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High Court of Fiji |
IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION
Civil Action No. 18 of 2023
PATRICK JOHN JAY of Nausori, Fiji, Retired.
APPLICANT
AND
RAJENDRA PRASAD aka JENA NAREN AUTAR and EVELYN RYDER both of Vusuya Road, Raralevu, Nausori both Business persons
RESPONDENT
Before: Mr. Justice Deepthi Amaratunga
Counsel: Mr. Shelvin Singh for the Plaintiff
Mr. A. Singh for the Respondent
Date of Judgment: 03.10.2024
Catch words – Promissory Estoppel – Section 12 of iTaukei Land Trust Act 1940, Section 59 Indemnity Guarantee and Bailment Act 1881 – Unjust enrichment
Cases Referred
JUDGMENT
INTRODUCTION
[1] Plaintiff is a foreign national who in his retirement made Fiji his residence. He met the Defendants at a hotel in Fiji and they had invited him to their home and had also offered to find a house for him to purchase. He had stayed in their home for some time. He was provided accommodation free of charge by Defendants at their residence and only paid for the food provided by them. So within a short period mutual trust developed between parties.
[2] Defendants had a business where earth moving vehicles utilized and Plaintiff also had an earth digger which he rented to said business. Plaintiff had also worked in the office of said business without being paid.
[3] Plaintiff had also paid an advance to Defendants, without any documents being executed, for a house on sale, which Defendant found. He could not purchase it as he was told by Defendants that a caveat was lodged on said certificate of title by a third party.
[4] There was a mutual trust between parties as Plaintiff stayed in Defendants residence and both parties tried to find a house for Plaintiff, without success.
[5] According to Plaintiff upon the mutual trust, Defendants encouraged Plaintiff to build a ‘farm house’ on vacant land which was under an Agreement to Lease to second named Defendant.
[6] Defendants dispute this fact and state they had built ‘farm house’ on the said land. Evidence proves that ‘farm house’ was built by Plaintiff.
[7] According to statement of claim Defendants had encouraged Plaintiff to build the house on a land subjected to agreement for lease granted to second named Defendant and had assured that Defendants will reimburse expenses to Plaintiff if moves out from that.
[8] Plaintiff had built the wooden ‘farm house’ and cost him around $30,000 and he had also lived there for approximately ten months, with water and electricity being provided from adjoining residence of Defendants.
[9] First these amnesties such as water and electricity, were deprived by Defendants and then he was evicted through an eviction notice issued by iTaukei Land Trust Board (TLTB) for occupation without their consent.
[10] According to Defendant it was a farm house, constructed for his workers to stay and deny Plaintiff’s occupation. There is no evidence of any worker staying in the property though some gave evidence and even admitted Plaintiff’s occupation of said ‘farm house’.
[11] Plaintiff admitted he built the house in terms of Agreement for Lease for Agricultural Purposes (Excluded from ALTA and not in Reserve) without obtaining consent in terms of Section 12 of iTaukei Land Trust Act 1940 on the assurance and encouragement of Defendants.
[12] Defendants contend that Plaintiff cannot seek equitable claim in terms of section 12 of iTaukei Land Trust Act 1940 and or Section 59 of Indemnity Guarantee and Bailment Act 1881.
Analysis of Evidence
[13] There is no dispute that there is a wooden ‘farm house’ on the agreement to lease marked D1. This ‘farm house’ lacked separate water or electricity connection. Plaintiff states that it was built by him and defendants deny this. First issue is who paid for the construction of ‘farm house’.
[14] Plaintiff had moved to Fiji in his retirement and was staying in a hotel when he met Defendants and they had invited to their residence to stay with them. He was looking for a house to purchase and Defendant had informed about a house that was on sale and he had paid a deposit of $10,000 to Defendants without written agreement, and moved in to said house, but was told that there was caveat lodged by another prospective buyer. So he had moved out from said house after living there for nine days and again went to Defendants’ residence. He stayed in Defendants’ residence and paid only for food provided by them. He had assisted Defendants’ office which was adjoining residence. During this time Plaintiff was searching for a house to purchase with the assistance of Defendants and this was not successful.
[15] According to evidence of Plaintiff, he was requested to build a house by second named Defendant, who is the wife of first named Defendant. This was on land under agreement for lease from TLTB to her and for this discussion both Defendants participated. According to Plaintiff, Defendants had assured to reimburse the expenses incurred in building said house if he leaves it.
[16] Based on the said assurance by Defendants Plaintiff had built a ‘farm house on the land adjoining to Defendant’s residence.
[17] Around May 2012 the construction of ‘farm house’ had begun. Plaintiff stated that he paid for more than thirty Poles of Timber, from a timber seller. He stated that the total purchases from said trader were around $12,000.00 and receipts were produced marked P1. These receipts were in the month of May, 2012. A person named Nizaam called by Defendants said they delivered the items to Defendants’ place and the customer was Defendant and or his business. Defendant had a garage and business entity and receipt of the items under its name, and it is not unusual considering conduct of the parties at that time. This is not proof of payment for the items delivered to Defendant and or his business.
