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Ali v Wati [2012] FJHC 849; HBA01.2012L (1 February 2012)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL APPELLATE JURISDICTION

Civil Appeal No: HBA 1 of 2012L
[Appeal from the Master’s Ruling in HBC 101 of 2011L]

BETWEEN:

SAIJAD ALI
Appellant

AND:

PADMA WATI
Respondent

JUDGMENT ON STAY PENDING APPEAL

Judgment of: Inoke J.

Counsel Appearing: Mr S Ram (Appellant)
Mr A Patel (Respondent)

Solicitors: Samuel K Ram (Appellant)
S B Patel & Co (Respondent)

Dates of Hearing: 1 February 2012

Date of Judgment: 1 February 2012

INTRODUCTION

[1] This is an application for stay pending an appeal of Master Tuilevuka’s ruling on a s 169 Land Transfer Act summons in which the learned Master ordered that the appellant give vacant possession to the respondent.

[2] After hearing counsels I refused the application with reasons to be published which I now do.

[3] The appeal rests on a rather novel argument, which is, that a creditor who occupies land owned by his debtor can resist eviction by the debtor in eviction proceedings under s 169.

THE BACKGROUND

[4] The respondent Padma Wati is the current registered proprietor of the sugar cane farm in question. She became registered by virtue of a transfer from one Mani Ram.

[5] Mani Ram became the registered proprietor in 1998 by mortgagee sale. In 2006, Mani Ram entered into a sale and purchase agreement for the sale of the farm to the appellant, Saijad Ali. The appellant went into occupation and over time paid a third of the sale price. The farm was iTaukei land so the agreement required the prior consent of the iTaukei Land Trust Board, which consent was never obtained, so the agreement became null and void under s 12 of the Native Land Trust Act and could not be enforced. The relationship between the parties soured and in 2008, Mani Ram took out a s 169 summons to evict the appellant. That summons came before me for hearing in 2009. I dismissed the summons on the grounds that the appellant had a pending application for declaration of tenancy over the land under the Agricultural Landlord and Tenant Act and the Act took precedence over the Land Transfer Act: see Ram v Ali [2009] FJHC 234; HBC228.2008L (22 October 2009). Subsequently, on 30 June 2010, the Agricultural Tribunal refused to grant the declaration of tenancy and the appellant’s claim for compensation but instead ordered that Mani Ram repay to the appellant the third of the purchase price which he paid in 2006. This sum is yet to be paid and underpins this application and pending appeal.

[6] After the Tribunal decision, Mani Ram transferred the farm to the respondent who became registered proprietor on 9 December 2010. The appellant alleges that this transfer was fraudulent on the part of Mani Ram; it was to defeat the appellant’s rights as a creditor. It was on this basis that his counsel submitted that the appellant should not be evicted from the farm and the Master was wrong in ordering that he give vacant possession to the respondent within 21 days of the date of the ruling.

THE MASTER’S RULING

[7] The Master’s ruling was delivered on 16 December 2011. It is reported in Wati v Ali [2011] FJHC 806; HBC101.2011 (16 December 2011). I quote from the ruling the reasons the Master gave for dismissing the appellant’s argument on fraud:

[10]. In my view, Mr. Ram’s submission fails for the following reasons. Even if Mani Ram and Wati had colluded to transfer the property in question to the latter to keep it out of reach of any potential enforcement proceedings by Ali, it does not render their collusion an act of fraud because Ali does not even have a proprietary interest on the land in question. In other words, he does not even have an “adverse claim” on the land in the sense contemplated by the above authorities.

[11]. Furthermore - without the iTLTB regulatory consent on the purported sale and purchase agreement between Ali and Mani Ram, an interest in equity cannot thereby arise to Ali. In Re CM Group Pty Ltd’s Caveat [1986] 1 Qd R 381, it was held that property did not pass in equity until the required municipal council approval was obtained. In Brown v Heffer (1967) 110 CLR 344, an interest in equity did not pass because the required consent of the Minister had not been obtained.

[8] The Master concluded:

[12]. Ali's claim against Mani Ram for the refund of monies he paid is not enough to justify his remaining in possession of the property in question. He has not shown any tangible evidence supporting an arguable claim to a right of possession. Whatever claim or entitlement he may have - is at best - a right in personam. Even if he had a right to possession (which he does not) - it would have died upon the transfer of the property to Padma Wati.

