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Wati v Prasad [1995] FJHC 81; Hbc0044j.92b (28 April 1995)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

CIVIL ACTION NO. 44 OF 1992

IN THE MATTER of an application under Section 169 of Part XXIV
of the Land Transfer Act Cap. 131

Between:

1. SANTA WATI
d/o Kali Charan
2. BISUN DEO
s/o Jag Deo
Plaintiffs

- and -

AMBIKA PRASAD
s/o Ram Piyare
Defendant

Mr. A. Sen for the Plaintiffs
Mr. V.P. Ram for the Defendant

JUDGMENT

By Summons dated 9 December 1992 the Plaintiffs seek an Order for possession under s.169 of the Land Transfer Act Cap. 131 (hereafter referred to as the "Act") requiring the defendant to show cause why he should not give up immediate vacant possession to the Plaintiffs of the Plaintiffs' land part of which is occupied by the defendant and known as Matasawalevu in the Island of Vanua Levu being Lot 3 on Plan No. 5800 and being part of land comprised in Certificate of Title No. 27109 (hereafter referred to as the "said land").

The Plaintiffs have filed an affidavit in support of their application. Therein they depose: that they bought the said land from the first Plaintiff's late father KALI CHARAN now deceased. It was registered in their name on 5 October 1991; that the defendant was let into possession of a portion of the said land by the said CHARAN but he was required to vacate the same within 12 months from the date of occupation; that the defendant is a nuisance and refuses to give up possession despite being served with a notice dated 30 September 1992 to quit and deliver vacant possession.

The defendant has filed an affidavit in reply sworn 23 April 1993. He said, inter alia, that he was brought on the said land by the said CHARAN to live there with him as he had no sons; that to pay for the said land the said CHARAN asked him to contribute half of the deposit for its purchase price namely $700 which he did and in return he said that he will give him half interest in the said land; but the said CHARAN refused to transfer to him his half interest.

The said CHARAN instituted an action in the Magistrate's Court at Labasa (C.A. 711/87) claiming vacant possession of certain Crown land. He said that the defendant was unlawfully in occupation of certain Crown Lease in respect whereof he was given notice to vacate. It is pertinent to note that the land in this case is not a Crown Leasehold land but freehold land.

Subsequently the defendant instituted proceedings in the High Court at Labasa (C.A. 89/87) claiming to be the equitable owner of a half interest in the said land or alternatively that the said CHARAN is trustee of the said land. This action is pending although no further steps have been taken by the defendant because he said that the deceased CHARAN was his grandfather and he (CHARAN) was "making no further move to evict" him.

The defendant denied having received the said notice.

As ordered, counsel filed written submissions.

Mr. Ram's submission is that the Plaintiffs (Ps) have failed to state how and the circumstances under which the defendant (D) was brought to live on the said land and before the land was transferred to the Ps.

Basing his argument on the affidavits Mr. Ram says that because of the conflicting facts it makes the procedure under section 169 "totally unsuitable for P's cause or cause of action".

Mr. Ram further argued that the Ps are not the registered proprietors of the said land but on the day of the hearing the Title reference was corrected and that shows that the Ps are the registered proprietors.

The Notice of Termination is also attacked by Mr. Ram as he says that there is no proper termination of D's occupancy.

He further submits that because D has paid half of the deposit a trust has been created and the only way to sort this out is by an actual trial. He says that "obviously following from the trust if the deceased in order to defeat the rights of D transferred the property, then the same is fraudulent vis à vis D".

Mr. Ram submits that D has shown a right to the possession of the said land as required under section 172 of the Act and therefore the Summons should be dismissed.

The learned counsel for the Ps, Mr. Sen submits that the claims of D "seem" to be against the said CHARAN and the Matawalevu Land Purchase Co-operative Society who are not the defendants in this case. He says that the effect of registration of instruments under the Torrens system gives the registered proprietor an indefeasible title. The Torrens System he says is not a system of registration of Title but a system of Title by registration.

Mr. Sen further submits that the said two "dead actions" have no relevance to the subject matter of this action. He says that D's allegations are not supported by any documentary evidence.

Since indefeasibility of title has not been impeached, he submits that D cannot show cause under the said section 172. On Notice he said it was some two years ago that it was served and it can be cured by filing an affidavit of service. In any case, he says, "the effect of service" is a "technical issue".

He concludes by submitting that D's claim is not supported by any documentary evidence and 'therefore it does not have any value' and secondly, "it does not raise any triable issue against the Ps but rather addresses an action against one deceased KALI CHARAN". He submits that the issues raised by D are not triable against the Ps nor does it go to establish any right to D to stay on the said land and in the absence of fraud on the part of the Ps "any previous or possible action by D against the third party does not go to show cause" why D should refuse to give possession. He says that an order for immediate vacant possession should be made.

The facts surrounding this case, the circumstances leading to the occupation of the said land, and the legal submissions of counsel have been outlined hereabove.

