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Bari v Sadranu [2015] FJHC 135; HBC137.2008 (27 February 2015)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION AT LAUTOKA
CIVIL JURISDICTION
Civil Action:HBC 137 of 2008


BETWEEN:


MALELILI BARI
Turaga ni Mataqali of Mataqali Koro, Marou Village, Naviti, Yasawa suing on his own behalf and on behalf of the Mataqali and
RATU TIMOCI NASAU
of Tokatoka Ketenasau suing on his own behalf and on behalf of the Tokatoka Ketenasau.
PLAINTIFFS


AND:


WAISAKE SADRANU
of Votualevu,Nadi, Businessman trading as
“RAYS TAIL ISLAND RESORT”.
FIRST DEFENDANT


AND:


NATIVE LAND TRUST BOARD
a duly constitutedbody formed under the Native Land Trust Act Cap 134.
SECOND DEFENDANT


Counsel: Mr. K. Tunidau for the Plaintiffs
First Defendant in person
Mr. P. Nayare for the Second Defendant


JUDGEMENT


INTRODUCTION


[1]. On 29 July 2008, the plaintiff, Ratu Timoci Nasau (“Nasau”) filed a statement of claim against the defendants, Waisake Sadranu (“Sadranu”) and the i-Taukei Lands Trust Board (“i-TLTB”)on his own and for and on behalf of the tokatoka Ketenasau, mataqali Koro. At some point early in the proceedings, some issue was raised as to whether or not Nasau could bring this action in a representative capacity against the members of the tokatoka. This was resolved in his favour by Mr. Justice Jiten Singh.It is not in dispute thatNasau and Sadranu are members of the tokatoka Ketenasau (“tokatoka’), Mataqali Koro (“mataqali”) on the island of Naviti in Yasawa.

[2]. Sometime in 2002, a delegation of members of the tokatokafrom Nadi and Lautoka went to Naviti to approachthe head of themataqaliand to seekhis permission to lease the island of Nanuya Balavu (“Nanuya”). Nanuya is a smaller island nearby Naviti. The mataqali is registered as the traditional owners of the mataqali.

[3]. In the event, the chief of the mataqali did accept the delegation. He did so after the performance of the traditional protocols of i-sevusevu and kamunaga.

[4]. The parties disagree as to whether or not the gentleman who would later be installed as the chief of the yavusa, namely Ratu Kinijoji Moala, was present at the meeting. Nasau would say that Ratu Kinijoji was not at the meeting. According to Nasau, only one Ratu Maleli Bari was at the meeting. Ratu Maleli was then the interim head of the mataqali pending the formal installation of a chief in the customary manner. After the presentations, Ratu Maleli, conveyed at the meeting that the mataqali was agreeable to the request. Sadranuwould say that Ratu Kinijoji was at the meeting and that he was the one that drank the first cup of yaqona.Following the ceremonies, and the communication of the decision of the mataqali to lease the island,Sadranu then caused to be taken around the village, and later, around Fiji, to the various members of the mataqali, some i-TLTB forms. These were typical pro-forma forms for i-TLTB purposes[1].

[5]. As a matter of law, members of anymataqaliwhose (mataqali’s) reserve land is proposed to be de-reserved,must consent to de-reservation before such action is taken. The pro-forma forms that Sadranu was taking around are designed for recording the details and signatures of mataqali members which is then submitted to i-TLTB as evidence of the requisite consent. Eventually, the requisite number of signatures were obtained.These were then presented tothei-TLTBwhich then formalized an Agreement to Lease in favour of Ray’s Tail Island Resort, which is Sadranu’s business name.

CLAIM AGAINST SADRANU


[6]. Nasau alleges the following against Sadranu.

CLAIM AGAINST iTLTB


[7]. Nasau alleges that i-TLTB, as trustee and administrator of all native lands, failed or neglected to scrutinize Sadranu’s lease application. He also alleges that i-TLTB failed to verify with the mataqali the authenticity of the purported consent to Sadranu to lease Nanuya in the name of “Ray’s Tail Island Resort”.Nasau seeks an order that the i-TLTB revoke forthwith the 99 years lease issued to Sadranu.

ISSUES


[9]. Nasau is aggrieved by the fact that Sadranu got himself registered on the lease instead of the tokatoka. According to Nasau, the mataqali had agreed that the tokatoka, and not Sadranu personally, would lease Nanuya. As Nasau would insist, the members of the tokatokawho approached the chief, did so on a common understanding that a lease would be given to the tokatoka. The gist of Nasau’s allegations is that Sadranu acted in bad faith throughout his dealings with the tokatoka and the mataqali and that he breached the trust bestowed upon him by the tokatoka and the mataqali. That trust, as Nasau pleads and said in evidence, was bestowed “in accordance with custom and tradition”.Nasau even seeks an Order that Sadranu transfers to the tokatoka, un-encumbered, ownership of Ray’s Tail Island Resort.

