Ports Authority v Walter Trading Co Ltd [2004] TOSC 37; LA 003 2004 (24 June 2004)

IN THE LAND COURT OF TONGA
NUKU'ALOFA REGISTRY

NO. LA. 03/2004

BETWEEN:

PORTS AUTHORITY
Plaintiff

AND:

1. WALTER TRADING CO LTD
2. 'ULITI UATA
Defendants

BEFORE THE HON. MR JUSTICE FORD.

ASSESSOR: GEORGE BLAKE

COUNSEL: Mr D.Garrett and Mrs F. Vaihu for the plaintiff and
Mr S. Tu'utavaiva for the defendants

Dates of hearing: 21st and 22nd June, 2004.
Dates of submissions: 23rd and 24th June, 2004.
Date of judgment: 24th June, 2004.

JUDGMENT

The Ports Authority was established under the Ports Authority Act 1998 which came into effect on 1 October 1998. It has the overall responsibility for running the port of Nuku'alofa. In this proceeding it effectively seeks orders allowing it to remove a large workshop complex owned and operated by the first defendant, Walter Trading Company Ltd, on land said to be vested in the Authority.

The second defendant, 'Uliti Uata, is the General Manager of Walter Trading. He told the court that he has been in the shipping business since 1968 starting off with one vessel and gradually building up to the three vessels his company presently operate on regular runs between all the Tongan islands and, sometimes, Fiji.

The evidence produced by the plaintiff satisfies me to the required standard of proof in civil proceedings that the land upon which the first defendant's workshop is situated is land vested in the Ports Authority. Prima facie, therefore, the plaintiff is entitled to possession. I turn, therefore, to consider the various defences advanced by the defendants.

In one paragraph of their statement of defence, the defendants plead that the building in question "had been on the said piece of land with the consent and approval of the appropriate authorities since about 1991" and, therefore, it was entitled to remain on the land. Mr Tu'utafaiva described that statement as his first ground of defence. It was made in response to an allegation by the plaintiff in its statement of claim that the defendants were unable to show that they had ever received consent to construct the workshop building.

Whether the point is pleaded as a specific defence or simply in answer to the allegations made in the corresponding paragraph in the statement of claim is not clear but, in all events, the issues involved are similar to those raised by the defence of estoppel and I propose to deal with them on that basis.

I do not propose to canvass all the evidence the court heard on the historical background to the case but I accept that when Mr Uata built his original workshop on the land in question in approximately 1991, he had the verbal approval of the Prime Minister at the time, the late Hon Tu'ipelehake, who was also Minister responsible for Marine and Ports.

Hon Tu'ipelehake discussed his decision with the then Head of the Ports Administration Department, Tu'itupou Fotu, and he (Tu'ipelehake) undertook to inform the Minister of Lands of his decision and to have the Ministry of Lands issue a permit for the area of land allocated to Mr Uata. For some reason, which was not revealed in the evidence, no permit or other such authority was issued by the Ministry of Lands.

Mr Uata, however, proceeded to build his first workshop. He told the court that it took him a year to build and it cost approximately $125,000.

In 1993 Mr Uata made a further approach to the Hon Tu'ipelehake, this time for approval to extend his workshop. Tu'ipelehake, again, orally agreed to the request but when the building extension work began, Mr Fotu put a stop to it because he had not yet received the permit from the Ministry of Lands relating to the original building. Mr Fotu told the court that he wanted to see something from the Ministry of Lands indicating that Mr Uata had official approval to carry out his extension work.

Faced with that demand, Mr Uata then went to see the Minister of Lands, Hon Ma'afu Tupou, and obtained from him a Memorandum authorising the extension and the work duly went ahead at a cost of approximately $120,000. That memorandum was not produced in evidence. Mr Uata explained that he no longer had his copy but he suspected that it may have been mislaid when he moved offices some years back. He did agree with Mr Garrett's proposition, however, that the document was important to him.

Mr Fotu told the court that he recalled being given a copy of the Minister of Land's Memorandum and, although he no longer had the copy in his possession, he was able to recollect its contents. He confirmed that it gave approval for the extension work in question. Mr Fotu explained that his office normally destroyed such records after five years.

