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Fakafanua v Fakafanua [2008] TOLawRp 26; [2008] Tonga LR 120 (7 May 2008)

IN THE LAND COURT OF TONGA
Land Court, Nuku'alofa

L 07/2008

Fakafanua anors

v

Fakafanua anors

Ford CJ; Land Assessor George Blake
28 and 31 March 2008; 7 May 2008

Land law – status of lease – still valid – Minister ordered to revoke cancellation
Probate and administration – wrongful intermeddling with estate by parties

The 22-year-old first defendant, Fakafanua, was a Noble of the Realm. His grandfather and father who had also held the title Fakafanua died in May 2004 and February 2006 respectively. The grandfather's wife, Kalolaine, died intestate in July 2007. The plaintiffs were the first defendant's uncles and aunts. They, along with the first defendant, were the heirs to Kalolaine's estate which included the lease of a commercial building complex known as the Fakafanua centre. They claimed that after Kalolaine's death, the first defendant, without obtaining letters of administration or giving prior notice, took over collecting the rents from the centre and had the lease cancelled by Cabinet. He also had commenced construction work on an additional building on the land which was intended to be let to the ANZ Banking Group The plaintiffs sought an injunction restraining the defendants from carrying on with any further construction work and a declaration that the lease to Kalolaine was still valid for the benefit of the estate. The first defendant admitted taking over the collection of the rents from the tenants of the centre and cancelling the lease for non-payment of rent (to himself as the estate holder). He also challenged the legal standing of the plaintiffs to bring the proceedings. There was evidence that the plaintiffs had paid the sum of $10,000 out of the rent money from the centre towards a misinale (missionary offering) for Kalolaine.

Held:

1. By intermeddling with the estate in the way that he had done, the first defendant had obtained the status of executor de son tort and was therefore liable to account to the beneficiaries. The plaintiffs had locus standi in so far as what they were seeking to do was to prevent the first defendant from intermeddling any further with the estate.

2. The problem for the plaintiffs, however, was that they had also wrongfully intermeddled with the estate in paying the sum of $10,000, out of rent money collected from the centre, towards the misinale.

3. The effect of section 11 of the Probate and Administration Act (Cap 16) was that all of Kalolaine's personal estate, including the lease of the centre, vested in the court from the moment of her death and such title remained with the court until the grant of letters of administration. The court made a declaration holding that the lease was still valid and binding and the Minister of Lands was ordered to take appropriate steps to revoke his purported cancellation of the lease. Other relief was to be made by the Supreme Court. No order was made as to costs.

Case considered:

Ingall v Moran [1944] 1 All ER 97

Statute considered:

Probate and Administration Act (Cap 16)

Counsel for the plaintiffs : Mr Niu
Counsel for the first defendant : Mr Tupou
Counsel for the fourth defendant : Mr Kefu

Judgment

Background

[1] The 22-year-old first defendant is a Noble of the Realm. He assumed the title "Fakafanua" in February 2006 upon the untimely death of his father, Hon Fakafanua Tutoatasi. Tutoatasi's father, Kinikinilau, who had also held the title Fakafanua, died on 12 May 2004. Kinikinilau's wife Kalolaine Fakafanua, who recently passed away, figured prominently in this case and, for ease of reference, I shall refer to her mainly as "Kalolaine". She was the first defendant's grandmother.

[2] The plaintiffs are Tutoatasi's siblings, in other words, the first defendant's uncles and aunts. They, along with Tutoatasi's legitimate children, one of whom is the first defendant, are the heirs to Kalolaine's estate. The estate included the lease of a block of land in Ma'ufanga upon which is situated a commercial building complex known as the Fakafanua Centre ("the centre"). Ma'ufanga is part of the Fakafanua Estate. The lease in question, Lease No.3532, was from Kinikinilau to his wife Kalolaine. It commenced on 8 February 1980 and was for a term of 30 years at an annual rental of $400.

[3] Kalolaine died intestate on 26 July 2007. Up until that stage she had been collecting the rents paid by the tenants of the centre but the annual rent under the lease of $400 per annum had not been paid since 1999. The plaintiffs allege that the lease and the rentals from the centre form part of Kalolaine's estate to be distributed in accordance with the provisions of the Probate and Administration Act (Cap 16) but they claim that, after Kalolaine's death, the first defendant, without having made any demand for the arrears of rent or without having given any other prior notice, unlawfully took over collecting the rents from the centre and had the lease cancelled by Cabinet. It is further alleged that the first defendant subsequently physically took possession of the land in question and entered into a contract with the third defendant for the construction of an additional building on the land, a substantial part of which will on completion be let to the second defendant.

