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Kalaisi v Maile [2016] TOLC 8; LA 19 of 2015 (9 November 2016)

IN THE LAND COURT OF TONGA

NUKU’ALOFA REGISTRY


LA 19 of 2015


BETWEEN: SIASI TOKAIKOLO ‘IA KALAISI

Plaintiff


AND: SIONE HAVILI MAILE

First Defendant

SIONE FOLIAKI ‘AMANAKI

Second Defendant

MO’UI FO’OU ‘IA KALAISI FELLOWSHIP

Third Defendant

MINISTER OF LANDS

Fourth Defendant

BEFORE THE PRESIDENT PAULSEN

Counsel: Mr. W.C. Edwards SC for the plaintiff

Mr. L. Niu SC for the first, second and third defendants

Mr. ‘A. Kefu SC for the fourth defendant


Date of Hearing: 17, 18, 19, 22, 23 August and 24 October 2016
Date of Ruling: 9 November 2016.


RULING

Introduction

[1] The plaintiff (Tokaikolo) is a church with branches in Tonga and overseas. It worshipped from a property at Ha’ateiho which comprised a church, hall, residential and school buildings (the Ha’ateiho property). In July 2013 the first defendant, Sione Maile, who was a Minister and Tokaikolo’s Secretary General, resigned from Tokaikolo. He established a new church, the Mo’ui Fo’ou ‘ia Kalaisi Fellowship (Mo’ui Fo’ou), and on 14 July 2013 Mo’ui Fo’ou took over the Ha’ateiho property. Tokaikolo members that would not join Mo’ui Fo’ou were told to leave. Mo’ui Fo’ou has kept possession of the Ha’ateiho property. It has made improvements and extended the school on to adjoining properties.

[2] Tokaikolo seeks a declaration as to its entitlement to the Ha’ateiho property and for orders granting it possession of the property and evicting Mo’ui Fo’ou.

[3] Tokaikolo also seeks an order directing the Minister of Lands to complete registration of its lease of the Ha’ateiho property, which has been issued but not registered, awaiting resolution of this dispute.

[4] In defence the Mo’ui Fo’ou defendants say that the Ha’ateiho property was gifted to Sione Maile by Tokaikolo’s President, Liufau Saulala, at the time of the breakaway.

[5] They also argue that Tokaikolo is estopped by representation and conduct under section 103 of the Evidence Act and by acquiescence from denying Mo’ui Fo’ou’s entitlement to the Ha’ateiho property.

[6] There is a final defence that Mo’ui Fo’ou’s taking of the Ha’ateiho property was not unlawful because Liufau Saulala had represented that it could use it.

[7] A further defence that breaches by Tokaikolo of its constitution justified Mo’ui Fo’ou’s actions in taking the property was not pursued although much evidence was directed towards this particular defence during the hearing.

[8] The Minister takes no position on the dispute between Tokaikolo and Mo’ui Fo’ou and will abide by any decision of the court. To be clear, Mr. Kefu advised that the Minister would accept a direction from the court to register a lease of the Ha’ateiho property in the name of Tokaikolo or Mo’ui Fo’ou as the court considers appropriate. On that basis Mr. Kefu was excused from further attendance from midway through the hearing.

The parties

Tokaikolo

[9] The story of Tokaikolo began in 1978 when the Tokaikolo Fellowship was formed by Senituli Koloi. Over time it established itself in Tonga, New Zealand, Australia and the United States. Senituli Koloi died in February 1980 and Liufau Saulala was ordained as the First Minister and Leader of the Fellowship on 1 January 1981. In 1994 the Fellowship changed its name to the Tokaikolo Christian Church (Siasi Tokaikolo ‘Ia Kalaisi) and Liufau Saulala’s title also changed from Leader to President. He still retains this title of President.

[10] Tokaikolo registered in Tonga under the Charitable Trusts Act 1993. In the riots of 2006 the Office of the Registrar of Charitable Trusts was destroyed and Tokaikolo was required to resubmit its registration and constitution, which it did on 21 May 2007. Both the constitution that accompanied Tokaikolo’s registration in 2004 and the one registered in 2007 were in evidence.

Sione Maile

[11] Despite being a central figure in this litigation Sione Maile did not give evidence. His intentions, beliefs and actions are shrouded in mystery. In closing submissions Mr. Niu said his instructions were that Sione Maile did not give evidence because he was ill. There was no evidence about that and it was not accepted by Mr. Edwards.

[12] The evidence established that Sione Maile had joined Tokaikolo from around 1978 and for many years was a Minister in the church and held the position of Secretary General. Under the constitution of Tokaikolo the Secretary General is responsible for the records and books of the church conference. It is a senior position and is described in the constitution as being second in command to the President.

[13] In a letter to Liufau Saulala dated 8 July 2013, Sione Maile resigned from Tokaikolo. His letter of resignation stated that he had been led by the Lord to move to a new life and that God had told him that his fellowship would be called New Life Fellowship in Christ (‘Feohi’anga Moui Fo’ou ‘Ia Kalaisi). In his letter he also stated that he would start that Sunday preaching for the people God had called him to look after. The letter did not say where he proposed to establish his church and no one gave any evidence about his intentions in this regard either.

[14] The second defendant, Sione ‘Amanaki, described Sione Maile as the Leader of Mo’ui Fo’ou who “takes care of those who serve under the church” but there was no evidence given as to his other duties or his present authority within Mo’ui Fo’ou.

Sione Foliaki ‘Amanaki

[15] Sione ‘Amanaki, was a Minister of Tokaikolo from 1995 until 14 July 2013 when he joined Mo’ui Fo’ou. He is the Chairperson of Mo’ui Fo’ou’s land committee and occupies the Minister’s residence at Ha’ateiho. He was instructed to deliver the first sermon for Mo’ui Fo’ou at Ha’ateiho on 14 July 2013.

Mo’ui Fo’ou

[16] There was scant evidence about Mo’ui Fo’ou, its legal status, history, organisation, officers or membership. What is not in dispute is that Mo’ui Fo’ou was established on or around 7 July 2013 as a breakaway group from Tokaikolo and that since 14 July 2013 it has been in possession of the Ha’ateiho property. It has also operated a school from the property.

The Minister

[17] The Minister is joined as the representative of the Crown on all matters affecting the land in the Kingdom.

The facts

[18] The Tokaikolo church at Ha’ateiho started with a small group who worshipped from a shelter at Sione Maile’s town allotment. In 1997 Sione Maile informed the congregation that leases of land at Ha’ateiho had been obtained from the Government so that they could build a church and residence. The land is located within the hereditary estate of Tu’i Ha’ateiho.

[19] There were two leases granted to Tokaikolo as follows:

(a) Lease no.6010 which was for an area of 1080m2 for a period of 50 years; and

(b) Lease no.6011 which was an area of 897m2 for a period of 50 years.

