Solomon v Turquoise Ltd [2008] VUSC 64; Civil Case 163 of 2006 & 29 of 2007 (8 August 2008)

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

Civil Case No. 163 of 2006
Civil Case No. 29 of 2007

BETWEEN:

ALBERT SOLOMON
Claimant (CC 163 of 2006)

AND:

PHILIP KALSUAK
Claimant (CC 29 of 2007)

AND:

TURQUOISE LIMITED
First Defendant

AND:

MINISTER OF LAND AND NATURAL RESOURCES
Second Defendant

AND:

DIRECTOR OF LANDS, SURVEY AND RECORDS
Third Defendant

Coram: Justice C.N. Tuohy

Counsel: Mr. Yawha for Claimant in CC 163 of 2006
Mr. Nalyal for Claimant in CC 29 of 2007
Mr. Sugden for First Defendant
Mr. Ngwele for Second and Third Defendants

Date of Hearing: 18, 19, 20, 21, 22 February 6, 7, 8, 9 May 2008
Date of Judgment: 8 August 2008

RESERVED JUDGMENT

Introduction

1. These are 2 claims which have been consolidated and were heard together. Both claimants seek the cancellation of registration of a lease granted by the second defendant (“the Minister”) acting under s.8 of the Land Reform Act [Cap.123] to the first defendant (“Turquoise”) on the grounds that registration was obtained by fraud or mistake in terms of s.100(1) of the Land Leases Act [Cap.163].
   

Background Facts

2. The land in question is just over 20 ha in area comprising the north eastern tip of Lelepa Island. The leasehold title is 12/0512/002. Prior to the grant of the lease the claimant in CC 163 of 2006 (“Solomon”) was using parts of the property for the purposes of his tourism business but no-one lived on it permanently.
   
3. There had been litigation under the Custom Land Tribunal Act in respect of the custom ownership of he land. In April 2004, the West Efate Area Lelema Joint Customary Land Tribunal declared Nareo Kalsuak and Kalsau Naparo the custom owners of the land. Nareo Kalsuak is the elderly father of Philip Kalsuak the claimant in CC 29 of 2007 (“Kalsuak”). Two of the unsuccessful parties before the Lelema Tribunal, Jimmy Marango and John Kaloroa on behalf of Family Leisongi Leivele, appealed against the Lelema Tribunal decision to the North West Efate Area Customary Land Tribunal.
   
4. On 18 October 2005, the then Minister of Lands, Willie Jimmy Tapangararua, issued a registered negotiator’s certificate for the land to Solomon. The custom owners named in the certificate were Nareo Kalsuak and Kalsau Naparo. Then on 22 November 2005, the Minister issued a registered negotiator’s certificate for the land to Turquoise. The custom owners named were Chief Jack Tuqulumanu, John Kaloroa and two others.
   
5. On 29 December 2005, the North West Efate Area Land Tribunal issued its decision on the appeal. The decision declared Kalsuak to be the custom owner of the land. In early 2006 John Kaloroa filed a further appeal to the Efate Island Land Tribunal which had not been heard at the date of trial.
   
6. On 18 April 2006 the Minister granted the lease to Turquoise. It was registered on 20 April 2006. In its judgment of 5 April 2007, in CAC 4 of 2007 the Court of Appeal upheld the ruling of this Court that at the time the Minister granted the lease the ownership of the land was disputed in terms of s. 8(1)(b) of the Land Reform Act. Therefore the Minister had the power to grant the lease.
   
7. Prior to the grant of the lease, the Minister was advised in writing by Solomon, by Kalsuak’s advisors and by his own officers in the Department of Lands that the custom ownership of the land was in dispute, that Kalsuak was one of the disputing custom owners, that both lower level land tribunals had ruled in his favour and, most importantly, that he did not consent to the grant of a lease to Turquoise. Although the Minister prevaricated in evidence about reading these communications, I am satisfied he was well aware of the situation. However, at no stage did the Minister consult Kalsuak about the granting of the lease. Kalsuak was and still is opposed to the leasing of the land. The Minister indicated in oral evidence that it made no difference to him.
   
8. All the above is undisputed. There is much dispute about other factual matters, particularly those on which the claim of fraud is based. I intend to deal with fraud and mistake separately although there is a degree of overlap in the facts relating to them. I will discuss the relevant facts in more detail in the course of considering each issue.
   

Fraud

9. The allegation of both claimants is the same and is very simple. It is that the Minister granted the lease in exchange for a bribe of VT 3 m in cash given to him by Gilbert Trinh (“Trinh”), the principal of Turquoise, on the day he signed the lease. If that claim is made out then without doubt fraud in terms of s. 100(1) will have been established.
   
10. Before considering the evidence it is important to say something about the onus and standard of proof. The onus of proving an allegation of fraud under s. 100 (1) falls on the parties making it, the claimants. The standard of proof requires a little more discussion in a case such as this where the allegation amounts to a serious criminal offence and the consequences of an adverse finding to reputations and careers may be profound.
    
11. That question has very recently been the subject of detailed consideration at the highest level in New Zealand by the Supreme Court in Z v. Dental Complaints Assessment Committee [2008] NZSC 55 (25 July 2008). Giving the majority judgment, McGrath J said:
    

“[98] The civil standard of proof generally applies in civil proceedings even if the facts in issue, including the consequences if they are proved, are serious. As Dixon J put it in a classic passage in Briginshaw v Briginshaw:[154]

The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.

