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Proline Boating Company Ltd v Director of Lands [2014] FJCA 159; ABU0020.2013 (25 September 2014)

IN THE COURT OF APPEAL
APPELATE JURISDICTION

CIVIL APPEAL NO. ABU 0020 of 2013

On Appeal after the Granting of Leave from a decision of the High Court of Suva dated 6th August, 2010 HBJ 02 of 2010

BETWEEN:

PROLINE BOATING COMPANY LIMITED
Appellant

AND:

THE DIRECTOR OF LANDS
1st Respondent

AND:

THE REGISTRAR OF TITLES
2nd Respondent

AND:

DOMINION FINANCE LIMITED
3rd Respondent

AND:

PROLINE MARKETING LIMITED
4th Respondent

Coram : Almeida Guneratne, JA
A. Brito Mutunayagam, JA
C. Kotigalage, JA

Counsel : Mr. H. Nagin for the Appellant
Mr. A. Pratap for the 1st and 2nd Respondents
Mr. D. Sharma for the 3rd Respondent
4th Respondent Absent and Unrepresented

Date of Hearing : 12 September 2014
Date of Judgment : 25 September 2014

JUDGMENT

Almeida Guneratne JA

Background to this Appeal

[1] This is an appeal against the order dated 6th August 2010 of the High Court of Suva in which leave to apply for judicial review was refused. Leave to appeal against that order also being refused by the High Court, the Appellant subsequently obtained leave pursuant to Section 20(1)(a) of the Court of Appeal Act (Cap.12) to appeal to the full Court.

Essential Basic Facts and the basis on which the Appellant
had sought leave to apply for Judicial Review

[2] I shall only record, which, in my view I consider to be the essential basic facts for the purpose of deciding whether leave to apply for Judicial Review ought to have been given.

[3] The 4th Respondent, (PML) a land developer on 21st May 2009 had made an application to the 1st Respondent (the Director of Lands) to obtain leases in respect of three lots depicted as lots 2, 3 and 5 in SO 5866 (vide: page 1162 of the Court Record–Vol. 4) to be registered in the Appellant (PBCL)'s name and had paid the registration fee as well.

[4] Thereafter, the 1st Respondent executed the said leases in the Appellant's favour.

[5] Subsequently, the 1st Respondent cancelled the said leases bearing Nos. 11769, 11770 and 11771 and re-entered crown leases bearing the said numbers and issued crown leases bearing Nos. 18013, 18014 and 18015 to the 4th Respondent on or about 8th February, 2010.

[6] The 1st Respondent had issued one-day Notice for the aforesaid re-entry on 8th February, 2010 (vide: pages 543 to 545 of the Case Record – Vol. 2) which was served after Lease Nos. 18013, 18014 and 18015
had been signed and lodged with the 2nd Respondent on 31st December, 2009 (vide: at page 646 of the Case Record – Vol.2).

[7] The 1st Respondent had accepted Rental payments from the Appellant on 19th April, 2010, that is, even after the said cancellation and re-entry in February, 2010 (vide: page 546 of the Record – Vol.2)

[8] Apart from the aforesaid facts, the 1st Respondent had consented to Mortgage Nos. 729939A, 729939B and 729939C in favour of the 3rd Respondent which has had an impact on the said leases in question initially issued in favour of the Appellant which explains the reason why the Appellant had named the 3rd Respondent as a party to its application for leave for Judicial review.

[9] Consequently, the Appellant sought leave to apply for Judicial review of the said decision of the 1st Respondent dated 8th February, 2010 and consequential acts on the part of the 1st and 2nd Respondents.

[10] The grounds on which the Appellant sought leave to apply for Judicial review are set out in Paragraphs 2(a) to (g) of its Notice of Application (vide: pages 1194 to 1198).

[11] For purposes of Record, it is to be noted that, the 4th Respondent has been put into receivership by the 3rd Respondent the legality of which and enforceability of the securities are under challenge in High Court Civil Action No. 212 of 2009.

[12] Thereafter, all necessary steps being taken, the matter was taken for hearing.

[13] The position taken by the 1st Respondent is that initially the said three leases had been issued to the Appellant by error which had therefore led him to cancel the same and effect re-entry.

