|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Supreme Court of Samoa |
IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU
CP 111/09
BETWEEN:
SEABEE AH YEUNG and
NELE AH YEUNG
of 69 St. John's St. Woolston, Christchurch, New Zealand,
both Retirees
Plaintiffs
AND:
MOE JAY TO
also known as MOE JAY TO AH TO
of Tanumalala and Alafua, Planter
Defendant
Presiding Judge: Justice Slicer
Counsel: R Drake for Plaintiffs
T S Toailoa for Defendant
Hearing: 25, 26 and 29 March 2010
Reasons: 14 April 2010
Judgment: 26 May 2010
JUDGMENT (NO.2) OF SLICER J
1. The plaintiffs are the daughter and son-in-law respectively of the late Jay Ah To. The defendant Moe Jay To is the son, by a different marriage, of Jay Ah To. The plaintiffs seek equitable relief claiming restitution of title to a parcel of land Lot 142 identified on Plan 44U/XVL and situated at Tanumalala in the District of A'ana, near Apia.
2. The proceedings were commenced by Ordinary Summons but the jurisdiction enlivened by those proceedings was that of equity. The plaintiffs claimed that they had entered into an agreement with Jay Ah To in 1983 whereby they would purchase, through him, Lot 143 while the father would purchase the adjoining land Lot 142 on which he built the family home. They claimed beneficial interest in the land, the title to which had been registered in the defendant's name as Volume 29 Folio 175 delineated on Plan 2602. They sought the remedies of declaration and directed transfer. The defendant admitted some of the material set out in the Statement of Claim but denied the existence of a Trust stating in his Defence;
"13 THAT any funds contributed by the Plaintiffs to their father were by way of gift by her to their father.
"14 THAT in making such contributions the Plaintiffs placed herself in the position of a volunteer and the Defendant will place reliance on the equitable doctrine that equity will not assist a volunteer."
The import of paragraph 14 remains unclear, but is accepted as suggesting that there was no mutual benefit between the parties and no equity was created.
3. A preliminary application to Strikeout the Statement of Claim was dismissed by this Court for reasons delivered on 14 April (Seabee Ah Yeung v Moe Jay To (No.1). One of its bases was a last minute plea of limitation. The Court permitted an amendment to the pleadings which now relevantly state;
"15. THE Defendants would also place reliance on section 9 (2) of the Limitation Act 1975 in that the time fixed by law permitting the Plaintiffs to bring their action/suit commenced as from the 19th September 1991 the date of the registration of the conveyance from Jay To to the Defendant.
"16. THE Plaintiffs are also absolutely barred and estopped to bring their action/suit by virtue of the relevant provisions of the Titles Registration Act 2008."
4. Jay Ah To, born in Canton China in 1911 came to Samoa in 1927 and remained there until some few years before his death. He avoided compulsory return to China in the early 1930's and remained as a responsible and assiduous worker in his adopted country. He married, and the second plaintiff was born of that union. Her parents separated when she was 6 years old. By that time Ah To had leased Lots 142-3 from the Western Samoa National Provident Fund ("The Board") and began its cultivation. He had built a two-storey home on Lot 142. After the separation Luisa, Ah To's second wife moved into the home bringing with her the defendant who was also his child and her daughter. Nele left the family home when she was 20 years old moving to New Zealand where she married the first plaintiff in 1967. Seabee Ah Yeung the first plaintiff had lived at Tuvao and his father had worked with Ah To. In 1965, Ah Yeung's father leased the adjoining Lot 144. Thus there was a close connection between the parties in this case with both Ah To and the disputed land.
5. In 1983, the Board permitted the sale of the land presumably giving first opportunity to leaseholders. In November 1983 Ah To indicated to the Board his wish to purchase the freehold of his leased land. On 29 October 1985 the Board offered him the land at the price of $1,000.00 per acre. Each Lot comprised 24a 1r 37p and 24a 1r 39p respectively making a sale price slightly in excess of $48,000.00. The terms of the offer included;
1) The payment of a deposit of 10% payable on the execution of the agreement;
2) The balance to be paid over 18 years at an interest rate of 14% reducible to 12%;
3) Completion of the agreement before 30 November 1985.