[99] As proposed by the Australian Law Reform Commission,[155] this approach has now been given effect in Australian evidence legislation.[156] The approach in Briginshaw has also regularly been applied in New Zealand by the High Court as the appropriate standard of proof in cases concerning professional discipline.[157]

[100] A parallel line of cases in England over the last 50 years treated the balance of probabilities test in civil cases as flexible in its application in that jurisdiction. A leading statement of the principles appeared in the majority judgment of Lord Nicholls in Re H (Minors)Sexual Abuse:buse: Standard of Proof).[158] In the context of an application by a local authority carer based on the alleged rape by the respondent of other children in the family, Loy, Lord Nird Nicholls said that the "established general principle" was that the balance of probabilities was the standard of proof and continu59]

The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on vidence, the occurrence of the event was more likely than nhan not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence. Deliberate physical injury is usually less likely than accidental physical injury. A stepfather is usually less likely to have repeatedly raped and had non-consensual oral sex with his under age stepdaughter than on some occasion to have lost his temper and slapped her. Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of theallegation.

Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established.

Lord Nicholls later added that this approach to applying the civil standard of proof:[160]

provides a means by which the balance of probability standard can accommodate one’s instinctive feeling that even in civil proces a court should be more sure before finding serious allegallegations proved than when deciding less serious or trivial matters.

[101] Without wishing to be pedantic, it is not the position that flexibility is "built into" the civil standard, thereby requiring greater satisfaction in some cases. Rather the quality of the evidence required to meet that fixed standard may differ in cogency, depending on what is at stake.

[102] The civil standard has been flexibly applied in civil proceedings no matter how serious the conduct that is alleged.[161] In New Zealand it has been emphasised that no intermediate standard of proof exists, between the criminal and civil standards, for application in certain types of civil case.[162] Balance of probabilities still simply means more probable than not. Allowing the civil standard to be applied flexibly has not meant that the degree of probability required to meet this standard changes in serious cases. Rather, the civil standard is flexibly applied because it accommodates serious allegations through the natural tendency to require stronger evidence before being satisfied to the balance of probabilities standard.

..............

04][104] ........the reality is that a finder of fact in a civil case does generally look for stronger evidence of serious allegations before being satisfied that an event was more likely to have occurred than not. Morris LJ once put it this way in a leading case:[165]

[T]he very elements of gravity become a part of the whole range of circumstances which have to be weighed in the scale when deciding as to the balance of probabilities.

[105] The natural tendency to require stronger evidence is not a legal proposition and should not be elevated into one.[166] It simply reflects the reality of what judges do when considering the nature and quality of the evidence and deciding whether an issue has been proved to "the reasonable satisfaction of the tribunal".[167] A factual assessment has to be made in each case. That assessment has regard to the consequences of the facts to be proved. Proof to a tribunal’s reasonable satisfaction will, however, never call for that degree of cery which is necs necessary to prove a matter in issue beyond reasonable doubt.

............

[112] ........&the rule that a flexible approach is taken to applying the the civil standard of proof where there are grave allegations in civil proceedings remains generally applicable in England.[182] There is accordingly a single civil standard, the balance of probabilities, which is applied flexibly according to the seriousness of matters to be proved and the consequences of proving them. We are satisfied that the rule is long established,[183] sound in principle, and that in general it should continue to apply to civil proceedings in New Zealand”.

12 This discussion demonstrates that the approach is essentially the same in England, Australia and New Zealand: the standard of proof is the balance of probabilities which however must be applied flexibly according to the seriousness of matters to be proved and the consequences of proving them. It is that standard which I adopt in respect of this allegation.

13. The allegation of bribery is based upon the evidence of Petre Malsungai (“Malsungai”) who was First Political Adviser to the Minister on 18 April 2006. He was terminated from that position in December 2006, according to him without good reason. He stated that it was part of his job to receive anybody who wanted to see the Minister concerning anything to do with land.

14 He stated that around December 2005 he met Solomon in connection with Solomon’s desire to obtain a lease of this land. As from November 2005 he was also meeting John Roy, who was acting as agent for Trinh, who also wanted to obtain the lease. He stated that John Roy was insisting that the Minister sign a lease in favour of Turquoise, implying to him without saying directly that Trinh would have a reward for the Minister if he did so.

The evidence in his sworn statement about the actual giving of the bribe is set out below verbatim:

“17. However, the drama comes when the Minister was about to sign the lease for Turquoise Ltd. I cannot recall the exact date the incident happened but I can recall it vividly clear that it happened a week prior to the Minister signing Turquoise Ltd lease.