The Impugned Order of the Learned High Court Judge dated 6th August, 2010
and the Reasons Refusing the Application for Leave to apply for Judicial Review

[14] Those reasons which are succinctly recaptured in the learned Judge's subsequent Order dated 28th November, 2011 refusing leave to appeal against the said refusal may be reproduced as follows:

"(a) PML always had a first interest over the leases granted to PBCL by way of an approval notice granted to it on 28th April, 2009. PML had three months to execute the lease by virtue of s.27(2) of the Crown Lands (Leases and Licenses) Regulations pursuant to which section, the approval notice was granted to PML.

(b) Before the three months had expired, the Director of Lands had issued the leases over the same potions of lands to PBCL. PML's interest in the unexecuted leases were then still in existence. PBCL was not entitled to be issued with any leases over the said lands at the time in question. There was an error by the Director of Lands in issuance of the said leases.

(c) PBCL, should have made an application for the leases and the application must have stated the applicant's interest in the said land it should have also stated whether any person has acquired the transfer or otherwise the land in respect of which the application is made. There was never any application made by this applicant. The applicant never made any declaration of its interest in the land nor did it declare the interest of the 3rd respondent DFL. Further, the applicant knew or ought to have known, that PML had interest in the said lands and that DFL had mortgages over the approval notices because it was undisputed that the directors of PML were the directors of PBCL, until January 2009, some 6 months before the leases were made out in the name of PBCL. Thus, the applicant had breached regulation 4 of the Crown Lands (Leases and Licenses) Regulations and s.16 of the Crown Lands Act.

(d) s.16 of the Crown Lands Act granted the Director of Lands statutory powers to cancel the leases.

(e) The leases issued to the applicant, were never binding on the 3rd Respondent, DFL. As the same were issued without the consent of DFL, when it should have been, under s.55 of the Land Transfer Act. DFL's interest was never extinguished as it had an indefinite right to have its mortgages brought down on the leases."

[15] In the written submissions of the Appellant it has been submitted as follows:-

"1.05 The main issue before the High Court and the issue before this Honourable Court is how the Applicant's Crown Lease Nos. 17769, 17770 and 17771 were cancelled and re-entered by the Director of Lands and the Registrar of Titles and not how those Leases were issued. No one challenged the issuance of those leases by way of judicial review. The Learned Judge of the High Court went beyond the scope of the Judicial Review and decided the matter finally on how the Leases were issued to the Applicant when she should have looked at the cancellation of the Leases on a quick perusal of the material then available as it clearly disclosed what might on further consideration turn out to be an arguable case in favour of granting to the Applicant the relief claimed and she ought, in the exercise of a Judicial discretion given leave to apply for that relief."

[16] This aspect was re-iterated and urged very strongly during oral submissions as well.

[17] I will deal with that aspect later.

[18] It must be said in fairness to the learned High Court Judge that Counsel had contributed in no small measure to that approach. The President of this Court during the leave to appeal stage states this in His Lordship's order:

"Counsel conceded before me that a number of matters had been argued at the leave application which had required the learned Judge to consider in greater detail matters that would otherwise have been more appropriately considered in the substantive hearing."

(at page 15 of the Case Record – Vol.1)

[19] However, as far as this Court is now concerned, my obligation is to see whether the criteria necessary for the granting of leave to apply for judicial review were present before the learned High Court Judge.

The Criteria necessary for the granting of leave to apply for Judicial review

[20] These criteria may be classified as follows:

(a) Mandatory Statutory Requirements.

(b) Other requisites developed largely judicially given the fact that, as opposed to a direct appeal, judicial review is a remedy that is subject to the exercise of judicial discretion.

[21] These may be examined seriatim as follows:

Mandatory Statutory Requirements

[22] These requirements are spelt out in Rule 3(2) and Rule 3(5) of Order 53 of the High Court Rules (Cap. 013A).

[23] Rule 3(2) states that:

"An application for leave must be commenced by originating motion and must be supported by affidavit stating the facts relied on."

[24] It is not disputed that, the Appellant had complied with this requirement. (vide: pages 1194-2000 of Vol. 4 and at page 1216 of Vol. 4 Counsel for the 3rd Respondent conceded this.

[25] Rule 3(5) lays down that:

"The Court shall not grant leave unless it considers that the applicant has a sufficient interest in the matter to which the application relates."

What Constitutes "Sufficient Interest"

[26] No doubt, the said rule makes it clear that, the said statutory requirement is a threshold test of standing which applies when an applicant is seeking leave.

