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Supreme Court of Samoa |
IN THE SUPREME COURT OF SAMOA
HELD AT APIA
BETWEEN:
SAMOA LAND CORPORATION
a duly incorporated company operating in Samoa.
First Plaintiff
AND:
THE ATTORNEY GENERAL
on behalf of the Land Board established under the provisions of the
Lands, Survey and Environment Act 1989
Second Plaintiff
AND:
SIVA AFI INVESTMENTS LTD
a duly incorporated company located at Sogi, Apia
Defendant
Counsel: D Kerslake and A Lesa for the plaintiffs
O Woodroffe for the defendant
Submissions: 8 July 2009
Judgment: 28 July 2009
JUDGMENT OF THE COURT
Introduction
1. The first plaintiff Samoa Land Corporation is described in the Statement of Claim as an incorporated company operating in Samoa. It owns lands at Sogi, Apia and elsewhere throughout Samoa.
2. The second plaintiff is a statutory board established and continued pursuant to the provisions of the Lands, Survey and Environment Act 1989.
3. Siva Afi Investments Limited, the defendant, is a private family company located at Sogi. Prior to 2006 it operated inter alia a bar and restaurant on leased lands at Sogi. It expanded its business into other areas and currently employs about thirty workers.
4. In February 2006 the first plaintiff and the defendant entered into a lease agreement to formalise the lease of two parcels of land at Sogi to the defendant for a term of twenty years to commence from the 1st February 2005.
5. Rental payments provided for in the third and fourth schedule deed of the lease are as follows:
| 1st April 2005 | $15,750 |
| 1st April 2006 | $40,500 |
| 1st April 2007 | $48,375 |
| Rent Review | January 2008 |
| Rent Review | January 2011 |
| Rent Review | January 2014 |
6. Termination of the lease by the Lessor of the lease is provided for in clause 11. It grants the lessor the right to terminate if part of the rents shall be unpaid for two months after becoming due and payable (whether formally demanded or not) or if the lessee remain in breach of any covenant, terms, conditions or stipulations for a period of two consecutive months.
7. A few months after the deed of lease was executed the first plaintiff verbally advised the defendant of the government’s plans to use the leased land. This was followed in writing by a letter of the 13th October 2006 from the first plaintiff to the defendant. The letter reads:
"This is to officially inform your company of government’s plans for the area where your company currently holds a leasehold from Samoa Land Corporation.
As verbally conveyed to you earlier, Cabinet has approved an exchange of land between Samoa Land Corporation and the Land Board, whereby approximately 1 1/2 acres of land where the Savalalo Flea Market is, will be transferred to Samoa Land Corporation, while approximately 2 ½ acres belonging to Samoa Land Corporation will be transferred to the Land Board. Samoa Land Corporation is required to transfer its portion of the land exchange free of any encumbrances hence, the need for our two parties to hold formal consultations as to a mutually beneficial (my emphasis) way forward.
Please contact the undersigned for an appropriate time for us to meet.
We look forward to fruitful consultation.
Arasi Tiotio
Manager Estates and Development
for: General Manager"
8. Later in 2006 a representative of the first plaintiff and the defendant met to discuss relocation of the defendant. Land at Vaitele was offered but was declined by the defendant. The first plaintiff then offered to:
(i) look for an alternative site in the town area; and
(ii) cease charging rent to the defendant to enable the defendant to save money to relocate.
9. In January 2008 a property at Matautu Apia with an old two storey building was offered to the defendant by letter dated 15th January 2008. But it was again declined. That site has since been leased to another bar and dining enterprise.
10. By letter dated 26th January 2008 to the first plaintiff the defendant not only gave its reasons for declining to relocate to the Matautu property, it also notified the first plaintiff that:
(a) the defendant has been consulting with the Prime Minister as to suitable sites for relocation;
(b) the defendant has identified three suitable sites for relocation; and
(c) the defendant will be forwarding written proposals to the first plaintiff and the government by April 2008.
The three sites were outside the jurisdiction of the first plaintiff but under the control of the second plaintiff hence the need for the defendant to direct its proposals to government.
11. In April 2008 the first plaintiff again offered to the defendant a spot previously occupied by a dine and dance outfit called the Lighthouse at Tauese, the night club hub of Apia. But this offer was again declined by letter dated 28th April 2008. The same letter also reminded the first plaintiff that the defendant’s written proposals for the three sites is almost completed.
