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Jones v iTaukei Land Trust Board [2014] FJHC 517; HBC263.2012 (11 July 2014)

In the High Court of Fiji at Suva
Civil Action No.HBC 263 of 2012

Between:

Harley Alfred Jones & Marie E Jones, as administatrix of the estate of Arnold James Roe
First Plaintiff

And:

Alexander J H Whitten-Hannah
Second Plaintiff

And:

ITaukei Land Trust Board
Defendant

Appearances: Mr H.Nagin with Mr N. Nawaikula for the plaintiff
Ms L.Komati for the defendant

JUDGMENT

1. By inter parte summons the plaintiffs move for an interim injunction to restrain the iTLTB, the defendant from terminating native lease nos 25324 and 26629, until further order. The plaintiffs allege that they are creditors of Denham Island Limited,(DIL) and Nagigia Villas Limited,(NVL). The defendant contends that the plaintiffs have no locus standi to bring these proceedings. The defendant had granted native lease nos 25324 and 26629 to DIL and NVL respectively. There is no mortgage registered against native lease no 25324.
   
2. An affidavit in support has been filed by an employee of the plaintiffs, Valerau Waqanigau. She states that:
   
   1. The first plaintiffs are creditors of DIL and NVL in a sum of $1,897,494.90 secured under Mortgage no 6667 and a caveat over NVL’s native lease 26629. DIL issued a Mortgage Debenture to the first of the first plaintiffs over its assets.
      
   2. The second plaintiff is a creditor under a “2008 agreement” for a sum of $12,975,984.00, the payment of which is guaranteed by DIL and NVL.
      
   100. The payment of these debts depend on the continuity of the native leases and the resorts operating therein.
        
   4. The defendant failed to notify the plaintiffs of the breach of conditions of the two native leases.The breaches were the non-operation of the resort and non-payment of rent.It is an implied condition in every mortgage and guarantee that the mortgagee can step in to perform the condition of a lease.The plaintiffs paid all arrears.
      
   5. The resort has been deserted with more than 20 employees without employment and the plaintiffs are continuing to make the resort operational.
      
   6. The resort contributes over $15,000.00 a month to the local economy. Employments must be saved. The defendants will not suffer any prejudice or harm, if native lease nos 25324 and 26629 are maintained. The balance of convenience favours the interest of all parties to keep the resort operational
      
3. Solomoni Nata, Deputy General Manager Operations, in an affidavit in opposition, filed on behalf of the defendant states:
   
   1. The plaintiffs have no locus standi to institute this action. The right of forfeiture belongs to DIL and NVL.
      
   2. The defendant gave its consent for mortgage dated 23rd February, 1999, but it was not specified for any lease. The consent of the defendant is limited to the contents of the application by DIL to $206,000.The defendant did not consent to any variation of mortgage.
      
   3. The defendant states that a mortgage has been registered as deed no:18489 against the agreement for lease(NLTB ref: 4/05/002103) and thereafter has been terminated upon its surrender.
      
   4. A title search was conducted at the Registrar of Titles office and it was found that no mortgage was registered against native lease 25324.
      
   5. The alleged Mortgage Debenture was made without the consent of the defendant.
      
   6. The sale and purchase agreement entered between the second plaintiffs and Nagigia Development Limited in 2008 is void ab initio, as it is contrary to the Native Land Trust Act,(cap 134). That agreement included land areas outside the surveyed areas of native leases nos 25324 and 26629, which the defendant had not agreed to.
      
   7. Notices of breach were issued to the lessees, in terms of section 105 of the Property Law Act.
      
   8. No steps were undertaken by DIL and NVL to remedy the breaches. The defendant received payments in the sums of $7,735.39 and $9,172.51,from the accounts of DIL and NVL, after the issue of the notices.
      
   9. Upon a recent inspection of the site on 8th August,2012, it was found that the resort has not been in operation for several years. This has had a direct effect on the livelihoods of the I-Taukei land owners, in terms of securing employment and leasing monies. The defendant has the right of re-entry, since the conditions of the leases have been breached.
      
4. The first of the first plaintiffs, in his affidavit in reply states:
   
   1. Mortgage No.6667 confirms the locus of the plaintiffs.
      
   2. The second plaintiff is an unpaid vendor under “the 2008 Sale and Purchase of New Zealand Shares Agreement”.The purchasers have abandoned and deserted the resort.
      
