Kitekei'aho v Moehau [2018] TOLC 7; [2018] Tonga LR 93; LA 22 of 2016 (9 March 2018)

[1] The plaintiff (Mr. Kitekei’aho) granted a registered lease of his town allotment at Ma’ufanga to the defendant (Mr. Moehau). Disputes arose between them concerning the transfer of the lease by Mr. Moehau to a third party and the use of the land for commercial purposes contrary to Cabinet’s approval. At the hearing however the Court was asked to determine only whether Mr. Moehau is indebted to Mr. Kitekei’aho for a balance of T$10,000 that it is alleged he agreed to pay for the grant of the lease and, if so, whether Mr. Kitekei’aho’s action to recover that sum is time barred.

[2] Because of Mr. Moehau’s limitation defence it is necessary to say something about the pleadings. This action was commenced on 4 August 2016. The statement of claim alleged that Mr. Kitekei’aho had entered into an agreement to grant a 50 year lease of his town allotment to Mr. Moehau and that the lease had been approved by Cabinet. The lease was registered under No. 7455. The statement of claim sought cancellation of the lease because of alleged breaches of the agreement by Mr. Moehau; specifically by his refusal to pay a balance of T$10,000 as agreed compensation for the lease and in transferring the lease to a third party rather than using it as a residential property for himself.

[3] The statement of claim did not seek judgment for the T$10,000 but all the elements of a cause of action for recovery of that sum were pleaded. The statement of claim pleaded the agreement between the parties to grant the lease for payment by Mr. Moehau of the sum of T$20,000, that the T$20,000 was payable in two installments, that the second installment was to be paid when Cabinet approved the lease, that Cabinet approved the lease and that in breach of the agreement the second installment of T$10,000 was not paid.

[4] At a directions conference on 9 June 2017 the Court granted Mr. Kitekei’aho leave to file an amended statement of claim. There was no opposition to the granting of leave. The amended statement of claim was filed on 11 July 2017. Mr. Kitekei’aho no longer sought cancellation of the lease but an order for payment of the T$10,000 and damages.

[5] Mr. Kitekei’aho gave evidence. Mr. Moehau did not. Much of Mr. Kitekei’aho’s evidence was either not disputed or not contradicted by the evidence of any other witness and I set out my findings of fact below.

[6] Mr. Kitekei’aho and Mr. Moehau were friends. In around 2006 they entered into a verbal agreement pursuant to which Mr. Kitekei’aho agreed to grant Mr. Moehau a 50 year lease of his town allotment. Mr. Moehau was to pay Mr. Kitekei’aho a sum of money for the lease but there is a dispute as to the amount that was agreed. The application for the lease was filed with the Ministry of Lands on or about 20 July 2006 and Cabinet gave its approval to the lease on 16 August 2006. The lease was registered on 7 December 2006. Mr. Moehau then almost immediately made an application to transfer the lease to Ms. Noleen Blake. Cabinet gave its approval to the transfer of the lease on 21 February 2007. The transfer was effected on 2 April 2007. Mr. Kitekei’aho was living in Fiji and did not know that the lease had been registered until 2008. Mr. Kitekei’aho then made a demand upon Mr. Moehau for the balance he said was owing for the lease. Mr. Moehau disputed his liability. He set-off the value of furniture that he had given Mr. Kitekei’aho for use in his night club business. Mr. Kitekei’aho had not agreed to pay for the furniture and returned it. On 31 January 2012 Mr. Kitekei’aho wrote to the Minister of Lands asking him to cancel the lease. On 10 December 2012 Mr. Kitekei’aho wrote to the Minister again. In this letter he set out in detail his complaint that Mr. Moehau had not paid what he agreed for the lease and referred to Mr. Moehau’s attempt to set-off the value of the furniture.

[7] The parties are in dispute over two issues. First, the amount that Mr. Moehau agreed to pay for the lease. Secondly, whether that sum was paid. Mr. Kitekei’aho says that the agreed sum was T$20,000 and that a balance of T$10,000 was not paid. Mr. Moehau’s case is that he agreed to pay T$40,000 and the full amount has been paid.

