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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
HBC No: 82 of 2014
IN THE MATTER of the property comprised in Certificate of Title No. 18993, the Property of Semur Securities Limited
AND
IN THE MATTER of the Land Transfer Act
[Cap 131] Section 109.
BETWEEN:
SEMUR SECURITIES LIMITED a limited liability company incorporated in New Zealand and having its registered office at 447 Blenheim Road, Christchurch, New Zealand.
PLAINTIFF
AND:
ANNIE MADDEN of Butukia Estate, Matei Taveuni, Company Director.
DEFENDANT
BEFORE: Acting Master Vishwa Datt Sharma
COUNSELS: Mr. Vinit Singh for the Plaintiff.
Mr. Parvesh Sharma for the Defendant.
Date of Hearing: 10th March, 2015
Date of Decision: 13th October, 2015.
RULING
INTRODUCTION
BACKGROUND FACTS
By Plaintiff:
By Defendant:
LAW
Any person-
(a) claiming to be entitled or to be beneficially interested in any land subject to the provisions of this Act, or any estate or interest therein, by virtue of any unregistered agreement or other instrument or transmission, oany trust expressed or impl implied, or otherwise howsoever; or
(b) transferrny land subject toct to the provisions of this Act, or any estate or interest therein, to any other person to be held in trust,
may at any tidge with the Registrar a caveat in the prescribed form, for, forbidding the registration of any person as transferee or proprietor of, and of any instrument affecting, such estate or interest either absolutely or unless such instrument be expressed to be subject to the claim of the caveator as may be required in such caveat.
Any such applicant or registered proprietor, or any other person having any registered estate or interest in the estate or interest protected by the caveat, may, by summons, call upon the caveator to attend before the court to show cause why the caveat should not be removed, and the court on proof of service of the summons on the caveator or upon the person on whose behalf the caveat has been lodged and upon such evidence as the court may require, may make such order in the premises, either ex parte or otherwise as to the seet seems just, and, where any question of right or title requires to be determined, the proceedings shall be followed as nearly as may be in conformity with the rules of court in relation to civil causes.
ANALYSIS and DETERMINATION
‘That under the Torrens system, a caveatable interest amounts to a proprietary interest in land.’
Further, in Fiji National Provident Fund Board v Vivrass Holdings Ltd (supra) , Justice Jitoko said that in a caveatable interest:
“A caveat is the creature of statute and may be lodged only by a person upon whom a right it has been conferred by the statute. It is not enough to show that the lodging and continued existence of the caveat would be in some way advantageous to the caveator. He must bring himself within section 146 of the Land Transfer Act.’
“the respondent must however, bring itself within the provision of Section 106 and in order to do this must satisfy the court that the following are fulfilled’-
(a) That it is a person claiming to be entitled to or to be beneficially interested in any land estate or interest under the act; and
(b) That is it so claiming by virtue of any unregistered agreement or other instrument or transmission or any trust expressed or implied or otherwise howsoever .....’
However, upon the perusal of the Defendant’s affidavit in opposition, it was ascertained that the Defendant was not only claiming equitable interest under the doctrine of proprietary estoppel for the improvements carried out with the knowledge and acquiescence of Mr. Anersen, the previous registered proprietor of the property but also alleged Fraud on the part of the Plaintiff as well.
The general principle is that a person seeking to lodge and maintain a caveat must have an interest in land, Holt– v – Anchorage Management Ltd [1987] NZCA 5; [1987] NZLR 108 at 117 per Somers J. It is for this reason caveat must state with sufficient certainty the nature of interest or estate claimed by the caveator; NZ Mortgage Guarantee Co Ltd – v – Pye [1979] 2 NZLR 188. Vautier J at page 195 of the report after referring to and following from the Australian cases stated the following:-
“...a caveator who fails to comply fully with the statutory requirements and fails to state accurately the nature of interest claimed which he claims by caveat will not succeed in securing assistance of the Court to maintain such a caveat."
