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High Court of Solomon Islands |
HIGH COURT OF SOLOMON ISLANDS
Civil Case Number 14 of 2003
ANDREW MAUKERA
V.
ATTORNEY GENERAL AND MARTIN SAEFAFIA AND MARTIN HAIKIU
HIGH COURT OF SOLOMON ISLANDS
(PALMER J.)
Date Hearing: 19th September 2003
Date of Judgment: 19th November 2003
J. Apaniai for the Plaintiff
G. Deve for the first Defendant
A. Radclyffe for the second Defendant
PALMER J.: The Plaintiff, Andrew Maukera was the registered holder of the fixed-term estate in Parcel Number 171-001-337, also referred to as Lot 125/Auki (hereinafter referred to as “the Property”) for a term of fifty years commencing from 1st January 1996. The Grant Instrument was executed on 14 October 1997 and title registered on or about 21st September 1998.
One of the obligations set out in that Grant Instrument was for the erection of a building up to an unascertained value for business or commercial purposes within 24 months. The Plaintiff unfortunately failed to comply with this requirement.
On or about 20th March 2002, the Commissioner of Lands (“Commissioner”) issued a forfeiture notice (“the Notice”) under section 138 of the Land and Titles Act (Cap. 133) (“LTA”). That Notice required inter alia, the Plaintiff to develop and erect to the satisfaction of the Commissioner a building costing a minimum of $70,000.00 within three months of the date of the Notice.
Following the purported issue of that Notice, the Commissioner issued Notice of Re-Entry dated 14th April 2002 (note only about three weeks after the issue of the Notice). That Notice of Re-Entry however was not served until 18th November 2002. A copy was put up on the Property on the said date. The Property thus was purportedly repossessed by the Commissioner on 18th November 2002. Amazingly however, when forfeiture proceedings were yet to be completed and the fixed-term estate repossessed by the Commissioner, a grant in favour of Martin Saefafia had already been executed six days earlier on 12th November 2002! This was a legal impossibility! No valid grant could have been executed by the Commissioner without first repossessing the Property from the Plaintiff.
There were more surprises to come. On 18th November 2002, a transfer was purportedly executed by Martin Saefafia in favour of himself and Martin Haikau! This was done presumably by Martin Saefafia on the belief that he had a valid grant from the Commissioner. What was even more perplexing was the fact that a Consent from the Commissioner for that transfer was issued one month earlier on 18th October 2002, when even the Commissioner was yet to repossess the Property from the Plaintiff. Again this action defies all logic as forfeiture proceedings were yet to be completed on the said date.
Claim of the Plaintiff
The claim of the Plaintiff is based on the grounds of mistake enumerated above and knowledge of those mistakes by the Defendants. The Defendants on the other hand plead the defence of a bona fide purchaser for value and possession under section 229(2) of the LTA. They deny knowledge of the mistakes relied on by the Plaintiff.
The Law
The law on forfeiture proceedings is set out in sections 136 – 139 of the LTA. The right of forfeiture may be exercised in two ways: (i) by entering upon and remaining in possession of the land (re-entry); or (ii) by action in the High Court (section 136).
Section 138 provides that no right of forfeiture may be exercised by the Commissioner until a notice of forfeiture had been served on the owner of the estate. Proof of service of notice of forfeiture therefore is crucial to any valid exercise of forfeiture. No proof of service, no valid exercise of the right of forfeiture. The Plaintiff says that there was no valid service of the Notice on the Plaintiff.
The law dealing with mistakes is covered by section 229(1) of the LTA. The High Court has jurisdiction to order rectification of the land register where it is satisfied that any registration has been obtained, made or omitted by fraud or mistake. The burden lies with the Plaintiff to demonstrate on the balance of probabilities that registration had been obtained, made or omitted by mistake.
Subsection 229(2) however provides a defence to the second Defendants where they had acquired the interest for valuable consideration and that they had been in possession since unless it can be shown that they had knowledge of the mistakes alleged by the Plaintiffs.