[10]. Sadranu, on the other hand, maintains that the intention all along was that the lease would be given to him, personally.

THE EVIDENCE


[11]. I reiterate here that the issue is simply whether or not Sadranu can be said to be holding the lease in question on constructive trust for the tokatoka.

PW1 – Ratu Timoci Nasau


[12]. Ratu Timoci said repeatedly that it was the tokatoka and not Waisake Sadranu that had approached the mataqali to lease Nanuya.He said it was he who spoke on behalf of tokatoka at the 2012 meeting and that it was he who presented the kamunaga to lease Nanuya. At the meeting, they had discussed the strategy to take the consent form to mataqali members in the village and around Fiji. Ratu Timoci said he and some other mataqalimembers hadsigned the consent form after the meeting on the same night.He said Waisake Sadranu would later take the forms around Fiji for signing by mataqali members scattered around Fiji – as agreed at the meeting.

[13]. Ratu Timoci would learn later that Waisake Sadranu had written his name alone on the lease. He said there was no meeting between i-TLTB and mataqali Koro and the tokatoka before the lease was granted to Sadranu.

[14]. In cross-examination by Mr. Nayare, Ratu Timoci admitted that he has lived in Lautoka for most of his life.Asked whether he was aware that there is evidence that the Tui Marou had communicated to i-TLTB to issue a lease to Sadranu, Ratu Timoci said he was not.Asked whether the tokatoka ever approved Sadranu’s application to lease Nanuya, Ratu Timoci replied:

“When Sadranu applied for lease, he used our consent. We came to know later he wrote his name on the lease.”


[15]. Asked whether he ever wrote a letter to i-TLTB, Ratu Timoci said:

“No, we had trust based on traditional ties. I only wrote much later when Sadranu was trying to sell off some land to some foreign investors”


[16]. Asked whether he was aware that Sadranu had made a traditional presentation to the Tui Marou, Ratu Timoci said he was not aware of such happening. He admitted that, as he lived in Lautoka, he would not have been aware if such a presentation was made.Ratu Timoci was then referred to a record of a statement of the current Tui Marou. The said statement contains words which seem to confirm that the mataqali gave the lease to Sadranu and not the tokatoka.Ratu Timoci replied that the current Tui Marou was installed in 2014 and did not accept the sevusevu and kamunaga on the occasion in 2002-2003 when the delegation went to the village. According to Ratu Timoci, the current Tui Marou was not even at the 2002-2003 meeting.

[17]. Sadranu also cross-examined Ratu Timoci. He put to Ratu Timocithat on one occasion, he called a meeting of members of his tokatoka at his house in Sabeto in Nadi in 2010 where he presented a sevusevu to let the members know of his plans to take early retirement from his teaching job so he could develop Nanuya for tourism purposes.

[18]. Ratu Timocidenied there was ever such a meeting. Sadranu put to Ratu Timoci that he, Ratu Timoci, waspresent at that meeting in Sabeto as well as others.Ratu Timoci maintained he did not know of any such meeting.

[19]. In re-examination, Ratu Timoci was referred to a Deed of Trust created for the tokatoka and which was set up in 2013. Although this was not raised in chief, I did allow it subject to further cross-examination. Under cross examination by Sadranu, Ratu Timoci said that the signatories were all his immediate family members.

[20]. On re-examination on the Deed, Ratu Timoci said the tokatoka was never advised about the need to create a Deed which is to be the vehicle for entering into the lease for the tokatoka.

PW2 - Vilimoni Dau


[21]. He is also a member of the tokatoka. He said that he was the cup-bearer at the ceremony and his evidence merely repeats all that Ratu Timoci had said. He recalls that sometime in June 2014, officials from the i-TLTB visited the island of Naviti to meet with the mataqali members. Their investigation report which is PEX 1 was shown to him. He saidthat after the originalmeeting in 2002, a lot of trust was placed on Sadranu that he would do things for the benefit of the mataqali.

PW3 – Senitia Kuruvoli Wekanasau


[22]. He is a son of Ratu Timoci and is also a member of the tokatoka. He merely repeated the evidence of Ratu Timoci and Dau.

PW4 –Jonasa Senitia


[23]. He recalls Sadranuhad brought a document to him at his home in Lautoka to sign some years back. He does not recall the date or month or year but he recalls that Sadranu told him:

“sign so the tokatoka can lease Nanuya”.


