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Ratu v McGoon [1994] FJHC 124; Hbc0125d.94s (21 September 1994)

IN THE HIGH COURT OF FIJI
(SUVA)
CIVIL JURISDICTION

ACTION NO. HBC0125D OF 1994S

BETWEEN:

RATU JOPE RATU & ANOTHER
PLAINTIFFS

-and-

DAMIEN HERBERT THOMPSON MCGOON & ANOTHER
DEFENDANTS

Mr. Fa for Plaintiffs
Mr. H.M Patel for Defendants

RULING

This is an application for an order that the time for removal of Caveat No. 346312 be extended beyond 21 days mentioned in the Notice of Removal. This was intended to be an ex parte application by Mr. Tevita Fa but Mr. H.M. Patel for the Defendants appear at the hearing and was allowed to make his submission against the Plaintiff's application. At the end of a short hearing I granted the application of Plaintiffs and allow defendants to file affidavit within 2 days and affidavit in reply within two days by the Plaintiffs.

I regret that the delivery of this ruling has taken rather longer than I would have wished.

In his affidavit of the 10th March, 1994 Ratu Jope Ratu states that the defendants are the registered proprietors of all that piece of freehold land known as Lot 1 on DP.4147 having an area of 32 perches together with all the improvements thereon situated at 10 Salato Road, Tamavua and more particularly described in C.T.No. 16041.

In June, 1993 the defendant's attorney one Mrs Vasiti Raiwalui entered into an oral agreement with him and his wife for their purchase of the said property at a price of $55,000; following that oral agreement, Mrs Vasiti Raiwalui wrote an undated letter addressed to the Housing Authority as the defendant's attorney, a copy of that letter was annexed to the affidavit marked "A" which reads:

"The General Manager

Housing Authority

Valelevu

I Vasiti Raiwalui (Mrs.) Holder of the Power of Attorney No. 15470 of Mr. Herbert Thompson McGoon and P/A No. 15471 of Mrs. Salanieta Falualuo Adisenitoa McGoon of their property at 10 Salato Road, Namadi Heights, Suva hereby administer to the initial negotiation over this property.

I am acting in the interest of the joint owners of the said property Mr. and Mrs. H.T. McGoon of Sydney, Australia.

Mr. and Mrs Ratu Jope Ratu have expressed their wish of purchasing this property at the cost of $55,000.00

I remain,

Yours faithfully

(sgd) Vasiti Raiwalui (Mrs)"

The plaintiffs were asked to pay to the Housing Authority a sum of $1600 being half the arrears of monthly instalment payment as at June, 1993 and thereafter took possession of the property. The above sum was paid as supported by annexure "B" a true copy of the receipt.

On the 2nd day of June, 1993 the Plaintiffs prepared an agreement to be executed by Mrs. Vasiti Raiwalui but she refused to execute the same and a copy of the agreement is annexed to the agreement as annexure "C".

Thereafter plaintiffs had to do certain upgrading work to obtain engineers certificate to enable their application for loan to be processed by Housing Authority. The total cost of upgrading work was approximately $3,500 inclusive of a valuation report.

Because Mrs. Raiwalui refused to execute the agreement, the Plaintiffs instructed their solicitors to place a Caveat on the said property. On 4th day of October, 1993 their solicitors Tevita Fa & Associates placed Caveat No. 346312 on the aforesaid property, a copy of which is annexed as annexure "D".

The defendants solicitors have applied for removal of the said Caveat No. 346312.

The Plaintiffs have been informed and believed that defendants' attorney is selling the property to someone else and they have been reliably informed that they are Mr. & Mrs. Joe Waqa.

The defendants in their affidavit state that they have read and understood the affidavit of the plaintiffs sworn by Ratu Jope on 10th March, 1994. They are the registered proprietors of the property in dispute. They had appointed Mrs. Vasiti Raiwalui as their lawful attorney by virtue of Power of Attorney No. 15470 and No. 15471.

That till the end of May, 1993 the said property was occupied by the parents of the first defendant and sometimes in June 1993 the second Plaintiff who is related to them, by telephone offered to buy their property for $55,000 and they would acquire the loan from the Housing Authority.

The offer was open for 3 months commencing from 2nd day of June, 1993. That as from 1st of June, 1993 the Plaintiffs became the lawful tenants and commenced to occupy their residential property in question at $500 per month.