Was there service of the Notice?
The evidence adduced in respect of this issue is crystal clear. The Plaintiff has sufficiently demonstrated on the evidence before me that he was not served with the Notice. This meant the Commissioner was not entitled to exercise the right of forfeiture as against the Plaintiff.
The effect of this renders any subsequent actions of the Commissioner null and void. He could not have issued a valid Notice of Re-Entry nor exercise any valid right of Re-Entry on the said Property. Insofar he had purported to do so those were invalid transactions. The same applies to the Consent issued on 18th October 2002 for the transfer of the Property from Martin Saefafia to Martin Saefafia and Martin Haikau, the Grant issued on 12th November 2002 and the transfer executed on 18th November 2002.
Was registration obtained, made or omitted by mistake?
Did the Commissioner commit a mistake in repossessing the Property from the Plaintiff? The answer to this question must be in the affirmative. Insofar as he assumed he had power or right on 18th November 2002 to make re-entry on the Property and reclaim possession that was a mistake. He had failed to demonstrate on the evidence before me that the Notice had been served on the Plaintiff at least three months prior to the purported re-entry on 18th November 2002.
Similar mistakes were committed in respect of the Consent issued on 18th October 2002, the Grant dated 12th November 2002 and the transfer executed on 18th November 2002. They were all based on the mistaken belief by the Commissioner that he had jurisdiction to enter into those transactions. They could only have been validated by a Notice that had been duly served on the Plaintiff. Where there was no effective service or proof of service, the right of forfeiture did not arise.
Further, a reasonable diligent and intelligent Commissioner would be aware that pursuant to section 139(2)(c) of the LTA, the Plaintiff had a right of relief against the actions of forfeiture by the Commissioner which he can exercise by applying to the High Court for relief within six months of the date of re-entry. The six months period lapsed on 19th May 2003. As a rule of thumb therefore, no transactions should have been entered into by the Commissioner until the six month period had lapsed, provided of-course that no relief was sought from the High Court by the owner of the estate. Where relief was sought, then no dealing should be entered into until determination of the matter by the court. Where the Commissioner enters into any dealings within that time period and the right of relief is exercised, he exposes the Government unnecessarily to a possible claim for damages in the event the right of relief is successful. Such action can only be described as improper. He ought to have exercised due diligence and care and refrained from entering into any transactions that would unnecessarily expose the Government to unnecessary liability. That unfortunately has happened in this case. No sense of care, concern and responsibility had been exercised in the way the Consent, Grant and Transfers had been executed on the 18th October 2002, 12th November 2002 and 18th November 2002 respectively.
Following those erroneous transactions, the Commissioner lodged application for registration of the Re-Entry and Grant on 13th November 2002. Again this action defies logic and can only be described as conduct amounting to dereliction of duty. If Re-Entry was not made until 18th November 2002, how could a Commissioner in his right mind lodge an application for registration of the Re-Entry and Grant on 13th November 2002 when Re-Entry was yet to be completed? This is preposterous! Initially I had thought that the date of presentation of the application on 13th November 2002 at the Registrar of Titles Office was a typographical error. However on cross-checking that date with the date of registration of the Grant Instrument, being 14th November 2002, that couldn’t have been so. Further, an application presented on the 13th November 2002 and registered on the very next day 14th November 2002 is unheard of. That application must have jumped the queue (only the Registrar of Titles (“Registrar”) would know how many other applications have been by-passed to register this application! What was so special about this application that it should receive top priority from the Registrar? Those who have worked in the Registrar of Titles Office and are familiar with the procedures adopted in that Office know only too well that any application presented at the counter of that Office is given an Application Number and joins the queue or list of applications in the order of presentation. It is patently clear that this application was given improper treatment for it to be able to be registered within a day. I take judicial notice of the letter of the Deputy Registrar of Titles, Mr. Haelo Pelu, dated 6th December 2002, marked as Document No. 21 in the Agreed Bundle of Documents in which this responsible officer was bold enough to point out that this application was not submitted through the Public Counter, raising the suggestion that the proper procedures had not been complied with in that office. This is quite serious and should warrant in my respectful view, an internal investigation into the performance of the responsible officer(s) who had carriage of this application and where necessary appropriate action to be taken against such officer(s).
