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Court of Appeal of Fiji |
IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF FIJI
Civil Appeal No.ABU 0065 of 2011
(High Court Civil Action No. HBC 223 of 2008)
BETWEEN:
STAR AMUSEMENTS LIMITED
Appellant/4th Defendant
AND:
NAVIN PRASAD
1st Respondent/1stPlaintiff
SAMUEL NILESH PRASAD
2nd Respondent/2nd Plaintiff
THE REGISTRAR OF TITLES
3rd Respondent/1st Defendant
THE ATTORNEY-GENERAL OF FIJI
4th Respondent/2nd Defendant
KRISPA FOODS (FIJI) LIMITED
5th Respondent/3rd Defendant
ANZ BANKING GROUP LIMITED
6th Respondent/5th Defendant
Coram: Hon. Justice William Calanchini, Acting President
Hon. Justice Suresh Chandra, Justice of Appeal
Hon. Justice Pradeep Hettiarachchi, Justice of Appeal
Counsel: Mr.V.P.Maharaj for Appellant
Mr. S. Singh for 1st and 2nd Respondents
Mr. R. Green for 3rd and 4th Respondents
Date of Hearing: Thursday, 6th September 2012
Date of Judgment: Friday, 28th September 2012
JUDGMENT
William Calanchini, AP
1. I have had the opportunity of reading the judgment of Chandra JA and agree with his proposed orders.
Suresh Chandra, JA
2. This is an appeal by the Appellant (hereinafter referred to as the 4th Defendant) from an interlocutory judgment dated 3rd November 2011 of the learned High Court Judge at Lautoka.
3. The 1st and 2nd Respondents (hereinafter referred to as the Plaintiffs) instituted action by originating summons dated 17th October 2008 and in their Statement of Claim (which was subsequently amended on 9th October 2009) stated as follows:
(a) That they were the judgment creditors under a judgment delivered on 20th December 2007 in Civil Action No.154 of 2006 in the High Court of Fiji at Lautoka against the 5th Respondent (hereinafter referred to as the 3rd Defendant) in the sum of $ 95,417 and cost in the sum of $ 3,500;
(b) That the 3rd Defendant was the registered proprietor of the lease comprised in Native Lease No.14279;
(c) That the said Lease was subject to two mortgages, namely Mortgage Nos. 50169 and 555398;
(d) That on 18th January 2008 the Plaintiffs lodged the said judgment for registration with the 3rd Respondent (hereinafter referred to as the 1st Defendant) and the said Judgment was registered as Dealing No.698496, and that the 1st Defendant had wrongly dated the dealing as 18th January 2007 instead of 18th January 2008;
(e) On 3rd March 2008, the 1st Defendant registered a transfer of the said lease from the 3rd Defendant) to the 4th Defendant for a consideration of $382,000 and registered as Dealing No.700886. A mortgage was also registered against the said lease in favour of the 6th Respondent (hereinafter referred to as the 5th Defendant) as Dealing No.700887.
(f) That the said transfer and the mortgage were wrongly and/or negligently registered by the 1st Defendant without they being made subject to the judgment in favour of the Plaintiffs;
(g) That on 29th May 2008 the Plaintiffs had obtained an order from the High Court of Lautoka to the following effect:
"That Judgment No.698496 registered on Native Lease No.14279 being Lot 7 Waiyavi Subdivision in the District of Vuda and in the province of Ba shall bind the said lease and remain as charge on the Lease until further order of the Court."
(h) That on 4th June 2008 the 1st and 2nd Defendants lodged the said order for registration with the 1st Defendant, and the 1st Defendant endorsed this against the said lease as Dealing No.704687;
(i) That due to the wrongful and negligent act of the 1st Defendant in allowing registration of the said transfer and the said Mortgage, the Plaintiffs have been deprived of the opportunity to exercise their rights under the said judgment and the said order;
That as a result of the aforesaid matters the Plaintiffs have suffered loss and damage and sought the following orders:
(i) That the 3rd Respondent rectified the date of registration of the Judgment in Action No.154 of 2006 dated 20th December 2007 as per Dealing No. 698496 against Native Lease No.14279 to read as 18th January 2008;
(ii) For a declaration that the registration of the Court Order of 29th May 2008 properly extended the registration of the said Judgment;
(iii) For a declaration that the registration of the said Judgment (as extended by the Court Order of 29th May 2008) continues as a valid and subsisting charge against Native Lease No.14279;
(iv) That the 1st Defendant be directed to cancel all instruments registered against the lease after the registration of the said Judgment;
(v) Alternatively for a declaration that the said Judgment (as extended by the said Order) takes priority over all subsequent dealings;
(vi) Further, in the alternative Judgment in the sum of $98,917 against the 1st and 2nd Defendants;
(vii) For costs against the Defendants.