I am of the view that as the registered proprietors of the said land, about which there is no doubt, the Ps are entitled to bring the present proceedings under the said section 169 of the Act.

I find that the said two Court actions have no relevance to the present proceedings and also in the said High Court action the Ps are not even a party. The D's alleged grievances are with the deceased CHARAN and in respect whereof D has not taken any further action since 1987. It is not for me in this action to go into the merits and demerits of that dormant action.

Despite notice to vacate having been served, D has failed to give up possession but instead puts up arguments referred to hereabove by his counsel as grounds for his right to remain in possession.

Under section 169, D is required "to show cause" why he "should not give up possession" to the Ps. In response to the Summons D appeared and has given reasons as to why he refuses to give possession of the said land as outlined hereabove; but under section 172 of the Act he has to prove "to the satisfaction of the judge" "right to the possession of the land". The onus is on D to show cause to the Court's satisfaction and this I find he has not done on the facts of this case.

The reasons that D has given for remaining on the land do not amount to cause to come within the meaning of s.172 to enable the Court to let D remain in possession. All the grievance that D has is with the said CHARAN. If he had an equitable interest in the said land he had many years within which to come to some legal and binding agreement. As it is he has produced no documentary evidence to prove his claim; but if he has a claim he can only enforce it against the said CHARAN and not against the Ps who are the registered proprietors of the said land.

The situation here is similar to the one in TEVITA FA and TRADEWINDS MARINE LTD, OCEANIC DEVELOPERS (FIJI) LTD (CIV. APP. NO. 40/94 FCA) (although that was a case where consent of the Director of Lands was not obtained) where THOMPSON JA said that:

"The respondents, having come onto the scene three years after the sub-lease was granted, cannot be fixed with any obligation towards the applicant arising out of the trustees' failure to obtain the Director's consent to the sub-lease".

Further in FA (supra) THOMPSON JA goes on to say:

"So again, while he may have a claim against the trustees for damages, he cannot, in my view, succeed in showing either that the Crown lease did not pass to the respondents or that they had any obligation in law or equity to permit him to continue to occupy the rooms such that he could show cause why they should not have obtained the order for possession made by Pathik J."

In this case there is no serious dispute as to the facts to which the Ps are a party or are in any way affected arising out of D's allegations. It is pertinent to note at this stage that according to copy Title filed as annexure the land in question was transferred direct to Ps but from whom it does not say except that reference to transfer document (308450) is given. In other words it was not a case where there was a title in the name of CHARAN and he transferred to Ps. As to when CHARAN died is not stated in the affidavits filed.

Mr. Ram had argued that, as alleged, because a trust was created the transfer by CHARAN to Ps was "fraudulent" 'vis à vis D' and that Ps took the title with knowledge of D's occupation of the said land.

Mere knowledge on the part of the Ps of D's occupation is insufficient to constitute fraud in them (but fraud is not alleged against them but against CHARAN). However, it is not even sufficient to enable D to attack the principle of indefeasibility of title for it was said by DENNISTON, EDWARDS, COOPER, & CHAPMAN JJ. IN FELS AND ANOTHER v KNOWLES AND ANOTHER (1907 26 NZLR 604) that:

"The cardinal principle of the Land Transfer Acts is that the register is everything, and that, except in cases of actual fraud on the part of the person dealing with the registered proprietor, such person, upon registration of the title under which he takes from the registered proprietor, has an indefeasible title against all the world. Everything which can be registered gives, in the absence of fraud, an indefeasible title to the estate or interest registered, or, in the cases in which registration of a right is authorized - as in the case of easements or incorporeal rights - to the right registered"

(underlining mine)

The D's complaint is against the said CHARAN. He did commence an action as stated above in the High Court. The fact that there are other proceedings before the Court is not in itself a ground to resist the s169 Summons for one has to look at each case on its own facts. It is a matter entirely in the discretion of the Court. In SHYAM LAL v ERIC MARTIN SCHULTZ 18 FLR FCA p. 152 GOULD VP said:

"that I am in sympathy with the proposition that complicated question of fact (particularly where there are allegations of Fraud) cannot adequately be investigated and dealt with on a summary proceedings in Chambers. The present case, however, involved initially no contested relevant fact and the Learned Judge in my opinion rightly entertained and dealt with it."

In GAJADHAR s/o Bharat and JAI PAL s/o Sital v NATIVE LAND TRUST BOARD (Civ. App. 49/81 FCA) the Court said that:

"Fraud cases largely turn upon the knowledge that the challenged party has of the existence and nature of the adverse claims."

