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Xiao's Hardware Co Ltd v United Enterprises (Property) Ltd [2025] SBHC 1; HCSI-CC 50 of 2024 (21 January 2025)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 50 of 2024

BETWEEN:

XIAO’S HARDWARE COMPANY LIMITED
Claimant

AND:

UNITED ENTERPRISES (PROPERTY) LIMITED
Defendant

Date of Hearing: 27 November 2024
Date of Judgment: 21 January 2025

Mr. J Apaniai for the Claimant
Mr. A Radclyffe for the Defendant

JUDGMENT

AULANGA PJ:

1. Situated along Prince Philip Highway at Ranadi, East Honiara opposite SINU Marine School lies a registered land in parcel number PN:191-041-14 (“PN 14”). Inside PN 14 is a Brick Wall, the disputed area in this proceeding, that runs parallel to a common boundary of a neighbouring registered land. The Claimant asserts it owns the Brick Wall area and that it has never been possessed by adverse possession. The Claimant claims inter alia, for a complete and unobstructed possession of that strip of land. The Defendant says otherwise and avers that it has possessed that disputed area by adverse possession. This case concerns an ownership dispute over that Brick Wall area and the ultimate question for me to decide is whether the area in question was possessed by adverse possession.
2. The Claimant is a registered proprietor of PN 14 by virtue of registration by a transfer in May 2022. Previously, in 1967, PN 14 was first registered to D.J. Gubbay, for 49 years lease. PN 14 then transferred to Harvest Pacific in 1985. In August 2010, it was transferred to Bishop Brothers. In May 2022, Bishop Brothers then transferred it to the Claimant, being the current proprietor of the land. The transfer was made after it was renewed in 2016 for 75 years to Bishop Brothers upon lapse of the 49 years lease duration.
3. PN 14 is a commercial land with a total area of 0.2668ha. Situated on it is a Hardware building called Xiao’s Hardware, owned by the Claimant. Inside PN 14 is the Brick Wall, constructed on an unknown date in 1999 by former proprietor Harvest Pacific. It is located about 1.3 meters inside PN 14 and runs parallel to a common boundary it shares with the Defendant’s registered land parcel number 191-041-187 (“PN 187”). PN 187 was registered to the Defendant since 1995.
4. The total area between the Brick Wall and the common boundary is 63 square meters, which is part of the 0.2668ha of PN 14. It is this portion of land that the Defendant claimed to have acquired by adverse possession since 1999.
5. Before PN 14 was transferred to the Claimant, it had been leased to the Claimant from Bishop Brothers for 3 years, commencing from 2014 to 2017. That was when the Claimant had notice of the Brick Wall but was unable to have it rectified for reason that it did not own PN 14. At the material time, PN 14 was owned by Bishop Brothers and it was Bishop Brothers that allowed or acquiesced the Defendant to use the Brick Wall area undisturbed.
6. On 13^th June 2022 and after the Claimant had acquired PN 14, the Claimant’s solicitor sent a formal notice to the Defendant to either rent the Brick Wall area or else to have it demolished. The Defendant, through its solicitor, refused the proposal and claimed that it had acquired it by adverse possession pursuant to sections 224 and 225 of the Land and Titles Act (Cap. 133). The Defendant then disclosed its intention to sue the Claimant for trespass if the Brick Wall is to be demolished or reclaimed.
7. As a result, the Claimant brought this action for a number of declaratory orders. First, that it owns PN 14 including the encroached area that comprised the Brick Wall. Second, for permanent injunction restraining the Defendant, his servants and agents from undertaking any unwanted activities that would deny the Claimant from peaceful enjoyment and full possession of PN 14, including exercising its propriety rights to remove or demolish the Brick Wall. Third, for damages for trespass to PN 14, to be assessed commencing 3^rd May 2022 or alternatively, mesne profit at $69,000 per month commencing 3^rd May 2022 until trial. And finally, for costs.
8. There is a counterclaim by the Defendant for an order pursuant to section 224 (2) of the Land and Titles Act for the ownership of the Brick Wall area by adverse possession. A consequential order for that area to be registered and incorporated in the Defendant’s fixed term estate PN 187 was also sought. If such to be given, the advertisement and notice provisions as required by section 224 (2) of the Land and Titles Act, says the Defendant, have been duly complied with.
9. By Agreed Facts and Issues filed on 19^th July 2024, the parties have agreed for me to consider these three issues:
   1. whether the Defendant had acquired the encroached area by adverse possession pursuant to sections 224 and 225 of the Land and Titles Act;
   2. whether the knowledge by the Claimant at the time it purchased the property from Bishop Brothers of the use of the encroached area by the Defendant coupled with the failure of the Claimant at the time of the purchase to object to the use of the encroached area by the Defendant amounted to estoppel thereby barring the Claimant from claiming ownership of the encroached area; and
   3. whether an order should be made formally incorporating the encroached area as part of the Defendant’s PN 187.
10. Of all the issues, it is my view that the pertinent and decisive issue for this proceeding is issue 1. That is, whether the Defendant had acquired the encroached area by adverse possession pursuant to sections 224 and 225 of the Land and Titles Act. The other two issues can be subsumed into the overarching finding of the Court in holding whether or not the Defendant had acquired the encroached area inside PN 14 by adverse possession.

