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Fund Management Ltd v Uta'atu [2011] TOCA 5; AC 16 of 2010 (30 September 2011)

IN THE COURT OF APPEAL OF TONGA
LAND JURISDICTION
NUKU'ALOFA REGISTRY

APPEAL NO.AC 16 of 2010
[LA 13 of 2010]

BETWEEN:

FUND MANAGEMENT LIMITED
& TOURIST SERVICES HA'APAI LIMITED
Appellant

AND :

CHRISTINE UTA'ATU as COURT – APOPOINTED
RECEIVER for on behalf of COMMERCIAL FACTORS LIMITED
Respondent

Coram : Burchett J
Salmon J
Moore J

Counsel : Mr Niu for the Appellants
Mr Stephenson for the Respondent
Mr R. Harrison SCQC for the Intervenor Applicant

Date of hearing:
Date of Judgment: 30 September 2011

JUDGMENT OF THE COURT

[1] This is an appeal from a decision of the Chief Justice dated 20 August 2011 given as president of the Land Court. The respondent who was the court appointed receiver of property including lease number 5404 applied to remove a caveat lodged against the lease by the appellants. The Chief Justice granted that application and dismissed an application by the appellants for an extension of the caveat.

[2] At the hearing in the Land Court Commercial Factors was not separately represented. When we commenced hearing the appeal on 23 September Commercial Factors did not seek representation. During the hearing of an associated appeal in Wang v Commercial Factors Mr. Harrison appeared for the respondent and sought leave on behalf of his clients to make submissions on this appeal. We therefore resumed the hearing on 28 September and heard submissions from him and in reply from Mr. Niu.

Background

[3] Lease 5404 is in respect of the land upon which a hotel has been built. Dr. Wang was the lessee under this lease. In 1998 the appellants entered into an agreement with Dr. Wang to protect money owing to them under an agreement relating to a different property. The 1998 agreement included the following paragraph:

"7. To further protect payment of the liquidated damages as aforesaid, a caveat has been registered on the leasehold property owned by the guarantor at Fua'amotu, Kingdom of Tonga to secure the repayment of this guarantee."

[4] At the time of the signing of the agreement no caveat had been registered on the property.

[5] In February 2003 the appellants obtained judgment by default in the Land Court against Mr. Wang for the monies purportedly secured by the 1998 agreement. In August 2003 the appellant's registered a caveat on lease 5404. The document recorded the provision in the 1998 agreement that the caveat be registered and went on to refer to the judgment mentioned above. The caveat was noted on the lease.