[4] There is no real dispute about these matters although the first defendant denies making any request of Cabinet. He says that his dealings were only with the Minister of Lands. The plaintiffs issued the present proceedings on 5 March 2008 and they also filed an ex parte application for an interim injunction restraining the defendants from carrying on with any further construction work. Immediately upon service of the injunction application, the first defendant very responsibly suspended all work on the construction site making it unnecessary for the injunction application to be heard. For its part, the court agreed to treat the matter with priority and I record that counsel were fully cooperative in this regard. The plaintiffs seek a declaration that the lease in question is still valid and binding and part of Kalolaine's estate. They seek further orders requiring the first defendant to account to and pay to the plaintiffs all rent received by him from the centre and directing him to remove all structures on the leased land and restore the area to the condition it was in before construction work began.

[5] For his part, the first defendant admits taking over the collection of the rents from the tenants of the centre in October 2007 and then having physically taken possession of the land in February 2008 in which month he also entered into the building contract with the third defendant for the construction of the new building. The first defendant also admits that even prior to Kalolaine's death he had, without her knowledge, had correspondence with the Minister of Lands requesting the cancellation of the lease for non-payment of rent. He claims that he was entitled to take the action he did in terminating the lease and entering into possession because of the non-payment of the rent. He further claims that the plaintiffs have no legal standing to bring the present proceedings. The second and third defendants took no part in the proceedings. The fourth defendant played an active part and fully supported, in particular, the first defendant's submissions that the plaintiffs had no locus standi. I shall deal with that issue first.

Locus standi

[6] The defendants, quite properly, wanted the locus standi issue dealt with at a preliminary hearing prior to trial and whilst that would have been the normal procedure, as it had already determined that priority would be given to the substantive hearing, it was agreed that all issues would be dealt with at the one time. No authorities were cited by counsel on the question of standing. The defendants simply submitted that as there has been no grant of letters of administration in relation to Kalolaine's estate all her personal property is, pursuant to section 11 of the Probate and Administration Act (Cap.16), still vested in the court.

[7] Whilst admitting that his clients have not been granted letters of administration, counsel for the plaintiffs submitted that all that is necessary for a plaintiff to have legal standing "is for him to have a sufficient interest which other members of the public do not have." Counsel also stressed that since the present proceedings were commenced, the plaintiffs have filed their application for letters of administration in respect of Kalolaine's estate but that application is being opposed by the first defendant. In his submissions in reply, counsel for the first defendant contended that the proper test for determining locus standi is not whether the plaintiffs have "sufficient interest" but whether they "have the legal right and title to bring the action in their own names."

[8] The starting point for any consideration of this issue is the Probate and Administration Act. The relevant provisions are:

"9. The court in granting letters of administration shall proceed as far as may be as in cases of probate.

10. When administration is applied for by one of some of the next of kin only there being another or other next of kin equally entitled thereto, the court may require proof that notice of the application has been given to the other next of kin.

11. From the death of an intestate until administration be granted his personal property shall be vested in the court."

[9] Section 12 provides that unless a claimant or other person has been found to be the next of kin to the deceased or to have established a right to the deceased's property within three years from the date of death, the proceeds of such estate shall become the property of the Crown. Section 16 provides that the distribution of an estate shall be divisible according to Schedule 1. Relevantly, Schedule 1 provides that if the deceased dies leaving children and grandchildren by the deceased child then the division of the property is to be: "amongst children in equal shares, the grandchildren by deceased children taking amongst them their deceased parent's share."

[10] Halsbury Vol 37 Para 211 states:

"A person cannot be a plaintiff unless he has a vested interest in the subject matter of the action . . . In an action in tort the proper plaintiff is the person who has been injured by the wrongdoer, or the person in whom a right to sue is vested or by whom it has since been acquired. In an action for the recovery of land the proper plaintiff is the person in whom the legal estate is vested and who is entitled to possession of the land."

[11] In Ingall v Moran [1944] 1 All ER 97 an action was brought by the respondent as administrator of his deceased son's estate for loss of expectation of life and expenses occasioned by an accident. The writ, in which the respondent was described as an administrator, was issued on 17 September 1942 although he was not granted letters of administration until 13 November 1942. The case went to trial and the respondent (as plaintiff) recovered damages. The defendants then appealed contending that the action was not properly constituted in as much as the writ was issued before the respondent had been granted letters of administration. The respondent contended that by reason of the doctrine of relation back an action commenced by him as administrator before the grant of letters of administration was properly constituted. The English Court of Appeal held, as summarised in the head note:

"HELD: (I) an administrator as such has no cause of action vested in him before he had obtained letters of administration.