[18] Apart from his oral testimony of Nizam, he could not produce any documentary proof that items in P1 were purchased by Defendants. This witness stated that first named Defendant was a long standing customer and items were sold on credit to him. Even for this there were no evidence to show that these items were sold on credit though he said he was Manager of the said timber business.
[19] He admitted that Plaintiff sought confirmation that the timber stated in P1 were sold to him, but he had refused to do so. He had not provided evidence that who paid for said timber. In the analysis of evidence of Nizam is not truthful as to person who paid for P1. He is Manager of a business and Defendants have long standing relationship, and did not want to give correct picture. His evidence is not credible. So he has a commercial interest as a business customer to give evidence for Defendants and his evidence cannot be accepted in analysis, as correct regarding who had paid for the said timber.
[20] Plaintiff stated that he purchased everything for construction of ‘farm house’ and paid in cash. He said he spent around $8,400.00 to a hardware shop and the receipts were marked P2 and this accompanied by an email which explains that items were purchased by Plaintiff despite delivery place written as Yadra Viti which is business entity of Defendants. It is pragmatic method to state a known local address as opposed to a foreigner’s name for delivery of hardware items for location of place and also ease of acceptance of goods.
[21] Some documents contained Plaintiff’s name, but said email is self-explanatory as to why some receipts did not show Plaintiff’s name. So in analysis of P1, P2 and P3 along with oral testimonies prove that Plaintiff had paid in cash for said purchases and these were purchased to build a ‘farm house’.
[22] Plaintiff is a foreigner and would not need hardware items in large amounts unless he was constructing a wooden structure. This proves he had purchased the items despite delivery address being written as Yadra Viti. P3 confirms why Plaintiff’s name does not appear in all delivery notes.P3 was written as a result of Plaintiff’s request confirmation of the sales to him. This is after he was evicted for gathering evidence for litigation and said email P3 confirmed that most of the items were delivered to him. It also confirms that some items were received by a Defendant (Jena and email state Jema). P3 contains delivery notes issued from May 2012 to October, 2012. This confirms the time period of building evidenced by Plaintiff.
[23] Plaintiff further stated that during the construction period, he had also purchased items from Kasabias of about $230.00. The receipts from Kasabias was marked as ‘P4’. For this Defendant called witness to prove it was not original receipt but confirmed a receipt can be printed on request from data base if original was lost.
[24] Plaintiff further informed that he also purchased items from another reputed hardware shop during construction period. He stated that in 2014 he wrote a letter to said entity and requested for confirmation from them that he purchased items in year 2012 this was issued and they were both marked as P5 and receipts were marked as P6. This again confirms that Plaintiff had purchased hardware items in bulk which proves that he purchased material to build house, during the period of construction of ‘farm house’. At that time (i.e May- October, 2012) there is no evidence that Plaintiff was constructing another structure. During said period Plaintiff was staying with Defendants.
[25] Plaintiff stated that he paid labour charges for building the house and labourers were provided by Defendant as he had used two of his workers worked in the garage of Defendants when they were available. Work for building farm house had ended in October 2012 and he moved into the new house. This time period can be accepted for building of the ‘farm house’ as purchase of hardware items were during this time period.
[26] There were no separate water and electricity supply for the said ‘farm house’ and they were provided from adjoining house of Defendants. In cross examination he was suggested that he never lived in the said house, but he stated not only him another local also stayed with him and Defendants did not like this person.
[27] Around August 2013, he had to move out of the house because the basic amnesties provided by Defendants were discontinued and an eviction notice was also served on him. Even without eviction notice Plaintiff could not have stayed without water which is a basic necessity for living. Water and electricity were provided by Defendants and discontinuation of said amnesties was a constructive eviction of Plaintiff by Defendants prior to service of eviction notice by TLTB
[28] Plaintiff was questioned about the authenticity of the various receipts tendered as Plaintiff’s evidence. He stated that all the purchases were made in cash and most of the time first named Defendant or his worker Nilesh would accompany him to the hardware shops. At that time there was no need to be suspicious about Defendants or workers as relationship between them was very close and mutual trust between them. So even name of Plaintiff on receipts was not an issue for concern.
[29] Plaintiff was cross examined as to that he stole the receipts from first named Defendant’s office but he denied stealing, but admitted that there was a complaint but no prosecution.
[30] It was suggested to him that he never stayed in the new house as it was never completed but Plaintiff replied that he stayed in the new house from October 2012 till August 2013 and he was served with the eviction notice from TLTB but before that water and electricity provided by Defendants by adjoining house was discontinued.
[31] Plaintiff is the only witness in support of his claim based on equity, this is understandable considering that he is a foreign national. His evidence relating to assurance given by Defendants to reimburse cost of building and also expenditure was incurred by him is accepted as truthful. The evidence is consistent with the circumstantial evidence as to the time of purchase and items purchased. Defendant as well as his workers who gave evidence and Manager of Vitiana Timber were interested parties due to their own self-interest. Plaintiff was the only witness and no one gave evidence for him. It is not the number of witnesses that proves facts in issue or relevant facts on balance of probability; Plaintiff’s evidence is cogent. So in the analysis of evidence Plaintiff’s evidence proved that he is truthful.
