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McCarthy v Samoa National Provident Fund [2020] WSSC 41 (24 July 2020)

SUPREME COURT OF SAMOA
McCarthy v SNPF [2020] WSSC 41


Case name:
McCarthy v SNPF


Citation:


Decision date:
24 July 2020


Parties:
THERESA MCCARTHY for herself and in respect of BLUE PACIFIC HOTEL LIMITED of Auckland New Zealand v SAMOA NATIONAL PROVIDENT FUND established pursuant to the National Provident Fund Act 1972.


Judgment date(s):
24 July 2020


File number(s):



Jurisdiction:
Civil


Place of delivery:
Supreme Court of Samoa, Mulinuu


Judge(s):
JUSTICE LEIATAUALESA DARYL MICHAEL CLARKE


On appeal from:


Order:
- For the foregoing reasons, the Plaintiff’s Amended Statement of Claim is dismissed. If parties cannot agree as to costs, the Defendant may file and serve Memorandum as to Costs within 14 days. The Plaintiff may file a response as to Costs within a further 14 days thereafter.
Representation:
O Woodroffe for the Plaintiff
S Leung Wai and R Masinalupe for the Defendant


Catchwords:
negligent – unjust enrichment


Words and phrases:
Statement of claim is dismissed; fail to repay loan;


Legislation cited:
Declaratory Judgments Act 1988,
Land Titles Registration Act 2008,
Limitation Act 1975, s 26(c)
Limitation Act 1950, s 26(c), s 28(c)
Limitations Act 1939, Article 9 of the Constitution
Survey Ordinance 1961 s. 13(1)

Court (Civil Procedure) Rules 1980 (rule 17)
Cases cited:
Sapolu CJ in Su’a v Attorney General [2013] WSSC 1;
(Tokuma v Samoa Land Corporation [2018] WSSC 81 (8 June 2018);
Stanley v Vito [2010] WSCA 2 (7 May 2010));
James v McMahon Butterworth Thompson [2014] NZAR 295;
Roose v Duthie [2015] NZHC 2035 at para. 35);
Burton v Thom [2008] 1 NZLR 293;
D W Moore & Co Ltd v Ferrier Ferrier [1988] 1 WLR 267, [1988] 1 All ER 400 (CA));
Rosenberg v AMP Services (NZ) Limited [2018] NZHC 1929; [2018] NZAR 1459;
Phillips-Higgins v Harper [1954] 1 All ER 116;
New Zealand Court of Appeal in Amaltal Corp Ltd v Maruha Corp [2006] NZCA 112; [2007] 1 NZLR 608 explained at [151 – [153];
Nelson J on the 18th December 2014. In Fiso v Reid [2002] WSCA 2;
Craig v Stringer [2020] NZCA 260, Gilbert J;
Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37, the New Zealand Court of Appeal by Tipping J;
New Zealand Court of Appeal in Vanvi v Dawson [1980] 1 NZLR 513 at p.516, Cooke J;
Downside Nominees Ltd v First City Corporation Ltd [1993] AC 295;
Lord Templeman Hinde, McMorland & Sim Land Law in New Zealand (online looseleaf edn, LexisNexis) at [15.134]);
Lord Templeman in Downsview Nominees Ltd v First City Corporation Ltd (supra) at 524.


Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU


BETWEEN


THERESA MCCARTHY for herself and in respect of BLUE PACIFIC HOTEL LIMITED of Auckland New Zealand
Plaintiff


A N D


SAMOA NATIONAL PROVIDENT FUND established pursuant to the National Provident Fund Act 1972
Defendant


A N D


Counsel:
O Woodroffe for Plaintiff
S Leung Wai and R Masinalupe for the Defendant


Hearing Dates: 28, 29 January & 21 February 2020
Decision Date: 24 July 2020


JUDGMENT

INTRODUCTION:

General Overview and Comments on these Proceedings:

  1. In 2001, the Defendant lent to the Plaintiff $1,139.800.00. To secure the loan, the Defendant took a mortgage over parcel 426 plan 5908, parcel 433 plan 5920, parcels 498 and 499 plan 6146 and parcel 575 plan 6523 (the “security property”) located at Fugalei belonging to the Plaintiff. The Plaintiff failed to repay any of the loan and as a result, the Defendant exercised its mortgagee powers and eventually acquired the security property.
  2. The purposes for which the loan was granted included “to complete thirty (30) rooms hotel at Fugalei.” The hotel consisted of an “old” part and a “new” part. The “new hotel” which consisted of twenty (20) rooms in a two story building was not constructed on the “security property” but on adjacent parcel 387 Plan 5823 (“Toamalama Street”).
  3. Following the mortgagee sale process and the acquisition of the “security property” by the Defendant on or about 16 January 2008 through that process, the Plaintiff and the Defendant entered into a lease agreement for the Plaintiff to lease from the Defendant parcel 426 plan 5908 (“parcel 426”) in or about November 2010, which the parties appear to have both understood included the “new hotel”. The “new hotel” however was not on parcel 426 but on parcel 387 Plan 5823 (“parcel 387”) which was not part of the “security property” secured by the Defendant’s mortgage and acquired by the Defendant on or about 16 January 2008.
  4. As had occurred with the loan, the Plaintiff again did not meet her payments in accordance with the lease agreement. The Plaintiff and the Defendant became embroiled in a further dispute. The Defendant by Statement of Claim dated 11 September 2012 then initiated legal proceedings against the Plaintiff for an order for possession of the ‘premises’ under the lease and damages. Judgment by Consent was entered on the 27th May 2013 in the sum of $205,496.87 in favor of the Defendant against the Plaintiff (attachment “G” to annexure 33, affidavit of Ms Lafaialii). The Plaintiff in these proceedings seeks recovery of that payment. The Plaintiff by those Consent Orders was required to vacate the premises by 1st September 2013.
  5. In breach of the Consent Orders, the Plaintiff did not vacate the premises. Instead, by Notice of Application Seeking Enforcement of Fundamental Rights dated 5th March 2014, the Plaintiff on grounds including purported ‘fraud and or conspiracy’ sought orders for the “enforcement of her fundamental right to ownership of Parcel 387 / Lot 17 Plan 10542 and to a fair trial guaranteed by Article 9 of the Constitution in respect of the Consent Order dated 27th May 2013. On the 18th December 2014, that proceeding was struck out by His Honour Nelson J. That judgment was not appealed by the Plaintiff.
  6. The Plaintiff’s claim in these proceedings against the Defendant pleads:
  7. The Plaintiff’s claim and the orders sought can broadly be described as directed to and flowing from (i) the acquisition of the security property by the Defendant through the mortgagee sale process; (ii) the alleged unlawful acquisition of parcel 387 / lot 17 and lot 14 Plan 10542 by the Defendant allegedly through that mortgagee sale process; and (iii) the recovery of lease payments and associated costs paid to the Defendant pursuant to the Consent Orders. In this context, the Plaintiff seeks:
  8. For the reasons that follow, the Plaintiff has failed to prove her claim in negligence and unjust enrichment. In terms of the claims directed at the acquisition of the “security property” and the lease payments to the Defendant and the remedies sought by the Plaintiff against the Defendant, they are without merit.
  9. Based on the evidence heard in these proceedings, there is however in my respectful view an issue between the Plaintiff, the Defendant and government in terms of Toamalama Street (parcel 387 / lot 17) and how these parcels of land (subsequently sub-divided and then amalgamated in Plans 3086, 10542 and 11264) were dealt with together with Tovaetoto Street (parcel 454) adjoining Toamalama Street which later became in part only, lot 14 Plan 10542 (“lot 14”). For the ease of reference for this judgment, I will refer to these parcels of lands (despite their later sub-divisions and amalgamations) as parcel 387 / lot 17 and Lot 14.
  10. In my respectful view, the ‘causes of action’ pleaded by the Plaintiff in relation to those issues in terms of parcel 387 / lot 17 and lot 14 in these proceedings have been misconceived and has proceeded on the fundamentally flawed footing that the Defendant acquired parcel 387 / lot 17 and Lot 14 through the mortgagee sale process directly from the Plaintiff.
  11. The evidence is that Toamalama Street (parcel 387 / lot 17) and Tovaetoto Street (Lot 14) were acquired by government when these were purportedly made “public roads”. After they were purportedly made ‘public roads’, they were later transferred to the Defendant (see evidence of Safuta Toelau and Filisita Heather). That government purportedly acquired parcel 387 is evidenced for example by the Computer Folio Certificates dated 1st April 2014 for Lots 17, 18, 19 and 20 Plan 10542 (formerly parcel 387) describing these Lots as ‘government land” (see: affidavit of Filisita Heather, exhibit D5 annexure 10).
  12. Bearing in mind then that these lands were described as ‘Government’ Land’ in the Computer Folio Certificates, the evidence heard before this Court is also that:
  13. While there are real questions around the legality of the purported designation of parcel 387 / lot 17 and lot 14 as “public roads” and thereby government land and their later purported “transfer” to the Defendant in or about 2014, these proceedings against the Defendant for negligence and unjust enrichment are misconceived in terms of the causes of action pleaded as well as the factual pleadings pleaded. The evidence is that the Defendant did not acquire parcel 387 / lot 17 and lot 14 through the mortgagee sale process but that parcel 387 / lot 17 and lot 14 was transferred to the Defendant by the government after they had been purportedly dedicated as ‘public roads’.
  14. To address this issue, the Plaintiff may have more appropriately considered proceedings brought on the basis of:

(a) a Motion for Declaratory Orders pursuant to the Declaratory Judgments Act 1988 seeking declarations as to the validity and legality of:

(i) the purported dedication of parcel 387 and 454 as a ‘public road’ given that there was apparently no Instrument of Dedication as required by section 13(1) of the Survey Ordinance 1961 (repealed); and

(ii) the purported transfer of parcel 387 and Lot 14 to the Defendant;

and/or

(b) the making of an application for the Correction of the Land Register in accordance with the provisions of the Land Titles Registration Act 2008 or for compensation as provided for under section 77 of that same Act.