However, a copy was annexed and marked as “H” to Murray George Allott’s affidavit on behalf of the Plaintiff filed on 17th March, 2014.
The statutory requirement is also mandatory under section 107 of Land Transfer Act (Cap 131). It states:-
"Every caveat shall state the name, address and description of the person by who or on whose behalf the same is lodged and, except in the case of a caveat lodged by order of the court or by the Registrar, shall be signed by the caveator or his agent and attested by a qualified witness and shall state with sufficient certainty the nature of the estate or interest claimed and how such estate or interest is derived."
It is a mandatory provision and the interest in the property has to be described in the caveat with certainty which means that it cannot be vague or incomprehensible for a reasonable person.
"Under the Torrens system, a caveatable interest amounts to a proprietary interest in land".
Caveat can thus only be lodged by a person who has legal or equitable interest in the land. Griffith CJ in Municipal District of Concorde v Coles supra said:-
"I am of the opinion that it is only a person who has a legal or equitable interest in land, partaking the character of an estate in it, or an equitable claim to it, who can lodge a caveat."
Any person claiming to be ‘entitled to or to be beneficially interested in any land, estate or interest.” The word ‘Interest’ shows that the legal interest is meant and it is meant to guard equitable interest.
Allegation of Fraud
‘that Mr. Arnesen, the Plaintiff and the Mayfields by attempting to ignore the Defendant and her family’s rights and interest in the said property, are engaging in a form of land fraud termed ‘Wilful blindness’. Not only that, she makes further allegations against stating when the Plaintiff sought Ministerial Consent to sell the said property to the Mayfields, it actually engaged in misrepresentations when it claimed that there were ‘nil improvements’ on the said property. Two applications for Ministerial Consents have been exhibited to the affidavits and in both; the Minister was given the impression that the said property being sold was a vacant land with no improvements. In the application for Ministerial Consent signed on behalf of Semur Securities Limited and Mayfields, the parties declared that there were Nil Improvements on the said property. They tried to pretend that the said property was vacant agricultural land. This was a gross misrepresentation. Prima facie, this shows that whilst Semur Securities Limited was fully aware of the occupation by the Maddens family, it was prepared to lie on an official Government documents to obtain Ministerial Consent.’
35. Reference is made to the case of Shah v Fifita ] FJH; HBC; HBC0392j.2003s 003s (23 June 2004) wherein Justice Pathik said-
“The true test of fraud is not whether the purchaser actually knew for a certainty the existence of the adverse right, but whether he knew enough to make it his duty as an honest man to hold his hand, and either to make further enquiries before purchasing, or to abstain from the purchase, or to purchase subject to the claimant’s rights rather than in defiance of them. If, knowing, as much as this, he proceeds without further inquiry or delay to purchase an unencumbered title with intent to disregard the claimant’s rights, if they exist, he is guilty of that wilful blindness or voluntary ignorance which, according to the authorities, is equivalent to actual knowledge, and therefore amounts to fraud ...”
“by fraud in these Acts is meant actual fraud, i.e. dishonesty of some sort, not what is called constructive or equitable fraud – an unfortunate expression and one very apt to mislead but often used, for want of a better term, to denote transaction having consequences in equity similar to those which flow from fraud. Further, it appears to their Lordships that the fraud which must be proved in order to invalidate the title of a registered purchaser for value, whether he buys from a prior registered owner or from a person claiming under a title certified under the Native Land Acts, must be brought home to the person whose registered title it impeached or to his agents. Fraud by persons from whom he claims does not affect him unless knowledge of it is brought home to him or his agents. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shewn that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different, and fraud may be properly ascribed to him. A person who presents for registration a document which is forged has been fraudulently or improperly obtained it not guilty of fraud if he honestly believes it to be a genuine document which can be properly acted upon.
