Home | Databases | WorldLII | Search | Feedback High Court of Fiji

Chand v Prakash [2011] FJHC 84; HBC169.2010 (21 February 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION HBC 169 OF 2010
CIVIL APPEAL NO. 12 OF 2010

BETWEEN:

AMI CHAND (trading as Tabua Furniture Limited)
Plaintiff/Respondent

AND:

AVIN PRAKASH (trading as Tabua Furniture Investments Limited)
Defendant/Appellant

Mr S Kumar for the Plaintiff
Mr R Chaudhary for the Defendant

DECISION

On 27 August 2010 the Master delivered a Ruling in respect of an application by Ami Chand for possession under section 169 of the Land Transfer Act Cap 131 (the Act). The application sought an order for vacant possession of land being Crown Lease No. 6566, Lot 11 and Lot 12, on Crown Lease No. 6090 at Manoca Industrial Sub-Division in Tailevu (the premises). The application was opposed by Avin Prakash.

The Master accepted that Tabua Furniture Investments Limited (TFIL) purchased from Tabua Furniture Limited all its machinery for $75,000.00 and paid a further $20,000 for the stock. The agreement was between the two corporate entities. It was dated 13 December 2007. It provided for the transfer of all stocks, machinery, business and goodwill that was described in Schedule 1 to the Agreement. Schedule 1 was a three page document containing a number of items, some of which were valued and the remainder had not been valued. The agreement provided that the vendor would give possession of the chattels on the date of the execution of the agreement.

The Vendor's business had been conducted from the premises. The chattels were located on the premises on the date when the Purchaser was to take possession. The agreement was silent as to whether the Purchaser was to remove the purchased chattels from the Plaintiff's premises or whether the chattels were to remain on the premises and the Purchaser would conduct its business from the said premises. The business was one of manufacturing furniture for well known retailers.

However, it would appear that there was an understanding that the chattels would remain on the premises and that the Purchaser would conduct its business from the Plaintiff's premises. This is supported by the fact that the a monthly rental of $1500.00 was paid to the Plaintiff following the sale and purchase transaction. It was not disputed that there was no formal tenancy agreement between the parties. However, this payment to and acceptance by the Plaintiff of a monthly rental would appear to confirm the existence of an informal or implied tenancy arrangement.

At this stage it should be noted that the sale and purchase agreement was silent as to whether the purchaser also acquired the name TFL although the preamble did refer to "goodwill".

It was an express term of Crown Lease No. 6566 that it was declared to be a protected lease under section 13 of the State Lands Act Cap 132. The other portion of the premises described in Crown Lease No. 6090 was also expressly declared to be a protected lease under section 13 of the Act.

The Master noted that there was no material to suggest that the Director of Lands had consented to the Defendant's occupation of the premises nor for the Plaintiff to commence the present proceedings.

The Master made no finding in relation to the validity of the Notice to Quit that had been served by the Plaintiff. Instead, he regarded the mandatory requirement of section 13 and the consequences that result from non-compliance as decisive. He held that whatever the nature of the Defendant's occupation, it was unlawful from the beginning and as a result the Defendant could not show cause under section 172 of the Land Transfer Act. Consequently the Plaintiff's application succeeded and the Master made the following orders:

"(i) TFIL 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.

The Defendant wishes to appeal the Ruling. Pursuant to Order 59 Rules 12 and 14 of the High Court Rules, the Defendant filed on 17 September 2010 a Notice of Appeal dated 16 September 2010 with Grounds of Appeal.

The grounds of appeal were stated as being:

"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 on 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 the 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 the costs.

6. That the Appellant/Defendant reserves the right to add, amend or alter his grounds of appeal upon receipt of the Master's notes and exhibit."

The filing of the Notice and Grounds of Appeal does not operate as a stay of proceeding or execution unless the Court so directs (See Order 59 Rule 16 (1)). Pursuant to Order 59 Rules 16 (2) and 17 (2) the Defendant filed on 27 September 2010 a summons seeking the following:

"1. That there be an unconditional order of stay of all Orders made by the learned Master on 27 August 2010 until the final determination of the Appeal in the High Court of Fiji vide Civil Appeal No. 12 of 2010.

2. That this Honourable Court gives further directions in relation to the date for the hearing of the Appeal and or give directions as to security for costs.

