Home | Databases | WorldLII | Search | Feedback High Court of Fiji

Sautu v Housing Authority [1994] FJHC 12; Hbc0558j.93s (28 January 1994)

IN THE HIGH COURT OF FIJI
CIVIL JURISDICTION
CIVIL ACTION NO. 558 of 1993

Between:

BERANAVERE SAUTU
Plaintiff

- and -

1. HOUSING AUTHORITY
2. INIA TUBUKOSO TAMANI and
VULI KACILALA TAMANI
Defendants

Mr. Kitione Vuataki for the Plaintiff
Mr. Vijay Maharaj for the Defendants

INTERLOCUTORY JUDGMENT

The Court has before it, FIRSTLY a motion dated 19th October 1993 by the Plaintiff seeking an Order by way of injunction that the first and second defendants, their servants, agents or howsoever be restrained from evicting the Plaintiff and any member of his family from Lease No. 265327 on Lot 67 on D.P.4266 in Naitasiri comprising 1 rod 12.9 perches or in any way disturbing the Plaintiff's quiet enjoyment thereof until further order of the Court and SECONDLY, a Summons dated 17th November, 1993 by the second-named Defendants praying for an Order that the Writ (I do not see a writ on the file) and Statement of Claim filed herein be struck out against them on the grounds that they disclose no reasonable cause of action against them and or that the Plaintiff's action is frivolous and vexatious and or abuse of the process of the court.

By consent both the applications were heard together.

On the day of the hearing, Mr. Vuataki for the Plaintiff said that although he has not filed an Affidavit in Reply to Summons to Strike Out, he wished to add that the Fiji National Provident Fund were to have paid the arrears but the letter in that regard came after the property in question was transferred to the second-named defendants. Mr. Maharaj for the defendants did not object to this factor being noted by the Court.

FACTS OF THE CASE

The Plaintiff commenced this action by filing a Statement of Claim in which he seeks, inter alia, an injunction (as stated hereabove) and an order that transfer of Lease No. 265327 (hereafter referred to as the "said land") by first defendant (D1) to second defendants (D2) by Transfer of Lease by Mortgagee's Sale No. 3456797 registered on the 22nd day of September, 1993 be expunged. At the same time he filed a Motion and Affidavit in support for an injunction (as stated hereabove).

The Plaintiff bought the said land and mortgaged it to the Housing Authority (the first defendant - D1) on 27th September 1988. He was then an employee of the D1 but was dismissed from employment on 6th September, 1991. The payments under the mortgage fell into arrears and eventually the said property was sold under Mortgagee's sale to the second-named defendants (D2).

The Plaintiff alleges that D1 accepted payment of $54 per week towards current payments and arrears and which said payments totalled $1199.00 and D1 led him to believe that the property will not be sold. In August 1993 D1 refused to accept any further payment.

However, D1 states that whatever was accepted it was done on a "without prejudice" basis to the D1's right to proceed with the mortgagee's sale and this fact is revealed in a letter to the Plaintiff dated 22nd October, 1992 (annexure 'A' of D1's Affidavit sworn the 16th November, 1993).

COUNSELS' SUBMISSIONS

Mr. Maharaj submits that his application is under Order 18 rules (1) and (2). He says that looking at the Statement of Claim, the allegation in the various items are all against the D1 except in item 12 where the D2 have been brought in as recipients of the acts of alleged fraud. He says that this is not the way to bring the D2 as a party without D2 having been shown to have any knowledge of the alleged fraud, being a party to it and knowingly having purchased the property. He says that even in the Affidavit in Reply which the Plaintiff wanted to file there is no allegation against the D2.

Mr. Maharaj says that the D2 are the registered lessees and it is also thus stated by the Plaintiff himself in item 15 of his Affidavit in Support.

He said that the Plaintiff is challenging the transfer. To do that there has to be fraud on the part of the defendants under s.39 of the Land Transfer Act. He says there is no allegation of fraud on the part of the D2. In support of his argument he referred the Court to a number of cases: DAMODARAN NAIR s/o LATCHMAN NAIR v AZAM ALI & GAFFAR ALI s/o JAFFAR ALI (C.A.485/91 High Court), RAGHUPAL SINGH s/o NAKSHU SINGH v CHABILDAS & ANOR. (CIV. APP. 42/78 F.C.A.)