THE PLAINTIFF’S CLAIM:

  1. These proceedings were first brought against the Defendant by Statement of Claim dated 8th August 2017 which cited the Defendant as First Defendant and Toleafoa Toailoa as Second Defendant. The original Statement of Claim pleaded only one cause of action, unjust enrichment.
  2. Proceedings against Mr Toailoa were discontinued on or about the 16th May 2018.
  3. On the 12th November 2019, just over two months before the hearing, the Plaintiff filed an Amended Statement of Claim. No application for leave to amend the Statement of Claim was made by counsel for the Plaintiff pursuant to rule 17 of the Supreme Court (Civil Procedure) Rules 1980, as should have been made. The Amended Statement of Claim now advanced two causes of action against the Defendant being:
  4. The Defendant did not oppose the Amended Statement of Claim and filed an Amended Statement of Defence. At the commencement of the hearing, the Amended Statement of Claim was raised with both counsel and counsel for the Defendant advised that an Amended Statement of Defence had been filed. No issue was taken and the hearing proceeded on the basis of the Plaintiff’s claim as pleaded in the Amended Statement of Claim. In the Defendant’s submissions however (para. 2.7), the Defendant through counsel now submits that no leave had been granted to amend the Statement of Claim.
  5. If the Defendant intended to oppose the Amended Statement of Claim, it should have done so expressly and at the outset, whether by filing a Notice of Opposition to Leave to Amend the Statement of Claim or at the start of the hearing. It is inappropriate through counsel to do so now in this way, after filing an Amended Statement of Defence and raising no objection at the start of the hearing or earlier. The Defendant filed an Amended Statement of Defence and if leave had not been formally granted at the beginning of the hearing, I do so now. There is no prejudice to the Defendant and the Defendant conducted its defence on the basis of its Amended Statement of Defence.

THE EVIDENCE/BACKGROUND:

  1. Much of the evidence is not in dispute.

The Loan and Security Arrangements.

  1. The Plaintiff is and was the registered owner of various parcels of land at Fugalei. According to the Plaintiff, in the early 1990s, the Blue Pacific Hotel was built on certain of her lands at Fugalei. She states in her affidavit exhibit P2 that the original Blue Pacific Hotel was built on Lot 426. This land is depicted in annexure ‘E’ to the affidavit of Tuala Piki Tuala (exhibit P1).
  2. On 12 June 2001, the Plaintiff lodged a loan application to the Defendant (annexure 2, Affidavit of Sine Lafaialii). The purpose of the loan stated in the loan application was:

“Loan amount sought is to complete the established Hotel Structure at Fugalei – resulting in the provision of an additional 20 accommodation units. The project currently has 10 rooms available.”

  1. In her affidavit exhibit P2 paragraph 3, the Plaintiff states that the ‘New Blue Pacific Hotel” was built on parcel 387 / lot 17.
  2. The security offered by the Plaintiff for the loan was described as ‘the project site’, which the Plaintiff stated in the loan application, “- the details to come.” The Plaintiff’s loan application did not specify the land parcels proposed security as security for the loan.
  3. On the 13th August 2001, a Letter of Offer was made to the Plaintiff by the Defendant for a loan of $775,000.00 to (a) refinance the Plaintiff’s debts with Westpac Bank and (b) complete thirty rooms hotel at Fugalei. Repayments were to be made at the rate of $9,022.00 per month, first payment three months after full disbursement of the loan. The loan was to be secured over five (5) parcels of land (“the security property”) being:
  4. As I have touched on earlier, there are also two additional parcels relevant to these proceedings and which did not form part of the security property. These parcels are parcel 387 / lot 17 (Toamalama Street) and parcel 454 Plan 5910 (Tavaetoto Street)(“parcel 454”) which were registered to the Plaintiff. There is no dispute between Mr Piki Tuala and Mr Safuta Toelau that parcel 387 refers to Toamalama Street (see exhibit P1 para. 4 and D4 para. 12).
  5. Toamalama Street (parcel 387) was re-defined in Scheme Plan 3086 in 2010. In Scheme Plan 3086, Toamalama Street was sub-divided into Lots 17, 18, 19 and 20 Plan 3086 and closed as a road (see exhibit D4 para. 19). Subsequently, a further Plan 10542 was approved in September 2013 which created Lot 14 Plan 10542 which is the eastern end of Tovaetoto Street. Lot 14 being the eastern end of Tovaetoto Street had part of the New Hotel encroaching on to it from parcel 387 / lot 17. A further Plan for Amalgamation 11264 was then approved in May 2014 amalgamating all the various parcels of land (annexure 9, exhibit D4) to reflect the closure of parcel 387 (Toamalama Street) as a road as well as that of the eastern end of Tavaetoto Street (lot 14).
  6. The purported designation of parcel 387 and 454 as a ‘public road’ is relevant in these proceedings. It is on the basis that “Toamalama Street (parcel 387) and Tavaetoto Street (parcel 454) were “public roads” that they became ‘Government Land” and as “Government Land” purportedly owned by government, government transferred those to the Defendant (as later delineated as Lots 14 and 17). I will return to this later.
  7. The financial arrangements between the Plaintiff and the Defendant involved two loans to the Defendant under loan agreements dated 21st August 2001 and 4th September 2001. Following the further Loan Agreement dated 4th September 2001 that was entered between the Plaintiff and Defendant, the “total loan” to the Plaintiff was now $1,139,800.00 (“the loan”). Repayments at the rate of $13,679.52 per month were to be made, three months after full disbursement. A Deed of Mortgage dated 21st August 2001 was also executed between the Plaintiff and the Defendant on the 21st August 2001(annexure 5, affidavit of Sine Lafaialii) securing the loan over the security property. The mortgage was lodged with the Land Registry on the 4th September 2001.

Plaintiff’s Default and Mortgagee Action.

  1. It is not in dispute that the Plaintiff defaulted in her loan repayments since the inception of the loan. The annexures to the affidavit of Ms Lafaialii attach various letters to the Plaintiff raising concerns relating to the loan repayment.
  2. In 2007, when the Plaintiff had not sorted out her repayments with the Defendant, the Defendant resumed mortgagee sale proceedings. In an effort to address her arrears, the Plaintiff offered to the Defendant “the new highway at Fugalei which in her letter dated 8 May 2007 to the Defendant states:

“This is the new highway at Fugalei which the Governments decision whether or when to develop, I do not know, the ownership is still under my name...”

  1. The valuation for the “highway” prepared by Central Property Valuers is said to have been $1,010,000.00.
  2. The offer was rejected and the Defendant referred the matter to ToaLaw ‘for legal action.’ T & T Real Estates prepared a valuation for the security property on behalf of the Defendant dated 20 November 2007. The valuation of the security property was valued at $3,340,000.00 as at 19 November 2007. Based on what appears to be the Ex Parte Application for Public Auction (unsigned) (Affidavit of Lafaialii, exhibit D2 annexure 28), the redemption price for the property was $2,902,864.00.
  3. The mortgaged property proceeded to mortgagee sale by Registrar of the Court on the 24th December 2007. There were no bidders at the Public Auction and the mortgaged property passed in.
  4. Ms Lafaialii for the Defendant explained in her affidavit (exhibit P2 at para. 36):

“There were no bidders at the public auction and given that the reserve price was over a million tala, it was very unlikely that there would be any buyers for the mortgaged lands. The interest on the loan of the Plaintiff was still accruing and the amount of the loan increasing substantially. The SNPF therefore had to consider carefully whether to purchase as the mortgagee.”

  1. The Defendant decided to purchase the mortgaged property. According to Ms Lafaialii, the mortgaged property was bought for $2,902,864.00 as shown in the “Memorandum of Contract” marked annexure 30 to her affidavit on the 16th January 2008. The “Memorandum of Contract” is however unsigned and undated.
  2. No copy of a Transfer Form, Deed of Conveyance or such other registrable instrument was tendered into evidence to determine the date of transfer of the security property to the Defendant. An excerpt from the Land Register was also not provided to assist in identifying the date on which the transfer of ownership was purportedly effected from the Plaintiff to the Defendant under the mortgagee powers of sale.
  3. For his role as solicitor acting for the Defendant in the mortgagee sale, Mr Toailoa charged the Defendant $445,957.35. These fees were passed on by the Defendant to the Plaintiff.
  4. I now return to the lease agreement between the Plaintiff and the Defendant and parcel 387 lot 17 (Toamalama Street) and parcel 454 (Tavaetoto Street).

The Lease of Lot 426 Plan 5908 by Plaintiff, Default and Legal Proceedings.

  1. In or about November 2010, the Plaintiff leased parcel 426 from the Defendant. Parcel 426 was part of the security property that the Defendant had acquired under the mortgagee sale. A copy of the lease was not tendered into evidence in these proceedings but according to Ms Lafaialii, the lease term was 32 months at a monthly rental of $5,750.00 per month inclusive of VAGST (exhibit D2 para. 43).
  2. The lease fell into arrears and the Defendant then terminated the lease in June 2011 and was given 4 months to vacate the ‘leased premises’ (exhibit D2 para. 44). In 2012, the Defendant initiated legal proceedings to evict the Plaintiff and to recover the lease arrears (affidavit of Ms Lafaialii, exhibit D2 attachment “F” to annexure 33). Judgment was then later entered by consent on the 27th May 2013 in the sum of $205,496.87 in favor of the Defendant against the Plaintiff (attachment “G” to annexure 33, affidavit of Ms Lafaialii).
  3. According to Ms Lafaialii, the Plaintiff however did not vacate the land and her then counsel initiated legal proceedings against the Defendant, the Ministry of Natural Resources and Environment (“MNRE”) and Ruth and Khosrow Moghbelpour by way of Notice of Application Seeking Enforcement of Fundamental Rights (see: affidavit of Ms Lafaialii, exhibit D2 annexure 32). Those proceedings sought the “enforcement of her fundamental right to ownership of parcel 387 Plan 5823 (Lot 17 Plan 10542) and her right to a fair trial under Part 9 of the Constitution.” The grounds pleaded were that, amongst others:
  4. In his judgment of the 18th December 2014 (supra), Nelson J stated:

“The applicant places much emphasis on the argument that the access road at the heart of this dispute and upon which part of the Hotel is built viz. Toamalama Street was not ever or was improperly dedicated as a public road. As such she remains the owner thereof and attempts to whittle away or remove her title infringes her Constitutional right to ownership of the land. In this regard she must be referring to article 14 regarding compulsory acquisition of land as no other fundamental rights provision of the Constitution would appear applicable. Quite how this argument assists her is not clear as she lost her lands at mortgagee sale to the NPF when she defaulted in payment of her loan and the NPF foreclosed.