4. In response to the said summons, the 1st Defendant, the 4th Defendant, and 5th Defendant filed their Defence.
5. On 3rd March 2010 the 1st Defendant (Registrar of Titles) filed a summons in the same action instituted by the Plaintiffs seeking the following orders:
(a) That the judgment number 698496 on Native Lease No.14279 being Lot 7 Waiyavi Sub-Division in the District of Vuda and in the Province of Ba shall bind the said lease and remain as a charge on the said lease until furthers Orders of the Court;
(b) Rectification of the incorrect date of registration of judgment No.698496 from 18th January 2007 to the correct date of 18th January 2008;
(c) Declaration that transfer made on 3rd March 2008 on Native Lease No.14279 being Lot 7 Waiyavi Sub-Division in the District of Vuda is null and void or subject to judgment No.698496;
(d) Rectification of the said dealing in respect to the transfer to the 4th Defendant from the 3rd Defendant is subject to the registered judgment and the court order which extended the judgment will subsist until further orders of the Court;
(e) Further orders of the Court as it deemed fit and proper to regularize the transactions pertaining to Native Lease No.14279.
6. The learned High Court Judge after considering the affidavits filed by the parties and the submissions filed by them, pronounced his Interlocutory Judgment on 3rd November 2011 and made the following orders:
(a) That the judgment number 698496, on Native Lease No.14279 being Lot 7 Waiyavi Sub-Division in the District of Vuda and in the province of Ba, shall bind the said lease as a charge to the extent of the monetary sum of the judgment only, and shall stand as having effect from 18th January 2008 till further orders of Court;
(b) Rectification of the incorrect date of registration of judgment No.698496 as a charge as aforesaid from 18th January 2007 to the correct date of 18 January 2008 to be effected by the Registrar of Titles forthwith;
(c ) The transfer to the 4th Defendant and the Mortgage to the 5th Defendant, of Native Lease No.14279 being Lot 7 Waiyavi Sub-Division in the District of Vuda and in the province of Ba, to survive and subsist, subject to the charge created as aforesaid in favour of the Plaintiffs, by the judgment number 698496 for the judgment sum therein;
(d) The 1st Defendant to pay the Plaintiffs, the 4th and 54th defendants costs of this application to the taxed on the standard basis or in a sum of $1000/- to each party whichever is higher.
7. It is against this Judgment of the learned High Court Judge that the 4th Defendant has filed this appeal wherein the following grounds have been set out:
(a) That the learned Judge erred in law and in fact in holding that Judgment No.698496 on Native lease No.14279 binds the said lease as a Charge to the extent of the judgment sum in the following respects:-
(i) His failure to appreciate that the power of the 1st Defendant (in the absence of fraud) to correct clerical slips ceases and becomes an absolute bar pursuant to Section 42(3) of Land Transfer Act when a new transaction occurs whereby a bona fide purchaser for value relying on the face of the register (as was done by the appellant) purchases and becomes registered on the Title.
(ii) In ordering the Registrar of Titles (1st Defendant) to rectify the incorrect date of registration of judgment from 18th January 2007 to the correct date of 18th January 2008 when such powers could not be exercised to the prejudice of the appellant who is a registered bona-fide purchaser for value.
(iii) Ignored or misconstrued the basic principle of TORREN'S system which is, that it is not a system of registration of title but a system of title by registration which entitled the appellant, upon registration of its title as an indefeasible title holder good against all the world.
(iv) Took extraneous matters into account in arriving at his decision.
(v) His failure to award indemnity costs.