The discrepancies (errors) stand out like a sore thumb and should have been detected by the Registrar. Nowhere in a normal Registrar of Titles Office would such an application have been allowed to proceed through. It would have been rejected outright. Amazingly the Registrar failed to detect the glaring discrepancies/errors in the date of presentation (13th November 2002) as contrasted with the purported date of Re-Entry (18th November 2002) and the date of the Grant instrument (12th November 2002). Had the Registrar exercised due diligence in checking those documents lodged for registration in that application she would not have failed to notice the glaring discrepancy in the date of Grant and the date of Re-Entry. Her actions or lack of it have contributed to the whole fiasco.
Further, before considering whether the title of the Plaintiff could be cancelled, the Registrar was obliged to ensure that forfeiture proceedings had been completed. That included satisfying herself that the Notice had been served on the Plaintiff. Had she done that, she would have noticed immediately that there was no evidence to show that the Notice had been served on the Plaintiff by the Commissioner. This would also have put her on guard and resulted in the rejection of the said application for forfeiture and re-entry by the Commissioner.
On 19th November 2002, a further application for transfer of the fixed-term estate from Martin Saefafia to Martin Saefafia and Martin Haikau was lodged with the Registrar. Again the Registrar failed to pick up a discrepancy in the Consent instrument lodged with the transfer document. The Consent instrument was issued on 18th October 2002 when the Commissioner was yet to repossess the said Property! The Consent therefore was a valueless document. How could the Commissioner consent to the transfer of the fixed-term estate in the above Property when the title was still vested with the Plaintiff? This discrepancy should have alerted the Registrar that something was not right. She again failed or deliberately overlooked that discrepancy and proceeded with registration of the grant and transfer in favour of the Second Defendants.
I am satisfied there is overwhelming evidence that the registration of the Second Defendants had been obtained by mistake.
Did the second Defendants have knowledge of the mistakes or caused such mistakes or substantially contributed to it by his act, neglect or default?
The second Defendants deny having knowledge of the mistakes or caused such mistakes or substantially contributed to it by their act, neglect or default. Unfortunately, the evidence adduced before me does not support that contention. When the Consent was issued on 18th October 2002 for the transfer of the Property from Martin Saefafia to Martin Saefafia and Martin Haikau, the forfeiture proceedings were yet to be completed. Title of the fixed-term estate to the said Property on that date still vested with the Plaintiff. It was yet to be forfeited on 18th October 2002! The second Defendants should have picked up this discrepancy. But the fact they did not is immaterial, they are deemed to have knowledge of that discrepancy or error. Had they checked the land register, they would not have failed to notice that title remained with the Plaintiff.
The same thing can be said of the Grant purportedly made on 12th November 2002. Title to the Property was yet to be forfeited on that date. The second defendants cannot plead ignorance in this matter. They too should have picked up this discrepancy. They knew or ought to have known that forfeiture proceedings had been instituted in respect of the said Property. In a letter to the Commissioner dated 2nd October 2002 they had made inquiries for the forfeiture of the Property. They ought to have inquired about the outcome of those proceedings. They knew they could only be granted valid title to the Property after forfeiture proceedings had been completed, title in favour of the Plaintiff forfeited and title to the Property re-vested with the Commissioner. They ought to have exercised proper caution in the matter as reasonable prudent and intelligent business persons. The title in the land registers are public documents and available for public inspection on payment of a fee. As such they are deemed to have knowledge of the dealings contained in the said fixed-term estate register at any one time. Before entering into any land transaction they ought to have inspected or caused an inspection to take place of the land register on 18th October 2002, on 12th November 2002 or on 18th November 2002. Had they done so, they would have noticed that something was drastically wrong with those documents. They would not have failed to realize that title to the Property on those dates remained with the Plaintiff. That would have rang alarm bells in their minds and put them on guard about the validity of those transactions. They failed to do that and turned a blind eye to them. They cannot now lay blame on the shoulders of the Commissioner and the Registrar alone. They too had simply failed to exercise due diligence and proper caution as reasonable prudent and intelligent business persons.