Further, as pointed out by the respondents this overlooks the fact that the original Scheme Plan prepared and submitted by the applicant for subdivision of her lands made provision for Toamalama Street. Following normal procedure this was designated a public road on subsequent survey plans. The argument being she cannot now complain about a state of affairs which she initiated.”

New Hotel On Unsecured Land - Toamalama Street and Tavaetoto Street.

  1. In that earlier proceeding before Nelson J, it was pleaded by the Plaintiff in her pleadings that in fact the hotel building was not on any of the security property mortgaged to the Defendant but on a separate parcel of land not part of the security property. In the Valuation Report of November 2007 prepared by T & T Real Estate for the mortgagee sale of the Plaintiff’s property, the Valuation Report describes the improvements to lot 426 as follows:

“Set to road level and slightly set back from the frontage of parcel 426 is a two storied modern designed european building used for hotel, an oval shaped office and a dining hall / kitchen area with storage / laundry to the rear...”

  1. The Valuation Report goes on to describe the floor area of the hotel as 899.32 square meters. The Valuer also then refers to other improvements on parcel 426 as including an Office / Reception (87.49 square meters) and Dining / Kitchen (439.92 square meters).
  2. In his affidavit about 7 years later and in his evidence, Piki Tuala, a qualified and highly experienced surveyor with over 40 years’ experience explained that he had reviewed the security property and the location of the Blue Pacific Hotel. He stated in his affidavit and evidence:

“7. ...For the record, Hotel Pacific Blue is not located and or situated on Parcel 426 Plan 5908.

8. INSTEAD, Blue Pacific Hotel encroaches slightly unto Parcel 426 southwards, as well as unto Parcel 454 Plan 5910 northwards starting from a small inroad into Lot 15. I have measured these encroachments southwards as 33.9m and eastward 5.9m. ..Blue Pacific Hotels sits admirably on Parcel 387 and Parcel 454. And neither of these Parcel 387 and Parcel 454 were securities for the loan...”

  1. Attached as Annexure “E” to Piki Tuala’s affidavit is a sketch plan detailing the results of his survey. The attachment shows ‘the new hotel” largely located on lot 17 (formerly parcel 387 / Toamalama Street) with minor encroachments onto parcel lot 25 (formerly Parcel 426) and lot 14 (formerly parcel 454 / Tavaetoto Street). A similar “Plan Showing Encroachment” is attached as annexure 6 to the affidavit of Safuta Toelau (exhibit D4) which also shows the “new hotel” primarily on Toamalama Street with slight encroachments on to parcel 426 and Tovaetoto Street (later, parcel 14).
  2. In his affidavit and evidence, Piki Tuala also confirmed that Toamalama Street (parcel 387) and Tavaetoto Street (parcel 454) are not “legal”. He explained that “[t]his is because, for these to be ‘legal’ streets, Parcels 387 and 454 should, by instrument of dedication, be dedicated as roads as required by section 13 of the Survey Ordinance 1961. When a road is dedicated as a public road, Mr Tuala also stated that the dedication is published in the Gazette and after publication, the surveyor places a number in the Plan showing the dates of the gazette and the gazette pages. He confirmed that no such notation is on any of the plans (NOE, 28 January at p.34). In his evidence, he also said that while Toamalama Street and Tavaetoto Street are shown on plan 5910 as both a “Street”, they were unformed roads (NOE, 28 January 2020 at p.28).
  3. In his evidence, Safuta Toelau who is a government surveyor ostensibly did not dispute the evidence by Piki Tuala. In his evidence, he confirmed that the practice for the dedication of a road as a ‘public road’ requires an Instrument of Dedication. His evidence on questioning by the Court was as follows (NOE at pp 22 – 23):

“HH you are familiar as a surveyor in the Ministry of Natural Resources and Environment, of the s.14 of SO. Now, this is not the first time and this is not the only time that a scheme plan and a survey plan is prepared? Not just this matter but in other matters when there is a scheme plan so that land can be subdivided; in those other cases where roads are provided for in other scheme plans and survey plans, has it been the practise of the Ministry of the Land Registry to actually prepared or have signed off the instrument of dedication?

Wit ona e pei o le mataupu muamua lea ua tulai mai, o le practise lea a le Matagaluega e tatau ona tapā ia le

HH le instrument of dedication?

Wit yeah

HH was there a reason why it was not prepared in this case?

Wit masalo ua lape le auaunaga a le Matagaluega ile vaega lea

HH my understanding of the s.13 of the Survey Ordinance, do you have a copy?

...

  1. so that the first sentence: “every proposed road and every piece of land shown on a scheme plan as road which is not already an existing public road shall be deciated by instrument in writing” o e vaai atu ile faaupuga lena?

Wit o lea lava

  1. so that says to me: even if it is on the scheme plan as a road, but it is not already a public road then there has to be an instrument of dedication to make it a road, doesn’t it, a public road?

Wit o lea lava

  1. so generally in order to make it legally make it a public road, it is that instrument of dedication that gives effect to that, is it not?

Wit o lea lava

HH and it is not the fact that it is written on the plan?

Wit o lea lava.”

  1. Safuta Toelau’s evidence was that government had proceeded on the belief that Toamalama Street and Tavaetoto Street were roads based on the surveys (NOE, p.23). He stated:

“HH you proceeded on the basis it was a road?

Wit o le tulaga lena na iai ona o lae ua iai le talitonuga ua le faia le instrument ua iai le talitonuga o le public road luga o le faafanua.”

  1. In explaining how Toamalama Street and Tavaetoto Street were then transferred from the government to the Defendant, Mr Toelau further explained (NOE, p. 23):

“Wit e pei o le faafanua lena na toe faatino mulimuli ina ua mae’a ona fua le auala fou lea ma le tulaga pei ona iai ua aveese atu ai ma le vaega lena 17 lea la e pei ua alu uma ai ile NPF ia vaega ia

  1. but usually to transfer of legal interest in land you don’t transfer it by sketch plan

Wit sei toe saunoa mai lava faamolemole

  1. registrar translate. Usually to convey a legal interest in land it is not done by a sketch plan; you need either a legal transfer and a transfer form but the transfer form that MNRE has or it was a status transmission or a similar type of document, was there such a document that effected legal transfer from the government to NPF?

Wit leai

  1. so are you saying in your evidence that the transfer to NPF was effected by this plan 11264?

Wit o lea lava.”

Marked Streets Blocked by Hotel Building.

  1. As a result of the “New Hotel Building” being built on “Toamalama Street” blocking access to the rear land parcels, an alternative road access to the rear parcels was negotiated. In her affidavit, Ms Filisita Heather explained at para. 15:

“In about October 2007, the NPF and Mrs Ruth and Mr Khosrow Moghbelpour arranged for and obtained a new subdivision of their lands to redefine the boundaries of various parcels belonging to both parties so a new street for public access can be created because Toamalama Street can no longer be used. In this regard, the NPF and Moghbelpours agreed to give up portions of their lands to accommodate for the new road. This scheme plan was submitted by the NPF and the Moghbelpours as landowners was finally approved as Scheme Plan 3086 in 2010. Under this new sub-division, Toamalama Street was further subdivided and became Lots 17, 18, 19 and 20 Plan 3086 (Toamalama Street) delineated as road to be closed...

16...Pursuant to the Survey Act, the Moghbelpours resurveyed the new sub-division and prepared a new survey which incorporated the closing of Toamalama Street to give way to the new road which compromises of lands belonging to the NPF, Moghbelpours and the Ministry. As settlement the parties agreed to give up land comprising Toamalama Street to the NPF And Moghbelpours in exchange for their respective lands taken for the new access road which had been agreed to and set aside for the new road/street. This new survey plan reflects the agreement between all the parties and was approved as Plan 10542 on 19 September 2013... Furthermore, that Toamalama Street and part of Tavaetoto Street (lot 14) will be closed as a public road and given to the NPF and Moghbelpours in exchange for their lands used to create the new road...””

  1. When Ms Heather was examined on how the transfer of the lands were effected, her evidence was that (NOE, 30.01.2020 at p.27):

“L Wai e faafefea na faatino fanua ia, e fai ni transfer forms?

Wit o le faatinoga o le vaega lea, na mulimulitai le faatinoga ile toe fetuunaiga o fanua ia mai ile taimi na faatino ai le auala lea i luga o le 1640 lea na faasolo mai ai faafanua, pei o iina ma mulimulitai ai le galuega a le Matagaluega ina ua aumai faafanua mulimuli mai ma taumafai e fetu’utu’unai ai le vaevaega lea i totonu ma mautinoa la ua treat lava e le Matagaluega as a public road -

L Wai tusa la o lau molimau na fa’aaoga ia survey plans

Wit sao lelei.”

