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Ram v Native Lands Trust Board [2011] FJHC 404; HBC184.2008L (19 July 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 184 of 2008L

BETWEEN:

KHUSHI RAM
Plaintiff

AND:

NATIVE LANDS TRUST BOARD
Defendant

JUDGMENT AFTER TRIAL

Judgment of: Inoke J.

Counsel Appearing: Mr A Sudhakar (Plaintiff)
Mrs L Macedru (Defendant)

Solicitors: A K Law (Plaintiff)
In-house solicitors (Defendant)

Dates of Hearing: 27 April 2011

Date of Judgment: 19 July 2011

INTRODUCTION

[1] This is a claim for damages for breach of contract. The plaintiff alleges that he entered into a binding contract with the defendant in which the defendant was to issue him with a lease. But the defendant instead issued the lease to someone else and he now sues for damages and loss arising from the defendant’s failure to honour its promise.

[2] The crucial issue is whether there was a binding contract for the grant of a lease by the defendant to the plaintiff. It is common ground that if there was such a contract then it was breached by the defendant when it granted the lease to someone else.

THE PARTIES

[3] The plaintiff is a farmer. The defendant is the statutory trustee of iTaukei land under the iTaukei Land Trust Act [Cap 134] and is responsible for the lease of land owned by iTaukei, the indigenous owners, previously known as native land.

CASE HISTORY

[4] The Writ of Summons and Statement of Claim were filed on 22 September 2008 and acknowledged by the defendant on 5 November 2008. The Defence was filed on 8 December 2008 and the Reply filed on 17 June 2009. The Summons for Directions was filed on 14 August 2009 then followed 17 appearances before the Master before this matter was ready for trial. It was set down for hearing on 27 and 28 April 2011 but only took one day.

THE STATEMENT OF CLAIM

[5] The Statement of Claim pleaded the facts and circumstances supporting the plaintiff’s claim, evidence of which was given at the trial, so I need not set them out now. The main basis of his claim is that there was a binding contract for the defendant to issue him with a lease of the subject land. He further alleges in paragraph 11 of the Statement of Claim that “the defendant in leading (him) to believe that a lease would be issued to him and receiving payment from (him) and representing that a lease in fact existed in (his) favour causing (him) to act to his detriment and suffer loss, is estopped from not issuing (him) the lease”. Although the plaintiff asks for specific performance he abandoned that at the trial because the subject land had been leased to someone else and only asks for damages.

THE DEFENCE

[6] The Defence is simply that the defendant did not offer a lease to the plaintiff, there was no binding contract to grant a lease to the plaintiff and no estoppel by representation.

THE AGREED FACTS

[7] The agreed facts from the Pre Trial Conference (“PTC”) Minutes are as follows. In or around 2003 the plaintiff went to the defendant’s Lautoka office to enquire about leasing land next to his farm. He was told to obtain the consent of the iTaukei owners, Mataqali Ketenavunivalu, which he did on 5 March 2003 and lodged it with his application for lease and paid the $56.26 application fee to the defendant. The plaintiff paid a further $1,023.30 to the defendant. On 1 August 2007, the defendant issued to the plaintiff an account statement for the period 1 January 2007 and 1 July 2007 stating that part of the lease processing fee, contract documentation fees, stamp duty, registration fees, FEA consent fee, approval (water/building) fees, rent for 1 January 2007 to 30 June 2007, lease administration fees from 1 January 2007 to 30 June 2007, rent from 1 July 2007 to 31 December 2007 and lease administration fees for 1 July 2007 to 31 July 2007 was due. On 22 November 2007, the plaintiff caused its solicitors to write to the defendant to demand that the defendant immediately issue the lease to the plaintiff as agreed for which payment had been made. A further reminder was sent to the defendant on 22 February 2008 but the defendant has not responded to those letters. On 1 August 2008, the defendant issued to the plaintiff another statement of rent due of $3,208.05 being the balance of the previous statement, interest, lease administration fee from 1 July 2008 to 31 December 2008 and rent from 1 July 2008 to 31 December 2008. The defendant never issued a lease to the plaintiff.

THE AGREED DOCUMENTS

[8] As is the usual practice in this Court, the parties by consent tendered an Agreed Bundle of Documents (“ABD”) as the documentary evidence. These documents were accepted pursuant to s 4 of the Civil Evidence Act 2002 and the Court decides as to what evidentiary weight is to be given to a particular document. The parties also tendered other documents in the course of evidence, some of which were not already in the ABD.