Further, something should have clicked in their minds when they executed a grant with the Commissioner on 12th November 2002 but did not receive an offer until the next day on 13th November 2002, a day later. Normally, an offer comes first before a grant is executed! Yet they proceeded with registration turning a blind eye to those blatant omissions, errors and discrepancies committed by the Commissioner. These are inexcusable.
Rectification of the Land Register
The Court has power to rectify the land register where registration has been obtained, made or omitted by mistake (section 229(1)) and where it is satisfied in the circumstances that the owner (defendant) had knowledge of the mistake or caused such mistake or substantially contributed to it by his act, neglect or default.
I am satisfied it had been amply demonstrated in this case that rectification should be ordered and I do make such order.
Indemnity from Government
Section 230(1) provides for any claim of indemnity by any person who had suffered damage from such rectification of the land register:
“Subject to the provisions of this Act and of any written law relating to the limitation of actions, any person suffering damage by reason of-
(a) any rectification of the land register under this Act;
(b) ...
(c) ...
(d) ...,
shall be entitled to be indemnified by the Government.”
Subsection 230(2) however imposes a restriction.
“No indemnity shall be payable under this section –
(a) to any person who has himself caused or substantially contributed to the damage by his fraud or negligence, or who derives title, otherwise than under a registered disposition made bona fide for valuable consideration, from a person who so caused or substantially contributed to the damage;”
The second Defendants must bear some responsibility in their damages claim for indemnity. They also contributed to the whole matter by their own negligence. Had they exercised due diligence and caution as reasonable prudent and intelligent business persons, they would not have ended up where they are now.
The bulk of the damages claim however must be borne by the Commissioner and the Registrar. The Commissioner (Silva Dunge) failed to discharge his duties honestly and professionally in accordance with what was expected of a reasonable prudent and intelligent Commissioner of Lands. His performance can only be described as amounting to gross dereliction of duty. The Attorney General must consider holding him personally liable for the damages incurred against the Office of the Commissioner of Lands in this matter and take appropriate action to recover them from him. The Attorney-General must be more vigilant in ensuring that where appropriate, such person is joined separately as a Defendant in his/her personal capacity so that where necessary appropriate orders can be made against such persons as well. Silva Dunge should have been joined as the third Defendant in his personal capacity in this case at the outset.
The Registrar of Titles in my respectful view is partly responsible as well for this fiasco. Had the Registrar exercised due diligence, the applications for registration by the Defendants should have been rejected outright. The Attorney General should also consider seriously whether recovery action should be taken as well against the Registrar (Ms. Irene Vaukei) in her personal capacity, of payments that may be apportioned against the Office of the Registrar of Titles. She too should also have been joined as the fourth Defendant in her personal capacity.
I would assign responsibility for damages at 50% by the Commissioner, 30% by the Registrar and 20% by the second Defendants.
Quantum of Damages
Unless agreed upon, the quantum of damages is to be adjourned to chambers for determination. The figure of $79,648.80 spent by the second Defendants in developing the land and claimed as the total value of the damages due is not necessarily the value of the interest immediately before the time of rectification. It could be much less. Subsection 230(5) places a limit on the quantum of damages that may be awarded as not exceeding the value of the interest immediately before the time of rectification. The proper order in the circumstances would be to allow the parties to decide on the quantum in chambers and to apportion the liability accordingly.
Orders of the Court:
The Court.
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