[24]. In cross-examination by Mr. Nayare, Senitia admitted that he did not know what had happened at Marou at the time.Under cross examination by Sadranu, Senitia said he had lived in Tomuka in Lautoka all of his life and that Ratu Timoci is his father.In re-examination, he was asked when he first became aware that tokatoka had plans to lease Nanuya. He answered –

“....when Waisake Sadranu gave me the document”.


PW5 - Maleli Nakulanikoro


[25]. He was not a helpful witness as he did not seem to know much about the happenings on the island and appeared to be confused between the names of the tokatoka and the mataqali.

PW6 – Asenaca Liku


[26]. She resides in Tavakubu and is a member of the tokatoka. She recalls that Sadranu did bring a document to her to sign which she did. She said Sadranu had explained to her that the purpose of the document was for the tokatoka to lease Nanuya.In cross-examination, she admitted that she was not living on Marou Island at any time between 2002 to 2003. Under cross examination by Sadranu, Liku said she has no house in the village and has lived all her life away from the village.

DW1 – Elisare Naqau


[27]. He is 62 years of age. He does not recall any tokatoka meeting to lease Nanuya. What he recalls though is that Sadranu had called him about him (Sadranu) leasing Nanuya. Naqau recalls that there was a meeting in Sabeto. At the time of the meeting, Sadranu was teaching in Sabeto. Sadranu had called him to tell him of his intentions of developing Nanuya after retirement. Sadranu then prepared dinner and then called and sat down together with the tokatokaelders. At the meeting, Sadranu informed the members of his intentions to apply his retirement money towards developing Nanuya.Naqau then recounted how he presented the sevusevuat the meeting in Sabeto,which was accepted by Ratu Timoci. He then recounted the names of other people who were present at the meeting and who all agreed to Sadranu’s request. He recalled Sadranu saying that he (Sadranu) would develop Nanuya and would employ Ratu Timoci on Nanuya and also build him a house on site.

[28]. When the business started, he would see Ratu Timoci on Nanuya. He was shown a photograph which showed Ratu Timoci, Sadranu and a caucasian couple standing side by side on a sandy beach on Nanuya.

[29]. In closing, he reiterated that Sadranu’s wish was to use his retirement money to develop Nanuya for the sake of the tokatoka and the village.Under cross-examination, Naqau said Sadranu is his elder brother. He denied that there was a plan by the tokatoka to lease Nanuya. He insisted when challenged that Ratu Timoci was present at the meeting in Sabeto.

DW2 – Aralai Vurano


[30]. She is 67 years of age. She recalls the meeting in the village of Marou on the island of Naviti where Sadranu had approached the mataqali to lease Nanuya. She lives in Marou. She said Nasau did not present the kamunaga at the meeting. She said one Niko presented the kamunagawhich belonged to Sadranu.

[31]. Under cross-examination, Vurano said Sadranu’s business did not run well as Ratu Timoci was creating obstacles to it. When put to her that membersof the tokatoka were not well educated and had put their trust on Sadranu, Vurano said Sadranu was a teacher and had a plan to lease Nanuya. She said Ratu Kinijoji (Tui Marou) was at the meeting and drank the first yaqona. However, the kamunaga was accepted by Ratu Maleli who belongs to the same tokatoka as Ratu Kinijoji.

DW 3 – Akanisi Tivo


[32]. She is 55 years of age. Sadranu is her elder brother. Sadranu started to make known his plans to develop Nanuya on the eve of his retirement. She reiterated that it was Sadranu and not the tokatoka that was to lease Nanuya as the tokatoka did not have any money.Asked how she was certain of that, she replied:

“Na tokatoka a sega mada ni se bau bucina me lisitaka na yanuyanu”.


The above translates as follows: that the tokatokahad never at any time entertained any thoughts or plans of/about leasingNanuya.


DW4 – Mereseini Sadranu


[33]. She is Sadranu’s wife, 68 years of age and is a retired teacher.She said that in the year 2000, Sadranu had told her that he would ask for early retirement. Sadranu then asked her if she would give up her retirement money so they could start a business together in the village. She agreed. She gave up $55,0000 to Sadranu sometime in the year 2000.She was then teaching in Sabeto. At some point in that year, Sadranu’s tokatoka came to their house in Sabeto. She named those who attended as one Sikeli,Timoci, Sekaia and Iliaseri. At the meeting, Sadranu told his tokatoka of his plans to start a business on Nanuya, which he did later.In due course, a Sadranu started clearing around Nanuya and built some houses. During the school holidays, Mereseini would also help around Nanuya.The business started sometime in 2001.Ratu Timoci worked at the hotel. One Seleima Lomaloma, Ratu Timoci’s daughter, who worked for a Travel Agent in Namaka, would book tourists to Nanuya through the travel agency. Lomaloma handled all the finances of the business. The business stopped in the year 2003. Seleima did not handle the business accounts well.In fact, Lomaloma did not keep any account, or receipt, or any documentation at all– let alone any cash. Sadranu told Seleima he would take over the business.Asked about what the tokatoka has done about the resort since 2003, Mereseini said “nothing”.

