Reed v Sioa [2002] WSSC 13 (4 July 2002)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

of an application by
PATOSINA REED of Papauta Retired,
AFAMASAGA DAN BETHAM of Potoga Retired,
BURTON KIUPI BETHAM of Wellington New Zealand Retired,
MARK EVERETT BETHAM of Lotopa Managing Director,
CHERITH SULA RENNER of Auckland, New Zealand, Housewife and
ELON BETHAM of Tulaele, Valuer.
Applicants

AND

MATALENA SIOA
of Matautu-uta near Apia, Widow.
Respondent

AND

REGISTRAR OF LANDS
Third Party

Counsel: S Leung Wai for applicants
A Roma for respondent
T Potoi-Vaai for third party

Hearing: 19 June 2002
Judgment: 4 July 2002

JUDGMENT OF SAPOLU CJ

Facts

As the evidence shows, the land in dispute is situated at Matautu-uta near Apia. It was owned by the late Situpe Leiataua. By her will which was executed on 29 September 1962, Situpe Leiataua devised her land to her daughter the late Ota Betham who was the mother of the applicants. The respondent, who is one of the daughters of Situpe Leiataua, was not included as a beneficiary in the will.

Ota Betham, the sole beneficiary under her late mother’s will, then died intestate on 10 September 1967. At that time the will of her late mother had not been probated. It was not until 1 September 1998 that probate of her late mother’s will was granted to the Public Trustee as executor of the will and the transmission was registered on 20 July 1999. The Public Trustee subsequently conveyed the said land to the administrator of the estate of the late Ota Betham. The letters of administration of the estate of the late Ota Betham were granted on 4 September 2000. The administrator that was appointed of the estate of the late Ota Betham was her son Masoe Henry Betham, a brother of the applicants. Masoe Henry Betham, as administrator of her late mother’s estate, then executed a deed of conveyance dated 20 October 2000 where the said land was conveyed to himself, the applicants and their sister Lydia Groves, being the children of the late Ota Betham, as tenants in common in equal shares. Lydia Groves has since passed away.

When the said deed of conveyance was executed, the transmission of Ota Betham’s estate to the administrator had not been registered. The transmission was only registered on 17 November 2000. The next day, 18 November 2000, the deed of conveyance was registered. On 2 March 2001 Masoe Henry Betham passed away. The names which now appear on the register as registered owners of the said land are those of the applicants, their deceased brother Masoe Henry Betham and their deceased sister Lydia Groves.

The respondent, the sister of the late Ota Betham, then lodged caveat no. 796x against any dealings with the said land claiming an equitable interest in the land as a beneficiary of the estate of her late mother Situpe Leiataua. That caveat was registered on 30 November 2000. On 26 October 2001, the applicants filed a motion for removal of the caveat. On 10 December 2001, the respondent filed an application to strike out the applicant’s motion for removal of the respondent’s caveat.

Proceedings by the parties

The applicants motion for removal of the respondent’s caveat is based on the ground that the respondent has no caveatable interest in the land and therefore has no reasonably arguable case for maintaining her caveat. They say that the sole beneficiary under the will of their late grandmother Situpe Leiataua who owned the said land was their late mother Ota Betham who died intestate. Under the will the said land was devised to their late mother when she was alive. By reason of the rules of succession in an intestacy, as provided in s.44 of the Administration Act 1975, only the children of their late mother have an entitlement to share in the distribution of their late mother’s estate. The applicants, their late brother Masoe Henry Betham and their late sister Lydia Groves being the only children of their late mother when she died, they are therefore the only persons entitled to share in the distribution of their late mother’s estate. The respondent who is only a sister of their applicants late mother would not be entitled to share in the distribution of the applicants late mother’s estate in terms of s.44 of the Administration Act 1975 given that the intestate has children. The applicants also claim that the respondent was not a beneficiary under the will of the said Situpe Leiataua. She therefore has no interest in the land that can support her caveat.

The application by the respondent to strike out the applicants motion for removal of the caveat seeks several orders. The first is for a declaration that the deed of conveyance which was executed by the administrator of the estate of Ota Betham where the land was conveyed to himself, the applicants and their late sister Lydia Groves is fraudulent and therefore void. Two reasons are given in support of this contention of fraud. First, it is alleged that when the deed of conveyance was executed on 20 October 2000, the transmission of the estate of Ota Betham to the administrator had not been registered. Therefore, at that time, the administrator had no legal capacity to execute the deed. Secondly, the recital in the deed of conveyance that the letters of administration of Ota Betham’s estate had been granted to the administrator and had been registered as a transmission is not correct, as the transmission was only registered on 17 November 2000 but the deed of conveyance was executed on 20 October 2000.