[32] Plaintiff was searching for a house to purchase without success. In this backdrop, he was suggested to build a house adjoining to Defendant’s residence. By this time parties have developed mutual trust .The suggestion came from wife of first named Defendant in the presence of her husband. Plaintiff state that they assured him that they would reimburse the cost of construction when he decide to move out.
[33] At that time there was no reason for Plaintiff to doubt that Defendant will not reimburse him for the cost incurred in building a structure around $30,000. So Plaintiff had relied on oral assurance and acted on that to his detriment.
[34] Perusal of the documents and oral evidence of Plaintiff proves that Plaintiff had paid for the raw materials purchased for the building of the farm house. First named Defendant was not truthful on material facts.
[35] First named Defendant confirmed that he and his wife and her father met Plaintiff first at a Hotel and invitation from them to say with them for about two weeks and thereafter when he asked for longer period Defendants had consented to it. He did not explained why he offered free accommodation to a foreigner and also provided food for a person who had no prior relationship
[36] First named Defendant said he thought that Plaintiff could be used as security guard. According to him Plaintiff recorded vehicle movements in his yard and he had access to his office which was attached to his residence where Plaintiff resided. According to Defendant, Plaintiff had assisted him in his office while was absent from office. In cross examination further stated that no payment was made for Plaintiff for his work in his business.
[37] According to him, he had built a ‘farm house’ for his workers He denied Plaintiff paid for the purchases. He stated that he paid through instalments for the purchases of the items purchased on credit. There were no documents to prove credit sales of hardware items produced in court. It is not in dispute that workers of Defendants constructed ‘farm house’. There is a dispute as to who paid for construction.
[38] First Defendant denied that anybody lived in the farm house but admitted that eviction notice from lTLTB was served to Plaintiff. Why TLTB addressed eviction notice to Plaintiff if he did not reside? This shows first Defendant’s evidence on material facts are not correct in the analysis of evidence.
[39] According to first Defendant Plaintiff had lived with them while they were building farm house and already floor of the house was built when he came to their house. If so why he was asked to come and live with them when he could have easily asked Plaintiff to live in that house when completed. Completion of wooden farm house may not take long period of time.
[40] First Defendant had not built the said farm house and he and his wife who is the lessee under agreement to lease had encouraged Plaintiff to build the farm house. It is proved on balance or probability that Defendants had encouraged Plaintiff to build the house on the land subject to agreement to lease.
[41] Defendant denied occupation of Plaintiff in farm house but this cannot be accepted as eviction notice from TLTB was served to Plaintiff and this is an admitted fact in pre-trial conference.
[42] It is proved on balance of probability that Plaintiff had constructed a wooden ‘farm house’ on the land adjoining Defendants’ residence which was under an agreement for lease for agricultural purposes. There is no evidence construction of ‘farm house’ required sanction from TLTB in terms of Agreement for Lease.
Is Section 12 of iTaukei Land Trust Act 1940, bar to Equitable relief sought by Plaintiff?
[43] Both parties relied on Court of Appeal decision Native Land Trust Board v Subramani [2010] FJCA 9; ABU0076.2006 (25 February 2010) in written submissions. Defendant also relied on some High Court decisions, too.
[44] Defendants’ contention is that Plaintiff cannot seek equitable relief as there was a ‘dealing’ when oral agreement to build the farm house was agreed between the parties and when it was built on the land. Such ‘dealing’ is statutorily made null and void, and contended, law cannot grant equitable relief to Plaintiff. This is oversimplification of the said provision of law which had already interpreted in two Privy Council decisions which is discussed later. It is suffice to state there is no such absolute bar to equity claimed by Plaintiff by Section 12 of ITaukei Land Trust Act 1940.
[45] There are flaws in that Defendants’ contention, firstly, there is no proof that there was a violation of section 12 of iTaukei Land Trust Act 1940. Second named Defendant is the ‘lessee’, and if there was a violation of said provision a breach of statutory condition must be served by ‘lessor’ (TLTB). No such evidence adduced. There is no evidence TLTB had taken steps regarding any alleged breach of statutory provision by lessee contafined in the agreement for lease marked D1.
[46] The eviction notice which was issued to Plaintiff on 4.7.2013 is contained in the supplementary bundle of documents filed by Defendants on 11.10.2019. This is also an admitted fact in the pre-trial conference. According to said letter Plaintiff was in unlawful occupation as he held ‘no title or consent from the’ lessor. So the possession or occupation of Plaintiff without TLTB’s permission was the reason for eviction and not the construction on it. It is axiomatic that ‘lessee’ was in occupation at adjoining land and any construction on the land was with lessee’s blessing hence if the construction was unlawful ‘lessee’ must be dealt by TLTB for breach of statutory provision.