[34]. In cross-examination, Mereseini said Ray’s Tail Island Resort was registered as a business name in 2002 and the business was jointly owned by her and Sadranu.Mereseini was cross-examined in detail about the nature of the arrangement between Sadranu and Lomaloma and the circumstances in which the business failed.

DW5 – Waisake Sadranu


[35]. He said he took early retirement in 2001 in accordance with his plans to lease Nanuya. He then approached his tokatoka in the traditional Fijian manner for its blessings. He had the tokatoka’s interests at heart. He and his wife are without children. His wife gave $55,000 of her retirement money as capital contribution for their project. He said he hosted the elders of the tokatoka in Sabeto to let them know of his designs over Nanuya. He said that after that meeting, he took out his own tabua andyaqona and then went to Marou village some time after the Sabeto meeting. He stressed that the tabua(kamunaga) and the yaqona(for sevusevu) they took to Marou for presentation to the mataqali were both his.He said that, at the meeting in the village, most mataqali members were there including the Tui Marou who was then yet to be formally installed to that chiefly position.He got his real brother, Niko to be involved in the ceremonies because the request to the mataqali was his (Sadranu’s) personal request. The tabua was presented to Ratu Kinijoji. OneMaleli Bari accepted the tabuafor and on behalf of the mataqali. Ratu Kinijoji then drank the first cup of yaqona which signified the acceptance for and on behalf of the entire mataqali. After that, he began the process of taking the forms around for members of the mataqali to sign. He then submitted the list of names to the i-TLTB and later in the same year, 2001, he started clearing up Nanuya.He went with Ratu Timoci to Nanuya. He knew Ratu Timoci had spent his entire life on the mainland. Ratu Timoci has two sons and Sadranu thought it would be good to involve them on Nanuya. In 2003, the business started and tourists started coming.Sereima Lomaloma was working at a Travel Agency in Nadi and she helped in marketing the resort and also in looking after accommodation and money.Sereima was not paid anything as the business was just starting.His wife contributed $55,000 as capital towards the business and he, $75,000. Then he took a loan of $78,000 which he is still paying off.The lease document is still with the Fiji Development Bank.He repeated the evidence given earlier by his wife that Sereima mismanaged the business and did not keep any account.

ANALYSIS


Business Name


[36]. Ratu Timoci’s claim that Sadranu should have registered the tokatokaas the proprietor of the business name Ray’s Tail Island Resort is rather misguided. There is nothing in the evidence to suggest that the tokatoka ever had any kind of domain on/over the said business name.

I need say no more on this[2].


The Lease


[37]. Ratu Timoci, at first, appears to be arguing that the discussion all along was for the tokatoka to become the proprietor of the lease.It is hard to believe this because the tokatoka is not legally recognized as a corporate body. Althoughtokatokas andmataqalis are registered under the i-TaukeiLands Act under which they are recognized ascustomary and traditionalland-owning units of their respective native lands (as registered under the i-Taukei Lands Commission scheme),they are not corporate entities in the juridical sense with a distinct legal personality capable of suing or being sued, or, of entering into a contract, or, of owning any other property apart from their own respective registered i-taukei lands.

[38]. But, as is common practice in Fiji, themataqali or the tokatokamay set up a trust (express trust)to be the legal entityunder which the members of the mataqali or tokatokabecome beneficiaries and under which trustees are appointed, usually from amongst the rank and file.As a legal entity, the trustees of any such trust would then, for example, be able to hold legal estate over any land, or be able to enter into contracts etc. A tokatoka or mataqali that might wish to commercially exploit their traditional cultural landfor the benefit of their members, for example, would have to first set up such a trust and which trust would then be the vehicle to lease thetokatoka/mataqali’s own customary land from the i-TLTB. In this case, the tokatoka did not set up such an express trust until 2013.In view of that, it is hard to accept that the tokatoka could have had any genuine expectation or designs of leasing Nanuya at all material times.

[39]. In addition to the above, the tokatoka did not have any funds. Without funds, it is hard to accept that there was at all any discussion that the tokatoka would lease Nanuya, let alone, that the tokatoka did entertain any such plans or designs.I accept the evidence of Akanisi Tivo (DW3) in this regard.