[20] Sione Maile signed both leases on behalf of Tokaikolo. The leases were obtained for and were the property of Tokaikolo.
[21] The Ha’ateiho property was developed over more than a decade. Over two years the land was filled. The congregation donated many truckloads of coral rocks. In 2000, work began building the church and residence. They were ready for dedication by December 2003. A school building, school toilets, showers, playground and fence were built between 2004 and 2007. The school building opened in 2008. The church hall was built between 2008 and 2010. This development of the Ha’ateiho property was the result of the combined efforts and contributions of the Tokaikolo members of Ha’ateiho who were assisted by donations of labour, money and food by other Tokaikolo branches. The work was undertaken in the name of Tokaikolo and for the use and benefit of the Ha’ateiho congregation.
[22] There was an attempt by the Mo’ui Fo’ou defendants (see the evidence of Tupou Manitisa) to suggest that this work was undertaken by Sione Maile and financed by him from the sale of crops. As Mr. Edwards conceded, it is undeniable that Sione Maile was an organiser and a force behind mobilising resources and money. However, the evidence is overwhelming that many contributed to the performance and the cost of the work and it was done for and on behalf of Tokaikolo and not Sione Maile personally. Mr. Niu responsibly accepted that Tokaikolo was the owner of all the buildings and improvements prior to the breakaway in July 2013.
[23] On 21 October 2005, Sione Maile wrote to the Minister on behalf of Tokaikolo requesting that leases no.6010 and no.6011 be cancelled so that they could be combined into one lease which would also include further reclaimed land. The estate holder wrote giving his consent to the request. On 15 June 2006, Cabinet decision no.589 approved the application to cancel leases no.6010 and no.6011 which was effective from that date.
[24] On 31 August 2006, Sione Maile submitted on behalf of Tokaikolo an application for a lease of an area that encompassed the land which had been subject to the previous two leases and additional reclaimed land extending towards the lagoon. On 5 September 2007, Cabinet decision no.928 approved the lease application on the following terms:

Lessee: Tokaikolo Christian Church

Lessor: Hon. Tu’i Ha’ateiho

Area: 1A OR 30.2P

Period: 50 years

Purpose: Chapel Site & Other Church Activities

Rental: $300 per annum

Effective: Date of Registration


[25] On 28 November 2007, the Ministry wrote to Liufau Saulala and the estate holder informing them of Cabinet’s decision approving the new lease and that the Ministry would proceed to complete the process of registration of the lease. On that same date, the Minister issued a direction to survey the land and issue a deed of lease for registration. On 23 February 2012, a deed of lease was issued (but not registered) in the name of Tokaikolo. It was signed by the Minister and by Sione Maile on behalf of Tokaikolo. The signatures were witnessed by the Minister of Education and one of the lands officers, Sione Moala, respectively on or about 13 June 2012. For reasons that are not clear the lease was not registered.
[26] On 8 July 2013, Sione Maile resigned from Tokaikolo. Both he and Liufau Saulala were in Auckland, New Zealand at the time. Liufau Saulala gave evidence, which I accept, that on 5 July 2013 Sione Maile had spoken to him and assured him that he had no intention of leaving Tokaikolo although some people were trying to lure him to lead a new congregation. However, in a letter of resignation of 8 July 2013 Sione Maile stated:

I have been led by the Lord in Genesis 12:1-4 to move to a New Life, and to take care of those people who are forsaken though still love the Lord...


Therefore Sir, God has already told me that the fellowship will be called “New Life Fellowship in Christ”, and I praise God, because that is what I have been waiting for...and it is obvious to me that you no longer need my service...Therefore I will start the command of the Lord this Sunday by preaching for the people that God has called me to “look after”, and I praise God for that.


[27] On 10 July 2013, Liufau Saulala spoke to a bible study of Tokaikolo at Auckland about the breakaway. Both he and Fine’eva Tautuiaki, a witness for Mo’ui Fo’ou, gave evidence of this. Fine’eva Tautuiaki said that when he attended the bible study he had not heard of the breakaway but Liufau Saulala mentioned it and said to “willingly let Sione go with all his workings, because all his workings belonged to him and was his individual undertaking”. He also said that Liufau Saulala spoke for over an hour and in the course of that he decided to join Sione Maile. He attended a sermon delivered by Sione Maile on 14 July 2013 at Otahuhu where Sione Maile spoke of the breakaway but he was not asked what Sione Maile said about it. He said that he travelled back to Tonga with Sione Maile on 17 July 2013.

[28] Evidence was given by Tupou Manitisa that he attended a bible study at Lavengamaile on 14 July 2013 where Liufau Saulala addressed those attending about the breakaway. He has a video of a bible study and a partial transcript of what was said was admitted into evidence. I was not shown the video. Liufau Saulala’s evidence was that the bible study was in Auckland on 10 July 2013. Fine’eva Tautuiaki said he attended a bible study in Auckland on 10 July 2013. A question arises whether the video and transcript are a record of the bible study of 10 July 2013 in Auckland or a bible study at Lavengamaile on 14 July 2013, as Tupou Manitisa contends.

[29] The starting point must be the transcript in which Liufau Saulala refers to the date as being 10 July 2013 (not 14 July 2013). I consider that very strong evidence of the date of the bible study. No other witness referred to a bible study on 14 July 2013 at Lavengamaile, which is surprising had it taken place. Added to this, I did not find Tupou Manitisa to be a credible witness. He appeared personally invested in the result of this action in a way that no other witness was. Tupou Manitisa maintained indefensible positions, such as his insistence that Ha’ateiho was constructed solely by Sione Maile. He said in his evidence “the construction of Ha’ateiho was from the funds obtained from the sales of the First Defendant’s yam containers, which he sold in the States, Australia, New Zealand.” He insisted he had been at Tokaikolo’s conference in New Zealand in 2003/2004 but the conference was in Tonga that year. He attacked the integrity of Liufau Saulala and made allegations against him which in my opinion he could not substantiate. His evidence that the boat, M.V. Toutai Mei Langi, had been gifted by Liufau Saulala is just one example where I consider Tupou Manitisa’s evidence was proven to be incorrect. When presented with contrary evidence his answers to Mr. Edwards’ questions were evasive. In so far as there is any conflict between the evidence of Tupou Manitisa and Liufau Saulala I have no hesitation in accepting the evidence of the latter. I find that the transcript is a partial record of Liufau Saulala’s address to the bible study at Auckland on 10 July 2013.

[30] I set out below the parts of the transcript of the bible study in so far as it is relevant to the issues raised by Mo’ui Fo’ou in defence of this claim. I have highlighted in bold the words that I understand are particularly relevant to Mo’ui Fo’ou’s defence but have, of course, considered the entire transcript.

Brethren, on the day of the break away, (then he wrote on the board – “Date – 5th July”), and this is the 10th of July. I told about how shocked I was. I said, no, no it cannot be. However, we had just recently talked, and prayed, and we were happy, before Sione and Mafi left. That was Friday, and then suddenly this happened on Monday. I said, no, no this cannot be true, they said, check the Facebook, and on the Facebook, Sione said “The Holy Spirit instructed the break away”. That is a lie, brethren, a very big lie, what a shame on the Holy Spirit! To speak one thing today and say the opposite on the next day, when there’s a contradiction in what you say, we call that a lie, and if it isn’t a lie, but something that’s happened in someone, that’s the spirit of lying from Hell, a lying spirit that has entered you. But God isn’t inconsistent. As Malachi says, God is constant. In Hebrews, Jesus is the same, yesterday, today and forever. No, that’s not from the Holy Spirit. It’s a lying spirit from Hell. Brethren, these are the workings of a lying spirit from Hell. Someone told me, in one Sione’s sermons...


It is now clear brethren, that some members are breaking away from us. If Sione should come for something that Tokaikolo has any claim to, I will tell Sione to take it with him. Not only that, Ha’ateiho was built by Sione Maile alone. That’s the only chapel that did not have a loan. He’s the servant of the Lord. Whilst we pay off these other loans. If Sione should come for something that Tokaikolo has a claim to, I’ll sign for whatever it is to be given to Sione. All of it. About their little school, Lavengamalie is always ready to offer it any help it may need, because it’s a good school. It emphasises The Word of God. It is God’s hand. Hundreds of students there belong to other denominations so this is an opportunity for the Gospel. We will lend them a hand. Let’s leave this other matter aside. We will help them out, dear brethren. Whatever it is. We won’t fight over any worldly goods.


