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Chand v Prakash [2011] FJHC 640; HBC169.2010 (7 October 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION HBC 169 OF 2010

BETWEEN

AMI CHAND
Plaintiff

AND:

AVIN PRAKASH
Defendant

Mr S Kumar for the Plaintiff
Mr A Singh for the Defendant

JUDGMENT

This is an appeal brought by the Defendant against a decision of Master Tuilevuka (the Master) dated 27 August 2010. The Orders entered by the Registry on 24 September 2010 stated:

"(i) TFIL (Tabua Furniture Investment Limited) and/or Avin Prakash is/are to vacate the property (Crown Lease No.6566, Lot 11, 24.6 perches and Lot 12 Crown Lease No.006090 at Manoca Industrial Sub-Division in the Tikina of Bau and Province of Tailevu) within one month of the date of this ruling.

(ii) TFIL and/or Avin Prakash to pay costs to the Plaintiff which I summarily assess at $500.00 to be paid within 14 days of the date of this Ruling."

At the outset it should be noted that the Master has expressed his Orders in the alternative. The Orders are directed to Tabua Furniture Investments Limited (TFIL) and/or Avin Prakash. The reason for this would appear to flow from the manner in which the parties have been named in the proceedings. The Plaintiff in the Originating Summons is named as Ami Chand trading as Tabua Furniture Limited (TFL). The Defendant is named as Avin Prakash trading as Tabua Furniture Investments Limited (TFIL).

Although not commenting on the propriety of the manner in which the parties were named, the Master alluded to the problem in paragraphs 13 and 18 of his decision. In paragraph 13 the Master observed:

"It is difficult to work out whether Avin Prakash or TFIL is the tenant to the Plaintiff."

And in paragraph 18 the Master noted:

"Hence, whether it is TFIL or Avin Prakash that is occupying the land, the occupation would still be unlawful ab initio. Accordingly, neither TFIL nor Prakash can under any circumstances ever successfully show cause under section 172 of the Land Transfer Act against an eviction order."

It is necessary to make some comments on the manner in which the parties have been named in the Originating Summons. The first comment is that all the entities named are legal persons. The Plaintiff is named as trading under the name of another legal person. The Defendant is also named as trading under the name of another legal person. Secondly, it is apparent that the two companies are not joined as parties in their own right. It is clear that there is only one Plaintiff and only one Defendant. Thirdly, pursuant to Order 81 Rule 9 of the High Court Rules an individual carrying on business within the jurisdiction in a name or style other than his own name is to be sued in that name or style as if it were the name of a firm. In other words, the Rule does not permit an individual to sue under a business name. Although not directly on point the Rule does indicate that a plaintiff is required to commence proceedings using his or its real name. Fourthly, in relation to the manner in which the parties have been named, the words "trading as" and what follows are "mere useless and inappropriate surplusage" (see W. Hill and Son –v- Tannerhill [1944] K B 472 per Scott LJ at 475). Finally, there are several issues arising out of the use of the name of a body corporate as a business name. There is the requirement that a registered company can only sue or be sued in its corporate name. Furthermore, from the date of incorporation the subscribers and subsequent members (shareholders) are a body corporate by the name of the company being an entity which is separate and distinct from the individual members. Also, since the Plaintiff, and for that matter, the Defendant, were both purporting to trade or carry on business using the name of a body corporate, it would be necessary for the Plaintiff and the Defendant to establish that they were trading under the company name with the consent of the company.

For the reasons stated I have concluded that the proper parties to the proceedings are the two individual living persons named as Plaintiff and Defendant respectively.

The Plaintiff commenced proceedings by Originating Summons for an order for vacant possession of the property described therein. Although not stated on the face of the summons it was accepted that the application was made under section 169 of the Land Transfer Act Cap 131 (LTA).

The application was supported by an affidavit sworn by Ami Chand on 31 May 2010. In the affidavit the Plaintiff stated that he was the last registered lessee and owner of all the land so described being state land. The Plaintiff deposed that the Defendant occupied the property at sufferance. He stated that a Notice to Quit was served on 29 April 2010 on the Defendant requesting him to vacate the property.

The documents annexed to the affidavit indicate that as at the date of issue of the summons the Plaintiff was the registered lessee of the two state leases. The copy of the Notice to Quit dated 29 April 2010 that was also annexed to the affidavit was addressed to TFIL. The Notice appeared to have been issued on behalf of TFL.