THE PLAINTIFF’S EVIDENCE

[9] The plaintiff gave his evidence in Hindi translated into English. He is 70 years old. He has been a farmer since 1957. His land is at Field 27, Navatu in Ba consisting of 20 acres. His claim is in respect of the land next to his 20 acres. He applied for a lease of that land in 2003. He went to the defendant’s office in Lautoka. He saw an officer by the name of “Luke Bavo”. The officer told him that the land was vacant and the officer told him to go and get the consent of the Mataqali owners of the land. It was Mataqali Qereqeretini. He knew the owners because they were the ones that gave consent for the lease of his 20 acres. The officer gave him a locality plan. His lease is NL 26180 being lot 3 on plan BA 2283[1]. His 20 acres is the land in the plan marked in ‘yellow’ and the land in dispute is next to it marked in ‘blue’. He paid the $45.25 application fee and was given a receipt. He had the Mataqali members sign the consent form[2] on 5 March 2003 and paid $2,000 to them at the Ba Provincial Council office. He went back to the defendant’s office in October 2006 and saw the officer in charge of the subject area, a Pauliasi, and paid $1,023.30 and given a receipt dated 31 October 2006. Pauliasi wrote on the back of the receipt the various sums which the plaintiff needed to pay for the issue of the lease. Pauliasi told him to pay the above sum in order to get the lease. Pauliasi let him initial parts of the lease document and he (the plaintiff) signed at the end. He went together with his son, Harmendra Singh. Pauliasi told him to check in five weeks time. His lease should be ready by then. He went back five weeks later and the receptionist told him that Pauliasi had gone to do studies and he was to come back when Pauliasi finished his studies. When he went back later, he was told that Pauliasi had left the defendant. He was never given the lease.

[10] He had cut grass and trees on the land awaiting the issue of his lease. His sons, Harmendra and Harmoit, also worked on the land. Later, he saw his neighbour, Sarjeet Singh, working on the land. Two officers of the defendant, Mataitini and Jacob, came and surveyed the land and told him that the land was his. Sarjeet Singh then stopped working the land and wrote to the defendant. Two officers from the defendant, Sadna and another, then came and told the plaintiff’s son not to enter the land. Police also came and told his son not to go onto the land. He wanted to plant vegetables on the land. He is an experienced farmer and was expecting to get yearly income of $15,000.

[11] The plaintiff said he paid $1,023 which included rent for the land. The defendant posted him statements of account for 2007 and 2008. He has suffered loss and claims it from the defendant. He intended to farm the land for the whole of the 30 years term of the lease which was promised to him by the defendant’s officers. His health has suffered. He has incurred expenses and legal costs.

[12] In cross examination he said the reason it took him 3 years to make payments was he was told by the defendant’s officers that his lease was not ready. He acknowledged and understood that the receipt for the application fee had typed on it at the bottom, a caption which read: “THIS AMOUNT IS SUBJECT TO FINAL ACCEPTANCE AND CERTIFICATION BY THE BOARD AND DOES NOT CREATE NOR RECOGNISE A TENANCY”. Similar captions appeared in the statements of account that were sent to him. He understood that this meant that there was no guarantee of a lease. He confirmed that he did not receive an offer letter from the defendant for the land. But he said the Pauliasi told him that he would give him the lease and the offer letter together. He has other land in Navatu on which his sons live. He lives on both lands. He still wants the lease. He suffered headaches from missing out meals because of the running around caused by the defendant. He saw a doctor many times but did not have receipts. He also suffered eye problems and has a certificate from his doctor. But no certificate was produced. He confirmed that the defendant’s officers came to show him the boundaries of the land and the police came to stop his son going onto the land. The land is now cultivated in cane by his neighbour, Sarjeet Singh.

[13] In re-examination, the plaintiff said he understood from the statements that the land belonged to him. He also understood that he had to pay some money for the lease. This land was special to him because it was next to his 20 acres and close to his other land and no other vacant land around.