Whether the Defendant acquired the Brick Wall area by adverse possession pursuant to sections 224 and 225 of the Land and Titles Act.

11. To answer this issue, I consider it pertinent to refer to section 224 of the Land and Titles Act and the approaches taken by the Court on the ownership of registered land by adverse possession.
12. Section 224 of the Land and Titles Act states:
    • “224-(1) The ownership of an estate or a registered lease may be acquired, subject to Part VII, against the person registered as the owner of the estate or the lease, as the case may be, by peaceable, overt and uninterrupted adverse possession of the land comprised in the estate or lease for a period of twelve years: Provided that -
    • (a) the interest acquired in the land by virtue of this section shall be the owner against whom the adverse possession occurs; and
    • (b) no person shall so acquire the ownership of any estate or lease in any land vested in or owed by the Commissioner or a local authority.
    • (2). Any person claiming to have acquired an estate or lease by virtue of the provisions of the sib-section (1) may, after having advertised or given notice in such manner as the High Court may direct, apply to High Court for an order that he be registered as the owner thereof.”
13. In Moses v Lovegrove [1953] 1 All ER 1279, cited in Bird v Registrar of Titles [1980] SILR 47, the Court stated that adverse possession means possession that is inconsistent with and in denial of the right of the owner or landlord of the premises. In Marshall v Roberson [1905] SO Sol J 75 (also cited in Bird v Registrar of Titles), the Court laid down the test that to prove adverse possession, it is not sufficient for the person claiming adverse possession to prove mere acts of ownership, but the person must also prove possession on their part and dispossession of the rightful owner. In Techbild v Chamberlain [1969] 20 P. & C R 633 (also cited in Bird v Registrar of Titles), it was judicially recognised that a finding on adverse possession requires some affirmative unequivocal evidence, going beyond mere evidence of discontinuance, consistent with an attempt to exclude the true owner’s possession.
14. Having traverse the law, I now turn to answer this issue. The Defendant contends that it has acquired the Brick Wall area by adverse possession for two reasons. First, in 2021 when PN 187 was renewed, the Commissioner of Lands had advised the Defendant and former proprietor of PN 14 to correct or consent to any encroachment pertaining to PN 187’s boundary upon which Bishop Brothers agreed that the Brick Wall could remain where it is. This, the Defendant asserts, that when the Claimant purchased PN 14, it acquired the same interests its predecessor had in the property. Second, the Claimant had full knowledge of the Brick Wall when it purchased PN 14 from Bishop Brothers without objection. As such, the Claimant is estopped by its conduct from making claims over the Brick Wall area. The effect of those, as submitted, is that it gives the Defendant adverse possession of the land in question for the prescriptive period when the land was registered under its former proprietors. This has extinguished the Claimant’s rights and interests over the said portion of land. Consequently, that strip of the land should be incorporated into PN 187 pursuant to section 224 of the Land and Titles Act.
15. The Defendant relies on the case authorities of Anglican Church of Melanesia v Dettke [2023] SBHC 91 as upheld on appeal in Dettke v ACOM [2024] SBCA 7 to support its claim of adverse possession of the disputed area. In my reading of these case laws, the facts and circumstances of these cases are different from the present case in that the Church of Melanesia brought the claim for adverse possession on the basis of undisturbed possession over an uninterrupted 15-years period. In the present case, the claim was brought by the registered proprietor of PN 14 following its objection (made about 2 years ago) to the Defendant’s purported possession of PN 14 since acquiring ownership of the land. The Claimant also disputed the period of the uninterrupted use of the disputed area as recognised under the Land and Titles Act for adverse possession, said to be relied upon by the Defendant. This makes these two cases cited by the Defendant neither helpful or relevant to the facts and circumstances of the present case.
