Mortimer v Fe'aomoeata [2015] TOCA 5; AC 2 of 2015 & AC 28 of 2014 (31 March 2015)

IN THE COURT OF APPEAL OF TONGA

LAND JURISDICTION AC 2 of 2015 & AC 28 of 2014
NUKU'ALOFA REGISTRY [LA12 of 2012]

BETWEEN:

1. RICHARD MORTIMER
2. ERIC STARK
Appellants

AND:

1. PIEA FE'AOMOEATA
2. TUPOU FE'AOMOEATA
3. NESHA ROSIC
4. GORDON ALLISON
5. MAKAFILIA MAFI
6. TU'A TAUMOEPEAU
7. KINGDOM OF TONGA
8. ESCAPE TONGA LIMITED
9. ISLAND REAL ESTATE LIMITED
Respondents

Coram: Salmon J
Moore J
Blanchard J

Counsel: Mr Niu SC for the Appellant
Mrs Vaihu the First, Second, Third and
Ninth Respondents
Mr Kefu A/AG for the Sixth and Seventh Respondents

Date of Hearing: 25 March 2015
Date of Judgment: 31 March 2015

JUDGMENT OF THE COURT

[1] This is an appeal against a judgment of a Judge of the Land Court determining that the Land Court had no jurisdiction in proceedings which had been commenced by the appellants. The appellants also appeal against a particular costs order made by the trial Judge.

[2] The proceedings were commenced by a summons and statement of claim filed in the Land Court by the appellants. The statement of claim recited, in some detail, the appellants' account of the facts. The events leading to the litigation were also described by the trial judge in his reasons for judgment of 18 December 2014. What emerges from the appellants' pleadings and the judgment is the following.

[3] The appellants reside overseas. The first appellant, Mr Richard Mortimer, entered an agreement expressed to be a Tenancy Agreement on 16 February 2006. The other parties to the Agreement were Moleni Fonokalafi Fe'aomoeata, his wife Tupou Fe'aomoeata and their son Piea Fe'aomoeata. The son and the mother were the first and second defendants in the proceedings below and are the first and second respondents in the appeal.

[4] Moleni Fe'aomoeata, who died on 10 October 2007, owned a tax allotment on the island of Nuapapu, Vava'u. The Tenancy Agreement gave Mortimer, so the appellants alleged in the statement of claim, the right to construct buildings and structures over a 2 acre coastal part of the allotment which after construction would become the property ofMoleni Fe'aomoeata who would rent the buildings to Mortimer for 60 years. The Agreement required the payment of US $28,965 to Moleni Fe'aomoeata less any deposit previously paid plus a monthly payment of US $70 rent. The trial Judge set out in his reasons for judgment two provisions of the Agreement. In one provision the landlord (we assume Moleni Fe'aomoeata), agreed he would not "in any way whatsoever interfere with the quiet enjoyment by the tenant, his spouse, family, guests, customers and invitees of the tenancy of the premises" if the tenant complied with the terms and conditions of the Agreement. The other provided that Mortimer "shall have the use of the grounds of the premises for personal gardening, cultivation or pleasure, and the landlord shall not interfere with the quiet use and enjoyment thereof by the tenant, his customers or guests".

[5] The second appellant, Mr Eric Stark, entered into an agreement, also expressed to be a Tenancy Agreement, with the same parties to the same effect in relation to a similar parcel of land of similar dimensions.

[6] On 29 June 2007 Piea Fe'aomoeata consented to the lease of the land the subject of the two Tenancy Agreements to the eighth defendant in the proceedings below, Escape Tonga Ltd, and the ninth defendant, Island Real Estate Limited. On that day, he signed two lease application forms. The applications were ultimately approved by Cabinet and leases were registered in April 2008 and in January 2009.

[7] After the appellants commenced the proceedings in the Land Court, the jurisdiction of the Court was put in issue which led to the judgment of the trial Judge determining that he did not have jurisdiction. Before discussing his Honour's reasons, it is convenient to set out the applicable legislative provisions.

The first is clause 90 of the Constitution which provides:

The Supreme Court shall have jurisdiction in all cases in Law and Equity arising under the Constitution and Laws of the Kingdom (except cases concerning titles to land which shall be determined by a Land Court subject to an appeal to the Privy Council in matters relating to hereditary estates and titles or to the Court of Appeal in other land matters) and in all matters concerning Treaties with Foreign States and Ministers and Consuls and in all cases affecting Public Ministers and Consuls and Maritime Cases.