“.....it has been contended for the defendant that the plaintiff was not an innocent purchaser for value he well knowing what has been called the defendant’s outstanding interest acquired by statute at the time that he purchased Solo. The contention could not be successfully maintained in that form even if the plaintiff had that knowledge for it would have to be classed as fraud on the plaintiff’s part. But it would not have been that fraud which the Lords of the Privy Council laid down is necessary to establish before a man’s Certificate of Title can be done away”.
“In dealing with actions between private individuals, their Lordships are unable to draw any distinction between the first registered owner and any other. A registered bona fide purchaser from a registered owner (and that is the case here) whose title might be impeached for fraud has a better title than his vendor, even if the title of the latter could be impeached by the Crown.
“This narrow meaning of the term “fraud” in the Real Property Act has been evident in pronouncements of the High Court also. For example, in Butler v Fairclough (1917 [1917] HCA 9; , 23 CLR 78 at 97), Issacs J. said that what was contemplated by “fraud” was “actual fraud, moral turpitude (ibid at 90)”, and Griffith C.J. said that it imported “personal dishonesty or moral turpitude”. A few years later, in Wicks v. Bennett [1921] HCA 57; (1921, 30 CLR 80 at 91) Knox C.J. and Rich J. said that “fraud”, as that term was used in s.43 of the Real Property Act 1900 (N.S.W.) meant “something more than mere disregard of rights of which the person sought to be affected had notice”. In Stuart v. Kingston [1923] HCA 17; (1923, 32 CLR 309 at 359) Starke J. said: “Fraud will no longer be imputed to a proprietor registered under the Act unless some consciously dishonest act can be brought home to him. The imputation of fraud based upon the reinforcements of the doctrine of notice has gone.” And the Privy Council, in a later case, expressed the view: “If the designed object of a transfer be to cheat a man of a known existing right, that is fraudulent, and so also fraud may be established by a deliberate and dishonest trick causing an interest not to be registered and thus fraudulently keeping the register clear..... The act must be dishonest, and dishonesty must not be assumed solely by reason of knowledge of an unregistered interest (Waimiha, supra).”
Whether there were any attempts to ignore the Defendant and her family’ by Mr. Arnsen, the Plaintiff, and the Mayfields, I will make reference to the Court of Appeal case of Hardeo Prasad f/n Badal v Abdul Hamid f/n Ahmed Ali (Civil Appeal No. ABU0059 of 2003 – Judgment 19.3.04), said:
“In the words of Salmond J the question is whether he knew for certainty of the existence of an adverse right but did he know enough to make it his duty to hold his hand and either to make further enquiry before taking the lease. Was he guilty of the wilful blindness to which Salmond J refers?”
As the Appeal Court has said in that case “there was no evidence before the Judge” that the plaintiff “knew for a certainty of the existence of an adverse right”.
Promissory estoppel
'During the nineteenth century equity extended the doctrine of estoppel to cases where instead of a representation of an existing fact there was a representation of intention or promise. More recently, this extension became prominent in a sequence of cases following the obiter statement by Denning J in Central London Property Trust Ltd v High Tree House Ltd, though these cases "may need to be reviewed and reduced to a coherent body of doctrine by the courts."
The doctrine
(a) The rule, Where by his words or conduct one party to a transaction freely makes to the other an unambiguous promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise) a, and before it is withdrawn, the other party acts upon it, altering this position to his detriment, the party making the promise or assurance will not be permitted to act inconsistently with it. It is essential that the representor knows that the other party will act on his statement. Yet the conduct of the party need not derive its origin only from the encouragement of representation of the first; the question is whether it was influenced by such encouragement or representation."
