Naflak Teufi Ltd v Kalsakau [2004] VUSC 94; Civil Case 102 of 2002 (6 May 2004)

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

Civil Case No. 102 of 2002

BETWEEN:

NAFLAK TEUFI LIMITED & KALMAN KIRI MANLANGAI,
TEUFI CLAN SPOKEPERSONS
Plaintiff

AND:

JOSHUA KALSAKAU
First Defendant

AND:

DIRECTOR OF LAND RECORDS OFFICE
Second Defendant

AND:

MINISTER OF LANDS
Third Defendant

AND:

DIRECTOR OF LANDS DEPARTMENT
Fourth Defendant

AND:

THE ATTORNEY GENERAL
Fifth Defendant

Coram: Justice Treston

Counsel: Mr. Mataskelekele for Plaintiff
Mr. I. Kalsakau for First Defendant
Mr. Edwards & Ms. William-Reur for Second Defendant

Date of Hearing: 1st April 2004
Date of Judgment: 6th May 2004

JUDGMENT ON APPLICATION THAT CLAIM BE STRUCK OUT

APPLICATION

The Second Defendant applies for orders that the claim be struck out and for costs and for any other or further orders of the Court considers appropriate upon the grounds that the amended Supreme Court Claim does not disclose a cause of action or alternatively that the claim as pleaded does not entitle the Claimant to the relief sought.

CLAIM

In the second amended Supreme Court Claim, the Claimant seek orders that the land lease register relating to Lease Titles 12/0633/415, 12/0633/065, 12/0633/066, 12/0633/067, 12/0633/068, 12/0633/069, 12/0633/070, 12/0633/071, 12/0633/072, 12/0633/073, 12/0633/074 to be rectified and the said leases be granted to the Claimant because they were obtained by the First Defendant by fraud and/or mistake and an order for damages in part or in the whole sum of VT 380, 781, 706 and for interest and costs.

FACTS

The Claimant contends that on 15 July 1996 it applied for a rural lease over part of pre-independence titles in accordance with standing procedures and including written application to the Rural Land Leases Selection Committee, approval of the custom owners and other procedures in the legislation. It is contended that correspondence took place and on 7 August 1997 the then Minister of Lands issued a certificate of registered negotiator to the Claimant. A second certificate of registered negotiator was issued to the Claimant on 26 August 1998 when the first certificate expired. It was contended that in or about 1998 or 1999 the First Defendant and a land enforcement officer in the Lands Department misled and defrauded the Government Land Management and Planning Committee and the Minister of Lands into issuing the First Defendant with leases over part of the titles referred to which leases should have been issued to the Claimant as first applicant. It seems that, according to the Claimant, that enforcement officer assisted the First Defendant to obtain a lease or leases over the titles even though they had been approved for leasing by the Claimant. It is contended that the Minister of Lands was misled by the circumstances to mistakenly issue leases to the First Defendant.

In addition it is contended by the Claimant that the Attorney General or his then agent gave misleading verbal and / or written advice to the Government Land Management and Planning Committee and the then Minister of Lands contributing to the mistaken and improper decision by the Minister of Lands to issue leases in favour of the First Defendant. Such advice included information that an outstanding land case involving Marope Land also applied to the land concerned.

It is contended that the Director of Lands gave misleading written advice to the Minister of Lands so contributing to the decision for leases being improperly issued over the titles in question.

The Claimant contends that the Land Leases Register relating to the lease titles in question should be rectified and leases granted to the Claimant pursuant to Section 99 of the Land Leases Act [CAP. 163] because the above mentioned leases were obtained by the First Defendant by fraud and or by mistake.

It was contended that the damages referred to above accrued by way of loss of potential economic benefit from a planned investment to subdivide, improve and sell residential plots in the areas concerned.

SUBMISSIONS

The Second Defendant submits that there is a fundamental flaw in the Claimant's case on the basis of the facts alleged in the statement of claim in that it had no right to the lease over the land. As it had no right to a lease it did not have any right for the register to be rectified to make it the registered lessee. After all the Claimant did not contend that it was a custom owner or had any other entitlement. The fact the Claimant was registered negotiator did not give it an automatic right to a lease. In this case, where customary ownership was in dispute the Minister acted as the lessor and the discretion as to whether a registered negotiator obtained a lease was vested in the Minister as lessor under Section 8 (2) of the Land Reform Act [CAP. 123].

It is further submitted that the Land and Planning Committee being a creature of statute had the function of making recommendation to the Minister as to whether he should grant a lease to a negotiator and its recommendations could not bind the Minister. Accordingly, the Claimant did not have any rights to a lease even if it established that the Minister was misled into granting the leases to the First Defendant and that did not give it a right to be registered as a lessee.

In addition, it is submitted that when one looks at the allegations of fraud or misrepresentation they did not go to vitiate Minister's decision in granting the First Defendant the leases. There was no particularization of any conduct, act of fraud or misrepresentation by the Mr. Kirby named in the pleadings leading the Minister to issue the leases over different land to that recommended by the Land and Planning Committee and no facts were alleged from which any such interference could be drawn.