[27] The terms of Rule 3(5) do not provide any guidance as to what will or will not constitute a sufficient interest. Hence, the Courts are left to set the parameters in that regard. The rule only applies expressly to the grant of leave. It does not address the question as to whether standing can play any and if so what part in determining if an applicant should be granted any relief at a final hearing.

The Rules of Supreme Court (RSC) of 1978
And the Supreme Court Act, 1981 of the United Kingdom

[28] At this point it would be useful to have a look at how the Courts in the United Kingdom have dealt with the question of "sufficient interest" in as much as, even at a cursory glance, it is apparent that, the Order 53 Rule 3(5) of the Fijian High Court Rules has been inspired by Order 53 Rule 3(7) of the RSC of 1978 and Section 31(3) of the Supreme Court Act of 1981 in the United Kingdom. In fact they are in identical terms.

The Direct Consequences Test

[29] The English decisions reveal a vast range of situations in which an applicant has been held to have a sufficient interest in applying for leave to seek judicial review. Of these it is what I would like to call the direct consequences test that would be applicable in the instant case, for example, if the decision sought to be reviewed interferes directly with the applicant's personal rights then the applicant would have "sufficient interest".

[30] It is to be noted that, the instant case is not one where like in the House of Lords decision in Inland Revenue Commissioners v. National Federation of Self-Employed and Small Businesses Ltd [1981] UKHL 2; [1981] 2 All ER 93, the applicant went to Court in the public interest or as in R v. Legal Aid Board, ex parte Bateman [1992] 1 WLR 711 where the applicant's attempt to move court had been quixotic. Likewise the present case is not where a representative body or a pressure group comes to court such as in the celebrated decisions of R v. Panel on Takeovers and Mergers, ex parte Datafin plc [1986] EWCA Civ 8; [1987] QB 815; R v. Secretary for the Environment, ex parte Rose Theatre (1990) 1 QB 504; R v. Secretary of State for Employment, ex parte Equal Opportunities Commission [1994] UKHL 2; [1995] 1 AC 1; R v. HM Inspectorate of Pollution, ex parte Greenpeace Limited (No. 2) [1994] 2 All ER and R v. Secretary of State for Foreign Affairs, ex parte World Development Movement Limited [1994] EWHC Admin 1; [1995] 1 WLR 386.

[31] The instant case is one where the Applicant sought leave to apply for judicial review on the demonstrable factual context of the 1st Respondent by his decision had cancelled and effected re-entry and issued three leases to the 4th Respondent which had been earlier granted to the Appellant.

[32] Thus the Applicant-Appellant was directly affected by the 1st Respondent's decision.

[33] At this point I would like to refer to the English case of R v. Edmundsbury B.C., ex parte Investors in Industry Commercial Properties [1985] 1 WLR 1168. In that case, 'X' had made an application for planning permission which was refused. The authority concerned granted permission to another developer 'Y'. The Court held that 'X' had standing to challenge the decision to grant permission to 'Y'.

[34] In the instant case, in fact it is on the application of the 4th Respondent that the three leases in question were issued to the Appellant. It was the 4th Respondent's task as the applicant for the three leases to show whatever other interests that impacted on its said application.

[35] In so far as the Appellant was concerned, once the said leases were granted in his name, it was vested with the right to make use of the said leases. It is that right that was adversely affected when the 1st Respondent cancelled the leases. Thus, the Appellant was directly affected by the said decision to cancel the said leases and effect re-entry.

[36] Accordingly, I am of the view that the Appellant had "a sufficient interest" to seek leave to apply for judicial review against the said decision of the 1st Respondent as contemplated by Rule 3(5) of the High Court Rules (Cap. 13A).

Misdirection or The Error on the part of the Learned High Court Judge

[37] It is not any other legal interest whether an interest in property or other that is envisaged in Rule 3(5). Rather, it is the threshold interest in moving Court for leave to apply for judicial review, being affected by an adverse decision.

[38] The Appellant had an existing right to the three leases in question being granted the same. When they were cancelled (for whatever reasons, whether it be on account of a mistake or not on the part of the 1st Respondent) the Appellant as a person directly affected by the 1st Respondent's impugned decision acquired "a sufficient interest" to apply for Judicial review. Whether or not the Appellant would be entitled to the final reliefs is a matter for the final hearing.