  1. She agreed under cross-examination that in terms of the declaration of the public roads (Toamalama Street and Tavaetoto Street), the only part of that process that was not completed was the preparation of the Instrument of Dedication (NOE, p. 33).
  2. When questioned about how the land (Toamalama Street and Tavaetoto Street) was transferred from government to the Defendant, Ms Heather confirmed that there was no instrument to effect transfer of the land from the government to the NPF (NOE, 30.01.2020 at p. 38). When questioned by defence counsel about how the roads were also created by government, Ms Heather also explained that government could do so pursuant to s. 32 of the Survey Act 2010 (NOE, 30.01.2020 at p. 27 - 28). That provision however does not create a ‘public road’ but only easements for the benefit of landlocked landowners only.

THE LAW:

  1. The Plaintiff’s ‘causes of action’ against the Defendant are for negligence and unjust enrichment.

Negligence:

  1. In terms of negligence, it is alleged that the Defendant was negligent by:
  2. The Plaintiff seeks relief as set out in paragraph 7 above. Through counsel, the Plaintiff has withdrawn the claim for relief at paragraph 48(a) of the Amended Statement of Claim.
  3. The elements of the tort of negligence as set out by the Sapolu CJ in Su’a v Attorney General [2013] WSSC 1 were summarized as follows:

“57. As pointed out in Matautia v Schuster [1993] WSSC 15, cited on behalf of the Attorney General, the tort of negligence consists of four elements which must be proved by the plaintiff. These are: (a) the defendant owed a legal duty of care to the plaintiff, (b) the defendant acted in breach of that duty, (c) the plaintiff suffered damage as a consequence of that breach, and (d) the damage suffered by the plaintiff was not too remote but a sufficiently proximate consequence of the defendant’s breach of duty. Sometimes, negligence is formulated as consisting of three elements that need to be proved...”

Unjust Enrichment:

  1. Similarly, the plaintiff claims that the defendant was unjustly enriched by:
  2. The enrichment is alleged to have been unjust in that the Defendant (a) breached its equitable duty owed to the plaintiff in terms of the fair market value of the security property; (b) was based on a mistake by the Plaintiff in terms of the transfer of lots 14 and 17 to the Defendant; and (c) exploitative and unconscionable conduct by the Defendant.
  3. The elements for the claim of unjust enrichment that the Plaintiff must establish on the balance of probabilities are: (i) a benefit enjoyed by the recipient, the Defendant; (ii) a corresponding deprivation on the part of the claimant, the Plaintiff; and (iii) the absence of any juristic reason for the recipient to retain the benefit (Tokuma v Samoa Land Corporation [2018] WSSC 81 (8 June 2018); Stanley v Vito [2010] WSCA 2 (7 May 2010)). In terms of the final element for a claim for unjust enrichment to succeed, the Court in Stanley v Vito (supra) explained:

“The real question on which liability turns is whether the respondents have demonstrated the third unjust enrichment element (absence of any juristic reason for retaining the benefit). The question is whether the respondents had excluded any legal basis upon which the Stanleys could retain the benefit of improvements to their property without paying for them.”

The Limitation Period for Claims in Negligence and Accrual of Cause of Action:

  1. The Defendant in its defence has pleaded that the Plaintiff’s claim in negligence is statute barred (section 6(1)(a) of the Limitation Act 1975). The Plaintiff however contends that she was mistaken and therefore the commencement of the limitation period was postponed by virtue of section 26(c) of the Limitation Act 1975. Sections 6 and 26 relevantly provide:

“6. Limitation of actions of contract and tort, and certain other actions –(1) Except as otherwise provided in this Act, the following actions are not to be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say:

(a) actions founded on simple contract or on tort;

...(8) This section does not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief.

...

26. Postponement of limitation period in case of fraud or mistake – Where, in the case of any action for which a period of limitation is prescribed by this Act, either:

...

(c) the action is for relief from the consequences of a mistake, – the period of limitation does not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:

PROVIDED THAT nothing in this section enables any action to be brought to recover, or enforce any charge against, or set aside any transaction affecting, any property which:

...

(d) for mistake, has been purchased for valuable consideration, subsequently to the transaction in which the mistake was made, by a person who did not know or have reason to believe that the mistake had been made.”

  1. In my research, I found no Samoan authority on the question of the postponement of the limitation period in the case of mistake by virtue of section 26(c) of the Limitation Act 1975. Section 26(c) however is identical to section 28(c) of the Limitation Act 1950 (NZ)(repealed) and section 26(c) of the Limitation Act 1939 (UK). I have therefore considered section 26(c) and the postponement of the limitation periods in context of persuasive New Zealand and United Kingdom authorities that have considered identical provisions.
  2. For causes of action based on tortious negligence, time begins to run from the date consequential loss is first suffered (See: James v McMahon Butterworth Thompson [2014] NZAR 295; Roose v Duthie [2015] NZHC 2035 at para. 35). The leading New Zealand authority on determining when a Plaintiff first suffers loss is the Supreme Court judgment in Davys Burton v Thom [2008] 1 NZLR 293. That judgment was succinctly summarized by Allan J in James v McMahon Butterworth Thompson (supra) as follows:

“[19] ...In that case, the defendant’s solicitor had, in 1990, failed to provide adequate instructions for the proper execution in the United States of a prenuptial matrimonial property agreement to be entered into between the plaintiff and his wife, the purpose of which was to preserve his house as his own separate property. In 1999, the Family Court held that the agreement was void because it had not been executed in the manner required by the Matrimonial Property Act 1976. The house was accordingly treated as matrimonial property in which the wife was entitled to a share. In 2002, the plaintiff commenced proceedings against the solicitors, claiming from them the value of the foregone share. The Court had to consider whether the claim against the solicitors lay outside the six-year period prescribed by s 4 of the Limitation Act.

[20] The Supreme Court was unanimous in holding that the cause of action accrued in 1990, when the defective agreement was executed. The claim was therefore statute barred. Elias CJ said that the cause of action for negligent professional advice arose as soon as the plaintiff, relying on the advice, was financially worse off, even if quantification was difficult and the measure of loss ultimately depended upon the assessment of further contingencies. She noted that a plaintiff might be made financially worse off in various ways, for example by transferring a property, by suffering a diminution in the value of an asset, or by incurring a liability.”

  1. This approach is similar to the English approach (see: D W Moore & Co Ltd v Ferrier Ferrier [1988] 1 WLR 267, [1988] 1 All ER 400 (CA)).

The Limitation Period and Mistake:

  1. Section 26(c) of the Limitation Act 1975 provides, as relevant to these proceedings, that where an action is for relief from the consequences of a mistake, the period of limitation does not begin to run until the Plaintiff has discovered the mistake or with reasonable diligence, could have discovered it.
  2. In Rosenberg v AMP Services (NZ) Limited [2018] NZHC 1929; [2018] NZAR 1459, the identical New Zealand provision being section 28(c) was explained as follows:

“For s 28(c) to apply, a plaintiff must plead and prove a cause of action that involves mistake as a necessary ingredient. Ms Rosenberg’s action is not an action in mistake, or for “relief from the consequences of a mistake” because “mistake”, in a legal sense, is not an essential part or necessary ingredient of a claim for payment under an insurance contract. Ms Rosenberg is simply suing in response to AMP’s decision to decline payment of Mr Rosenberg’s life insurance benefit. The sorts of “mistakes” Ms Rosenberg alleges do not amount to “mistake” in terms of s 28(c).”

  1. This approach adopted the approach in Phillips-Higgins v Harper [1954] 1 All ER 116. The facts there were that the Plaintiff was employed in 1923 by the Defendant, a solicitor, as a short-hand-typist. In 1934, the Plaintiff was admitted as a solicitor and became the Defendant’s Assistant. The Plaintiff and the Defendant reached an oral agreement whereby the Plaintiff would be paid a minimum salary and an additional yearly sum based on the annual net profit of the practice. This arrangement, varied in 1948, remained in place until March 1950 when the Plaintiff then became a salaried partner. The Plaintiff remained a salaried partner until the 1951 when the partnership ended and a dispute then arose over the amounts that the Plaintiff had been paid. The Plaintiff claimed from the Defendant an account in respect of the alleged under-payment of her salary from April 1938 to March 1950.
  2. The Defendant pleaded that the Plaintiff with knowledge of the Defendant’s accounts for each year claimed, agreed with the Defendant’s accountant the amount payable to the Plaintiff and that the amount payable to the Plaintiff and received was full satisfaction of the amount owing to her for those years. The Plaintiff denied the Defendant’s defence and responded that if there were such an agreement with the defendant, they were entered into under a mutual mistake of fact as to the true indebtedness of the Defendant to her since the accounts contained serious errors. The Defendant also pleaded the Limitations Act 1939 and the Plaintiff contended that it did not apply. In his judgment, Pearson J stated at p.119:

“...What, then is the meaning of provisions (c)? The right of action is for relief from the consequences of a mistake. It seems to me that this wording is carefully chosen to indicate a class of action where a mistake has been made and has had certain consequences and the plaintiff is seeking to be relieved from those consequences. Familiar mistakes are, (i) money paid in consequences of a mistake – the mistake is made, in consequence of the mistake the money is paid, and the action is to recover that money paid; (ii) there may be a contract entered into in consequences of a mistake, and the action is to obtain the rescission, or in some cases, the rectification of the contract; (iii) there may be an account settled in consequences of mistakes, and, if the mistakes are sufficiently serious, there can be a re-opening of the account.