The Defendant subsequently filed an answering affidavit sworn on 21 July 2010. Somewhat unfortunately the Deponent described himself as one of the Directors of TFIL being "the Defendant Company". An agreement dated 13 December 2007 between TFL and TFIL for the sale and purchase of stock, machinery and goodwill was annexed to the affidavit. In the agreement there was no reference to the property upon which the business had been conducted. There was no reference in the agreement to any lease or tenancy in relation to the subject land. Furthermore, in paragraph 8 of his affidavit, the Defendant stated:

"There was no tenancy agreement made between the parties as it was mutually agreed that TFIL could use the premises as long as they wanted and they would be given the first opportunity to purchase the premises should they wish to do so."

In his answering affidavit the deponent also stated that TFIL paid a monthly rental of $1,500.00. The deponent challenged the validity of the Notice to Quit on grounds that relate to the identity of the correct parties. In the same affidavit the deponent stated that TFIL needed a reasonable amount of time and suitable alternative premises to relocate its business as a substantial amount of machinery and stock was involved. He also stated that TFIL could not relocate its operations within such a short notice. This was clearly a reference to the period of one month that was the notice given in the Notice to Quit.

Also annexed to the Defendant's affidavit were photocopies of four receipts from the Plaintiff Ami Chand made out to TFIL for $1,500.00 in each case.

It was not disputed that the business which had been sold continued to be conducted on the property.

The matter came on for hearing before the Master on 26 August 2010. In a written ruling the Master identified two issues. The first concerned the validity of the Notice to Quit and the second concerned whether the Director of Lands had consented to the arrangement between the parties whereby there was a change in occupancy of the property. The Master concluded that since the Plaintiff was also relying on his registered ownership of the state leases, he did not have to rely on the tenancy or the Notice to Quit.

The Master concluded that the Defendant could not show cause why vacant possession should not be given to the Plaintiff. The Master considered that whatever the nature of the occupation by whatever the identity of the occupier, such occupation was illegal without the consent of the Director of Lands having first been obtained. The Master then ordered the Defendant and/or TFIL to vacate the property within one month.

The Defendant appealed by filing on 17 September 2010 a Notice of Motion seeking an Order that the Master's decision and Orders be wholly set aside and a further order that the Plaintiff's application be dismissed. The Defendant relies on the following grounds:

"1. That the learned Master erred in law and in fact by making the order for vacant possession on a Notice to Quit which was not properly issued and served on the Appellant.

2. That the learned Master erred in Law and in fact by failing to consider at all, the issue of Promissory Estoppels raised by the Defendant and which issue prevented the Respondent from evicting the Appellant from the subject property.

3. That the learned Master erred in Law and in fact by dealing with the Originating Summons for vacant possession and which summons was irregularly and improperly filed.

4. That the Learned Master erred in Law and in fact by dealing with the said Originating Summons for vacant possession filed under section 169 of Land Transfer Act wherein the said Section did not give the Master the jurisdiction to deal with the matter and/or the Master by dealing with the application exceeded his jurisdiction.

5. That the learned Master erred in Law by awarding the costs of $500.00 against the Appellant in breach of the established principles of the Rules in respect to the awarding of costs."

Pursuant to Order 59 Rule 17 (2) the Defendant filed on 27 September 2010 a Summons seeking directions for the hearing of the appeal. In the same Summons the Defendant also sought an order for a stay of the Masters Orders pursuant to Order 59 Rule 16.

An interim stay order was granted on 1 December 2010. However, after hearing the parties, that interim order was discharged on 21 February 2011. At the same time any further stay pending the hearing of the appeal was refused.

It would appear that the Plaintiff has not yet been handed vacant possession of the property.

The Appeal was listed for hearing before me on 15 August 2011. Prior to that date the Defendant filed on 9 August 2011 a summons seeking, inter alia, leave to amend the grounds of appeal. Since the application did not comply with Order 59 Rule 15 and since Counsel for the Plaintiff opposed the application, Counsel for the Defendant withdrew the application to amend the grounds of appeal at the commencement of the appeal hearing.

During the hearing of the Appeal Counsel for the Defendant informed the Court that the challenge to the Master's jurisdiction would not be pursued and should be regarded as having been abandoned.