Although fraud is imputed to CHARAN, D has introduced this allegation in a way suggesting that the transfer of the said land was done in a fraudulent manner. The D is attempting to bring in the question of fraud to defeat the indefeasibility of title. Sections 39 and 40 which (in so far as they are relevant) clear the situation as far as Ps are concerned. The said sections provide as follows:

"39. - (1) Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which but for this Act might be held to be paramount or to have priority, the registered proprietor of any land subject to the provisions of this Act, or of any estate or interest therein, shall, except in case of fraud, hold the same subject to such encumbrances as may be notified on the folium of the register, constituted by the instrument of title thereto, but absolutely free from all other encumbrances whatsoever except ..." (underlining mine).

"40. Except in the case of fraud, no person contracting or dealing with or taking or proposing to take a transfer from the proprietor of any estate or interest in land subject to the provisions of this Act shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such proprietor or in any previous proprietor of such estate or interest is or was registered, or to see to the application of the purchase money or any part thereof, or shall be affected by notice, direct or constructive, of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud." (underlining mine).

It is pertinent to note that under s.40 notice of a trust or unregistered interest in existence does not of itself constitute fraud upon the party obtaining registration. In this case Ps deny any knowledge of any unregistered interest of D or of any trust except that they knew that he was in occupation of the said land having been brought there by CHARAN. The fact that Ps have an "indefeasible title" to the property means that the title cannot be set aside because of some defect in the history of the title.

In his submissions Mr. Ram emphasised the point that the Ps knew of Ds existence on the land and they ought to have found out why and how he happened to be there. In regard to this argument I do not find that there is any such obligation based on authorities. In this regard and generally on this aspect I refer to the following passage from INTRODUCTION TO LAND LAW by PETER BUTT at p.298:

"It has been held that it is not fraud to purchase with notice of an unregistered lease, become registered as proprietor and then evict the lessee relying on the indefeasible title conferred by registration (Oretel v. Horden [1902] NSWStRp 21; (1901) 2 S.R. (N.S.W.) (Eq.) 37; Wicks v. Bennett (1021) [1921] HCA 57; 30 C.L.R. 80, at 91, 94-95; R. M. Hosking Properties Pty. Ltd. v. Barnes [1971] S.A.S.R. 100, at 103; Achatz v. De Reuver [1971] S.A.S.R. 240, at 250); it is always open to the holder of an unregistered interest to protect his interest by caveat, and "a purchaser may shut his eyes to the fact of there being an unregistered interest, and need not take any consideration of the persons who claim under the unregistered interest: (Munro v. Stuart [1924] NSWStRp 54; (1924) 41 S.R. (N.S.W.) 203, at 206. In the words of Kitto J., "merely to take a transfer with notice or even actual knowledge that its registration will defeat an existing unregistered interest is not fraud" (Mises v. Stokman [1967] HCA 15; (1967) 116 C.L.R. 61, at 78). Nor is it fraud to register promptly with the purpose of defeating a claim over the land which may be established by pending litigation: that is not cheating a person of a known existing right (Waimiha Sawmilling Co. Ltd. v. Waqione Timber Co. Ltd. [1926] A.C. 101). On the other side of the line, a registered title is defeasible for fraud where the purchaser takes not merely with notice of the unregistered interest but having given an assurance that the interest will be preserved (Loke Yew v. Port Swettenham Rubber Co. Ltd. [1913] UKLawRpAC 11; [1913] A.C. 491, at 501-502)."

Therefore, I find on the facts and on the basis of the above authorities, no fraud can be imputed to Ps either directly or indirectly.

Having thus found on the various matters raised by Mr. Ram, I hold that s. 169 procedure on the facts of this case is appropriate and the Court is therefore enabled to deal with it and make the order sought for vacant possession. I agree with JAYARATNE J in CPS REALTY - FIJI INC and DAVID SIMPSON & ANNE SIMPSON (Action No. 178/90) which was a case where certain expenditures were incurred by the defendant who was a tenant of the plaintiff for 20 years and verbal arrangement was made for them to stay on the property said that:

"the company is the last registered proprietor of the land in question. There are no encumbrances legally valid to be enforced in favour of the Defendant."

"Section 169 of the Land Transfer Act is very strict in its application. It is very effective piece of legislation to obtain recovery of possession of land by Summary Judgment. No amount of compassion, unfairness or caring for the land as urged by the Defendant can be allowed to supersede the statutory legal effect of the Section".

However in certain circumstances equity would compel the Plaintiffs to give right or title to the land to the defendant. But that is not the case here.

For the above reasons the title of the registered proprietors will prevail over anything that D has said and with no registered instrument and therefore there will be an order that the defendant do give vacant possession within three months from the date hereof to the Plaintiffs of the portion of the said land occupied by him being part of land comprised and described in C.T. 27109 being Lot 3 on D.P. 5800 upon payment by the Plaintiffs to the defendant of the value of improvements, if any, effected by him on the said land which are to be valued by a registered valuer/or agreed upon within one month from the date hereof. The defendant will also pay the plaintiffs' costs to be taxed if not agreed. Liberty is reserved to either party to apply for direction.

D. Pathik
Judge

At Suva
28 April 1995

HBC0044J.92B