The plaintiff called a witness from the Ministry of Land's Office who said that he had made a search and he was unable to locate a copy of the memorandum on the Ministry's file but he was able to locate another document relating to an application for a lease of land on the wharf area by the Shipping Corporation in the same year. Notwithstanding this evidence and the inability of the defendants to produce a copy of the memorandum, I accept what Mr Uata and Mr Fotu said on this issue.

In the year 2000 another extension was added to the workshop. The significance of this particular development is that it was the first building work carried out on the site after the creation of the plaintiff Board. Mr Uata said that his late brother Venisi was in charge of the workshop at that stage and after work had begun on the extension, he had pointed out to Venisi that they could not build without obtaining permission from the Ports Authority. Mr Uata said that Commander Lupeti Vi, General Manager of the Ports Authority and the Board Chairman Hon Mailefihi Tuku'aho, then inspected the site and gave the go-ahead to build the additional extension.

I say at once that I did not find the defendants' evidence regarding the 2000 extension at all convincing. Commander Vi, who was the principal witness for the plaintiff, denied Mr Uata's version of events and for some reason Hon Tuku'aho was not called to give evidence although he had been subpoenaed as a witness by the defendants.

Even the defendants' description of the costs of that particular extension work was suspect. The statement of defence alleged that the work had cost $45,000. Mr Uata said in evidence that the cost was "something like $65,000" and in his closing submissions, counsel put the figure at "about $65,000 or $75,000". The court ended up taking a view of the whole complex. The demarcation between the original building and the two extensions is very obvious -- they are each painted different colours. The building generally, while no doubt serviceable, is something of an eyesore.

My principal finding, however, is that, although the original workshop and the 1993 extension work were authorised, the later extension work in the year 2000 was not. Furthermore, the Ports Authority did absolutely nothing by its words or conduct to induce the defendants into believing that it consented to or approved the extension work. I am satisfied that The second defendant and/or his late brother simply decided to push ahead with the extension work without getting official approval from anyone. I suspect, in fact, that the defendants made a deliberate decision to take advantage of other matters that were then occupying the attention of the newly formed Authority and they decided to take the risk in the hope and expectation that no questions would be asked. In all events, I am satisfied that there was no conduct whatsoever on the plaintiff's part that could give rise to an estoppel situation.

Mr Tu'utafaiva submitted, in the alternative, that the plaintiff acquiesced in the construction of the extension work in the year 2000. That point was not pleaded but in any event I do not accept it. The Ports Authority was an entirely new statutory body which would have had a number of more pressing problems to deal with after its formation than the defendants' workshop. The court was told, for example, that at one stage the whole Board was forced to resign over some issue. A set of Board Minutes from a meeting dated 28 June 2001 was produced in evidence. It showed a wide variety of matters occupying the Board's attention at that time.

The land issue generally was one matter that the Board had before it but I accept that initially it would not have been to the forefront of its concerns because the Act of Parliament that created the Authority had also vested all the port land (including the area upon which the building in dispute stands) in the Ports Authority. Section 18 (3) of the Act required the The government to transfer all the land in the Schedule to the Act to the Authority "under such terms and conditions as it deems fit."

The evidence was that it was not until the present Minister of Lands, Hon Fielakepa, took up office that the decision was made to lease the land in the Schedule to the Ports Authority. The lease from His Majesty to the Authority was registered on 14 May 2001. It is clear from all the evidence that once the Board and the Authority's senior officials began to focus on the legal position regarding the defendants' warehouse they were genuinely and understandably confused as to its legal status. They knew that the building was situated on land that had been vested in the Authority by Parliament but they had no documentation indicating that the defendants had any legal rights to be in possession.

The board at one point tried to address the problem by negotiating, in good faith, a rental agreement with Mr Uata at a rent of $500 per month. Mr Uata rejected the proposal out of hand and nor would he agree to a reduced rental figure of $250. In the end the Board withdrew the offer anyway because it decided, for reasons which I accept were perfectly valid, that the building impeded the efficient operation of the slipway and had to be moved. Alternative space was then offered to Mr Uata in a new part of the Queen Salote Wharf domestic complex but it was not acceptable.

Mr Uata was given six months notice to remove his workshop but nothing happened. He was later given a further one months notice to move but still the defendants remained in occupation of the land. I suspect that Mr Uata had no great incentive to move or to enter into any arrangement that required his company to pay rent. He told the court under cross-examination that he had never paid any rent for his workshop from 1990 until the present day.