12. In May 2008 the defendant submitted its proposal for the three sites. Copies of the proposals were given to the Prime Minister, Deputy Prime Minister, Minister for the first and second plaintiffs. Those proposals are not before the court.
13. By letter dated 29th July 2008 the Ministry of Natural Resources and Environment (MNRE) informed the defendants that:
(a) The land leased by the defendant has been transferred ownership ... to the Government of Samoa on 1st August 2007 pursuant to a Cabinet Directive.
(b) As a result, the said land has been vested under the Government and accordingly the lease by the defendant over the land is no longer valid.
(c) The defendants are to vacate the land within two months.
The letter was signed by the legal consultant for the Ministry of Natural Resources and Environment.
14. On the 5th August 2008 MNRE wrote to the defendant confirm a meeting on the 28th July 2008 in which the defendant’s proposals to the three sites were discussed and declined on the grounds they are reserve lands.
15. On the 22nd September 2008 the defendant responded to MNRE’s letter of the 29th July. By letter dated 29th September 2008 MNRE responded to the defendant’s letter demanding the defendant to vacate the land immediately and to take its lease issues to the first plaintiff.
16. By deed of transfer dated 19th November 2008 the first plaintiff transferred the Sogi land including the leased land to the second plaintiff. The transfer was not notified to the defendant.
17. On the 18th March 2009 the first plaintiff terminated the lease with the defendant. The letter of termination reads:
"Further to our letters of 15th January and 1st February 2008 this letter serves as termination of your lease of Parcels 631 and 632 at Sogi.
Termination is based on non payment of current arrears of $103,194.93.
As we had reaffirmed in our letter of 15 January, the government has proceeded with its developments and parcels 631 and 631 have now been transferred to the government (MNRE).
We are sorry that no mutual solution has been arrived at between your company and MNRE regarding an alternative site for your business. However since the said land is now under the jurisdiction of MNRE they may now proceed to any necessary legal action."
This letter was copied to the Chief Executive Officer of Ministry of Natural Resources and Environment who was also the Registrar of Lands.
18. The defendant by letter of the 25th March 2009 responded as follows:
"Since Samoa Land Corporation first advised us of Government’s desire to develop land at Sogi, including our leased property, we have indicated our preparedness to consider relocation to an appropriate site.
From meetings with your General Manager, your Minister, the Deputy Prime Minister and the Prime Minister since October 2006, it has been our understanding that government would relocate us.
At a meeting with Afoa on or about 18th December 2007, where we specifically discussed issues regarding our rent I enclose copies of 2 letters which were discussed at that meeting. Afoa asked us to hold our payments until she came back to us with adjustments to our rent. As of today she has not come back to us.
I was very surprised to receive your letter terminating our lease based on arrears instead of discussing with us the adjustments mentioned above.
We now wish to resolve the issue of arrears. Siva Afi will not walk away leaving rent arrears.
19. On the 31st March 2009 the deed of transfer dated 19th November 2008 (paragraph 16) was registered. Registration was facilitated by the letter of termination of the 18th March 2009. It would therefore be reasonable to assume that the letter of termination was calculated by the plaintiffs to terminate the lease and to register the deed of transfer.
20. On the 7th April the defendant met with the General Manager to resolve rent issue. Siva Afi also paid $10,000 towards rent. It appears the issue was not resolved at that meeting because by letter of the same date the defendant requested the first plaintiff to set its rent at the rate when the lease commenced.
21. By letter dated 22nd April 2009 the office of the Attorney General wrote to the defendant stating that the lease with the first plaintiff is now terminated and for the defendant to vacate within one month and the defendant to liase with the first plaintiff on compensation if any. Why the office of the Attorney General acted for and represented the first plaintiff, a registered company, has yet to be explained.
22. The defendant did not vacate. Correspondences continued to flow between the defendant and the office of the Attorney General. Solicitors for the defendant also joined in.
23. Meanwhile negotiations and dialogue continued and the Prime Minister on behalf of the government offered to the defendant one of the three sites desired by the defendant in its letter of the 26th January 2008 (paragraph 10 above). The government also offered assistance in relocation.
24. Negotiations were not fruitful and the offer was withdrawn by government. Reasons for the breakdown in negotiations is unclear from the incomplete documentary evidence before the court. The defendant did however forwarded to government a written quote of estimated cost of relocation of two point five million tala ($2.5 million) to three million tala ($3 million) from Fletcher Construction dated 15th May 2009. It also enclosed a valuation report of the Replacement Value of all Improvements installed by the defendant on the leased land totalling six hundred and sixty nine thousand tala ($669,000).