18. After few discussions with Mr. John Roy and direct conversation with Mr. Gilbert Trinh through his cell phone it appears very clear from the intention of the Turquoise Ltd side that they are serious to reciprocate for any thing the Minister request if he signs Turquoise Ltd lease.
19. That morning in the month of April, 2006, I met with the Minister in his office and after our discussion over other matters Minister told me to call Mr. Gilbert Trinh and let him know that he needs VT3,000,000 vatu cash to assist him settle Vanuatu Republican Party’s Debts. If he can do that he will have his lease sign with no difficulty at all. He told me if he can do that by 11 o’clock that day.
20. I returned to my office and called 45705 and Mr. Gilbert answered. I told him this is your message from the Minister and conveyed exactly what the Minister wants him to do.
21. Mr. Gilbert without any hesitation agreed to me on the phone to do as the Minister wish.
22. Few Minutes before 11 o’clock I recalled Mr. Gilbert came to my office and we sat chatting for some minutes, then he said he had the money with him in the bag. He pulled out the white envelope from his bag bulging out and totally backed with money and I could notice it very clearly that money were inside.
23. I recalled Mr. Gilbert whispered “emi 3,000,000 vatu cash istap insaed we minister I wantem”.
24. He wanted to give it to me but I told him to keep it until he hand delivered it straight to the Minister.
25. Then I walked off my office into the Minister office and told the Minister Maxim Carlot Korman that Mr. Gilbert is here for the 11 o’clock appointment and if he can meet him.
26. The Minister nodded for a yes, so I went over to my office and told Mr. Gilbert that the Minister is ready.
27. We both went over to the Ministers Office and I locked the door behind me and they do a bit of greetings and a little bit of talking about business while I was sitting next to Mr. Gilbert listening and taking some part in their discussion.
28. Then I interrupted their discussion and told the Minister that as well aware of the nature of the appointment, Mr. Gilbert has the amount of money he requested.
29. While I was on the issue, Mr. Gilbert pulled out from his bag straight away the same white envelope and placed it on the Minister’s desk right in front of the Minister.
30. You could tell it was money as the envelop was tightly backed and looked thick and heavy. I have come across and also handled such packed envelope of money several times in my life so you cannot be mistaken as it is very obvious that the envelop contains money. Even looking from the position of the envelope where I was sitting I saw clearly the edge of a 5,000 vatu note emerging out of the corner of the sealed part of the envelope. You could tell all the rest contain vatu notes.
31. The Minister picked the envelope and thanked Mr. Gilbert for his generosity as the money will go towards the Vanuatu Republican Party.
32. Mr. Gilbert assured the Minister he would be ready anytime to assist the Party in future if they request help. Minister was pleased and thanked him again.
33. On the same occasion the Minister instructed me to have turquoise’s file before him to sign before it goes to the Registry’s office. I took note of it and assured Mr. Gilbert that we will do it.
34. We left the office and I instructed the secretaries to have Turquoise’s lease ready before the Minister. The was later signed by the Minister.
35. In the afternoon of the same day I was driving home when I met Gilbert on the road next to George Bompidu area. Mr. Gilbert stopped me and gave me VT23,000 cash and told me this is for you in return for your assistance.
36. I took the money and drove home.”
    

15 Malsungai stated that this was not the first time this had happened and that there were other occasions that he had been used by the Minister to get “commissions” for the Minister as a condition for signing a lease. In cross-examination he named specific leases and amounts.

16 Malsungai’s evidence about the giving of a bribe to the Minister and a “reward” to himself was totally denied by the Minister, Gilbert Trinh and John Roy.

17 It is important to record how Malsungai came to give evidence. This emerged during his cross-examination and the cross-examination of Solomon.

18 Both Solomon and Malsungai confirm that Solomon went to see Malsungai shortly after Malsungai had been dismissed as the Minister’s First Political Advisor. This must have been in about January 2007. Solomon’s proceeding CC 163 of 2006 had been filed some months previously in September 2006. Malsungai was then working for Dinh Van Than at Bladinieres Estate. Solomon arrived at Malsungai’s office there unannounced. Solomon said that he went there to find out what had happened in his case because he had read in the newspaper about the Minister allegedly using his power to grant leases corruptly and knew that Malsungai had been terminated from his position.

19 Solomon said that Malsungai told him that he could help him but that if he did so, he would be exposing himself to risk to his safety, therefore Solomon would have to pay for his services. Solomon said that they agreed after offer and counter-offer on a figure of VT 1.5 m. Malsungai confirmed that figure. Malsungai said that he told Solomon at that stage that the lease had been granted as a result of a bribe paid to the Minister but did not tell him the full details. It is clear that Malsungai was not prepared to provide his information to Solomon in a way that Solomon could use in the proceeding until he got paid for it. On Solomon’s side, he was not prepared to give Malsungai the money they had agreed upon until he was sure that he obtained usable evidence from him. Solomon said that he indicated that he wanted a written agreement with Mr. Malsungai. At this time Malsungai was building a house at on which building stopped in March 2007 because he ran out of funds.

20 However, Solomon did not follow up then. The reason for that is because at the time there was before the Court the preliminary issue of whether the Minister had the power under s. 8 of the Land Reform Act to grant the lease. If that question was to be decided in Solomon’s favour then the lease would have to be cancelled. So Solomon did not want to outlay money for Malsungai’s assistance if it was unnecessary. However, as recorded above, Solomon was unsuccessful on the preliminary issue both in this Court and later in the Court of Appeal.

21 It is evident that Solomon subsequently pursued the matter because on 8 August 2007, Malsungai signed two documents. The first was the sworn statement, the crux of which is reproduced in Paragraph 14 above. The second was an Agreement, the full terms of which are set out below:

“AGREEMENT:

Made this 6th of August 2007 at Port Vila

BETWEEN:

MR. ALBERT SOLOMON of Lelepa Island

North EfateVanuatu(of one part)

AND:

MR. PETRE MALSUNGAI Of Port VilaVanuatu (of the other part)

WHEREAS:

1. Mr. Albert Solomon wants Mr. Petre Malsungai to become the main witness in Civil Case No. 163 of 2006 (supreme)
2. Mr. Petre Malsungai agree to Mr. Solomon’s request.
   

NOW THE PARTIES AGREE AS FOLLOWS:

1. Mr. Albert Solomon will pay Mr. Petre Malsungai the total sum of VT 1,500,000
2. The payment will be paid to Mr. Malsungai as follows:

1. VT 70,000 upon receiving instructions from Mr. Malsungai
2. VT 300,000 upon swearing of the Sworn Statement by Mr. Malsungai

100. VT830,000 upon appearing and giving evidence in Court during trial.

4. VT300,000 upon 2 days before delivery of the Judgment.

3. The laws of the Republic of Vanuatu shall govern this Agreement.
   

SIGNED BY:

Albert Solomon } “A. Solomon”.