[39] With respect, it is the failure to recognise the distinction between the requirement of "sufficient interest" for purposes of leave to apply for judicial review as opposed to other substantive legal interests which necessarily would have to be gone into at a final hearing that had led the learned High Court Judge to err which, respectfully, constituted a misdirection.

[40] Consequently, I hold that, the Applicant had cleared the mandatory hurdles laid down in Rules 3(2) and 3(5) .

Other Requisites to be looked into at the Leave Stage

[41] I now move onto deal with the other requisites which ought to be looked into at the stage of seeking leave to apply for judicial review.

[42] This is necessary in order "to eliminate frivolous vexatious or hopeless applications" that would prima facie appear to be so. (vide: Harikissun Ltd v. Dip Singh & Ors. [FCA Rep. 96/365].

[43] These requisites in developed jurisdictions may be noted as follows:

(1) Was there an inordinate delay in seeking Judicial review against the decisions that is complained of by an applicant?

(2) Does that decision/emanate from the exercise of statutory power by a public body even if disputes involving private parties are involved?

(3) What reliefs have been sought by an applicant in his/her application for leave to apply for Judicial review and against whom?

[44] I propose now to deal with the said requisites as follows:

(1) Re Inordinate Delay

[45] The impugned decision of the 1st Respondent in cancelling the leases initially given to the appellant and effecting a re-entry was in February, 2010.

[46] The application for leave to apply for Judicial review against that decision was in May, 2010.

[47] Thus, it cannot be said by any stretch of imagination that, there was any delay, leave alone any inordinate delay in seeking leave to apply for Judicial review against the decision.

[48] In fact Counsel for the 3rd Respondent has conceded this (vide: page 1216 of Vol. 4 of the Case Record).

(2) Does the impugned decision emanate from the exercise of statutory power by a public functionary?

[49] The very notices dated 8th February, 2010 (vide: pages 208 to 210 of Vol. 1 of the Case Record) purports to be under Section 57 of the Land Transfer Act (LTA – Cap 131), Section 105 of the Property Law Act (PLA – Cap. 130) and the Crown Lands Act (CLA - Cap. 132).

[50] Consequently it becomes abundantly clear that, the 1st Respondent's decision cancelling the initial leases given to the Appellant and causing the impugned re-entry was pursuant to the exercise of statutory power by a public functionary which per se attracted an application for leave to apply for Judicial review.

[51] The 1st Respondent, (undisputedly, a public functionary exercising statutory power) although involving an issue between private parties (viz: the Appellant vis a vis the 3rd and/or 4th Respondent), the said exercise, clearly carried statutory underpinnings bringing the dispute into the fold of public law and could not have been regarded as a private law matter.

[52] In fact, the majority of cases concern rival claims between private parties, the grievances arising from some decision taken or a determination made by a statutory functionary in pursuance of power vested in such functionary statutorily.

[53] It would, in my view, amount to drawing a red herring if it were to be argued that merely because the Appellant, the 3rd and 4th Respondents are private parties, the impugned decision of the 1st Respondent and the consequential steps taken by the 2nd Respondent fell into the realm of private law.

[54] The private law – public law divide stands bridged when decisions of public functionaries who exercise statutory power vested in them affect private parties inter se such as in the instant case.

[55] The issuance and cancellation by the 1st Respondents of the said leases are intrinsically connected to the mortgages consented to by the 1st Respondent involving the 3rd and 4th Respondents.

The reliefs sought by the Appellant and against whom?

[56] It is apt in that regard to refer to the Notice of Motion and the grounds urged by the Appellant respectively in its application for leave to apply for Judicial review (vide: at page 1194 and pages 1196 to 1198 of Vol. 4 of the Case Record).

[57] Thus, it becomes abundantly clear that, all the reliefs claimed by the Appellant are against the 1st and/or 2nd Respondents and not against any private party.

[58] Consequently I am of the view that, apart from the mandatory requirements laid down in Rule 3(2) and Rule 3(5), all other requisites also stood prima facie established and that the Order 53 Procedure had been properly invoked by the Appellant.

[59] I do not think that, the case of Re Air Pacific Ltd (1988) 34 FLR 6 cited to this Court on behalf of the 3rd Respondent helps its cause.

[60] Whether or not initially the three leases had been issued by mistake or whether or not the Appellant was qualified to obtain the said leases, whether or not the 1st and 2nd Respondents were entitled to protection in terms of Section 28 of the Crown Lands Act (Cap. 132) as contended by the 1st to 3rd Respondents, the impact of the Receivership matter are all matters that require to be inquired into at a hearing after leave.