[9] There were only two witnesses. Mr. Kitekei’aho gave evidence. He called no other witnesses. I found him to be an honest and credible witness and as Mr. Moehau did not give evidence Mr. Kitekei’aho was unchallenged in certain important respects.

[10] Ms. Nau Ma’u gave evidence for Mr. Moehau. She has a long business and personal relationship with him. She was called to support Mr. Moehau’s case that he had paid Mr. Kitekei’aho T$40,000 for the lease. For reasons that follow I do not accept her evidence.

[11] I have reminded myself that the burden of proof is upon Mr. Kitekei’aho and that the standard of proof is the civil standard of on the balance of probabilities. In resolving each of the disputed questions of fact I have asked myself whether on the whole of the evidence that is before me I can be satisfied that the facts in issue have been proved by Mr. Kitekei’aho to the requisite standard.

[12] Mr. Kitekei’aho said the amount payable for the grant of the lease was T$20,000. Mr. Moehau’s case is that the agreed sum was T$40,000 but he did not give evidence and nothing in the able cross-examination of Mr. Kitekei’aho by Mr. Tu’utafaiva leads me to doubt Mr. Kitekei’aho’s evidence. Ms. Ma’u gave no evidence about what was agreed between the parties. Her evidence that Mr. Moehau paid T$40,000 to Mr. Kitekei’aho would be relevant if I accepted it but for the reasons that follow I do not.

[13] I find that Mr. Moehau agreed to pay Mr. Kitekei’aho T$20,000 for the grant of the lease.

[14] This issue was not subject to serious challenge as the arguments that Mr. Tu’utafaiva advanced in support of the limitation defence relied upon the Court accepting Mr. Kitekei’aho’s evidence that the second installment was payable upon Cabinet approval being obtained on 16 August 2006.

[15] I find that the second installment of T$10,000 was payable by Mr. Moehau to Mr. Kitekei’aho on 16 August 2006.

[16] Mr. Kitekei’aho said that he received a payment of T$10,000 a few days after the lease application was signed and no further payment. I have found him to be a convincing witness and he was resolute under cross-examination.

[17] I also find support for Mr. Kitekei’aho’s evidence in that his pleading that his request of Mr. Moehau for payment was met with an attempt to set-off the value of the furniture was not disputed (see paragraph 9 of the further amended statement of defence). Further support for Mr. Kitekei’aho’s evidence is to be found in the letter to the Minister of 10 December 2012.

[18] Mr. Tu’utafaiva submitted that Mr. Kitekei’aho was not a reliable witness as he could not recall when he received the first installment or what he did with it. That is not completely correct. Mr. Kitekei’aho said he received the first installment a few days after the lease application was signed. He recalled the circumstances under which the payment was received. It is not at all surprising that after such a long time he does not recall what he did with the payment.

[19] Mr. Kitekei’aho gave evidence that he had not checked his bank account to determine if any further payments had been made by Mr. Moehau. This is not significant as Mr. Moehau did not have his bank account details and Ms. Ma’u did not suggest that any payments were deposited directly into Mr. Kitekei’aho’s bank account.

[20] Mr. Kitekei’aho wrote to the Minister of Lands on 31 January 2012 requesting the cancellation of the lease and made no mention of the T$10,000. I do not think too much emphasis can be placed upon this. It is clear that his principal concern at that time was the cancellation of the lease because of the transfer and the use of the land for commercial purposes. Furthermore, in the letter sent to the Minister on 10 December 2012 Mr. Kitekei’aho did complain that he had not been paid.