[47] There was no mention in eviction notice, about the structure on the land in D1 .There was no mention of violation of Section 12 of iTaukei Land Trust Act 1940 or any other statutory provision. If there was such a violation some action is required and no evidence of such action by ‘lessor’. So it is not clear that building of ‘farm house’ on a land provided for agricultural purpose is a violation of Section 12 of iTaukei Land Trust Act 1940. Without proof of that fact Defendants cannot seek application of ratio in Privy Council decision of Chalmers v Pardoe [1963] 3 All E R 552.
[48] Secondly, Agreement to Lease issued to second Defendant covenanted second named Defendant for ‘not to use the land for any purpose other than agriculture and ancillary residential purpose’. According to Defendant it was a ‘farm house’ and had no separate water or electricity supply. So in my mind this cannot be considered as a permanent structure where Privy Council decision of Chalmers v Pardoe [1963] 3 All E R 552 can be applied. In that case parties were aware of the requirement to obtain consent in terms of Section 12 of iTaukei Land Trust Act 1940 and the structure was a permanent house. In contrast, Defendant named the structure as ‘farm house’. It had no water or electricity connection.
[49] Thirdly Court of Appeal in Native Land Trust Board v Subramani [2010] FJCA 9; ABU0076.2006 (25 February 2010) held,
“[34] Further, we think Chalmers v Pardoe (supra) is distinguishable from the present case because of the facts. In that case, in contrast to the present case, the NLTB and the landowners played no active part in the grant of the sublease. It is our respectful opinion that the principle in Chalmers v Pardoe (supra) is an exception to the general rule and is not a rule of general application to cases involving native land where s. 12(1) of the Native Land Trust Act is in issue. As we have said above, it is not true that in all cases where s. 12(1) is invoked, the Court will not assist the tenant or the subtenant.”
[50] So Court of Appeal held that Plaintiff could seek equitable relief and Charmers (supra) was an exception and not general rule.
[51] Fourthly, Maharaj v Chand [1986] 3 All ER 107 had distinguished Charmers (supra) and held,
“In terms s 12 is directed against alienating or dealing with the land without the consent of the board. Manifestly the section is intended to ensure that the board's power of control and the beneficial interests of the Fijian owners are not to be prejudiced by unauthorised transactions. Neither the terms nor the spirit of the section are violated by an estoppel or equity operating solely inter partes”
[52] As agreement for lease allows utilization of land only for agriculture and the structure on it is ‘farm house’ according to evidence of Defendants, Defendants are estopped from stating that the building of ‘farm house’ is not a use ‘of ancillary residential purpose.’ So cannot in the same token state, it was a bar to equity. There was no explanation from Defendants as to how Plaintiff went in to occupation of the ‘farm house’ if he did not build it on their assurance.
[53] Plaintiff was encouraged to build a ‘farm house’ upon the trust between parties while living in the same house and also worked in the office of Defendant’s business. Plaintiff was offered to stay in the said ‘farm house’ at the mercy of Defendants as it had no direct electricity or water supply which are essential for a dwelling. Plaintiff had not only built spend more than $30,000 for the construction of the said farm house but he was allowed to stay in the said house from October 2012 to August, 2013.
[54] Plaintiff is entitle to seek equitable relief from Defendants either on claim based on his equitable interest to compensate for his expenditure in building a ‘farm house’ or personal claim based unjust enrichment for the value of ‘farm house’. Unjust enrichment is a personam claim based on restitution or compensation based on Defendant’s enrichment, at Plaintiff’s expense. Both equitable claims provides same result in this instance as Plaintiff is seeking only $30,000 as equitable relief.
[55] Plaintiff’s evidence is credible and reliable as to encouragement to build the ‘farm house’, and that the expenditure on the said building was borne by him. If not there was no reason to allow him to occupy said ‘farm house’ after it was built without rent for ten months continuously till Plaintiff was evicted.
[56] Defendants’ conduct is unconscionable they had invited a foreigner to their home and provided free lodging and he was provided even food by them for a fee. So mutual trust developed and on that encouraged Plaintiff to build a ‘farm house’ on adjoining land. Defendants provided water and electricity to farm house and after about ten months these amenities were discontinued. It is clear that Plaintiff had trusted Defendants and acted in such a manner to his detriment.
[57] Evidence for the Defendants are not credible as second named Defendant had even denied Plaintiff’s occupation of the ‘farm house’. Eviction notice issued to Plaintiff is an admitted fact and from that it is proved that Plaintiff occupied the said ‘farm house’ after it was constructed.
[58] Defendant could not prove that he had paid for the items purchased for construction of ‘farm house’ between May, 2012 and October, 2012. All payments for the items were on cash sales and not credit sales as stated by Defendant. As relationship between parties were based on mutual trust during this time the name on some receipts had appeared Defendant and or his business entity. If his business entity paid such expense he should produce such evidence of payment.
[59] It is unconscionable to encourage Plaintiff to spend money to build a ‘farm house’ on the land under an agreement for lease on the verbal commitment that Defendants will reimburse the expenses incurred and not to compensate when Plaintiff was evicted by TLTB.
[60] Defendants in the written submission raised the issue of absence of written memorandum between parties in terms of Section 59 of Indemnity Guarantee and Bailment Act 1881.
