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Umaria Holdings Ltd v Umaria [2011] FJHC 483; HBC60.2011 (30 August 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 60 of 2011

BETWEEN:

UMARIA HOLDINGS LIMITED, a limited liability company having its registered office at Savita Flats, 337 Waimanu Road, Suva in the Republic of Fiji Islands.
PLAINTIFF

AND:

JAYANTI UMARIA (f/n Narotam Kanji Umaria) of Flat No. 1, Savita Flats, 337 Waimanu Road, Suva in the Republic of Fiji Islands.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSELS: Mr. R.Naidu of Naidu Law for the Plaintiff
Mr. S.Nandan of Reddy and Nandan Lawyers for the Defendant

Dates of Hearing: 1st August, 2011
Date of Ruling: 30th August, 2011

RULING

INTRODUCTION

1. By an originating summons filed on 3rd March 2011, the plaintiff is seeking an order that the defendant Jayanti Umaria to show cause why he should not give up vacant possession to the Plaintiff of the property occupied by the Defendant and his family, namely Flat No. 1, Savita Flats situated at 337 Waimanu Road, Suva comprised and described in Real Property Dealing No: 3342, Crown Grant Folio 607, Register Vol 56, Folio 5591. The Plaintiff is a private limited liability Company and the registered proprietor of the said property. The Defendant who is also a minority shareholder of the Plaintiff Company, and he admits the Plaintiff as the last registered owner of the property, but state that he is occupying the property without any rent as he had done some repairs to the premises as a set-off. He has lived in the said flat without paying the rent from 1st March 2010. No proof of any expenditure is submitted and clearly, the Defendant has not shown any right to occupy. The Defendant also alleges constructive trust, but fails to describe it satisfactorily. The Defendant's objections are sham and contradictory to the position averred in the affidavit and clearly an abuse of the process, in order to remain in the property without paying any rent. The Defendant while admitting the ownership of the Plaintiff, in its affidavit again tries to dispute the documentary proof of the title that is annexed to the plaintiff's affidavit in support on a technical point of it being not certified and also tries to dispute the averments in the affidavit on technical grounds without understanding a basic fact that once the ownership of the Plaintiff is admitted the burden is clearly shifted to the Defendant to prove a right to stay in the property. The Defendant also alleges constructive trust being a minority shareholder of the company, contrary to the accepted legal norms in company law.
   

B. FACTS AND ANALYSIS

2. This application is made under section 169 of the Land Transfer Act, Cap 131.
   
3. The Plaintiff is a private limited liability company where the Defendant is a minority shareholder. The Defendant has admitted the paragraphs 4 and 5 of the affidavit in support thus admitting that the Plaintiff's ownership to the premises where he resides and he has also admitted the non payment of rent and has also admitted that he is residing in the property as a tenant.
   
4. The Plaintiff Company in a special meeting held on 15th December, 2010 decided to institute action against the Defendant for eviction. The said minutes of the meeting is annexed as "PK18" in the affidavit in reply of the Plaintiff filed on 29th July, 2011.
   
5. This action was filed on 3rd March, 2011 after the Defendant was served with the notice to quit which granted the legally stipulated one month time in terms of Section 89 of the Property law read with Section 169 of the Land Transfer Act.
   
6. The Defendant states that he was not personally served with the notice to quit.
   
7. The Section 176 of the Land Transfer Act is explicit on that issue and it states as follows:
   

"176.(1) Any notice required by or under the provisions of this Act to be served or given to any person may be served or given by being sent by registered post to that person at his address for service."

8. The letter dated 5th February, 2011 marked as "PK10" annexed to the affidavit in support written by present lawyers for the Defendant states as follows:
   

'We act for Jayanthi Umaria and Chandra Kant Umaria.

Our client has forwarded us your Notice to Vacate dated 22nd December, 2010.

Kindly note that our client will not vacate the premises on the ground that your client has not been paying rent since 2002.'

9. The defendant had notice of the Notice to Quit annexed as "PK7" to the affidavit in support. After service of the notice to quit on the defendant, the defendant through his solicitors wrote, a letter to Naidu Law the very next day which is dated 23 December 2010 in response to the Notice to Quit. This letter is exhibited as annexure "PK8" in the affidavit in support of this application. On 5 February 2011, the defendant's solicitor wrote another letter to Naidu Law in response to the notice to quit. This letter is exhibited to affidavit in support marked as annexure "PK10". The defendant's solicitor in their letter dated 5 February 2011 to Naidu Law wrote "Our client has forwarded to us your Notice to Vacate dated 22 December 2010."
   