[14] The next witness for the plaintiff was his son, Harmendra Singh. He said he went with his father to the defendant’s office about the land about twenty times or more. He was with his father when his father paid the application fee of $56.25. The defendant’s officer Luke Vouvou was there. Luke told them that the land was vacant and they were to go and see the Mataqali members which they did in Ba. They had a meeting at his place. They reached agreement and he paid $2,000 as consent money on the next day at the Provincial Office in Ba. That was in March 2003. The defendant’s officers told them to go home and they will come for inspection. After more than five weeks he and his father went to the defendant’s office; in 2007. On the next day his father signed a lease copy. No copy was given to them. They were told that the copy would be given after the lease was stamped. Two weeks after signing the lease, Pauliasi came and inspected the land. He had a machine with him which he used to peg the land. They were told that they could work the land. He went to the defendant to inquire and was told that the documents had been sent to Suva. He went to see Pauliasi but was told that Pauliasi had gone to do studies. Pauliasi never came back to the defendant. Officers Mataitini and Jacob of the defendant came and stopped Sarjeet Singh from cutting timber on the land. They said the land belonged to him. A bulldozer came on to the land on the next day to clear the land but officer Sadna from the defendant came and told him that the land belonged to Sarjeet Singh. He reported it to the police who came and told him that he could not go onto the land. Sadna and Sarjeet Singh are neighbours in Tavua. He had plans to use the land for vegetable farming. His future plan was to connect electricity and build a house on the land.

[15] In cross examination, he said he went with his father to the defendant’s office. His father made the payments. He resides on the 20 acre farm with his family and his brother. His father lives in both places. He and his brother farm the land.

[16] The third witness for the plaintiff was an agricultural technical officer from the agriculture department. She inspected the land on 28 March 2011 with the plaintiff’s son and prepared a report. Her report was on the potential vegetable crops that could be grown on the 4.7 acres of land intended to be developed by the plaintiff’s family. The report concluded that the expected annual gross income of $44,540 and net profit of $13,491.

[17] In cross examination she said her report was not based on actual production fro previous years but on research information recorded in a “Cropping Calendar” that was revised two years ago.

THE DEFENDANT’S EVIDENCE

[18] The first witness for the defendant was Jekope Vunisa. He has worked for the defendant for 30 years. He works in the estate section. His duties include inspecting land for which applications for lease have been received, arranging meetings with the landowners, solving disputes and issues on land, preparing reports and making recommendations for approval of leases. He was in the Ba team at the time covering the land in this case. The procedure was to first screen the applications and check that all papers are in order. The application fee is paid before a file is opened. Then the estate team inspects and confirms the availability of the land through the technical section. A report and recommendation to refuse or accept is then sent to a superior officer. There is no guarantee that a lease would be offered. After approval, they prepare an offer and issue it to the applicant. When accepted the offer became binding. The letter of offer is normally on the defendant’s official letterhead and within 6 weeks payment is expected to be made. If no payment is made then it is assumed that the applicant is not interested and the offer lapses. The offer can be extended by arrangement with the supervising officer. He was not aware of the plaintiff’s application but was aware of Sarjeet Singh’s application over the same land. No lease was issued to the plaintiff. The lease was issued to Sarjeet Singh who is cultivating the land.

[19] In cross examination, he said he had met the plaintiff and has been to his house. But he did not go with Mataitini to the plaintiff’s farm. The costs to be paid are the costs set out in the letter of offer. The premium should not be paid before the offer. Statements of accounts are given to those with leases. The statements issued to the plaintiff refer to a 30 years lease of the same land leased to Sarjeet Singh. But the witness was adamant that he was not aware of the plaintiff’s application until this court case.

[20] On the Court’s prompting, he said the writing on the back of the receipt for the $1,023.30 payment looked like his writing. The figures were the amounts which the applicant had to pay when an offer is made. He could not remember when he wrote the figures on the back of the receipt.

[21] The second witness for the defendant was Etuate Nawakamocea Mataitini. He is an estate officer with the defendant. He has been with the defendant for 28 years. His area of responsibility includes the land in this case and he is familiar with it. He was instructed to investigate this dispute in November 2007 because of a letter from the plaintiff’s solicitors. He visited the land and interviewed the plaintiff and Sarjeet Singh and handed in a report. His report is dated 13 December 2007[3]. It confirmed that the area offered to Sarjeet Singh was already in the plaintiff’s area. The error is now rectified by the process of surrender. The new lease issued to Sarjeet Singh does not include the plaintiff’s land. He had never met the plaintiff until he was instructed to investigate. He went with Jekope when he was investigating. He could not recall what Sarjeet Singh was doing or what transpired or seeing a bulldozer. He can recall his son Harmendra but cannot recall telling him that the land was his or that he could farm it. Mrs Sadna Naidu works as an estate officer with the defendant. The statement of account shows that a lease was in existence and there would have been a lease contract. He explained that once an application is lodged, a contract number and file number are created. They are only activated after the supervisor’s recommendation and then it goes into the SAP system.