8. It is to be noted that this case originated with the Plaintiffs seeking relief against the 1st and 2nd Defendants regarding the correction of the entries in the Register and in the alternative damages against these two defendants, no relief was claimed by them against the 3rd, 4th and 5th Defendants although they were made parties. With the 1st and 2nd Defendants filing a summons seeking orders from Court to correct the entries in the Register and consequently further orders regarding the effect of such correction which would affect the interests of the 4th and 5th Defendants, the learned Judge has considered that as a preliminary matter to be dealt with and hence his proceeding to give the interlocutory judgment. The 4th Defendant in his grounds of appeal has not complained about this procedure adopted by the learned trial Judge and therefore the submissions made by the 1st Defendant regarding same do not arise for consideration in this appeal.
9. In considering the judgment of the learned High Court Judge which is an interlocutory judgment, the main ground of appeal of the Appellant is in relation to the order regarding the correction of entries in the Register of Titles.
10. From the facts as elicited from the statement of claim, the affidavits filed by the parties and the documents filed, the sequence of events that had taken place can be summarized as follows:
(a) The Plaintiffs obtained a judgment dated 18th January 2008, against the 3rd Defendant in a damages case.
(b) The Plaintiffs had moved the Registrar of Title (the 1st Defendant) to register the said judgment in relation to the lease registered by the 3rd Defendant so that the said judgment would be a charge on the lease.
(c ) The Registrar of Title entered the judgment in the Register with the dealing No.698496 by mentioning a wrong date, 18th January 2007. A seal has been placed as a Caption with the word "JUDGMENT" at the top of the entry. There is also an entry on the left hand corner of the memorial with the words "judgment" and the date "18/1/08" below it written in pen.
(d) The said entry had been cancelled with a seal "ENDORSED IN ERROR".
(e) The next entry in the Register is again captioned "JUDGMENT" with a seal and with No.698496 (same as the previous entry) with the date "18/01/07 in favour of Navin Prasand and Samuel Nilesh Prasad (the Plaintiffs).
(f) The 3rd Defendant had effected a transfer of the lease to the 4th Defendant, which is entered in the Register on the 3rd of March 2008 with the dealing No.700886.
(g) The 4th Defendant had effected a mortgage in favour of the 5th Defendant and that mortgage has been registered on the 3rd of March 2008 with the dealing No.700887.
(h) The Plaintiffs had obtained an order from the Master in HNC 154 of 2006L on 29th May 2008. Court to extend the registering of the judgment in their favour, to which action neither the 4th nor the 5th defendant were parties.
(i) The Plaintiff filed their originating summons on 17th October 2008 seeking the reliefs as set out in para.3 above.
(j) The 1st Defendant filed a summons on 3rd March 2010 seeking the orders that are set out in para.5 above.
11. The salient provisions relating to the registration of instruments and judgments in the Land Transfer Act (Cap. 131) need to be examined to deal with the main ground of appeal.
S.19 deals with the "Register of Titles" in which instruments tendered are recorded by entering a memorial thereof on the folium constituted by each such instrument of title, the particulars of every other instrument, dealing or matter affecting the same.
S.20 deals with the "Presentation Book" in which is entered a short description of every instrument presented for registration with the day and hour and if required by the person presenting the instrument, the minute of presentation.
S.24 deals with the "Memorial of Registration", where every memorial shall state the nature of the instrument to which it relates, the day and hour of the presentation of such instrument for registration and such other particulars as the Registrar may direct, and shall refer by number or symbol to such instrument and shall be signed by the Registrar.
S. 104 deals with registering of judgments or decrees against land and provides as follows:
"S.104(1) No judgment, decree or order for the payment of money, the sale of land or a sale in pursuance of an execution under any such judgment, decree or order issued prior to or after the commencement of this Act shall bind charge or affect any estate or interest in land subject to the provisions of this Act unless and until the Registrar has been served with a copy of such judgment decree or order certified by the Court and accompanied by a statement signed by any party interest or his barrister and solicitor or agent specifying
(a) the estate or interest sought to be affected thereby;
(b) the name, address and description of the person by whom or on whose behalf the same is lodged; and
(c) an address or place within Fiji at which notices and proceedings relating thereto may be served.
(2) The Registrar, on being served with a copy of a judgment, decree or order under the provisions of subsection (1) shall, after making upon such copy the time of service, enter the same in the register; and with effect from the time of service thereof upon the Registrar such judgment, decree or order shall, subject to the provisions of subsection (2) of section 105, have the effect of, and be deemed to be a caveat lodged under the provisions of section 106, subject to any prior registered mortgage or charge forbidding the registration of any person as transferee or proprietor of and of any interest affecting, the estate or interest affected by such judgment, decree, or order other than in pursuance of such judgment, decree or order.