10. The notice to quit need not be personally served on the tenant: Kamlesh Kaur v Jagendra Karam Singh (2000) 1 FLR 219.
    
11. As stated in Halsbury's Law of England. 4th Edn. Vol. 27 (1) para 197:
    

"The notice to quit need not be served personally upon the tenant. It may be served upon his agent, and when so served it is unnecessary to prove that it actually came to his knowledge; it is sufficient if the fact of the agency is established. The spouse, or a member of the domestic staff, of the tenant at the tenant's dwelling house, whether this is one or off the demised premises, is an implied agent to receive a notice to quit, although the tenant can give evidence to rebut the implication. Apart from any question of agency, the fact that the notice had been delivered to the tenant's spouse or servant raises a strong presumption that it has reached the tenant, especially if an explanation of the notice was given when it was delivered. The presumption can only be rebutted by proof that the notice did not come to the tenant's knowledge at all." (emphasis is added).

12. It is clear from the defendant's affidavit that the defendant had knowledge of the notice to quit. It was held in Re Poyser and Mill's Arbitration [1963] 1 ALL ER 612 (applied in Gulam Mohammed Properties Limited v Suresh Patel, Suva High Court Civil Action No. HBC 0115 of 1994 (22nd June 1994) that in every case it is sufficient if proof is given that the notice in fact came to a tenant's knowledge in time to be effective as a notice to quit. At page 617 Megaw J said:
    

"It is said by counsel for the landlord that, if the notice is sent by post as a registered letter that is sufficient service without proving that it ever reached the tenant at all; but if the notice is sent by post not as a registered letter, and if the party sending it can prove that it has in fact been delivered to the person to whom it is addressed – here the tenant – that is sufficient, and that is due service under s. 92(1) of the Agricultural Holdings Act, 1948."

13. It is clear that the Defendant has received the quit notice on 23rd December, 2010 and has also forwarded it to the lawyers for legal action and no objection as to the receipt was taken in that letter, but categorically state that the Defendant will not leave the premises and also will not pay the rent. So, the objection of non-personal service of the quit notice is again an afterthought and there is no requirement under the law. The notice to quit was dated 22nd December, 2010 and one month was granted from 1st January, 2011 to 31st January, 2011 to vacate the premises and the said quit notice is a valid notice to quit in terms of the law. Since the letter dated 23rd December, 2010 written by, the law firm of the Defendant at that time, admitted the receipt of the letter letter dated 22nd December, 2010 that proves the receipt of the quit notice. Since there was no correspondence other than the quit notice dated 22nd December, 2010 it can be safely deduced that the said reference was regarding the quit notice.
    
14. The parties have filed three affidavits for consideration:
    
    1. The plaintiff's primary affidavit in support of the application sworn by its director Pushpa Kantharia on 28 February 2011 and filed on 3rd March 2011;
       
    2. The affidavit of the defendant in opposition to the application where he without any reservations admitted the proprietorship of the property and also the fact of arrears of rent;
       
    3. The plaintiff's affidavit in reply sworn by its director Pushpa Kantharia on 29th July 2011 and filed on the same date which annexed the Plaintiff Company's resolution to evict him from the property and other correspondence regarding the alleged repairs to the property, which clearly indicate that the Plaintiff was taking care of the repairs to the said property, though the Defendant has indicated his displeasure as regards to pressure of the water and 'licking'(sic) of a water tap, for which the company has readily sent a plumber, but was unable to attended due to the closure of the property and non cooperation of the Defendant to repair it. Considering the contradictory positions that the Defendant has taken in this proceeding, it may be that those alleged 'licking' (sic) was a trivial issue and such maintenance are routine in any rented property and the Defendant is trying to create an issue out of nothing.
       
15. In support of the application, the plaintiff's director has sworn an affidavit in support and state that the plaintiff is the registered proprietor of the property comprised in Real Property Dealing No: 3342, Crown Grant Folio 607 situated at 337 Waimanu Road, Suva. The plaintiff has exhibited a certified copy of the title which is annexure "PK1". The said paragraph is admitted by the Defendant without any reservation.
    