THE LAW

[9] The law on stay pending appeal was recently applied by the Honourable Chief Justice Anthony Gates sitting as the President of the Supreme Court in Native Land Trust Board v Lal [2012] FJSC 1; CBV0009.11 (20 January 2012) to which I refer:

[14] The court considering a stay should take into account the following questions. They were the principles set out by the Court of Appeal and approved subsequently and applied frequently in this court. They were summarised in Natural Waters of Viti Ltd v Crystal Clear Mineral Water (Fiji)Ltd Civil Appeal ABU0011.04S 18th March 2005. They are:

(a) Whether, if no stay is granted, the applicant's right of appeal will be rendered nugatory (this is not determinative). See Philip Morris (NZ) Ltd v Liggett & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA).

(b) Whether the successful party will be injuriously affected by the stay.

(c) The bona fides of the applicants as to the prosecution of the appeal.

(d) The effect on third parties.

(e) The novelty and importance of questions involved.

(f) The public interest in the proceeding.

(g) The overall balance of convenience and the status quo."

CONSIDERATION OF THE STAY APPLICATION

[10] No questions of bona fides of the appellant or public interest or effect on third parties arise in this application. The novelty of the point which I raised at the outset seems appealing at first but on closer examination proved to be one not soundly based. This application therefore turns on whether the appeal would be rendered nugatory, whether the successful party would be injuriously affected by a stay and whether on the balance of convenience the appellant should be evicted.

[11] Mr Samuel Ram rightly conceded that his client has no proprietary rights in respect of the farm. He is not seeking to have his client registered as proprietor. His client's claim is simply one for unpaid monies.

[12] Several consequences flow from these. Firstly, if no stay is granted the appellant's rights would not be rendered nugatory if he succeeds, in my opinion. It is true that he may not have better security for the payment of his debt but that is a different thing altogether. He should not be put in a better position than any other creditor who does not have any proprietary rights over the subject land. There is nothing to stop the appellant from taking proceedings to enforce payment if he lived somewhere else other than on this farm. Further, the debt is not one owed by the registered proprietor. On the other hand, if the respondent succeeds on appeal, she would have been deprived of her land and farm, and in that sense, she would be injuriously affected if a stay is granted.

[13] Secondly, the appellant has an impossible task in asserting his rights as a creditor over the respondent's rights as the registered proprietor unless he can prove fraud. He relies on s 51 of the Property Law Act which provides:

51.-(1) Save as provided by this section, every alienation of property with intent to defraud creditors shall be voidable at the instance of the person thereby prejudiced.

(2) This section does not affect any law for the time being in force relating to bankruptcy.

(3) This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intention to defraud creditors.

[14] In the proceedings before the Master, the fraud allegation was made against the respondent's predecessor in title though I note that in his submissions in this application, Mr Ram alleges complicity on the part of the respondent because he says, firstly, the transfer was for consideration well below the value of the farm and, secondly, the respondent held a power of attorney on behalf of the previous owner and debtor, Mani Ram, and must have known of the debt. I have some doubts about the appellant's ability to show in other proceedings that these allegations amount to fraud. Mr Patel, counsel for the respondent, informed the Court that at present there are no such proceedings against his client; only against Mani Ram.

[15] Mr Samuel Ram also argued that the Master should not have decided on these issues in the summary way that he did. Again, the argument is premised on the proposition that a creditor in possession of the debtor's land cannot be evicted from that land. Counsel cited Regal Castings Ltd v Lightbody [2008] NZSC 87; [2009] 2 NZLR 433 as authority for the proposition. It is true that this case was a decision on the equivalent of our s 51 of the Property Law Act and that a fraudulent transfer would be set aside but the case is not authority for the proposition stated above.

[16] Put simply, the appellant's case is that he should remain on the farm until he proves, in other proceedings, if he can, that the respondent became registered fraudulently even though he, the appellant, has no right to be registered as proprietor of the farm, and, even though the debt is owed by someone else and not the respondent.

[17] It seems quite clear that the balance of convenience lies heavily in favour of refusing a stay pending appeal.

[18] I therefore conclude that the answers to the questions to be considered in this application overwhelmingly favour refusal of a stay pending appeal.

COSTS

[19] The respondent succeeds and is entitled to her costs which I summarily set at $800.

ORDERS

[20] I therefore order as follows:

1. The appellant's application for stay pending appeal is dismissed.
   
2. The appellant shall pay the respondent's costs of $800 within 21 days.
   
3. The notice of appeal shall be mentioned on 15 February 2012 at 10.00am before me for further directions.
   

Sosefo Inoke
Judge