According to S.105(2) such judgment shall cease to bind, charge or affect any estate or interest in land in respect of which it is registered unless a transfer upon a sale under such judgment, decree or order shall be presented to the Registrar for registration within six months, or such extended period as the court by order made on application to upon summons shall determine, from the day on which the copy of such judgment, order or decree was served.
12. The Plaintiffs had complied with the requirements in S. 104(2) in presenting the judgment for registration together with the necessary declaration and had thereafter presented the Order extending the effect same obtained from the Master of the High Court on 28th May 2008. The Record of the High Court at page 83 reveals that the lodgment slip regarding the registration of the said judgment is dated 18th January 2008.
13. In the ordinary course of events if not for the error in the date of registering the judgment in the Register, the plaintiff's claim would have served as a Caveat lodged in respect of the said land which was registered in the name of the 3rd Defendant and the judgment would certainly have been a charge on the said estate of the 3rd Defendant as six months would not have lapsed from the date of the judgment of 18th January 2008 when the transfer by the 3rd Defendant to the 4th Defendant took place and registered on the 3rd of March 2008. The said transfer in such an event would have been subject to the claim of the Plaintiffs.
14. But on the other hand as had occurred in the present case, if the 4th Defendant had done a search of the Register prior to the 16th of January 2008, the entries regarding the Judgment in favour of the Plaintiffs would not have been there. However, they effected the registration of the transfer in their favour only on the 3rd of March 2008. In the interim period the judgment in favour of the plaintiffs had been tendered for registration on the 18th of January 2008, which due to the negligence of the 1st Defendant had been entered as 18th of January 2007, not once but twice, and that in the first entry the date 18/1/08 had been written at the bottom left corner of the memoralia.
15. With the tendering of the extension relating to the plaintiffs' judgment by the Master of the High Court on 29th May 2008 which was also registered in the Register by the 1st Defendant, a question would no doubt arise regarding the effect of the entries starting from the entry of the judgment in favour of the Plaintiffs upto the entry relating to the extension order of 29th May 2008.
16. It is thereafter that the Plaintiffs resorted to instituting action which was in October 2008 and on receiving the summons, the 1st Defendant had filed their defence and thereafter filed a summons seeking orders to rectify the error in the entries in the Register as there was a conflict regarding the interests of the Plaintiffs, and the interests of the 4th and 5th defendants.
17. In such a situation the Registrar of Titles could have recourse to the provisions of S.165 of the Land Transfer Act which provides that the Registrar could where a question arises as to the mode in which any entry ought to be made in the register or any endorsement made or any instrument of title refer such matter to Court in the prescribed form and to obtain a direction from Court. The 1st Defendant has not resorted to this procedure in the present case as it appears from the affidavit filed by the 1st Defendant, that the error seems to have dawned on the Registrar only after receiving the summons from the Plaintiffs.
18. There is however a wider power given to Court to direct the Registrar of Titles by S.168 of the Act, which provides that:
"In any proceedings respecting any land subject to the provisions of this Act, or any estate or interest therein, or in respect of any transaction relating thereto, or in respect of any instrument, memorial or other entry or endorsement affecting any such land, estate or interest, the court may be decree or order direct the Registrar to cancel, correct, substitute or issue any instrument of title or make any memorial or entry in register or any endorsement or otherwise to do such acts as may be necessary to give effect to the judgment or decree or order of such court."
19. The learned High Court Judge, having considered the objections of the 4th and 5th Defendants and their submissions regarding indefeasibility of title examined the provisions of S.40 of the Land Transfer Act and the decisions related thereto and thereafter considered the provisions of S.104 and S.105 of the Act relating to the registration of judgments. The learned Judge also has made an exhaustive exposition of the Torrens System and its effect on Registration of Titles in Fiji. He further stated that there was no fraud alleged on the part of the 4th and 5th Defendants.
