The Church of Jesus Christ of Latter Saints in Tonga Board v Fepale [2011] TOLC 2; LA8 of 2008 (19 January 2011)

IN THE LAND COURT OF TONGA
NUKU'ALOFA REGISTRY

LA 8 of 2008

BETWEEN:

THE CHURCH OF JESUS CHRIST OF LATTER SAINTS IN TONGA TRUST BOARD
Plaintiff

AND:

LOPETI FEPALE
- First Defendant

FUTAKIHA'ANGANA FEPALE
Second Defendant

MINISTRY OF LAND
Third Defendant

BEFORE THE HON. CHIEF JUSTICE

Counsel: Mr. Laki Niu for the Plaintiff
Mr. Clive Edwards with Mr. William Edwards for the First and Second Defendants
Mr. Lutui for the Third Defendants

JUDGMENT

[1] The writ was issued in March, 2008. After numerous hearings in chambers including an unsuccessful application by the 1st and 2nd Defendants to strike out the action, the matter came before me for mention on 18 October, 2010.

[2] After discussion it was agreed that the facts were not in issue. The only questions were 9i) the validity of the third Defendant's allotments to the 1st and 2nd Defendant's and (ii) the rights of the Plaintiff as lessee of the allotments. Counsel agreed that the matter could be dealt with by written submissions and that no hearing in court was necessary.

[3] Written Submissions were filed by counsel for the Plaintiff and counsel for the 1st and 2nd Defendants for which I am grateful. It is a matter of regret that no submissions were filed by counsel for the third Defendant; it is primarily the third Defendants actions, which are impugned. Having acknowledged in June, 2009 that the "questions of law which are raised relate to important issues such that this case may be something of a test case" I would have expected some assistance to be provided.

[4] The brief facts are as follow. In 1982 one Uatesoni Sauaki; leased two parts of his town allotment at Folaha to the Plaintiff. The leases numbered 3859 and 3860 and replaced to earlier leases between the same parties which dated from 1970 and which had been surrendered.

[5] Sauaki died in 2003 without leaving an heir. By operation of section 83 of the Land Act (Cap 132-the Act) the whole allotment, including the two leased portions, reverted to the Crown.

[6] In April 2007 Sauaki's foster son Lopeti Fepale (the First Defendant) and Lopeti's own son Futakiha'angana Fepale (the Second Defendant) applied for grants to them of town allotments comprising the two portions of land contained in the two leases. On 13 November, 2007 the First Defendant was granted the land the subject of lease 3859 while the Second Defendant was granted the land the subject of lease 3860.

[7] It is not disputed that he third Defendant was aware that the lands in question were already occupied by the Plaintiff and that the Plaintiff was not consulted or notified before the lands were granted to the First and Second Defendants.

[8] Although copies of the leases were not produced it is not disputed that they are in standard form No. 3 in schedule IX to the Act. Lease 3859 is for a term of 80 years with an annual rent of $100.00 for a chapel site while lease 3860 is for a term of 80 years at an annual rent of $50 for a playground. Each lease also contains the Form 10 covenant which provides for a rent revision every five years with power to the cabinet to determine the appropriate rental in the event of failure by the parties to agree.

[9] In January, 2008 the First Defendant wrote to the Plaintiff proposing that the rent for lease 3859 be increased from $100 to $8000.00 per annum. His reasons for the request are contained in a letter to the Plaintiff dated 17 January. The writ was issued shortly after the third Defendant declined the Plaintiffs request to cancel the grants to the First and Second Defendants.

[10] Mr. Niu's principal submission was that the lands being occupied by the Plaintiff as lessee, they were not available for allocation to the 1st and 2nd Defendants. Mr. Niu relied principally on Tafa v Viau [2006] Tonga L R 287.

[11] Mr. Edwards rejected this argument. In his submission sections 83 and 88 of the Act govern the situation: Sauaki died without leaving an heir to his allotment and therefore it reverted to the Crown. Section 88, providing for re-grant, is mandatory: "such allotment......shall be granted out by the Minister....". Tafa v Viau is distinguishable and inapplicable.

[12] With respect, my view is that neither of these two submissions is entirely correct. As I see it, the position is as follows. Upon Sauaki's death, the leases not having expired, section 59 (ii) applied. Therefore the third Defendant was "bound by the terms of the lease". Section 83 had no application because it does not deal with allotments apply, section 88 does not apply either as, apart from section 83, no other reversion appears in Division VII of the Act. Section 88 has no application to section 59 reversions. Since section 88 has no application, it is not necessary to decide whether it is mandatory. I am inclined, however, not to accept that proposition. I prefer Mr. Niu's reading of the section.

[13] Given that the third Defendant as Minister was "bound by the terms of the lease" does that mean that he could not grant the leased allotments to the First and Second Defendant? In my view there is nothing in the Act prohibiting such a grant or requiring him to step into the shoes of the deceased allotment holder for so long as the lease lasts. In my opinion the situation is similar to that when a freeholder who has leased his land sells the freehold. The purchaser gets the land subject to the lease. Mr. Niu suggested that the Plaintiff should have been consulted before the land was re-allocated. He did not cite any authority in support of this proposition, which Mr. Edwards rejected. There is in common law no requirement for a freeholder to consult with a lessee before the freehold is disposed of. In my view there is no requirement in a section 59 situation for the Minister to consult with an existing lessee of the reverted allotment.

[14] Tafa v Viau is authority for the proposition that an allotment which is already occupied is not available for an unrestricted grant where the effect of such a grant would be to give the grantee the right to evict the existing occupant. In this case however, the grants to the First and Second Defendants are not restricted: they are restricted by the existing leases; unless there is a breach of covenant by the lessees the right to terminate the lessees occupancy of the land does not arise.

[15] In his letter of 17 January 2008, already referred to in paragraph 9 above, the First Defendant quite simply explain the position of the Defendants in relation to the Plaintiff. They accept that their allotments are encumbered "I have no right to the land until [the lease's] expiration which would be at age 98 years". I was confirmed by Mr. Edwards that the validity of the leases was not in question.

[16] Mr. Niu's final submission was that by allocating the lands to the 1st and 2nd Defendants the Plaintiff had been exposed to the probability of having to pay a much higher rental for the property. In my view this submission has little force. As already noted, the leases contain a procedure for determining a fair rent for the properties; the Plaintiff cannot complain if that procedure is followed.

[17] The Plaintiffs claim is dismissed. I will hear counsel as to costs.

DATED: 19 January, 2011

M D SCOTT
CHIEF JUSTICE