Absence of written contract Section 59 of Indemnity Guarantee and Bailment Act 1881
[61] Plaintiff’s claim is based on equity. It is admitted fact that there was no written agreement to reimburse for the cost of construction of ‘farm house’. There was no evidence that TLTB had found that constructing a ‘farm house’ violated conditions of agreement for lease or a ‘dealing’.
[62] So the claim is based on equity. The issue is whether Section 59 of Indemnity Guarantee and Bailment Act 1881 a bar to equity? By the same token can statute be an instrument for fraud against innocent parties such as Plaintiff who relied Defendants due to mutual trust developed through conduct of both parties
[63] It is not uncommon that written contract is not always pleaded when claims based on certain equitable interests on lands. Section 59 of Indemnity Guarantee and Bailment Act 1881 states,
‘59. No action shall be brought-
(a) whereby to charge any executor or administrator upon any special promise to answer damages out of his own estate; or
(b) whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person; or
(c) to charge any person upon any agreement made upon consideration of marriage; or
(d) upon any contract or sale of lands, tenements or hereditaments or any interest in or concerning them; or
(e) upon any agreement that is not to be performed within the space of one year from the making thereof,
Unless the agreement upon which such action is to be brought or some memorandum or note thereof is in writing and signed by the party to be charged there or some other person thereunto by him lawfully authorised.’(emphasis added)
[64] Origin of the said provision is found in UK Statute of Frauds 1677[1] and the purpose of the said statute was ‘For prevention of many fraudulent Practices which are commonly endeavoured to be upheld by Perjury and Subordination of Perjury.[2] Short title of the said statute states ‘An Act for prevention of Frauds and Perjuryes.’.[3]. This Act was subject to amendments and presently it was fully repealed.[4]
[65] Defendant are not allowed to use a provision meant for prevention of frauds to commit a ‘statutory fraud’.
[66] Despite similar provision, in common jurisdictions, claims based on equity is often lacked such written agreements. UK Court of Appeal in Inwards v Baker [1965] EWCA Civ 4; [1965] 1 All ER 446 it was held,(Per Lord Denning MR)
“It is quite plain from those authorities that, if the owner of land requests another, or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity in the licensee such as to entitle him to stay. He has a licence coupled with an equity. Counsel for the plaintiffs urged before us that the licensee could not stay indefinitely. The principle only applied, he said, when there was an expectation of some precise legal term; but it seems to me, from Plimmer's case ((1884), 9 App Cas at pp 713, 714) in particular, that the equity arising from the expenditure on land does not fail
“merely on the ground that the interest to be secured has not been expressly indicated ... the court must look at the circumstances in each case to decide in what way the equity can be satisfied.”
So in this case, even though there is no binding contract to grant any particular interest to the licensee, nevertheless the court can look at the circumstances and see whether there is an equity arising out of the expenditure of money.”
[67] Abovementioned UK Court of Appeal decision is often applied and referred in Fiji. I do not wish to mention all such decisions for obvious reasons. Court can look at the circumstances and grant Plaintiff equitable relief even on reliance of oral assurance and expenditure of money on that according to said decision and this was allowed in Fiji for actions based on equity.
[68] The contention based on Section 59 of Indemnity Guarantee and Bailment Act 1881, is yet another legal objection to prevent equity being used to compensate Plaintiff by unconscionable conduct of Defendants. It is a legal hurdle that needs to overcome.
[69] It is also use of statutory provision to commit a fraudulent conduct. This is a legal issue that had created considerable jurisprudence in UK and it is worth to survey the development of said contention though the present provision in UK is not identical to Fiji’s provision, and radically different.
[70] UK Court of Appeal in .Yaxley v Gotts and another [1999] EWCA Civ 3006; [2000] 1 All ER 711 dealt the issue of equity and application present UK statutory requirement for a contract relating land in writing and its implications.
[71] Present statutory provision relating to requirement for written document had taken a change from its earlier analogous provision to Fiji. Object of this provision is to prevent fraud. This change had incorporated case law and accordingly it is important to understand historical development in UK and present position to understand the rationale in equity to step in even in absence of a written contract, such as the claim of Plaintiff.
[72] Present UK law is found in Section 2 of Law of Property (Special Provisions) Act 1989 and “The material parts of s 2 are:
(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where the contracts are exchanged, in each.
(2) The terms may be incorporated in a document either by being set out in it or by reference to some other document.
(3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract ...
(5) ... nothing in this section affects the creation or operation of resulting, implied or constructive trusts.
(6) In this section—”disposition” has the same meaning as in the Law of Property Act 1925; “interest in land” means any estate, interest or charge in or over land or in or over the proceeds of sale of land ...