20. The learned High Court Judge thereafter considered the issue of "willful blindness" on the part of 4th and 5th Defendant as alleged by the 1st and 2nd Defendants in relation to the examination and search carried out on their behalf by their Solicitors. The learned Judge has stated thus at para.36 of the judgment:
"If on the other hand the search was done by a Solicitor aware of sections 104 and 105, still his professional eye ought to have detected the date of 18/1/2008 in the "first memorial". He would further be capable of checking the memorial backwards and should have noted the date of the judgment to be in December 2007. On the examination of the Presentation Book and the "dealing number", the correct date on the Lodgment document, the error of the date on the Memorial would have been obvious. It could be willful blindness on the part of a Solicitor not to examine a judgment on the title as he too would not know what the judgment is about till he reads it. It being a judgment and section 105(2) empowering the Court to extend the time of 6 months, and knowing that, it could be "willful blindness" not to read the judgment and thereby note its date."
The learned Judge however sated that in the circumstances of the facts in the case that the Court would not equate the possibility of "willful blindness" to the element of fraud required by section 40 of the Land Transfer Act and the authorities cited in relation thereto as the Court had not had the benefit of the evidence and the original documents and entries being viewed and tested under cross-examination.
21. The learned High Court Judge discussed the provisions relating to Caveats as set out in the said Act and had expressed the view that since a judgment that is registered in the Register is deemed to be a caveat, that the Registrar should have as required by S.109 taken steps to notify the 3rd defendant about same and that if that were not done it would indicate complicity, and that the mistake may not be innocent. Section 109 deals with a situation where a caveat has been lodged and does not deal with a situation where a judgment that is registered is deemed to have the effect of a caveat, and it is my view that where a judgment is registered there is no requirement for the Registrar to take steps to notify the person affected by the caveat.
22. The learned High Court Judge in dealing with the order of the Master which was entered in the memorial of the 4th of June in the Register, stated that it was effective from the 18th of January 2008 and concluded that the 1st defendant was entitled only to the first and second relief's claimed and that the transfer to the 4th Defendant and the Mortgage to the 5th Defendant to stand subject to the charge created in the judgment sum of the judgment served.
23. The Appellant submitted that in view of Section 42(3) of the Act, that the Registrar of Titles in the absence of fraud, has no power to correct clerical slips when a new transaction occurs whereby a bona fide purchaser for value relying on the face of the register purchases and becomes registered on the Title. But the question here as observed by the learned High Court Judge in his judgment is whether the Appellant could rely merely on the entry in the Register (which was an erroneous entry) and consider that there is no charge on the land that he was interested in purchasing, especially when even in the wrong entry, there were two dates visible, namely 18th January 2007, and 18th January 2008 and the fact that it was in relation to a Judgment. These two entries certainly had inconsistencies which were very conspicuous. A further search as would in such circumstances have been made by a diligent Solicitor of the copy of the judgment, and the "Presentation Book" (which would have had a short description of the instrument that was presented registration), would have revealed the real position regarding the judgment which had been delivered in December 2007 and therefore necessarily presented after that date which was in January 2008. Such an examination would have shown the significance of the entry at the bottom left hand corner of the memorial which was to the effect "judgment" and "18/1/2008". This would suggest that more care should be exercised in doing a search at the Registry in relation to land transactions, and merely relying on a single entry in a memorial in the Registry would not be sufficient.
24. In "Land Law in New Zealand" by Kinde McMorland and Sim (2003) at page 275 the position in New Zealand has been set out in relation to the searching of title as:
"Although the depth of search is a matter of judgment, it is essential to search, not only the current memorials entered in the register, but also the instruments to which they refer. This is due to the fact that upon registration, every instrument becomes constructively embodied in the register. The instrument "must therefore be treated as if written out on the fact of the register, and it would be the business of any one proposing to deal with the land to examine the documents thus constructively placed before his eyes."
25. In Ali v Nand (2009) FJHC 284, need for a comprehensive search was referred to by Court as follows:
"In conveyancing practice, is the purchaser's solicitor's fundamental duty to obtain a final search before settlement and to scrutinize each document to ensure that there were no additional encumbrances registered or noted on the title which would prejudice the purchaser's settlement."