16. I have considered the Claimant’s contrary submission to the Defendant. I think the answer to this issue lies in the application of section 224 of the Land and Titles Act, to the facts of the present case.
17. It is not disputed that the Brick Wall was constructed by Harvest Pacific in 1999 and not the Defendant. It is also undisputed that PN 14 was transferred from Harvest Pacific to Bishop Brothers in 2010 and later transferred to the Claimant in 2022. The Defendant did not construct any structures on the disputed area but merely using it as an access way as acquiesced by Bishop Bothers, the former proprietor of PN 14.
18. As such, when PN 14 was acquired and transferred from one entity to another, the registered proprietor, in the absence of evidence to the contrary, has acquired a valid and effectual title to PN 14 including the Brick Wall area. When the Claimant acquired and had PN 14 registered in its name in 2022, it acquired a valid and effective title to the entirety of PN 14 including the Brick Wall area notwithstanding the fact that the Brick Wall has been used as an access way by the Defendant. Its title to the land is indefeasible and remains undefeated unless extinguished under the Land and Titles Act. Hence, the effect of the transfer of a registered land is to destroy the title by adverse possession where the adverse possessor acquired but failed to have it registered.
19. Applying section 224 of the Land and Titles Act to the present case, the claim by the Defendant that it acquired the Brick Wall area by adverse possession must be rejected for three reasons. First, there is no evidence to show that the Defendant had actual possession of the disputed area. The Brick Wall was built by Harvest Pacific and not the Defendant. At all times, the Defendant had been using it as an access way without erecting any structures on it. Viewed in that context, it means the Defendant did not have actual possession of the land. This, in turn shows the Defendant also did not have an intention to possess the land in question.
20. In Land Law (6^th Ed), learned author Peter Butt states that in order for a claim for adverse possession to be successful, the Claimant must able to prove (1) actual possession of the land and (2) an intention to possess the land in question. For emphasis purposes, the author states (at page 902):
    • “Merely to use the land for personal convenience, with no intent to exclude all others, is not enough. Thus, no title by adverse possession was acquired where the possessor fenced the area claimed (a garden) with the intention of excluding the general public but not with the intention of excluding the documentary owner. Again, no title by adverse possession was acquired where the possessor fenced off for use as a tennis court and garden an area of communal park, but without intending to exclude others who were entitled to enjoy it in common with him. No title of adverse possession was established where a possessor fenced in an area, not for the purpose of excluding others but merely as a convenient way of penning-in his own sheep. And no title of adverse possession was established to a laneway, where the possessor used it as an access way to his property, but also allowed others to use it and requested the local council to surface it.”
21. In this case, there is no evidence from the Defendant to prove these two requirements. What can be concluded is that, the Defendant was merely using that area for its personal convenience without any actual possession and an intention to exclude the registered owner of PN 14. If there was such an intention, the Defendant unfortunately had sat on that right too long. It would have done it long ago by filing of a claim when PN 14 was registered under the former predecessors. That did not occur which is unfortunate.
22. Another obvious reason is, the use of the Brick Wall area as an access way was acquiesced by Bishop Brothers. The Claimant did not acquiesce in the Defendant’s use of the land upon acquiring the land from Bishop Brothers. In other words, the use of the Brick Wall was by permission by its former proprietor. As such, even if the Defendant was in possession of PN 14, which is denied, it does not amount to adverse possession.
