Kalou v Traverso [2003] VUSC 59; Civil Case 014 of 2003 (5 September 2003)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 14 of 2003

BETWEEN:

CHIEF KASS KALOU
Plaintiff

AND:

MME THÉRÈSE TRAVERSO
First Defendant

AND:

MINISTER OF LANDS
Second Defendant

Plaintiff: Mr. Malcolm
First Defendant: Mr. Boar

Hearing: 26 and 27 August 2003

JUDGMENT

CLAIM

The claimant alleges that he is the custom owner of a 3.98 block of coastal land known as Eruity on the island of Efate (Title 12/1033/009), and the defendant is a leaseholder of that land under a lease issued by the Minister of Lands. The claimant alleged that the lease was obtained by the defendant by mistake or fraud in that be declined to give any consent for the issue of the lease, which was granted without negotiation, without any premium and at a very low annual rental. The Defendant counters that the claimant is not the custom owner and that ownership is in dispute and that consent to the granting of a lease was properly given by Akau Kaltamat a custom owner and that the Minister of Lands properly and lawfully managed the granting of the lease on behalf of disputing owners. The claimant seeks rectification of the lease.

FACTS AND CHRONOLOGY

On 24 April 1989 the Efate Island Court, held at Port Vila declared the claimant to be the true custom owner of the land (see TAB 4 Plaintiff's Bundle of Documents pp. 9 - 16). There is some suggestion that an appeal was filed (see TAB11 p.45) but no actual appeal notice, grounds or papers have been produced despite being referred to as Exhibit A in the sworn statement of Akau KALTAMAT (paragraph 7.)

There was no exhibit A.

On 5 May 2002 the defendant Mrs. Traverso applied for a certification of negotiation to obtain grant of the lease. (See Annexure GC4 to sworn statement of George Carlo). This had been prefaced by an earlier application for ministerial consent (see TAB 10 pp21, 22). On 26 July 2002 a negotiators certificate was issued to the defendant (TAB10. P25). By letter dated 13 August 2002 the defendant's agent LAHO Limited requested the claimant to give consent (TAB 10 p.30) and forwarded a consent form (TAB 2 p.5). On 31 July 2002 Joel Kaltamat signed a consent from (TAB 3, p.7). On 19 September 2002 the defendant signed the lease, (TAB 1 pp1 - 4). By letter dated 25 September 202 the claimant wrote indicating he would not sign the consent (TAB 6 p.20). On 4 October 2002 the lease was approved by the Minister and it was registered on 8 October 2002. The defendant's agent were paid VT5,500,000 to organise the lease (TAB12 pp. 48,49)

EVIDENCE

The claimant confirmed that he is the Paramount Chief of the Area in question under the Island Court decision, he said that on the face of the documents the Defendant has obtained a 75 year lease of prime beach front land without premium and at a rental of VT3, 950 per annum. He said that the land is largely on a protected lagoon just past the end of the new road and is worth many millions of Vatu. He only became aware of something happening when he received the letter of 13 August 2002 containing the consent. He replied very soon after he received the letter of 13 August 2002 by letter dated 25 September 2002. Other that the letter he said he was never consulted and no negotiation took place involving him. He said that Akau (Joel) Kaltamat was not a chief of the area and was not named anywhere in the Island Court decision nor in the letter about the appeal, although he agreed that he had been at the hearing along with many others. He said that the putative appellant John Kaltapau is deceased and has a son Kennedy.

Sylvie Lowen, an experienced Real Estate Agent familiar with the area, went to value and photograph the property several months ago but could not access it. She said that from her knowledge of the area of the land as it was just at the end of the new road and this readily accessible to town and as it was beautiful land it was very easily subdivided and saleable. As agricultural land it would be worth about VT2, 000, 000 as subdivided land or tourist orientated and it would be worth up to VT5, 000, 000 or more.

George Carlo said that he is in charge of Laho Real Estate and that some consultant of the firm was satisfied that the land was rural land still under dispute by the custom owners (see annexures GC2, GC3). He said that the Minister of Land exercised his power under the Land Reform Act [CAP. 123] to execute the lease on behalf of the customary landowners. He said a Laho Real Estate Consultant did meet the claimant to discuss the issue of consent. Stamp duty and registration fees were paid. He said that the ultimate true custom owner could negotiate any premium with the lessee. Mr. Carlo said he had been a real estate agent since May 2002 that Mr. John Bell still worked for the company and it was the practice of the company to send out consents already witnessed. He could not recall having seen the consent from (TAB 2 p.5) and did not know if the letter (TAB 10 p.35) had included the consent form. He said he knew that Chief KALOU was a Chief. He said he witnessed JOEL (AKAU) Kaltamat's signature (TAB 3 p.7) and they had crossed out "Eton Council of chiefs" and put in "Joel Kaltamat". He said that there had been no negotiations because the land was in dispute. He said that the VT5, 500, 000 fee his company charged to obtain the lease was for the hours they had spend but he could not quantify those hours. He said that he knew that the claimant was declared the true custom owner in the Island Court case and that Joel (AKAU) Kaltamat was not mentioned in the case nor in the appeal letter but they believed he was a chief. He denied paying any consent fee or consideration to Joel (Akau) Kaltamat. He initially denied seeing the letter (TAB 11 p.45) but then conceded that he had referred to it and exhibited it to his sworn statement (GC2). He said it was only as a matter of courtesy that they approached the claimant and Akau Kaltamat and they did not approach the others named in the letter. He said he was not sure whether the consent from Kaltamat went to the minister. He conceded that they drew up the lease document and told the minister that the custom owner consented.