25. On the 28th May 2009 the Prime Minister met with the solicitor for defendant. By letter of the same date the solicitor for the defendant accepted the offer by the Prime Minister of the site offered to the defendant. The same letter also inquired as to the amount of financial assistance the government will give to the defendant to relocate.
26. By letter dated 12 June 2009 the Prime Minister wrote to the defendant emphasising that the government will withdraw the site allocated as well as other assistance for relocation if the defendant did not make a move to relocate.
27. By letter dated 17th June 2009 the solicitor for the defendant referred the Prime Minister to his letter of the 12th June and emphasised the willingness of the defendant to negotiate the terms and conditions of the lease for the site offered to the defendant.
28. By Statement of Claim and Ex parte Notice for Interim Injunction dated the 26th June 2009 the first and second plaintiffs commenced proceedings seeking orders inter alia to evict the defendant, to restrain the defendant its agents, servants and representatives from remaining or returning to the property, to recover unpaid rents and costs.
29. The Court ordered the Motion for Interim Injunction to be on Notice and for the Motion and Statement of Claim to be listed for mention on the 6th July 2009.
30. At civil mention list on the 6th July 2009 the defendant had filed and served a Motion for stay of proceedings and counsel also advised the court an application for interim injunction will also be filed. Proceedings were adjourned to the next day.
31. On the 7th July 2009 the defendant filed:
(a) Notice of opposition
(b) Statement of Defence and Counterclaim
(c) Statement of Claim
(d) Notice of Motion for Interim Injunction.
Proceedings were then adjourned for hearing the following day commencing at 8:30am.
32. To avoid confusion Siva Afi Investments Ltd is referred to as the defendant, Samoa Land Corporation as the first plaintiff, and the Attorney General on behalf of the Land Board as the second plaintiff.
Matters for Determination
33. There are three motions which will be determined by the Court in the following order:
(a) the motion by the defendant for an order of interim injunction against the plaintiffs
(b) the motion by the plaintiffs for an interim injunction against the defendant
(c) the motion by the defendant for an order to stay the proceedings.
Motion for Interim Injunction against the plaintiff
34. The defendant seeks orders to restrain the defendant its servants, agents from:
(a) unlawfully entering the defendant’s leased land;
(b) from constructing on the leased land or tampering with the leased land and
(c) from demolishing the Woodstock Building on an adjoining land which shares a common wall with the defendant’s building on the leased land.
35. From the Statement of Claim and affidavits filed in support of the motion for interim injunction the allegations are directed at the second plaintiffs whose agents and the activities they authorised to be done on the land are the subject of the complaints. The first plaintiff having relinquished all its interest in the land has not participated in the activities complained of. The motion for interim injunction against the first plaintiff must therefore fail.
36. The motion for interim injunction against the second plaintiff also fails for very obvious reasons. As correctly submitted by counsel for the plaintiffs the Court is prevented by section 12 (2) of the Government Proceedings Act 1974 to grant any injunction or make any order against an officer of the Government if the effect of granting an injunction or making the order would be to give any relief against the government which could not have been obtained in proceedings against the government.
37. Section 12 (1) of the Government Proceedings Act 1974 provides:
"12. Nature of relief – (1) In any civil proceedings under this Act by or against the Government or to which the Government is a party or third party the Court shall, subject to the provisions of this Act and any other Act, have power to make all such orders as it has power to make in proceedings between subjects, and otherwise to give such appropriate relief as the case may require:
PROVIDED THAT:
(a) Where in any proceedings against the Government any such relief is sought as might in proceedings between subjects be granted by way of injunction or specific performance, the Court shall not grant an injunction or make an order for specific performance, but may instead make an order declaratory of the rights of the parties; and
(b) In any proceedings against the Government for the recovery of land or other property, the Court shall not make an order for the recovery of the land or the delivery of the property, but may instead make an order declaring that any person is entitled as against the Government to the land or property or to the possession thereof.
38. The second plaintiff was constituted under the Land Ordinance 1959 and continued under the Lands Survey and Environment Act 1989 which created the Department of Lands Survey and Environment now known as the Ministry of Natural Resources and Environment (MNRE).