Ground one (1) of the appeal raises a number of issues including the identity of the parties to the arrangement whereby the property in the two state leases registered in the Plaintiff's name was occupied by either the Defendant or by TFIL. This arrangement will be referred to as a sub-lease.

As I have already indicated I am satisfied that the summons for vacant possession has been issued by Ami Chand against Avin Prakash. However the Notice to Quit the property had been prepared by Sunil Kumar Esq. whose client is expressly stated in the Notice to be TFL. The notice to quit is addressed to TFIL and not Avin Prakash. The summons expressly stated that the Plaintiff Ami Chand was claiming vacant possession of the property from Avin Prakash.

At first glance the confusion concerning the identity of the parties to the sub-lease and the fact that TFIL carried on the business it had purchased from TFL on property the registered lessees of which at that time were the Plaintiff and TFL would appear to lead to the conclusion that this was not an appropriate claim to be decided summarily on affidavit material under section 169 of the Act.

There is also the additional confusion about the nature of the occupation as a result of two assertions made by the defendant in his affidavit sworn on 21 July 2010. In paragraph 8 the Defendant deposed that there was no tenancy agreement between the parties and then referred to some other mutual agreement. The terms of the mutual agreement were not provided. There was no indication as to who were the parties to the mutual agreement. In paragraph 6 the Deponent stated that TFIL paid a monthly rental of $1,500.00.

However, as the Master observed, there was one significant element that needed to be considered. The property for which vacant possession was sought consisted of two state leases both of which were expressly stated to be protected leases under the State Lands Act Cap 132. Section 13 of that Act, so far as is relevant, states:

"(1) Whenever in any lease under this Act there has been inserted the following clause:

"This lease is a protected lease under

the provisions of the State Lands Act"

(herein after called a protected lease) it shall not be lawful for the lessee thereof to alienate or deal with the land comprised in the lease or any part thereof, whether by sale, transfer or sublease or in other manner whatsoever _ _ _ without the written consent of the Director of Lands first had and obtained, nor, except at the suit or with the written consent of the Director of Lands, shall any such lease be dealt with by any court of law or under the process of any court of law _ _ _.

Any sale, transfer, sublease, assignment, mortgage or other alienation or dealing effected without such consent shall be null and void.

(2) _ _ _

(3) _ _ _

(4) _ _ _

(5) For the purposes of his section "lease" includes a

sublease and "lessee" includes a "sub-lessee".

In general terms, any dealing in land by a lessee in respect of a state lease requires the prior written consent of the Director of Lands. Without that prior written consent any such dealing by the lessee is both unlawful and is expressly stated in section 13 to be null and void.

Furthermore, in respect of any lease to which the Director of Lands has given his consent, that lease cannot be dealt with by a court or be the subject of court process without the written consent of the Director of Lands.

In the present case, it was not disputed that the Director of Lands had not given his prior written consent to any alienation or dealing of the property of which Ami Chand was or had become the registered lessee. As a result the inescapable conclusion is that the transaction whereby the lessee alienated or dealt with the property by way of a sub-lease either (1) to TFL who in turn came to an arrangement with Avin Prakash or TFIL or (2) directly to TFIL or Avin Prakash, was unlawful and null and void from the beginning.

The Defendant submitted in written submissions filed on 15 August 2011 at page 4 that it was implicit that the Company (presumably a reference to TFL) and the Plaintiff Ami Chand were to obtain the consent of the Director of Lands. The section prohibits the lessee from alienating or dealing with the leased land without first obtaining the written consent of the Director of Lands. As the prohibition is directed towards the lessee it can be reasonably inferred that it is the lessee who is required to obtain the consent of the Director of Lands. The matter is somewhat clarified by the wording of clause 2 in each of the lease documents. Clause 2 states:

"The lessee shall not transfer, sublet, mortgage, assign or part with the possession of the demised land or any part thereof without the written consent of the lessor first had and obtained. Consent to subletting will only be granted in special circumstances and then only on re-assessment of rental."

A breach of clause 2 is a matter that constitutes a breach of the leasing agreement between the parties to the lease. In the absence of section 13, the breach of this clause in the lease by the Plaintiff would ordinarily, if he so elected, entitle the Defendant to rescind the sub-lease agreement.