At the end of May, 1993 the arrears under the Mortgage defendants owed to the Housing Authority was about $3,506 and it was suggested by the Housing Authority that the Plaintiffs if desired to occupy the said property would have to pay about half of the arrears owed by defendants. On 2nd of June, 1993 Plaintiffs made a direct payment of $1600 which was not part payment or deposit for the sale of defendant's property, a copy of report from Housing Authority is annexed and marked "A".

The Plaintiffs have not been able to raise any loan or paid any further money besides the $1600 paid to Housing Authority.

On 11th of September 1993 defendants' attorney was contacted by Vasiti Menna Drau Waqa and Jiosefa Waqa who were interested in purchasing the said property.

They believed that on 16th of September, 1993 their attorney and the abovenamed purchasers executed a Sale and Purchase Agreement, a copy of the Agreement is annexed and marked "B".

The abovenamed purchasers on 17th September, 1993 applied for a loan of $60,000 from Housing Authority, a copy of the official receipt for the application is annexed and marked "C".

On 6th October, 1993 the loan to the above purchasers was approved and on 8th October, 1993 they both executed a Transfer and Mortgage Documents which were prepared by the Housing Authority, copies of the said Transfer and Mortgage Documents are annexed and marked "D" and "E" respectively and a copy of Loan Approval Letter annexed and marked "F".

On the same day when the abovementioned purchasers signed the above documents the Housing Authority discovered that a Caveat had been lodged on behalf of the Plaintiffs a copy of which is annexed and marked "G".

The defendants believe that the Plaintiffs at no time had the funds available to buy the said property.

The plaintiff besides the $1600 paid in June, 1993 have not paid any further rental to defendants or the Housing Authority and they believed they have no caveatable interest to lodge Caveat No. 346312 and prayed the Court to order for removal of the said Caveat with costs.

The Plaintiffs in their affidavit in reply state that the second plaintiff had spoken with the first defendant who agreed they would have the property for $55,000. The first defendant advised that Mrs. Vasiti Raiwalui would attend to the formal papers for such sale as the defendant's holder of the defendant's power of attorney.

They denied that there was a time limit given verbally either by the first defendant or specified in Mrs. Vasiti Raiwalui's undated letter in which they were to buy the property.

They denied that they occupied the premises as tenants. In accordance with the agreement between the second plaintiff and the first defendant supported by Mrs. Vasiti Raiwalui's letter, they occupied the premises with a view to purchase.

The $1600 they paid Housing Authority was a goodwill payment on their part showing their sincerity as proposed purchasers and as security in their intention to buy the property.

In addition to the $1600 they also spent $3,500 in acquiring an Engineering Certificate for the property. A part of $3500 was used for upgrading work on the property as directed by the engineer.

They contended that after the defendants had instructed Mrs.Vasiti Raiwalui to give them that undated letter of offer, defendants through their attorney continued to entertain other people who were interested in the property. This resulted in the Housing Authority refusing to entertain their loan application because Mrs. Raiwalui had given a much clearer letter of offer to Vasiti and Jiosefa Waqa.

When plaintiffs became aware of the interest of Vasiti and Jiosefa Waqa, they approached Mrs. Raiwalui and inquired why she had introduced these proposed buyers without informing them. She replied that she had received a telephone call from the Housing Authority threatening to place the property on mortgage sale as no money was coming in. They then told her that if she had signed the sale and purchase agreement nothing would happen. To that she remained silent. When they returned home second plaintiff telephoned her cousin the first defendant who confessed that he wasn't aware of the interest by Vasiti and Jiosefa Waqa.

They contend that the defendants are bound by their attorney's action. Their acceptance of the $1600 and plaintiff's further expenditure of $3500 on the engineering certificate together with their attorney's action in giving them possession of the property speak louder and more strongly than words or any written Sale and Purchase Agreement.