[61] At this point it is pertinent to refer to the case of State v. Connors, ex parte Shah [2008] FJHC 65 cited in Maisamoa v. Chief Executive Officer for Health Civil Appeal No. ABU 0080/2007 referred to in the 3rd Respondent's written submissions.

[62] The 3rd Respondent contends that, Scutt, J correctly observed the process to be adopted at the leave stage in the said case. In that case Scutt, J said:

"At this stage a full review of the facts is unnecessary. Nonethelss, a court is obliged to sufficiently peruse the material provided to determine whether an applicant raises an issue arguably involving an error in law, a serious error in fact; a violation of natural justice or procedural fairness, or an excess of jurisdiction by the decision-maker the subject of the application."

[63] An examination of that passage drives me to the view that, rather than the Respondent's contention it helps the Appellant's case.

[64] To begin with Scutt, J observes that, at the leave stage "a full review of the facts is unnecessary".

[65] The learned High Court Judge proceeds to observe that:

"Nonetheless, a Court is obliged to sufficiently peruse the material provided to determine whether an applicant raises an issue arguably ... ... a violation of natural justice or procedural fairness ..."

[66] No doubt, the learned High Court Judge has not sufficiently but comprehensively perused the material provided.

[67] But, apart from other grounds, the Applicant-Appellant has raised an issue based on violation of natural justice and/or procedural fairness. This is on the propriety of the notice of cancellation of the three leases that had been given to it initially being a one day notice.

[68] It is true that, neither Section 57 of the Land Transfer Act nor Section 105 of the Property Law Act or the Crown Lands Act lay down a specific period of notice for such a cancellation, the 1st and 2nd Respondents' contention being that, the said leases had been initially granted mistakenly and that, the Appellant was not qualified to have been given the said leases and further that, the Applicant has suppressed material facts and had procured the said leases illegally.

[69] As commented by me earlier, it was not the Appellant but the 4th Respondent that had made the application for the said leases in favour of the Appellant.

[70] The fact that, both the Appellant and the 4th Respondent being admittedly Corporate entities, that the said entities were composed of the same directors is rendered immaterial in my view for it would then amount to lifting the corporate veil.

[71] The situations in which the corporate veil could be pierced have been dealt with in my judgment in an earlier case. (See: R. C. Manubhai & 2 Ors v. Herbert Construction Company (Fiji) Ltd. ABU0002 of 2010 delivered on 29 May 2014.

[72] If the 1st to 3rd Respondents alleging fraud or illegal conduct on the part of the Appellant, it is a matter that a Court would be obliged to inquire into seriously at a full hearing after leave.

[73] In the instant case the Appellant has raised an issue based on the violation of natural justice and procedural impropriety in regard to the notices of cancellation of the said leases.

[74] One case in the year 1863 in the United Kingdom strikes me at this point – the case of Cooper v. Wandsworth Board of Works [1863] EngR 424; (1863) 14 CB (NS) 180, approved in the seminal decision of the English House of Lords in Ridge v. Baldwin [1963] UKHL 2; (1964) AC 40; Durayappah v. Fernando (1967) 2 AC 337 and Wiseman v. Borneman (1971) AC 297.

[75] In that case, it was held in effect that, even though the party affected had erected an unauthorised building he was entitled to a hearing at an inquiry. Earle, CJ in that case said:

"I think the board (the authority concerned – the interpolation is mine), ought to have given notice to the plaintiff and to have allowed him to be heard."

[76] In the instant case, a day's notice of cancellation was no doubt sent to the Appellant but the Appellant was never heard prior to it.

Could not the omission of the legislature of Fiji be supplied by the Courts of Fiji?

[77] The Land Transfer Act, the Property Law Act and the Crown Lands Act all do not contemplate an inquiry – an antecedent hearing – before a cancellation of a lease. (a right vested previously).

[78] But, given the fact that, the Fijian Order 53 the Rules 3(2) and 3(5) have been apparently inspired and are in identical terms to Rule 3(7) of the RSC and Section 31(3) of the Supreme Court Act of 1981 in the U.K. ought not the Fijian Courts be guided by precedents of the English Courts? Ought not the Fijian jurisprudence follow and apply such English precedents?