The court was told that relatively recently, as the result of a security appraisal which followed on from the aftermath of the 9/11 terrorist attacks in New York and Washington, the Ports Authority has come under increasing and urgent pressure to have the defendants' workshop removed altogether from the slipway area. The General Manager said that these developments may render it impossible for the Port of Nuku'alofa to retain its accreditation as an international port unless the building is removed by 1 July 2004.

Mr Tu'utafaiva correctly makes the point, however, that, regardless of those matters, the plaintiff still must make out a legal right to take the action it proposes.

Counsel for the defendants made two further principal submissions. First, he contended that even if the court found there had been no estoppel or acquiescence on the part of the Ports Authority itself, that body is effectively standing in the shoes of the old government department that had given the consents in the early 1990s and, as the Authority is the successor to that government department then it should be estopped from removing the defendants' workshop.

Secondly, in reference to the Ports Authority Act, Mr Tu'utafaiva accepted that the legislation did not make any provision for an occupier like the defendants but counsel went on to submit that an implied term should be read into section 18 (3) of the Act that the Ports Authority takes the land vested in it by Parliament subject "to the interest of those already occupying it."

I reject both of those submissions. No authorities were cited to me and I know of no authority that would permit an implied term to be read into an Act of Parliament. Besides, the submission seems to misunderstand the objective of section 18 (3) which is to allow terms and conditions to be imposed on the Authority itself rather than on some other entity further down the line.

In relation to Counsel's former submission, again there is no basis for reading into a Statute provisions which simply are not there. By analogy, section 20 of the Act provided for the Ports Authority to take over certain obligations in respect of staff transferred from the old government department. A similar provision could have been included by Parliament, had it so intended, to provide compensation for someone like the defendants who might during the process lose buildings or businesses they had established on the government land that was being transferred to the new Authority. It is significant that there is no such provision in the Act. That can only mean that Parliament never intended to provide compensation in such circumstances.

Mr Uata cannot be heard to complain that he did not know about the passing of the Ports Authority Act and its implications for him. He is, and was at the time of the passing of the Act, a member of Parliament. He told the court that he was aware that the Act was likely to affect the land he occupied but he did nothing about it at the time even though, as he put it, he did not "like the Bill".

Why Mr Uata took an ostrich like approach to the passing of the Ports Authority Act is frankly quite beyond me. He agreed with Mr Garrett in cross-examination that he was a man quite comfortable speaking to persons in positions of power and he was quite comfortable personally approaching members of Cabinet, all of whom he knew personally. Why, Mr Garrett asks rhetorically, did he not speak up? The question is a fair one. If he was unsure of his legal position then why did he not take proper legal advice at the time? I can only conclude that his failure to speak up or seek advice is a silent admission of, what Mr Uata realised, was his legal vulnerability.

For the foregoing reasons, I reject the various defences advanced by the defendants and I fail to see how the limitation point pleaded can be relevant to the facts of this case. The Ports Authority does not of section 170 of the Land Act and, in any event, its right of action accrued upon the vesting of the land in 1998 and not at some earlier time.

The plaintiff, therefore, succeeds in its action. A declaration is made that it has the right to remove the offending buildings from the land in question. I also make an order for the eviction of the defendants, their workmen and representatives.

Mr Garrett seeks an order for the building to be removed within 24 hours. He submits that the defendants have been given ample time to move and, if the building has to be demolished rather than dismantled to achieve that time frame then "Mr Uata has only his own unreasonable behaviour to blame."

Whilst having some sympathy with that submission, no time frame is suggested in the pleadings for the eviction order and the issue was not discussed in evidence. Although the plaintiff may now well be facing an urgent situation, it must accept that that there have been significant delays on its part in bringing the matter before the courts and, in those circumstances, the court is not going to be forced into making draconian orders to offset its dilatoriness. If a suitable timetable cannot be negotiated between the parties with the assistance of Counsel, then leave is granted to the plaintiff to come back to the court on 24 hours notice on or after 1 July 2004 and further orders will, if necessary, then be made.

The plaintiff is entitled to cost to be agreed or taxed.

NUKU'ALOFA: 24 JUNE, 2004

JUDGE