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Offa v Lever Solomons Ltd [2022] SBHC 14; HCSI-CC 668 of 2019 (3 May 2022)

HIGH COURT OF SOLOMON ISLANDS


Case name:
Offa v Lever Solomons Ltd


Citation:



Date of decision:
3 May 2022


Parties:
Ali Pitu Offa and Lisa Offa v Lever Solomons Limited, Melody Perry and Vaelaty Silas, Huang Xiaoli, Chen Hao, Attorney General
Lever Solomons Limited v Melody Perry and Vaelaty Silas, Huang Xiaoli, Chen Hao, Attorney General


Date of hearing:
15 November 2021


Court file number(s):
668 of 2019


Jurisdiction:
Civil


Place of delivery:



Judge(s):
Lawry; PJ


On appeal from:



Order:
1. The proceedings commenced by the Claimants on 26 August 2019 are not statute barred.
2. The Claimants do not have standing to bring their claim
3. The claim is dismissed generally and the Claimants are ordered to pay the costs on the standard basis.


Representation:
Mr B Upwe for the Claimant
Ms S Kabu for the First Defendant
L & L Lawyers for the Second and Third Defendants
Ms N Tongarutu for the Fourth Defendant
Mr B Pitry for the Fifth Defendant


Catchwords:



Words and phrases:



Legislation cited:
Land and Titles Act S 229, Limitation Act S 9, S 32 (2), S 32 (4) and (5)
Solomon Islands (Civil Procedure) Rules 2007 r 12.11,


Cases cited:
Australian Conversation Foundation v Commonwealth [1980] HCA 53, Kenilorea v Attorney General [1983] SBHC 30, Pou v Tropical Forest Products [2004] SBHC 4, Australian Conversation Foundation v The Commonwealth [1900] 146 CLR 493, Simikera v Ragoso [2000] SBHC 33

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION


Civil Case No. 668 of 2019


BETWEEN


ALI PITU OFFA AND LISA OFFA
Claimants


AND:


LEVER SOLOMONS LIMITED
First Defendant


AND:


MELODY PERRY AND VAELATY SILAS
Second Defendant


AND:


HUANG XIAOLI
Third Defendant


AND:


CHEN HAO
Fourth defendant


AND:


ATTORNEY GENERAL
(Representing the Registrar of Titles)
Fifth Defendant


Cross – Claim


BETWEEN


LEVER SOLOMONS LIMITED
Cross Claimant


AND:


MELODY PERRY AND VAELATY
First Cross Defendant


AND:


HUANG XIAOLI
Second Cross Defendant


AND:


CHEN HAO
Third Cross Defendant


AND:


ATTORNEY GENERAL
[Representing the Registrar of Titles]
Fourth Cross Defendant


Date of Hearing: 15 November 2021
Date of Decision: 3 May 2022


Mr. B Upwe for the Claimants
Ms S Kabau for the First Defendant
L & L Lawyers for the Second and Third Defendant
Ms N Tugarutu for the Fourth Defendant
Mr B Pitry for the Fifth Defendant


Lawry: PJ

RULING

Introduction

  1. The Claimants have filed a claim in which they seek a declaration that the transfers of the fixed term estate (FTE) 191-018-4 [“the land”] from the First Defendant to the Second Defendants and from the Second Defendants to the Third Defendant and from the Third Defendant to the Fourth Defendant are void ab initio because of fraud or mistake or omission pursuant to section 229 of the Land and Titles Act.
  2. As a consequence, the Claimants seek an order removing the name of the Fourth Defendant from the Register and replacing it on parcel number 191-018-6 and 191-018-7 with the names of the Claimants. As a second alternative the Claimants seek an order directing the First Defendant to grant a separate block of land to the Fourth Defendant and directing the Fifth Defendant register the land in the names of the Claimants.
  3. In addition, the Claimants seek an order for damages to be assessed.
  4. In the Statement of Case in the Claim the Claimants claim to have an equitable interest in the fixed term estates of parcels number 192-018-6 and 192-018-7. Throughout the Statement of Case the parcel numbers referred to are those set out in this paragraph.
  5. In the Cross Claim the First Defendant (the Cross Claimant) seeks a declaration that the transfer to the Second Defendants (the First Cross Claimant) then to the Third Defendant (Second Cross Defendant) then to the Fourth Defendant (Third Cross Defendant) were void ab initio because of fraud pursuant to section 229 of the Land and Titles Act with damages sought against the Claimants and the First Cross Defendants and costs sought against the Claimants and the First Second, Third and Fourth Cross Defendants.
  6. The Fourth Defendant (Third Cross Defendant) has brought an application pursuant to Rule 12.11 of the Solomon Islands Courts (Civil Procedure) Rules 2007 seeking a determination whether the Claimants have the standing to seek the relief of rectification of the title on FTE 192-018-6 and FTE 192-018-7. The Fourth Defendant also seeks a determination about whether the claim has been brought out of time pursuant to the Limitation Act.