6. The terms required a quick response or the loss of opportunity to purchase a valuable asset. Ah To sought the assistance of his children and traveled to New Zealand to speak with his former wife and other members of his family which included the plaintiffs. Seabee puts the date as approximately May 1984 and it is likely that the terms of the agreement had been made known before 29 October 1985, the date of the formal letter of the Board.
7. The Court accepts that the plaintiffs were the only children who agreed or were able to help their father financially. The Court for reasons which will be later outlined finds that at the meeting Ah To and the plaintiffs made an agreement that they would contribute with the deposit and make regular payments. In return they would receive title to Lot 143. Whilst he was the entitled purchaser, by reason of the lease, they were the effective purchasers of that Lot. Ah To would separately pay the balance owing on Lot 144.
8. The plaintiffs paid Ah To the sum of NZ$4,400.00 as the deposit required by the Board.
9. The repayment schedule for both Lots required the balance to be paid by 216 installments of $498.96 for the purchase price and interest on the sum of $44,080.00 commencing as and from 10 March 1986. The schedule represented payments over 18 years at an interest rate of 12 percent.
10. The plaintiffs made their first payment on 20 February 1986 and monthly payments of NZ$250.00 thereafter. In effect they were paying the whole of the due installments, a process which reduced the interest component and enabled Ah To to accumulate sufficient money to more readily meet his own commitment. Between 24 February 1986 and 8 September 1988 they paid NZ$7,500.00 directly to Ah To who in turn transferred the payments to the Board. The total payments made by the plaintiffs including the deposit was NZ$11,900.00. The accelerated payments enabled Ah To to more readily pay off the purchase price of Lot 142 in a short period. The payments were made in a cash payment of NZ$250.00 per month sent by letter addressed to the defendant. The amount was in accordance with the terms of a letter dated 24 February 1986 sent by the defendant on behalf of his father advising;
"Thank you, I have received the latter and I commend both of you. I have come early to send our document "repayment sheet". Well, it is only $498.96 but it is no difference from the $500 that I had told you about but that is just the limit that I referred to. It is different from the amount for late payment. But let us stay strong. It corresponds with the 10th of each month upon which payments must be made. Both of us must also consider the penalty of 14% for late payments: it is $559.98."
"This is my letter; I will keep all our receipts when received..."
11. The defendant acknowledged the payments on behalf of his father by letter. The plaintiffs tendered as exhibits some 21 such letters, each written by the defendant thanking the plaintiffs for their payments.
12. On 24 July 1987 the Board issued a receipt referable to Ah To to Lots 142/143 for the sum of $21,496.23 which represented sufficient payment for one of the allotments. On 27 September 1987 the defendant wrote to the plaintiffs advising;
"Seabee, Nele; I am writing because the other block has been paid. I received money from the people there plus money I had accumulated and then I went and paid $21,496.23 for this other block to reduce the interest which is quite high but the principal is low. This leaves a balance of $21,000 or more remaining. But my wish is to pay it off quickly. I prepare boxes of taro and save up money received to finish it off quickly and ease the burden if payment is prolonged. This is my letter to both of you to enable you two to understand the matter. I end my letter by saying we shall talk again another day..."
13. On 8 September 1988 the defendant again wrote to the plaintiffs confirming the payments and continuous assistance.
14. The defendant pleads that the payments made to Ah To were gifts and provided no basis for entitlement. That contention is rejected. The plaintiffs kept meticulous records. Each payment was recorded alongside the repayment schedule. Two payments lost in the post were recorded as such. Some 30 payments, each in the same amount, were recorded along side the due date. The sum total of the monies paid was $21,496.23 which left a balance owing of $21,000.00 for the second piece of land. Although the Board was selling both blocks at a total cost and was able to allocate the money equally to the purchases, the agreement between the parties was for separate allocations.
15. The Court is satisfied that there was an agreement between the three parties that the plaintiffs would purchase Lot 143 and Ah To Lot 142. The following matters are persuasive of that conclusion:
1) The family relationship between the three parties.
