IN THE LAND COURT OF TONGA
NUKU'ALOFA REGISTRY

LA06 of 2013

BETWEEN:

FRED VAKA'UTA SEVELE
PLAINTIFF
(lORD SEVELE 'O VAILAHI)

AND:

1. TUPOU LOTO'ANIU
2.	PETER DEAN TUPOU -DEFENDANTS

BEFORE THE HON. JUSTICE CATO

Judgment in relation to applications made by the First and Second defendants to rescind interim orders made on the 2n d May 2013.

[1]	On the 26th April, 2013, the plaintiff Lord Sevele, commenced action against the defendants alleging that the first defendant had wrongfully refused to renew leases that he had over two tax allotments or had wrongfully declined to give him continued occupation for three years. Both leases had expired and the second defendant as the registered lessee of one of the allotments of land (referred to in the Statement of Claim as lease No 5294) was pressing to evict the plaintiff and take possession of land and buildings thereon. 

[2]	As for the second lease referred to in the statement of claim as Lease No 5387, the plaintiff claimed also that he was entitled to a renewal or occupation of this allotment for three years based also on an alleged agreement from the first defendant that a renewal would be given, and or a later agreement in December 2012 he had with the first defendant that he would be able to occupy the land for three years, this being evidenced in a letter written by the first defendant's brother Soakimi Loto'aniu to the Minister of lands dated 17th March 2013.

[3]	I requested the Minister of Lands to deliver up copies of the leases. It appeared that the plaintiff did not have a registered lease over either of the allotments. Lease no 5294 was granted to a company which I was informed at the hearing had not been registered for some years. That company was Squash Exports Company Ltd of which the plaintiff was the former chairman of the Board of Directors. The lease had been granted for 20 years from the First Defendant for commercial purposes with the rent being $100.00 pa annually, the term being 2nd July 1992 to the 1st July 2011. On the 28th November, 2012 the second defendant, who was the son-in–law of the First defendant, became the registered leaseholder of the land. 

[4]	As for Lease 5294, this had been granted to the brother of the first defendant, Soakimi Loto'aniu, who had held it as registered lessee for the period 1st April 1993 to 31st March 2013. Although it appears that the plaintiff, Squash Export Company Ltd and or another company Touliki Trading Company of which the plaintiff was a shareholder, had occupied the allotment and worked it, I was advised by Mr Fakahua, counsel for the plaintiff, that there was no formal sublease or permit arrangement and nothing of this kind appears to have been registered.

[5]	It is to be noted that at the time when Mr Soakimi Loto'aniu wrote to the Minister on the 17th March 2013, seeking consent for the plaintiff to have his lease extended for three years, reference is made there to a lease to the plaintiff. Whatever the arrangement, be it a sublease or a permit to occupy, there was as I have said no registered instrument and accordingly, under section 126 any unregistered lease, sublease of greater than three years, or permit would not be effectual to pass or affect an interest in land. Further, at the time of writing his letter of request to the Minister, Soakimi had only days of his registered lease to run. The lease reverted to his brother, the first defendant, on the 1st April 2013. I was informed that it is the intention of the second defendant also to take a registered lease of this allotment.

[6]	The statement of claim alleged that valuable buildings and a concrete slab valued at about $700,000 were on the land and that on the 17th April 2013, after there had been a failure by the plaintiff to arrive at any agreement with the defendants concerning the continued occupation of the land, the second defendant had hired a security company to prevent employees of the plaintiff from entering the land. The plaintiff alleged that this had caused damage to a pig feed enterprise that was being operated and had interfered with the operations of another company which the plaintiff had allowed to occupy the premises for an agreed rental. 

[7]	As a consequence, the plaintiff commenced an action for judgment that he could remain in occupation for three years from the 1st July 2012 to the 30th June 2015 (lease 5294) and from the 1st April 2013 to the 30th May 2016 (lease no 5387) Orders were also sought that the first and second defendants, their heirs, servants, agents or family were restrained from trespassing, interfering with, demolishing premises, or machine and equipment and any goods of the plaintiff in the land in dispute. Damages under various heads were sought.

[8]	On the 2nd May 2013, having heard Mr Fakahua I made interim orders.

1.	The first and second defendants, members of their families, agents, employees or persons acting on their behalf are hereby restrained.

(a)	From molesting, harassing, or interfering in anyway whatsoever with the plaintiff Fred V Sevele and his employees or agents on the properties described in the application contained in leases no 5294 and No 5387;

(b)	From demolishing or damaging the 2 buildings, equipment, and machinery of the plaintiff on the land in dispute which is the former lease no 5294 and no 5387;

(c)	From stopping the plaintiff and his employees entering the land in dispute until further order.

2.	A copy of this application and affidavit in support together with the direction notice and this Order shall be served personally on the defendant within 7 days of this Order.

3.	Any Police Officer is authorised and directed to take whatever action is reasonably necessary to give effect to this order.