Facts

  1. In a letter dated 12 July 1997 the First Defendant made an offer to the Claimants to sell to them the fixed term estate in the land. That offer was made subject to the following conditions.
    1. The total purchase price excluding the survey fees and access to the water well and communal tank was $37,696.00.
    2. The survey fees and access to the water well and the communal tank $9,487.00.
    1. The deposit was $24,000.00.
    1. The balance of the purchase price was to be paid within 30 days of the contract being signed.
    2. The title would not pass until an additional amount said to be owed to RIPEL by Ali Pitu Offa was paid with RIPEL agreeing to accept $8,000.00 in full and final settlement. The Court takes judicial notice that RIPEL is a reference to Russell Islands Plantation Estates Limited which is part of the First Defendant.
    3. The offer was said to be open for only 14 days.
  2. No evidence has been put before the Court to show the offer was accepted within that time, however the Claimants rely on an Agreement for the Sale of land dated 26 November 1997. That agreement records that the deposit of $24,000.00 was paid, although in her sworn statement Lisa Offa said it was paid on or around 5 November 2004. Other evidence before the Court shows the deposit was paid by the Development Bank of Solomon Islands on behalf of the Claimants and the Claimants over time paid sums of money to the Development Bank. Not all the amount owed to the Development Bank was paid. The Development Bank recorded in an open letter dated 16 November 1999 that as a result of the ethnic tensions Lisa Offa (which the Court accepts is one of the Claimants) was unable to meet her obligations to the bank. The bank statement annexed to the sworn statement of the Claimant Lisa Offa shows that payments continued to be made until May of 2007 and the balance of $2,085.57 was written off by the bank on 1 December 2007. What was paid to the bank is irrelevant to the issues before the Court.
  3. There is an issue however as to whether the deposit was paid as the First Defendant in its defence, records at paragraph 4 of its Statement of Case: “4. The First Defendant...does not have any knowledge of the payment of the Deposit of SBD$24,000.00 from the Development Bank of Solomon Islands to the First Defendant”.
  4. Whether the Agreement for the Sale of the Land was executed is also unclear as for some reason the complete agreement was not annexed to the Claimants sworn statement. In what has been annexed however the document confirms that the sum of $9,487.00 for the survey fees and connection to the commercial water tank was payable by the Claimants on the signing of the agreement. The balance of the amount to be paid by the Claimants was recorded as being due 30 days from the date the subdivision is registered.
  5. Any delay on completion other than the vendor’s wilful default is to attract interest on the balance at the rate of 20% per annum. The agreement records that time for payment is of the essence of the contract.
  6. The Fixed Term Register in respect of Parcel number 192-018-6 annexed to the sworn statement of Lisa Offa filed on 20 February 2020, records that the Parcel number 192-018-6 has been superseded by Parcel 192-018-4. It also records the transfer to the First Defendant by mutation on 13 January 1998, the transfer to the Second Defendants on 7 April 2017, the transfer to the Third Defendant on 4 May 2017, the lodging of a caveat on 26 of an unknown month in 2018, by Ali Pitu Offa and Lisa Offa which the Court accepts are the Claimants, the cancellation of that caveat on 25 October 2019 and the transfer to the Fourth Defendant also on 25 October 2019.
  7. The same sworn statement annexes the Fixed Term Estate Register for Parcel number 192-018-7 which was also superseded by Parcel 192-018-4 and the same notations as to mutation, transfer and caveats as on the Register for 192-018-6. For the purpose of this application I treat the reference to Parcel 191-018-4, 191-018-6 and 191-018-7 as typographical errors in the remedies sought and replace those references with 192-018-4, 192-018-6 and 192-018-7 respectively.
  8. The Claimants do not claim to have paid anything more than the deposit of $24,000.00. They do not claim to have paid the survey fees nor the costs for connection to the commercial water tank. They do not claim to have paid the amount said to be owing to RIPEL as set out in the offer made to them.