Before, during the first break away, when some of the members left the church, I heard they were looking for a lawyer to claim half of Lavengamalie, and I told them, when people told me to get ourselves a lawyer, I said no, we won’t get a lawyer. I didn’t come to get myself a home or get myself properties. I came to lead the people spiritually. I won’t have any doubt about that! If they want Lavengamalie, and they tell them.. the judge tells them, the judge decides to give them Lavengamalie, then fine. I could leave because there’s plenty of land in Tonga and still be able find some people around who still desired to listen to the Life. That’s all. That’s my call! My call was not to acquire land or acquire worldly goods. My call was for people to acquire heavenly treasures alone! That’s the true home! I don’t want you to be angry at those joining the breakaway. Because there are some who just go, this one family told me, the reason why, Sione called us to follow him, because we owe Sione a lot. Similarly, a lot of people owe Sione a lot of things, they owe him their status of being a pastor, bible study, healing and other material assistance, and it tells us, and I tell them it’s all right, don’t be angry at them. They just feel obligated to Sione, but they should know that they are following a man, and man is inconstant. Therefore brethren, I just pray and ask for a time that the Lord will bring Sione back. I want to work together with Sione, I want Sione to be in the same Tokaikolo church as I, because we helped build this church. Senituli’s works was ceded to me, Sione and all of you. Let’s just pray that this will happen because the end is near.

[31] Liufau Saulala’s evidence was that it was not his intention to gift the Ha’ateiho property to Sione Maile (or anyone else). I accept his evidence. I found Liufau Saulala to be a credible witness. His evidence is consistent with the words that he used and entirely plausible in the circumstances under which they were spoken. He was unshaken in his evidence under cross-examination.

[32] The words were spoken at a bible study of Tokaikolo. It was not an address to Sione Maile or to his followers, as one would expect had it been Liufau Saulala’s intention to confer a gift upon them. There was no evidence of any communication of any sort between Liufau Saulala and Sione Maile following the breakaway until a meeting at Lavengamaile in November 2015.

[33] At its highest the words indicated a willingness to make a gift at some future time. The important words were “If Sione should come for something....I will tell Sione to take it with him" and “If Sione should come for something that Tokaikolo has a claim to, I’ll sign for whatever it is to be given to Sione.” There is no dispute that Sione Maile did not make any request of Liufau Saulala for the Ha’ateiho property.

[34] To understand why Liufau Saulala would speak these words it is necessary to consider the circumstances. The bible study was held within a few days of the breakaway. Sione Maile had recently assured Liufau Saulala that he had no intention of leaving Tokaikolo and his decision to do so was a shock to Liufau Saulala. The thrust of Mo’ui Fo’ou’s case was that the focus of the breakaway group’s dissatisfaction was Liufau Saulala himself. There was tension and disparaging comments being made in the media and, Liufau Saulala said, a need to calm anger resulting from the breakaway. In convincing evidence, Liufau Saulala said that at the time of the breakaway Sione Maile and others were making allegations in the media in New Zealand and Tonga and he believed it was his obligation to pacify members of Tokaikolo and remember the good work that Sione Maile and his followers had done with the church. At paragraph 66 of his evidence he said:

What I had said calmed the bible class members down and was taken no further. It was not a declaration of gift or a statement made to Sione Havili Maile personally or to his supporters.

[35] His evidence finds support in his words of the bible study and this passage from the transcript:

I don’t want you to be angry at those joining the breakaway. Because there are some who just go, this one family told me, the reason why, Sione called us to follow him, because we owe Sione a lot. Similarly, a lot of people owe Sione a lot of things, they owe him their status of being a pastor, bible study, healing and other material assistance, and it tells us, and I tell them it’s all right, don’t be angry at them.

[36] Liufau Saulala also said that the Ha’ateiho property was not his to gift even if he had wanted to. Whether or not he had such authority, his belief that he did not makes it unlikely that he would purport to make a gift to Sione Maile. At paragraph 68 of his evidence he said:

The lease of the land and the buildings on it which consist of the church building, Minister’s residence, hall and school buildings are properties of the church as declared in the Constitution. It is not my personal property to give away even if I wanted to. ...

[37] On 14 July 2013, Sione Maile’s son in law, Sosaia Tautalanoa, announced at the evening service at Ha’ateiho that Sione Maile and others (including himself) had left Tokaikolo and that the church would henceforth be called the Mo’ui Fo’ou Fellowship. He said anyone who wished to leave, by which he must plainly have meant anyone who did not wish to join Mo’ui Fo’ou, should “do so today”.

[38] In an act of pronounced symbolic significance Sione ‘Amanaki, who had joined Mo’ui Fo’ou, preached the sermon that evening. He gave evidence that he was contacted on 13 July 2013 and told of the breakaway and asked to preach at Ha’ateiho the next day. He had not spoken to Sione Maile about the breakaway and was not told the reason for the breakaway. He was asked whether he had any idea where Mo’ui Fo’ou intended to worship from. His answer was “What I know is that the chapel was under Sione Maile and that they would continue at this chapel”.

[39] Toni Heimatoto attended the evening service on 14 July 2013. He said, and I accept his evidence, that there was no mention that Liufau Saulala had gifted the Ha’ateiho property. He did not understand why Sione Maile had left Tokaikolo or the reason Sosaia Tautalanoa had told those that would not follow Sione Maile to leave. Sosaia Tautalanoa did not give evidence so there is no explanation from him about why or on whose instructions he was acting.

[40] Toni Heimatoto returned to the church on 18 July 2013. He spoke to Sosaia Tautalanoa. He told him that he had sacrificed his life in building the church “but today you are breaking away and taking the Church properties with you”. He said he would not join the breakaway but would remain with Tokaikolo. He also said that the members of Tokaikolo’s Ha’ateiho congregation who did not join Mo’ui Fo’ou have since conducted worship from the living room of a member by the name of ‘Onesi Ngahe.

[41] The evidence of Toni Heimatoto is important because whilst there was, to use Mr. Nui’s words, a “peaceful departure” of the members of Tokaikolo from the Ha’ateiho property (paragraph 5 of Mo’ui defendants’ submissions) it cannot be said that they left voluntarily or without objection. It is also important because the manner in which the Ha’ateiho congregation was told to leave is, in my view, incongruent with Mo’ui Fo’ou having any belief there had been a gift.

[42] It is at this juncture that the failure to call Sione Maile to give evidence assumes its significance. There are entire gaps in the evidence on matters bearing directly upon the defence of estoppel, in respect of which the Mo’ui Fo’ou defendants bear the onus of proof. These are some of those issues. Did Sione Maile instruct Sosaia Tautalanoa to take over the Ha’ateiho property? Was it always Sione Maile’s intention to take over the Ha’ateiho property upon resigning from Tokaikolo? If not, where was he intending to establish his church? When was Sione Maile first told of Liufau Saulala’s bible study address and what was he told? Did Sione Maile believe that Liufau Saulala had gifted him the Ha’ateiho property? Did Sione Maile act upon that belief? How did he act on that belief? In the absence of any evidence from Sione Maile the case that Mo’ui Fo’ou presents lacks the necessary evidential foundation.

[43] By way of one example, Mr. Nui made the submission that Liufau Saulala’s intention to gift the Ha’ateiho property was conveyed to Sione Maile who then took possession of the property on 14 or 18 July 2013 (paragraph 26 of the Mo’ui Fo’ou defendants’ submissions). This submission has no foundation in the evidence. The only direct evidence of Sione Maile being told what was said at the bible study comes from Tupou Manitisa who said that he told Sione Maile on 28 July 2013 of the words spoken by Liufau Saulala on “14/7/2013 namely that Sione Maile could leave with his works at Ha’ateiho”. He also said “Sione was happy although I understood that Sione had already known it beforehand”. He did not say why he believed Sione Maile already knew. There is no evidence about what Sione Maile understood by the words he “could leave with his works at Ha’ateiho” (and given their ambiguity one would think not very much could be taken from them) or how he acted upon any understanding that he may have had.

[44] On 18 October 2013, Sione Maile wrote to the Minister to cancel the lease application that he had signed in 2006 on behalf of Tokaikolo. He applied for a new lease to be granted to the Feohi’anga Mo’ui ‘Ia Kalaisi Fellowship. He stated in this letter that he had formed the Fellowship on 7 July 2013. He said that the land had been given to him by the estate holder and it was leased by Tokaikolo but the improvements to the land (landfill, church building, hall and school) were “done solely by myself”. He requested that the lease be registered to the Fellowship “as this is the church building where those who have left Tokaikolo in Tonga meet”.