[40]. I accept that a Deed of Trust was set up in 2013, but that was some ten years on from the time the delegation presented its sevusevu and kamunaga to the mataqali.What emerged from the evidence of Ratu Timoci, under cross-examination by Sadranu, is thatthose involved in setting up the Trust are all members of Ratu Timoci’s immediate family.From where I sit, this fact alone wouldraise issues about whether or not the said trust is abona fides arrangement that is truly representative of the interests of the tokatoka. I say that considering that a tokatoka is really a smallersub-unit of themataqaliwith fewer members and considering that Sadranu alsoappears to have a fair share of support from his immediate family members who are alsotokatoka members.

THE LAW


Constructive Trust


[41]. One school of thoughtviews constructive trust as an equitable remedy which the court imposes. The other school viewsconstructive trust as an institution which arises and exists under the law independently of any court order (see Dal Pont and Chalmers Equity and Trusts in Australi NendZealand (2000) 2nd ed state at pages 964-965[3]).

[42]. The better view, perhaps, is that which was exed bye J in the High Court of Australia in MuschMuschinskiinski v Dodds (1985) CLR 583 who would rather see constructive trust as both a remedy and an institution[4].

[43]. In the New Zealand High Court, Baragwanath J in Son & Kim v Ko & Others [2006] NZHC 1131, citing the Canadian Supreme Court in Soulos v Korkontzilas (1997) 146 DLR (4th) 214,sets out the conditions which must be satisfied before the Court imposes an institutional constructive trust:

[48] There are two types of constructive trust: institutional and remedial. An institutional constructive trust arises by operation of law, and arises from the date of the alleged breach. The court merely declares that a constructive trust has arisen. An institutional constructive trust usually (but not necessarily) requires a pre-existing relationship between the parties; that a defendant has breached his or her duty as a principal or a party in the relationship. A remedial constructive trust existsin response to an event and is not dependent on a pre-existing relationship between the parties. As its name suggests, a remedial constructive trust is imposed by the Court as an equitable remedy: Dal Pont p 972.


[49] Here the defendants appear to be arguing for the imposition of an institutional constructive trust. The test for imposing such a trust was stated by McLachlin J for the majority of the Supreme Court of Canada in Soulos v Korkontzilas (1997) 146 DLR (4th) 214. Four conditions should be satisfied before the Court imposes an institutional constructive trust (p 230):


"(i) The defendant must have been under an equitable obligation, that is, an obligation of the type that Courts of equity have enforced, in relation to the activities giving rise to the assets in his lands;


"(ii) The assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant in breach of his equitable obligation to the plaintiff;


"(iii) The plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure that others like the defendant remain faithful to their duties; and


"(iv) There must be no factors which would render imposition of a constructive trust unjust in all the circnces nces of the case; e.g. interests of intervening creditors must be protected."


[44]. I think this court would be well advised to heed the principled approach in Son & Kim v Ko (supra) which I do below.

Was Sadranu Under AnyEquitable Obligation In Relation To The Activities Giving Rise To The Assets In His Land?


[45]. An equitable obligation under this head is any obligation that courts of equity have imposed. In Son & Kim v Ko (supra), the New Zealand High Court said:

[50] The principles giving rise to the equitable obligation were stated by Mason J in Hospital Productions Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 (HCA) at 96-97:
The accepted fiduciary relationships are sometimes referred to as relationships of trust and confidence or confidential relations (cfBoardman v Phipps[[1967] 2 AC 46 at 127; ...]) viz trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company and partners. The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests


[46]. Generally, one mayalso consider under this head such equitable principles as unjust enrichment, unconscionability, breach of trust by an express trustee, unauthorized profit by a fiduciary, fraudulent misrepresentation or concealment, as well as other situations under which the court of equity has found an equitable obligation.

[47]. The first question I ask is whether Sadranu can be said to be under a fiduciary relationship with the members of the tokatoka.A fiduciary relationship will arise generally where one party is reasonably entitled to repose and does in fact repose trust and confidence in the other, and which reposed trust and confidence may either be general or be for a particular transaction (as per Casey J in Day v Mead ([1987] 2 NZLR 443; see also Estate Realties Ltd v Wignall[1981] 3 NZLR 482). And if a fiduciary to whom trust and confidence is reposed acquires property for his principal, he may be regarded as a trustee of that property.

