Church of Jesus Christ of Latter Day Saints in Tonga Trust Board v Fepale [2011] TOCA 8; AC 3 of 2011 (30 September 2011)

IN THE COURT OF APPEAL OF TONGA
LAND JURISDICTION
NUKU'ALOFA REGISTRY

APPEAL NO. AC 3 of 2011
LA 8 of 2008]

BETWEEN :

THE CHURCH OF JESUS CHRIST OF LATTER
DAY SAINTS IN TONGA TRUST BOARD
Appellant

AND:

LOPETI FEPALE
First Respondent

FUTAKIHA'ANGANA FEPALE
Second Respondent

MINISTER OF LANDS
- Third Respondent

Coram : Burchett J
Salmon J
Moore J

Counsel : Mr Niu for Appellant
Mr W. Edwards for 1st and 2nd Respondents
Mr Sisifa for 3rd Respondent

Date of Hearing : 21 September 2011
Date of Judgment: 30 September 2011

JUDGMENT OF THE COURT

[1] This is a land case of some novelty and difficulty. It should be noted at the outset that Scott CJ, who decided it below, was not assisted by submissions from the Minister of Lands whose actions were impugned. For some reason, the Minister's submissions were delivered only later. The Land Act is in large measure a Code, and when questions arise in respect of the Minister's actions under it, the Court is entitled to expect guidance through its interlocking provisions from those who have developed a detailed knowledge of it.

[2] The facts of the matter are straight forward, although unfortunately not all the documents were available at the hearing. Further documents were provided by consent upon the appeal, throwing light on some obscurities in the case. In brief outline, the following are the circumstances:

(a) On 18 September 1924, one Uatesoni Sauaki received a grant, which was duly registered, of a town allotment on a Crown estate in the village of Folaha. The town allotment was larger than would be granted today, because the present limitations in respect of area were not adopted until 1927, and only for grants after that year.

(b) In 1970, Sauaki agreed to lease one area out of his allotment to the Appellant church for a church building, and another area for associated uses. He continued to live on the remaining one third of the allotment. Buildings were erected and improvements carried out by the Church.

(c) In 1982, with the consent of Cabinet and due registration, the two leases were surrendered and two fresh leases granted, each for a term of 80 years.

(d) Sauaki died in 2003 leaving no widow and no heir who could take his allotment under s.82 of the Land Act, the result being a reversion to the Crown as provided by s.82(g) and s.83 of the Land Act, subject to s.58 (iii), which provides:

"Where there is no heir and where the allotment reverts to the holder of the hereditary estate or to the Crown as the case may be, then the holder of the hereditary estate or the Minister, as the case may be, shall –

(a) be bound by the terms of the lease;
(b) receive the rental due as provided by this Part of this Act."

(e) Without any notice to the Appellant, in 2007, the two areas held under the leases were made the subject of grants respectively to the First and Second Respondents, an action which it is not disputed is unique since the Land Act as it stands became law in its present form.

[3] Counsel for the First and Second Respondents argued that the grants by the Minister were "subject to" the leases. But this highlights the unfortunate obscurity in the facts left by the Third Respondent's failure to provide a submission when required. For in truth it transpires that payments of the rent have been handed over by the Treasury to the respective new grantees who were registered as lessors in the Register of Leases; so that they have not taken subject to the existing leases, but rather as de facto assignees of them. The Minister who, by s.58(iii), is "bound by the terms of the lease" appears to have treated the new grants as entitling him to rely on the new grantees as bound to fulfil those terms, and to pay over to them "the rental due" which the statute specifies, in the same subsection, that he "shall ... receive". There is nothing in the Land Act which could justify this approach.

[4] The general propositions stated by the Privy Council in O.G. Sanft Sons v Tonga Tourist and Development Co. Ltd [1981-1988] Tonga LR 26 at 33 that "[i]n respect of Tongan land, the Land Act is a complete code", and: "No estate, right, title or interest can be created [except] in accordance with the provisions of the Act", are basal to an understanding of the Act's operation. The word "except", which we have added in square brackets, does not appear in the Tonga Law Report we have cited, but we have checked and find it was in the original decision of the Privy Council. For completeness, we note, too, that "once a leasehold interest has been validly created", the decision accepts it may be subjected to particular legal incidents such as mortgages, but that is not relevant to this case.

[5] With these considerations in mind, we turn again to s.58 of the Land Act. Where there is a widow entitled upon the death of the registered holder, subs.(i) specifies she shall be "bound by the terms of the lease" for the relevant period and "shall ... receive the rental due", being personally liable to the hereditary estate holder or the Minister for any rental payable under the grant held by her late husband for the allotment. Failing a widow, the heir is subject to similar provisions under subs.(ii). But despite these detailed provisions concerning the lease in differing circumstances, there is no provision for such a regrant as has been attempted here. Indeed, the extent of the gap in that respect is emphasised by the unauthorised steps the Minister has taken concerning the rent he receives, and his apparent abrogation of his functions as the party bound in the deceased lessor's place.

[6] Had Parliament intended land in this situation to be capable of regrant during the currency of the existing lease, it is not conceivable that it would have failed to set out the rules governing the regrant as it has set out the rules governing other aspects of the continuing effect of the lease.

[7] Parliament has taken care to regulate leases very strictly, and in particular the Act does not permit any complete disposition of the lessor's interest in a lease of an allotment. The Minister here purported to exercise a power not available under the Act.

[8] For these reasons, we have concluded that the Minister acted beyond his powers; the orders of the Land Court should be set aside, and the grants to the First and Second Respondents be declared invalid and set aside; the Minister is ordered to cancel forthwith the said grants and to delete the names of the First and Second Respondents as lessors, with the result that the position is governed by s.58 (iii). The costs of the Appellant in this Court and the Land Court must be paid by the Respondents jointly and severally. Land which has reverted to the Crown or an hereditary estate holder does not provide an exception to the rule stated by this Court in Tafa v Viau [2006] Tonga LR 287 at 292-293.

Burchett J
Salmon J
Moore J