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Aujare v Sasasgo [2004] SBHC 7; HC-CC 078 of 1998 (23 January 2004)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 78 of 1998

JAPHET MANEUTHU AUJARE

-v-

MOSES SASASGO, COMMISSIONER OF LANDS
AND REGISTRAR OF TITLES.

HIGH COURT OF SOLOMON ISLANDS
(KABUI, J.).

Date of Hearing: 14^th November 2003
Date of Judgment: 23^rd January 2004

M. Samuel (Mrs.) for the Plaintiff.
A. Radclyffe for the 1^st Defendant.
F. Waleanisia for the 2^nd Defendant.

JUDGMENT

Kabui, J. This is a claim by the Plaintiff based upon alleged fraud committed by the 1^st Defendant, breach of the temporary occupation licence and breach of duty of care committed by the 2^nd Defendant and breach of duty of care committed by the 3^rd Defendant as set out in the Writ of Summons and Statement of Claim filed on 4^th May 1998. The relief sought by the Plaintiff is based upon these allegations. For the fraud allegation, the Plaintiff seeks a declaration that the Plaintiff is a joint owner of Parcel Number 131-001-1 and for the allegation of breach of duty of care, the Plaintiff seeks damages to be assessed together with an account of profits arising from the existence of an alleged partnership arrangement.

The hearing of this case took place on the last working day before I went on leave last year. Counsel had agreed to make written submissions to be filed in Court and that I would write and deliver my judgment after resumption of duty in 2004. The Courts were opened for business for the legal year 2004 on 21^st January 2004. Counsel for the Plaintiff filed her written submission in response to the submissions filed by Counsel for the 1^st Defendant and Counsel for the 2^nd and 3^rd Defendants only on 20^th January 2004.

The Facts.

By letter dated 30^th October 1991, the Plaintiff and the 1^st Defendant jointly put to the Commissioner of Lands their business proposal for the Island of Tirahi in the Ysabel Province. The Commissioner of Lands is the owner of the Island of Tirahi being Parcel Number 131-001-1. This letter was later followed by another letter dated 29^th April 1992, addressed to the Commissioner of Lands in which the Defendants sought a temporary occupation licence from the Commissioner of Lands to be followed by the grant of a fixed term estate for 50 years as may be determined by the Commissioner of Lands. In that same letter, the Defendants told the Commissioner of Lands their intention to set up a petrol depot together with a out-board motor workshop and a wholesale and retail shop on the Island of Tirahi as set in their business proposal. In fact, the temporary occupation licence had been issued as early as 12^th November 1991 in the joint names of the Defendants for a period of 12 months with the undertaking that the fixed term estate requested could be granted at the end of that 12 months period. By letter dated 28^th August 1992, the 1^st Defendant alone requested the Commissioner of Lands to grant him the fixed term estate in Parcel Number 131-001-1 for 50 years as the Plaintiff had shown no further interest in their partnership arrangement. The Commissioner of Lands granted the fixed term estate to the 1^st Defendant alone on 15^th April 1994 effective from 1^st January 1992. The Plaintiff lodged a caveat on 7^th September 1995 and had it registered that same day.

The issues to be determined.

The first issue I need to establish is whether or not there was a partnership in place between the Plaintiff and the 1^st Defendant. Having done that, I need to find whether or not the 1^st Defendant had committed an act of fraud against the Plaintiff, whether or not the 2^nd Defendant had breached the temporary occupation licence or had been negligent in his duty of care towards the Plaintiff and whether or not the 3^rd Defendant had also been negligent in his duty of care towards the Plaintiff thus causing him injury.

The Law.

The law that applies here is the Partnership Act, 1890 of the United Kingdom by virtue of Schedule 3 to the Constitution. Section 1(1) of this Act defines partnership as...”the relationship which subsists between persons carrying on business in common with a view of profit...” This definition is as broad as is stated. Implicit however in this definition must be an agreement whether oral or otherwise between two persons or more to carry on business with the clear understanding of profit-making. But where does a partnership arrangement begin to constitute a partnership? This question receives the following answer-

“...There is no rule that the parties to a joint venture do not become partners until actual trading commences. The rule is that persons who agree on a business activity as a joint venture do not become partners until they actually embark on the activity in question...^[1]. Therefore, an agreement to carry on business at a later time does not make the parties to that agreement partners before they actually carry on business^[2]. “...Partnership involves a contract between the partners to engage in business with a view to profit. As a rule, each partner contributes either property, skill or labour, but this is not essential. A person who contributes property without labour, and has the rights of a partner, is usually termed a sleeping partner or dormant partner. A sleeping partner may however contribute nothing...” ^[3]

The evidence adduced to prove the existence of a partnership.