[48]. There is not enough evidence before me to suggest that there was in fact a trust reposed by the tokatoka to Sadranu, or if there was, it is, I would say, not a trust which the tokatoka is entitled reasonably to repose. In saying that, I rely on the unrefuted evidence of Sadranu that he had been planning long before taking early retirement to apply his and his wife’s money towards the Nanuya-project – and which they did - as well as take out a loan secured by a mortgage over the island from the Fiji Development Bank. In contrast, there is no clear case theory let alone evidence evidence before me to say that the tokatoka did ever make such a ground-plan or scheme. All that Ratu Timoci and his witnesses appear to be saying is that, at the meeting in Marou, they understood that a lease would be issued to the tokatoka. In addition, as I have said above, the tokatoka did not have a single cent to its name. It is simply unreasonable for it to repose any trust to Sadranu in the circumstances.

[49]. Where a defendant receives property from the plaintiff in circumstances where the defendant can be said to have acted unconscionably, the defendant could be held to hold the property on constructive trust for the plaintiff (see for example Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669)[5]. But I do not find anything unconscionable in Sadranu’s conduct. As I have stated above, he and his wife, between them, poured well over $100,000 from their retirement money into the Nanuya-project as well as borrowed a substantive amount of money from the FDB. On top of that, the evidence is clear that the tokatoka had not set up an express trust at all material times to be the vehicle of any imagined acquisition of the lease over Nanuya. When these are all taken together, it is hard to make a finding that the tokatoka did have any designs on Nanuya at all relevant times. In other words, there is nothing really in the circumstances of this case against which Sadranu’s conscience might be held accountable.

[50]. I accept that where parties have entered into a relationship with a common intention that property is to be held between them in a particular way, equity may enforce that common intention by the imposition of a constructive trust.

[51]. This type of constructive trust has, traditionally, been applied rather narrowly by the courts in situations where a husband and wife who are separated are fighting over their home (or where two former cohabitees are). Hence, a husband (or wife or co-habitant) who is the registered proprietor of the home, really holds a half interest over the home on constructive trust for the other spouse/cohabitee, where there is evidence that their common intention was such.The best evidence of common intention is of course an express agreement. An inference of common intention,in the absence of evidence of express agreement, may arise when the “unregistered” party claiming a beneficial interest has made a direct financial contribution to the acquisition of the property. In Stack v Dowden [2007] UKHL 17 (on appeal from: [2005] EWCA Civ 857)[6], Baroness Hale said:

The onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership.


[52]. At the outset, I must say that I am not comfortable applying the law of common-intention in this case because the scenario before me does not involve any equitable-beneficial claim to a matrimonial or co-habitants' home.However, even if this principle can be extended to such a scenario as the one before me now, which I doubt, I would not apply it in favour of Ratu Timoci or the tokatoka considering that there was never any express agreement between the parties and considering also that the members of the tokatoka appear to be split on the issue. In addition to that, tokatoka had made no financial contribution concerning the lease.

[53]. One may speculate that, in an appropriate case, the record of a consensus in amataqali or tokatokameeting would be highly persuasive to evidence common intention to support a finding of constructive trust – but this case before me is not a case for such speculation.

Could the Lease in Sadranu's Hands Have Resulted from Deemed or Actual Agency Activities of Sadranu in Breach of His Equitable Obligation to the Tokatoka?


[54]. Firstly, as I have said above, I am of the view that no fiduciary relationship existed between Sadranu and the tokatoka in the circumstances of this case.

[55]. Secondly, I am of the view that Sadranu was not an agent of the tokatoka at any time whatsoever. He dealt with the tokatoka because he was and still is a member of the tokatoka. In traditional i-taukei protocol, it is not uncommon for a member to seek the blessings of his or her tokatoka or mataqali before embarking on anything in life as an individual. While an i-taukei may be said (as elders would caution their children and grandchildren) to carry the name of their tokatoka or mataqali wherever they venture in the world, and while that may be accepted, that does not necessarily make an i-taukei an agent of his or her mataqali at all times.

Has Ratu Timoci Shown A Legitimate Reason to Seek the Remedies in Question Against Sadranu?


[56]. I am of the view that Ratu Timoci does not have a legitimate reason. He would if there was clear evidence before me that Sadranu had acted unconscionably or had abused any trust reposed in him or had acted fraudulently – but there is no evidence of any of these before me.

Are There Any Factor(s) Which Would Render The Imposition Of AConstructive Trust Unjustll The Circumstances nces Of The Case?


[57]. The evidence of Sadranu is that he had, in addition to his own and his wife's capital contribution to the project which was taken out of their retirement funds, taken a loan from the Fiji Development Bank. What I gather from Sadranu's evidence is that the said loan is secured by a mortgage-debenture on the island. He did say that the "lease document is still with FDB and that he was still paying off that debt.

[58]. It would defeat the security in any mortgage-debenture issued in favour of FDB, if this court were to impose a constructive trust in favour of Ratu Timoci at this time.