   100. The defendant has unlawfully insisted and unreasonably withheld its consent for the sale of the New Zealand company shares to another New Zealand company.
        
   4. Two years after the 2008 Agreement was signed and the new operators were operating the resort,the plaintiffs received a letter dated 5th May, 2010, stating that the 2008 agreement was illegal.
      
   5. The new operators are contravening many clauses of the 2008 Agreement.Land outside native lease nos 25324 and 26629 were included in the 2008 Agreement, at the request of the purchaser.
      
   6. The resort has been rendered in a “bad condition” by the actions of the defendant and the purchasers, but it cannot be said to be vacant land.
      
   7. The intervention of the plaintiffs to pay rent, repair and make the resort operational is in the interest of land owners and employees too.
      
5. The determination

5.1 The plaintiffs moves to restrain the defendant from terminating two native leases.

5.2 The first native lease no 25324 was granted by the defendant to DIL for tourism purposes for a term of 99 years.

5.3 The second native lease no 26629 was granted by the defendant to NVL for tourism purposes, for a term of 99 years.

5.4 The plaintiffs state that they are creditors of DIL and NVL.The first plaintiffs allege that they secured Mortgage no 6667 over DIL’s native lease 25324 and a caveat over native lease no 26629. The second plaintiff alleges that he is a creditor under a “2008 agreement” for a sum of $12,975,984.00, the payment of which is guaranteed by DIL and NVL.

5.5 Mr Nawaikula, counsel for the plaintiff, in his written submissions contended that there is a serious issue to be tried and a mortgagee can step in to the shoes of the mortgagee to ensure that its security, the lease continues unabated. He further said the breaches have been made good.

5.6 Next, it was submitted that damages will not be an adequate remedy as DIL and NVL “do not have the cash nor resources..”.

5.7 Finally, on the balance of convenience Mr Nawaikula submitted that it is in the interest of employees and the local economy to keep the resort operational.

5.8 At the hearing, Mr Nagin, senior counsel for the plaintiffs cited Hubbard v Pitt, (1975)3 All ER 1 where an interlocutory junction was granted against picketing in front of the applicant’s business.

5.9 He also relied on Lal v NLTB, (2011) FJCA 37. In that case, the FCA found the NLTB’s conduct oppressive, since it had advised that a lease of agricultural land was for a period of 13 years, but subsequently re-assessed the leased area as 3 acres.

5.10 Ms Komati, counsel for the defendant in reply pointed out that there is no mortgage registered on native lease no 25324. The plaintiffs do not have locus to institute this action. The claim is frivolous and vexatious. The right to forfeiture lies with DIL and NVL.

5.11 She stated further that the defendant did not receive rentals. The resorts admittedly continue to be non- operational. The defendant is entrusted under the Native Land Trust Act,(cap 34),to ensure that the land is leased for the benefit of the I-Taukei landowners.

5.12 It was also submitted that the consent to mortgage was limited to a sum of $ 206,000. In conclusion, Ms Komati asserted quite correctly that the plaintiffs have not given an undertaking as to damages.

5.13 Mr Nagin quite correctly pointed out in reply, as accepted by Ms Komati, in her written submissions, that the consent to mortgage was for a sum of $206,000 and any subsequent sums advanced. On the question of locus, he said that the plaintiffs have locus impliedly.

5.14 The case for the plaintiffs is “based on the enormous amount of debts owed to them(by DIL and NVL)”-paragraph 11 of the affidavit in support. It was submitted that damages are not an adequate remedy, as DIL and NVL do not have the resources to pay damages.

5.15 The preliminary issue that arises is whether the plaintiffs have locus standi to bring these proceedings, as contended by the defendant .

5.16 Ms Komati cited section 105(2) of the Property Law Act(cap 130), in support of her proposition that the right to forfeiture lies with DIL and NVL.

5.17 Section 105(2) reads:

Where a lessor is proceeding,. to enforce a right of re-entry or forfeiture, the lessee may,. in any action brought by himself, apply to the court for relief; and the court may grant or refuse relief,..including the granting of an injunction to restrain any like breach in the future,”(emphasis added).

