act 2009, Te Rakirake Co Ltd had failed to re-register “and accordingly the company is no longer valid (sic) and has no business legal status.” Presumably a consequence of that letter, coupled with the application of the 3^rd defendant for the land grant, the Commissioner, by letter dated 25 March 2013 accepted such application, the approval given “based on understanding that your father (Nantara Moaniti (Ekteta) was the original trustee of the defunct Rikirake company and the fact that the land in question is still undeveloped.”

19. By her sworn statement, filed 17 November 2016, Merean Nantara at exhibit “MN-6”, annexed her written application dated 3 June 2014 acquire the “expired parcel of land at White River.” In the letter to the Commissioner of Lands she said:

“Madam, the said parcel of land was granted to the original migrants from the Gilbert Islands in the 60s, and my father, the late Moaniti Nantara was a member of the original committee who set up the Te Rakiraki Company. However, according to a letter from the company Haus Solomon Islands, the Te Rakiraki Company ceased to exit and therefore has no business legal status.

With the expiry of the legal title and non-existence of the company, I wish therefore to have the said land allocated to me as I understand the parcel was zoned as commercial and I am financially capable of developing it to the satisfaction of the Commissioner as stipulated in the grant instrument.”

Insofar as the 1^st paragraph is concerned, the company had not then been reregistered. The second paragraph failed to mention the land in fact had a commercial building, tenanted, built upon it.

20. The Commissioner’s subsequent grant of the estate to the 3^rd defendant presumed an understanding in effect, acknowledgment the land was previously that of Te Rikirake Company, of which the 3^rd defendants’ father was the trustee. This clearly is reliant upon the letter of application for grant which the second “understanding” stated by the Commissioner also may be seen to come from that letter. I am satisfied the 3^rd defendant, then had acquired the land on the basis of the “understanding” the Commissioner accepted from the terms of her letter of application.

21. Leaving aside for the moment, the effect of Marean Nantara’s acceptance of the Commissioner” understanding” leading to his grant, I wish to deal with the argument by Mr. Ipo (for the 3^rd defendant) that at the time of the grant to the 3^rd defendant on the 26 January 2016 (before re registration of the claimant company in April 2016) that “property” dealt with in s. 146(1) and (2)(a) of the Companies Act cannot be envisaged in this case, for the lease-hold estate had expired. This argument rather conflates two issues. The first is whether the expiration of the estate in 1999 without any further, enables the Commissioner to treat the land as his own and if so whether he may there upon grant such estate to another.

22. I am further satisfied a grant in these circumstances where the Commissioner had presumed rights as owner, contrary to the provisions of the Act, is a mistake.

23. The arguments fail to address the effect, if any of the coming into operation of the Land and Titles (Amendment) Act (no 11 of 2014) which by Legal Notice no 67 published in the supplement to the Solomon Islands Gazette, came into force on 1 December 2014.

24. By S.9 of the amending Act, Section 132 of the principal Act was amended by substituting the word “Board” where-ever appearing in Ss 132(1) and (2).

25. The grant of the 1 January 2016 by the Commissioner as Granter may consequently be seen to be invalid for the substitution of the word “Board” for the “Commissioner” was not descriptive of change of the name “Commissioner” but in substitution of the decision maker. By Part 11A-Establishment of the Land Board and it Powers and Functions, Section 8 B, a Land Board was established comprised of those persons named in the Second Schedule. No Grant by the Land Board is pleaded by the 3^rd defendant. The registration of the 3^rd defendant in contravention of the amended s.132 by the Registrar of Titles was a mistake.

. 26. By evidence exhibited in the photographs included in the statement of Anthony Tepano, the company Secretary of Te Rikirake, it can be seen a single story building is on the land.

27. I consequently find the 3^rd defendant has dissembled in her letter of application “MN-6”where she said:

“I understand the parcel was zoned as commercial and I am financially capable of developing it to the satisfaction of the Commissioner as stipulated in the grant instrument.” The photographs show two shops and two self-contained apartments.

28. By offer of fixed term estate, a key condition 3 was submission of a copy of “the approved building plan from the relevant Town and Country Planning Board to the Ministry of Land Housing & Survey.” Further by terms of the letter of application “MN-6” the 3^rd defendant acknowledged the original land grant to the Gilbertese and her father “was a member of the original committee who set up the Te Rakirake Company”. The company was the registered owner of the original land grant of fixed term estate. I am satisfied the 3^rd defendant took the grant by the Commissioner with knowledge of the implied rights of the Gilbertese migrants, represented by the Company. Knowledge of both the implied rights and the fact the land was developed may be imputed to the 3^rd defendant and are mistakes giving rise to a right of rectification in the claimant pursuant to S.229 (1).

29. For by S.229 (2) there is clear evidence the 3^rd defendant has acquired her interest free from any implied trust acknowledged by her letter of application, omitted to detail the building existing and consequently cannot be said to have acquired her interest for valuable consideration from the owner registered at the time free from notice of the subsisting obligations of the company.

30. I find the 3^rd defendant has substantially contributed to these mistakes by her acts and defaults.

31. Since the claimant company has been re-registered, by S.151 (2) of the Companies Act 2009, the company “is deemed to have continued in existence as if it had not been removed from the (company) register”. The company then is again its lawful entity subject to any subsisting rights or obligations at the time of first registration.

32. By S.152 (3) a company whose property has (by de registration) vested in the Crown may not recover such property when that property (the fixed term estate) has been registered under the Land & Titles Act. I am satisfied no such registration had taken place to avoid the companies right to the estate for its ownership status had never been changed in accordance with the L & T Act.

33. I consequently order rectification of the Land Register affecting FTE no. 191-001-39 and 191-001-47 by directing cancellation of the registration of Merean Nantara as owner of the fixed term estate.

34. For abundance of caution I order the Land Register to reflect the ownership of Te Rikirake Company Limited as owner of such fixed term estate and the Registrar shall take any necessary steps to this effect relying if necessary on this court order.

35. I award costs on 3^rd schedule basis to the claimant, costs to be assessed or taxed, to be paid within 3 months of such assessment or taxation.

36. I also order the claimant shall have possession of the land.

__________________
BROWN J

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^[1] Anthony Tepano statement filed 11/08/16. “AT-20”
^[2] Statement of Anthony Tepano filed 11/08/2016