Akau (Joel) Kaltamat said that he organised the claimant and the people of Eton Village to lodge the Island Court claim and that the claimant's name was put in to represent the people but not necessarily as custom land owner. He said he took an actual part in that claim and that John Kaltapau, a cross claimant, lodged an appeal and prior to his death instructed him to pursue the matter as he (Kaltamat) is the true custom owner. He denied that the claimant is the true custom owner and stated that he only acts in a representative capacity. He said he was surprised that the claimant is used as a chief because it was Kalou's father who had the chiefly blood. He conceded that he is not the paramount chief but only a chief in his nakamal. He said he respects the paramount chief but that chief is not a chief of the leased land. That was so even though he had never been declared as a landowner because the paramount chief is the owner of the land. He said he signed the consent even though he did not go to the other families nor to the claimant. He said that he never negotiated a price with the defendant and never considered a premium because the lease was to be agricultural and not for subdivision. He was never paid a consent fee or any other money.

SUBMISSIONS

The claimant submitted that there is clear fraud on behalf of the defendant through her agent because there was no negotiation as to the lease, there was no premium, there was almost no consideration making it an almost free lease, the consent obtained was clearly not from a declared or claiming custom owner and the defendant was prepared to pay a very high fee (VT5, 500, 000) to obtain the lease. In addition the matter seemed to have progressed with undue haste.

The defendant submitted that there is no legal requirement for disputing custom owners to give consent and that the Minister may give consent and sign the lease on those circumstances under S.8 of the Land Reform Act [CAP. 123]. The lease did not have to have a premium or consideration under the Land Leases Act [CAP. 163] and there was no fraud or illegality in the defendant's actions.

FINDINGS AND LAW

I accept the evidence of the claimant and his witness. For there to be fraud there must be dishonesty of some sort and it is clear that if a person has became a lessee of any land through his own fraud or that of his agent his lease is voidable at the suit of the person defrauded. So fraud is the major exception to indefensibility under the Land Reform Act [CAP. 123]

I find that the defence evidence is unsatisfactory and their defence is somewhat spurious even on the face of the documentation. It was surprising that the Court heard nothing at all directly from the defendant herself Mme. Traverso, nor did she even attend the hearing nor was there evidence from the general manager of her agent Laho Limited, Mr. Ouchida. After all he wrote letters both to the claimant (TAB 10 p.30) and to the Director of Lands Department. (Annexure GC7). I found George Carlo to be an unconvincing and unreliable witness putting aside the fact that he gave largely hearsay evidence. He produced letters written by Mr. Ouchida and referred throughout to "Laho Real Estate Consultant" doing various things. From time to time he had a convenient memory for example when he could not recall having seen the consent document [TAB 2p.5]. He was evasive more that once, for example when he said he had never seen the letter from the Supreme Court (TAB 11 p.45) but then conceded that he had produced a copy in his sworn statement (GC2). In addition the witness became most uncomfortable when being cross-examined about any consent fee or other payment being made to the witness Akau Kaltamat who had signed the consent.

Mr. Kaltamat himself was clearly confused and uncertain as to his status as a chief or custom owner and as to his role in the whole scenario apart from contending that he considered that he had the right to sign the consent.

Here I am satisfied that the registration of the lease has been obtained dishonestly or by fraud for the following reasons:

(1) Laho Limited, the agent of the Defendant clearly knew that the claimant, Chief Kas Kolou, had been declared custom owner of the land in the Island Court decision. That knowledge was demonstrated by their endeavoring to obtain the consent of the claimant by sending him the consent to sign by letter dated 13 August 2002. The consent had been pre dated and pre witnessed. If Laho Limited had believed that there was a true dispute then it would have sent all the parties in the Island Court proceedings a consent but it only contacted the claimant and Joel Kaltamat. Joel Kaltamat was never even a named party in the Island Court. It seems that Laho Limited may have put in the consent signed by Joel Kaltamat dated 31 July 2002, to obtain the lease. Laho Limited could not confirm the date of delivery of the letter of 13 August 2002 to the claimant to verify when the 30 day period for reply commenced but it clearly never drew the specific lack of consent to the attention of the Minister before the lease was approved on 4 October 2002 and registered on 8 October 2002.

