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Soltuna Ltd v Hickie [2017] SBHC 20; HCSI-CC 272 of 2012 (8 March 2017)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction
(Maina J)

Civil Case No. 272 of 2012

BETWEEN: SOLTUNA LIMITED - Claimants

AND: NORMAN HICKIE - 1^st Defendant

AND: COMMISSIONER OF LANDS - 2^nd Defendant

AND: REGISTRAR OF TITLES - 3^rd Defendant



Date of Decision: 8 March 2017

Mr G. Suri for Claimant
Mr. P. Tegavota for First Defendant No appearance
Mr. J. Muria (Junior) for the Second and Third Defendant

JUDGMENT

Maina PJ:

Introduction

This is a Category A case that involves a fixed term estate (FTE) on a parcel of land at Noro, Western Province.

The Claimant applied for rectification of fixed term estate under Section 229 of the Lands and Titles Act and alleges that the grant of Fixed Term Estate no. 098-009-10 by the Second Defendant to the First Defendant was obtained or made by fraud or mistake. And the Claimant seeks orders that the grant of fixed term estate in parcel no. 098-009-10 by the Second Defendant to the First Defendant be cancelled. And further, an order that the Fixed Term Estate Register in parcel no. 098-009-10 be amended to register the said estate to the name of the Claimant.

Alternatively if orders sought not granted herein are refused, the Claimant seeks a declaration that the Claimant’s following interest on the parcel no. 098-009-10 constitute under section 114 of the Lands and Titles Act, and therefore, are protected by the said statutory provision: i.e. right of water with access to water bore hole, easement to maintain the supply of water, right of way to residential houses and the water to bore hole.

And any further orders the court thinks fit and cost to be award to the claimant.

Admissibility of Court Book

A Court Book filed on 25^th April 2014 containing the copies of agreed documents and consented the counsels for the parties are admitted pursuant to section 12 (1) (a) of the Evidence 2009. Under rule 12.3 of the Civil Procedure Rules 2007, any documents included in a court by agreement of the parties under rule 12.2 are deemed to be evidence and need not to be proved.

The Court Book filed on 25^th April 2014 was agreed or consented by the counsels for the parties and therefore are deemed to be evidence and court will rely on the document as evidence for this case.

Background Facts

The claimant company has been trading under different names and it is important to note at this stage those different names i.e. Solomon Taiyo Limited [STL], Soltai Fishing & Processing Co Ltd incorporated on 23^rd January 2001 and re-registered under the new Companies Act on 30^th July 2010. And Soltuna Ltd was registered as new name on 4^th June 2012.

Business and Assets of the Solomon Taiyo Limited were transferred to Soltai Fishing & Processing Co Ltd by a Deed of Transfer dated 22^nd August 2010.

It is also noted from correspondences by and to First Defendant was also addressed to the following address;

(a) Noro Shipping & Forwarding Agency,

(b) Noro Diesel & Petrol Supplies Ltd.

The Claimant and First Defendant are disputing ownership of Parcel no. 098-009-10 situated at Noro Western Province.

The following facts is noted from the trial book and documentaries and disclosed the interests of the parties in the Parcel no. 098-009-10.

1. On or about 28^th May 1987, the Second Defendant assured the STL that the vacant land (now Parcel no. 098-009-10) was available for establishment of a waste treatment facility in the north,
   
2. On 12^th February 1988, Western Provincial Executive approved the land site for expansion on the Solomon Taiyo Limited cannery factory,
   
3. On 20^th February 1988, the Surveyor General raised an instruction to survey as a result of the application of STL,
   
4. On 20^th February 1989, Surveyor General informed the STL the survey had been approved and that STL should approach the Commissioner of Lands for FTE,
   
5. The First Defendant wrote and applied to the Second Defendant for the land only 0n 20^th October 1998,
   
6. Mr. John Mark Hikimae with a letter dated 12th January 1999 advised the Director of Noro Diesel & Petrol Supplies Ltd of the directive by the Minister for the 2nd Defendant to offer the concern FTE to them and again with the letter of offer 26^th February 1999 to the Director of Noro Diesel & Petrol, Mr Hikimae re-iterated that Directive that it was the direction of the Minister,
   