The plaintiffs would have obtained a similar loan from Housing Authority given to Vasiti and Jiosefa Waqa if they were given the opportunity to. They suspected that they were being used by Mrs. Raiwalui in the circumstances. After paying the $1600 on 2nd June, 1993, they finally moved into the property on 5th June, 1993. They immediately made inquires with the Fiji Development Bank about a loan. They were told that they needed a Sale and Purchase Agreement, a copy of Titles, a Certificate Valuation Report, an Engineering Certificate together with supporting letters from their employers. They attended to the Valuation Report and managed to obtain one on 21st June, 1993, a copy of which is annexed marked "A". They telephoned the Housing Authority about a Sale and Purchase Agreement and they suggested plaintiffs go to Mrs. Raiwalui. On 16th June, 1993 they approached Mrs. Raiwalui at her office in Toorak. She told them there was no need for a Sale and Purchase Agreement and she gave them an undated letter which she said was sufficient for the purpose, a copy of letter is marked as annexure "B". They sought the assistance of a friend with regard to their problem and annexure "B" as this was their first experience in buying a property. Their friend advised them that they return to Mrs. Raiwalui and ask her to sign an offer for sale their friend had prepared. They returned to Mrs.Raiwalui some days later but she was adamant that her letter which is annexure "B" was sufficient and that she was not signing the offer for sale prepared by a friend which is marked as annexure "C".

It was at that point that they decided not to pursue their application with the Fiji Development Bank. The reason being the refusal by Mrs.Raiwalui to sign the offer for sale. They then decided to apply for a loan with the Housing Authority. Towards the end of June, 1993 they had a meeting with the officials of the Housing Authority who explained to them the documents they had to obtain. One of those documents was an Engineering Certificate for the house. At their home on the same day they telephoned Mrs.Raiwalui and informed her of the need to have an Engineering Certificate and if she would obtain one. She said she would think about it. They waited for some two weeks and when they did not hear from her, they decided that they would go ahead and obtain one at their own costs. The second plaintiff telephoned her cousin the first defendant and told him about it. He agreed and he realised then that they were serious about buying. The engineer they engaged wanted extra rafter brackets and hurricane shutters for the house. Altogether they cost $3500. The engineering report was finally available on 28th September, 1993. The workers they hired to carry out the works took some four weeks to have the work completed. A copy of engineering report is marked as annexure "D".

On 16th September, 1993 they arrived with all required documents at the Housing Authority except the engineering report. They told the officer who attended to them that the engineering report would be ready in two weeks. That officer told them that another couple had applied for loan to purchase the same property. As they had paid for the upgrading works, she suggested that they went to see Mrs. Raiwalui and ask her if she could provide them a more serious letter than the one she had written. They went to see Mrs. Raiwalui at her office and explained the situation to her. They demanded to know why she had introduced Vasiti and Jiosefa Waqa when she knew that they were doing upgrading work at the property. They told her that they needed a more serious letter something like the letter she had given Vasiti and Jiosefa Waqa. She told them to go ahead in the processing of their loan application but she was not writing another letter. They returned to the Housing Authority and informed the official of her reaction. They however insisted on receiving the letter. They returned to Mrs.Raiwalui on the same day and she told them she was busy and would not be able to assist further. That same day they paid a valuation fee of $11 which enabled the Housing Authority valuers to go to the property the following day to do a valuation.

On 28th September, 1993 when they received the Engineering report they took it to the Housing Authority. They were reminded again that Housing Authority still needed the letter from Mrs.Raiwalui. The official advised them if Mrs.Raiwalui continued to refuse to give the letter then they should try to obtain a letter from the first defendant. The second plaintiff rang the first defendant on 28th September, 1993 and explained their problem with Mrs.Raiwalui. He replied there was nothing he could do about it.

It was after this that their friends advised them to seek legal advice and subsequently the Caveat was placed on the title.

They (plaintiffs) maintained that the defendants were aware earlier on of the double dealing Mrs. Raiwalui was doing. Defendants could have averted this situation if they had wanted to, by telling them earlier that Vasiti and Jiosefa Waqa intended to buy the property. The defendants led them to believe that they were the only people buying the property and encouraged them to spend funds knowing that they would not get it in the end.

They (plaintiffs) were encouraged to pay $1600 and thereafter allowed to take possession of the property. While their loan was being processed by the Housing Authority, the defendants allowed Vasiti and Jiosefa Waqa to make a similar application.

They believe that defendants became greedy and thought they would get away without any difficulties in receiving a larger sum than that offered to them. Even when they (plaintiffs) had to do upgrading works on the property which with the Engineering report cost them a further $3500 the defendants and Mrs. Raiwalui opted to remain silent about the other arrangement they had quietly made with Vasiti and Jiosefa Waqa. They also contended that for the proposed sale to Vasiti and Jiosefa Waqa, the parties had relied on their (plaintiffs) engineering certificate of the property.

The Plaintiffs are ready and willing to pay the defendants $55,000 as they had agreed to and pray that this Court confirms the existence of Caveat No. 346312.