[45] Mr. Edwards submitted that it is significant that Sione Maile did not state that the property was gifted to him. Mr. Nui countered that the letter simply reflected Liufau Saulala’s bible study address where he said that Ha’ateiho was built by Sione Maile.

[46] Had Sione Maile believed that the Ha’ateiho property had been gifted to him it would have been a simple matter to obtain Tokaikolo’s consent to his application. He obtained the estate holder’s consent to his application and on the same date, that is 18 October 2013, the estate holder wrote to the Minister supporting Sione Maile’s request. The fact that Sione Maile did not also seek Tokaikolo’s consent and did not state that the Ha’ateiho property had been gifted to him is strong evidence that he did not believe Liufau Saulala had gifted him the property at all. It is a notable feature of this case that there was no evidence before me that Sione Maile or Mo’ui Fo’ou ever alleged that the Ha’ateiho property had been gifted until after the issue of proceedings.

[47] No action was taken on Sione Maile’s application. The registration of Tokaikolo’s lease was not progressed either and matters stalled within the Ministry at this point.

[48] After the breakaway Mo’ui Fo’ou raised funds during 2013. Between May 2014 and June 2015 Mo’ui Fo’ou did work on the Ha’ateiho property and on neighbouring properties. Mo’ui Fo’ou did not lead evidence about when exactly and in what order the work was done and my attempts to obtain this information from Tupou Manitisa did not take matters very far. It may have assisted had Mo’ui Fo’ou produced the receipts for the work but they were not put into evidence.

[49] The work on the Ha’ateiho property involved the removal of the name of Tokaikolo from the church and substitution with the name of Mo’ui Fo’ou, repainting of the church and the Minister’s residence in the colours of Mo’ui Fo’ou, repainting of the church pews and fences and replacement of guttering. The playground of the school was filled and sealed because it became muddy in the rain. It appears to me this work was in part maintenance and in part intended to mark the change from Tokaikolo to Mo’ui Fo’ou.

[50] In addition the school was extended on to two adjoining properties. Classrooms and toilets were built on that land. The nature of the arrangements between Mo’ui Fo’ou and the adjoining landowners was not explained.

[51] Tupou Manitisa said that the cost of the repainting work and replacement of the guttering was $20,489.43, the cost to fill the playground was $14,887.50 and the cost of building on the adjoining allotments was $100,887.50.

[52] There was no evidence that Mo’ui Fo’ou ever shared its plans to do work on the Ha’ateiho property or the adjoining properties with Tokaikolo or that Tokaikolo’s members were aware of the intention to do the work before it commenced.

[53] There was in evidence letters of resignation from Ministers who chose to follow Sione Maile to Mo’ui Fo’ou as well as letters from Tokaikolo accepting those resignations. There were also letters revoking the title of Ministers who had gone to Mo’ui Fo’ou but not tendered resignations. Mo’ui Fo’ou relies on these letters in its defence, particularly the expressions of good wishes in the final paragraphs of the letters. By way of example, the letter sent to Sione Maile accepting his resignation on 14 January 2014 stated:

Although your resignation will be a loss to our ministry, but we would like to bid you farewell with hope for His blessings upon you and your family and your future endeavours.

[54] All of the letters accepting resignations contained similar statements of good wishes, as did the letters revoking Minsters’ titles. For instance, Sione ‘Amanaki did not submit a letter of resignation. On 14 January 2014 Tokaikolo wrote to him that the Conference of Ministers of Tokaikolo had resolved to revoke his Minister title. The letter concluded:

I wish you all the best in the work that you are now doing. May you be blessed with your family in your new endeavours.

[55] The Mo’ui Fo’ou defendants argue that the letters conveyed approval and encouragement for the work Mo’ui Fo’ou was doing on the Ha’ateiho and adjoining properties. That was the evidence of Tupou Manitisa (paragraph 30 of his brief of evidence). Mr. Nui submitted that the letters were given to the Ministers after Mo’ui Fo’ou had used the facilities at Ha’ateiho and “carried out some of the works”. This submission is not correct.

[56] The letters from Tokaikolo to the Ministers are all dated 14 January 2014. The letters could not have been intended or taken as encouragement for work that Mo’ui Fo’ou was carrying out on the Ha’ateiho property. That work did not commence until May 2014 and there was no evidence that Tokaikolo was consulted in advance of the work. The good wishes extended in respect of “the work” or “your work” must refer to spiritual work and were simply good manners. Saia Tatafu, the Tokaikolo Conference Secretary, signed the letters and said that they extended best wishes because that was the right thing to do. Liufau Saulala said that the letters were a normal Christian parting saying “May God bless you and what you want to do”.

[57] At Tokaikolo’s 2014/2015 Ministers’ Conference a resolution was passed to commence legal action against Mo’ui Fo’ou for the return of the Ha’ateiho property as well as another property, also in the possession of Mo’ui Fo’ou, at Kolomotu’a. It appears, and I find, that the reason Tokaikolo did not act sooner to reclaim the Ha’ateiho property was because it wanted time to pass to allow emotions to cool and in the hope that those who had left Tokaikolo might return. That was the evidence of Liufau Saulala and Saia Tatafu.

[58] On 20 January 2015, Mr. Edwards wrote on behalf of Tokaikolo to Sione Maile in relation to his application to register the lease of the Ha’ateiho property in the name of Mo’ui Fo’ou. The letter demanded that Sione Maile remedy what he had done and return the leases to Tokaikolo.

[59] On 26 January 2015, Sione ‘Amanaki responded to that letter in his capacity as the chair of the land committee of Mo’ui Fo’ou. He set out a timeline of events but no real explanation for rejecting Tokaikolo’s demand stating “...your letter contains no authority that will enable the lawful return of the property as mentioned in your letter.” The letter did not mention Liufau Saulala’s bible study or that the Ha’ateiho property was a gift.

[60] On 15 January 2015, Liufau Saulala wrote to the Minister expressing surprise with a letter received from the Ministry dated 5 January 2015. In that letter he was informed of the 2006 request to cancel leases no.6010 and no.6011 and the application for a new lease. Liufau Saulala strongly denied that authorisation had been given by Tokaikolo to these transactions. He also denied receiving correspondence and stated that the improvements and buildings on the Ha’ateiho property were the result of the combined contributions of the Tokaikolo churches in Tonga and overseas. Liufau Saulala confirmed in answer to questions from Mr. Kefu that his letter was wrong to the extent that the cancellation of Tokaikolo’s two leases and the application for a new lease was what Tokaikolo had wanted.

[61] Tokaikolo issued these proceedings on 25 June 2015. On 14 November 2015 Sione Maile, Tupou Manitisa and other members of Mo’ui Fo’ou met with Liufau Saulala and representatives of Tokaikolo at Lavengamaile Hall. Liufau Saulala said that the representatives of Mo’ui Fo’ou apologised and asked to be given the Tokaikolo properties at Ha’ateiho and Kolomotu’a. Tupou Manitisa said that the approach was in accordance with tradition and in the interests of maintaining peace among the church communities. That this approach was made also indicates to me that Mo’ui Fo’ou did not consider the Ha’ateiho property was a gift. If it believed that, it would simply have said so and sought a peaceful resolution from that foundation.

[62] Following that meeting Mo’ui Fo’ou’s request was considered by Tokaikolo’s conference and on 18 January 2016 a letter was sent to Sione Maile thanking him for the apology that had been offered but refusing the request for the properties. The letter advised:

The Conference reconvened on Monday, 11th January to further discuss these matters that caused scepticism in our ministers. In that meeting, it was determined that there is no unity in the Mo’ui Fo’ou Fellowship, and they are divided. Further, some of the pastors of the Mo’ui Fo’ou have claimed that they have excluded you out. If that is the case, the question is: Who will take the ownership?