2) The fact that without the provision of money by the plaintiffs, Ah To would not have been able to conclude the transaction, to his own benefit, in the manner and time which he did.
3) The Lot chosen by Ah To was the one on which he had erected a house.
4) The correlation between the repayment schedule and the amounts forwarded on or near the due date. In particular, the records kept by the plaintiffs can be seen as none other than a record of purchase rather than gift.
5) The contents of the letters written by the defendant on behalf of his father and the acknowledgments therein.
6) Acceptance of the truthfulness and accuracy of the evidence of the plaintiffs tested through cross-examination.
7) The means of indirect payment to the Board was the best available given his special entitlement to purchase as a lesser.
16. The Court determines that an equitable Trust existed. Ah To received and held the money paid to him on Trust that it would be allocated to the purchase of Lot 143. Upon completion and the legal transfer of Lot 143, Ah To held that land on trust for the joint benefit of the plaintiffs.
17. On 27 September 1987 Ah To paid the sum of $21,496.23 to the Board as payment with respect to the purchase. On 6 October 1988 the plaintiffs forwarded their final payment of NZ$250.00 to Ah To.
18. In 1988 Ah To visited his family in New Zealand. While there, he told the plaintiffs that Lot 143 had been fully paid for and belonged to them while Lot 142, on which the home had been built, was for Luisa's children.
19. On 1 July 1991 the Board, by deed, conveyed Lots 142 and 143 as estates in fee simple to Ah To. The plaintiffs were not advised but given that the original agreement with the Board was with Ah To as a previous leaseholder there is nothing surprising in the form of transfer. On that day Ah To held the land, Lot 143 on Trust for the plaintiffs.
20. On 26 August 1991 Jay To Ah To executed a Deed of Gift of both parcels of land to the defendant. The consideration was expressed as 'natural love and affection'. By then the land had become registered in Vol. 29 Folio 175 of the Land Register but the two Lots were separately identified in the Schedule. There was, at trial, some controversy about the signing of the deed, the literacy of the donor and how the deed came into existence. There was some doubt as to whether the signature was complete or added to and a suggestion that the defendant had either importuned his father or deceived him as to its effect. It is not necessary to fully determine the controversy. The Court accepts that Ah To signed, at least, two parts of his name and the Court has no evidence suggestive of mental impairment. It matters little. Neither plaintiff was consulted about the deed or given notice of its execution, until many years later. In executing the deed, Ah To was in breach of his fiduciary duty as a trustee.
21. The Court accepts the evidence of Nele that Ah To, on his last visit to New Zealand before he died, had told her that the plaintiffs should see a Mr. Jackson, a solicitor, to obtain the 'papers' for the land when they next visited Samoa. That evidence suggests that Ah To was not fully aware of the import of the deed.
22. The breach of trust was not known to the plaintiffs. On 12 November 2001 the defendant executed a mortgage over the land to the ANZ Bank. Again, no notice was provided to the plaintiffs. Given the contents of the letters written by the defendant on behalf of his father it is difficult to accept his evidence that he had no knowledge of the trust or the agreement. Ah To died on 19 May 2003, aged 92. There is no evidence that he was aware, before his death that the defendant had encumbered the trust land. The extended family met at their father's funeral but there was no discussion about the land. By 2009 the plaintiffs had retired. It had been their intention to return to Samoa and spend their retirement in their homeland.
23. The plaintiffs returned to Samoa in March 2009, and met with the defendant. When the discussion turned to the land, the defendant became evasive and made a general statement, difficult to comprehend, to the effect that 'we have not forgotten you'. Seabee raised the question about the land the following day to which the defendant replied that he was considering subdividing Lot 143. He was reminded of the payments and the acknowledgements given in the letters. The matter was further raised with the defendant a day later but the defendant again avoided the issue with the enigmatic reply that he had spoken with his mother who answered that it was not the time to discuss the property. The plaintiffs undertook their inquiries discovering for the first time the history and status of the land which resulted with the commencement of these proceedings.