08/08/07

In the presence of }

.................

Witness

SIGNED BY:

Petre Malsungai } “P. Malsungai”

In the presence of: }

...............................

Witness.”

Malsungai said at the trial that he had received payment under the agreement of VT 410,000 in 2 or 3 instalments.

22 On 29 July 2007, a few days before he signed these two documents, Malsungai arranged to meet Trinh at a café in Vila. There is a disagreement between them as to whether the meeting was at Nambawan Café or the Vietnamese Café on Lini Highway. However, they both agree the meeting took place.

23 In his sworn statement dated 11 October 2007, Trinh said this about the meeting:

“I did have a meeting with him a few days before I left at the Vietnamese Café across Lini Highway from where Ma Barker’s was and it may have been 29 July, 2, 2007. It happened because he had telephoned me on my mobile (I have no other telephone) from Dinh Van Than’s office were he works and asked to meet me. I agreed to meet him at the Café. At the meeting he asked me for VT 1.5 million so he could finish building his house. I refused saying “Why should I?” During the conversation I asked him whether he had asked Than and he said that Than had already helped him a lot.”

24 Malsungai said that he asked to meet him so he could confirm the amount which Trinh gave the Minister. He said that Trinh did confirm at the meeting that it was VT 3 m. Malsungai also acknowledged that he did ask Trinh for VT 1.5 m so that he could finish building his house. Solomon had already asked him to make a sworn statement for him but Malsungai did not tell Trinh this.

25 Malsungai said that Trinh did not refuse him the VT 1.5 m but asked him to wait for a while. He acknowledges that Trinh did ask whether Dinh Van Thanh could help him but he replied that he already owed too much to him. He said that he asked Trinh for the money because he was a friend.

26 I am satisfied that the reason why Malsungai approached Trinh to see if he would give him VT 1.5 m was because he was contemplating entering into the agreement with Solomon for payment of that sum in exchange for evidence that Trinh had paid the Minister a bribe for the lease. When he did not get the money he wanted from Trinh, he went ahead with his agreement with Solomon.

27 A few days after the meeting on 29 July, Trinh went on a holiday to Vietnam. He returned to Vila on 24 September 2007 and on his return learnt of Malsungai’s sworn statement of 8 August alleging that he paid a bribe to the Minister. Trinh said that a couple of days after his return he was having morning coffee at the Vietnamese café when Malsungai came in. He said that he beckoned him over and asked him why he made his statement. He said that Malsungai’s reply was:

“ I did it for the offer of money from Albert so I can finish my house and pay school fees. My salary is not enough. I also did it because Maxime sacked me”.

He said that Malsungai told him that he got VT 1.5 m and when asked “you are doing this for money?”, he replied in the affirmative. When asked whether he was doing it because Trinh would not give him the money he asked for, he said “Yes. I came to see you first but you didn’t help me so I went to see Albert”. At this point, Malsungai had to go but said that he would contact Trinh because he wanted to talk more.

28 Trinh stated that about 2 days later, Malsungai telephoned and asked to meet Trinh at the café. He said that at the meeting Malsungai confirmed that he had a written agreement with Solomon. Trinh asked to see it but Malsungai said it was at his lawyer’s office and he would get it and arrange to meet Trinh again the next day.

29 Trinh said they met again the next day. Malsungai gave him the agreement to read after which they had the following conversation:

“I see that you have only received VT370,000”. The Agreement provided for two further installments of the VT1,500,000 he was to receive but they were not to paid before he gave evidence in the case against me. I asked him “how long do you think it will be before you get the rest.” He shook his head looking unhappy and said he didn’t know. He said he needed the money now. I said “So what are you going to do now. Are you really going to do this to me – to face to face in Court?” He had previously agreed that it would just be his word against mine as there was no other evidence. He responded “Not if you and I can come to a better agreement. After all, you and I know each other for a long time.” He went on to say that if I would give him VT 1.5 million straight away so that he didn’t have to wait, he would withdraw his evidence. He said that if I paid him now, he’d use part of it to pay back what Albert had given him. I asked him how he could withdraw his evidence and he said he could do it easily because when he had been Secretary-General of the V.R.P. he had done it many times and therefore knew how to do it. I said “OK, but I must talk to my lawyer first. Contact me tomorrow and I’ll give my answer.”

30 Trinh stated that they met the next morning at the café. John Roy was there. Trinh and Malsungai normally conversed in French but because John Roy is Anglophone some of the conversation was in Bislama. He said that he told Malsungai that his lawyer was drawing up a further sworn statement for Malsungai to sign saying that the first one was wrong. Malsungai indicated he was ready to sign it.

31 Trinh had his lawyer draw up a further statement for Malsungai. It stated:

“3) I am a natural speaker of French rather than English and since I swore the document I have re-read it several times and I realize that I was confused by the English and did not property understand it because it is not correct.

4) I have never witnessed Mr. Gilbert Trinh bribe or attempt to bribe Mr. Carlot Korman or anyone else and I did not see him give any money to Mr. Carlot Korman and he did not give me VT 23,000 as is stated at paragraph 35 of my previous sworn statement.”

32 He arranged to meet Malsungai again with John Roy as a witness. He gave Malsungai the statement to read saying that if it was OK, he could go and sign it with John Roy who would pay the Government fee for the swearing. Malsungai said it was OK for him to swear but he wanted to take it home first and he left with it.