Questions arising from the conference included, if your apology is accepted, whose possession are we leaving the property of Tokaikolo Church? And because it was plainly unclear, and there was no official letter of apology from the day, the Conference did not accept your request, to give you the two Tokaikolo Church properties at Ha'ateiho and Kolomotu’a for use by Mo’ui Fo’ou Fellowship.

Therefore, the Conference unanimously decided, to proceed with the Conference decision from 2015: To return to Tokaikolo its properties at Kolomotu’a and Ha’ateiho.

A summary of my findings on the facts

[63] Before considering the positions of the parties it will assist if I summarise my relevant factual findings. Based on the evidence and for reasons that I have set out above my findings are as follows:

(a) Prior to the breakaway Tokaikolo was in lawful occupation of the Ha’ateiho property and was the owner of all the buildings and improvements on it. The development of the Ha’ateiho property before July 2013 was undertaken by and for the benefit of Tokaikolo.

(b) Sione Maile resigned as a Minister and Secretary General of Tokaikolo on or around 8 July 2013 and formed the breakaway church, Mo’ui Fo’ou. On 10 July 2013, Liufau Saulala addressed a bible study at Auckland on the topic of the breakaway and the transcript records what he said. Liufau Saulala did not intend to make a gift of the Ha’ateiho property to Sione Maile (or Mo’ui Fo’ou) nor did he intend to be understood by Sione Maile (or Mo’ui Fo’ou) to be doing so.

(c) There is no evidence that Sione Maile knew of Liufau Saulala’s bible study address before Mo’ui Fo’ou took the Ha’ateiho property. His conduct following the taking of the property satisfies me that he did not believe, and did not claim, that the Ha’ateiho property was a gift. It follows that he (and through him Mo’ui Fo’ou) knew or ought to have known that Mo’ui Fo’ou had no right to take the Ha’ateiho property and that in the absence of any such right its taking was unlawful.

(d) Sosaia Tautalanoa took possession of the Ha’ateiho property for Mo’ui Fo’ou on 14 July 2013 and required those in the Ha’ateiho congregation that would not join Mo’ui Fo’ou to leave that day. The Tokaikolo congregation left the Ha’ateiho property peacefully but not voluntarily. Sosaia Tautalanoa was made aware of that by Toni Heimatoto on 18 July 2013. Since 14 July 2013 Tokaikolo has been excluded from the Ha’ateiho property by Mo’ui Fo’ou.

(e) Mo’ui Fo’ou did work on the Ha’ateiho property and adjoining properties between May 2014 and June 2015. It is not clear when particular work was done during that period. Mo’ui Fo’ou did not inform or consult with Tokaikolo about the work. There is no evidence that Tokaikolo was aware of Mo’ui Fo’ou’s intentions to do the work before it commenced or that, subject to paragraph (f) below, Tokaikolo can be said to have done anything to encourage Mo’ui Fo’ou to do the work.

(f) Tokaikolo gave Mo’ui Fo’ou notice of its intention to reclaim the Ha’ateiho property in January 2015 which was while Mo’ui Fo’ou was doing work on either the Ha’ateiho property or the adjoining properties (Mo’ui Fo’ou having failed to call evidence as to when particular work was done). Mo’ui Fo’ou continued with its work notwithstanding that it was aware that Tokaikolo intended to reclaim the Ha’ateiho property.

(g) In November 2014 at Lavengamaile, Sione Maile and others of Mo’ui Fo’ou, in recognition of Tokaikolo’s rights, apologised to Tokaikolo for taking the properties at Ha’ateiho and Kolomotu’a and requested that Mo’ui Fo’ou be given those properties. The request was refused by Tokaikolo.

Discussion

[64] Mr. Nui’s submissions concentrated primarily on the defence of estoppel but it seems logical to deal first with whether the Ha’ateiho property was gifted to Mo’ui Fo’ou and, if that defence fails, to then turn to the issue of estoppel. I will deal last with the argument that Mo’ui Fo’ou did not convert the property because Liufau Saulala had represented that it could use it as its own.

Gift

[65] Mo’ui Fo’ou argues there was a gift by Liufau Saulala to the Mo’ui Fo’ou defendants of “the physical properties situated on the land as well as the right to claim to lease the land from the estate holder” (paragraph 25 of the Mo’ui defendants’ submissions). The gift is said to have been made by Liufau Saulala on 10 July 2013 at Auckland and when “Sione Maile accepted the gift and took possession of the properties gifted on 14th or 18th July 2013 the gift was complete” (paragraph 26 of Mo’ui defendants’ submissions).

The Law

[66] A gift is a voluntary and gratuitous transfer of property by one person (the donor) to another (the donee) without receiving consideration and with no intention that the property will be returned (Berry v Warnett (Inspector of Taxes) [1980] 3 All ER 798, 811).

[67] The essential elements of an effective gift are the following (Garrow and Fenton’s ‘Law of Personal Property in New Zealand’ Vol 1, 7th ed at 4.3 and 4.4):

(a) The donor and donee are both competent to give and receive what is intended;

(b) The donor actually intends to gift the immediate ownership of the property or, where the legal title is retained, to relinquish immediately the beneficial ownership in favour of the donee;

(c) An act or acts adequate to give complete effect to that intention. An attempt to gift property which is not in existence or does not belong to the donor cannot operate as a complete gift and is unenforceable in the absence of consideration; and

(d) Acceptance of the gift by the donee, which will be presumed subject to the donee’s right to disclaim the property when he or she has knowledge of the gift.

Neither Liufau Saulala nor Tokaikolo had capacity to gift an interest in land

[68] At the time of the breakaway the Minister had issued but not registered Tokaikolo’s lease. Mr. Nui submitted that in those circumstances Tokaikolo had no interest in the Ha’ateiho property other than an expectation that it would be granted a lease. He argued that it followed that what was gifted was “the right to claim to lease the land from the estate holder” and it was then up to the defendants “to apply to lease the lands from the estate holder” (paragraphs 25 and 27 of the Mo’ui Fo’ou defendants’ submissions). This argument cannot succeed. A mere expectancy, such as a right to succeed to property, or as in this case, to apply to be granted property, cannot be gifted (Halsbury’s , 4th ed ‘Gifts’ Vol 20 at 23).

Liufau Saulala did not own the Ha’ateiho property and had no authority to gift it

[69] Mr. Niu argued that “for practical purposes, the president, Saulala, had and has complete control of the affairs of the plaintiff” and therefore the power to gift the Ha’ateiho property (paragraph 1(h) of the Mo’ui Fo’ou defendants’ submissions). In support of that submission Mr. Niu relied upon:

(a) The terms of the constitution;

(b) The President’s authority to appoint Ministers and other office holders of Tokaikolo;

(c) That the President had approved expenditure of funds for various purposes over the years;

(d) The statements made by Liufau Saulala purporting to gift the Ha’ateiho property with no indication that he would seek approval of any other body.

[70] Mr. Niu referred to Article VI Section 10(i) of the 2004 constitution. The equivalent provision is Article V section 10(h) of the 2007 constitution. I understood a challenge was to be made to the 2007 constitution but this was not developed in submissions. In any event these sections of the constitutions with which I am concerned lead me to the same conclusion.

[71] The constitutions are in the Tongan language but correct translations of the sections concerned are as follows:

Article VI section 10(i) 2004 Constitution

The President of the Church has the authority to control, decide and maintain all of the workers of the Church and everything of the Church in accordance with its laws and also is accountable to the Conference.

Article V section 10(h) 2007 Constitution

The President of the Church has the authority to control, decide and maintain all of the workers of the Church, in accordance with its laws and is then to be conveyed to the Conference.

[72] Contrary to Mr. Niu’s submissions the President does not have complete authority over “all the affairs, including the properties and finances of the plaintiff” (paragraph 1(e) of the Mo’ui Fo’ou defendants’ submissions). The constitutions make plain that properties (land and buildings) acquired, built, purchased or leased in the name of the church are the property of the church. The highest authority in the church is the Conference of Chairman Ministers which maintains and governs according to the constitution.