[59]. In Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120, when discussing the imposition of common intention constructive trusts the Full Federal Court of Australia held that the trust was created by the conduct of the parties and arose at that time, even if that had the effect of defeating unsecured creditors (see also Jabbour v Sherwood [2003] FCA 529; Parianos v Melluish (Trustee) [2003] FCA 190; (2003) 30 Fam LR 524).

[60]. But these cases are rather limited in their application and I would not use them as authority that the interests of a secured creditor such as a Bank is readily defeated in every case where a case of constructive trust is imposed by the court. In any event, I have not imposed a constructive trust in this case.

A Constructive-Trust As An Equitable Remedy Approach


[61]. In the foregoing paragraphs, I have attempted to analyse the evidence and facts from an institutional approach, which is, to see if there is anything in the circumstances of this case which might render the relationship between Sadranu and the tokatoka as one which would justify a finding that what they had from the beginning was a relationship based on constructive trust.

[62]. If I were to analyse the circumstances of this case from the viewpoint of constructive trust as an equitable remedy, I would still refuse to make a finding of constructive trust.

[63]. The equitable remedy-approach, is perhaps adequately summarized in the words of Lord Denning in the English Court of Appeal case of Hussey v Palmer [1972] EWCA Civ 1; [1972] 3 All ER 744 at 747 where he adopted a free-ranging remedial basis for constructive trusts and came to the view that a constructive trust is:

'....imposed by law whenever justice and good conscience require it'.


[64]. While Lord Denning's approach has received its fair share of rejection even in England (see Lloyds Bank v Rosset [1990] UKHL 14; [1991] 1 AC 107; [1990] 1 All ER 1111) and Australia (see Bryson v Bryant (1992) 29 NSWLR 188 at 196, per Kirby P who criticized it as "palm tree justice"), I would, for exactly the same reasons I have stated above, refuse to accept that this is a case where "justice" and "good conscience" would support the imposition of a constructive trust.

CONCLUSION


[65]. For all the above reasons, I find that the plaintiff has not proven its case before me on the balance of probabilities. The claim against the iTLTB is contingent upon the success of the claim against Sadranu. Since the plaintiff has failed in that regard, his claim against the iTLTB must also fail.

[66]. The plaintiff is ordered to pay costs to the defendants which I summarily assess at $600-00 (six hundred dollars) each.

Anare Tuilevuka
JUDGE

27 February 2015.

[1] Section 17 of the Act deals with de-reservation of itaukei lands:

"17(1) The Board may, upon good cause being shown and with the consent of the native owners of the land , exclude either perman or y or for a specified period any portion of land from ative0 reserve&#rve .

(ery such euch exclusion as aforesaid shall be published in the Gazette and iewspaublisn the Fthe Fijian language and circulating in Fiji.

(3) When any nany native tive land has excluded from a nativeative reserve for a specified period such land shall upon the expiratiosuof such period resume the same character and ints as were attached to it before its exclusion from the &#1e reserve .
The main objectivective of the Act is, the protecand pvation of i tauketaukei lani land e hands of i-taukei owei owners. To oversee and administer this, the iTLTB was set up onsti under section 3 on 3 and gand given the powers under section 4(1) which states:

"4- (1) The control of all native lan0; shall be vested in thin the Board and all such land she admeredtered by the Bohe Board for the benefit of all Fijwners."
Under section 17(1), the iTLTB must seek the "consent of the native owve owners of the land "s is datory reqenremenrement. Wht. What constitutes consent? This is answered in Regulation 2 of the Native Land (Miscelus FoRegulation stat states:
"Form of Consent of native owners

2>2. The consent of native owners to anyer org in respect of which such consent is required to be given under the Act or any rany regulaegulations made thereunder shall be given in such manner as evidenced in such form as the Board may consider appropriate and such consent shall be deemed to have been given if a majority of the adult native owners shall have signified their consent."


[2]Business names in Fiji are registered under the Registration of Business Names Act (Cap 249). That is a totally different regime which has nothing to do with any dispute over the leasehold in question. Apart from that, the tokatoka Ketenisau is not a corporate body and therefore not a juridical person capable of ownership of any business name. It follows that Sadranu cannot be said to be under any legal duty to inform the tokatoka about his choice and/or use of the business name in question.
[3]Dal Pont and Chalmers Equity and Tru160; in Australia and Nend New Zealand (2000) 2nd ed state at pages 964-965:

The principal hallmark of an ‘institutional constructive trus0;is that it arises by operation of law as from the date ofte of circumstances which give rise to it: the function of the Court is merely to declare that such trust has arisen in the past. Those circumstances are recognised by law as defined categories which give rise to an interest to which the Court gives effect from the date when the defining events occurred. Two further points be made in this context. Fit. First, although described as institutional, the trust in suses is not deprived oved of all remedial character, as the trust&#16 such a case is mois most commonly used as a vehicle through which a person who has coed a h of a pre-existing duty (whether as principal oral or as a as a party) is made accountable for that breach. Secondly, although strictly speaking the use of the term ‘ trust ’ carrith wt a notionotion that a proprietary interest is given effect to, in the context of the institutional constructive trust , the te also used to descrdescribe personal accountabilir>And‘remedial&#ial’8217; constructive trust, Dal Pont and Chalmers continue by saying:


The ‘remedial7; coctive trust #160;does does not eat all all until the Court imposes it, meaning that it is not premised on any pre-existing relationship between the parties giving rise to legal duties. The trust acts merely as a remedy for an independent cause of action, constituting a judicial response to a triggering event, rather than a triggering event in itself. What is required is that thereome asset in the defendant’s hands in respect of whic which the Court considers it appropriate to impose a trust and some ipled basis for deor declaring assets by A should be held on trust for B, both vis-à-vis A and any third person who proper interest in the asset affected by the imposition of the trust.


[4]ding to Deane J:

6. The nature and function of the cthe constructive trust have been the subject of considerable discussion throughout the common law world for several decades ..........Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle. (my emphasis)

7.......If "institution" is understood as connoting a relationship which arises and exists under the law independently of any order of a court and "remedy" is defined as referring to the actual establishment of a relationship by such an order, the catchwords of "institution" and "remedy" do serve the function of highlighting a conceptual problem that persists about the true nature of a constructive trust. Even in this more limited sense however, any perceived dichotomy between the two notions tends to prove ephemeral upon closer examination. Equity acts consistently and in accordance with principle. The old maxim that equity regards as done that which ought to be done is as applicable to enforce equitable obligations as it is to create them and, notwithstanding that the constructive trust is remedial in both origin and nature, there does not need to have been a curial declaration or order before equity will recognize the prior existence of a constructive trust (cf. Scott, The Law of Trusts, 3rd ed. (1967), Vol.V, par.462.4). Where an equity court would retrospectively impose a constructive trust by way of equitable remedy, its availability as such a remedy provides the basis for, and governs the content of, its existence inter partes independently of any formal order declaring or enforcing it. In this more limited sense, the constructive trust is also properly seen as both "remedy" and "institution". Indeed, for the student of equity, there can be no true dichotomy between the two notions.

8. The acknowledgment of the institutional character of the constructive trust does not involve a denial of its continued flexibility as a remedy (cf. Wirth v. Wirth, at p 238). The institutional character of the trust has never completely obliterated its remedial origins even in the case of the more traditional forms of express and implied trust. This is a fortiori in the case of constructive trust where, as has been mentioned, the remedial character remains predominant in that the trust itself either represents, or reflects the availability of, equitable relief in the particular circumstances. Indeed, in this country at least, the constructive trust has not outgrown its formative stages as an equitable remedy and should still be seen as constituting an in personam remedy attaching to property which may be moulded and adjusted to give effect to the application and inter-play of equitable principles in the circumstances of the particular case. In particular, where competing common law or equitable claims are or may be involved, a declaration of constructive trust by way of remedy can properly be so framed that the consequences of its imposition are operative only from the date of judgment or formal court order or from some other specified date. The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles Viewed as a remedy, the function of the constructive trust is not to render superfluous, but to reflect and enforce, the principles of the law of equity.


[5]Lord Browne-Wilkinson at p. 705 highlighted the relevant principles:

(i)” Equity operates on the conscience of the owner of the legal interest. In the case of a trust, the conscience of the legal owner requires him to carry out the purposes for which the property was vested in him (express or implied trust) or which the law imposes on him by reason of his unconscionable conduct (constructive trust).

(ii) Since the equitable jurisdiction to enforce trusts depends upon the conscience of the holder of the legal interest being affected, he cannot be a trustee of the property if and so long as he is ignorant of the facts alleged to affect his conscience, i.e. until he is aware . . . in the case of a constructive trust, of the factors which are alleged to affect his conscience.

(iii) In order to establish a trust there must be identifiable trust property. The only apparent exception to this rule is a constructive trust imposed on a person who dishonestly assists in a breach of trust who may come under fiduciary duties even if he does not receive identifiable trust property.

(iv) Once a trust is established, as from the date of its establishment the beneficiary has, in equity, a proprietary interest in the trust property, which proprietary interest will be enforceable in equity against any subsequent holder of the property (whether the original property or substituted property into which it can be traced) other than a purchaser for value of the legal interest without notice. . . .”.


[6]http://www.bailii.org/uk/cases/UKHL/2007/17.html

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