[79] These again are matters to be decided after full inquiry and hearing after the granting of leave to apply for judicial review.

[80] Respectfully, the learned High Court Judge, in refusing leave to apply for judicial review has not addressed these aspects.

[81] Nevertheless, it is opportune now for this Court to reflect on the issues involved as articulated above on the question whether leave to apply for judicial review ought to have been allowed.
[82] On the application of the principles as afore articulated, I am of the view that, this case was a fit case where leave ought to have been granted to apply for judicial review.

[83] Before I conclude, I venture at this point to make some reflections which may be useful in future judicial review proceedings at the leave stage.

Re: The Distinction between the approach at the leave stage and at the stage when the Court is reaching its Final Conclusion

[84] Is there or should there be such a distinction?

[85] Lord Donaldson M.R. in R v. Monopolies and Mergen Commission, ex parte Argull Group [1986] 1 WLR 763 indicated the following approach when stating that:

"The first stage test, which is applied upon the application for leave, will lead to a refusal if the applicant has no interest whatsoever and is, in truth, no more than a meddlesome busybody. If, however, an application appears otherwise to be arguable and there is no other discretionary bar, such as dilatoriness on the part of the applicant, the applicant may expect to get leave to apply, leaving the test of interest or standing to be re-applied as a matter of discretion on the hearing of the substantive application. At this stage, the strength of the applicant's interest is one of the factors to be weighed in the balance. ..."

[86] Lord Donaldson's approach was endorsed by Purchas L.J. in R v. Department of Transport, ex parte Presvac Engineering Ltd (1992) 4 Admin. L.R. 121 when after considering extensively the decision of the House of Lords in the National Federation case (1981, supra), His Lordship said:

"Personally I would prefer to restrict the use of the expression locus standi to the threshold exercise and to describe the decision at the ultimate stage as an exercise of discretion not to grant relief because the applicant has not established that he ha been or would be sufficiently affected."

[87] The emphasis laid by Purchas L.J. "on the discretion of the Court in relation to the extent of the interest of the application after leave has been granted." (emphasis is mine) has been academically commended. (See: Judicial Review of Administrative Action, De Smith, Woolf and Jowell, 5th ed. Sweet & Maxwell, at p.124)

Other Matters that Need to be addressed Re: 3rd Respondent's Counsel's Submissions based on futility

[88] Lastly, Learned Counsel, Mr. Sharma, for the 3rd Respondent strenuously argued that, since the learned High Court Judge has comprehensively dealt with the substantive aspects of the dispute, it would be futile to grant leave for it would only result in a repetition of the proceedings had before the learned High Court Judge.

[89] Mr. Nagin for the Appellant however sought to meet that argument and submitted that, should leave be granted, there would be an opportunity for discovery of documents and other evidence and even the possibility of cross-examination and the right to place new material at the final hearing. Accordingly he submitted that, the granting of leave would not be futile.

[90] I see some merit in Mr. Nagin's submissions.

[91] In any event, without getting into an area of surmise, the matter for this Court to determine is whether there were sufficient grounds to be granted leave to apply for judicial review.

[92] I have already held that the Appellant had a "sufficient interest" as contemplated by Rule 3(5) of the High Court Rules and the Order 53 procedure had been properly invoked.

[93] This Court's function for the purposes of this appeal begin and end there. It is not for this Court to say that, since the High Court has dealt comprehensively with the contentious issues involved in the case as if in a full hearing leave ought not be granted.

[94] If leave ought to have been granted initially then leave must be granted. To hold otherwise would amount to ignoring Rule 3(5). In a given case, if the High Court proceeds to, in effect, determine the substantive issues as if in a full hearing then the legislature must decree so that, notwithstanding Rule 3(5) a Court is empowered to do so.

[95] In the absence of such legislation, the Appellant's grievance that, leave ought to have been given is the matter this Court now stands vested with jurisdiction to determine.

[96] Thus, 3rd Respondent's Counsel's contention based on futility though not altogether without merit is not entitled to succeed.

Re: 3rd Respondent's Counsel Contention that, the Appellant cannot be allowed
to go beyond the limited scope on which leave to appeal to this Court was granted

[97] The first matter to address is whether the Appellant's Counsel attempted to go beyond the limited scope on which leave to appeal to this Court was granted.

[98] I do not think so.