33 The next day, according to Trinh’s statement, he was at the café with John Roy when Malsungai came in. He said he would sign the statement but was worried about getting his VT 1.5m. He said he wanted his money before he swore it. Trinh said he would not pay before he swore it because he would then have no guarantee it would be sworn. Malsungai left saying he would telephone about the swearing.

34 The next day a letter dated 4 October 2007 was delivered to Trinh’s lawyer. It was addressed to George(sic) Trinh and John Roy, although Trinh said it was not given to them until 9 October by Solomon. The letter read:

“Re: Interference with Claimant’s witness in Albert Solomon –v- Turquoise Limited, Minister of Lands and Natural Resources & Director of Lands Civil Case No. 163 of 2006

1. I am not happy over your constant telephone calls to time and time again pressurizing me to withdraw my evidence in court against you over Albert Solomon’s case.

2. I am also advising you Mr. Trinh that your offer at a Vietnamese Café next to National Library in town yesterday to assist me financially in building my house if I withdraw my evidence in court in Albert Solomon’s case is declined.

3. I cannot do that your conduct to bribe me to act so only confirms your attitude or habit in bribing people to act in your interest. That’s what I have always stood up against where I gave evidence in support of Mr. Albert’s.

4. I am showing my dissatisfaction of your conduct by informing all relevant authorities or persons concerned.

Yours faithfully,

Petre Malsungai.”

Malsungai said in his second sworn statement that he wrote the letter. In cross-examination he said it was written by an Anglophone colleague John Batey. I am satisfied by the wording of the letter, the names of the people it was copied to and the type used that it was drafted by Solomon’s lawyer.

35 John Roy made a statement supporting Trinh’s. He had been told about Malsungai’s statement alleging bribery. He said that he saw Trinh and Malsungai talking in the Vietnamese café after he had been told. He said he was present there a few days later at a meeting between Trinh and Malsungai at which they spoke partly in Bislama which he could understand and partly in French. Before the meeting Trinh had shown him the draft sworn statement his lawyers had drawn up for Malsungai to sign. He said he heard Malsungai say that he had done it for money and Trinh say he must withdraw it before he would help him. He said that Malsungai said the statement was OK to swear but he wanted to take it home first and would be in contact the next day.

36 He said that the next day Malsungai came into the café when he and Trinh were there. Malsungai said that he did not have the statement for swearing but that if Trinh gave him the money he would go and swear it, to which Trinh said he would have to swear it first. Malsungai left saying that he would come to see them again.

37 In answer to these sworn statements Malsungai made another dated 9 November 2007. It stated that he had met Trinh on several occasions at his request. He said that on one occasion on 3 October 2007 Trinh and Roy offered financial assistance from Trinh to complete his house in return for withdrawing his evidence. He said he was constantly pressured to withdraw his evidence. He admitted showing Trinh his agreement with Solomon. He confirmed that Trinh had his solicitor draft a sworn statement for him to sign withdrawing his first one. He said he would not sign, the reason being

“not to support the unlawful practices that is happening with registration of land leases in Vanuatu today”.

38 Malsungai was cross-examined about the series of meetings he had with Trinh in late September/early October 2007. His answers in cross-examination were unimpressive. On many occasions he said that he did not remember or did not recall what happened. He denied asking Trinh for VT 1.5 m but eventually said that Trinh had actually offered to provide him with iron roofing to complete his house. Trinh and Roy were also cross-examined. Essentially they maintained what they said in their statements.

39 I am satisfied from the evidence about these meetings that Malsungai was exploring the possibility of bartering the withdrawal of his sworn statement alleging bribery for an immediate payment of VT 1.5 m. I am satisfied he would have signed Trinh’s statement if Trinh had paid him that sum. However acting on legal advice, Trinh was holding out the prospect of financial assistance but not making a firm commitment. Because he would not do so, Malsungai eventually pulled out of negotiations. There is no other explanation for him attending several meetings with Trinh at this time and for showing Trinh his agreement with Solomon. It also why Trinh had his lawyer prepare a further statement for Malsungai to swear. The letter of 4 October signed by Malsungai was a self-serving attempt to put a different slant on what Malsungai had been trying to do.

40 The evidence also satisfies me that Trinh was attempting to have Malsungai swear a statement which both of them must have known was false. Malsungai knew exactly what he was saying in his sworn statement alleging bribery and Trinh knew that. The exchange which Trinh recounted when they first met after the statement was filed shows that. According to Trinh, when he asked Malsungai why he did it, he replied that he did it for the offer of money. Trinh was quite willing to have Malsungai swear a statement on oath that Malsungai was confused by the English and did not properly understand it when he knew that was untrue. I think it likely that if Malsungai had sworn it, Trinh would have filed it. When the matter was raised with Trinh by the Court, he did not seem to appreciate the point.

41 The evidence about these meetings at the café confirmed what was evident from the extraordinary (and undoubtedly void) agreement between Solomon and Malsungai: that Malsungai was quite prepared to sell his evidence about bribery to whoever he thought would provide him most quickly with VT 1.5 m.

42 A third person was at the alleged meeting where the bribe was given. That was the Minister. He also made a sworn statement and was cross-examined. He alleged that Malsungai was terminated for cause and produced the termination letter which set out 4 grounds relating to Malsungai’s conduct and performance. He denied the allegations of bribery, painting them as the actions of a disgruntled former employee seeking revenge. He also said that:

“Mr. Gilbert Trinh is a long time friend of mine as well as supporter of the Vanuatu Republican Party of which I am the President. However any land dealings which I may have executed in favour of Mr. Trinh’s business interests are not in anyway influenced by his association to the party.”