There is no dispute that the Plaintiff and the 1^st Defendant did agree to set up three business activities on the Island of Tirahi as mentioned above. This agreement was confirmed by the granting of the temporary occupation licence for one year in the joint names of the Plaintiff and the 1^st Defendant on 12^th November 1991. One of the conditions of the temporary occupation licence was that the Plaintiff and the 1^st Defendant must develop the Island within 6 months. The Plaintiff gave evidence on oath in Court at the hearing. He said he contributed his time, labour and provided gravel and sand to build a house on the Island and the 1^st Defendant was to provide the funds. He said he helped to design the house. He said his relatives helped him also in putting up the house. This was confirmed by the Plaintiff’s brother, Sam Tedi, (PW1) who is a carpenter by trade. He said in evidence that he supervised the building work. He said the 1^st Defendant’s relatives also helped. He said some building materials were also provided by the 1^st Defendant. He said the house was built in 1991. Diana Yates (PW2) did recall participating in the work on the Island around November 1991 on the understanding that the Plaintiff and the 1^st Defendant were to develop the Island. The 1^st Defendant, on the other hand, did admit in his evidence the existence of the house on the Island but said it was a joint effort by both of them. By December 1991, the Plaintiff and the 1^st Defendant were logger-ahead about their business proposal and the ownership of the Island. The Plaintiff said that the 1^st Defendant had forgotten him and failed to corporate with him, let alone speak with him. The 1^st Defendant, on the other hand, said the Plaintiff had lost interest in the business proposal and therefore decided to go it alone in 1992. This fact was denied by the Plaintiff in his evidence. The 1^st Defendant said that the Plaintiff had told him on two occasions in 1992 in Honiara that he, the Plaintiff, was no longer interested in the business proposal and that he did not wish to help. The Plaintiff denied this fact. When crossed-examine by Mr. Radclyffe, the Plaintiff admitted that they did not start their business proposal in 1991 because the plan to do that business broke down due to the 1^st Defendant deciding to go his own way after the expiry of the temporary occupation licence.

Application of the law to the facts.

Clearly, in this case, the building of one house with the efforts of both parties on the Island in November/December 1991 and perhaps other structures thereafter was the beginning of the preparation work for the commencement of the business activities intended for the Island. The joint efforts had stopped there and then after November/December 1991. It would seem that nothing more had been done on the Island by both parties in terms of paving the way for the commencement of trading. I do not think that enough had been done by both parties in preparation for the commencement of trading so as to say that a partnership had been in place. I find that there was no partnership at the point the first house had been built and completed on the Island. As stated by Lord Millett cited above at 2128, “...The question is not whether the restaurant had commenced trading, but whether the parties had done enough to be found to have commenced the joint venture in which they had agreed to engage...” I find that in this case the parties had not done enough to be so considered as a partnership. There is no evidence of a conclusive partnership. By 1992 the Plaintiff had been aware of the fact that the 1^st Defendant was no longer interested in him despite the existence of the temporary occupation licence. In fact, the Island had not been developed by the parties under clause 4 of the temporary occupation licence and thus a breach of one of the conditions of that licence by them. By about the middle of 1992, the partnership arrangement was effectively at an end by virtue of the conduct of the parties, terminated at will, lest I have been wrong in my first conclusion that the parties had not done enough to complete a partnership situation. The Plaintiff did admit in evidence that their relationship stalled as early as in 1991. He said in evidence in chief these words, ”Moses forgot me”, ”Moses did not co-operate with me that time..., I felt ashamed because he refused to speak to me.” and... ”We did not speak about the temporary occupation licence...” Communication had broken down beyond repair between the parties as early as November/December, 1991.

Conclusion.