16. The paragraph 5 of the said affidavit in support states that the defendant has been occupying a portion of the property (Flat No.1) since April 2003. The defendant has not been regularly in payment of his rent and his rent is still in arrears. Since 1st March 2010, the defendant completely stopped paying his rent. The outstanding for the period March 2009 to February 2011 is $9,600.00 (nine thousand six hundred dollars) (The said paragraph 5 of the affidavit in support is admitted by the defendant at paragraph 5 of his affidavit in reply. The Defendant admitted paragraphs 4 and 5 of the affidavit in support and they are reproduced below to show what has been expressly admitted by the Defendant:
    

'4. The Plaintiff is the registered proprietor of the propertry comprised in Real Property Dealing No 3342, Crown Grant Folio 607 situated at 337 Waimanu Road, Suva. There is now produced and shown to me and exhibited herewith marked 'PK 1' a certified true copy of the Certificate of Title in respect of this property.'

'5. The Defendant has been occupying a portion of this property (Flat No 1) since September, 2006. The Defendant has not been regular in payment of his rent and his rent is still in arrears. Since 1st March 2010 the defendant completely stopped paying his rent. The sum outstanding for the period March 2009 to February 2011 is $ 9,600.00' (emphasis is added)

17. Section 169 of the Land Transfer Act under which this application is made, in so far as it is relevant provides:
    

"169. The following persons may summon any person in possession of land to appear before a Judge in Chambers to show cause why the person summoned should not give up possession to the applicant;

(a) The last registered proprietor of the land;

(b) ..........

(c) ........."

The Defendant in his affidavit in opposition has admitted the paragraphs 4 and 5 of the affidavit in support and has admitted the proprietorship of the premises and in terms of the law the burden shifted to him to show his right to stay in the premises in terms of the Section 172 of the Land Transfer Act.

18. The procedure under section 169 is governed by section 171 and 172 of the Land Transfer Act, Section 171 provides as follows:
    

"171. On the day appointed for the hearing of the summons, if the person summoned does not appear, then upon proof to the satisfaction of the judge of the due service of such summons and upon proof of the title by the proprietor or lessor and, if any consent is necessary, by the production and proof of such consent, the judge may order immediate possession to be given to the plaintiff, which order shall have the effect of and may be enforced as a judgment in ejectment".

19. The relevant part of section 172 provides:
    

"172. If the person summoned appears he may show cause why he refuses to give possession of such land and, if he proves to the satisfaction of the judge a right to the possession of the land, the judge shall dismiss the summons with costs against the proprietor, mortgagee or lessor or he may make any order and impose any terms he may thinks fit;

Provided that the dismissal of the summons shall not prejudice the right of the plaintiff to take any other proceedings against the person summoned to which he may be otherwise entitled."

20. The onus of proof is therefore on the defendant and to the standard "if he proves to the satisfaction of the judge a right to possession of the land". Vijay Prasad v Satish Prasad (unreported) Civil Action No. 307 of 1996S at p.2. It is for the defendants to show cause as to why he should not give vacant possession of the premises. The defendant has to prove or establish a right to possession of the land.
    
21. In Morris Hedstrom v Liaquat Ali, High Court of Fiji, Action No. 153 of 1987, Justice Sheehan said:
    

"Under Section 169 of the Land Transfer Act certain persons (which include the registered proprietor) may summons a person in possession of land before a Judge in Chambers to show cause why that person should not be ordered to surrender possession of the land to the claimant. Under Section 172 the person summoned may show cause why he refuses to give possession of the land if he proves to the satisfaction of the Judge a right to possession or can establish an arguable defence the application will be dismissed with costs in his favour. The defendants must show on affidavit evidence some right to possession which would preclude the granting an order for possession under Section 169 procedure. That is not to say that final or incontrovertible proof of a right to remain in possession must be adduced. What is required is that some tangible evidence established a right or supporting an arguable case for such a right must be adduced."