The respondent then says that given that the said deed of conveyance is fraudulent and therefore void, the respondent seeks an order to direct the Registrar of Lands to rectify the register. As a consequence of this order being sought, the Court accepted the joinder of the Registrar of Lands as a third party to these proceedings. Furthermore, the respondent says that the deed of conveyance being fraudulent and void, the applicants have no standing to bring and maintain their motion for removal of the caveat. An order is accordingly sought to strike out the motion by the applicants. Perhaps the respondent should also have sought an order to bring up and cancel the deed if it is fraudulent and therefore void.

The response by the applicants is that the deed of conveyance from the administrator of their late mother’s estate has been registered. That being so, they have standing to bring their motion for removal of the respondent’s caveat. They also contend that the deed of conveyance is not fraudulent and is therefore not void.

Counsel for the respondent also told the Court that his position was that the Court would hear the application by the respondent first and then the motion by the applicants later. As the issues raised in the respondent’s application and the applicants motion are inter-related, I decided to deal with both in the same proceedings rather than in different proceedings which will necessarily involve a good deal of repetition of the same facts and legal arguments.

Resolution Of Issues

I accept that for a case like the present one, fraud means some sort of dishonesty or moral turpitude. And whether there is fraud is a question of fact to be determined having regard to the peculiar circumstances of each case. Fraud being the central issue to the application by the respondent, I will now proceed to determine whether the deed of conveyance executed by the administrator of Ota Betham’s estate is fraudulent as contended for the respondent.

The first ground advanced on behalf of the respondent for saying that the deed of conveyance is fraudulent is that the title to the land was not with the administrator when he executed the deed, as the transmission of the estate to him had not then been registered. Therefore, he had no power or authority to execute the deed. I have decided to leave out the words “legal capacity” used in the submissions for the respondent because those words have a special meaning of their own in law.

This part of the case for the respondent does touch on a significant issue of law which has been the subject of opposing views amongst Judges and lawyers as set out in Land Law (1978) vol 1 by Hinde, McMorland and Sim at para 2.130. The issue is whether the passing of legal title in an estate ought to depend upon the registration of a transmission. I am not required to decide between the opposing views on that issue or to set out those opposing views in detail. But for the purpose of determining whether the first ground supports the contention for the respondent that the deed of conveyance is fraudulent, I will refer briefly to the issue I have identified and the opposing contentions.

The contention for the respondent is that when the administrator of the estate of the intestate Ota Betham executed the deed of conveyance which transferred the land which was an asset of the estate to the applicants and others, he had no power or authority to do so, because even though the letters of administration of the estate had already been granted to him on 4 September 2000, the transmission had not been registered when the conveyance was executed. This contention is founded on s.16 of the Land Registration Act 1992/1993 which provides:

“No instrument of title shall in any manner affect the legal title to land until and unless such instrument is registered in the Land Register in accordance with this Act.”

The expression “instrument of title” is defined in s.2 of the Act to include letters of administration. Thus in terms of s.16 the letters of administration will have no effect on the legal title to land until registered. It was therefore contended for the respondent that as the transmission of the estate had not been registered at the time the conveyance was executed the administrator had no title to the land which could be conveyed by him to the applicants and the other children of the intestate. This contention finds support in the judgment of the then Supreme Court of New Zealand in Howie v Barry [1909] NZGazLawRp 20; (1909) 28 NZLR 681 per Edwards J, where the Court reached a view on the provisions of the Land Transfer Act 1908 (NZ) which is similar to the view advanced by counsel for the respondent. That view was also approved by Hosking J in Orr v Smith [1919] NZGazLawRp 99; [1919] NZLR 818 at 828.

The contrary view is expounded in Land Law (1978) Vol 1 by Hinde, McMorland and Sim at para 2.130 citing supporting dicta from Holt v Deputy Federal Commissioner of Land Tax (NSW) [1914] HCA 26; (1914) 17 CLR 720 at 725 per Isaacs J; and The King v Waiariki District Maori Land Board [1921] NZGazLawRp 237; [1922] NZLR 417 at 424 per Salmond J. Support for the same view is also found in an article by Professor FM Brookfield, “Prescription and Adverse Possession” in the (1971) Contennial Essays 162 at 184-187. This contrary view expounded by Hinde, McMorland and Sim is stated in these terms at para 2.130:

“In principle, the better view would seem to be that, since the passing of legal title by operation of law rests on an event rather than on an instrument, it ought not to depend upon the registration of an application for transmission.”