26. The 4th Defendant-Appellant relied heavily on the decision in Attorney General v Vijay Kumar and Everet Riley 1985 FLR Vol. 31 p23 and submitted that the present case falls within all corners of that decision. Riley's case dealt with straight forward transactions where the error had been the failure to record that the transfer was only regarding half a share of the property, whereas the entry showed it was a transfer of the entirety of the property. It was held that the purchaser could rely on that entry and that there was no necessity to have checked on the caveats that had been filed and cancelled earlier. The present case is different from that situation as what was sought to be registered was a "Judgment" and therefore necessarily the nature of the judgment was something to be looked at by a prudent Solicitor in effecting a search unlike the case of a cancelled caveat in Riley's case. It is my view that the decision in Riley's case would not apply to the present case.
27. The protection afforded to a bona fide purchaser for value by section 42(3) of the Land Transfer Act in my view cannot be taken cover of by a purchaser on whose behalf a proper search has not been effected as set out above and therefore the 4th Defendant's submission on the basis of S.42(3) would fail.
28. The 4th Defendant also submitted that the learned High Court Judge had taken extraneous matters into consideration. A consideration of the said judgment would show that the learned Judge had addressed the issues relating to the confusion that had arisen regarding the entries in the "Register of Titles" which required his venturing on to delivering an interlocutory judgment so that the substantive matters could be proceeded with, in the High Court.
29. The 1st Defendant in the submission tendered to Court sought to point out that the 3rd Defendant had deliberately transferred the property in question to deprive the Plaintiffs of their adverse rights or their equitable rights in the same, and that the court had corrected the fraud and rectified the honest mistake committed by the 1st defendant. Though the judgment of the High Court has sorted out the inequities of the parties, the manner in which the Registrar of Titles has acted in registering the interests of the Plaintiffs in this case is deplorable and not what is expected of an officer on whom much confidence and trust is placed upon in carrying out his/her duties under the Land Transfer Act. More care has to be exercised in making entries in the Registry as they have to be relied on by parties interested in dealings related to such entries. If the Registrar has delegated such functions of making entries to other Officers, proper supervision must be exercised regarding such duties to ensure that such entries are made accurately and correctly. In the present case, an examination of the entries in the register do not show that any care had been taken in making such entries.
30. The third ground on the which the 4th Defendant made submissions was that the learned Judge erred in law in his failure to award indemnity costs as the main thrust of the plaintiffs' claim was against the Registrar of Titles.
31. Although no relief was sought against them by the Plaintiffs, the naming of the 4th and 5th defendants as parties was necessary for the completion of the action as the entire case revolved round the transfer by the 3rd Defendant to the 4th Defendant and the Mortgage effected by the 4th Defendant to the 5th Defendant.
32. It has been held in the Singh v Commander Naupoto and Others HAC No.199/08, that the conduct of the party against whom an indemnity costs order is sought has to be reprehensible. Such reprehensible conduct would be where such conduct is oppressive and vexatious as was laid down in Police Service Commiwssion v Naiveli (1995) HBJ 029 of 1994. Further in Rokotuiviwa v Seveci (2008) FJHC 221, it was held that "The party's conduct must be unreasonable, but with the further characteristic that it is unreasonable to an extent or in a manner that it earns some implicit expression of disapproval or some stigma".
33. In the circumstances of the present case, the step taken by the 1st and 2nd Defendant in taking out summons to obtain order regarding the correction of the entries in the Registrar of Titles cannot be considered as oppressive and vexatious as such a step had been taken in the interests of justice. The seeking of such orders and obtaining them would make the proceedings in the main action less cumbersome and would also assist in bringing about an early conclusion.
34. In the above circumstances, I am of the view that the learned High Court Judge had made the correct orders in his interlocutory judgment which are hereby affirmed. The appeal of the Appellant is dismissed without costs. However, the costs awarded by the learned High Court Judge against the 1st Defendant shall remain to be paid to the 4th and 5th Defendants.
Pradeep Hettiarachchi, JA
35. I also agree with the proposed orders of Suresh Chandra JA.
Suresh Chandra, JA
ORDERS OF THE COURT
36. The orders of the Court are:
Hon. Justice William Calanchini
Acting President
Hon. Justice Suresh Chandra
Justice of Appeal
Hon. Justice Pradeep Hettiarachchi
Justice of Appeal
Solicitors:
M C Lawyers for Appellant
Parshotam & Co for 1st and 2nd Respondents
Attorney-General's Office for 3rd and 4th Respondents'
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