(8) Section 40 of the Law of Property Act 1925 (which is superseded by this section) shall cease to have effect.'(see United Bank of Kuwait plc v Sahib and others [1996] EWCA Civ 1308; [1996] 3 All ER 215
[73] So in UK provision had expressly recognize ‘resulting, implied or constructive trusts’. This can be considered as statutory intervention to equity which is difficult to draw boundaries for the sake of consistency or predictability. Historical Development of requirement for written contract to provide relief by court in UK is discussed in UK Court of Appeal decision of Yaxley v Gotts and another [1999] EWCA Civ 3006; [2000] 1 All ER 711
“The historical background
Section 2 of the 1989 Act has repealed and replaced s 40 of the Law of Property Act 1925, which itself replaced part of s 4 of the Statute of Frauds 1677. It is not in dispute that s 2 is an entirely new provision which marks a radical change in the law: Firstpost Homes Ltd v Johnson [1995] 4 All ER 355 at 358, [1995] 1 WLR 1567 at 1571 per Peter Gibson LJ and McCausland v Duncan Lawrie Ltd [1996] 4 All ER 995 at 1001, [1997] 1 WLR 38 at 44 per Neill LJ. Section 40 of the Law of Property Act 1925, by contrast, largely re-enacted the relevant provisions of s 4 of the Statute of Frauds Act 1677, but in such a way as to incorporate and confirm a volume of case law on that section, including in particular the equitable doctrine of part performance, which was specifically mentioned in s 40(2). Section 40 was in the following terms:
(1) No action may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto by him lawfully authorised.
(2) This section applies to contracts whether made before or after the commencement of this Act and does not affect the law relating to part performance, or sales by the court.'
The development of the law was clearly summarised by Lord Reid in Steadman v Steadman [1974] 2 All ER 977 at 980–981, [1976] AC 536 at 540:
'This matter has a very long history. Section 40 replaced a part of s 4 of the Statute of Frauds 1677 (29 Car 2 c 3), and very soon after the passing of that Act authorities on this matter began to accumulate. It is now very difficult to find from them any clear guidance of any general application. But it is not difficult to see at least one principle behind them. If one party to an agreement stands by and lets the other party incur expense or prejudice his position on the faith of the agreement being valid he will not then be allowed to turn round and assert that the agreement is unenforceable. Using fraud in its older and less precise sense, that would be fraudulent on his part and it has become proverbial that courts of equity will not permit the [statute] to be made an instrument of fraud. It must be remembered that this legislation did not and does not make oral contracts relating to land void: it only makes them unenforceable. And the statutory provision must be pleaded; otherwise the court does not apply it. So it is in keeping with equitable principles that in proper circumstances a person will not be allowed “fraudulently” to take advantage of a defence of this kind. There is nothing about part performance in the Statute of Frauds. It is an invention of the Court of Chancery and in deciding any case not clearly covered by authority I think that the equitable nature of the remedy must be kept in mind.'
The decision of the House of Lords in Steadman v Steadman shows that the doctrine of part performance often gave rise to difficulty, even though it had been established by a decision of the House of Lords as early as Lester v Foxcroft [1700] EngR 38; (1700) Colles 108, 1 ER 205. The development of the doctrine during the eighteenth and nineteenth centuries was fully considered by the House of Lords in Maddison v Alderson (1883) 8 App Cas 467, [1881–5] All ER Rep 742, especially in the speeches of the Earl of Selborne LC and Lord Blackburn. For present purposes it is sufficient to note that the doctrine relied strongly on the effect of the statute in making an oral contract for the disposition of land merely unenforceable, and not void; that it was essential that there should be a clearly proved oral contract susceptible of specific performance; and that the claimant should have done acts unequivocally referable to performance of the contract on his part. The principle underlying the doctrine was expressed as follows by Lord Selborne:
'In a suit founded on such part performance, the defendant is really “charged” upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the statute) upon the contract itself. If such equities were excluded, injustice of a kind which the statute cannot be thought to have had in contemplation would follow.' (See 8 App Cas 467 at 475, [1881–5] All ER Rep 742 at 747.)
It was also of central importance to the doctrine that an oral contract was under the old law not void, but merely unenforceable (see Britain v Rossiter (1879) 11 QBD 123 at 130 and Maddison's case (1883) 8 App Cas 467 at 474–475, [1881–5] All ER Rep 742 at 746–747).
At p 719 held,
“I have no hesitation in agreeing with what I take to be the views of Peter Gibson, Neill and Morritt LJJ, that the doctrine of estoppel may operate to modify (and sometimes perhaps even counteract) the effect of s 2 of the 1989 Act. The circumstances in which s 2 has to be complied with are so various, and the scope of the doctrine of estoppel is so flexible, that any general assertion of s 2 as a 'no-go area' for estoppel would be unsustainable. Nevertheless, the impact of the public policy principle to which Sir John Balcombe drew attention in Godden's case does call for serious consideration. It is not concerned with illegality (some confusion may have arisen from the inadequate report or note shown to this court in Bankers Trust Co v Namdar) but with what Viscount Radcliffe in Kok Hoong's case [1964] 1 All ER 300 at 308, [1964] AC 993 at 1016 called a principle of general social policy:
'... to ask whether the law that confronts the estoppel can be seen to represent a social policy to which the court must give effect in the interests of the public generally or some section of the public, despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise.'