Counsel further submits that injunction is not the proper remedy and that it should not be granted; award of damages would be a sufficient remedy.

He is asking that the action against the D2 be struck out but that it be continued against D1.

The Plaintiff complains that the D1 has been "misleading" him when he told him to pay $54 per week and that the "conduct" of the D1 was fraudulent.

Mr. Vuataki submits that although there is no allegation of fraud against the D2, there is a cause of action against them as they are inextricably linked to the title in question which they now have.

He then refers the Court to s.41 of the LAND TRANSFER ACT (CAP.131) (Vol 111 LAWS OF FIJI) which provides as follows:-

"41. Any instrument of title or entry, alteration, removal or cancellation in the register procured or made by fraud shall be void as against any person defrauded or sought to be defrauded thereby and no party or privy to the fraud shall take any benefit therefrom."

Mr. Vuataki argues that the person defrauded is the Plaintiff and this section does not cover D2 who have their remedy in damages against D1. He says that D2 are a party and they should not take benefit from the fraud. He then refers the Court to RAM NANDAN s/o Ramrakha v SHIU DATT s/o Lotan (F.C.A. CIV. APP. 29/82). There, he says that that "privy" in s.41 refers to buyer. He argues that for this reason title can be void and since the title is in D2's name he wants to join them as a party to the action.

On injunction he says that looking at 'balance of convenience' injunction ought to be granted in the circumstances of this case. He says that if the Plaintiff succeeds damages will not be an adequate remedy if he is evicted before the hearing of the action is finalized.

Further since the title is inextricably linked to D2 they should remain a party.

DEALING WITH THE TWO APPLICATIONS

Having heard counsel on both sides I consider this to be a proper case to grant the application to strike out the second defendants as a party to this action.

The main ground of the Plaintiff's action is the allegation of "fraud" against the Housing Authority (the first defendant). I am in full agreement with the submissions by Counsel for the second Defendants that nowhere in the Statement of Claim or in the Affidavit in Support of Motion for injunction is there any allegation of fraud or any other allegation against the second defendants except to say that they are now the registered proprietors and as such they should not reap the benefits of the alleged fraud. The Plaintiff's counsel does admit that no fraud is alleged against the second defendants.

The second defendants are bona fide purchasers of the said land without notice or knowledge of any alleged fraud. There is no reason in law for them to suffer as a result of the alleged fraud on the part of the first defendants.

I do not agree with Mr. Vuataki's argument that because the second defendants are the registered proprietors of the land from the first defendant under a Mortgagee's Sale, the second defendants should not reap the benefit because of allegations of fraud by the Plaintiff against the first defendant. The learned counsel is putting forward this argument based on his interpretation of the said s.41 of the Land Transfer Act.

With respect I find his interpretation of that section to be wrong; he interprets that the second defendants are "privy to the fraud" I hold that the second defendants are not in any way 'privy' to the alleged fraud. On the facts of this case they are bona fide purchasers for value without notice or knowledge of any alleged fraud under a mortgagee's sale. No action such as this can lie against them in such circumstances.

Counsel referred the Court to RAM NANDAN'S case (supra) in interpreting as to who is included in the word 'privy'. The following quotation from RAM NANDAN is pertinent in establishing that in the case before me the second defendants are in no way affected by the alleged fraud:-

"Richmond J. and Turner P. were in agreement that a person who knows of another's interest and procures registration which cheats the other of that interest is guilty of fraud and his title can be impeached:

"It is well settled that knowledge of a breach of trust or of the wrongful disregard and destruction of some adverse unregistered interest does itself amount to fraud. In Locher v. Howlett it is said by Richmond J: 'It may be considered as the settled construction of this enactment that a purchaser is not affected by knowledge of the mere existence of a trust or unregistered interest, but that he is affected by knowledge that the trust is being broken, or that the owner of the unregistered interest is being improperly deprived of it by the transfer under which the purchaser himself is taking'"

per Salmond J. in Waimiha Sawmilling Co. Ltd. v. Waione Timber Ltd. [1923] NZGazLawRp 32; 1923 NZLR 1137 at 1173 - N.Z. Court of Appeal, affirmed in the Privy Council 1926 A.C. 101."