24. The avoidance and prevarication of the defendant in March 2009 supports the conclusion that he was aware of the true status of the land and his father's agreement with the plaintiffs. The Court accepts the version of the plaintiffs as to those meetings and that the defendant was attempting to avoid the discussion and would not enter into any exchanges as to the events occurring in the period before his father's death.
25. In 2008 the Legislative Assembly enacted the Land Titles Registration Act and the title to the disputed land came within the provisions of that legislation. That enactment is relevant to issue of indefensibility of title relied upon by the defendant.
CONSTRUCTIVE TRUST AND EQUITY
26. There have been considerable developments in Equity, Remedies and Trusts over the last 30 years as Courts are required to deal with more complex forms of finance and property. Here the plaintiffs rely on the existence of a constructive trust in that it is the defendant, not a party to the original agreement, nor a bona fide purchaser for value who, is in possession of property and thus bound to hold on Trust as a constructive trustee. It is first necessary to consider the nature of the Trust claimed.
27. The first question is whether the Trust followed the transfer to the defendant. Two answers may be had:-
1) The land was subject to the trust of Ah To who attempted to defeat it by transferring legal title to a third party, the defendant. The defendant was not a bona fide purchaser for value, and the transfer was executed without notice to the beneficiaries of the Trust.
2) The defendant was a knowing party to the attempted defeat by the trustee and indeed an active participant in it. In doing so he assumed the burden of the equitable interest in the land. Equitable Liability in respect of both knowing receipt and dishonest assistance has often been held to establish 'constructive trust liability' (Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] UKHL 12; [1996] AC 669).
28. The second question is whether the Trust survived the death of Ah To or left the plaintiffs with a personal remedy against his estate. In this instance, the equitable interest was in the land itself irrespective of any personal right of the plaintiffs to seek remedy through damages against Ah To.
29. The evidence shows the creation of several categories of Trusts throughout the course of the dealings. But common to them all is the fundamental proposition stated in Dyer v Dyer [1788] EWHC J8; [1788] 2 Cox Eq, Cas. 92, cited with approval in Pettitt v Pettitt [1969] UKHL 5; [1970] AC 777 that;
"The clear result of all the cases, without a single expectation, is that the trust of a legal estate, whether freehold, copyhold or leasehold; whether taken in the names of the purchasers and or others jointly, or in the names of others without that of the purchaser; whether in one name or several; whether jointly or successive - results to the man who advances the purchase-money."
30. The categories can be stated as:
1) Ah To held the amount of the deposit and installment payments on Trust for the plaintiffs until transfer of title by the Board on 1 July 1991.
2) Ah To held the land on Trust from 1 July 1991 until the date of registration of the Deed of Conveyance on 19 September 1991.
3) Ah To remained personally liable for compensation until his death in 2003 and thereafter his estate.
4) The defendant, not being a purchaser for value and without notice, held the legal estate on Trust for the plaintiffs thereafter. Ah To had no right to assign the equity (Hodgson v Marks [1971] 1 Ch 892). A person becomes liable when he or she knowingly receives trust property in breach of trust (Karak Rubber Co Ltd v Burden & others (No. 2) [1972] 1 All ER 1210). The test for receipt or dealing is objective i.e. the question is whether the 'stranger' had, at the material time, actual or constructive knowledge of the trust (Karak Rubber Co. supra). A second basis for the existence of a binding trust is that of knowing assistance which is either fraudulent or by a person with knowledge of circumstances which would indicate to an honest reasonable man that such a deceit was being committed or would put him on inquiry, which the stranger failed to make, whether it was being committed (Selangor United Rubber Estates Ltd v Cradock (No. 3) [1968] 2 All ER 1037).
5) Had Ah To remained living on the property it is likely that the defendant held Lot 142 on Trust for him and at least a fiduciary duty with respect to Lot 143 (Hodgson v Marks (supra), Haigh v Kay [1872] UKLawRpCh 47; [1872] L.R. 7 Ch App 469) especially if the presumption of undue influence applies (in Re Craig decd [1971] Ch 95). It is not necessary to consider whether this would be a resulting or constructive trust (Vandervell v Inland Revenue Commissioners [1966] UKHL 3; [1967] 2 AC 291).