43 Mr. Trinh denied he was a long time friend of the Minister or a supporter of the Vanuatu Republican Party. When faced with that, the Minister said that he actually meant Trinh’s father, George, and that there had been miscommunication in regard to the drafting of his sworn statement, the blame for which he tried to put on his Director-General. He also tried to say that he did not understand what he was signing because it was in English and he is francophone. I find that not credible. The Minister has been a Minister (and former Prime Minister) of the Government of Vanuatu for many years. I am sure he is perfectly capable of reading and understanding the simple English in his sworn statement. Just reading the Bislama letter of termination he wrote shows that he has a good vocabulary in English. Many of the English words used in it (with Bislama spelling) are sophisticated.

44 In addition, the Minister was generally unimpressive as a witness. He was long-winded and evasive in cross-examination. He sometimes found it difficult to give direct answers. All in all, I was unable to have confidence in his evidence.

45 As well as the evidence of the three witnesses said to be present when the cash was allegedly handed over, there are some circumstances about the granting of the lease which are very suspicious. The first is that the Minister granted this lease without even consulting Kalsuak who had been declared custom owner by two levels of Customary Land Tribunals. Secondly the lease was granted on 18 April 2006 and registered 2 days later on 20 April. Malsungai said that this was because the Minister instructed that it be registered immediately. I accept that evidence. Michael Mangawai, the acting Director of Land Records confirmed it. There was no other explanation why registration should be so quick. The evidence of the Director of Land Records, Jean Marc Pierre, is that registration of a lease can typically take 6 months to a year or longer.

46 The Court must decide whether the evidence of Malsungai, when coupled with those circumstances and taking into account the denials of Trinh and the Minister, satisfies the Court to the required standard that a bribe was indeed paid to the Minister. To reach that point, the Court must be satisfied that Malsungai’s evidence is credible and reliable.

47 I have reached the conclusion that it would be quite unsafe for the Court to rely on the truth of Malsungai’s evidence. There are a number of reasons for this. First, on his own evidence he was an accomplice to the offence of bribery which as well as being a gross breach of trust, is a serious crime. The long experience of the Court has taught that the evidence of accomplices must be treated with caution. Indeed juries in criminal cases receive a warning to that effect. In this case, the crime in which he says he took part is a crime of dishonesty and according to him, he received his own reward from Trinh for helping in it.

48 Secondly, Malsungai has a very strong motive to lie. It is plain that he harbours resentment against the Minister for terminating him from his position as First Political Adviser, for no reason in Malsungai’s eyes, except to replace him with a relative. Trinh said that Malsungai specifically told him that that was a reason for making the sworn statement. I accept that evidence. It is consistent with the attitude Malsungai displayed in his own evidence. Again, the Courts have long recognized the need for caution where a witness has a motive to lie. Again it is common in criminal cases for juries to be warned about the need for caution before accepting a witness in this category. I am satisfied from my observations that pay-back for the Minister was one of Malsungai’s motives in giving his sworn statement.

49 But the most important reason for not placing any reliance on Malsungai’s evidence is that he has a direct financial motive for giving it. The agreement he made with Solomon is an extraordinary document. Obviously neither Solomon nor his advisors realized that nothing could be more likely to destroy the Court’s confidence in Malsungai’s evidence. It is perfectly plain from the document itself and from his prior attempt to obtain the same amount from Trinh that the only reason Malsungai made his sworn statement was because he was going to be paid cash for doing so. This was in a situation where he needed cash badly. It is plain that if Trinh had given him the same amount of cash, he would not have sworn the statement.

50 The later dealings just made matters worse. It was plain from them that if Trinh had given Malsungai VT 1.5 m in cash even then, Malsungai would have withdrawn his statement, that is, he would have made another sworn statement saying that the first one was untrue. Obviously if he had done so, one or other of the sworn statements would have to be a lie. I am satisfied from the evidence that, if paid enough, Malsungai would be prepared to give false evidence. In those circumstances, the Court can have no confidence at all in the truth of the evidence which he has given, for which he undoubtedly has been paid, and for which he was to be paid more provided he maintained it in Court.

51 The allegation of bribery is dependent on accepting that Malsungai’s evidence is truthful. For the reasons stated above, it would be quite unsafe for the Court to do that. The claim of fraud based on the allegation of bribery must fail.

52 It would be wrong to read that finding as a positive finding that bribery did not take place. There were one or two aspects of Malsungai’s evidence which did impress me. The first was the readiness with which, when pressed, he provided the names of others who had paid “commissions” to the Minister for the grant of leases. The second was the detail he provided in cross-examination that the VT 23,000 which he said Trinh had paid him later as reward was paid in Australian currency. In addition, there are the suspicious circumstances referred to above. But when the Court has no confidence generally in Malsungai’s evidence, that is not enough to prove the allegation to the civil standard having regard to its gravity and its consequences.