Is the claim out of time?

  1. The Fourth Defendant submits that section 9 of the Limitation Act limits the time for bringing the claim for the rectification of the title to 12 years from the non-compliance with the agreement. The land was surveyed and registered by 13 January 1998. The Claimants were required to complete the purchase within 30 days of that date. As at the date of the hearing of the Application, the various sums required to be paid still had not been paid.
  2. Section 9 of the Limitation Act provides:
  3. The Claimants do not dispute that section 9 applies but says that as the claim is for fraud, omission or mistake the cause of action did not arise until the land was transferred to the Second Defendant. The Claimants submit they had an equitable interest in the property once they paid the deposit. They submit that the fraud or mistake was the First Defendant offering of the fixed term estate in the land for sale, when the plots were not available for sale. The Claimants claim that they had been in occupation for 20 years by that time. That claim is disputed.
  4. The Claimants rely on section 32(2) of the Limitation Act which provides:
  5. Also relevant to the proceeding are sections 32(4) and (5) which provide:
  6. It follows that if the Claimants had an interest in the fixed term estates of the land and were prevented from becoming those estates because of fraud, omission or mistake, the time frame for proceedings to be filed would be within 12 years of when the Claimants discovered the fraud omission or mistake or could have discovered it with reasonable diligence. The Claimants say they discovered the alleged fraud omission or mistake in 2017, the year the property was transferred to the Second Defendants. They submit that the fraud omission or mistake was in 2017. The proceedings were commenced in 2019. The delay of around two years in commencing proceedings was well within the time limit imposed by section 32 of the Limitation Act.
  7. The Claimants however have the hurdle of sections 32(4) and 32(5) to overcome. They had pleased nothing on the Register to alert potential purchasers until after the transfer to the Second Defendants and after the transfer to the Thirds Defendant. For the purposes of this application however, that issue can be put to one side.