When section 13 is considered in its entirety it is clear that it is the responsibility of the lessee to obtain the consent of the Director of Lands. Section 13 (3) gives a right of appeal to any lessee who is aggrieved by the refusal of the Director of Lands to give any consent required by the section.

Although a sub lease is null and void without the prior written consent of the Director of Lands, the unlawful aspect of the breach is reflected in section 40 of the State Lands Act which states:

"(1) Every omission or neglect to comply with, and every act done or attempted to be done, contrary to the provisions of this Act, _ _ _, shall be deemed to be an offence against the Act."

Therefore the effect of section 13 is that any sub lease of state land granted by the lessee without having first applied for and having obtained the written consent of the Director of Lands shall render the sub lease null and void ab initio and may expose the lessee to prosecution under section 40 of the State Lands Act.

The date of the agreement for the sale of machinery and stock was 13 December 2007. It may reasonably be inferred that the informal sub lease was granted by the lessee on about the same date. At that time state lease No.6090 was registered in the name of the Plaintiff. State lease No.6566 was registered to TFL. It was the responsibility of both the Plaintiff and TFL to obtain the prior written consent of the Director of Lands. Lease No. 6566 was subsequently transferred to the Plaintiff on 7 July 2009. When the Plaintiff commenced the proceedings under section 169 he was the registered owner of both leases.

There is no dispute that the leased property was the subject of a protected lease. There is no doubt that section 13 of the State Land Act applied to the leased property. It is not disputed that at the time the Plaintiff commenced the proceedings he was the registered owner of the two leases. Under section 169 the Plaintiff is entitled to seek possession of the property on the strength of his title. His right to possession does not depend on the sub-leases but on his registered ownership.

Under these circumstances it does not matter whether Avin Prakash or TFIL was the sub-lessee. In my judgment nether Avin Prakash nor TFIL can rely on the sub-lease on which alone, it is necessary to justify remaining in possession because of its illegality (See Northern Hotels Limited –v- Gordon L Oliver (1980) 26 FLR 93). Although the Notice to Quit that was sent by the Plaintiff's legal practitioners was a requirement, express or implied, under the sub-lease arrangement, the Plaintiff need not rely on it as the basis for his claim for possession. Whatever may be its defects concerning the name of the party serving or being served, the manner of service or its contents, the notice to quit is of no consequence to a claim by the Plaintiff based on his being the registered owner. The Defendant cannot rely on any defect in the Notice to Quit since it came into being as a result of a sub-lease that was null and void.

There is no evidence before the Court to suggest that the acquisition of the property described in State lease 6566 by the Plaintiff and Savita Devi from TFL was unlawful, null and void. Counsel for the Defendant made an allegation to this effect in his written submissions without adducing any evidence to support the allegation.

To be more precise, the Plaintiff cannot be classified as a lessor with power to re-enter or as a lessor acting under a notice to quit (whether valid or otherwise) for the purpose of section 169. This is because the lessees entered into subleases with either the Defendant Avin Prakash or with TFIL which were null and void. In Indar Prasad and Bidya Wati –v- Pusup Chand [2001] 1 FLR 164 Gates J (as then was) noted at page 170:

"Whatever the nature of the permission granted to [the Defendant] (by the lessees) to occupy the relevant State Land, it was clearly unlawful because it lacked the Director's consent_ _ _"

As a result ground one of the Grounds of Appeal is rejected.

Ground 2 of the Grounds of Appeal raises the issue of Promissory Estoppel. It is not apparent from the file notes whether this was raised by the Defendant during the course of submissions before the Master to show cause under section 172 why he should not give possession of the property to the Plaintiff. Certainly the Master did not refer to this issue when he summarised the Defendant's submissions in his decision. Although no objection was taken by Counsel for the Plaintiff I am by no means satisfied that the issue of promissory estoppel was an issue raised by the Defendant at the hearing before the Master.

There is a further problem concerning this ground of appeal. In his written submissions, commencing at page five (5) Counsel for the Defendant comments on what is headed "Court of Equity". Counsel then discusses fraud and deception. Then almost in the same breath, as it were, Counsel raises the issue of a constructive trust. Counsel then proceeds to make submissions on unjust enrichment. It should be noted that no where in his written submission does Counsel for the Defendant refer to either the general topic of equitable estoppel or more particularly the issues of promissory estoppel or proprietary estoppel.