Mistake

53 In Paragraph 23 of his Further Amended Claim, Solomon set out the grounds (other than bribery) on which he relies. In it he alleges that Turquoise obtained the lease “fraudulently or by mistake”, giving the following particulars:

a) The Negotiator Certificate issued to First Defendant bears the names of some custom owners who are not declared by court of law.

b) The First Defendant deliberately or mistakenly over looked the decision of Village and Area Land Tribunal which declared Philip Kalsuak as custom landowner and entered the else with the second Defendant.

c) The Second Defendant unlawfully becomes the lessor of the said land when there is a declared custom owners.

d) The First Defendant knew and or by mistake obtain a Negotiator Certificate on the land which has already been issued a Negotiation Certificate.

e) The First and Second Defendant knew very well that there was a valid negotiator Certificate, for the Claimant however fraudulently and or by mistake obtained another certificate for the First Defendant.

f) The First, Second and Third Defendant knew very well that the survey plan of the said land was funded by the Claimant and wrote a letter to that effect, fraudulently and or by mistake registered the said land in favour of the First Defendant.

54 Kalsuak’s claim, although relying on both, does not clearly distinguish between fraud and mistake. However, as well as particularizing the allegation of bribery, it clearly sets out the Land Tribunal decisions declaring Kalsuak the custom owner of the land, the communication in various ways to the Minister of those decisions and of Kalsuak’s opposition to the grant of a lease to Turquoise, and the failure of the minister to consult Kalsuak. It is plain that that those facts are the foundation of the claim of mistake.

55 Turquoise is the defendant which stands to be directly affected by the claim for cancellation. In its pleadings, it denied all the particulars of fraud and/or mistake alleged by Solomon. In respect of Kalsuak’s claim, the defence is to the same effect except that the Land Tribunal decisions are admitted. However in his oral submissions in closing, Mr. Sugden made it clear that Turquoise’s position was:

a) it concedes that there was a mistake in the granting of the lease in not consulting Kalsuak but this mistake was not causative of registration. Mr. Sugden relied on the decision in Roqara v. Takau [2005] VUCA 5 in that respect

b) in any event, Turquoise was protected by s. 100 (2) of the Land Leases Act in that it was a registered proprietor in possession of the land for value and had no knowledge of the mistake.

The Minister and the Director of Land Records also generally denied either fraud or mistake.

56 With regard to the first point, Mr. Sugden relied upon the following passage in Roqara v. Takau:

“For a party seeking rectification under s.100 of the Land Leases Act, it is not sufficient to prove that a mistake occurred in the course of a transaction which ultimately concluded in registration of the interest which it is sought to have removed from the register. In terms of s.100, the Court must be satisfied that the "registration has been obtained, made or omitted by fraud or mistake". The section imposes a causal requirement. The mistake must lead to the impugned registration being made. The onus is on the party seeking rectification not only to establish a mistake, but also to satisfy the Court that it caused the registration to occur.

We observed, above, that it would be highly probable that if the Island Court order had been brought to the attention of the Minister, it would have caused him to withhold approval for the grant of the lease. There are other matters in this case which lend weight to that probability, and, in our opinion, justify the finding of Saksak J. "that the granting of the leases by the Minister was done through mistake". In substance, this is a finding that the causal requirement of s.100 had been established".

His argument was deceptively simple. Even if he had consulted Kalsuak, the Minister’s attitude was such that he would have ignored Kalsuak’s opposition and granted the lease anyway. Therefore, it was not the failure to consult which was causative of registration

57 It is true that the Minister’s attitude was extraordinary. His power to act under s. 8 of the Land Reform Act is given to him to exercise in the interests of custom land owners: see 8(2)(b). It can hardly be acting in the interests of a custom land owner to grant a 75 year lease of his land without even consulting the presumptive owner, particularly when he had made it clear to the Minister that he did not want a lease granted. The Court of Appeal has previously had cause to comment upon the responsibilities of the Minister of Lands when exercising his powers under s.8 of the Land Reform Act. This was in the case of Ifira Trustees Ltd v. Kalsakau & Others [2006] VUCA; CAC5 of 2006 (6 October 2006) where the Court said:

"When Parliament grants a power to make decisions, the decision maker must undertake the task conscientiously and independently weighing all matters which are relevant and ignoring those which are irrelevant and the decision maker must faithfully apply fair and proper processes and procedures.

Section 8, as an example, is not a licence for a Minister to make any decision that he likes about the care and control of disputed land pending the resolution of that dispute. A Minister exercising this power can only reach a proper and lawful conclusion after he has weighed and assessed all matters which are relevant".

58 In Roqara v. Takau itself, the Court referred to the practice adopted by the Ministry and Department of Lands of issuing negotiator’s certificates to applicants seeking to lease land, the ownership of which is disputed. It was said that this was done as the Department required the claimants for custom ownership to be consulted and their consent sought by the applicant for a lease. This is a sensible and just requirement to protect the basic rights of custom owners not to have their land alienated without their views being heard. Mr. Sugden’s argument, if correct, involves accepting the unpalatable proposition that if a Minister overlooks carrying out his duty to consult one or other of the disputing custom owners by oversight then a lease may be cancelled but if he ignores that duty deliberately, as the Minister did here, nothing can be done about it.

59 In my view, the Court is not forced to accept that proposition. If he had consulted Kalsuak the Minister would have heard that Kalsuak was opposed to the land being leased or developed by anyone and would also have heard the reasons for that. Kalsuak expressed himself about this in his oral evidence in an unusual way. But what he conveyed to the Court is that he sees this land in terms of its history as a place where there had once been a village where his forebears lived. In my view, it is probable that if the Minister had directly consulted Kalsuak and given proper weight to his wishes about what should or should not happen to what has (so far) been declared his ancestral land and the reasons for his wishes, he would not have granted this lease, the effect of which is to give the possession of the land to a developer for the next 75 years to build on and use as he wishes to the exclusion of Kalsuak. That mistake of ignoring his duty to properly consult led the Minister to grant the lease to Turquoise and for registration to be obtained.