Standing

  1. The Fourth Defendant, supported by the remaining Defendants seeks a declaratory order as to whether the Claimants have locus standi to seek relief of rectification of title. The Fourth Defendant submits that the Claimants have no standing to bring the Claim. The basis for this is that any rights as to an equitable interest in the land expired when the agreement of sale of the land came to an end.
  2. Ordinarily the question of standing is raised in the public law arena. At common law, the test for standing is whether the plaintiff has a "special interest in the subject matter of the action. This was confirmed in Australian Conservation Foundation v Commonwealth [1980] HCA 53. The High Court of Australia also confirmed that any application to determine this issue can be made as a preliminary matter rather than being dealt with at trial. The question of standing however is not limited to public law matters. In Solomon Islands the leading authority is Kenilorea v Attorney General [1983] SBHC 30. That was a public law case in which the former Chief Justice Daly reviewed the Common Law and applied it to Solomon Islands. The Court held that the Claimant in that case as a Member of Parliament and Leader of the Opposition had standing to bring an action challenging the exercise of the prerogative of mercy. The present case is quite different.
  3. The Claimants submit that their special interest arises from the Agreement they entered into with the First Defendant, recorded in the document dated 26 November 1997. In order to have standing to bring the claim the Claimants must have sufficient connection to and harm from the action challenged in order to be able to participate in the case. In Pou v Tropical Forest Products [2004] SBHC 4 Justice Brown cited the words of Aitkin J in Australian Conservation Foundation v The Commonwealth [1900] 146 CLR 493:
  4. The Claimants entered into an agreement to purchase the fixed term estates of the land in 1997. Before the purchase could be registered they were required to pay the purchase price which was made up of an initial deposit of $24,000.00. They were required to pay the costs of survey and the connection to the commercial water tank. They were also required to pay an amount said to owing by Ali Pitu Offa as set out in paragraph 7(e) above. The payment of the deposit was made and the balance was required to be paid within 30 days of the registration of the subdivision. The subdivision was registered on 13 January 1998. The balance of the purchase price being $29,226.00 made up of the difference between 24, 00.00 deposit and $37, 6960.00 for the price of the land (2.0942 hectares @$18,000.00 a hectare) plus the costs of survey and connection to the commercial water tank plus the amount to be paid by Ali Pitu Offa to the First Defendant being the requirement in the offer to sell the estates. This requirement must have been accepted for the contract to proceed to the Agreement on 26 November 1997. Whether or not it was paid is immaterial to the issue before the Court because the other sums were not paid and attracted interest at the rate of 20% per annum from 12 February 1998.
  5. It is significant that the time for payment was of the essence in the contract. It gave the First Defendant to right to cancel the contract because of the non-performance of the Claimants. At paragraph 16 and 17 of the Statement of Case in the Claim, the following is recorded:
  6. Curiously the Claimants have not annexed a copy of the letter of 17 August 2000 nor even referred to it in the sworn statement of Lisa Offa. By 17 August 2000 the Claimants were already in default of the agreement by around two and a half years. Interest had accrued on the unpaid balance of the purchase price. A significant further amount would be required to be paid to complete the purchase before the Claimants could acquire the right to have the fixed term estate registered in their names.
  7. If the First Defendant had cancelled the agreement, as appears to be the case, that is the end of the matter. The Claimants by their own failure had lost the opportunity to have the estates registered in their names. If the First Defendant had not cancelled the agreement the Claimants by 17 August 2000 had not put themselves in a position where the estates could be registered in their names. In the 19 years that have followed, they still have not put themselves in that position. If what is set out in paragraph 17 can be proved the effect would be that the Claimants agreed to the cancellation of the agreement. The only issue then to be determined is what if anything the First Defendant should pay to the Claimants. The Claimants were not entitled to the full $24,000.00 because they were liable to meet the costs of survey and connection to the commercial water tank and the interest on the outstanding balance.
  8. They were not entitled to have the estates registered in their names until they completed their obligations under the agreement. They had not done so by 2000 and have done nothing since to complete their obligations. The First Defendant was under no obligation to transfer the estates to them. They have not acquired the right to be registered by their continued failure.
  9. The Claimants have referred the Court to the decision of Simikera v Ragoso [2000] SBHC 33 to support a claim that they have standing to bring this claim. In Simikera the Court was concerned with a claim that the Plaintiff was a descendant of the original owner of land on Mbava Island in Western Province. As a descendant he would have a claim to being returned to the original owners from the Government. That situation is quite different from the present case. The Claimants in the present case have not put themselves in a position where they could have the land registered in their names. They have not claimed nor could they claim that they were in adverse position of the land. They have not sued and could not sue for specific performance by the First Defendant. What they are in effect asking the Court to do is to order that land be registered in their names without being required to complete the purchase.
  10. In the Claimants’ submissions at paragraph 8.8 the Claimants submit:
  11. This submission is plainly wrong. The $24,000.00 was only the deposit paid. The agreement made that clear. Paragraph 4 required the Claimants to pay $9,487.00 in addition to the per hectare price. Paragraph 5 records that the $24,000.00 was the deposit. Paragraph 6 required the Claimants to pay the balance within 30 days of the date the subdivision was registered. Paragraph 7 required the Claimants to pay interest at the rate of 20% on the balance of the purchase price. Paragraph 8 made time of the essence for payment and paragraph 9 recorded that the vendor would transfer the title on payment of the full purchase price. Finally, the purchase was subject to the approval of the Commissioner of Lands. No evidence has been put forward that such approval was obtained.
  12. In dealing with the submission at 8.8 of the Claimants submission the only conclusion is that the Claimants could have had no expectation that the First Defendant would transfer the title of two parcels to them. The statement that they had complied with the sale agreement of the land is clearly not correct.
  13. The proceedings are not a claim in public law but a claim arising from a contract in which the Claimants were the ones in breach. It follows that the Claimants had no interest in the land that would entitle them to have the parcels registered in their names. As a result, they have no standing to bring the claim against any of the defendants.

Orders

  1. The proceedings commenced by the Claimants on 26 August 2019 are not statute barred.
  2. The Claimants do not have standing to bring their claim
  3. The claim is dismissed generally and the Claimants are ordered to pay the costs on the standard basis.

By the Court
Justice Lawry
Puisne Judge


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