4.	Application for variation or cancellation of this Order may be made within 48 hours notice to the Plaintiff.

5.	The Minister of Lands is to provide a copy of the said leases No 5294 and No 5387 and any subsequent lease of the said land to Peter Dean Tupou and deliver these up to the Court within 7 days of this Order.

[9]	Both the first and second defendants now move on notice to rescind these orders.

[10]	I had ordered the plaintiff to serve copies of the proceedings on the Minister of Lands and advise him of the date for the hearing of the application to rescind. The Minister did not make any appearance.

[11]	The first defendant denies that any assurance was given to the plaintiff that he could lease or occupy the allotments beyond the expiry of the leases. He seemed to admit that some discussions were had in December 2012, by which time the second defendant had become the registered lessee of the land over which formerly lease 5294 had existed, but the plaintiff had not met conditions he had sought. 

[12]	In any event, by that time the land had been leased to the second defendant and registration effected in November 2012. Accordingly, unless the second defendant was a party to any such arrangement and there was no evidence he was, he could not be bound by any arrangement his father had made in December 2013 with the plaintiff. 

[13]	Of concern to me also is the fact that the plaintiff did not annexe to his affidavit a letter addressed to him as director of "The Squash Company" from the first defendant dated 13th September 2012, advising that the lease had expired on the 1st July 2012. The first defendant said that he did not want the company operating further on the land. Mr. Fakahua confirmed the plaintiff had received this letter. Ex parte applications must reveal material that may be unfavourable to the plaintiff's case as well as material that is favourable. 

[14]	It seems despite this letter, the plaintiff did nothing until December 2012, when there was, as I have said, some verbal discussion between the plaintiff and the first defendant concerning a possible extension of occupation even though by that stage the plaintiff was aware that the second defendant had a registered lease. Faced with such a clear intention not to grant any further lease, in September 2012, it is surprising that the plaintiff did nothing at all about attempting to persuade the first defendant to honour his alleged previous assurance until it seems December. 

[15]	Mr Fakahua resisted rescission on two bases;

1.	He contended that the first defendant had given the plaintiff an assurance that he would be permitted to continue in occupation beyond the period of the leases, and he was estopped from denying this. Accordingly, he and, it would seem to follow, the second defendant were bound to recognise and grant him a right to occupy the land for a further three years.

2.	The second point made by Mr Fakahua was that the lease to Squash Exports mortgage to the Tongan Bank should not have been released to the second Defendant and that something was wrong about the registration of the lease in November 2012 to him.

The Assurance of a further right to occupy 

[16]	The first correspondence concerning any alleged assurance of a right to occupy came from the plaintiff's solicitor in a letter to the second defendant dated 12th December, 2012. In that letter, the plaintiff's solicitor purports to write not on behalf of the plaintiff but the companies, Squash Exports Company Limited and Touliki Growers Company Ltd and asserts;

"Although the lease expired on the 1st July 2012, there was some understanding between our clients and the lessor that the lease will be continued for another five years after the expiration of the lease. As such it is obligatory and imperative on the lessor to honour their verbal agreement as it is binding on both parties to the lease."

[17]	This was written after the second defendant had written to the plaintiff on the 5th December 2013, threatening to assert his rights as registered lessee. A copy of the letter of the 5th December 2013 was not before the Court. Although asserting that an assurance had been given by the first defendant, it is noted no particulars were given as to the date, time, or place of this assurance. Any such assurance was not given personally to the plaintiff, it seems either, but to companies with which he was associated.

[18]	There was a further letter from the plaintiff's solicitor to the second defendant dated 25th January 2013 in which the plaintiff said that, after the plaintiff's letter of the 12th December, there was a meeting in which the first defendant agreed to give the said company another three years to continue occupying the land until the 31st December 2015. At this point, it is unclear whether the assurance was given to Squash Exports or Touliki Growers Company Ltd, but again there is no suggestion in that correspondence that it was given to the plaintiff personally. There is mention in this letter of a letter sent by the plaintiff to the Tonga bank which had held a mortgage over the lease to Squash Exports confirming this arrangement.

[19]	Accordingly, it seems at that point, there was no longer reliance on any earlier assurance but on the fact of an alleged agreement with the first defendant in December 2012 that the company would be given another three years to continue occupying the land until the 31st December 2015.

[20]	Subsequent correspondence annexed to the affidavits evidenced that conditions insisted upon by the first and second defendants at various times since December had not been met. It was apparent from the correspondence that the second defendant also suggested terms on which he would be prepared it seems to grant the plaintiff a right to occupy the land for a further three years but it is plain the parties did not reach any accord. Indeed, Mr Fakahua for the plaintiff at the hearing agreed that was the case. In a further letter dated 7th February 2013, the first defendant states his view of the December meeting, which confirms not only had his terms not been met, but the lease by then had expired and the land had been released to the second defendant.

[21] The plaintiff, although alleging a right of renewal of the lease of 5294 for three years, could not and did not rely at the hearing on any purported renewal of the registered lease to Squash Exports which expired in July 2012. The company had been unregistered for a number of years. If it had existed, any renewal of that lease would have required a written application under 36 (1) of the Land Act to have been made within six months of the expiration of the lease.

