IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 148 of 2003

BETWEEN:

KALOMUT KALSES, SUPU KALANGIS, RICHARD KALSES, BOB KALSAOPA, DAVID KALTAKEI BANI, FRANCISE KALFAU
First Claimants

AND:

FREDDY KALSES, JACK KALSAKAR, HARRIS KALO
Second Claimants

AND:

LE MANGENESE DE VATE LIMITED
First Defendant

AND:

FORARI DEVELOPMENT COMPANY LIMITED
Second Defendant

AND:

ATTORNEY GENERAL
Third Defendant

Coram: Justice Treston

Mr. Yawah for Claimants
Mr. Malcolm for first and second Defendants
Mr. Botleng for third Defendant

Date of Hearing: 21 October 2003.

JUDGMENT

APPLICATION

The First and Second Defendants seek orders striking out the claim in this matter as being frivolous and vexatious and ordering the Claimants as lessors to execute a consent to transfer of the leasehold land in question to a prospective purchaser of the leases, Vanuatu Project Management Limited

CLAIM

The First Claimants are Ni-Vanuatu resident custom landowners and lessors of leasehold titles 12/0741/002 and 12/0741/003 situated in Forari, North East Efate. The second Claimants are Ni-Vanuatu from Eton Village, Efate and are authorized through a power of attorney to act for and on behalf of the first Claimants. The First and Second Defendants are the lessees of the respective titles. 

The Claimants contend that various representatives of the First and Second Defendants made promises to the lessors that the lessors would do certain things in relation to mining and providing employment and opening a mini-township and a retirement village for millionaires and a vehicle assembly plant. The Claimants contend that these promises were never kept and thus they were deprived of the development of their land.

In addition the Claimants contend that a Mr. Fox made an approach to the First Claimants and promised to carry out certain activities, which promises which were never kept. 

As a result, the Claimants claim:-

1.	General damages to be assessed, and

2.	(a)	Forfeiture of the leasehold titles; or
(b)	Rectification of the lease registers.

EVIDENCE

Sworn statements in support of the application by the First and Second Defendants were filed and Mr. Geoffrey Robert Gee confirmed that he is a shareholder and director of both Regent and Satellite Holdings Ltd, the nominee shareholders of the Defendants. Mr. Gee deposed that the lease contained no provision for mining requirements or development of the land as claimed and there is currently an agreement for sale and purchase in the sum of about USD$800, 000 to Vanuatu Project Management Ltd. 

Mr. Douglas Patterson a real estate agent produced a copy of the agreements with a total purchase price of USD$775, 000.

Mr. Jeffrey Miles deposed that at no stage did he agree to or promise anyone that he intended to mine or develop the mine at Forari. He said that squatters were removed and Eton people were employed to clean up the property. He said that in no stage was Mr. Fox given any authority to remove and sell property and that the mine was not and is not viable. 

In response to the application sworn statements were filed. Mr. Bani said that he is the son of one of the original landowners, that he had inherited his father's rights, on his father's death on 17 May 1992, as customary land title holder. He produced as an exhibit, a purported termination notice of the leases dated 3 June 2003. He also deposed as to what Mr. Miles had allegedly said in relation to the development of the land in 1989. 

Mr. Supu Kalangis deposed that Mr. Miles had talked about building a vehicle assembly plant to which they agreed. That was in 1989. He said that there has been no development of the land through mining or other commercial activities. 

Mr. Freddy Kalses deposed that he was one of the Second Claimants and was aware of the forfeiture notice, which was served at Geoffrey Gee's on Wednesday 4 June 2003. He produced a power of attorney appointing him to act as attorney on behalf of the landowners and said that in June 2003 the rental sum of VT41, 500 was transferred back to Mr. Miles and that the Claimants have refused to accept any further payments towards rent.

SUBMISSIONS

Mr. Botleng submitted on behalf of the Third Defendant that the Attorney General should be dismissed from the action. There was no objection from the Claimants and an order was made dismissing the Third Defendant from the action with the costs of VT10, 000 to be paid to the Third Defendant by the Claimant.

Mr. Malcolm on behalf of the First and Second Defendants submitted that, as to the claim for general damages, there were no specific pleadings in relation to such damages which had not even been particularized. In any event, it was submitted that the sale of the leases would not affect any claim for damages.