6) It is not necessary to consider the position of the ANZ Bank in relation to its interest as mortgage. Presumably it was a bona fide party without notice.
7) Registration of the land in accordance with the Land Titles Registration Act 2008 does not affect the Trust (The Act s14).
The plaintiffs are entitled to claim transfer of title of Lot 142 to them by the defendant.
INDEFEASIBLE TITLE
31. The defendant by his Amended Defence pleads that the suit is barred by virtue of provisions of the Lands Titles Registration 2008 ("The Act"). In effect the plea is that of an indefeasible title.
32. The Act section 13 (2) provides;
"(2) Where a computer folio certificate is issued in respect of a folio of the Register it shall be received by all courts or persons having by law or consent of parties authority to hear, receive or examine evidence as evidence of the of the particulars recorded in that folio, and it shall be conclusively presumed that:
(a) the certificate contains all the information that was recorded in that folio at the time specified in the certificate;
(b) the land to which the certificate relates was, at that time, under the provisions of this Act; and
(c) a person recorded in the certificate as the registered proprietor of an estate or interest in the land to which the certificate relates was, at the time, the registered proprietor of that estate or interest."
33. The issue raised by the provision was considered by the High Court in Parramore v Duggan [1995] HCA 21; [1995] 183 CLR 633 which determined that a failure to record an easement on the title was fatal to the owner of the dominant tenement (whose title recorded the benefit of that easement).
34. However the Samoan legislation Part 4 allows for a transition period to permit the further recording of existing interests (section 16) and the deeming provision (section 14) provides:
"14 Land deemed to be qualified title land – upon the commencement day of this provision all land registered in the Land Register under the Land Registration Act 1992/93 shall be deemed to be land comprised in qualified folios of the Register, held subject to any existing interests which may exist, whether recorded in the folio or not."
35. Section 18 enables a transition period of 12 years after the commencement of the legislation for land brought under the Act 'by the creation of the qualified folio and which were not shown on the relevant folio of the Register' and 'any caution recorded on that folio lapses.'
"Manual folio to be considered evidence of title – A manual folio shall be received by all Courts or persons having by law or consent of parties authority to hear, receive and examine evidence, as evidence of the particulars therein recorded and shall be conclusive evidence that any person recorded in the folio as the registered proprietor of an estate or interest in the land comprised in the folio is the registered proprietor of that estate or interest and that the land compromised in that folio has been duly brought under the provisions of this Act."
"19. Limitation of actions in respect of trust property – (1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action:
(a) In respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or
(b) To recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his or her use."
LIMITATION
"Postponement of limitation period in case of fraud or mistake – Where, in the case of any action for which a period of limitation is prescribed by this Act, either:
(a) The action is based upon the fraud of the defendant or the defendant's agent or of any person through whom he or she claims or his or her agents; or
(b) The right of action is concealed by the fraud of any such person as aforesaid; or
(c) The action is for relief from the consequences of a mistake,-
the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:
PROVIDED THAT nothing in this section shall enable any action to be brought to recover, or enforce any charge against, or set aside any transaction affecting, any property which:
(d) In the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that any fraud had been committed; or
(e) In the case of mistake, has been purchased for valuable consideration, subsequently to the transaction in which the mistake was made, by a person who did not know or have reason to believe that the mistake had been made."
'reason to believe that any fraud had been committed.'
'reason to believe that (a) fraud had been committed.'
LIMITATION AND LACHES
"No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accured to him or her or to some person through whom he or she claims."
LACHES
CONCLUSION
ORDERS
1) The Court declares that the defendant holds the land Lot 143 comprised in Certificate of Title Vol. 29 Folio 75 on Trust for the plaintiffs.
2) The Court directs the defendant to assign and transfer the legal title of the land comprised in Certificate of Title Vol. 29 Folio 175 to the plaintiffs within thirty (30) days of the date of this Order.
3) The defendant pay all legal costs, fees and incidental expenses incurred in such transfer.
The Court will hear submissions on behalf of the parties as to the question of costs and any incidental orders arising from Order 2.
JUSTICE SLICER
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/ws/cases/WSSC/2010/49.html