[22] The third witness for the defendant is Lui McKay, a technical officer with the defendant. He has been with the defendant for 22 years. He is the technical section and deals with the day to day preparation of plans, charting of all active leases and anything to do with mapping. He is familiar with the land in this case. He compiled a report at the former manager’s request. His report is dated 15 May 2008[4]. Contract number 4/1/3324 refers to the plaintiff’s land.

[23] In cross examination he said what is in their system may not match what is on the ground. When the file came to him, the plaintiff’s application was for an area which included land already leased to him.

FINDINGS ON THE EVIDENCE

[24] I accept the plaintiff’s evidence that he lodged an application for lease of land apparently next to his farm from the defendant and paid the requisite application fee in 2003. He also obtained the consent of one of the Mataqali landowners and paid them $2,000 through the Provincial Office in Ba in March 2003. The defendant’s statements of account dated 1 August 2007 and 2008 show that the plaintiff paid $1,023.30 on 31 October 2006 towards the issue of a lease and “contract number 50036579 old ref: 4/1/6393 land name: Navutu (Pt of) Lot 1” was generated and entered into the defendant’s computer system. No further payments were made by the plaintiff towards the account.

[25] I also accept that the plaintiff knew that all payments made by him were received subject to final acceptance and certification by the defendant and did not create or recognise a new tenancy or contract.

[26] No letter of offer of lease was sent by the defendant.

[27] I do not accept that the plaintiff signed a lease document at any time. If he had signed a lease I think he would have gone a head and paid on the statements of account in the belief that his lease had been registered because there was nothing more for him to do. He and his witnesses failed to prove it on the balance of probabilities.

[28] On 22 November 2007, the plaintiff’s solicitors wrote to the defendant demanding the issue of the lease to their client.

[29] Estate officers Mataitini and Jekope went to the land and carried out an investigation and wrote a report dated 13 December 2007. I accept the finding of the report that although the land was not in current use, parts of it was inside both the plaintiff’s 20 acre land as well as Sarjeet Singh’s adjoining land. I also accept the report’s analysis that:

“From the findings, one can say that indeed there has been some mistake in as far as plotting of leases in our system is concerned. As a result, the Board has not only created overlapping of lease boundaries, but also “trespassed” into land whose owners have not endorsed the leasing of same. It is quite a relief though that all land in question are outside native reserve.

The big question as far as Kushi and his lawyers are concerned, regardless of ownership, is whether the land in question is available for leasing”.

And the recommendation that the plaintiff’s lawyers:

“be advised that until updating of data is complete, which we will do early, we cannot say if indeed the subject land is available for leasing. There’s even the possibility that it is already in Kushi’s land”.

[30] The plaintiff’s solicitors wrote to the defendant on 22 February 2008 acknowledging the attendance of the defendant’s officers on numerous occasions between late November 2007 and early December 2007 to assess and survey the land and requesting a response to their earlier letter within 7 days failing which court proceedings were to issue without notice.

[31] A further report was compiled by Mr McKay of the defendant on 15 May 2008. His recommendation was that the plaintiff’s lease contract number 50036579 should be refused because the same land was within his registered lease NL 26180 and because the plaintiff now resided permanently on a Crown lease in another area, Vunisamaloa. The recommendation is consistent with Mr Mataitini’s and I therefore accept it.

[32] The Instrument of Tenancy eventually issued to Sarjeet Singh, according to the lease document[5], was signed on 4 July 2008 and registered on 22 July 2008 for a term of 30 years commencing from 1 January 2007. This is for a larger area after resurveys were done and included the land that is the subject of this case.

[33] In summary therefore, I find that between 2003 and 2006, the plaintiff’s application for lease stalled because the plaintiff did not pursue it vigorously enough and the officer he was dealing with went on study leave and eventually left the employ of the defendant. The application was revived by him in October 2006 when he paid $1,203.30 towards the processing of the lease. The money remains undisbursed. The payment was made on the plaintiff’s full understanding that it was subject to final approval by the defendant. Between 2006 and 2008 the defendant tried to sort out the boundary issues over the land. In 2008, the defendant resolved the issues against the plaintiff and issued a lease of the land to his neighbour Sarjeet Singh instead. There was never a letter of offer issued by the defendant to the plaintiff for the land. Neither did the plaintiff at any time sign a lease document for the land. The question therefore is whether, under these circumstances, the defendant is bound to issue a lease of the land to the plaintiff.