23. Adverse possession as defined in Moses v Lovegrove (cited earlier) and more recently in HDD Development Ltd v Vaike [2023] SBCA 7, means possession without the permission of the landlord. In a case where the registered owner has acquiesced for such use or occupation of the land, a claim for adverse possession simply cannot arise. This is for the simple reason that the purported possession or usage of the land is not adverse or inconsistent with the permission of the owner. This position is well settled law in this jurisdiction as echoed in HDD Development Ltd v Vaike (cited above) where the Court of Appeal states (at paragraphs 22-23):
    • “22. For prescriptive rights to arise from possession it must be adverse possession, i.e., possession “without the permission of the person lawfully entitled to possession”.
    • 23. As we said above, it is clear in this case that LSL acquiesced in Commines Vaike’s occupation, so this essential trigger for prescriptive rights by way of adverse possession simply does not arise.”
24. Based on the authority in HDD Development v Vaike cited above, I do not think the Defendant can rely on adverse possession of the disputed area since all along, its purported possession of the Brick Wall, was not adverse, but by permission from Bishop Brothers.
25. The Defendant submits that when the Claimant purchased PN 14, it acquired the same interests its predecessor had in the property. This submission in my view is partially correct to the extent that when the Claimant acquired PN 14, it has a valid and indefeasible title to that property, including the Brick Wall area. To assert that the previous agreement entered into between the Defendant and the Bishop Brothers for the use of the Brick Wall area ought to be considered as ‘interests’ attached and transferable with the land and is binding on the Claimant, is incorrect for the simple reason that the Claimant is not privy to that agreement.
26. Next is, a claim for adverse possession of PN 14 under section 224 of the Land and Titles Act requires a 12-years uninterrupted period of possession against the registered owner. In this case, the undisputed evidence shows that PN 14 was owned by different proprietors, and had subjected to renewal of the lease period. The history of PN 14 shows that it was first registered in 1967 to D.J. Gubbay (first owner), for 49 years lease. In 1985, it was transferred to Harvest Pacific (second owner). In August 2010, it was transferred to Bishop Brothers (third owner). On 3^rd May 2022, Bishop Brothers then transferred it to the Claimant (fourth owner), as the current proprietor of the land. It was when the Claimant took ownership of the land that it objected to the use and the location of the Brick Wall area, a move to have full and uninterrupted possession of the land.
27. The accepted evidence shows the first 49-year FTE granted to D.J Gubbay had expired on 1^st October 2016, and PN 14 then reverted to the Commissioner of Lands. The land was vested in the Commissioner for more than 6 months before it was renewed to Bishop Brothers for 75 years FTE on 29^th May 2017. As such, the Defendant’s claim that it had acquired adverse possession of the Brick Wall area since 1999 must fail because there was an interruption of the use or the purported occupation of the land by reason of it being transferred from one lessee to another. Notably, at one stage after the Brick Wall was constructed, it was reverted to the Commissioner of Lands, a prohibition to a claim for adverse possession under section 224 (1) (b) of the Land and Titles Act. Based on these factors, in my view, a claim for adverse possession of PN 14 against the Claimant cannot be properly commenced on any date other than on 3^rd May 2022 when the Claimant became the proprietor of the land and had objected the Defendant for the use of the Brick Wall area. By claiming adverse possession of PN 14 in that short timeline, unfortunately, it does not satisfy the 12 years’ prescriptive period recognised under the Land and Titles Act. On those reasons, the Defendant’s submission that it had acquired the disputed land by adverse possession must be rejected.