Promissory or equitable estoppel is described in Halsbury's Law of England Fourth Edition Volume 16 at paragraph 1514:

"When one party has, by his words or conduct, made to the other a clear and unequivocal promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced."

However, there is a principle that the doctrine of estoppel cannot be invoked to render valid a transaction which the legislature has enacted is to be invalid. (Halsburys Laws of England supra at paragraph 1515). As Gates J (as then was) noted in Indar Prasad (supra) at page 171:

"Section 13 of the State Lands Act would appear to be a complete bar to any equitable estoppel arising in the Defendant's favour."

Furthermore, the comments of Byrne J (as then was) in Mani Lal and Others –v- Satya Nand (1994) 40 FLR 94 at page 100 are relevant to the position of the Defendant in the present proceedings. His Lordship stated:

"I am satisfied that the Defendant must have known that no consent of the Director of Lands had been obtained to his occupation. Before taking possession of the land he was under a duty to make all relevant enquiries as to the Plaintiff's title and since the land in question obviously was not freehold in my judgment one of the first steps he should have taken was to enquire whether the Director of Lands had given his consent to the transaction. If the Defendant proceeded to erect a building on the land either knowing that the Director of Lands had not given his consent or oblivious to the lack of such consent he cannot hold this against the Plaintiff".

In his affidavit sworn on 21 July 2010 Avin Prakash deposes in paragraph 12 to his knowledge of the premises being "crown leases".

I am, as a result of the above matters, not satisfied that ground 2 has been established and is therefore rejected.

As noted earlier, the grounds of appeal that concern the Master's jurisdiction have been abandoned. There are two aspects to the issue of jurisdiction. The first relates to the requirement in section 13 of the State Lands Act that the consent of the Director of Lands is required for the sub-lease to be dealt with under the process of any court of law. The Court in Indar Prasad (supra) stated at page 166:

"The court is asked to make an order of ejectment against a person in whose favour the Director either, has never considered granting a lease, or has never granted a lease. The ejectment of an occupier who holds no lease is therefore not a dealing with a lease. Such occupier has no title. There is no lease to him to be dealt with. The order is for his ejectment from the land."

In the circumstances, there was no requirement for the Director's consent in respect of the proceedings under section 169 of the LTA.

The second issue concerning jurisdiction is the Master's jurisdiction to adjudicate contested applications under section 169 of the LTA. This matter was discussed in my earlier ruling. It is sufficient to note that a practice direction from the Chief Justice under Order 59 Rule 2 (l) has extended the Masters jurisdiction to hear such applications.

The general practice that costs follow the event was followed by the Master and I see no reason to disturb the award of costs in favour of the Plaintiff.

Before concluding it is necessary to make some final observations about the present application.

First, the evidence before the Master was by way of affidavit. In that regard I note paragraphs 9, 10 and 11 of the affidavit of Avin Prakash sworn on 21 July 2010. The theme running through those three paragraphs is that it was unreasonable to demand that TFIL vacate the property at short notice. The reasons for that position were also stated on the affidavit. This aspect of the Defendant's case received no emphasis whatsoever from Counsel for the Defendant in either the written or oral submissions before this Court. Instead, Counsel referred to a number of matters which had not been included in the affidavits and as a result of which the Court must disregard.

Secondly, Counsel for the Defendant raised the issue of unjust enrichment. There was no material before the Master nor before this Court that would support such a claim even if it was a claim that was available to the Defendant.

I had noted much earlier in this decision that at first glance this appeared to be an application that should not or could not be decided upon affidavit material alone. However, in my judgment the classification of the leases as protected leases and hence bringing into play section 13 of the State Lands Act is decisive. The mandatory requirement of section 13 and the legal consequences that flow from non-compliance overcome and sufficiently dispose of any interest claimed by the Defendant under section 172 of the Land Transfer Act.

The appeal must be dismissed. The orders of this Court are:

1. Appeal is dismissed other than to vary the Master's orders by extending the time by which vacant possession be given back to the Plaintiff to three months from the date of this judgment.

2. The Plaintiff is entitled to the costs of this appeal which are fixed summarily in the sum of $1,000.00.

W D Calanchini
JUDGE

7 October 2011
At Suva