C. THE DEFENDANT HAS FAILED TO SHOW CAUSE

22. The defendant has admitted the fact that he has not been regular in payment of his rent and his rent is still in arrears. He accepts that since 1st March 2010, he completely stopped paying his rent. He accepts that the sum outstanding for the period March 2009 to February 2011 is $9,600.00 in paragraph 5 of the defendant's affidavit in reply.
    
23. The defendant is refusing to deliver vacant possession on the grounds that:
    
    • (i) He has carried out repairs to the property. The money is set-off against the rent due;
      
    • (ii) The director of the company Pushpa Kantharia (the deponent of the affidavit in support) has not been paying rent. The dividends which the defendant should have received had Pushpa Kantharia paid rent since 2002 can be set off with the rent that is owing by the defendant as the plaintiff is responsible for collecting of rental and has been negligent in not doing so;
      
    • (iii) The plaintiff company did not authorize Pushpa Kantharia to swear affidavits and institute these proceedings against the defendant;
      
    • (iv) These proceedings are not in the best interests of the beneficiaries;
      
    • (v) The notice to quit was not served on the defendant personally.
      

Set off Against the Repairs to the Property

24. The defendant says he has carried out repairs to the property. He says that has on many occasions he informed the plaintiff to do the repairs which were not done. He spent considerable sum of money for the repair and up keep of the property. The money is set-off against the rent due, but failed to mention an amount though he had clearly admitted the amount of overdue rent to the Plaintiff which was for the period March 2009 to February 2011 stands at $9,600.00
    
25. In response, the plaintiff's director in her affidavit in reply says:
    
    • (a) The plaintiff's tenants, including the defendant do not have the right to carry out any repairs to the plaintiff's property without first obtaining the consent of the plaintiff. All tenants of the plaintiff enter into a standard tenancy agreement and this condition is stated in clause 6(b) of the tenancy agreement. The defendant being a shareholder of the plaintiff company was permitted to reside without entering into a tenancy agreement.
      
    • (b) The plaintiff had received a few requests from the defendant to carry out certain repairs to his flat and these requests were attended to. On about 3 occasions the requests were refused since the work that the defendant wanted the plaintiff to carry out was not the plaintiff's responsibility for example to paint defendants flat with multi colored walls according to his preference/choice and to install additional gates/grilles. The plaintiff has also exhibited some receipts in respect of the repairs carried out by the plaintiff which is annexed as "PK15" to the affidavit in reply.
      
    • (c) The plaintiff states that it has always repaired and maintained its properties and the plaintiff has not received any complaint from the rest of its tenants.
      
26. The defendant has failed to swear an affidavit to provide any real particulars of the allegation put forward. The defendant has not identified in his affidavit what repairs he carried out on the property and how much did the repairs cost him. No receipts/invoices in respect of the repairs have been provided. The defendant has made no attempts to state when were those repairs carried out or even to mention the said repairs and cost associated with.
    
27. The claim for repairs appears to be an afterthought and a sham defence to this application to prolong his stay in the property that would deprive the profits to the company where he is also a shareholder. The defendant did not make such a claim in Civil Action No. HBC 263 of 2010 nor was such a claim made in the several correspondences that were exchanged between the defendant's solicitors and the plaintiff's solicitors since November 2010. The first time this issue was raised by the defendant was on 7 March 2011 in a letter from Reddy Barristers to Naidu Law and clearly it was done to remain in the property without paying rent.
    
28. That on the evidence contained in the defendant's affidavit before the court, the defendant has done nothing more than make an allegation that he carried out certain repairs on the property without any credible evidence whatsoever to support that claim. Such a claim depends upon the provision of sufficient and credible evidence which has not been produced. It is no more, than a mere statement. The defendant has offered no convincing evidence. There are several cases on this point which state that by building a home on another's property or by carrying out repairs/renovations on another's property the tenant cannot claim to have a right to possession of that property. In B S Shankar & Co. Limited v Nur Ahmed & Co Limited, Suva High Court Civil Action No. 181 of 2006 the defendant who was in the hardware and timber business made substantial improvements to the property. Vacant Possession was ordered. His Lordship, Justice Pathik at page 4 said:
    

"....the fact that a tenant carries out improvements without the consent of the his or her landlord does not give him a right to continue in the occupation of the land if the landlord is otherwise lawfully entitled to it. On the other hand, if improvements are carried out, pursuant to some understanding, however, loose, it may be that in some cases rights till be conferred on tenants at least to purchase the land if a price can be agreed upon. One cannot lay down any hard and fast rule. Every case will depend upon its own facts."

