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Reddy v Devi [2011] FJHC 804; HBC341.2006L (15 December 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 341 of 2006L

BETWEEN:

RAM CHANDAR REDDY
Plaintiff

AND:

SUBADRA DEVI by her lawful attorney SATYAKAR PRASAD
First Defendant

AND:

DIRECTOR OF LANDS
Second Defendant

JUDGMENT AFTER TRIAL

Judgment of: Inoke J.

Counsel Appearing: Mr D S Naidu (Plaintiff)
Mr R Singh (1st Defendant)
Mr R Green (2nd Defendant)

Solicitors: Pillai Naidu & Assocs (Plaintiff)
Patel & Sharma (1st Defendant)
AG's Chambers (2nd Defendant)

Dates of Hearing: 17, 18 November 2011; written submissions filed [].

Date of Judgment: 15 December 2011

INTRODUCTION

[1] This a claim for specific performance of a sale and purchase agreement entered into between the plaintiff and the first defendant, Subadra Devi, for the purchase of her sugar cane farm by the plaintiff. The farm is on Crown land and therefore the agreement was subject to the consent of the Director of Lands. The Director initially gave his consent to the agreement and the plaintiff paid the deposit and took possession. However, the Director later withdrew his consent and the defendant terminated the agreement and evicted the plaintiff. The plaintiff made further representations to the Director who again changed his mind and re-granted consent. The defendant refused to let the plaintiff back into possession and pay the balance of the purchase price. The plaintiff then sued the defendants for specific performance of the sale and purchase agreement.

CASE HISTORY

[2] The original Writ of Summons and Statement of Claim was filed on 7 November 2006. The first defendant filed her defence on 18 December 2006. The summons for directions was filed on 19 January 2007 and the directions order made on 31 January 2007. The matter was eventually set down for hearing on 2 and 3 July 2007. But the hearing could not proceed because the plaintiff was not present and the first defendant Subadra Devi had passed away on 30 April 2007. On 12 September 2007, the plaintiff applied for Satyakar Prasad to be substituted as the first defendant in place of Subadra Devi being the executor and trustee under her will and for leave to amend his statement of claim. The order for substitution was granted on 26 October 2007 by consent and the order for amendment was granted on 13 March 2008. The plaintiff then filed his amended Statement of Claim on 31 March 2008. The first defendant filed his defence to the amended statement of claim on 24 April 2008 and the plaintiff's reply filed on 4 June 2008. A further summons for directions was filed on 4 June 2008 and the directions order made on 25 June 2008. The matter then lingered until the plaintiff filed his summons to enter the matter for trial on 24 July 2009. There were no more dates available for 2009 so the matter was further adjourned and eventually set down for hearing on 15 April 2010 before another Judge. The hearing did not proceed and was transferred to me on 21 April 1010. I set it down for hearing on 28 May 2010. It could not proceed and was reset for 21 and 22 July 2010 but, again, could not proceed because of the continuation of another hearing before me on those dates. The new trial dates were set for 13 and 14 October 2010. When the matter was called on 13 October 2010, counsel for the second defendant raised the issue of the Director of Land's prior consent. The second defendant, until now had not taken any active part in the proceedings. I adjourned the matter to the Master for directions and completion of the pre-trial steps. The second defendant eventually filed its defence on 21 October 2010. The plaintiff filed his reply on 15 November 2010. On 24 January 2011, I set the matter down for hearing on 12 and 13 July 2011. On 10 June 2011, the plaintiff applied to have those dates vacated because Dr Sahu Khan, who represented the plaintiff, had been debarred from practice. The first defendant opposed the application. On 26 August 2011 I allowed the application and reset the hearing for 11 and 14 November 2011. The hearings were adjourned and eventually came for hearing on 17 and 18 November 2011 after which counsels were given time to file written submissions. At the time of writing this judgment no submissions had been filed but I decided to write the judgment without the assistance of submissions rather than delay this long outstanding matter any further.