Whether the knowledge by the Claimant at the time it purchased the property from Bishop Brothers of the use of the encroached area by the Defendant coupled with the failure of the Claimant at the time of the purchase to object to the use of the encroached area by the Defendant amounted to estoppel thereby barring the Claimant from claiming ownership of the encroached area

28. For this issue, the Defendant contends that the Claimant purchased the property with full knowledge of the history and location of the Brick Wall, and without lodging of any objection to it. By implication, the Claimant has accepted the location of the Wall at the time it purchased PN 14. Therefore, the Claimant is estopped by its conduct from making claims or complaints relating to the location of the Wall.
29. This contention was denied by the Claimant who asserts inter alia, that this submission is flawed and without legal validation. The Claimant states that any interests in a registered land can only be lawfully acquired through ways or grounds provided under the Land and Titles Act. Reference is made to section 110 of the Land and Titles Act that provides for the indefeasibility of title of the registered owner and that can only be defeated or extinguished by ways provided under the Act. The Claimant further avers that there is nothing in the Land and Titles Act to support the argument advanced by the Defendant except for a claim for adverse possession and not by estoppel by conduct.
30. The Defendant’s argument on this issue is unconvincing and must be rejected. Unless it is provided under the Land and Titles Act that interests in a registered land can be acquired against the owner of the land where the owner had full knowledge of a prior usage or occupation such as the use of a Brick Wall area within the property, it is my view that interests in a registered land can only be acquired by prescribed ways or grounds recognised under the Land and Titles Act. If there is such as proposed by the Defendant, it would have been plainly laid down by the legislature. Having full knowledge of any prior dealing by the Defendant and the former proprietor of PN 14 relating to the use of that Brick Wall area perceived to be “interests” capable of acquiring ownership to that land, in my view, is far-stretched from the law and is without legal basis. It cannot be recognised as interests transferable with change of ownership of the registered land under the Land and Titles Act.

Whether an order should be made formally incorporating the encroached area as part of the Defendant’s PN 187

31. Since the two issues are considered in favour of the Claimant, I do not think there is any legal basis to make an order to formally incorporate the Brick Wall area as part of the Defendant’s PN 187. I have decided not to do so on the basis that PN 14 was never subdivided at any time and the undisputed evidence also shows that the Claimant has been paying annual rent of $36, 680.00 to the Commissioner of Lands since it acquired that property in 2022. The rent is payable to the whole of PN 14, including the Brick Wall area.
32. Based on those findings, I reject the Defendant’s contention. Instead, I find in favour of the Claimant that the Brick Wall area remains part of PN 14 and is owned by the Claimant. The Defendant has not acquired that disputed or Brick Wall area by adverse possession, and its claim in that regard must fail accordingly.
33. The counterclaim must also inevitably dismiss as a result of the Court’s findings to the issues at hand.
34. I have accepted the market value or rate of the Brick Wall area to be $69,000 per year based on the Survey Report of Victor Maáhanua. This is a commercial land with high value, based on the current land rate of PN 14. There is no other Report produced by the Defendant to contradict this Report. The material findings in the Report regarding the current market rate of the disputed area remains unchallenged and thereby accepted. I do not consider the Report misleading or misrepresenting as described by the Defendant’s counsel, so much so that it is unreliable for me to accept. The material evidence in the Report is accepted. As a result, I prefer the order for the Defendant to pay mense profit at $69,000 per year commencing 3^rd May 2022 as the amount representing the rate per square of the entire PN 14 that the Claimant was deprived of since acquiring ownership of the land. The order for damages for trespass on PN 14, to be assessed, is therefore unnecessary.
35. In view of the above reasons and considering the materials available before me, I therefore find in favour of the Claimant and grant the remedies claimed in the Amended Category A claim accordingly. The counterclaim is dismissed forthwith. The Claimant shall have its costs to be paid by the Defendant on standard basis, to be taxed if not agreed.

Orders of the Court

1. Order that the Claimant is the owner of the Fixed Term Estate in Parcel No. 191-041-14.
2. Order that the Brick Wall constructed within the boundaries of Parcel No. 191-041-14 with an area of 69 square meters of the eastern part of PN 191-041-14 is owned by the Claimant.
3. Order that permanent injunction restraining the Defendant, his servants and agents from entering the encroached area, or any part of PN 191-041-14 without the consent of the Claimant.
4. Order that permanent injunction restraining the Defendant, his servants and agents from obstructing, harassing, threatening or in any way whatsoever from interfering with the Claimant’s right: -
   • [a] to the peaceful enjoyment of the whole of PN 191-041-14, including the encroached area;
   • [b] to enter and take possession of the whole of PN 191-041-14, including the encroached area; and
   • [c] to remove from PN 191-041-14 the said Brick Wall.
5. Order for Defendant to pay mense profit at $69,000 per year commencing 3^rd May 2022.
6. Costs to be paid by the Defendant on standard basis, to be taxed if not agreed

THE COURT

Augustine S. Aulanga

PUISNE JUDGE