Counsel submitted in relation to the forfeiture that notice for forfeiture was covered by Sections 43 and 45 of the Land Leases Act [CAP 163]. Counsel submitted that the notice of forfeiture was defective in terms of Section 45 but conceded that there might be an arguable case in relation to that.

In relation to the rectification of the leases he submitted that that claim had to be pursuant to Section 101 of the Land Leases Act and the Court had to be satisfied that there had been fraud or mistake going to registration. It was submitted that there was no fraud or mistake pleaded in the claim. 

As to the lease documents generally, the applicants submitted that no sale to another party could be completed without the prior consent in writing of the lessor (which consent should not be unreasonably withheld) and it was argued that if the leases were fully paid up to date, and a consent fee had been agreed with the trustees, refusing consent because of this action was unreasonable and that a declaration could be made by the Court either to sell without consent or an order that the lessors be directed to sign. It was submitted that the vendors had agreed to pay a reasonable consent fee of 1% of the purchase price namely VT850, 000 (actually VT750, 000).

In reply, Mr. Yawah, on behalf of the Claimants, submitted that proper notice under Section 45 of the Land Leases Act had been given and that subsequent payments of rent had now been refused. It was submitted that the breaches were specified in the notice. As to damage, promises had been made and not complied with, and that Section 100 of the Land Leases Act should be accepted as a claim and if there was any defect in the statement of claim such could be remedied or cured by amendment to the claim. It was submitted that there was a serious case to be tried and that the action should not be struck out.

FINDINGS

In relation to the claim for damages, I agree that statement of claim is totally defective in that there is no pleading in the claim alleging any specific damage or particularizing the same. Simply to say that general damages may be assessed in my view insufficient. 

However, it seems to me that there is a more telling reason why the claim for damages should be dismissed. It is my view that any claim for damages on the basis of the pleadings must be on the basis of a contract between those making promises and the Claimants, being the lessors of the land. Under section 3 (1) of the Limitations Act No. 4 of 1991 it is provided that actions founded on simple contract cannot be brought after the expiration of 6 years from the date on which the cause of action accrued. Clearly on the statement of claim and on the sworn statements any promises made by Mr. Sombardier in 1982 or by Mr. Miles in 1989 or by Mr. Fox in 1995, even if any of those promises be proved to be correct, are now outside the limitation period as far as actions upon them are based.

As to the claim for forfeiture of the leasehold titles, that is covered by Sections 43 and 45 of the Land Leases Act. Those sections provide as follows:-

"LESSOR'S RIGHT OF FORFEITURE

43.	(1)	Subject to the provisions of section 45 and to any provision to the contrary in the lease, the lessor shall have the right to forfeit the lease if the lessee commits any breach of, or omits to perform any agreement or condition on his part expressed or implied in the lease.

(2)	The right of forfeiture may be-

(a)	exercised, where neither the lessee nor any person claiming through or under him is in occupation of the land, by entering upon and remaining in possession of the land; or

(b)	enforced by a reference to the Referee.

(3)	The right of forfeiture shall be taken to have been waived if-

(a)	the lessor accepts rent which has become due since the breach of the agreement or condition which entitled the lessor to forfeit the lease or has by any other positive act shown an intention to treat the lease as subsisting; and

(b)	the lessor is, or should by reasonable diligence have become, aware of the commission of the breach:

Provided that the acceptance of rent after the lessor has commence a reference to the Referee under subsection (2) shall not operate as a waiver".

"NOTICE BEFORE FORFEITURE

45.	Notwithstanding anything to the contrary contained in the lease, no lessor shall be entitled to exercise the right of forfeiture for the breach of any agreement or condition in the lease, whether expressed or implied, until the lessor has served on the lessee and every other person shown by the register to have an interest a notice in writing which-

(a)	shall specify the particular breach complained of; and

(b)	if the breach is capable of remedy, shall require the lessee to remedy the breach within such reasonable period as is specified in the notice; and

(c)	in any case other than non-payment of rent may require the lessee to make compensation in money for the breach;

and the lessee has failed to remedy the breach within a reasonable time thereafter, if it is capable of remedy, and to make reasonable compensation in money if so required".