THE STATEMENT OF CLAIM

[3] The plaintiff pleaded in his amended statement of claim that he entered into a memorandum of agreement dated 23 November 2004 with the first defendant for the purchase of part of Crown lease No 12639 being lot 1 on plan SO 857. The first defendant was the registered proprietor of the Crown lease. Attached to the lease was sugar cane contract No 738. Under the agreement, the plaintiff agreed to purchase approximately 16.5 acres which comprised the sugar cane farm together with the sugar cane contract for the price of $77,000. The balance of the land which contained the house site was to be retained by the first defendant. Her interests were looked after by her son and lawful attorney, Satyakar Prasad, who held a registered power of attorney No 40442. The Director of Lands gave his consent to the agreement on 24 November 2004 and the plaintiff paid the deposit of $8,000 and took possession of his part of the land on 25 November 2004 in accordance with the terms of the agreement. He claims that he cultivated the land from then until August 2006 when Satyakar Prasad arbitrarily stopped him. The subdivision of the land had been approved by the relevant authorities on 4 July 2006. The plaintiff's solicitors forwarded the necessary transfer documents for execution by the first defendant on 5 August 2006. The Director of Lands however, withdrew his consent to the agreement on 9 November 2005. The first defendant terminated the agreement on 2 December 2005 on the basis that consent had been withdrawn. On 9 December 2005, on representations by the plaintiff, the Director of Lands re-instated his consent. The first defendant however refused to execute the transfer documents and forcibly stopped the plaintiff from harvesting the standing cane. The plaintiff had paid the balance of the purchase price of $69,000 into his solicitor's trust account on 8 August 2006 in anticipation of settlement. He claims that he has suffered loss and damage as a result of being forced out of the land and the first defendant's refusal to complete the agreement in breach thereof. He particularised his loss as loss of sugarcane proceeds for the years 2005 and 2006, loss of earnings from 2006 to the date of judgment, loss of interest at 10% pa on the $77,000 contract sum.

[4] He seeks an order for specific performance of the agreement and damages by way of compensation. I note that his claim is not damages in the alternative to specific performance. I further note that no relief was sought against the second defendant.

THE DEFENCE

[5] The first defendant admits that the parties entered into an agreement as alleged by the plaintiff but says that the Director of Lands subsequently withdrew his consent and that she terminated the agreement and refused to execute the transfer documents because the agreement was null and void. She admits that she stopped the plaintiff from harvesting sugar cane but denies that it was by force. She further says that the plaintiff accepted the termination by handing the farm back. She also alleged that the plaintiff breached the agreement but no particulars were pleaded. She denies the plaintiff suffered loss and damage as alleged.

[6] The second defendant admits that the Director's consent was endorsed on 23 November 2004 but subsequently withdrawn on 9 November 2005 because the plaintiff already held an economical agricultural holding on 23 November 2004. Subsequently, consent was given on 4 July 2006 on the condition that the plaintiff transfers that holding to his son. The second defendant further says that as a result the withdrawal of consent was void for all intents and purposes.

THE ADMITTED FACTS

[7] It is not in dispute that the parties entered into an agreement on 23 November 2004 for the plaintiff to buy 16.5 acres of the first defendant's Crown lease comprised of a sugarcane farm and farm contract. The Director of Lands gave his consent to the agreement on 24 November 2004. The plaintiff paid the $8,000 deposit on 25 November 2004 and took possession of the land and started cultivating. On 9 November 2005 the Director of Lands withdrew his consent on the grounds that the plaintiff held another economic agricultural holding. On 2 December 2005 the first defendant's solicitors wrote a letter terminating the agreement. On 4 July 2006 the Director "re-instated" his consent on the condition that the plaintiff transfers that holding to his son. In August 2006 the plaintiff left the land.

THE EVIDENCE AT THE HEARING

[8] I do not think it is necessary for me to go into the evidence in detail because this case turns on one issue. That issue is whether the agreement remained on foot after the Director withdrew his consent on 9 November 2005. If the agreement became null and void ab initio, then the giving of consent by him on the second occasion is of no consequence. The facts on this issue are not in dispute as I have set them out above.