In this case that principle must of course be applied consistently with the terms in which s 2 of the 1989 Act has been enacted, including the saving at the end of s 2(5).
parliament’s requirement that any contract for the disposition of an interest in land must be made in a particular documentary form, and will otherwise be void, does not have such an obviously social aim as statutory provisions relating to contracts by or with moneylenders, infants, or protected tenants. Nevertheless it can be seen as embodying Parliament's conclusion, in the general public interest, that the need for certainty as to the formation of contracts of this type must in general outweigh the disappointment of those who make informal bargains in ignorance of the statutory requirement. If an estoppel would have the effect of enforcing a void contract and subverting Parliament's purpose, it may have to yield to the statutory law which confronts it, except so far as the statute's saving for a constructive trust provides a means of reconciliation of the apparent conflict.
Goff and Jones The Law of Restitution (5th edn, 1998) p 580, a textbook of high authority, reaches the tentative conclusion that—
'even if the purchaser can demonstrate that the vendor's conduct was so unconscionable that it would be inequitable for him to rely on the absence of writing, to order the conveyance of, or to declare him trustee of, the property is an inappropriate remedy in that it frustrates the policy underlying section 2(1) of the 1989 Act.'
In inquiring whether the parliamentary purpose is frustrated it is necessary to note the wide range of relief which may be granted where a claim to proprietary estoppel is established. Just how wide that range is appears, for instance, from Snell's Equity (29th edn, 1990) p 577. The general aim is to 'look at the circumstances in each case to decide in what way the equity can be satisfied' (per Sir Arthur Hobhouse in Plimmer v Mayor of Wellington (1884) 9 App Cas 699 at 714) and to achieve 'the minimum equity to do justice to the plaintiff' (per Scarman LJ in Crabb v Arun DC [1975] EWCA Civ 7; [1975] 3 All ER 865 at 880, [1976] Ch 179 at 198). Sometimes the equity is given effect to simply by dismissing an adverse claim. But in other cases more positive action is needed, extending (as Snell p 578 notes, with numerous examples) both to giving the claimant an equitable lien on the disputed property for his expenditure, and to the positive conferment of title on the claimant. That is the sort of relief referred to in the Law Commission's report (para 5.5) as going to the extent of an order for land to be transferred.
[74] After discussion of the historical development of the law regarding the requirement for written contract summarised it at p 724 and did not interpret the present provision in UK narrowly to exclude proprietary estoppel as an exception to the requirement though not expressly stated in the UK provision. So it is clear that courts are reluctant to exclude claims on equity, as it will be s unconscionable conduct which is the basis of claim on equity. So in Yaxley (supra),(Per Robert Walker LJ), held
“To recapitulate briefly: the species of constructive trust based on 'common intention' is established by what Lord Bridge in Lloyds Bank plc v Rosset [1990] UKHL 14; [1990] 1 All ER 1111 at 1118[1990] UKHL 14; , [1991] 1 AC 107 at 132 called an 'agreement, arrangement or understanding' actually reached between the parties, and relied on and acted on by the claimant. A constructive trust of that sort is closely akin to, if not indistinguishable from, proprietary estoppel. Equity enforces it because it would be unconscionable for the other party to disregard the claimant's rights. Section 2(5) expressly saves the creation and operation of a constructive trust.
I cannot accept that the saving should be construed and applied as narrowly as Mr Laurence contends. To give it what I take to be its natural meaning, comparable to that of s 53(2) of the Law of Property Act 1925 in relation to s 53(1), would not create a huge and unexpected gap in s 2. It would allow a limited exception, expressly contemplated by Parliament, for those cases in which a supposed bargain has been so fully performed by one side, and the general circumstances of the matter are such, that it would be inequitable to disregard the claimant's expectations, and insufficient to grant him no more than a restitutionary remedy.
To give the saving a narrow construction would not to my mind be a natural reading of its language. Moreover, it would often require the court to embark on minute inquiries into informal negotiations, between parties acting without legal advice, in order to decide whether or not the parties' 'agreement, arrangement or understanding' would have amounted to a complete and legally binding contract but for the single fatal defect of non-compliance with s 2. The course which this case has taken vividly illustrates the problems involved.”
[75] In contrast to UK, Fiji had no statutory intervention to Section 59 of Indemnity Guarantee and Bailment Act 1881 for more than 140 years. So in my mind court can intervene by way of equity to grant relief when there is unconscionable conduct.
[76] UK House of Lords in Thorner v Major and others [2009] UKHL 18; [2009] 3 All ER 945, Lord Walker of Gestingthrope held,
‘My Lords, this appeal is concerned with proprietary estoppel. An academic authority (Gardner An Introduction to Land Law (2007) p 101) has recently commented: 'There is no definition of proprietary estoppel that is both comprehensive and uncontroversial (and many attempts at one have been neither’ Nevertheless most scholars agree that the doctrine is based on three main elements, although they express them in slightly different terms: a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance (see Megarry and Wade Law of Real Property (7th edn, 2008) para 16–001; Gray and Gray Elements of Land Law (5th edn, 2009) para 9.2.8; Snell's Equity (31st edn, 2005) paras 10–16 to 10–19; Gardner An Introduction to Land Law (2007) para 7.1.1).