...In this case, the mistake, in my judgment, has had no relevant consequences for the purposes of this section. As the statement of claim shows, the plaintiff’s claim is to recover money moneys due to her under a contract, and the cause of action is the same as if she had sued for each unpaid balance of the due date. By reason of that mistake she failed to realise that the balance was due to her, and by that mistake the right of action was concealed from her. But that is not sufficient. Probably provision (c) applies only where the mistake is an essential ingredient of the cause of action, where the statement of claim sets out the mistake and its consequences and prays for relief from the consequences...This action is not for relief from the consequences of a mistake within the meaning of s.26(c).” (emphasis added)

  1. In terms of the reasonable discovery of a mistake, the New Zealand Court of Appeal in Amaltal Corp Ltd v Maruha Corp [2006] NZCA 112; [2007] 1 NZLR 608 explained at [151 – [153]:

“As to the law with respect to “reasonable diligence”, 28 Halsbury’s Laws of England (4th ed) states at [1122]:

1122. Diligence in discovery of fraud, deliberate concealment or mistake. The standard of diligence which the plaintiff needs to prove is high, except where he is entitled to rely on the other person; however, the meaning of ‘reasonable diligence’ varies according to the particular context. In order to prove that a person might have discovered a fraud, deliberate concealment or mistake with reasonable diligence at a particular time, it is not, it seems, sufficient to show that he might have discovered the fraud by pursuing an inquiry in some collateral matter; it must be shown that there has been something to put him on inquiry in respect of the matter itself and that if inquiry had been made it would have led to the discovery of the real facts. If, however, a considerable interval of time has elapsed between the alleged fraud, concealment or mistake and its discovery, that of itself may be a reason for inferring that it might with reasonable diligence have been discovered much earlier.

...

The authority to which Halsbury refers for the proposition that the meaning of “reasonable diligence” varies according to the particular context is Peco Arts Inc v Hazlitt Gallery Ltd [1983] 3 All ER 193 (QB) (a so-called “art fraud” case). Webster J held at 199 that:

“... the precise meaning to be given to [the words “reasonable diligence”] must vary with the particular context in which they are to be applied. In the context [of this plaintiff’s action] reasonable diligence means not the doing of everything possible, not necessarily the using of any means at the plaintiff’s disposal, not even necessarily the doing of anything at all, but that it means the doing of that which an ordinary prudent buyer and possessor of a valuable work of art would do having regard to all the circumstances, including the circumstances of the purchase.”

Res Judicata:

  1. In these proceedings, the Defendant has raised res judicata in terms of the Consent Judgment entered on the 27th May 2013 and the subsequent proceedings struck out by His Honour Nelson J on the 18th December 2014. In Fiso v Reid [2002] WSCA 2, Lord Cooke in delivering the judgment of the Court of Appeal stated:

“We have no doubt that in considering the exercise of the discretion to extend time the principle that there ought to be an end to litigation is a consideration to be taken into account. It is not the only consideration, but it is a major one in a case such as the present. An expression of the principle which has come to be cited very often in the last eighty years or so is contained in the judgment of Wigram V.-C. in Henderson v Henderson [1843] EngR 917; (1843) 3 Hare 100, 115 –

... when a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward... The plea of res judicata applies, except in special cases ... to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

Henderson v Henderson and many subsequent cases have been reviewed in the House of Lords in Johnson v Gore Wood & Co. [2000] UKHL 65; [2001] 1 All ER 481. Delivering the leading speech, Lord Bingham of Cornhill concluded at pp. 498 to 499 –

It may very well be, as has been convincingly argued (Watt ‘The Danger and Deceit of the Rule in Henderson v Henderson: A new approach to successive civil actions arising from the same factual matter’ (2000) 19 CJQ 287), that what is now taken to be the rule in Henderson v Henderson has diverged from the ruling which Wigram V-C made, which was addressed to res judicata. But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole.

Lord Bingham continued –

The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not...”.

  1. In Craig v Stringer [2020] NZCA 260, Gilbert J in delivering the judgment of the New Zealand Court of Appeal stated in a similar vein:

“[16] Access to the courts will be denied where a litigant seeks to reopen a dispute that has already been determined. This is precluded by the doctrine of res judicata which serves the public interest in finality in litigation and upholds the principle that a party should not be vexed twice in the same matter. Res judicata applies where a cause of action has been determined in earlier proceedings between the same parties or their privies — cause of action estoppel. The doctrine prevents re-litigation of the same cause of action in any subsequent proceedings. Res judicata can also apply where there has been a determination in earlier proceedings between the same parties or their privies of an issue that was essential to the determination of the claim such that the judgment could not stand without it — issue estoppel. Issue estoppel is narrower, and less absolute in its application than cause of action estoppel.

[17] A related principle is that the parties are required to bring forward their whole case and will generally be prevented from later attempting to re-open the same subject on a different basis. This principle was first recognised by Wigram V-C in Henderson v Henderson:

[W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.” (emphasis added)

  1. In Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37, the New Zealand Court of Appeal in a judgment delivered by Tipping J examined res judicata and the difference between cause of action estoppel and issue estoppel stating at pp. 40 - 41:

“The expression "res judicata" means the matter has been adjudicated. The concept of res judicata is often applied to both cause of action estoppel and issue estoppel. Traditionally its use was confined to the former. Cause of action estoppel is different from issue estoppel which can arise where a plea of res judicata in the strict sense is not open because the causes of action are not the same: see 16 Halsbury's Laws of England (4th ed, reissue) (Estoppel) at para 977. Cause of action estoppel is more precise than issue estoppel. For there to be cause of action estoppel the cause of action sought to be estopped must be precisely the same as that upon which there has been an earlier adjudication.

Issue estoppel is concerned with the prior resolution of issues rather than causes of action. In the same paragraph of Halsbury as that referred to above, it is said that issue estoppel precludes a party from contending the contrary of any precise point which, having once been distinctly put in issue, has been solemnly and with certainty determined against him. Cross on Evidence (4th NZ ed, 1989) by Mathieson discusses issue estoppel at para 12.8 on p 315. The learned author cites the judgment of Lord Denning MR in Fidelitas Shipping Co Ltd v V/O Exportchleb [1965] 2 All ER 4, 9:

". . . within one cause of action, there may be several issues raised which are necessary for the determination of the whole case. The rule then is that, once an issue has been raised and distinctly determined between the parties, then, as a general rule, neither party can be allowed to fight that issue all over again."

There is an authoritative recent discussion of cause of action and issue estoppel in the House of Lords: see Arnold v National Westminster Bank plc [1991] 3 All ER 41 especially at pp 46 and 47 per Lord Keith of Kinkel.

It is to be noted that both Halsbury and Lord Denning MR refer to the need for the point said to be the subject of the issue estoppel to have been raised in the previous litigation. Halsbury uses the phrase "distinctly put in issue" and Lord Denning spoke of "issues raised which are necessary for the determination".” (emphasis added)

THE ISSUES:

75. The Plaintiff’s claim against the Defendant in negligence can be summarized as follows:

(a) $5,000,000.00 being the costs to the Plaintiff to restore, refurbish and fully furnish ‘the new hotel to its original state and condition;
(b) $5,000,000.00 as restitution and compensatory damages for the loss of business and accommodation, resulting from the loss of the Plaintiff’s hotel, financial hardship, endured, stress, humiliation and negative impacts on the plaintiff’s health;
(c) $155,000.00 to account for lease charges and payments mistakenly paid under the “Lease arrangement”;
(d) $60,000.00 (2009 value) to account for costs associated with the unnecessary and incorrect legal action associated with the lease;
(e) the fees charged by Toailoa Law Firm in the sum of $445,957.35 being excessive and exploitative;
(f) $437,536.00 being the ‘discount’ the defendant gave itself when it ‘purchased’ the mortgaged properties. This amount is the difference between the valuation of the secured property and the amount paid by the defendant; and
(g) return of Lots14 and 17 to the Plaintiff.
  1. Similarly, the Plaintiff’s claims against the Defendant for unjust enrichment relate to the same factual allegations above at paragraph 45(a), (b), (c), (d), (e) (f), (g).

DISCUSSION:

The Transfer of Lots 14 and 17 to the Defendant:

  1. As I have touched on at the beginning of this judgment, in the Plaintiff’s Amended Statement of Claim, it is pleaded that following the auction of the security property, the Defendant had effected the transfer of the security property and Lots 14 and 17 to itself in the absence of any legal right to transfer Lot 14 and 17 to itself (paragraph 33, Amended statement of Claim). This is also reflected in the affidavit of the Plaintiff (exhibit P2 at paragraph 38) where the Plaintiff states:

“By doing so, Lot 17, parcel 387 was lost to me at the mortgagee sale, pursued by the First Defendant.”

  1. Having heard the evidence, I am satisfied that the Defendant did not effect a transfer to itself of Lots 14 and 17 from the Plaintiff through the mortgagee sale process. The purported ‘transfer’ of Lots 14 and 17 to the Defendant was based on Lots 14 and 17 having been purportedly made “public roads”. On the basis that Lots 14 and 17 were “public roads” vested in government as “Government Land” as evidenced by the Computer Folio Certificates that I have referred to in paragraph 11 above, these Lots were then transferred by government to the Defendant. The purported transfer of these parcels of land to the Defendant was not through the mortgagee sale process.

Two Categories of Land for the Purposes of the Judgment:

  1. In my judgment, I will deal with the land in two categories when dealing with each cause of action. The first is land forming part of the security property. The second are parcels 387 / Lot 17 (Toamalama Street) and parcel 454 (Tavaetoto Street) which were not part of the security property.