39. The duties of the second plaintiff pursuant to section 6 of Lands Survey and Environment Act 1989 is to administer, manage, develop, alienate, settle, protect, care, control and carry out all negotiations for the purchase of land by the government under the Act, and the performance and completion of all contracts of purchase entered into by the government. In the exercise of its powers and functions the second plaintiffs shall have regard to any representations that may be made by the Minister and shall give effect to any decision of the government in conveyed to it in writing by the Minister.
Motion by the plaintiffs for interim injunction
43. The sole purpose of the plaintiffs’ motion for an interim injunction is to remove the defendant from the leased land forthwith to facilitate the construction development which the second plaintiffs have commenced on adjoining lands and intended to include the leased land.
44. Efforts by the plaintiffs to remove the defendant from the leased land commenced in the year 2006 a few months after the deed of lease were signed (see 7 above) when the government formulated plans to use the leased land. The first plaintiff as lessor negotiated with the defendant. It offered to the defendant other lands to relocate to. It also told the defendant that rental payments be withheld to assist the defendant with relocation costs.
45. Rental payments were withheld and the first plaintiff offered several properties outside and within the township for relocation of the defendant but they were declined by the defendant as unsuitable. By withholding rental payments the defendant has agreed to relocate. When the first plaintiff told the defendant to stop rental payment to assist with relocation costs, the first plaintiff conceded the defendant was entitled to costs for relocation.
11. IF any part of the rents hereby reserved shall be unpaid for two (2) months after becoming due and payable (whether formally demanded or not) or if the Lessee shall at any time during the term hereby granted (or of an extended term) remain in breach of any covenant terms stipulation or conditions on his part contained or implied for a period or two (2) consecutive months after being notified of such breach then either of the said cases it shall be lawful for the Lessor at any of them in the name of the whole and thereupon this Lease shall absolute terminate not withstanding clause 2 hereof and without prejudice to the right of the Lessor to take legal action in respect of any such breach.
47. When the defendant in January 2008 identified three properties suitable for relocation, MNRE for the second plaintiff virtually took over the dialogue initiated by the first plaintiff. What was initially a dialogue between the first plaintiff and the defendant transformed into threats and demands when MNRE took over. On the 29th July 2008 the legal consultant for MNRE wrote to the defendant (see 13 above) advising and demanding the defendant that:
(a) the leased land has been transferred ownership to the government;
(b) the lease by the defendant is no longer valid; and
(c) the defendant are to vacate within two months;
The letter was as counsel for the plaintiffs agreed not only blatantly misleading factually but if was also erroneous in law. At that point of time the land was still registered under the first plaintiff and the deed of transfer has not yet been executed. A valid lease still existed.
48. Under the false assumption that the defendant was legally obliged to vacate the leased land, the MNRE officers were reluctant to co-operate with the defendant. It continued to demand the defendant to vacate the land and all issues relating to the lease should be directed by the defendant to the first plaintiff.
49. Rather than dealing directly with the officers of MNRE the defendant approached the Prime Minister who not only offered one of the sites originally desired by the defendant but he also confirmed assistance in relocation.
50. In any event the first plaintiff was brought back into the arena for very obvious reasons. It terminated the lease by letter of the 18th March 2009 on the grounds of non payment of rent arrears of $103,194.93. This letter was copied to the Chief Executive Officer of MNRE who is also the Registrar of Lands. This letter of termination facilitated the registration of the deed of transfer. The rent which the first plaintiff agreed to forego to cover the defendant’s costs in relocation have without warning to the defendant became rents owing. At the date of the termination letter, relocation negotiations have not ended. Unpaid rent was the only option opened to the first plaintiff to terminate the lease promptly in the absence of a mutual agreement. A lease like any other contract may be determined by its own contractual procedure or by repudiation. Here the plaintiff chose contractual procedure which was not available in 2006.
51. Counsel for the plaintiffs submit that there is a serious question to be tried and the balance of convenience favours the granting of an interim injunction. The serious question submitted by the plaintiffs is continued occupation by the defendant of the leased property after the lease has been terminated on the 18th March 2009 for non payment of rent arrears. For the defendant it is contended that the lease was not validly terminated so that the lease still exists.
53. The Statement of Claim by the plaintiffs after pleading the government’s plans and the ensuing negotiations between the plaintiffs and the defendant to relocate the defendant went on to plead at paragraphs 10 and 11.
10. That discussion between the plaintiffs and the defendant did not prove successful and the defendant has refused to move from the property. Therefore any offers of assistance to the defendant by the first plaintiff has lapsed and or withdrawn.