Having concluded that there had not been a partnership in existence or that if there had been any, it had been terminated at will, the allegations of fraud against the 1^st Defendant, breach of the temporary licence and negligence against the 2^nd Defendant and negligence against the 3^rd Defendant would appear to be in doubt though they will be considered by this Court. The evidence of Mr. Nesa, a former lands officer, clearly shows that the Plaintiff and the 1^st Defendant had not been working together to develop the Island under the terms of the temporary occupation licence and so the Commissioner of Lands made up his mind to grant the fixed term estate to the 1^st Defendant without the Plaintiff. The decision was based simply on the ground that the 1^st Defendant had the financial basis to develop the Island than the Plaintiff. The Plaintiff did admit in evidence that he had not been employed unlike the 1^st Defendant who worked and resided in Honiara. The Plaintiff himself knew that he would no longer be working together with the 1^st Defendant as previously planned but of course he was interested in the ownership of the Island. The purpose of his caveat was to register his interest as a member of the Thogokama tribe allegedly being the original owners of the Island in custom. This attempt to prevent the transfer of title to the 1^st Defendant had come too late and furthermore it could not have succeeded in the first place because the Island at the relevant time was vested in the Commissioner of Lands even up to this present time. To come to Court some years later and allege that the Defendants had committed fraud or had been guilty of negligence is far too fetched an effort to salvage a situation that the Plaintiff himself knew from the start had not been in his favour. The Commissioner of Lands had known about the bad relationship that existed between the Plaintiff and the 1^st Defendant which led to the breach of one of the conditions in the temporary occupation licence and therefore chose to deal with the 1^st Defendant alone. The choice was based upon the 1^st Defendant’s financial standing and his ability to develop the Island without the assistance of the Plaintiff. In fact, Mr. Nesa, the lands officer, knew both parties well personally and was convinced that the Plaintiff was unable to work together with the 1^st Defendant. As has been said, the bad relationship that existed between the Plaintiff and the 1^st Defendant was no secret to the Commissioner of Lands through Mr. Nesa, his lands officer. How could there be allegation of fraud against the 1^st Defendant when the 1^st Defendant had been recognized by the Commissioner of Lands as being the better candidate for the granting of a fixed term estate. I do not think a case for fraud has been made out by the Plaintiff against the 1^st Defendant. As to the 2^nd Defendant, the position was clear. The temporary occupation licence had expired on 12^th November 1992. The grant of the fixed term estate for 50 years was made on 15^th April 1994 after the expiry of the temporary occupation licence, some 17 months later after the expiry of the licence. Whilst clause 7 of the temporary occupation licence did envisage the Plaintiff and the 1^st Defendant jointly, the position did change subsequently following the dispute between the Plaintiff and the 1^st Defendant. The joint arrangement for the development of the Island had been abandoned or at least had come to an end. This fact had been known by the Commissioner of Lands and his action in granting a fixed term estate to the 1^st Defendant could not have been a breach of the temporary occupation licence as alleged by the Plaintiff. I find that the Commissioner of Lands had not breached the temporary occupation licence. Furthermore, there is no evidence of duty of care being owed to the Plaintiff by the 2^nd Defendant. In the absence of a partnership in existence, or even in the normal case, the Commissioner of Lands would have no duty of care towards the Plaintiff. Clearly, the granting of the fixed term estate to the 1^st Defendant was conditional upon the Plaintiff and the 1^st Defendant being able to finance the development on the Island and the Commissioner of Lands having knowledge of the fact that the Plaintiff was not in that position independently of the 1^st Defendant, decided to leave out the Plaintiff and gave preference to the 1^st Defendant. The Plaintiff did not qualify for consideration beyond the temporary occupation licence that expired on 12^th November 1992 for the same reason stated above. There is no evidence to show that the relationship between the Plaintiff and the Commissioner of Lands did create a situation where the Commissioner of Lands would owe a duty of care towards the Plaintiff. Whilst there might have been a case calling for fairness on the part of the Commissioner of Lands, that reason is insufficient to mount an action for negligence. I find that the 2^nd Defendant owed no duty of care towards the Plaintiff and therefore is not guilty of negligence. As to the 3^rd Defendant, the allegation of negligence is but far fetched. Although the Registrar-General who is responsible for registration of title was not called to give evidence, I do not think the Registrar-General or any officer in the Registrar-General’s Office would have the obligation to investigate every application for registration that is lodged in that Office. I do not think the Registrar-General owes a duty of care to the public at large to ensure that the Commissioner of Lands does his work correctly in so far as the granting of estates is concerned. I find that the 3^rd Defendant owes no duty of care towards the Plaintiff in that the 3^rd Defendant should have investigated whether the Commissioner of Lands’ had dealt fairly with Plaintiff. The Plaintiff’s desire to repossess the Island from the Commissioner of Lands at some later date is a matter for him. For the moment, his action against the 1^st, 2nd and 3rd Defendants is dismissed. Whilst the Plaintiff has lost his action, I do not think I should penalize him with costs. He is a villager and is unemployed and rather ignorant of the government bureaucratic system in Honiara. All long he was in a weak position from the start as opposed to the 1^st Defendant who is employed in Honiara and a little more sophisticated and confident than the Plaintiff. His coming to court seems to have been predicated upon his wish to acquire title to the Island which for him has misfired due to his lack of knowing how to handle the government bureaucracy in Honiara. The parties will meet their own costs. I order accordingly.

F.O. Kabui
Puisne Judge

^[1] (per Lord Millett in Khan and Another v. Miah and Others [2000] 1WLR 2123).
^[2] (See pages 17 to18 in Lindley on Partnership, 12^th Edition, 1962, by Ernest H.Scamell).
^[3] (See pages 4 to 5 in Halsbury’s Laws of England, volume 35, 4^th Edition, 1981).