In addition, there is no allegation in the statement of claim which, if proved, established that the Minister could not lawfully issue a lease over the land titles in question to the First Defendant. Just because the Claimant was the original applicant did not mean that the Minister had to grant a lease to it. The Claimant might have had a claim if it had been granted a lease over the land prior to the granting of the lease to the First Defendant, and if the Claimant's lease had not been registered. But that was not the case.

In relation to the second alleged misrepresentation of incorrect advice from the Attorney General, the only significance and relevance of that is, given the status of litigation, it could be said that custom ownership of the land was in dispute therefore the Minister had management and control over the land and could enter into the lease over the land. There was no allegation in the claim that the Minister did not have the power to grant a lease over the land and it would be inconsistent with the Claimant's case to say that the Minister did not have power to grant a lease. Misrepresentation as to the effect of the land claim referred to did not go to the Minister's right to grant the First Defendant a lease.

It is submitted that before the Claimant could succeed under Section 100 of the Land Leases Act it must have a lease between the Minister and the First Defendant set aside and that course was not open to the Claimant in these proceedings as it was not a party to the lease and could not set it aside on general contractual principles.

The Second Defendant also submits that as the Claimant could not, on the pleadings, establish a right to be granted a lease over the land it must fail in its claim for a right to compensation. In addition, as there was no breach of contract, negligent misstatement or any other cause of action alleged which caused it to suffer a loss for which it is entitled to be compensated, it must fail in its action.

Counsel for the First Defendant joined with the Second Defendant in its submissions.

In response, the Claimant submits that as there was an issue to be determined, the claim should not be struck out. The issue to be decided in the claim is whether the whole process to grant a lease is the same as actually granting a lease. Section 100 of the Land Leases Act [CAP. 163] refers to mistake and fraud in obtaining the lease and that must include the initial process of approval at Committee stage including the process of the Minister granting the lease. It was submitted that once the certificate of a registered negotiator was issued the Claimant had status and fraud had been perpetrated at that stage. Moreover it is submitted that there is no gap in the pleadings as there was a legal connection between the Committee and the Minister, and there was enough of an issue raised to go to trial on the merits of the case. A question for determination is whether the first person to be granted a negotiator's certificate should be first to be granted a lease and as there was an issue to be decided the claim should not be struck out. It was contended that this is in the nature of a precedent case issue.

LAW

In its application the Second Defendant is asking this Court to exercise its inherent jurisdiction separate from its powers under the Civil Procedure Rules No. 49 of 2002. It is effectively contended that the application is to strike out the proceeding because it has failed to show a reasonable cause of action. A reasonable cause of action means one with some chances of success when the allegations in the pleadings are considered.

Section 100 (1) of the Land Leases Act [CAP. 163] are as follows: -

"RECTIFICATION BY THE COURT

(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."

The Claimant not seek to say that his claim is based on any grounds other than fraud or mistake.

Section 6 of the Land Reform Act [CAP 123] provides as follows: -

"(1) No alienator or other person may enter into negotiations with any custom owners concerning land unless he applies to the Minister and receives a certificate from the Minister that he is a registered negotiator.

(2) A certificate issued in accordance with subsection (1) shall-

(a) state the names of the applicant and of the custom owners;

(b) give brief details of the land in respect of which negotiations are registered; and

(c) state the object

(3) If negotiations are completed without compliance with subsection (1) the Minister may refuse to approve the agreement between the custom owners and the unregistered negotiator and if he is an alienator may declare the land unsettled land.

That means that a person cannot negotiate a lease with a custom owner without first obtaining a negotiator's certificate to do so.

Section 8 (1) provides that if the ownership of land is in dispute the Minister shall have general management and control of it

FINDINGS

I agree that there is a fundamental flaw in the Claimant's case in that on the basis of the facts alleged in the statement of case it has no right to a lease over the land. Having no right to a lease, it is clear that it cannot have the register rectified to make it the registered lessee. It is clearly neither the custom owner nor does it have any other entitlement to the land such as an alienator and under the legislation it is clear that simply because the Claimant was a registered negotiator does not give it any automatic right to a lease. The discretion as to who obtains the lease is vested in the Minister as lessor in the case of disputed land. it is not a case of first in first served. The Claimant simply does not have any legal status to bring the action.

I also agree that allegations of fraud or misrepresentation do go to vitiate the Minister's decision to grant the First Defendant a lease. There is no suggestion that the Minister could not lawfully have issued the lease over the land in the relevant titles and in relation to the allegations about the misrepresentation concerning the Marope land case all that led to was a conclusion that the Minister had management and control over the land and could grant a lease over it. The Claimant simply does not have the status to claim that the lease between the Minister and the First Defendant must be set aside and that is a condition precedent to its claim for compensation. I cannot find any basis in the claim itself which could found a cause of action. The Claimant did not obtain a lease over the period that it held a certificate of registered negotiator between 6 August 1997 and 6 August 1999. As to the claim for compensation itself, that is largely based on mere speculation. As the Claimant failed to secure any lease itself, it cannot establish on the pleadings what its prospective or potential loss might have been.

CONCLUSION

I find that the claim fails to show a reasonable cause of action and I strike it out.

I award costs to the First and Second Defendant at the standard rate as agreed or as determined by the Court.

Dated AT PORT VILA, this 06^th day of May 2004

BY THE COURT

P. I. TRESTON
Judge