3. That the costs of this application be paid by the Respondent on Solicitor Client basis."

The application was supported by an affidavit sworn by Avin Prakash on 27 September 2010. An answering affidavit was sworn by Ami Chand on 18 October 2010 and a reply affidavit was sworn by Avin Prakash on 17 November 2010. The hearing of the application commenced on 1 December 2010 and was adjourned part-heard to 19 January 2011 with the following interim arrangements ordered until that date:

"1. Interim stay granted until further order on condition that the Appellant pay the sum of $1500.00 as monthly rent commencing on 1 December 2010 for the month of November and thereafter on the last day of each month.

2. The Appellant be restrained from in any way causing any damage to the said premises the subject matter of these proceedings.

3. The Respondent is given leave to file a supplementary affidavit within seven days.

4. The Appellant is given leave to file a supplementary affidavit within seven days thereafter.

5. Costs in the cause".

The Plaintiff filed a supplementary affidavit sworn by Ami Chand on 7 December 2010. The Defendant also filed a supplementary affidavit sworn by Avin Prakash on 20 January 2011.

The hearing of the stay application resumed on 19 January and was completed on 21 January 2011.

In Ambaram Narsey Properties Ltd –v- Khan Brothers and Lautoka City Council (unreported Civil Action No. 139 of 1996 (Lautoka) delivered 18 November 2008) Gates ACJ (as then was) at page 2 stated:

"If a stay was not granted by the Court at the time of making the order now appealed against, the applicant must show that special circumstances exist as to why a stay should now be imposed, and the successful litigant in effect held back from his remedy: Tuck v Southern Counties Deposit Bank [1889] UKLawRpCh 149; (1892) 42 Ch. D 471 @ 478 per Kay J ...."

In the recent decision of Abhay Kumar Singh v Chief Registrar (unreported Civil Appeal No. 7 of 2010 delivered 22 October 2010) the Supreme Court of Fiji stated at page 7:

"In the case of Ambaram Narsey Properties Ltd v Khan Brothers and Lautoka City Counsel (supra) ... which was stay application pending appeal His Lordship the Chief Justice (the then Acting Chief Justice) ... discussed in detail the recently considered principles governing stay applications with reference to the decision in Natural Waters of Viti Ltd –v- Crystal Clear Mineral Water (Fiji) Ltd. I agree with the views expressed by His Lordship the Chief Justice in that case regarding stay applications pending appeals." (per Hettige J).

In Natural Waters of Viti Ltd v Crystal clear Mineral Water (Fiji) Ltd (unreported Civil Appeal No. 11 of 2004 delivered on 18 March 2005) the Court of Appeal discussed the principles to be applied on an application for stay pending appeal at paragraph 7:

"The principles to be applied on an application for stay pending appeal are conveniently summarised in the New Zealand text, McGechan on Procedure (2005):

"On a stay application the Court's task is carefully to weigh all of the factors in the balance between the right of a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful ...." (emphasis added)

The following non-comprehensive list of factors conventionally taken into account by a court in considering a stay emerge from Dymocks Franchise Systems (NSW) Pty Ltd –v- Bilgola Enterprises Ltd (1999) 13 PRNZ 48 and Area One Consortium Ltd –v- Treaty of Waitangi Fisheries Commission (1993) 7 PRNZ 200:

(a) Whether, if no stay is granted the applicant's right of appeal will be rendered nugatory (this is not determinative): Philip Movus (NZ) Ltd –v- Liggett & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA).

(b) Whether the successful party will be injuriously affected by the stay.

(c) The bona fides of the applicant as to the prosecution of the appeal.

(d) The effect on third parties.

(e) The novelty and importance of questions involved.

(f) The public interest in the proceeding.

(g) The overall balance of convenience and the status quo."

The task of determining the weight to be given to these factors in the balancing exercise that is referred to in the first paragraph of the above quotation is, in my opinion, dependent upon an assessment as to the likelihood of the appeal being successful.

The two principal questions raised by the appeal concern, first, the jurisdiction of the Master to hear the application and, secondly, the effect if any, of the absence of consent by the Director of Lands for the Defendant to occupy the premises and pay rent to the Plaintiff.

On the question of the Master's jurisdiction, the starting point is Order 59 Rule 2 of the High Court Rules (L/N 39 of 2006) which states:

"2 The Master shall have and exercise all the power, authority and jurisdiction which may be exercised by a judge in relation to the following causes and matters:

....