[73] The President has only such powers as are conferred by the laws of the church. His powers under the constitution to ‘control, decide and maintain’ cannot sensibly extend to gifting away the church properties without reference to the Conference of Chairman Ministers. The position is beyond any doubt in the 2007 constitution where the President’s powers to control, decide and maintain relates only to “all the workers of the Church”. It is the local trustees who are responsible to care for, protect and manage all properties of the local church but have no authority to “dispose of any land or property” without the authorisation of the General Trustees under Article IX section 3(m).

[74] It is of no relevance that the President has the power to appoint Ministers and other office holders and to expend church funds. These are powers conferred upon him under the constitution. These are materially different from a power to gift church land and buildings.

[75] Much of the hearing was spent examining Liufau Saulala’s involvement in specific transactions going back as far as 1989. Primarily, it seemed, this was to attack his integrity but the transactions were also relied upon by Mr. Niu to show that Liufau Saulala had complete authority over church affairs. This evidence did not go close to establishing that Liufau Saulala had or was held out as having authority to gift church land and buildings. I do note that Tupou Manitisa alleged that Liufau Saulala gifted the boat, M.V. Toutai Mei Langi, but the evidence established that the boat was sold by a committee of Tokaikolo and was not a gift.

[76] Finally, contrary to Mr. Niu’s submission, the words spoken by Liufau Saulala at the bible study are not evidence of authority to gift church property. This is tantamount to saying that he might confer authority upon himself or, put another way, Tokaikolo is to be bound by Liufau Saulala’s own expression of authority. These are not tenable arguments.

Liufau Saulala did not intend to gift the property

[77] For a transaction to have effect as a gift the donor must actually intend to immediately give legal or beneficial ownership of the property to the donee (Dewar v Dewar [1975] 2 All ER 728, Standing v Bowring [1885] UKLawRpCh 282; (1885) 31 Ch D 282, Meisels v Lichtman [2008] EWHC 661 (QB)).

[78] In Norman v Federal Commissioner of Taxation [1963] HCA 21; (1963) 109 CLR 9, 28-29 in the High Court of Australia Windeyer J said:

But the weight of authority is, I think in favour of the view that in equity there is a valid gift of property transferable at law if the donor, intending to make, then and there, a complete disposition and transfer to the donee, does all that on his part is necessary to give effect to his intention and arms the donee with the means of completing the gift according to the requirements of the law.

[79] In Meisels v Lichtman (supra) at [71], [72] and [74] Blake J said:

Clearly people frequently make gifts to charities and the Defendants can point out that very large sums by way of gift have been made to this charity. However, charitable gifts are not usually made as part of an agreement with mutual obligations, and where someone donates to charity there is not usually a dispute as what the donor’s intentions were. Where there is a dispute it seems to me that it is the intentions of the donor that will be crucial, rather than the more familiar exercise of ascertaining the intentions of both parties in construing the agreement.

Mr. Hornett’s written reply helpfully refers me to Halsbury’s Laws of England 4th Edition (2004) vol 20(1) that address the topic of “Gifts Made Between Living Persons” at Paragraph [1] p.3.:

“A gift made between living persons...may be defined shortly as the transfer of any property from one person to another gratuitously while the donor is alive and not in expectation of death. It is an act whereby something is voluntarily transferred from the true owner in possession to another person with full intention that the thing shall not return to the donor. A gift appears to be effective when the donor intends to make it a gift and the recipient takes the thing given and keeps it knowing that he has done so. The mere fact that the recipient regards the thing as a loan and intends so to treat it does not by itself prevent the transaction from being effective as a gift. ...

Taking the passage [from Halsbury’s] above as a whole I derive from it two principles of relevance to the present dispute:-

  1. Gifts are voluntary and gratuitous, that is to say made without consideration.
  2. Gifts require the donor to intend that the gift shall not be returned to him.

[80] In Garrow and Fenton at 4.4 the learned authors state:

A gift requires an act of immediate disposition or transfer of title. The promise “I will give you this property” without more, does not affect an immediate transfer of title and can only be enforced if there is an agreement supported by consideration.

[81] Examples of the operation of the requirement that there be an immediate intention to gift are referred to in Garrow and Fenton at 4.4, page 304 and include Shower v Pilck [1849] EngR 956; (1849) 4 Ex 478, 154 ER 1301, where the words “I will give you all the plate that is mine” were held to be not words of gift; Re Hudson (1885) 54 LJ Eq 811 where a verbal promise to give £20,000 was held to be unenforceable in the absence of consideration and Rai v Wilson [1915] NZGazLawRp 122; (1915) 17 GLR 589 where a father’s expressed intention to give his son enough stock for his farm was held to be unenforceable.

[82] Liufau Saulala’s evidence was that he had no intention to make a gift of the Ha’ateiho property to Sione Maile. I have accepted his evidence. Accordingly there was no gift.

There was no act of delivery of the Ha’ateiho property to complete an intention to gift it

[83] There cannot be a gift without a giving and taking. In the case of chattels this will generally require an unequivocal delivery of the chattel to the donee. It may be sufficient if the donee obtains possession with the donor’s consent (Halsbury’s , 4th ed ‘Gifts’ Vol 20 at 35-36). In Olsson v Dyson [1969] HCA 3; (1969) 120 CLR 365, 380 Windeyer J said:

...to make a gift of any thing the intending donor must actually give it to the donee in a way which the law recognises. The owner of a thing does not effectively give it away by simply saying “it is yours as a gift”. He must not only say it is a gift, he must give it to the donee, who must, by words or conduct, accept it. How a thing can be given way depends on what it is. Since the decision in Cochrane v Moore, it is certain that if it be a chattel capable of manual delivery the donor must deliver it to the donee by actually handing it over, or else do some act which in the eyes of the law amounts to delivery of possession, as for example handing over some indicia of ownership or the means of obtaining possession. If the donor means to give some thing which is not a chattel, but is an intangible thing such as a share in a company or a debt owing to him or other chose in action, he must give it by some way which the law provides for the transfer of a thing of that kind. In such a case his gift is not of rights of ownership in respect of a visible and tangible thing, but of rights to be asserted against a person or persons natural or artificial.

[84] There was no delivery by Tokaikolo of the Ha’ateiho property to Sione Maile (or to Mo’ui Fo’ou). To the contrary, Sosaia Tautalanoa, in the name of Mo’ui Fo’ou, took the Ha’ateiho property and required the Tokaikolo congregation to leave. There was no giving by Tokaikolo, only a forced taking by Mo’ui Fo’ou and accordingly no gift.

[85] There was plainly no gift of the Ha’ateiho property because:

(a) Liufau Saulala did not intend to gift the Ha’ateiho property;

(b) Liufau Saulala did not own the Ha’ateiho property and had no authority to gift it;

(c) There was no act of delivery of the Ha’ateiho property to Sione Maile (or anyone else) to complete an intention to gift it; and

(d) In respect of the lease, neither Liufau Saulala nor Tokaikolo had capacity to gift an interest in land or, as Mr. Niu contends, the right to claim the lease.

[86] I now move to consider the alternative argument based on estoppel.

Estoppel

[87] Mo’ui Fo’ou’s arguments based on estoppel can be reduced to these propositions

(a) That Liufau Saulala represented at the bible study that Mo’ui Fo’ou could occupy and use the Ha’ateiho property as its own and would not seek its return; or

(b) That after Mo’ui Fo’ou had taken the Ha’ateiho property, Tokaikolo by its conduct represented that Mo’ui Fo’ou could retain the property and the improvements as its own.

[88] In either case, Mo’ou Fo’ou says Tokaikolo intended that Mo’ui Fo’ou act on the representation and Mo’ui Fo’ou did so act and did expensive and substantial work on the Ha’ateiho property to its detriment. Given my findings on the facts this defence has no possibility of success.