The second is s 149(1) of the Land Act which provides:

(1) The Court shall have jurisdiction –

(a) to define the area and boundaries of every parcel of land in the Kingdom;

(b) to hear and determine all disputes, claims and questions of title affecting any land or any interest in land in the Kingdom and in particular all disputes, claims and questions of title affecting any tofia, tax or town allotment or any interest therein; excepting any disputes, claims and questions affecting any land or interest in land resumed by the Crown under Part IX of this Act;

(c) to appoint one or more fit and proper persons with or without remuneration to act as trustees for any Tongan other than a noble or matapule who being entitled to any land is either under the age appointed by law for succeeding thereto or is by reason of mental infirmity incapable of managing his affairs for the purpose of protecting and managing such land and of applying in accordance with the directions of the Court for the maintenance and benefit of the person beneficially entitled to such land all monies received from the management thereof including monies arising from the sale or hire of livestock or the sale of copra or other products;

(d) to take the accounts of all such trust estates and to dismiss any trustee guilty of mismanagement, breach of trust or fraud in connection with the trust estate and to appoint another trustee in his stead;

(e) to hear and determine any question or amount of damages, loss, compensation, mesne profit, rent or claim in respect of any allotment, lease, sub-lease, permit or interests of any kind in any land.

[8] The procedure adopted by the trial judge to determine the question of jurisdiction was to try two preliminary issues under Order 24 Rule 4 of the Supreme Court Rules. One concerned the question of whether the Tenancy Agreements were illegal under s13 of the Land Act. His Honour concluded they were not, though the correctness of that conclusion does not arise for consideration in this appeal and this Court should not be taken to hold the view that it is necessarily correct. However his Honour also concluded that the Tenancy Agreements did not create any title or interest in land. This conclusion was foundational to his Honour's conclusion that the Land Court did not have jurisdiction to entertain the claims. His Honour did not, himself, undertake an analysis of the provisions of the Land Act to determine whether the Court had jurisdiction. Rather he felt obliged to follow a judgment of the Lord Chief Justice in Yuzhen Yang and another v Manoa (LA 11 of 2013, 6 June 2014). His Honour's approach appears to have been to ask what is the nature of the plaintiffs' claim and does it concern an interest in land. If the answer to that question is that it does not concern an interest in land, then the Land Court has no jurisdiction to deal with the claim.

[9] In our view, that process of reasoning does not, at least in a case such as the present, address the right question. The pleadings are important in the following consideration of the issue raised in this appeal and it is appropriate to describe, when discussing the pleadings, the status of the parties in the proceedings in the Land Court rather than in this appeal.

[10] The exclusion in clause 90 of the Constitution limiting the jurisdiction of the Supreme Court should not be taken to identify the boundaries of the jurisdiction of the Land Court. The Courts can have concurrent jurisdiction. That is clear from the judgment of the Court of Appeal in Niu and ors v Tapealava AC 15 of 2012, 17 April 2013. That the jurisdiction of the Land Court is wider than the limit on jurisdiction of the Supreme Court was recognised by the Lord Chief Justice in Yuzhen Yang and another v Manoa at [24]. We agree. That being so, it is necessary to consider the ambit of the jurisdiction of the Land Court conferred by s149(1).

[11] It is clear, in our opinion, that the proper construction of s149(1)(b) results in the Land Court having jurisdiction to hear and determine disputes affecting any land or any interest in land, claims affecting any land or any interest in land, or questions of title affecting any land or any interest in land. So much is clear from the language used together with the punctuation in the paragraph. The Crown argued in this appeal for a narrower construction of this paragraph effectively confining the jurisdiction it confers to disputes about title. However the language used is clear and the expression "questions of title" is but one of three classes of matters identified in the opening part of s149(1)(b), the other two being disputes and claims. What is necessary is that each of these classes must be "affecting any land or interest in land". If that nexus or link exists then jurisdiction is conferred. If it is accepted, as it should be, that the Land Court and the Supreme Court can have concurrent jurisdiction then no violence is done to the system of administration of justice in the Kingdom or the system of land law to treat the Land Court as having a wide rather than narrow jurisdiction to the extent authorised by s149 of the Land Act and the Act more generally. As a matter of general principle statutes conferring jurisdiction on a Court should not be narrowly construed: see, for example, The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404 at 420 – 421 and Patrick Stevedores Operations No 2 Ply Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [112]