[99] At paragraphs [27] and [28] in His Lordship's order granting leave to appeal, the Honourable President stated thus:

"[27] In conclusion then, I am satisfied that the Applicant has raised issues in the material that indicate that leave to appeal should be granted. In particular the issues include whether the First Respondent and/or Second Respondent exceeded their jurisdiction by proceeding before giving notice or ensuring that notice was given to the Applicant and as a result whether the Appellant was denied natural justice. Furthermore the material raises issues as to whether the First Respondent and Second Respondent have acted in error of law (under sections 105 and 57) and whether the First and/or Second Respondent have acted unreasonably in accordance with what is termed the "Wednesbury test" (see Associated Provincial Picture Houses Ltd -v- Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223).

[28] Furthermore, for the reasons stated, leave to appeal is limited to the decision refusing leave to apply for judicial review that relates only to the decisions under challenge of the First Respondent and the Second Respondent. The parties are given leave to argue whether an Order 53 judicial review proceeding was appropriate."

[100] I have perused the notice and grounds of appeal urged on behalf of the Appellant (pages 2 to 6 of Vol. 1 of the Case Record). I have noted the reliefs sought in the High Court in the application for leave to apply for judicial review.

[101] It is apparent that the grounds of appeal so urged in the light of the reliefs sought in the High Court in the application for leave seeking judicial review and the submissions made by Mr. Nagin for the Appellant are in harmony with the Order granting leave to appeal.

[102] I have already held that, Order 53 procedure was the correct procedure to have been invoked.

Re: 3rd Respondent's Counsel's contention that, the Appellant is not entitled to raise an issue for the first time in Appeal

[103] This contention had reference to the Notices of cancellation of the leases in question for which learned counsel referred to the judgment of the learned High Court Judge (Vol. 3 of the Court Record at page 820, paragraph 72).

"72. There has been no submission by the applicant at any stage to the effect that the provisions of the Land Transfer Act was not complied with before the leases were re-entered, taken possession of and then cancelled."

[104] Counsel also submitted that, the issue in regard to just one day's notice (Vol. 1 – page 157) was also not correct, for which submission page 158 (Vol. 1) was adverted to. He did however made a concession in saying that, perhaps the Appellant could argue that, the Notices were not legal but the Appellant cannot argue that they were not served.

[105] Consequently, Mr. Sharma contended that, it was unfair on the part of Mr. Nagin to raise a new issue at the Appeal stage.

[106] However, the issue relating to the said Notices is subsumed in the Appellant's grievance that, natural justice and a fair opportunity had not been afforded to it to show cause that, the leases issued to it ought not to have been cancelled.

[107] Viewed from that perspective it would be unnecessary to address the proposition articulated by the Supreme Court of Sri Lanka that, leave being the key that opens the door for an appeal, an aggrieved party is not confined to the grounds on which leave had been granted. (vide: Sri Lanka Ports Authority v. Peiris per Sharvananda, CJ [1981] 1 SLR 101)

[108] Mr. Nagin in reply also made a valid point in submitting that, his client's legitimate expectation to enjoy the said leases had been denied and had been re-entered in breach of natural justice.

[109] I am inclined to agree with Mr. Nagin's counter to Mr. Sharma's contention where learned Counsel contended that not only the adequacy of the said Notices and subsequent steps taken by the 1st and thereafter the 2nd Respondent (the Registrar of Titles) but also the legality of the said Notices was in issue having regard to the impacting statutory provisions contained in the Land Transfer Act read with the Property Law Act and the Crown Lands Act.

[110] These are contentious issues that ought to be gone into at a full hearing after leave being granted to apply for judicial review – as to whether the Appellant had been given a fair opportunity to show cause against the cancellation and re-entry of the leases in question.

[111] In fact, Mr. Sharma was heard to submit that, the Appellant being a sister Company of the 4th Respondent, the said leases had been procured by the 4th Respondent in favour of the Appellant for some reason which smacks of even fraud.

[112] An allegation of "fraud" is a serious matter which requires a high standard of proof which in my view, cannot be sustained on documents without an inquiry, inter partes.

[113] Then again there is the issue that, having realised he had made a mistake in issuing the said leases in the name of the Appellant, the 1st Respondent cancelled the same.