29. In Huang Chiu-Fang v Andrew Gucake Civil Action No. 369 of 1994 (11 October 1994) Justice Fatiaki dealt with a similar situation. The landlord issued eviction proceedings against the tenant as he was in arrears of rent. The tenant refused to vacate the property claiming that the landlord failed to repair the premises despite requests. His Lordship relied on the following passage from Chitty on contracts (3rd ed) Volume 1, para 1355:
    

"......It has long been established that a tenant's covenant to pay rent is independent of the landlord's covenant to repair the premises; the tenant is not discharged from his obligation to pay rent merely because his landlord is unwilling to fulfill his obligation."

His Lordship then said:

"Indeed in my considered opinion even if the defendant could positively establish the nature and costs of any agreed repairs he carried out to the villa, at best that would only entitle him to some form of equitable 'set off' or cross claim against a monetary claim by his landlord. It would not also establish"....a right to the possession of the premises. "So much then for the defendant's principal reason for refusing to give up possession."

30. There is no suggestion by the defendant in his affidavits that he was encouraged by the plaintiff to do the renovations on the plaintiff's property and to believe that, by doing so, he will acquire an interest in the land that will be legally recognized. No work was done on reliance of the plaintiff's promise. That even if the defendant did carryout any improvements, he did so on his own will without the consent of the defendant. There is nothing in writing to show that the improvements wee done with the plaintiff's consent. To succeed the defendant needs to show that there was a binding agreement between the parties. There is none. The fact that he has done improvements does not entitle him to claim possession of the land. That any claim to compensation for work done/renovations would simply give raise to a separate cause of action for a monetary payment, but not a basis for asserting a right to any form of tenancy, the Defendant has not shown any such improvement or repair in this action.
    
31. The fact that another director has not paid rent cannot be a ground to stay in the property, and I need not say more on that ground, though the said Director has explained the circumstances under which she did not pay, but also states that she has started to pay rent now. This is clearly sham defence and needs no further deliberation in an application in terms of Section 169 of Land Transfer Act.
    
32. The Defendant also states that the Plaintiff Company has not authorized the deponent of the affidavit in support to institute action. It is clear that a company resolution was passed on the 22nd of December, 2010 and the Plaintiff Company has acted swiftly on that resolution and even the Defendant has thought it fit to refer the said quit notice dated 22nd December, 2010 to his lawyers who had replied on the very next day on 23rd December, 2010. In Jims Enterprises Limited v Marika Vosawale Mara and Another Suva High Court Civil Action No. HBC 106/04, his Lordship Justice Jitoko said:
    

"It is sufficient for the court that the deponent swears to his directorship of the company and the authority that flows therefrom. It is the defendants to prove otherwise."

33. The Defendant has failed to do so and the Plaintiff has produced the said resolution that has authorized to evict the Defendant and another person, who were residing in the property without a payment of rent.
    

4. CONCLUSION
   

34. Clearly the Defendant does not have a right to stay in the premises. He has not established any such right. No proprietary estoppel is established. No set off can be done as there is no proof of any such repair and also no consent from the Plaintiff and the Plaintiff has always proptly attended to the essential repairs on the evidence before me. Since the Defendant has accepted the ownership of the Plaintiff and also admitted that he is a tenant in the said property he has not fulfilled in proving any right to remain in the property. As a minority shareholder of Plaintiff Company he cannot remain in possession. Clearly the Defendant is using the process of the court to frustrate the Plaintiff and resorting to contradictory positions which clearly shows an abuse of the process. The Plaintiff is granted immediate possession of the premises that is described in the summons.

35. Considering the facts of this action I will order a cost of $1,500 in favour of the Plaintiff to be paid within 21 days by the Defendant.

The Court Orders as follows:

1. The Plaintiff is granted immediate possession of the premises more fully described in the summons;
   
2. The Plaintiff is granted a cost of $1,500.00 for this action to be paid within 21 days, by the Defendant.
   

Dated at Suva this 30th day of August, 2011

Mr Deepthi Amaratunga
Acting Master of the High Court

Suva