p974 (Per Lord Neuberger) held,
“However, it is equally true that focusing on technicalities can lead to a degree of strictness inconsistent with the fundamental aims of equity.”
further held, pp 974-975
For the same reason (namely the very different nature of the cases), it appears to me unlikely in the extreme that Lord Scott was intending impliedly to disapprove any aspect of the reasoning or decision of the Court of Appeal in Gillett v Holt [2000] EWCA Civ 66; [2000] 2 All ER 289, [2001] Ch 210. Indeed, Lord Walker referred (at [66]) to Gillett v Holt with implied approval, and emphasised (at [68]) the distinction between 'the commercial context' and 'the domestic or family context' (and it is to be noted that Lord Brown of Eaton-under-Heywood agreed with both Lord Scott and Lord Walker (at [94])). In Gillett v Holt [2000] EWCA Civ 66; [2000] 2 All ER 289 at 312, [2001] Ch 210 at 236, Robert Walker LJ, having observed that the equity arising in that case from assurances continued 'down to the time when those assurances were repudiated', said that this was 'a long period and a broad approach is necessary'. .....
As Hoffmann LJ memorably said in Walton v Walton (14 April 1994, unreported), para 21:
'equitable estoppel [by contrast with contract] ... does not look forward into the future [; it] looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.'
[77] From the said UK authorities it is safe to deduce that despite statutory intervention courts had recognized claims on equity.
[78] Common law countries such as Australia had also considered equitable doctrine such as past performance and or estoppel as exception to the statutory requirement of writing.
[79] In Australian High Court case of Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, held,
“23. There is force in these objections and it may not be a sufficient answer to repeat the words of Lord Denning M.R. in Crabb v. Arun District Council [1975] EWCA Civ 7; (1976) Ch 179, at p 187, "Equity comes in, true to form, to mitigate the rigours of strict law".
[80] Accordingly survey of cases in Australian authorities show that courts have not applied statutory requirement for writing to commit statutory fraud or unconscionable acts.
[81] Section 59 of Indemnity Guarantee and Bailment Act 1881 was not considered as a bar to equity in Fiji. There were no statutory interventions similar to UK to application of equity to grant relief to parties such as Plaintiff. Despite statutory interventions in UK to intervene in such instance the UK courts have not allowed statute to be used an instrument of fraud. Ratio from the above UK decisions are clear indication as to paramount importance of equity to intervene when there is unconscionable conduct such as the conduct of Defendants. So in my mind Section 59 of Indemnity Guarantee and Bailment Act 1881 is not a bar to equitable relief of Plaintiff.
[82] Plaintiff was assured by both Defendants that he will be paid the cost of construction of ‘farm house’ when he leaves it. Plaintiff had spent around $30,000 and to build wooden house and had lived in the said property for nearly ten months and then he was evicted. There is a creation of promissory estoppel and Plaintiff needs to be compensated for his expenditure.
[83] Alternatively, Plaintiff’s claim on equity can also base on unjust enrichment which is not a proprietary remedy. This is a well-recognized common law remedy. Farm House had added value to land provided for agriculture. (see Yeoman's Row Management Ltd and another v Cobbe [2008] 4 All ER 713) .
[84] Defendant’s counter claim is not proved on balance of probability. Accordingly it is struck off.
CONCLUSION
[84] Plaintiff had proved that he had expended money to build a farm house on the assurance of Defendants. He had acted in detriment and spend money and he was evicted from the premises. So he should be compensated and on evidence Plaintiff is awarded a sum of $30,000 as equitable compensation Considering the facts and circumstances cost of this action is summarily assessed at $4,000
FINAL ORDERS;
.................................
Deepthi Amaratunga
Judge
At Suva this 03rd October, 2024.
Solicitors
Shelvin Singh Lawyers
A K Singh Lawyers
[1] Statute of Frauds 1667 (1677 CHAPTER 3 29 Cha 2) https://www.legislation.gov.uk/aep/Cha2/29/3/data.pdf(3.10.2024)
[2] ibid
[3] ibid
[4] IV. No Action against Executors, &c. upon a special Promise, or upon any Agreement, or Contract for Sale of Lands, &c. unless
Agreement, &c. be in Writing and signed.
And bee it further enacted by the authoritie aforesaid That from and after the said fower and twentyeth day of June noe Action shall be brought whereby to charge any Executor or Administrator upon any speciall promise to answere damages
out, of his owne Estate or whereby to charge the Defendant upon any speciall promise to answere for the debt default or miscarriages
of another person or to charge any person upon any agreement made upon consideration of Marriage or upon any Contract or Sale of
Lands Tenements or Hereditaments or any Interest in or concerning them or upon any Agreement that is not to be performed within the
space of one yeare from the, makeing thereof unlesse the Agreement upon which such Action shall be brought or some Memorandum or
Note thereof shall be in Writeing and signed by the partie to be charged therewith or some other person thereunto by him lawfully
authorized.
(https://www.british-history.ac.uk/statutes-realm/vol5/pp839-842) (3.10.2024)
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