Evidence Act

[89] Sections 103(2) and (3) of the Evidence Act provide:

(2) If a person, either in express terms or by conduct, makes a representation to another of the existence of a certain state of facts which he intends to be acted upon in a certain way, and it is acted upon in that way in the belief of the existence of such a state of facts to the damage of him who so believes and acts, the first is estopped from denying the existence of such a state of facts.

(3) If a person, whatever his real meaning may be, so conducts himself that a reasonable man would take his conduct to mean a certain representation of facts, and that it was a true representation, and that the latter was intended to act upon it in a particular way, and he with such belief does act in that way to his damage, the first is estopped from denying that the facts were as represented.

Section 103(2)

[90] Before section 103(2) can apply what must be proved are at least all of the following:

(a) A representation by person A, in express terms or by conduct, to person B of the existence of a certain state of facts;

(b) An intention on the part of person A that the representation be acted upon by person B in a certain way;

(c) That it is acted upon by person B in that way;

(d) That person B acts in that way because of his belief of the existence of that state of facts; and

(e) Person B suffers damage as a result of acting upon his belief.

[91] In my view none of these requirements are satisfied in the present case.

[92] As to the requirement that there be a representation of the existence of a certain state of facts, Mr. Nui referred to the words from Liufau Saulala’s bible study:

Sione Maile can leave the Church and take with him what he has done

and

If Sione should come for something that Tokaikolo has a claim to, I will tell Sione to take it with him...I’ll sign whatever it is to be given to Sione...

and

We wouldn’t fight over worldly goods

[93] Liufau Saulala did not say that Sione Maile could occupy and use the Ha’ateiho property. He did not say he was gifting the property or that Tokaikolo would not claim the return of the property. What he said, on two occasions, was that “If Sione should come for something...” he would give it to him. Sione Maile did not come and ask for the property and what Liufau Saulala said is not a representation as to the existence of a certain state of facts. It is at best a statement of future intentions.

[94] The requirements of section 103(2) are not met for other reasons. Liufau Saulala had no intention of representing that Sione Maile (or Mo’ui Fo’ou) could occupy or use the Ha’ateiho property nor any intention that Sione Maile (or Mo’ui Fo’ou) would act upon what he said and take the property. The evidence satisfied me that Sione Maile did not believe that the Ha’ateiho property was gifted for his (or Mo’ui Fo’ou’s) occupation and use and he did not act on such a belief in any way. To the contrary, Sione Maile (and Mo’ui Fo’ou) knew or ought to have known that he had no right to occupy or use the Ha’ateiho property. Finally, it must follow from all of this that Sione Maile (or Mo’ui Fo’ou) suffered no damage in terms of the section.

Section 103(3)

[95] Before section 103(3) can apply what must be proved are at least all of the following:

(a) Some conduct by person A;

(b) The conduct is such that a reasonable person would take his conduct to mean a certain representation of fact and that it was a true representation;

(c) An intention on the part of person A that person B will act upon the representation in a certain way;

(d) That it is acted upon by person B in that way;

(e) That person B acts in that way because of his belief of the existence of that state of facts; and

(f) Person B suffers damage as a result of acting upon his belief.

[96] Mr. Niu’s submission was that there was a representation by conduct that “the works at Ha’ateiho were to be the defendants’ works forthwith” (paragraph 6 of the Mo’ui defendants’ submissions). The conduct was said to be Tokaikolo’s peaceful departure from the Ha’ateiho property, the lack of any objection to the work that Mo’ui Fo’ou did on the property and in increasing the pupils and teachers at the school, the invitation to those Ministers who had followed Mo’ui Fo’ou to resign and wishing them well in their future works and in standing by for 18 months while Mo’ui Fo’ou treated the Ha’ateiho property as its own. I do not accept this submission.

[97] The outstanding feature of this case is that Tokaikolo did not invite or encourage Mo’ui Fo’ou to go into possession of the Ha’ateiho property. Mo’ui Fo’ou took the property unlawfully when it knew or ought to have known it had no right to the property and required Tokaikolo’s congregation to leave. There was a peaceful but unwilling departure of Tokaikolo. Having been removed from the property Tokaikolo did not offer encouragement for Mo’ui Fo’ou’s work. It was not consulted about the work and there is nothing to suggest that it knew of Mo’ui Fo’ou’s intention to do the work before it commenced and Tokaikolo made a clear demand for the return of property during the course of the work which was rejected. There was no evidence at all that Tokaikolo was aware of an increase in teacher or pupil numbers at the school. I have already dismissed the incorrect characterisation of the letters Tokaikolo sent accepting the resignations and terminating the titles of Ministers as encouragement to continue the work (paragraph 1(k) of the Mo’ui Fo’ou defendants’ submissions). The conduct relied upon by Mo’ui Fo’ou, assessed individually or collectively, could not possibly have been understood by Mo’ui Fo’ou as a representation by Tokaikolo that it could retain the Ha’ateiho property or the improvements on it as its own.

[98] There is no doubt in my mind that Tokaikolo never intended its conduct to be understood or acted upon by Mo’ui Fo’ou as meaning that Mo’ui Fo’ou could retain the property and the improvements. Mr. Nui argued that if Liufau Saulala had not intended that Mo’ui Fo’ou would treat the property as its own he would have immediately objected when Mo’ui Fo’ou took over the property. That overlooks three important points. First, the evidence of Liufau Saulala, which I accept, was that steps were not taken immediately to reclaim the property to let emotions cool and in the hope that those who had left Tokaikolo would return. Secondly, I am satisfied that Toni Heimatoto on behalf of the Tokaikolo congregation did object to the take over and Sosaia Tautalanoa was aware of that. Thirdly, this was not a case where Tokaikolo considered Mo’ui Fo’ou was mistaken as to its rights so that there could be said to be an obligation on Tokaikolo to assert its rights and correct the mistake.

[99] I am satisfied that Mo’ui Fo’ou never understood that Tokaikolo, by its conduct, intended it to retain the property and the improvements. Sione Maile never believed or even asserted prior to the issue of these proceedings that the property had been gifted to him. His application to the Minister in October 2013 , the failure of Mo’ui Fo’ou to raise any reasoned ground of objection to Tokaikolo’s January 2015 demand and the approach by Mo’ui Fo’ou to Tokaikolo in November 2015 seeking its forgiveness and requesting the Ha’ateiho and Kolomotu’a properties demonstrates that Sione Maile and Mo’ui Fo’ou have throughout been aware that they have no right to the property. Had Mo’ui Fo’ou been acting upon a belief that Tokaikolo intended it to retain the property as its own, it would have immediately stopped its work when it learned in January 2015 that its belief was incorrect and Tokaikolo intended to reclaim the property. That it did not do so is a clear indication that it had no such belief.


Estoppel by acquiescence

[100] Mr. Nui referred me to a number of cases where the Tongan courts have upheld a defence of estoppel by acquiescence to an action for recovery of land. The principles expressed in the cases descend from Dillwyn v Llewelyn (1862) 4 De G F & J 517 and Ramsden v Dyson [1866] UKLawRpHL 7; (1866) LR 1 HL 129. In the cases following Ramsden equity binds the owner of property who induces another to expect that an interest in the property will be conferred upon him. In the Dillwyn line of cases equity binds the donor of property where, after the making of an imperfect gift, the donor induces the donee to act on the assumption that the imperfect gift was effective or in the expectation that it will be made effective (Meagher, Gummow & Lehanes, Equity Doctrines and Remedies 4th ed at 17-075 page 560).

[101] The cases recognise a principle that where a person is encouraged by the true owner to occupy and improve land in the mistaken expectation that he is or will be the owner or have a particular interest in the land, and the true owner being aware of that mistake does nothing to correct it, equity shall, as far as it can, prevent the true owner from profiting from that mistake and may require the true owner to fulfil the other party’s expectation (The New South Wales Trotting Club Ltd v The Council of the Municipality of the Glebe [1937] NSWStRp 14; (1937) 37 SR (NSW) 288, 308).