60 This does not mean that all disputing custom owners have a power of veto on the Minister’s exercise of his powers under s. 8. What it does mean is that when exercising those powers, the Minister must consult the disputing owners and must carefully consider their views and the reasons for them before acting. This is part of the Minister’s duty to follow fair and proper processes and to act only after he has weighed and assessed all relevant matters. Here he did not and could not do so without ascertaining Kalsuak’s wishes and the reasons for them. In deciding whether it is probable that he would not then have granted the lease, the Court has assumed, as it must, that the Minister would then have acted reasonably and not arbitarily.

61 The other issues of mistake and/or fraud relied upon were not causative of registration. It was a mistake for two negotiator’s certificates to be issued in respect of the same land naming different custom owners. The mistake was not in the fact that there were two certificates issued. It may well be in the interests of custom owners to have more than one potential lessee in competition for a lease. The mistake was in the naming of different custom owners on the separate certificates. That would lead to the potential lessees carrying out negotiations with only some of the disputing owners, which is of course what happened here. However neither certificate resulted in the grant of the lease by the Minister.

62 Likewise, the issue about whether or not Turquoise wrongly got the benefit of the survey plan Jerry Moli prepared on the instructions of Solomon is not something which was causative of the grant of the lease. No doubt if Mr. Moli had not made his plan available to Turquoise, it could have had another survey plan done by another surveyor.

63 It remains to consider the alternative matter raised, that is whether Turquoise is entitled to the benefit of s. 100 (2) which provides:

"s. 100 (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".

This issue was not specifically pleaded but no objection was made when Mr. Sugden raised it in his closing submissions. The Court will deal with the issue on the assumption that it is open.

64 Two questions arise. Is Turquoise "in possession"? Secondly did it have knowledge of the mistake?

65 On the first point, Mr. Sugden submitted that Turquoise was "in possession" as from registration of the lease because, he submitted, a person is in possession in law if he had actual possession, constructive possession or an immediate right to possession, citing in support Wilson v. Lombank Ltd [1963] 1All E.R. 740.

66 I have no doubt that as general proposition at common law, that is correct. But here it is a question of statutory interpretation. Every registered lease grants the immediate right to possession to the proprietor. That is the very purpose of leases. If Mr. Sugden’s argument is correct, there would be no purpose in having the words "in possession" in s. 100(2) because every proprietor has at least the right to possession.

67 The words must be read in their statutory framework. Section 100 is an unusual provision to find in a Torrens system such as that constituted in Vanuatu by the Land Leases Act, the central feature of which is indefeasibility of title. It provides a means for a registered title to be defeated retrospectively. It also permits the registered title to be defeated, not just for fraud which is the sole exception in most other systems, but even for mere mistake. In those respects the principle of indefeasibility is not so strongly entrenched in Vanuatu’s Torrens system as elsewhere, no doubt as Parliament intended to accommodate Vanuatu’s circumstances.

68 Nevertheless the intention of the Land Leases Act is clearly to provide security of title although, because of s.100, that security is by no means absolute. In my view, it is necessary to give the words "in possession" in s.100(2) some practical meaning consistent with providing a level of security, less than absolute, to registered proprietors of leases. That can be done by construing the words "in possession" as meaning in possession, either actual or constructive, of the land. On that basis, a proprietor who, although having the right to possession given him by his lease, is not in possession, actual or constructive, would not have the protection accorded by s.100(2). It is consistent with a provision which allows cancellation of registration titles for mere mistakes of omission in their grant, that a proprietor who is not yet in possession is not protected. Once however the proprietor (for valuable consideration and without knowledge) has come into possession, actual or constructive, the value accorded by Parliament to the security of his title becomes paramount.

69 I am not satisfied on the evidence that Turquoise is in possession of the land. The matters in section 100(2) need to be positively proven. The onus of proving them is on the party alleging them. The evidence is clear that Solomon is at least partially occupying the land, has constructed buildings on it and was using it for the purposes of his tourism business. His existing use was protected by an interim injunction for a period of some months in late 2006 and early 2007. There was evidence at that time that Turquoise had begun to put up a fence on the land but no other evidence that Turquoise had in fact taken possession. On this basis, s. 100(2) is not available to Turquoise.

70 It is therefore unnecessary to consider the issue of Turquoise’s knowledge. There was in fact no evidence about it no doubt because s. 100 (2) was not pleaded.

71 There remains the issue of whether the Court should make an order. Section 100 gives a discretion once mistake is established. I am satisfied that an order should be made cancelling registration of the lease. The interests of justice very much favour that course. I have found that Turquoise does not have the benefit of s. 100(2). It is not in physical occupation of the land. These proceedings were launched only a few months after the lease was granted and before Turquoise sought to take possession. It has ever since been aware of the possibility of cancellation. Any premium or rental paid is held by the Lands Department and can be repaid.

72 On the other hand, if rectification is not ordered and the custom ownership of Kalsuak is later upheld in the Island Tribunal as it has been in the lower tribunals, he will have lost for his own lifetime and probably the lifetime of his children, the possession of his traditional land, completely against his wishes. The land may in all likelihood have already been subdivided and homes or other buildings constructed and occupied. That would be a very unfortunate result.

73 There will be an order under s. 100(1) of the Land Leases Act rectifying the register for leasehold title 12/O512/002 by cancellation of the registration of the lease. The claimants are entitled to their costs to be agreed or fixed by the Court on application.

Dated at Port Vila, this 8th day of August, 2008

BY THE COURT

C.N. TUOHY
Judge