[21] As far as the evidence of Ms. Ma’u is concerned, she worked for a firm of accountants, Tupou & Associates, that paid Mr. Moehau’s business accounts. She said that instructions were given by Mr. Moehau to make payments to Mr. Kitekei’aho and that she prepared and recorded them. Once the payments were prepared they were left for collection. She said that payments were made totaling T$40,000. She produced three documents in support of her evidence. First, a voucher dated 13 March 2007 recording a payment of T$3,503.15 to Mr. Kitekei’aho with a notation that it was the settlement of the outstanding balance on the lease of his land. Secondly, a table that she prepared listing payments totaling T$40,000. Thirdly, a letter from Mr. Moehau’s then law practitioner, Miss Tonga, stating that an amount of T$6,164.14 was owed by Mr. Kitekei’aho to Mr. Moehau under a judgment obtained in civil proceedings.

[22] I do not accept Mrs. Ma’u evidence. In certain respects it appears to me to be implausible, it is largely unsupported by documentary evidence that she (or Mr. Moehau) could be expected to produce and because she is unable to say that Mr. Kitekei’aho either collected the payments or received them.

[23] In relation to the table Ms Ma’u prepared, the first payment was said to be an amount of USD$5,000. There was no explanation for why payment would be made in a foreign currency. Mr. Kitekei’aho appeared genuinely perplexed at the suggestion that he received US dollars and denied it. In addition, one of the ‘payments’ listed was the T$6,164.14 said to be owing by Mr. Kitekei’aho under a civil judgment. It was clear to me that this was not a payment at all but an attempt to set-off that sum against what was owed to Mr. Kitekei’aho. However, the existence of the judgment was not proven and Mr. Kitekei’aho denied any knowledge of it.

[24] Ms. Ma’u said that the payments were prepared and vouchers were signed by the person collecting them before the details of each payment were entered into the computer. She was not able to recall Mr. Kitekei’aho ever collecting any payment and she produced just one voucher. That voucher was not signed by Mr. Kitekei’aho and there was no other evidence that he ever received it.

[25] Ms. Ma’u said she prepared the table as part of her duties as an accountant at Tupou & Associates but it does not contain information one would expect to be included, such as the name of the payee and the numbers of the cheques by which payments were made.

[26] Ms. Ma’u’s evidence was not supported by copies of payment vouchers (other than the one she presented) or bank statements or reconciliations. She said that monthly reconciliations were completed and that she had no recollection that any cheques were not paid but she did not produce any reconciliations, could not say into which account the cheques were paid and had made no enquires to find out. It was surprising that despite being an experienced accountant and business women Ms. Ma’u had clearly made no serious attempts to collect relevant documents (such as vouchers, reconciliations and bank statements) from Mr. Moehau.

[27] For those reasons I accept Mr. Kitekei’aho’s evidence that the second installment of T$10,000 was not paid by Mr. Moehau.

[28] It follows from what I have said above that there is a sum of T$10,00 owing by Mr. Moehau to Mr. Kitekei’aho which fell due for payment on 16 August 2007.

	Home \| Databases \| WorldLII \| Search \| Feedback Land Court of Tonga

[29] Mr. Moehau contends that Mr. Kitekei’aho’s action is statute barred. Section 170 of the Land Act provides:

No person shall bring in the Court any action but within 10 years after the time at which the right to bring such action shall have first accrued to some person through whom he claims, or if such right shall not have accrued to any person through whom he claims then within 10 years next after the time at which the right to bring such action shall have first accrued to the person bringing the same.

[30] Mr. Tu’utafaiva submits that if the second installment fell due for payment on 16 August 2006 any action to recover it should have been commenced before 16 August 2016. He argues that as Mr. Kitekei’aho only claimed the T$10,000 when he filed his amended statement of claim on 11 July 2017 he did so outside the 10 year limitation period.

[31] For the benefit of the reader the following timeline of relevant dates may assist:

2006	Agreement to grant lease. Mr. Moehau agrees to pay T$20,000 by installments of T$10,000.
20 July 2006	Application for lease filed with Ministry of Lands. First installment paid.
16 August 2006	Cabinet approval to lease given and second installment is payable.
7 December 2006	Lease is registered.
3 August 2016	Action commenced seeking cancellation of lease.
16 August 2016	Ten years from date that second installment payable.
11 July 2017	Amended statement of claim filed with leave of the Court (money judgment sought).