[102] Often quoted in this area is Inwards v Baker [1965] EWCA Civ 4; [1965] 1 All ER 446 and particularly the judgment of Lord Denning. Inwards concerned a son who, with his father’s permission, built himself a house on his father’s land. The father was fully aware of his intentions and contributed to the cost of the house. The son lived in the house for a number of years both before and after the father’s death and it was only 12 years after the father’s death that the trustees of his will claimed possession of the land on the basis that the son had nothing more than a licence to be there which had been revoked. The Court of Appeal held that since the son had been induced by the father to build his house on the land and expend his money for that purpose in the expectation that he would be allowed to remain on the land, equity would not allow that expectation to be defeated. Lord Denning, at pages 448-449 said:

It is quite plain from those authorities that if the owner of land requests another, or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity in the licensee such as to entitle him to stay. He has a licence coupled with an equity....

It is an equity well recognised in law. It arises from the expenditure of money by a person in actual occupation of land when he is led to believe that as a result of that expenditure, he will be allowed to remain there. It is for the court to say in what way that equity can be satisfied.

[103] It is fundamental that what creates the equity is the unconscionable conduct of the true owner. In Willmot v Barber [1880] UKLawRpCh 183; (1880) 15 Ch D 96 Fry J said at 105 and 106:

It has been said that the acquiescence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of a very true proposition. A man is not to be deprived or his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. What then, are the elements or requisites necessary to constitute fraud of that description? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does know of it he is in the same position as the plaintiff and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly ... the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right.

[104] In Crabb v Arun District Council [1975] EWCA Civ 7; [1975] 3 All ER 865, 877 Scarman LJ explained the requirement that the circumstances be such that it would be fraudulent for the true owner to assert his legal rights as meaning that it would be unconscionable, inequitable or unjust, as follows:

Counsel for the defendants, in the course of an interesting and vigorous submission, drew the attention of the court to the necessity of finding something akin to fraud before the equity sought by the plaintiff could be established. ‘Fraud’ was a word often in the mouths of those robust judges who adorned the bench in the 19th century. It is less often in the mouths of the more wary judicial spirits who sit today on the Bench. But it is clear that whether one uses the word ‘fraud’ or not, the plaintiff has to establish as a fact that the defendant, by setting up his right, is taking advantage of him in a way which is unconscionable, inequitable or unjust. It is to be observed from the passage that I have quoted from the judgment of Fry J, that the fraud or injustice alleged does not take place during the course of negotiation, but only when the defendant decides to refuse to allow the plaintiff to set up his claim against the defendant’s undoubted right. The fraud, if it be such, arises after the event, when the defendant seeks by relying on his right to defeat the expectation which he by his conduct encouraged the plaintiff to have. There need not be anything fraudulent or unjust in the conduct of the actual negotiations - the conduct of the transaction by the defendant.

The court therefore cannot find an equity established unless it is prepared to go as far as to say that it would be unconscionable and unjust to allow the defendants to set up their undoubted rights against the claim being made by the plaintiff. In order to reach a conclusion on that matter the court has to consider the history of the case under the five headings to which Fry J referred.

[105] The point is made again in Olsson v Dyson [1969] HCA 3; (1969) 120 CLR 365 where in the High Court of Australia Kitto J at 378-9 said:

Thus in a case of this kind what gives rise to an equity which the attempted making of the gift did not by itself create is the conduct of the intending donor after the act of incomplete gift; cf Ramsden v Dyson [1866] UKLawRpHL 7; (1866) LR 1 HL 129; Plimmer v Mayor of Wellington (1884) 9 App Cas 699...

[106] Without attempting any definitive list of relevant matters, it appears to me that the cases can be seen to share the following common factors:

(a) An expectation or belief by person A that is encouraged by person B as to the property of person B, such as that the property is or will be the property of person A or that he has some other interest in it;

(b) Knowledge by person B of person A’s expectation or belief;

(c) Some activity by person A in reliance upon his expectation or belief such as the expenditure of money upon the property;

(d) The interest or expectation is one that person B could lawfully satisfy;

(e) Encouragement by person B of the activities of person A or at least knowledge of those activities with a failure to assert his title to the property when they are adverse to it so that it would be unconscionable, inequitable or unjust for him to rely upon his legal rights to defeat the expectation encouraged by his conduct or lack of it.

[107] Given my findings on the facts it seems impossible to me to apply these principles to the present case. There is simply nothing in the facts of this case which can reasonably be thought to make it unconscionable or unjust or inequitable for the court to order the return of Ha’ateiho property to Tokaikolo. Mo’ui Fo’ou knowingly and unlawfully, in my view, took the Ha’ateiho property from Tokaikolo. It never had any right to the property and cannot ever have considered it did. It did some work on the property in that knowledge but Tokaikolo did not encourage Mo’ui Fo’ou’s work. The only possible criticism that could be made of Tokaikolo is that it might have reclaimed the Ha’ateiho property earlier, but it is clear that if it had that would have made no difference. When put on notice of Tokaikolo’s intention to reclaim the land Mo’ui Fo’ou rejected the demand and continued with its work.

[108] Tokaikolo should not be deprived of its property. It is fundamental that its property rights must be acknowledged and vindicated unless it has behaved itself in a manner that makes it unconscionable that it be so, and that is not the case here. Mo’ui Fo’ou should be required to give the Ha’ateiho property back. The defence of estoppel by acquiescence fails.

No conversion

[109] The final defence relied upon by Mo’ui Fo’ou is that it did not convert the Ha’ateiho improvements because Liufau Saulala represented that they could use the buildings as the property of Mo’ui Fo’ou. Liufau Saulala did not make any such representation nor is there any evidence that the property was occupied because Mo’ui Fo’ou considered that he had. It was established to my satisfaction that in taking the property Mo’ui Fo’ou committed trespass to the land and converted the buildings to its own use.

The school

[110] The statement of defence at paragraphs 32-35 and 41-42 highlights the position of the school. At paragraph 41 the Mo’ui Fo’ou defendants plead that it will be disruptive and harmful to the lives of the children at the school and many families in Tongatapu if possession of the Ha’ateiho property is returned to Tokaikolo. A decision returning the Ha’ateiho property to Tokaikolo should not result in any disruption or hardship to teachers and pupils. There is evidence from Lute Finau, a witness for Mo’ui Fo’ou, who said that the breakaway did not cause any problems with the smooth operation of Tokaikolo’s school and did not affect the students in anyway. There is nothing to suggest that with the goodwill of the parties anything should be different when the property is returned to Tokaikolo.

The lease

[111] I have rejected all the defences of Mo’ui Fo’ou and will return the Ha’ateiho property to Tokaikolo. Tokaikolo’s lease of the property was issued but not registered pending resolution of this dispute. There is no reason why it should not now be registered and I will so direct.

Result

[112] For the reasons set out in this ruling the orders I make are as follows:

(a) I make a declaration that Tokaikolo is entitled to possession of the Ha’ateiho property and is the lawful owner of the buildings and improvements on the property.

(b) I order that Mo’ui Fo’ou, its agents, employees, servants and invitees shall within 30 days of the date of this ruling vacate the Ha’ateiho property in favour of Tokaikolo.

(c) I order that the Minister of Lands is to forthwith register in favour of Tokaikolo the lease of the Ha’ateiho property approved by Cabinet Decision no.928 and previously issued and signed by the Minister and Sione Maile on behalf of Tokaikolo;

(d) I reserve leave to the parties to apply for any directions necessary to implement these orders upon 2 days’ notice.

[113] Tokaikolo is entitled to costs as against the three Mo’ui Fo’ou defendants which are to be fixed by the Registrar if not agreed within 28 days.


O. G. Paulsen

NUKU’ALOFA: 9 November 2016. PRESIDENT

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