(k) possession of land under section 169 of the Land Transfer Act (Cap 131) and Order 88 and 113, where uncontested."

The matter before the Master was a contested application under section 169 of the Land Transfer Act. As a result, at first glance, it would seem that the Master exceeded his jurisdiction.

However, Order 59 Rule 2 (l) goes on to provide that the Master shall also exercise jurisdiction in relation to:

"any other matter in respect of which jurisdiction is confined upon the Master by or under any other written law or by the Chief Justice."

In a document dated 5 October 2009 and signed by the Hon. Chief Justice the following was addressed to the Master:

"In exercise of powers provided pursuant to Order 59 Rule 2 (k) of the High Court (Amendment) Rules 2006, I confer jurisdiction upon you as Master of the High Court to hear applications for possession of land under s.169 of the Land Transfer Act (Cap 131) and orders 88 and 113, whether contested or not."

It would appear that the question of his jurisdiction to hear the application was not raised by the parties before the Master. Had it been then no doubt the Master would have made reference to the extension of his jurisdiction. It may well be prudent for the Master in future applications of this kind to make reference to his extended jurisdiction at the commencement of the hearing.

However, be that as it may, it is clear that the Master did have the jurisdiction to hear and determine the application.

The second significant issue raised by the appeal concerns the nature of the lease. It was not disputed that the lease was a protected lease under section 13 of the State Lands Act Cap 132. So far as is relevant section 13 (1) states:

"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'

(hereinafter 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 any 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 ...."

Both lease documents contain a clause to the effect that the lease is a protected lease under the provisions of the (State) Lands Act. As a result the written consent of the Director of Lands was required to be obtained by the Plaintiff for what may be termed the subletting of the premises to the Defendant. Furthermore the Director of Lands must give his written consent for the lease to be dealt with by the Court or under the process of the Court.

Upon a careful reading of this section it becomes apparent that the two instances requiring the written consent of the Director of Lands are in this particular case connected.

Since the subletting has taken place without the prior written consent of the Director of Lands, the transaction is unlawful. The effect of the provision is to render such a transaction illegal and void from the beginning. It follows that, an application for possession is not a situation where the court can be said to be dealing with the lease or that that the lease is being dealt with under the process of any court of law.

This conclusion is consistent with the observations of Gates J (as then was) in Indar Prasad and Bidya Wati –v- Pusup Chand [2001] 1 FLR 164 at page 166. His Lordship noted that in a case where the Director had not consented to the Defendants' occupation of the State land which was, as a result, illegal, the position was that:

"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."

In the same decision (supra) at page 170 His Lordship stated:

"Whatever the nature of the permission granted to the Defendants (by the Plaintiff) to occupy the relevant State land, it was clearly unlawful because it lacked the Director's consent. .... The Director has had no prior opportunity to evaluate the Defendants as suitable tenants of the State, the very purpose for the consent provision."

On the evidence before me it is clear that the Director's written consent has not been obtained for the Defendant to occupy the premises. Such occupation was unlawful and the subletting of no effect. As a result the written consent of the Director to commence the ejectment application was not required.

The Plaintiff was entitled to rely upon the fact that he was the registered proprietor of both leases as the basis for his application under section 169 of the Act. As a result the issues raised by the Defendant concerning the Notice to Quit are of no consequence in the proceedings.

As a result, for the purposes of the application for stay, I am compelled to proceed on the assumption that the appeal, at least on the principal substantive issues is most unlikely to succeed.

Whatever may be the merit of any of the other factors that would usually be considered in an application for stay, I am unable to find that any of those factors either individually or taken together outweigh the consideration that the appeal is unlikely to succeed.

I cannot conclude without making reference to the manner in which the proceedings have been commenced. In my opinion the words "trading as ..." are surplasage and add nothing to the character in which the Plaintiff and Defendant are named. Added to this is the fact that the entities following the words "trading as" are legal persons. It is difficult to understand on what basis the expressions have been used. Their usage in this case is not in accordance with either Order 81 of the Rules or the Partnership Act Cap 248.

The application for stay is refused. The Plaintiff/Respondent is entitled to costs on this application which are fixed summarily in the sum of $600.00. The appeal is listed for mention on 28 February 2011 for further directions.

W D Calanchini
JUDGE

21 February 2011
At Suva