[32] I am unable to accept Mr. Tu’utafaiva’s submission. Under section 170 time begins to run when a person’s right to bring an action in the Court first accrues. A claimant’s right to bring an action is synonymous with his/her cause of action. The right to bring an action arises by virtue of the existence of factual circumstances entitling him to seek some remedy from the Court. Mr. Kitekei’aho’s right to bring an action arose under the agreement as a result of the non-payment of the second installment. All of the facts giving rise to his right to bring the action were fully and adequately pleaded in his original statement of claim. All that changed when he filed his amended statement of claim was that he sought monetary relief rather than the cancellation of the lease. That was not a fresh right of action.

[33] There is an important distinction between a right to bring an action (or a cause of action) and a remedy that is claimed. This is highlighted in his extract from the White Book Vol 1 at 20/5-8-2:

Where, however, the amendment sought to be made relates to matters going to the remedy claimed rather than introducing a new cause of action, the Court will grant leave to amend the original pleadings in order to allege facts arising subsequent to the date of the writ ....e.g. acceptance of the repudiation of contract and a claim for further loss arising out of such repudiation and a declaration relating to such repudiation and its acceptance...

[34] Furthermore, an amendment to a pleading takes effect not from the date that the amendment is made but from the date of the original pleading which it amends (White Book Vol 1 20/5-8/2). This is the reason why Rules of Court may require a party to seek leave before amending their pleadings (O.8 Rule 7) and why a party may not amend a pleading to add a cause of action that accrued after the commencement of the action. Mr. Kitekei’aho’s amended statement of claim was filed with the leave of the Court and with no objection from Mr. Moehau’s then Counsel and no application was made to set the amended pleading aside. The amended pleading therefore takes effect from the date the action was filed and it was not time barred.

[35] Mr. Tu’utafaiva sought to rely upon section 16(1) of the Supreme Court Act which imposes a five year limitation period in actions to recover debts and damages. It reads:

It shall not be lawful to sue any person for debt or damages after the expiration of 5 years from the date on which such liability was incurred.....

[36] Reliance upon section 16(1) was not fairly signposted in the statement of defence and it is not just that it be raised but it does not assist Mr. Moehau in any case. Under section 149(1)(e) of the Land Act this Court has jurisdiction to hear and determine any question or amount of ‘damages, loss, compensation, mesne profits, rent or claim’ in respect of any interests of any kind in any land including any lease. Mr. Tu’utafaiva accepted the Court’s jurisdiction to hear Mr. Kitekei’aho’s claim.

[37] There is an apparent inconsistency between section 170 of the Land Act and section 16(1) of the Supreme Court Act. This inconsistency is easily resolved by the application of established principles of statutory interpretation. Section 16(1) was enacted in 1912 (Section 1 of No 24 of 1912). It is on the face of it a general provision not limited to actions in the Supreme Court. The Land Act was enacted later in time. Section 170 deals only with actions commenced in the Land Court under its specialist jurisdiction. In such circumstances section 16(1) is said to be impliedly repealed pro tanto. Section 170 engrafts an exception upon the application of section 16(1) and will apply to the exclusion of section 16(1) in the specific circumstance of actions filed in the Land Court (Burrows and Carter ‘Statute Law in New Zealand’ Fourth Edition at Chapter 14, page 461). Section 16(1) has no application to this action.

[38] Mr. Kitekei’aho is successful and he shall have judgment against Mr. Moehau in the sum of T$10,000.

[39] Mr. Kitekei’aho is entitled to costs. If Counsel are unable to agree on quantum they may file memoranda within 28 days.

Land Court of Tonga

Kitekei'aho v Moehau [2018] TOLC 7; [2018] Tonga LR 93; LA 22 of 2016 (9 March 2018)