NEGLIGENCE:

Negligence and the Security Property Acquired Through Mortgagee Sale:

Limitation Act 1975 and Accrual of Cause of Action:

  1. The Defendant relies on section 6(1) of the Limitation Act 1975 to submit that the Plaintiff’s claim in negligence filed on the 12th November 2019 is statute barred.
  2. In carefully perusing the Plaintiff’s Amended Statement of Claim, the Amended Statement of Claim does not plead ‘mistake’ in relation to the Plaintiff’s claim in negligence in respect of the mortgagee sale and the Defendant’s acquisition of the security property. ‘Mistake’ in respect of negligence is pleaded only in paragraphs 34, 35, and 37 of the Amended Statement of Claim and relate to the Plaintiff’s Lease of parcel 426 and the occupation of Lots 14 and 17 where the “new hotel” is located. Based on the pleadings, section 26(c) of the Limitation Act 1975 is not pleaded to postpone the limitation period in relation to the mortgagee sale and the Defendant’s acquisition of the security property.
  3. As the Plaintiff’s claim is in tort, section 6(1) of the Limitation Act 1975 applies. The action based on negligence in relation to all claims associated with the mortgagee sale must therefore be brought within 6 years of the accrual of the cause of action.
  4. In determining when the cause of action therefore accrued for the Plaintiff’s causes of action based on tortious negligence, time begins to run from the date consequential loss was first suffered (see paragraph 65 above). The Plaintiff’s Amended Statement of Claim does not plead when the Instrument of Transfer giving effect to the Mortgagee Sale of the Security Property to the Defendant was registered with the Registrar of Lands. In the Amended Statement of Defence, the Defendant also simply pleads at paragraph 48:

“The Defendant purchased the lands mortgaged by the Plaintiff to the Defendant on or about October 2008.”

  1. Similarly, in determining when consequential loss first occurred, it is surprising that neither party tendered any evidence from the Land Registry by way excerpts from the Land Register or copies of the Instruments of Transfer to establish when the security property was registered to the Defendant at the end of the mortgagee sale process.
  2. I find on the evidence before me that the acquisition of the security property by the Defendant occurred on or about 16 January 2008 (Affidavit of Sine Lafaialii, exhibit D2 at para 37). The loss alleged by the Plaintiff crystallized and was first suffered by the Plaintiff when the mortgagee sale was complete and the security property registered to the Defendant. The six (6) year limitation period therefore began to run on or about 16 January 2008 and ended on or about 15 January 2014. The claim in negligence in relation to the security property filed on the 12th November 2019 is therefore almost six (6) years out of time and is statute barred. The Plaintiff’s claim in negligence pleaded at sub-paragraphs 48(b), (d), (e), (f), (g), (h) and (i) of the Amended Statement of Claim is statute barred.

Limitation Act 1975 and Postponement of Accrual Due to Mistake:

  1. Despite not having pleaded ‘mistake’ in the Amended Statement of Claim to postpone the commencement of the limitation period and its application to the security property in negligence, the Plaintiff’s counsel in her submissions at paragraph 60 submits that the Plaintiff was mistaken in believing, as relevant to the security property, that:
  2. While I do not have to address this un-pleaded issue in terms of negligence and the security property, I will do so for completeness as it has been raised through submissions. The Plaintiff’s submission is that the limitation period for its claim in negligence in relation to the security property should accrue from when she discovered this mistake. The discovery of the mistake is submitted to have been in 2017 “when she (the Plaintiff) instructed current counsel in 2017.” (paragraph 60.5, Plaintiff’s Closing Submissions)
  3. With respect, I do not accept this submission. The purported mistaken belief was that the Plaintiff believed the Defendant legitimately exercised its power of sale under the mortgage agreement and that the Defendant was entitled to purchase the security property. First, the alleged mistake is not a necessary ingredient in the cause of action brought in tort in relation to the security property. In this context, in the New Zealand Court of Appeal in Vanvi v Dawson [1980] 1 NZLR 513 at p.516, Cooke J as he then was stated:

“In Phillips-Higgins v Harper [1954] 1 QB 411, 419; [1954] 1 All ER 116, 119, Person J expressed the opinion that "Probably provision (c) applies only where the mistake is an essential ingredient of the cause of action, so that the statement of claim sets out, or should set out, the mistake and its consequences and pray for relief from those consequences". Noting that Pearson J included "should set out", I respectfully agree; it must be the essence of the claim that matters. If the plaintiff here had sought to set up in essence a cause of action depending on mistake, the equities on both sides would have been material, as was held in Thomas v Houston Corbett & Co. This action was never conceived in that way in the Magistrate's Court. It was too late to alter its essential basis on appeal.”

  1. The proceedings in tort in relation to the acquisition of the security property by the Defendant has not been pleaded in this way and mistake is not an essential ingredient of the cause of action in tort.
  2. Second, the mistake relied on by the Plaintiff is a mistake of law, ie. she mistakenly believed that the Defendant was lawfully entitled to acquire the security property through the mortgagee sale process. In 30 Halsbury's Laws of England (4th ed) Para 8 and 9, the learned authors state:

“8. Relief not generally available. As a general rule relief will not be granted on the ground of mistake if the mistake is one of law distinguished from one of fact. The distinction between mistakes of law and mistakes of fact has never been clearly defined by the courts, but the mistake of law must be one of the general law, for example the legal interpretation of a contract or the construction of a statute.

9. Circumstances in which relief may be granted. There is no mistake of general law where there is ignorance of a private right, even though the private right is the result of a matter of law, or depends upon the rules of law applied to the construction of legal instruments. There is no mistake of general law where there is an ignorance of a right which depends upon questions of mixed law and fact, and a statement of fact which involves a conclusion of law is still a statement of fact and not a statement of law...

However, even where the mistake is one held to be in a matter of law, the court may grant relief, if there are circumstances which make it inequitable on the facts of the particular case that the act should stand...”

  1. To succeed on this basis, the Plaintiff must in my view first prove to the civil standard that the Defendant did not legitimately exercise its power of sale under the mortgage agreement and had not legitimately (lawfully) acquired the security property through the mortgagee sale process. This is because to mistakenly believe that the Defendant did not have the right acquire the security property, it must be established as a fact that the Defendant did not have that right and had acted unlawfully. The evidence led by the Plaintiff in terms of the security property falls well short of satisfying me that the security property was unlawfully acquired by the Defendant.
  2. Third, the asserted mistake is one of either law or mixed law and fact. As an alleged mistake of general law, relief is not generally available on this basis except where the circumstances are such that it would be inequitable on the facts of this case to allow the act to stand. As I have said, I am not satisfied that the exercise of the Defendant’s mortgagee power of sale and its subsequent acquisition of the security property was unlawful or ‘illegitimate’. There is no basis for the Court to therefore intervene on this basis nor does it therefore act to extend time pursuant to section 26(c) of the Limitation Act 1975.

Defendant/Mortgagees Duties to the Plaintiff/Mortgagor:

  1. Similar to counsel for the Plaintiff, counsel for the Defendant in his submissions has raised a defence not set out in the Amended Statement of Defence. As an un-pleaded defence (and one not addressed by the Plaintiff), it is not a defence that I am required to address but will also do so for completeness because it raises an important question of law.
  2. At paragraph 3.4.3, the Defendant submits that in terms of the actions of the Defendant, “a tortious standard of care is inappropriate because the power of sale is given to a mortgagee for his or her own benefit.” What the Defendant is saying is that there is no duty of care in tort owed by a mortgagee (the Defendant) to the Plaintiff (the Mortgagor). As a result, this cause of action fails entirely in relation to the acquisition of the security property by the Defendant. I am referred by counsel to Downside Nominees Ltd v First City Corporation Ltd [1993] AC 295 where Lord Templeman of the Privy Council stated at p.10:

“Several centuries ago equity evolved principles for the enforcement of mortgages and the protection of borrowers. The most basic principles were, first, that a mortgage is a security for repayment of a debt and secondly, that a security for repayment of the debt is only a mortgage. From these principles flowed two rules, first, that powers conferred on a mortgagee must be exercised in good faith for the purposes of obtaining repayment and secondly that, subject to the first rule, powers conferred on a mortgagee may be exercised although the consequences may be disadvantageous to the borrower.”

  1. Lord Templeman continued at p.13:

“The general duty of care said to be owed by a mortgagee to subsequent encumbrancers and the mortgagor in negligence is inconsistent with the right of the mortgagee and the duties which the courts applying equitable principles have imposed on the mortgagee...If a mortgagee exercises his power of sale in good faith, for the purposes of protecting his security, he is not liable to the mortgagor even though he might have obtained a higher price and even though the terms might be regarded as disadvantageous to the mortgagor. Cruckmere Brick Co. Ltd v Mutual Finance Ktd [1971] Ch. 949 is Court of Appeal authority for the proposition, if the mortgagee decides to sell, he must take reasonable care to obtain a proper price but is no authority for any wider proposition...

Their Lordships consider it is not possible to measure a duty of care in relation to a primary objective which is quite inconsistent with that duty of care.”

  1. Downsview Nominees Ltd v First City Corporation Ltd [1993] 1 NZLR 513 is authority for the mortgagee’s duties owed to a mortgagor laying in equity rather than tort (Apple Fields Ltd v Damesh Holdings Ltd [2000] NZHC 1280; [2001] 1 NZLR 194 at 206).
  2. In Hinde, McMorland & Sim Land Law in New Zealand (online looseleaf edn, LexisNexis) at [15.134]), the learned authors also state:

“The duties of a mortgagee who exercises a power of sale of land are found in a mixture of equitable and statutory rules. The fundamental equitable rule, as stated by the Privy Council in Downsview Nominees Ltd v First City Corporation Ltd, 1 is that, since a mortgage is simply a security for the payment of a debt, a power of sale conferred on a mortgagee must be exercised in good faith for the purpose of obtaining repayment, and not for some other purpose. This duty of good faith is owed to the mortgagor, to any subsequent encumbrancers, to all those interested in the equity of redemption (such as a purchaser of the mortgaged land), and to guarantors of the mortgagor’s obligations.

An important aspect of the duty of good faith is that, if the mortgagee decides to sell, he or she must take reasonable care to obtain a proper price for the property. Until the Privy Council’s decision in Downsview there was considerable debate as to whether this duty to take reasonable care was an aspect of the tort of negligence, as opposed to being a part of the equitable duty of good faith. In Downsview the Privy Council, while approving the existence of a duty to take reasonable care to obtain a proper price, rejected the notion that this was a duty sounding in negligence, holding that a duty in negligence would be inconsistent with the mortgagee’s self-interest in realising his or her security. This decision means that it is inappropriate to judge a mortgagee’s conduct against a tortious standard of care. In practical terms, Downsview means that the Courts should, when assessing a mortgagee’s conduct, pay proper regard to the self-interest that the mortgagee has in exercising the power of sale.