The purported forfeiture notice is as follows:-

"The Custom Land Owners
Eton Village
PO Box 200
Port Vila

Le Manganese de Vate Limited
Forari Development Company Limited
Regent Limited
Satellite Holdings Limited
C/- Geoffrey Gee & Partners
Barristers & Solicitors
PO Box 782
Port Vila.

3rd June 2003

Dear Sir,

Re: Purported Lease of Eton Lands at Forari

We hereby give notice of immediate termination of the purported leases over our land in Forari.

Despite repeated requests from us, you have consistently failed to comply with your responsibilities under the leases. You have abandoned the properties and they are now in a state of total disrepair of such magnitude that it is now impossible to remedy the many breaches, all of a fundamental nature.

Le Manganese De Vate Limited has consistently been in breach of its covenants contained in Clauses 4(a), 4e), 4(j) and 4(k). It would also appear that the requirements of Clause 4(1) of the purported lease were not complied with when your solicitor wrote to the Lands Department 28th March 1989 stating that "Mr. Gerry Miles and Mr. Tom Alcock are beneficial owners of Le Manganese de Vate Limited".

Forari Development Company Limited is similarly in breach of all of its covenants contained in its lease (possibly with the exception of its covenant to pay rent).

We have re-entered upon the demised lands in an effort to mitigate the substantial losses we have incurred a result your continued failure to meet your obligations.

Yours faithfully 

Richard Kalses		"R. KALSES"
Bob Kalsoapa			"B. KALSAOPA"
David Bani			"DAVID. BANY"
Kalo Kalses (President Epuen Trust) 	"Kalo Kalses"

(As duly authorised representatives of the Custom Landowners and Eton Community)"

While in a general way, as Counsel for the Applicants conceded, that notice could be said to be valid, because it specifies the particular breaches complained of with reference to the clauses in the lease namely 4(a), 4(e), 4(j), and 4(k), and while the notice indicates that the breaches are now impossible to remedy, and while the notice did not elect to require compensation in money for the breach, it is my view that the action for forfeiture of the lease cannot be sustained, because on the evidence the lessor should by reasonable diligence have become aware of the commission of the breaches long before 3 June 2003. Under Section 43 (3) (b) the right of forfeiture will be taken to have been waived if the lessor is, or should by reasonable diligence have become aware of the commission of the breach. It is axiomatic that, after a period of nearly 21 years since 9 November 1982 the lessors could within that time frame, with reasonable diligence, have become aware of the commission of the alleged breaches. I am of the view that in the circumstances of that time frame the claim for forfeiture is indeed vexatious and frivolous.

In relation to the claim for rectification of the lease registers, the only remedy that is available is under Section 100 of the Land Leases Act which provides as follows:-

"RECTIFICATION BY THE COURT

(1)	Subject to subsection (2) the Court may order rectification of the 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 register shall not be rectified so as to affect the title of a proprietor who is in possession and acquired the interest for valuable consideration, unless such proprietor had knowledge or 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".

There is no evidence at all in the statement of claim indicating that registration had been obtained or made by fraud or mistake and the claim for rectification is likewise frivolous and vexatious, in my view. In any event under section 14 of the Limitation Act there is no indication as to when any fraud or mistake had been discovered and it seems to me that nearly 21 years after the signing of the leases the Claimants could, with reasonable diligence, have discovered fraud or mistake, should there be any. In any event none is alleged. 

JUDGMENT

For the above reasons the Third Defendant is dismissed from the action with costs as above, and the claims against the First and Second Defendants are struck out.

As to the order directing that the lessors sign their consent to the transfer of the leases, I am of the view that, as the proceeding has been struck out in its entirety, there ought now to be no impediment to that proposed transfer.

Sufficient notice of the First and Second Defendants' application in that regard has been given and the Claimants have filed sworn statements in reply. The leases provide in clause 3 (1) that consent to any transfer "shall not be unreasonably withheld". I am of the view that such consent is being unreasonably withheld and I direct that the lessors now sign the consents. 

I note that the consent fee has now being withdrawn (se exhibit "C" to statement of Douglas Patterson). My order is subject to a proper consent fee being paid to the lessors.

I award costs to the First and Second Defendants at the standard rate against the Claimants as agreed or taxed.

Dated AT PORT VILA, this 24th day of October 2003

BY THE COURT

P. I. TRESTON
Judge