The question to be resolved in this case is this.

"Do the plaintiffs have any legal or equitable interests in the property at 10 Salato Road, Tamavua?"

Section 106 of the Land Transfer Act Cap. 131 states:-

106. Any person--

(a) claiming to be entitled or to be beneficially interested in any land subject to the provisions of this Act, or any estate or interest therein, by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise howsoever;

may at any time lodge with the Registrar a caveat in the prescribed form, forbidding the registration of any person as transferee or proprietor of, and of any instrument affecting, such estate or interest either absolutely or unless such instrument be expressed to be subject to the claim of the caveator as may be required in such caveat.

It is clear from the affidavits of both plaintiffs and both defendants that there is no note or memorandum of agreement between the plaintiffs and defendants exist for the Sale and Purchase of the Property at 10 Salato Road. But Mr.Fa for the plaintiffs argued that the plaintiffs moved into the said property after paying a goodwill sum of $1600 to the Housing Authority to reduce the amount owing on the mortgage by the defendants as an indication of their sincerity in their interest to purchase the said property. The Plaintiffs stated that they had a verbal agreement with defendants' attorney to purchase the property while occupying it. To show genuine interest the Plaintiffs no sooner had they moved into the property they started making approaches to a number of financial institutions looking for a loan to purchase the property. They first approached the Fiji Development Bank where they were told of the various requirements they have to meet before their application for loan could be processed. Among this requirement was a Sale and Purchase Agreement. They approached the Housing Authority as the property was mortgaged to them but they were told to go to Mrs. Raiwalui who holds the Power of Attorney for the Defendants. Instead of issuing them with a Sale and Purchase Agreement she gave them an undated letter to Housing Authority wherein she indicated that she was acting on behalf of the defendants and the plaintiffs were interested in purchasing the property at 10 Salato Road. On the advice of a friend the Plaintiffs returned to Mrs. Raiwalui with an Offer for Sale to be signed by her but she refused maintaining that the letter she had written to the Housing Authority was quite sufficient.

Because of her refusal the plaintiffs abandoned their application with the Fiji Development Bank. The Plaintiffs then lodged their application for a loan with the Housing Authority only to be told to return and obtained a stronger letter of offer from Mrs. Raiwalui only to receive a negative response from her. Unbeknown to the plaintiffs Mrs. Raiwalui was also entertaining the interest of Vasiti and Jiosefa Waqa in purchasing the same property. The plaintiffs because of the failure of Mrs. Raiwalui in obtaining an Engineering Certificate they obtained one on their own, costing them a further $3500. The first defendant when contacted by telephone by his cousin the second plaintiff in Sydney had agreed to sell the property to the plaintiffs for $55,000. The later offer by Vasiti and Jiosefa Waqa to Mrs. Raiwalui was $60,000 $5000 more.

There is no doubt the plaintiffs have acted in good faith all along after being given verbal assurance and agreement by both the defendants and Mrs.Raiwalui to purchase the property in question. Even though there is no written note or memorandum of the offer by the plaintiffs or the Sale and Purchase Agreement I am satisfied of the existence of an offer for Sale and Purchase Agreement made verbally by the parties including Mrs Raiwalui. Clearly the plaintiffs occupation of the property is legal. The action of Mrs Raiwalui is most unfortunate because while encouraging the plaintiffs to continue to pursue their loan, she at the same time was entertaining an offer from Vasiti and Jiosefa Waqa for the purchase of the property at a higher price. They have expended $1600 as goodwill payment and $3500 in upgrading of the property and obtaining an Engineering Certificate on their own. Surely no one who is trying to raise a loan to purchase a property could make unnecessary expenditure to the tune of $3500 like the plaintiffs in this case unless they were genuine on their part of the bargain. The plaintiffs actions clearly indicates that they have been given assurances by both first defendant and Mrs Raiwalui orally to purchase the property in question.

I find that the plaintiffs have a legal interest in the property at 10 Salato Road and even if I am incorrect in that they at the very least have an equitable interest in the said property, and therefore their action applying for and obtaining a caveat on the title to the property in question was in accordance with Section 106 of the Land Transfer Act Cap. 131.

In accordance with Section 110(3) of the same Act I order that the time for removal of Caveat No. 346312 be extended beyond 21 days mentioned in the Notice of Removal until the determination of this action or further order of this Court.

I make no order as to cost.

S W Kepa
JUDGE

21st September, 1994

HBC0125D.94S