11. That on 18 March 2009 the first plaintiff advised the defendant that the lease had been terminated due to non payment of rent arrears. The first plaintiff through its solicitor notified the defendant on 22 April 2009 of the termination of the lease due to rent payments in arrears and requested the defendant to vacate the property within one month from the date of receipt of the letter that being the 27th May 2009.
54. Paragraph 10 of the Statement of Claim cannot be accepted as totally correct based on the documentary evidence before the court. The defendant did agree at the request of the first plaintiff to relocate. What was in issue was the relocation site and the costs. By foregoing rental payments the first plaintiff agreed to contribute to costs of relocation. Negotiations appeared to stall when MNRE for the second plaintiffs came in.
55. Without warning the defendant was virtually ambushed with a termination notice based on unpaid rents which were waived as part and parcel of the negotiations. At the time of issuing the termination notice the second plaintiff was under pressure to provide vacant land to the contractors who have moved on to the adjoining land to commence construction. In response to the termination notice the defendant wrote to the first plaintiff:
"We now wish to resolve the issue of arrears. Siva Afi will not walk away leaving rent arrears."
56. The total arrears alleged to be owing in the Statement of Claim and the termination notice is disputed by the defendant. A statement showing the balance owing was never tendered despite the first plaintiff accepting payment of $10,000 on the 7th April 2009 after it received a letter dated 5th April from the first plaintiff. Paragraphs 7 to 9 of that letter reads:
The letter went on to say:
"... we are still willing to waive rental for the last 32 months only to compensate relocation of your assets to a safe place for now, while the issue of a new location is being sorted out between your company and rightful landlords of your preferred sites.
57. The Court is of the view that the letter of the 5th April 2009 reaffirms its earlier notion that the letter of 18th March 2009 terminating the lease was issued at the time when the first plaintiff was not a party to the ongoing negotiations and the pressure on both plaintiffs exerted by the urgency to provide vacant land. Allegations in paragraph 10 of the Statement of Claim which states:
are accordingly not true. The defendant has never conveyed to the plaintiffs that he will not move out. The impression conveyed by the statement of claim is that the defendant was legally obligated to vacate the leased land despite the 20 years lease agreement simply on the grounds that the government wanted the leased land for development.
59. It does appear from the documentary evidence that there is in existence a mutual agreement between the parties to terminate the lease. The offer by the first plaintiff to relocate the defendant and to forego rental payments was in essence accepted by the defendant. A serious question is perhaps posed. What remains to be settled between the parties is essentially the cost of relocation and the allocation of those costs.
60. But the court however cannot on its own amend the pleadings of the parties. The plaintiffs have chosen to focus on the letter of termination as the basis of its cause of action in these proceedings.
Motion for Stay of Proceedings
61. The defendant seeks an order pursuant to clause 13 of the lease and section 7 of the Arbitration Act 1976 to stay proceedings and to refer the dispute over the issue of rent to be determined by arbitration. It is argued by the defendant that there is a real and genuine dispute as to rent payable by the defendant for the reasons:
(a) In 2006, the defendant was told by the first plaintiff that they would cease charging rent.
(b) In 2007 the defendant approached the first defendant saying they would commence payment rent but required an adjusted rent amount for maintaining adjoining vacant lands of the plaintiff and for construction of access roads to the leased land; and
(c) The first plaintiff agreed to adjust the rent amount but failed to confirm an adjusted figure.
62. The court accepts from the documentary evidence that the defendant was told by the first plaintiff that they would cease charging rent. If no rent was charged then no rent was owing. There is nothing for the arbitrator to determine as the deed of lease explicitly sets out the amount of yearly rents payable in advance.
63. Whether the plaintiff agreed to adjust the rents in 2007 for the maintenance and construction of access roads and other expenses alleged by the defendant is an issue which can only be determined at a substantive hearing. There is nothing in the deed of lease which authorise adjustment of rents to compensate the defendant for the work it claimed to have done.
64. In essence there is no real or genuine dispute as to the amount of rent owing. The motion for stay of proceedings is accordingly dismissed.
Conclusions
1. The Notice of Motion by the defendant for an order of interim injunction is dismissed.
2. The Notice of Motion by the first and second plaintiffs for an order of interim injunction is dismissed.
3. The Notice of Motion by the defendant for a stay of proceedings is dismissed.
JUSTICE VAAI
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