A lessee includes a sub-lessee.

5.18 I agree with Ms Komati that in terms of this provision, the right of forfeiture can only be exercised by a lessee.

5.19 The plaintiffs have not controverted the defendant’s assertion that they had not consented to the “2008 agreement”. The only document that then arises for consideration is Mortgage no 6667, which the first plaintiffs contend that they secured over DIL’s native lease no.25324.

5.20 I find that there is no mortgage registered on native lease 25324. Mortgage no 6667 has not been registered with the Registrar of Titles. A mortgage of a lease must be registered on a lease “in accordance with the provisions of” section 63 of the Land Transfer Act(cap131).

5.21 Further, the consent for mortgage document provides that the term of the mortgage is a period of one year commencing from the date consent was granted, namely,23rd February,2009, which as Ms Komati pointed out, had long expired.

5.22 It is axiomatic that a plaintiff seeking equitable discretionary relief must have locus standi to seek relief.

5.23 I would refer to the judgment of the FCA in v Chambers v Wakaya Ltd, (Civil Appeal ABU0040 of 2010) where Marshall JA stated:

In Strategic as in this present case in the Court below the learned judge applied American Cyanamid v EthiconStrategic and in this present case the judgment of Lord Diplock in that case does not apply. Lord Diplock was concerned only with quia timet injunction says so in the judgment. Hnt. His detailed rules centred on "balance of convenience" and "preserving the status quo" only apply in decisions concerning whether to grant the Plaintiff a quia timet interim interlocutory injunction. The quia timet situations have been extended in Mareva [1980] AER 213 and Anton Pillar [1976] Ch 55 but not otherwise. Without any further development of the quia timet law situations the law and the extent of the Fiji High Courts jurisdiction is clear. If the Plaintiff does not have an action to prevent the Defendant infringing a proprietary or other established legal right of the Plaintiff, there is no jurisdiction to entertain an application or grant an interim interlocutory injunction on a quia timet or any other basis. In the mainstream common law jurisdictions there is no new law that Lord Diplock's advice can be used in other situations. There are cases, however, such as Bryanston Finance v de Vries (No.2) [1976]3Ch 63 where the Court of Appeal in England has emphasized that it is an egregious error to interpret American Cyanamid and "balance of convenience"so fon ways and into situations never intended or envi envisagedsaged by Lord Diplock.(emphasis added)

In the same case, Izaz Khan JA said the first question is whether the respondent had the locus standi to obtain the injunction cited Gleeson CJ in Australia Broadcasting Corporation v. Lenah Game Meats Pty, (2001) 185 ALR1:

A dispute arose in the course of argument as to "whether interlocutory injunctive relief to prevent publication can be granted without any underlying cause of action to be tried". In the context of the present case, this is puzzling. There could be no justification, in principle, for granting an interlocutory injunction here other than to preserve the subject matter of the dispute, and to maintain the status quo pending the determination of the rights of the parties. If the respondent cannot show a sufficient colour of right of the kind sought to be vindicated by final relief, the foundation of the claim for interlocutory relief disappears.

5.24 The Supreme Court in Wakaya Ltd v Chambers,(Civil Appeal No:CBV0008/11) upheld the finding of the FCA that the case "did not come within the principles enunciated in the American Cyanamid v Ethicon [1975] UKHL 1; 1975 AC 396 regarding the granting of interim injunctions as there was no question of balance of convenience in the circumstances of the case as there was no infringement of a proprietary or legal right" (emphasis added).

5.25 Returning to the present case, in my judgment, the summons for interim relief fails, as there is no infringement of a proprietary or legal right of the plaintiffs.

5.26 I hold that the plaintiff has no locus standi to institute these proceedings.

5.27 In view of the finding that the plaintiff has no locus standi to bring these proceedings, the substantive case filed by the plaintiff fails and cannot proceed. Accordingly, I dismiss the plaintiff's action.

6. Orders

I make orders as follows:

1. The application for an interlocutory injunction is declined.
2. The plaintiff's action is dismissed.

100. The plaintiff shall pay the defendant a sum of $ 2500 as costs summarily assessed within 21 days of this judgment.
     

11th July, 2014

A.L.B.Brito-Mutunayagam
Judge