Counsel for the applicants referred to s.14 of the Administration Act 1975. Under s.14(1), it is provided that the estate of any deceased person is to vest immediately in the administrator upon the grant to him of the letters of administration. Section 14(2), which gives recognition to the doctrine of relation back, provides that the title of an administrator to the estate of a deceased person shall relate back to the time of the death of the deceased. So s.14 of the Administration Act 1975 vests the estate of a deceased person in the administrator immediately upon the grant of letters of administration and his title to the estate relates back to the time of the death of the deceased. Nothing is said in s.14 about registration being required to bring into effect this process of vesting the estate in the administrator upon the grant of letters of administration and the relating back of the administrator’s title to the estate to the time of the deceased’s death. On the other hand, s.16 of the Land Registration Act 1992/1993 provides in effect that a grant of letters of administration will not affect the legal title to land in the estate until the transmission is registered.

As I have already stated, I am not required to decide between the opposing views I have briefly set out. What I am required to decide is whether the deed of conveyance executed by the administrator of Ota Betham’s estate in favour of the applicants and others is fraudulent. The point I wish to make is that, the administrator of the estate in this case was not a lawyer. He could not have been aware whether as a matter of law, he had the power or authority to execute the deed of conveyance in favour of the applicants. He might have assumed that he had the necessary power given that the letters of administration had already been granted to him. It is more likely that he was advised by the solicitor who prepared the conveyance to go ahead and execute the conveyance. Even if the administrator had consulted a lawyer who knows this area of the law he might have received an uncertain answer given the opposing views I have referred to. The law on the point in issue is debatable. In these circumstances, the administrator, in my judgment, cannot be held to have acted dishonestly so as to make the deed of conveyance fraudulent.

I cannot accept, in the absence of evidence to the contrary, that the administrator, who was not a lawyer, knew that he had no power or authority to execute the conveyance, but still went ahead and executed the conveyance with intentional or reckless disregard of the true legal position. It will be expecting too much of the administrator to know what is the true legal position when even eminent Judges and lawyers are not in agreement as to what should be the true legal position. I also cannot accept that the administrator acted dishonestly when he executed the conveyance given that on one view of the law he would have the power to execute the conveyance, whereas on another view of the law he would not have such power. The question of whether there is fraud should depend on the facts of the case, not on a debatable legal issue. But that seems to be what the contention for the respondent leads to, because it touches on the question of whether the administrator had the power to execute the conveyance.

As for the second ground in support of the contention for the respondent that the deed of conveyance is fraudulent, I accept that the recital in the conveyance that the transmission had been registered is incorrect. But the question of whether that amounts to fraud is one of fact to be determined having regard to the peculiar circumstances of each case.

In this case, when the conveyance was executed, administration of the estate of the intestate had already been granted to the administrator. Whether the grant of administration vested the title to the estate in the administrator before registration is, as shown, a debatable matter of law. The conveyance was made in favour of the children of the intestate, including the applicants, who are entitled to share in the distribution of the estate of the intestate under the rules of succession in an intestacy. No other person is entitled to share in the distribution of the estate of the intestate. The conveyance was only registered after registration of the transmission. There is no evidence any person was misled or deceived because of the incorrect recital in the conveyance; there is also no evidence that the incorrect recital was put in the conveyance for the purpose of deceiving anyone. In the context of these circumstances surrounding the execution of the conveyance, I am of the view that the incorrect recital was not dishonestly inserted in the conveyance. Accordingly, there is no fraud.

The onus of proving fraud lies on the party who is alleging fraud. The respondent who is alleging fraud has not discharged that onus. That being so, the foundation for the application by the respondent disappears. It is therefore dismissed.

I turn now to the applicants motion for removal of the caveat. Now that the deed of conveyance has been registered, the applicants appear on the land register as registered owners of the land together with their deceased brother and sister. It was argued on behalf of the applicants that the respondent has no caveatable interest to support her caveat. Under the will of Situpe Leiataua only the applicants mother was a beneficiary, the respondent was not a beneficiary. The said land was devised under the will to the applicants mother who died intestate. In terms of the rules of succession in an intestacy provided in s.44 of the Administration Act 1975, only the applicants and their deceased brother and sister are entitled to share in the distribution of their late mother’s estate. The respondent has no such entitlement. However, the caveat lodged by the respondent states that the respondent claims an equitable interest in the said land as a beneficiary of the estate of her late mother Situpe Leiataua. It was not explained how she can be a beneficiary of her late mother’s estate, or what equitable interest does she hold in the said estate. In these circumstances, I have to agree with the applicants that the respondent has no caveatable interest which can support her caveat. Accordingly the caveat is to be removed from the land register.

In view of that conclusion, I will not deal with the submissions by counsel for the third party which raise questions of fundamental importance regarding the nature of the land registration system that we have and the effect of the registration of an instrument of title such as a deed of conveyance.

Counsel to submit memorandum as to costs within seven days.

CHIEF JUSTICE

Solicitors:

Leung Wai Law Firm for applicants
Sapolu Lussick for respondent
T Potoi-Vaai for third party