[114] No doubt a statutory functionary who wields power in trust for the public would have an obligation to correct a mistake made by him. But there is a way in which he must set about doing so. As Professor Wade in his academic classic opines, if an authority does the right thing in the wrong way then it would amount to procedural ultra-vires or procedural impropriety as the issue has now come to be understood after the decision of the House of Lords in CCSU v. Minister of the Civil Services [1985] AC 374.

[115] Both, Mr. Sharma for the 3rd Respondent as well as Mr. Pratap who represented the 1st and 2nd Respondent relied on a letter written by the 1st Respondent to the Appellant to surrender the documents pertaining to the three leases in question and appeared to argue that, that amounted to a fair opportunity responding to the dictates of natural justice.

[116] But it came to light in the course of Mr. Nagin's reply that, the said letter (vide: pages 636 and 639 of Vol. 2) had not been even responded to by the Appellant and in almost a tone of sarcasm Mr. Nagin submitted that, had the documents been surrendered, he would not be present in Court to espouse his client's cause.

[117] This is another aspect that brings into focus the obligation on the 1st Respondent's part to have held an inter partes inquiry between the parties concerned before cancelling the said leases and effecting a re-entry.

[118] The not surrendering of the said documents is another pointer to the argument on the part of Mr. Nagin for the Appellant that, to seek leave to apply for judicial review against the judgment of the learned High Court Judge is not visited with futility.

[119] All these matters, being contentious, could in my view have been gone into, resolved and determined only at a full hearing after leave.

[120] The same would apply to the other matters raised by Mr. Sharma such as:

(a) as to when a person could be regarded as a lessee in order to acquire any right in respect of a lease (in an endeavour to demonstrate within the relevant statutory provisions) that, until registration a person cannot be regarded as such thus, seeking to justify the signing of the new leases in favour of the 4th Respondent;
(b) as to the real parties who were involved with the mortgages in question;
(c) as to who the real applicant for the initial leases was through the aforesaid links;
(d) as to the expectations of the 3rd Respondent in regard to the whole land depicted in Plan No. 505388 and not just Lot 21, depicted therein etc.

Final Observations and Conclusion

[121] In sum, while Mr. Sharma's contention boiled down to the fact that, since the learned High Court Judge had dealt with all matters, admitted by him to be substantive, and therefore it would be futile to grant leave, Mr. Nagin's counter, advanced with precision and clarity was, if the mandatory provisions of Rules 3(2) and 3(5) stood established and that taken together with the aspects of procedural impropriety on the part of the 1st Respondent in making the impugned decisions he made subsumed in the principle audi alteram partem, then his client had an arguable case and was entitled to leave.

[122] I must commend the role Mr. Sharma played in this case showing forensic honesty in his submissions particularly when he appeared to acknowledge, if not concede, that, the dispute does involve a public issue, thereby striking a via media between the duty by his client and the duty owed to Court as a ward.

[123] Indeed, Mr. Pratap, who appeared for the 1st and 2nd Respondents, who submitted that, he was associating himself with the submissions made by Mr. Sharma did not fall behind in that regard.

[124] In any event, I have already held that, Order 53 Procedure had been properly invoked by the Applicant-Appellant.

[125] Given the manner in which the learned High Court Judge has dealt with the substantive matter, it may well be open to the argument that, the Appellant is seeking to have another bite at the cherry. But, that is not the matter for consideration in this appeal. It is whether the Appellant was entitled to leave to apply for judicial review.

[126] I have, considered both the oral and written submissions of the parties and the authorities tendered.

[127] Before parting with this judgment I wish to place on record the valuable assistance rendered by Counsel in this case.

[128] In conclusion, I hold that, the Appellant is entitled to succeed in this Appeal.

A. Brito Mutunayagam, JA

I am in agreement with the reasoning and conclusions of Justice Guneratne.

C. Kotigalage, JA

I agree with the Judgment and the orders made herein.

Consequently, Orders of this Court are:

(1) The Appeal is allowed and the judgment of the learned High Court Judge dated 6th August, 2010 is set aside.

(2) Leave to apply for judicial review is granted.

(3) The Chief Registrar is directed to list the case for mention on a call-over date in order to fix a date for hearing.

(4) Although this Court is aware of the principle that, costs must follow the event, in all the circumstances of this case there shall not be any costs.

Hon. Justice Almeida Guneratne
Justice of Appeal

Hon. Justice A. Brito Mutunayagam
Justice of Appeal

Hon. Justice C. Kotigalage
Justice of Appeal