7. On 5^th April 1999 the Western Provincial Executive made a deliberate decision to approve and maintain interest of Solomon Taiyo Limited over Lot 182 in Noro and revoke approval made to 1^st Defendant,
   
8. Soltai Ltd paid a total of $27,643.75 on 23rd July 2002 for premium, land rental, registration fee and stamp duty for lot 182/Noro - parcel no. 098-009-10 [Receipt GTR 849233]
   
9. First Defendant made three instalment payments which was completed on 10^th October 2004 and total up to $16,376.00 and as follows:
   
   • $3,500.00 by Noro Shipping & Forwarding Agency – GTR no. 686743 dated 19^th March 1999
     
   • $3,500.00 by Noro Shipping & Forwarding Agency – GTR no. 717031 dated 19^th May 1999
     
   • $9,376.00 by Markwarth Oil Ltd - GTR no. 937437 dated 10^th August 2004.
     
10. The claimant has a water bore hole and some residential houses on the land in dispute. They were on the land prior to the grant of the FTE to the First Defendant.
    

The interest of Markwarth Oil Ltd is noted from the letter by So-law Firm to Commissioner of Lands and payment of $105.00 for consent fee (GTR no. B955803) was for Norman Hickie to sell the parcel no. 098-009-10 to them. The proposed sale was also noted or confirmed by the Pacific Lawyers’ letter to over the caveat placed by the claimant on Parcel no. 098-009-10

Issues

There are factual and legal issues identified at the Pre-trial conference for determination in this trail they are as follows:

(a) Factual issues

1. Did Claimant applied for the first survey, demarcation and registration of the FTE in the land parcel no. 098-009-10?
   
2. Did Claimant pay the Premium and other fees for the land?

3. How was the offer of the land made to the 1^st Defendant?
   

(b) Legal Issue

Whether the grant of the FTE by the 2^nd Defendant to the 1^st Defendant was made by fraud or mistake?

The factual issues relate to the documentary evidences contained in the Court Book for this case.

Factual Issues

Issue (a) 1.

The Defendants do not dispute the Claimant’s application for the first survey, demarcation of Lot 182 and registration of the FTE in the land parcel no. 089-009-10.

And these all started with discussions with the Commissioner of Land G. Rence as from 1987 and upon that an instruction to survey 111/88 dated 8^th December 1988 was issued for the purpose of STL fishing and cannery.

Upon the completion of the survey, an application by Commissioner of Land was made to Registrar of Titles by Memo dated 7^th April 1989 for subdivision to create of parcel no. 098-009-10. As a result of that an advice by the Registrar of Titles dated 16^th May 1989 0n the registration of parcel no. 098-009-10,

The claimant had discussed its interest with Commissioner of Lands on the site for the purpose of fishing and cannery. Upon taking up the Claimant’s interest the first survey of the site was done and later the site was registered as parcel no. 098-009-10.

Issue (a) 2

It is not challenged or disputed by the Defendants that the Claimant paid $27,643.oo [GTR B 849233] on 23^rd July 2002 the Premium and other fees for the land and under the former name the Soltai Fishing & Processing Ltd. It was on an invoice issued to them by the Assistant Land Officer Western Province on 5^th June 2002 which includes the Premium of $25,000.00 and other fees for the land.

On this issue of Premium and other fees the Claimant had paid total of $27,643.oo for the premium and other fees for the land parcel no. 098-009-10 at Noro, Western Province.

Issue (a) 3

With the question of an offer to the First Defendant, his is position like this:

The First Defendant applied to the Commissioner of Lands for an offer by a letter dated 20^th October 1998 and entitled: “RE: APPLICATION FOR COMMERCIAL SIT - LOT 193 PN: 098-o11-10 NORO, WESTERN PROVINCE”. But the three numbers at the middle (011) was crossed out and rewritten in pen with numbers as “009” therein appears as “PN: 098-009-10”. The letter was attention to Mr. Silas Chekana.