Shortly after Downsview was decided the duty of care was put into statutory form, in s 103A of the Property Law Act 1952.” (emphasis added)

  1. As this point was not pleaded and counsel for the Plaintiff did not make submissions on this question, I do not need to definitively determine this issue. My preliminary view however is that an action against the Defendant framed as a tortious cause of action in negligence as the Plaintiff has done is inappropriate. This is also reflected in the Plaintiff’s own submissions which states at paragraph 52.1 and 52.2 where the Plaintiff in addressing its claim in negligence against the Defendant states:

“52.1 There is a well settled rule of equity preventing a mortgagee from selling mortgaged property to himself either alone or with others, or to a trustee for himself commonly known as the Rule in Farrar’s Case or Farrar’s Rule...

52.2...A sale or property found to be in breach of the rule will be voidable in equity for constructive fraud at law (See Re White Ex Parte Goggs), or alternatively the property will be held in equity to remain subject to the mortgagee’s right of redemption (see Hotel Terrigal Pty Ltd (on liq) v Latec Investments Ltd (No. 2).” (emphasis added)

  1. The duty owed by a mortgagee to a mortgagor are as generally understood are a mixture of equitable as well as statutory duties and do not extend to a general duty in tort. This is also supported by Australian authorities. In CGU Workers Compensation (NSW) Ltd v Garcia [2007] NSWCA 193, the New South Wales Court of Appeal determined that there was no tortious duty of good faith at common law. This question as a matter of Samoan law can however be definitively determined at a later point where this question is expressly pleaded.

The Pleaded Claim In Tort – The Security Property and Associated Legal Fees Claim:

  1. While I have determined that the claim in negligence against the Defendant relating to its acquisition of the security property and the associated claims that flow from that acquisition are statute barred (and likely are not available on the basis of a tortious cause of action), I will also however address briefly certain specific pleaded claims in paragraph 48 of the Amended Statement of Claim.
  2. The first is the claim for $5,000,000.00 being the claimed costs for the Plaintiff to restore, refurbish and fully furnish ‘the new hotel’ to its original state and condition (Amended Statement of Claim, paragraph 48(d)). There was no evidence led at trial to support this claim and how such a figure was reached. It accordingly fails on its merits as the Plaintiff has failed to discharge the evidential burden she bears to prove the alleged damage.
  3. The second claim is for $5,000,000.00 restitution and compensatory damages for the loss of business and accommodation, resulting from the loss of the Plaintiff’s hotel, financial hardship, endured, stress, humiliation and negative impacts on the plaintiff’s health (paragraph 48(i), Amended Statement of Claim). Similarly, this claim must fail as there was no expert and other reliable evidence before the Court (medical, financial and the like) to establish this claim. In saying this, I do acknowledge the evidence of the Plaintiff that these proceedings and her dispute with the Defendant have had a significant impact on her life, as regrettably, is often associated with disputes and litigation.
  4. Third is the claim for $445,957.35 for what is alleged to have been “the manifestly excessive and exploitatively legal fees charged for “loan recovery” and “Conveyancing” (paragraph 48(g), Amended Statement of Claim), which is also statute barred. Following correspondence from the Plaintiff’s then solicitor to the Defendant referred to in her affidavit (exhibit P2 annexure “C”), the Plaintiff deposes at para. 26 that she “finally received the breakdown statement and I was shocked to find that the (then) Second Defendant (Mr Toailoa) had charged me $445,957.35 for legal work pertaining to the auction...”
  5. While the legal fees charged are significant, there was no evidence led by the Plaintiff that the sum paid to Mr Toailoa was in breach of any purported duty owed to the Plaintiff. There was also no evidence led from a lawyer or qualified expert to say that for the work carried out, the fees charged by Mr Toailoa was excessive and unreasonable. The onus of proving any alleged negligence by the Defendant in paying this sum of money to Mr Toailoa rests with the Plaintiff and she has simply failed to call evidence to support this claim.
  6. In terms of the claim for $437,536.00 at paragraph 48(b), for the same reasons I set out below at paragraphs 115 – 120, that claim is also not established by the evidence.

The Pleaded Claim in Tort – Parcel 387 Plan 5823 / lot 17 and Parcel 454 Plan 5910 / lot 14:

  1. The Plaintiff seeks the recovery of lease payments paid to the Defendant of $155,000.00 and $60,000 for the costs of legal action (Paragraphs 48(e) and (f), Amended Statement of Claim). These payments were made by the Plaintiff to the Defendant based on the written lease Agreement entered on or about 19 November 2010 (Affidavit of Ms Lafaialii, paragraph 43). In her affidavit, the Plaintiff says at paragraph 35 that the lease was dated 19 September 2010.
  2. The claim for the recovery of the lease payments allegedly made mistakenly by the Plaintiff to the Defendant is based on the tort of negligence. Generally, actions for the recovery of moneys paid to another party due to a mistake of fact is a common law action for money had and received. This cause of action does not require proof of wrong doing or fault on the part of the Defendant. This action only requires the Plaintiff to prove that she would not have made the payment but for the mistake (The Laws of New Zealand, Restitution, Claims Based on Mistaken Payments or Compulsion, online looseleaf edn, LexisNexis, at [11]).
  3. Nevertheless, on the evidence, I am satisfied that the lease was terminated by the Defendant sometime in 2011. Any claim for these payments in negligence became statute barred sometime in 2017. The claim in negligence was only filed in November 2019, approximately two (2) years out of time.
  4. A more significant difficulty for the Plaintiff however is that the lease agreement between the Plaintiff and the Defendant concerning parcel 426 and the premises then occupied by the Plaintiff was sued on by the Defendant for the lease arrears and eviction. Judgment by Consent was entered on the 27th May 2013 in those proceedings (Affidavit of Lafaialii, exhibit D2 Annexure 1,). It is noteworthy that the Judgment by Consent specifically states:

“UPON perusal of the Plaintiff’s Statement of Claim and upon confirmation from Counsel for the defence that the defendant consents to the judgment, the Court hereby orders that...” (emphasis added)

  1. The Plaintiff consented to the making of those orders represented by counsel in terms of the pleaded matters in dispute and judgment entered in respect of the lease payments and other charges now sort to be recovered in these proceedings. This claim has already been dealt with by the Supreme Court, judgment entered by consent and it is therefore in my assessment res judicata (see: “Judgment by default or consent”, 16 Halsbury’s Laws of England (4th ed) states at [1159]. It was also revisited by Nelson J in his later judgment dated 18 December 2014 at para: 9 and 11.
  2. Even if mistake was available to postpone the accrual of the cause of action (which it is not because of the Consent Orders), the Plaintiff has failed to satisfy me that she could not, with reasonable diligence have discovered the mistake about the location of the “new hotel” on parcel 387 / lot 17 that she now relies on to extend time. This is for a number of reasons. First, it was the Plaintiff who was the Applicant / Owner who lodged Plan 5823 delineating parcel 387 as “Toamalama Street” and Plan 5910 delineating parcel 454 as Tavaetoto Street. Second, it is the Plaintiff who was the owner of parcel 387 / lot 17 and lot 14 (parcel 454) on which the ‘new hotel’ was located. Third, it is the Plaintiff who went and constructed the ‘new hotel’ on parcel 387 / lot 17 with encroachments onto lot 14 and parcel 426. Fourth, the Plaintiff was the mortgagor well aware of the security property that she mortgaged to the Plaintiff. Fifth, when the Plaintiff settled the claim by Consent Orders on the 27th May 2013, she was represented by counsel. With these known facts, with reasonable diligence, the Plaintiff should well have known that the ‘new hotel’ was on parcel 387, and parcel 387 did not form part of the security property and therefore did not belong to the Defendant through the mortgagee sale process. Mistake, even if it was available to the Plaintiff, would not assist her.
  3. In counsel for the Plaintiff’s submissions at pp. 47 – 49, counsel submits that due to the mistakes in the Consent Orders of 27th May 2013 constituting a fundamental failure that impugns the Consent Orders, those Orders should now be set aside. No application to set aside those Consent Orders has been pleaded in these proceedings and therefore, I do not need to consider this submission further nor is it appropriate for me to do so in the circumstances.
  4. The Plaintiff seeks “return of Lots 14 and 17 and the new hotel thereon” at prayer for relief 47(c). The basis for the relief sought is that the Defendant unlawfully took Toamalama Street (partly Lot 17) and Tovaetoto Street (partly Lot 14) through the mortgagee sale process when they were not part of the security property. As I have find (refer also below at [121] – [124]), that land was not acquired by the Defendant through the mortgagee sale process from the Plaintiff but transferred to the Defendant from government after purportedly being made public roads. The cause of action in negligence for the recovery of the land is not established and the factual basis pleaded that it was acquired directly from the Plaintiff is not supported by the evidence. I have commented earlier on what may have been the more appropriate proceedings for the Plaintiff to pursue.

UNJUST ENRICHMENT:

  1. The Plaintiff’s claim for unjust enrichment is identical to the prayer for relief in tort but with an additional claim for $294,816.00 for the alleged dispossession of the Plaintiff from 996m2 of freehold land. I will deal with each claim as raised by the Plaintiff.