[22]	At the hearing, Mrs Taufateau, for the first defendant, strongly contended that the proceedings brought by the plaintiff were misconceived. She contended that the plaintiff was not the correct party to bring these proceedings. No assurance as alleged had been given to the plaintiff personally, but on the evidence provided by the plaintiff in support of the claim to the companies with which the plaintiff was associated. This point seems correct. I adjourned the proceedings to see what had become of Squash Exports and I was informed it had ceased to be a registered company some years ago. No mention was made of Touliki Trading company it appears from his affidavit that the plaintiff is a shareholder of that company. The thrust of the correspondence adduced in the plaintiff's affidavit from the solicitors would suggest that any alleged assurance was given companies with which the defendant was associated and not personally. As such the claim for relief by the plaintiff would seem to be misconceived.

[23]	However, even assuming the assurance was given to the plaintiff personally, the plaintiff is in difficulty. Any suggestion by Mr Fakahua that representation and estoppel might operate to personally bind the first defendant to grant the plaintiff a lease or right of occupation (possibly a permit) of the former 5294 seems to conflict, in these circumstances, with Sanft v Tonga Tourist and Development Company and Minister for Lands [1981-88] Tonga LR 26. That case stands against invoking equity if it were to conflict with the Act's own procedures for the creation and registration of interests in land. The Land Act in Division III lays down procedures for the creation and registration of leases, subleases transfers and permits and in section 36 the procedure for renewal of leases. The plaintiff could have personally sought from the first defendant a lease or permit to occupy in the appropriate form and if granted taken steps for registration of that instrument to take effect when the lease to Squash Exports terminated. He did not do so. It is difficult to see that the plaintiff incurred any detriment consequent upon any alleged assurance being given for extended personal occupation. All that happened was that he neglected to make good the assurance by obtaining a lease or permit to occupy, in the proper form and obtaining registration as he was required to do under the Act, if he wanted the arrangement to take effect under section 126 of the Land Act. I note that the plaintiff, in his statement of claim, alleges as an alternative to renewal a right to occupy for three years. A sublease for a period of no greater than three years does not have to be registered under section 126 to take effect, but there could be no sublease other than one taken from the second defendant. That was not alleged. 

[24]	Nor was there evidence that the second defendant was a party to any alleged representation made by his father to the plaintiff prior to the expiry of the lease to Squash Exports that a lease or right to occupy would be granted to the plaintiff, or anybody else. As such, the second defendant could not be bound by any assurances made allegedly by his father to the plaintiff concerning renewal or right to occupy for a further period. Having achieved registration in November 2012, as Mr Pouono for the second defendant contended, the second defendant was entitled to assert the rights the lease gave him after registration.

[25]	In relation to the second allotment lease 5387, it seems that Squash Export never enjoyed any registered sub-lease or permits to occupy it, at all. Mr Fakahua said that was so, at the hearing. It seems that tenure, such as it existed, was informal. The lease to Soakimi has now also expired with the reversion falling to the first defendant on the 1st April, 2013. In his letter to the plaintiff of the 7th February 2013, the first defendant informed the plaintiff he would not grant a renewal of this lease (presumably to his brother Soakimi) and that he was aware from the Ministry's record that there was no agreement between the plaintiff and Soakimi for a sub lease. He said that after the 31st March, 2013 he would give the plaintiff two weeks to clear his work and machinery from the land after that he would lock up his "api". Whatever may have been the relationship between the plaintiff and Soakimi (and it would not seem anything more than informal), the letter of request to the Minister to renew a sub lease sent on the 17th March 2013 a few days before the expiration of the lease plainly cannot bind the reversioner.

The release by the Bank of its mortgage over lease 5294

[26]	I asked Mr Fakahua whether any inquiry had been made why this had occurred. He said there had been none. In the absence of any lawful challenge to the regularity of the register, the second defendant must be recognized by this Court as the lawful registered lessee. Ma'ake v Lataimu'a [2007] to LR 15 it would seem that on the expiration of the lease at least that part of the security would be worthless anyway. 

[27]	Accordingly, applying the principles in American Cyanimid Co v Ethicon Ltd [1975] AC 300, I do not consider that there is a serious question to be tired. Whilst the plaintiff does not have to show a strong prima facie case, to succeed on such an application, there must be an issue demonstrated of some real substance. Whilst at this stage, I refrain from deciding these issues conclusively on the affidavits, I do have regard to them in order to satisfy myself whether the plaintiff can be said to have a good arguable case. For reasons, I have given I do not consider he has such a case.

[28]	Accordingly I rescind the orders previously made on the 2nd May 2013.

[29]	Further I order the costs of these applications be those of the first and second defendants, and payable by the plaintiff.

[30]	If they are not agreed to within 14 days of this judgment they are to be assessed by the Registrar.

DATED: 24 MAY 2013
JUDGE