(II) the doctrine of relation back of an administrator's title to his intestate's property to the date of the intestate's death when the grant of letters of administration has been obtained has no application to an action commenced by the administrator as such before the grant is made.

(III) the respondent had no cause of action vested in him at the date of the issue of the writ and the action failed and ought to be dismissed."

[12] Ingall was concerned with the issue of who had authority to bring a cause of action in the name of the estate itself. It seems to me that that is quite a different situation from the case before me which involves an action brought by the plaintiffs to prevent the first defendant from intermeddling with the estate. By intermeddling with the estate in the way he has done, the first defendant has obtained the status of executor de son tort (a status which exists equally in respect of intestate estates) and is therefore liable to account to, inter alia, beneficiaries.

[13] Halsbury, Vol 17 at para 702 states:

"702. Meaning of "executor".

. . .

An executor de son tort is one who takes upon himself the office of an executor, or intermeddles with the goods of a deceased person, without having been appointed an executor by the testator's last valid will or by a codicil to that will, or without having obtained a grant of administration from a competent court; and the term is therefore equally applicable in the case of an intestacy as in the case of testacy for there is no such term known to the law as an administrator de son tort."

Further at para 759:

"759. Liability to be sued.

An executor de son tort is liable to be sued by the rightful representative, a creditor or a beneficiary. He is not liable for more than has come to his hands, and he may, as against the rightful representative, set up in mitigation of damages or payments made by him in due course of administration; but it would appear that he cannot avail himself of any right of recoupment if the rightful representative is a creditor and there are insufficient assets left to pay his debt."

[14] Based on these passages from Halsbury, it seems to me that the plaintiffs in the present case do have locus standi in so far as what they are seeking to do is to prevent the first defendant from intermeddling any further with the estate.

Other matters

[15] The problem for the plaintiffs, however, is that the evidence clearly established that they also wrongfully intermeddled with the estate. The court heard evidence that one of the plaintiffs, ostensibly on behalf of the others, collected the rents for a period and paid to the church from those funds the sum of $10,000 towards a misinale (missionary offering) for Kalolaine some months after her death. There was other rather confusing evidence about additional unauthorised payments.

[16] The effect of section 11 of the Probate and Administration Act is that all of Kalolaine's personal estate, including lease 3532 which I find still subsisted and the rents from the centre, vested in the court from the moment of her death. Such title then remains with the court until the grant of letters of administration. The actions of the first defendant in taking over the rents and entering into possession are a flagrant breach of section 11 as is the conduct of the plaintiffs referred to in the previous paragraph. Likewise, with the fourth defendant. It was not open to the Minister of Lands to take any action that might undermine the status of the estate property that had become vested in the court. In purporting, therefore, to cancel the lease in question the Minister like the other parties to this action acted contrary to the Probate and Administration Act. Quite simply, what appears to have happened is that all the parties to this litigation have to varying degrees taken matters into their own hands in flagrant disregard of section 11. To that extent, they are all chargeable as executors de son tort.

[17] It is not appropriate to make any orders in this proceeding to try and remedy the unsatisfactory situation that has arisen. That action will need to be undertaken by the Supreme Court. What this court will do, however, in order to facilitate the Supreme Court in its probate and administration jurisdiction is to make a declaration (which is now made) that lease number 3532 is still valid and binding and the Minister is to forthwith take appropriate steps to revoke the purported cancellation of the said lease. Contemporaneously with this judgment, the Supreme Court will issue an injunction precluding the defendants from proceeding any further with construction work on the new building.

[18] Further orders will also be issued in the immediate future requiring an accounting of all monies received and paid in connection with the estate since the date of the intestate's death. An independent auditor may need to be appointed by the court to carry out this reconciliation exercise. Notice will be issued by the Chief Registrar advising tenants at the centre as to where and how they should pay future rental payments. It may also be necessary to issue a supplementary order relevant to the injunction requiring the first defendant to remove the foundation work that has been carried out to date in respect of the new building.

Conclusion

[19] In the course of the hearing, I took the rather unusual step of urging counsel to explore the possibility of trying to negotiate an out-of-court settlement so that the problems that have now manifested themselves could have been resolved by way of a consent order. In this regard, I recognise that the case is essentially a family dispute involving one of the Kingdom's most prominent families. I also record that a possible settlement option was raised by one of the counsel in cross examination in open court. However, in spite of the best efforts of counsel, which were appreciated, settlement did not prove possible. I am nonetheless confident that with a little goodwill, common sense and traditional Tongan forgiveness on all sides, it is not too late for the parties to revisit this question of settlement. Unless wiser heads prevail, it will obviously be some time before all matters relating to the estate in question are resolved.

[20] In the circumstances, I decline to make any order as to costs.