[12] Accordingly the question becomes, in the present case, is there a dispute affecting any land or any interest in land? The parties in the appeal accepted that this question may be answered by reference not only to the plaintiffs' claims but also the defences of the various defendants. A broadly analogous approach is adopted in the Australian Courts in determining whether federal jurisdiction has arisen. This is particularly relevant in the Federal Court of Australia. A case may have a federal element if a plaintiff relies on a federal statute but equally a case may have a federal element, not because of the nature of the plaintiff's claim which might not have a federal element, but by virtue of the defence which has relied on a federal statute: see, for example, the discussion of this issue by Burchett J in Australian Solar Mesh Sales Pty Ltd v Anderson [2000] FCA 864; (2000) 101 FCR 1.

[13] Even assuming a tenancy agreement of the type in issue in the present proceedings does not create an interest in land (and we express no view on that issue), the plaintiffs seek an order that the leases of the eighth and ninth defendants be cancelled and that they be evicted from the lands the subject of the cancelled leases. The third and ninth defendants raise, as a defence, that they had no knowledge of the Tenancy Agreements and that they secured clear title to the leasehold without impediments. What may emerge as an issue in the proceedings is the legal effect of the contractual rights of the plaintiffs (on the assumption that they are bare contractual rights and the Tenancy Agreements have not created an interest in land) on the rights of the leaseholders under the leases or even whether those leasehold interests should be extinguished. It is difficult to avoid the conclusion that both the plaintiffs' claims and the defendants' defences together concern a dispute about land and interests in land within the meaning of s 149(1)(b). We conclude that it does and, accordingly, the proceeding should be remitted to the Land Court for hearing and determination.

[14] One further matter needs to be addressed. The trial of the entire case was set down for hearing for 5 August 2014 in Vava'u. That date had been fixed on 5 June 2014. The first and second defendant did not appear. Shortly before the hearing, the trial Judge received notices from the first and second defendants seeking an adjournment. The first defendant said he had not had the opportunity to organise travel to Vava'u and, it appears, he was only notified of the hearing date on 28 July 2014. The second defendant sought the adjournment on health grounds. The plaintiffs sought an order that the first and second defendants pay the costs thrown away by their non-appearance and the consequential adjournment of the trial and that those costs be paid forthwith. Those costs were said to include the costs of the plaintiffs attending the trial, the costs of witnesses who had been subpoenaed to attend and counsels' fees for the lost time and associated expenses. The trial Judge refused this application noting that it would be a significant award of costs against the defendants as laypeople and that the plaintiffs, if successful, would be entitled to claim these costs in the cause. Accordingly his Honour took the view that those costs should be reserved in the cause. It was also the circumstances that led to his Honour, it appears, suggesting the trial of preliminary questions.

[15] The appellants accepted that in making the decision he did about costs, the trial Judge was exercising a discretion. However they argue that in the circumstances, the order they sought should have been made. They submit that it was an unreasonable exercise of the discretion to decline to make the order because the first and second defendants were lay people. Moreover they argue it can be inferred that the first and second defendants were quite content for the matter not to go to trial because they are, in substance, being accused of fraud and, under the Tenancy Agreements, were paid significant amounts of money. In addition, the late notice flowed from the failure of at least the first defendant to notify a change of address.

[16] These arguments would have sustained a decision to make costs order requested at the aborted trial. However it was open to the trial Judge, as a matter of discretion, to decline to make the order. There is no warrant for appellate intervention. That said, the appellants are entitled to their costs in the appeal and also, as they request, the costs of the trial of the preliminary questions to be paid by the respondents to the appeal jointly and severally except the fifth respondent. It is appropriate, in our view, that those costs be payable forthwith.

The Court orders:

1. The appeal be allowed.
2. The second preliminary question is answered that whether or not the tenancies created any title or interest in land, the Land Court does have jurisdiction to entertain the claims.
3. Any order which may have made dismissing the appellants' claim, be set aside.
4. The matter be remitted to the Land Court for hearing and determination.
5. The respondents (save for the fifth respondent) pay the appellants' costs of the appeal.
6. The respondents (save for the fifth respondent) pay the appellants' costs of the trial of the preliminary questions.
7. These costs be payable forthwith.
   

Salmon J

Moore J

Blanchard J