(2) Despite the negotiation certificate issued to the named defendant it is clear that no negotiations took place even with Joel (Akau) Kaltamat. It is fundamental that negotiations must take place. They must, of course, take place between the registered negotiator, or in this case her lawfully appointed agent, and the custom owners. Here the custom owner was readily identifiable as there was a valid decision naming a person, the claimant, as true custom owner. The sending of a consent form with a time limit for its return could never be seen as "negotiations". In my view it was high-handed, unfair and in the circumstances fraudulent. The defendant's agent omitted to negotiate with the known and declared custom owner, and of course under Article 73 of the Constitution of the Republic of Vanuatu all land belongs to the indigenous custom owners and their descendants.

(3) It is clear from the evidence of Mme Lowen that the land has significant value even as an agricultural block. That is confirmed by the letter from Hawaiian & South Pacific Ltd (TAB 9 p.24). Even though the witness is not a registered valuer I can accept her evidence as to value for the purposes of this trial. The land would clearly be much more valuable were it subdivided for residential purposes or used for resort purposes. Despite that there was no what is frequently called a premium paid by the lessee because clause 1 of the lease was deleted. In addition the annual rent was set in clause 2 of the lease at VT3,950 per annum which is clearly inadequate being in mind the actual and potential value of the block. Clearly the block was of significant value to the defendant because she paid VT5, 500, 000 to Laho Limited to obtain the lease. The actual custom owners received virtually nothing. The only real immediate financial beneficiary from this transaction was the defendant's agent. That is another clear element of fraud. The question of value and premium is of course a relevant consideration. (See Bouchaud v Director of Land Records and The Minister of Lands and Societe Civil Immobiliere Du Canal CC79 of 2001and CAC05 of 2003) The defendant through her agent has obtained a lease of valuable property and defrauded the claimant, the declared custom owner, of any payment for the land (premium) and a realistic annual rental.

(4) The speed with which the defendant's transaction was processed was abnormally fast. That was another feature of the Bouchaud Case and here I find that there was no proof that Laho Limited ever gave the claimant the 30 days as set out in its letter even if there was some bases for that time frame. After all Laho Limited wrote to the Director of Lands on 13 September 2002 indicating there was no reply from the claimant. I find that the company was dishonest in saying to the Director that it was safe to assume that consent would not be forthcoming. Lingering concerns about the time taken remain, bearing in mind the note from the Director of the Minister of Lands (TAB 10 p.33) when the Director in an urgent memo said that he wanted the defendant's lease processed and registered as soon as possible, sometime this week please, but I note that the claimant has discontinued his action against the second defendant. In summary on this point there was clearly hardly time for the claimant to reply to the letter from Laho Limited before the Minister signed the lease and it was registered.

(5) I do not over look the provisions of S. 8 of the Land Reform Act [CAP. 123]. That provides as follows:

"(1) The Minister shall have general management and control over all land

(a) occupied by alienators where either there is no approved agreement in accordance with sections 6 or 7 or the ownership is disputed; or
(b) not occupied by an alienator but where ownership is disputed; or
(c) not occupied by an alienator, and which in the opinion of the Minister is inadequately maintained.
(2) Where the Minister manages and controls land in accordance with subsection (1) he shall have power to-

• (a) consent to a substitution of one alienator for another;
• (b) conduct transactions in respect of the land including the granting of leases in the interests of and on behalf of the custom owners;
• (c) take all necessary measures to conserve and protect the land on behalf of the custom owners".
  

Here however I am not satisfied that the Minister was given full enough information particularly concerning the decision of the Island Court. There is really still no detail as to when an appeal was lodged and upon what grounds and whether it is still being pursued. At the time that the transaction took place Laho Limited did not have the advantage of the details concerning the appeal against the Island Court decision because the letter from the acting Chief Registrar was dated 14 April 2003. Akau Kaltamat was not a person who was directly part of the original case in the Island Court nor was he a person who could properly be an appellant nor was he a person who could give consent to a lease. I am satisfied that the defendant through her agent dishonestly omitted to inform the Minister that the signed consent was from a party other than the declared custom owner.

CONCLUSION AND ORDER

The claimant seeks relief under s.100 of the Land Leases Act [CAP. 163] which provides as follows:

"(1) Subject to subsection (2) the Court may order rectification of the register by directing that any registration be cancelled or amended where it is so empowered by this Act or where it is satisfied that any registration has been obtained, made or omitted by fraud or mistake.

(2) The register shall not be rectified so as to affect the title of a proprietor who is in possession and acquired the interest for valuable consideration, unless such proprietor had knowledge of the omission, fraud or mistake in consequence of which the rectification is sought, or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default.

For the above reasons I am satisfied that the registration of the lease was obtained by fraud and that the defendant through her agent caused such fraud.

I find that the claimant has proved his case on the balance of probabilities and that the register should be rectified under s. 100 by cancelling the registration of the lease. The defendant can of course, reapply for a certificate as a registered negotiator but must thereafter properly negotiate with the claimant, the declared custom owner.

I order that the registration of the lease dated 19 September 2002, registered on 8 October 2002 over title No. 12/1033/009 be cancelled.

I award costs to the claimant against the defendant on a standard basis.

Dated AT PORT VILA, this 5^th September 2003

BY THE COURT

P. I. TRESON
Judge.