The copy of the letter is in the Court Book and at page 116 with handwritten notes with direction to forfeit and facilitates transfer of lease to Noro Diesel & Petrol Supplies. The notes also stated the interest with complaint of STL.

Mr. John Mark Hikimae for the Commissioner of Lands in the letter dated 12^th January 1999 responded to the 1^st Defendant (Director of Noro Diesel & Petrol Supplies Ltd) and states:

“Upon the direction of the Hon Minister of Lands and Housing, I am pleased to inform you that the Commissioner on Lands has approved your request for the above.”

The reply states clearly the approval was done on the direction of the Minister of Lands and Housing and refers to Lot 182. By another letter dated 26^th February 1999 to the Director of Noro Diesel & Petrol Supplies Ltd with the advice on the premium and fees for $16,326-oo it again made reference to Lot 182/Noro. Despite some differences with lot numbers as Lot 193 and Lot 182 they all refer to the land that is now parcel no. 098-009-10 at Noro, Western Province.

The First Defendant applied and an offer as directed by the minister for the site was relayed to him. However at the time of the First Defendant’s application and offer for the site, the process of STL interest was also still undertaken or in progress for the same site (parcel no. 098-009-10).

Flaw

The interests of STL on the site for fishing and cannery activities commenced in 1987 and an instruction to survey the site for the registration was in 1988. There were discussions and correspondences between STL and Commissioner of Land and Western Provincial Government also endorsed the interest of the STL. The work and process on the STL interest had continued for years or slowly until the land was gradually registered as parcel no. 098-009-10.

The First Defendant also applied for the same site in 1998 but when the interest of the STL to acquire the site was still processed by the Commissioner of lands’ office and notably was done in a slow manner.

It is clear that an offer to the First Defendant (Director of Noro Diesel & Petrol Supplies Ltd) was on the direction of the Minister who has no power under the Lands and Titles Acts. The power to allocate land, and for that matter this land, vests on the Commissioner of Lands. Palmer J (as he was then) held in DJ Graphics Ltd v Commissioner of Lands; DJ Graphics Ltd v Attorney General; Solomon Islands Ports Authority v Commissioner of Lands [1995] SBHC 111; HCSI-CC 102 of 1995; 40 of 1995; 164 of 1995 (11 December 1995) that the Minister has no power under that provision to allocate the land in question to the applicant and that the power to allocate vests on the Commissioner of Lands.

I adopt the conclusion of Palmer J and in this case the Minister has no power under the law or provision to direct or allocate the land in parcel no. 098-009-10 to the 1^st Defendant.

b) Legal Issues

The issue of fraud or mistake arose on the fact that Mr. John Mark Hikimae had been aware that Commissioner of Land had directed the offer to be made to the STL before the grant instrument of FTE to the First Defendant. And the First Defendant was also aware of the interest of the Claimant before the grant instrument was executed on the 14^th October 2014.

The Law

Section 229 of the Lands and Titles Act (Cap 133) provides:

“229 - (1) Subject to subsection (2), the High Court may order rectification of the land register by directing that any registration be cancelled or amended where it is so empowered by this Act, or where it is satisfied that any registration has been obtained, made or omitted by fraud or mistake.

(2) The land register shall not be rectified so as to affect the title of an owner who is in possession and acquired the interest for valuable consideration, unless such owner had knowledge of the omission, fraud or mistake in consequence of which the rectification is sought, or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default”.

Under this provision there are specific requirements or the court cannot grant rectification unless it is established either that the First Defendant had knowledge of the fraud in the consequence of which rectification is sought or caused such fraud or substantially contributed to the act.

Fraud is defined in Osborn’s Concise Law Dictionary, 8^th Edition Sweet and Maxwell 1993 as “The obtaining of a material advantage by unfair or wrongful means; it involves obliquity. It involves the making of a false representation knowingly, or without belief in its truth or recklessly”.

CJ Daly in case Trading Company (Solomons) Ltd v PKR Pacific Sales Ltd [1981] SBHC 13; [1980-1981] SILR 172 (31 July 1981) regarded Fraud in the Lands and Titles Act as synonymous or the same with "dishonesty" a view that I also adopt for section 229 of the Lands and Titles Act. The honest is on the defendant to establish that he was a bona fide purchaser and registered owner untainted by fraud and protected by the Act.