Fraud means actual dishonesty; in this case none of this is to be found in the second defendants and I would like to quote the following passage from THE PRINCIPLES OF THE AUSTRALIAN LANDS TITLES (TORRENS) SYSTEM by KERR p. 195 as being relevant to the issue before me particularly when it touches on the indefeasibility of the registered title:-

"The principal statutory qualification to the indefeasibility of the registered title is that, if the immediate registered proprietor has become so registered by fraud, then his title is voidable at the instance of the person defrauded. In the case of fraud, any person defrauded has the same rights and remedies that he would have had if the land were not under the System. But this qualification does not affect the title of a registered proprietor who has taken bona fide from the fraudulent person for valuable consideration, or any person bona fide claiming through or under such registered proprietor. The word fraud "clearly implies some act of dishonesty." Waimiha Sawmilling Co. Ltd. v. Waione Timber Co. Ltd. (1926) A.C., 101, at p.106

The case of RAGHUPAL SINGH (supra) is also relevant on the question of fraud where it is stated, inter alia:-

"In the admitted absence of fraud respondents took an indefeasible title to the exclusion of any claim by appellant that he had an equitable interest for a term of years created by a predecessor in title and binding upon respondents who had notice of no more than the occupancy of appellant as a tenant and who were not a party to any fraud."

On the material before me and after considering the counsels' submissions I find that there is no cause of action against the second defendants and therefore they should not have been joined as a party to this action.

As far as the Plaintiff's application is concerned, the undisputed facts are that the Plaintiff's said land had been transferred to the second-named defendants by the first defendant under a mortgagee's sale. The Plaintiff is still in possession of the said land despite the fact that the second defendants are the registered proprietors thereof. It appears that the Plaintiff did not take steps to obtain relief from the Court when the property was under Mortgagee's Sale.

Although the second defendants have not instituted proceedings to evict the Plaintiff from the said land, the Plaintiff fears that eviction proceedings may be instituted against him by the first and second defendants and hence he has come to Court for an injunction restraining them from doing so.

If the second defendants do apply under sections 169 - 172 of the Land Transfer Act, it will be for the Court to consider the application; and under s.172 of the Act the Plaintiff will have to show cause as to why he should not give vacant possession of said land. It is my view that on the facts of this case s.169 of the Land Transfer Act cannot be resorted to by the first defendant particularly because the registered proprietors now are the D2. Hence the question of restraining the D1 from invoking the provisions of s.169 to evict does not arise.

As I have stated hereabove, there is no allegation of fraud against the second defendants. The fact of the allegation of fraud against the first defendant does not show good cause in this case. Even s.41 referred to hereabove is of no assistance to the Plaintiff in so far as the second defendants are concerned for the reasons I have already stated hereabove.

I had already said that in view of the fact that there is no cause of action against the second defendants, they should not be joined as a party to this action.

As was said by SCOTT J. in DAMODRAN NAIR (supra) where allegation did not include allegations of fraud, as in the present case against the second defendants, "they do not in my opinion affect the Plaintiff's indefeasibility of title (see section 40 of the Land Transfer Act and generally RAGHUPAL SINGH (supra)." While the Plaintiff might ground an action against the first defendant viz. the Housing Authority, I cannot see how that could be so as far as the second defendants are concerned.

If the Plaintiff is aggrieved by the first defendant's action, he has his remedy in damages against it. Why should the second defendants have to suffer for the alleged wrongful act of the first defendant and particularly bearing in mind the circumstances under which the second defendants obtained title to the said land as outlined hereabove.

I am not at all convinced that this is an appropriate case for the grant of an injunction as prayed.

For the reasons given hereabove I refuse the Plaintiff's application for an injunction as per the Motion of 19th October, 1993 but grant the second defendants' prayer as per Summons dated the 17th November, 1993 by striking out the claim against them as well as striking them out as a party to the action AND I do so order with costs to the second defendants to be paid by the Plaintiff and which is to be taxed if not agreed.

D. Pathik
Acting Puisne Judge

Suva
28.1.94

HBC0558J.93S