Proprietary estoppels
In Denny v Jessen [1977] 1 NZLR 635 at 639 Justice White summarized the proprietary estoppel as follows:
"In Snell's Principles of Equity (27th ed) 565 it is stated that proprietary estoppel is "... capable of operating positively so far as to confer a right of action". It is "one of the qualifications" to the general rule that a person who spends money on improving the property of another has no claim to reimbursement or to any proprietary interest in the property. In Plaimmer v Wellington City Corporation (1884) 9 App Cas 699; NZPCC 250 it was stated by the Privy Council that "...the equity arising from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated."(ibid, 713, 29). After referring to the cases, including Ramsden v Dyson [1866] UKLawRpHL 7; (1866) LR 1 HL 129, the opinion of the Privy Council continued, "In fact the court must look at the circumstances in each case to decide in what way the equity can be satisfied" (9 App Cas 699, 714; NZPCC 250, 260). In Chalmers v Pardoe [1963] 1WLR 677; [1963] 3 All ER 552 (PC) a person expending money was held entitled to a charge on the same principle. The principle was again applied by the Court of Appeal in Inwards v Baker [1965] EWCA Civ 4; [1965] 2 QB 29; [1965] 1 All ER 446. There a son had built on land owned by his father who died leaving his estate to others. Lord Denning MR, with whom Danckwerts and Salmon L JJ agreed, said that all that was necessary;
"... is that the licensee should, at the request or with the encouragement of the landlord, have spent the money in expectation of being allowed to stay there. If so, the court will not allow that expectation to be defeated where it would be inequitable so to do." (ibid, 37,449).
However, the general rule is that "liabilities are not to be forced upon people behind their backs" and following four conditions must be satisfied before proprietary estoppel applies-
(a) There must be an expenditure;
(b) A mistaken belief;
(c) Conscious silence on the part of the owner of the land; and
(d) No bar to the equity
"Conscious silence" implies knowledge on the part of the defendant that the plaintiff was incurring the "expenditure" and in the "mistaken belief "that here was a contract to purchase and that here the defendant "stood by" without enlightening the plaintiff. In short the plaintiff must establish fraud or unconscionable behaviour.
"Knowledge of the mistake makes it dishonest for him to remain wilfully passive in order afterwards to profit by the mistake he might have prevented. The knowledge must accordingly be proved by "strong and cogent evidence"
This passage was adopted by Megarry J in Re Vandervell's Trusts (No 2) [1974] Ch 269,301[1974] 1 All ER 47, 74".
8. At paragraph 8(o) of her affidavit, Ms. Madden states that ' I sought William Madden's consent to purchase the Land. This is not true. I first met William Madden in 1993 when I visited the Land to inspect it and its condition. During this period, I got to know a little bit about the Madden family and was aware that their landholding interests on the Island had come to be sold through a mortgagee sale process. As indicated above, I was aware that there was a campground on the Land and that this was being run by the Madden family. I did not seek any consent from the Madden family in relation to my proposed purchase of the Land. The Madden family was not in occupation of the Land at the time (they were living on an adjacent plot) and, as far as I was aware, there was no need to obtain their consent in respect of any sale of the Land."
9. "I had some sympathy for the family's plight at the time I acquired the Land and indicated to them that I was open to them continuing to operate the campground for the time being. Given the family's financial situation at the time (as far as I understood it) and the remote location of the Land, I did not expect that the Maddens would generate a great deal of revenue from the campground and, on this basis, I did not expect them to be in a position to pay a visible commercial rent from their operation from the campground."
10. "While it has been a long time since these events all took place, my recollection is that I would have indicated to William Madden that he was welcome to continue operating the campground on the Land for the time being on a rent-free, tenancy-at-will basis, but I did not give Mr. Madden or any other member of his family any promise or other assurance that the family would be able to continue to operate the campground indefinitely. I certainly did not give any of these assurances which Ms. Madden alleges at paragraph 8(p) of her affidavit. The proposition in bold at the end of paragraph 8(p) is quite preposterous. There was no such condition imposed on me or the Land, and in my experience, a mortgagee would not have been concerned with any such arrangements. Besides, there is no evidence of "the condition" to which Ms. Madden refers."