Claim for Difference Between True Market Value and Discounted Sale Price to the Defendant (Paragraph 58(b), Amended Statement of Claim):

  1. The first claim is for unjust enrichment by the Defendant giving itself a 13% discount off its own valuation for the security property in the amount of $437,536.00 (2007 Valuation). This claim seeks the recovery from the Defendant of the difference between the valuation of the security property of $3,340,400.00 and the price paid by the Defendant of $2,902,864.00. The valuation sum relied on by the Plaintiff is that based on the Valuation Report prepared by T & T Real Estates dated “November 2007”. That report values the property security property at $3,340,000.00. In reaching that assessment, the Valuer refers to parcel 426 at p.12 and allows a valuation of $777,013.00 for the “Hotel”. That “Hotel” is described at p.6 of the Valuation report as a two storey ‘modern designed European building used for hotel...”
  2. I am satisfied as I have set out earlier that the two storey 20 room hotel building valued at $777,013.00 was not located on parcel 426 but on parcel 387 (later, Lot 17) (see also paragraph 3 of the affidavit of Plaintiff and Plaintiff’s evidence, at pp.4 - 5, Transcript 29 January 2020). Parcel 387 (later, Lot 17) did not form part of the security property obtained by the Defendant through the mortgagee sale process. Less the amount of $777,013.00 from the T & T Valuation for the 20 room hotel building, the adjusted Valuation for the security property is $2,563,387.00. The Defendant through the mortgagee sale process therefore paid $2,902,864 for the security property. On this basis, it appears that the Defendant in fact paid $339,477.00 above the assessed Valuation when the valuation is adjusted to remove the 20 room hotel building. In this context, I agree with the “Opinion on the Appraisal Report Prepared by T & T Real Estate on 20 November 2007” given by Tumua Ioane Evalu that the T & T Valuation has overstated the valuation of the security property (exhibit D6).
  3. As stated by Lord Templeman in Downsview Nominees Ltd v First City Corporation Ltd (supra) at 524:

“If a mortgagee exercises his power of sale in good faith for the purposes of protecting his security, he is not liable to the mortgagor even though he might have obtained a higher price and even though the terms might be regarded as disadvantageous to the mortgagor. Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 is Court of Appeal authority for the proposition that, if the mortgagee decides to sell, he must take reasonable care to obtain a proper price but is no authority for any wider proposition.”

  1. The equitable duty (bearing in mind that this cause of action is for unjust enrichment) on a mortgagee in respect of a sale of land subject to a mortgage is to take reasonable care to obtain a proper price reasonably obtainable as at the time of sale, not to necessarily get that best price. Simply because a valuation states the land is valued at $3,340,400.00 and the Defendant fails to get that price, the Defendant is not automatically liable per se for the difference. Much more needs to be established by a Plaintiff to show that that a Defendant has failed to take reasonable care to obtain a proper price.
  2. In this case, the evidence I accept is that through the mortgagee sale process, the Plaintiff paid $339,477.00 more than the adjusted valuation when the new hotel building located on parcel 387 is removed from the valuation figure. As the Defendant paid more than the adjusted valuation amount, the Plaintiff has failed to satisfy me that the Defendant has enjoyed any benefit to the deprivation of the Plaintiff. Indeed, on the evidence, the Plaintiff has been overpaid for the “security property” by $339,477.00. That difference may be even greater when taking into account the evidence of Limasene Samau-Tupou at paragraphs 10 and 12 of her affidavit that there was in fact an additional $242,432.60 shortfall because the loan was not settled until 31 December 2008.
  3. Accordingly, I am not satisfied that the defendant has enjoyed any benefit as alleged nor has there been any corresponding deprivation to the Plaintiff.

Dispossessing the Plaintiff of 996m2 of freehold land and taking title thereof together with Improvements thereon (Paragraph 58(c), Amended Statement of Claim).

  1. This claim is pleaded on the basis of unjust enrichment and not fraud. On the evidence heard before this Court that I accept, any purported dispossession of the Plaintiff from Lots 14 and 17 was effected by the government through the Ministry of Natural Resources and Environment rather than by the Defendant. In his evidence, Mr Toelau stated at p. 23 NOE:

“HH you proceeded on the basis it was a road?

Wit o le tulaga lena na iai ona o lae ua iai le talitonuga ua le faia le instrument ua iai le talitonuga o le public road luga o le faafanua.

...

“Wit e pei o le faafanua lena na toe faatino mulimuli ina ua mae’a ona fua le auala fou lea ma le tulaga pei ona iai ua aveese atu ai ma le vaega lena 17 lea la e pei ua alu uma ai ile NPF ia vaega ia

  1. but usually to transfer of legal interest in land you don’t transfer it by sketch plan

Wit sei toe saunoa mai lava faamolemole

  1. registrar translate. Usually to convey a legal interest in land it is not done by a sketch plan; you need either a legal transfer and a transfer form but the transfer form that MNRE has or it was a status transmission or a similar type of document, was there such a document that effected legal transfer from the government to NPF?

Wit leai

  1. so are you saying in your evidence that the transfer to NPF was effected by this plan 11264?

Wit o lea lava.”

  1. The Ministry of Natural Resources and Environment had proceeded on the basis that the effect of scheme plans 1640, 5823, 5908, 5910 and 5920 was to establish Toamalama Street and Tovaetoto Street as “public roads”. Due to the blockage of Toamalama Street and the eastern side of Tovaetoto Street by the new hotel building, the government (through the Ministry of Natural Resources and Environment) then negotiated with the Defendant and Moghbelpour to create a new access road using lands belonging to the Defendant and Moghbelpour for the new access road and exchanged those lands for Lots 14 and 17.
  2. The end result of this then is that the alleged “dispossession” of the Plaintiff of legal title to parcel 387 / lots 14 and parcel 454 / lot 17 was not by the Defendant but by the government through the Ministry of Natural Resources and Environment. The purported transfer of title to parcel 387 / Lots 14 and parcel 454 / lot 17 was however not supported and effected by an Instrument of Dedication in accordance with section 13(1) of the Survey Ordinance 1960 (Repealed). The Defendant then later exchanged some of its land with government for Lots 14 and 17.
  3. Consequently, the claim for unjust enrichment by the Plaintiff against the Defendant cannot succeed. This is because the Defendant took purported legal title from the government who had proceeded on the basis that the land is a ‘public road’ and therefore belonging to government. In exchange for Lots 14 and 17, the Defendant exchanged some of its land with the government. Any purported “deprivation” of the Plaintiff from Lots 14 and 17 was therefore not by the Defendant but by the government through the Ministry of Natural Resources and Environment. The first two elements for unjust enrichment has not been satisfied.
  4. The government is not a party to these proceedings.
  5. The claim for unjust enrichment against the Defendant on this basis has not been established. I however note my earlier comments at paragraphs 13 and 14 above.

Claim for Refurbishing and Furnishing New Hotel and Restitution for Compensatory Damages” (paragraphs 58(d) and 58(i), Amended Statement of Claim):

  1. I refer to paragraphs 101 and 102 above. The reasons stated there apply equally in terms of this claim brought on the basis of unjust enrichment, which has not been made out by the Plaintiff.
  2. A further difficulty for the Plaintiff is that this cause of action is for alleged unjust enrichment, that is, the unjust enrichment of the Defendant at the expense of the Plaintiff. The relief for a Plaintiff is restitutionary. In the Laws of New Zealand (online loose-leaf edn, LexisNexis), Restitution and Damages at [2]), the learned authors explained the difference between restitution and damages as follows:

“The function of restitution is to ensure that, where a plaintiff has been deprived of wealth that is either in his or her possession or would have accrued for his or her benefit, it is restored to him or her. The measure of restitutionary recovery is the gain the defendant made at the plaintiff’s expense. When one talks of restitution, one normally talks of giving back to the plaintiff something that has been taken from the plaintiff (a restitutionary proprietary remedy), or its equivalent value (a personal restitutionary award)

In contrast to the gain-based remedy of restitution, damages whether at common law or in equity are compensatory: they are designed to restore the plaintiff to the position that he or she would have occupied had no wrong been done to him or her.”

  1. The Plaintiff’s claim for $5,000,000.00 to restore, refurbish and fully refurnish the new hotel is not restitutionary relief available for actions based on unjust enrichment but a claim for damages. Similarly, the claim for $5,000,000.00 for the loss of the business and accommodation resulting from the loss of the new hotel, financial hardship endured, stress, humiliation and the negative impact on the Plaintiff is also not restitutionary relief in that these are were not benefits gained by the Defendant at the expense of the Plaintiff. The relief sought here by the Plaintiff is one of damages which is not available in a claim based on a cause of action for unjust enrichment.

Erroneously Charging and Accepting Lease Payments in the amount of $155,000.00 and Legal Costs of $55,000.00:

  1. The doctrine of res judicata applies to this claim. It was the subject of Consent judgment entered into by the Plaintiff and the Defendant on the 27th May 2013. I have dealt with this issue earlier in my judgment.

The Legal Fees Charges for Loan Recovery and Conveyancing:

  1. This claim for unjust enrichment relates to the legal fees purportedly paid to Mr Toleafoa Toailoa Solomona in or about 2007 or 2008 for acting as solicitor for the Defendant in the mortgagee sale process. The beneficiary of that purported payment is Mr Toleafoa Toailoa Solomona and not the Defendant. Accordingly, this claim has not been proven by the Plaintiff on the balance of probabilities.

Interest:

  1. As I have found that the claim for unjust enrichment has not been proven by the Plaintiff on balance of probabilities, I do not need to then turn my mind to the claim for interest.

Res Judicata – Strike Out Motion 18 December 2014:

  1. In these proceedings, I have made no determination in relation to whether the judgment of Nelson J striking out the earlier proceedings by the Plaintiff on the 18th December 2014 gives rise to res judicata on the basis of issue estoppel in relation to title to parcel 387 / lot 17 and parcel 454 / lot 14. To determine these proceedings and the causes of action pleaded by the Plaintiff, I have not needed to determine that question.
  2. Should further proceedings be initiated following this judgment, no doubt that question amongst others will need to be determined at that point in time.

RESULT:

  1. For the foregoing reasons, the Plaintiff’s Amended Statement of Claim is dismissed. If parties cannot agree as to costs, the Defendant may file and serve Memorandum as to Costs within 14 days. The Plaintiff may file a response as to Costs within a further 14 days thereafter.

JUSTICE CLARKE

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