[9] However, I do wish to make some comments on the plaintiff's evidence as I do not think he is entirely frank. He said after the Director withdrew his consent on 9 November 2005, he wrote to him on 18 November 2005 appealing to the Director to re-issue consent. He promised to transfer his other landholding to his son. So on 4 July 2006, the Director "re-instated" his consent on that basis. He had four sons who had all migrated to America in 1994 and were living there at the time. He wrote to the Department of Lands on 14 August 2006 advising that he had entered into a contract to sell that holding to the Vulani hotel project developer so he trusted that the condition requiring him to transfer to his son no longer applicable. According to the executed transfer the sale and purchase agreement was entered into on 27 October 2006. So, instead of transferring the holding to his son, he sold it to the hotel developer for a very large sum of money who became the registered proprietor on 22 June 2007.

DETERMINATION OF THE CENTRAL ISSUE

[10] As I have mentioned above, the sole issue which determines the outcome of this case is whether the agreement survived the withdrawal of consent on 9 November 2005.

[11] The lease in this case is a "protected lease". Section 13 of the Crown Lands Act [Cap 132] provides:

13.-(1) Whenever in any lease under this Act there has been inserted the following clause:-

"This lease is a protected lease under the provisions of the Crown Lands Act"

(hereinafter called a protected lease) it shall not be lawful for the lessee thereof to alienate or deal with the land comprised in the lease of any part thereof, whether by sale, transfer or sublease or in any other manner whatsoever, nor to mortgage, charge or pledge the same, without the written consent of the Director of Lands first had and obtained, nor, except at the suit or with the written consent of the Director of Lands, shall any such lease be dealt with by any court of law or under the process of any court of law, nor, without such consent as aforesaid, shall the Registrar of Titles register any caveat affecting such lease.

Any sale, transfer, sublease, assignment, mortgage or other alienation or dealing effected without such consent shall be null and void.

(2) On the death of the lessee of any protected lease his executors or administrators may, subject to the consent of the Director of Lands as above provided, assign such lease.

(3) Any lessee aggrieved by the refusal of the Director of Lands to give any consent required by this section may appeal to the Minister within fourteen days after being notified of such refusal. Every such appeal shall be in writing and shall be lodged with the Director of Lands.

(4) Any consent required by this section may be given in writing by any officer or officers, either solely or jointly, authorised in that behalf by the Director of Lands by notice published in the Gazette. The provisions of subsection (3) shall apply to the refusal of any such officer or officers to give any such consent.

(5) For the purposes of this section "lease" includes a sublease and "lessee" includes a sublessee.

[12] It seems to me very clear from these provisions that once the Director withdrew his consent, the agreement became null and void, not only from the date of withdrawal but ab initio.

[13] It follows that irrespective of whether the agreement was terminated the parties had no more rights under it. It also follows that the granting of consent on the second occasion is of no consequence because there was no agreement to consent to. The situation may have been different if both parties considered themselves still bound by the initial agreement. In the absence of that they would have to re-enter into a fresh agreement and go through the whole process of obtaining consent again.

[14] It is not necessary for me to decide whether the termination of the agreement by the first defendant was effective for the reason that there was nothing to terminate once the consent was withdrawn.

[15] It was not raised or argued in this case that the Director acted unlawfully in withdrawing the initial consent. Even if it was, I think this Court would have not interfered because the reason for the withdrawal was a matter of policy for the Minister and government to be implemented by the Director. This was clearly not a case where the Director acted irrationally or unfairly towards the plaintiff.

LIABILITY

[16] I therefore find the agreement of 23 November 2004 became null and void ab initio when the Director of Lands withdrew his consent on 9 November 2005. The parties no longer had any rights under the agreement so any claims based on it must necessarily fail.

[17] The plaintiff is therefore not obliged to pay any part of the purchase price to the first defendant nor is the first defendant obliged to pay any cane proceeds to the plaintiff.

[18] No cause of action has been pleaded or made out against the second defendant so any claims against the second defendant are dismissed.

COSTS

[19] The normal rule applies so the plaintiff shall pay both the first and second defendant's costs which I summarily assess as $3,000 each.

ORDERS

[20] I therefore make the following orders:

• (a) The plaintiff's claim for specific performance and other relief is refused.
  
• (b) The plaintiff shall pay the first and second defendant's costs of this action of $3,000 each within 21 days.
  

Sosefo Inoke
Judge