13. "It is true that I applied for consent to develop the Land at the time I acquired it, however, this did not oblige me to undertake any development on the Land. Ms. Madden appears to understand the nature and purpose of development consent in this regard. While I had the right at all relevant times (and subject to local planning and other governmental approvals and consents) to develop the Land, it is simply misconstrued to assert that I had an obligation to do so. Too be clear, I never gave any promises or assurance to any member of the Madden family with regards to my plans for the Land. I only indicated that I was prepared to accommodate their use of the Land to run the campground while I looked into the feasibility of the various development options available to me."
14. "Following my acquisition of the Land in 1993, I looked into a number of development options for the Land. I invested a considerable sum of money into a diving business which was operated on the Land from the mid 1990's to the early 2000's. This business was conducted through a Fijian company called Aqua venture Taveuni Limited. I saw this business as a means of 'testing the water' for a large resort-style development on the Land. By the early 2000's, I had invested over NZ$200,000 into this business and not received any profit or other returns. This was largely due to the remote location of the island and the costs and complications associated with operating a tourism business from the Land. By the early 2000's, the political and economic climate in Fiji had also changed significantly and (in my opinion at that time) for the worse. As a result, the diving business was wound down and the company ceased to trade in 2004. Fijian Companies office records show that the last form of annual return for the company was filed on 23rd February, 2005 for the year ended 31st December, 2004."
18. "I was never consulted or otherwise formally approached by the family to discuss moving onto and taking occupation of the Land, which they could have done through a solicitor or other agent, had they chosen. Given the compassion and good faith which I had shown to them at the time I purchased the Land, I was somewhat taken aback by the family's actions. I did not ask the Madden family to remove their improvements from their Land as I understood that I had a clear right at law to require them to vacate their Land. And, in any event, as reiterated above, I had agreed with William Madden that he and his family were tenants-at-will on the Land."
23. "I understood from Ms. Madden's affidavit that she lodged the caveat when she learned that the Land was to be sold by Semur Securities Limited to another purchaser. I also understood from reading Mr. Allott's affidavits that Semur Securities Limited's sale of the Land may well have been irreparably and adversely affected as a result.
24. It appears to me that Ms. Madden is improperly taking advantage of a process available under Fijian law to frustrate a legitimate sale of the Land by its registered proprietor. I understand that Semur Securities Limited's sale received all necessary ministerial and government concerns. Had the Madden family had a legitimate right or claim in respect of the Land, they could have raised this through the appropriate Fijian courts at any time in the past several decades. They have chosen not to do so. To my mind, this is very telling." (underline and highlight is mine)
Justice Jitoko's decision of the High Court of Fiji at Suva Civil Action No. HBD 325D of 2002S in dealing with an application by the Plaintiff by originating summons under section 109 (2) of the Land Transfer Act, the First Defendant to show cause as to why the caveat lodged by the First Defendant should not be removed the Court held that "In order for the First Defendant to sustain its caveat, it must show that it has a caveatable interest& in C.Tn C.T.24128".The said Fiji National Provident Fund Board case determined that the Fiji equivalent to New Zealand's section 146 (now NZ section(a), and has quoted section 106 of the Land Transfer Act inct in the said decision.
Justice Jitoko in the said case stated "that the essential requirement in caveatable interest;is that that the right base on statute confers an estate or interest in land. It is this interest in land that gives a person the locus standi to caveat'.
'Even if the Defendants did occupy the property for more than 20 years, they cannot bank on this to justify their staying on the land. The Defendants very well know of their rights of adverse possession and if they thought or think that they are entitled to the property by adverse possession, they should have applied for vesting orders in their favour. Their sleeping on their rights cannot be a ground for them to stay on the property."
"The Plaintiffs are the registered proprietors of the property in question and no allegations of fraud against them or any previous owner of the property for that matter is made. The Plaintiffs' title is therefore indefeasible and as such is good against the whole world."
CONCLUSION
ORDERS
Dated at Suva this 13th Day of October, 2015
VISHWA DATT SHARMA
Acting Master of High Court, Suva
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