THE LAW

[34] An enforceable contract requires intention to create legal relations, a binding agreement (offer and acceptance) supported by valuable consideration. The requisite intention and consideration are not in issue in this case. The issue here is whether there was a binding agreement – whether there was an offer and acceptance of it. In deciding whether the parties have reached agreement, the courts normally apply the objective test.[6]

[35] Negotiations leading up to the agreement may not necessarily amount to an “offer” but merely “an invitation to treat”: Harvey v Facey [1893] AC 552. An invitation to treat, as distinguished from an offer, is a communication or conduct which is not made with the intention to be legally binding as soon as the person to whom it is directed simply communicates his assent to its terms.[7]

[36] The control of iTaukei land is vested in the defendant (Board) by s 4 of the iTaukei Land Trust Act [Cap 134]. Section 12 of the Act provides:

12. -(1) Except as may be otherwise provided by regulations made hereunder, it shall not be lawful for any lessee under this Act to alienate or deal with the land comprised in his lease or any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever without the consent of the Board as lessor or head lessor first had and obtained. The granting or withholding of consent shall be in the absolute discretion of the Board, and any sale, transfer, sublease or other unlawful alienation or dealing effected without such consent shall be null and void ...

(underlined for emphasis).

[37] Other relevant provisions are ss 7 and 8(2) which provide:

7. Subject to the provisions of the Crown Acquisition of Lands Act, the Forest Act, the Petroleum (Exploration and Exploitation) Act and the Mining Act, no native land shall be sold, leased or otherwise disposed of and no licence in respect of native land shall be granted save under and in accordance with the provisions of this Act. ...

8(2) Any lease of or licence in respect of land under the provisions of this Act shall be made out from and in the name of the Board and such lease or licence shall be executed under the seal of the Board.

APPLICATION TO THE FACTS

[38] It seems to me clear that all payments made by the plaintiff to the defendant were on the parties understanding that they did not guarantee the issue of a lease to the plaintiff. The receipts which were issued clearly stated that payments were subject to final acceptance and certification by the defendant Board and did not create or recognise a new tenancy. The subsequent statements that followed must also be subject to these conditions. The fact that a contract number was given did not amount to confirmation of a lease. It could be viewed as an administration step in the defendant's process. Even the plaintiff himself did not make any further payments on the statements. I conclude from this that he did not feel himself bound to pay until he was given his lease. The land in question had not been identified so no lease or agreement to lease could be entered into. The issue of such a lease is at the discretion of the defendant. It considered that the plaintiff lived somewhere else and he already held a 20 acre lease. The defendant's prior consent is required by law. No such consent was given in fact. No letter of offer was made in accordance with the practice of the defendant which the plaintiff would have been fully aware, having leased land from the defendant previously.

[39] In the circumstances therefore I am not convinced that an offer capable of acceptance was in fact made by the defendant. Whatever was said or transpired between the parties were nothing more than pre-contract negotiations and invitations to treat.

[40] It also follows that any argument based on estoppel or false or misleading representation cannot succeed.

[41] Although I am not required to make any finding as to quantum because of the conclusion that I have reached above, for the sake of completeness I think I should. I am not convinced of the evidence submitted by the plaintiff as to his desire to farm the land for 30 years as a vegetable farm. Firstly, I think his sons were to farm the land and not the Plaintiff. Secondly, vegetable farming, and other farming for that matter, is subject to the vagaries of the weather and the economic conditions. Thirdly, the technical officer's report does not seem to me to be specific enough for that area or the land in question. I think the damages claimed are too remote and speculative and would not have granted it had the plaintiff showed that he had a binding agreement for a lease.

[42] The final result is that the defendant should refund the amount of $1,023.30 paid by the plaintiff on 31 October 2006. I make no order in respect of the application fee as normally such fees are not refundable.

COSTS

[43] The defendant is entitled to its costs having successfully defended the claim which I asses, based on the case history outlined above, as of the same amount as the refund to be made by the defendant to the plaintiff. I therefore order that it be defrayed as the defendant's costs in this action.

ORDERS

[44] The orders are as follows:

• (a) The plaintiff's claim is dismissed.
  
• (b) The amount of $1,023.30 paid by the plaintiff to the defendant and receipted on 31 October 2006 is to be defrayed by the defendant towards it costs in this action.
  

Sosefo Inoke
Judge

^[1] Exhibit P1.
^[2] Exhibit P2.
^[3] Exhibit D1.
^[4] Exhibit D2.
^[5] ABD 7.
^[6] Chitty on Contracts, 1994 Sweet & Maxwell, 27^th edn., vol 1, para 2-001, note 4.
^[7] Op cit, para 2-005.