The First Defendant had not in possession of land and so equity or any claim of overriding interest is not an issue for him.

The defence filed by First Defendant on 18^th February 2013 denied the claimant’s claims and said that the grant instrument between the First and the Second Defendants constituted a valid agreement. He denied any knowledge that there was an application or any arrangement by the Claimant for the purpose of expanding its fishing operation to acquire lot 182 (parcel no. 098-009-10),

The execution of the Grant Instrument on FTE of parcel no. 098-009-10 to the First Defendant was on 14^th October 2004. At the time STL have on the site two water boreholes, smoking factory and staff houses. Mr. Hickie should or if he inspected the land before his application, he would have seen the properties and activities.
Mr. Hickie’s letter dated 19^th March 1999 to the General Manager of STL demanded the removal of workers who were occupying lot 182/Noro and his letter dated 12^th April 1999 also demanded the STL to bury the water pipe to cannery and tank.

These facts simply suggest that Mr. Hickie have knowledge of the Claimant’s interest prior to his application for the site and the execution of the Grant Instrument on 14^th October 2004.

The list of disclosure for the Second Defendant shows that all the relevant documents were available in the file, and so Mr. Hikimae would have been aware of the interest of the STL at the time he made an offer dated 26^th February 1999 to the First Defendant. He should aware of:

• an instruction in 1988 to survey the site for STL,
  
• the letter by Surveyor General dated 20^th February 1989 that shows it was STL that initiated the survey, subdivision and registration of parcel no. 098-009-10,
  
• the Deputy General Manager of STL, by a letter dated 26^th April 1999 to the Commissioner of Lands and protested against Norman Hickie over his claim of the land Lot 182, Parcel no. 098-009-10,
  
• Files notes by the Commissioner of Land made on 3^rd July 1999 and 24^th September 1999 shows direction by the Commissioner of Lands for offer of the land to STL and;
  
• the letter dated 12^th January 1999 by Mr. Hikimae which he informed the Director of Noro Diesel & Petrol Suppliers Ltd that the Commissioner of Lands had approved their request is contrary to the File Notes by the Commissioner of Lands on 3^rd July 1999 and 24^th September 1999.
  

These stated correspondences and documents were available in the file and Mr. Hikimae should have seen them. From these it further shows the Commissioner of Lands did not direct or authorise the allocation of Parcel no.98-009-10 to the First Defendant before his application and the execution of the Grant Instrument on 14^th October 2004 and on that fact Mr. Hikimae had knowledge or aware of the interest of the Claimant on the land or the process for the claimant to acquire the FTE of Parcel no.98-009-10.

I have earlier ruled on the grant of FTE to the 1^st Defendant as not according to the law.
But it needs to be emphasis here, the circumstances of knowing or aware of the interest of STL by the 1^st Defendant and Mr. Hikimae is critical or decisive on their part in undertaking the act to apply for the site and to act on the direction of the Minister. This is so because of the obvious activities and overriding interest of STL on the land and Mr. Hikimae was a senior official in the Commissioner of Lands’ office, at least should aware of it.

It is my view that the acts of Mr. Hikimae (for the Second Defendant) and the First Defendant were dishonest on their part. And I rule that their acts were false representation and dishonest acts. I, therefore grant the declarations sought by the Claimant under section 229 of the Lands and Titles Act.

ORDERS

1. The grant of fixed term estate in Parcel no. 89-009-10 by the Second Defendant to the First Defendant and or executed on 14^th October 2004 is declared void,
   
2. The grant of fixed term estate in Parcel no. 89-009-10 by the Second Defendant to the First Defendant is cancelled,
   
3. The Fixed Term Estate Register in Parcel no. 89-009-10 is amended to register the said estate in the name of the Claimant
   
4. Costs is ordered against the First Defendant, Second and Third Defendants.
   

THE COURT

......................................................
Justice Leonard R Maina
Puisne Judge