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Solomon Islands Home Finance Ltd v Kaota [2013] SBHC 138; HCSI-CC 259 of 2012 (16 October 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona J).

Civil Case No. 259 of 2012.

BETWEEN:

SOLOMON ISLANDS HOME FINANCE LTD
Claimant

AND:

JACK KAOTA & EHTEL KAOTA
Defendant

Date of Hearing: 8th October, 2013.
Date of Ruling: 16th October, 2013.

Mr M. Ipo for the Claimant
Mrs N. Tongarutu for the Defendants.

DECISION ON APPLICATION FOR SUMMARY JUDGMENT.

Faukona J: This is an application for summary judgment pursuant to Rules 9.57 to 9.66, to be entered against the Defendants. Rule 9.57 provides that the Claimant may apply for summary judgment where a response and defence had been filed but the Claimant believes that the Defendants do not have any real prospect of succeeding.

2. In spite of that, the Court must be satisfied before it can give summary judgment, that there is a real dispute between the parties on material fact Rule 9.65.

The facts:

3. The Claimant hold a fixed term estate in land parcel number 191-056-281, located at Vura estate in Honiara. On 5th December, 1997, the Claimant sub-leased the land to the Defendants through sub-lease agreement executed on the above date. The sub-lease should last 50 years from 1st May, 1997. The lease was registered on 25th November, 1998.

4. Amongst others, the important terms of the sublease was entrenched in the instrument; that the Defendants paid annual rental of $100.00; they would develop the land by building a private residence and that they would hold the sub-lease as joint owners in an undivided shares.

The belief:

5. The belief advocates by R.9.57 must not be perceived as a myth. The Claimant before forming such belief is obliged to seriously consider the materials file by the Defendant. Having considered and measure up the strength of the Defendant's case as to his own, concluded that the defendant do not have real prospect of defending the claim. This belief depends on individual intellectual capacity and experience. Knowing one's own capacity to assess is of significant. It assist the Court and at the same time not unduly wasting of Court's time. The rule must not be taken for granted to achieve earlier judgment or result, than it is required in the process lead up to trial of the substantive matter.

The Claimant's Case:

6. The Claimant's case is that the Defendants had breached the terms of the sub-lease agreement. Since 1997 until now they have not developed the land by constructing any residence building. They have also failed to pay up the annual rental amount of $100.00, which has accrued since then. Land policy adopted by the Claimant in 2006 that any sub-lease must construct a permanent building on the land sub-leased to him within 18 months. Failure, the vacant land is forfeited. This policy now has played some effect on the Defendant, as one of the terms. For all the failure and breaches, the land therefore should be forfeited back to the Claimant.

The Defendants' Case:

7. Both Defendants agree they are party to the sub-lease agreement. They had paid the necessary and initial fees. They also agree they have not constructed any building on the vacant land. They also have agreed being failed to pay up the annual rental fees. Their reason is that after taking possession of the land they have submitted their building plan to Honiara Town and Country Planning Board in 1998 but since then nothing is forth coming. 1998 was the commencement of the ethnic tension. In 1996, the Defendants were posted to Lata Hospital until June 2006. From Lata they were posted to Auki. They have confronted difficult circumstances, which contributed to their failure to develop the land and paid the rental fees. However, they express intention to retain and develop the land and pay the outstanding rental amount due of $3400-00.

Sub-lease instrument.

8. Noted from the instrument used, is in fact form extracted from sections 133 and 135 of the Land and Titles Act. And it accommodates terms whereby which the Commissioner of lands used when leasing crown land to individuals and entities. The only change in the form is the insertion of the Claimants business name and other irrelevancies, which are omitted.

9. Whilst nothing is seriously wrong for adapting lease instrument used by the Lands Department, the question whether those clauses are applicable to the circumstances of the parties remain to be answered. As I would perceive the lease instrument is not the best the Claimant can rely on. It would be ideal that as a separate entity it ought to have its own standard lease format to enhance its mission statement.

10. The Defendants deny that the purported lease instrument provides particular time period to build, and a kind of structure preferred. I have read the instrument in full and my finding affirms the Defendants contention. It would have been ideal to have such clauses entrenched into the sub-lease agreement so that the Defendants were well aware of their obligations and at best attempt to develop the land within 18 months. In the absence, it is arguable that the Claimant would not rely on. In any agreement the terms be well understand with clarity before execution of the instrument. This is an issue ought to be considered.

11. In association to that, is the notice of forfeiture issued to the Defendants in 2012. Undoubtedly is a part of 2006 policy to activate implementation of the grace period of 18 months. Sadly, that is not part of the original sub-lease agreement. And the question whether such policy would have direct effect on the purported sub-lease which was executed nine years back, is an arguable issue.

12. The Defendants have no issue that the land was undeveloped and rentals were not paid. The major obstacle is that the Claimant had illegally through its unauthorized decision permitted another person Henry Tabai to inhabit and had built a semi-permanent building on the land. This occurred in 2008. By common sense, the defendants would not dare interfere being fear of escalating physical confrontation. As a result further rentals were not paid, and if calculated properly should amount to $1,000.00 for ten years the Defendants failed to enter and develop the lands. In any event, the Defendants are willing to pay the full amount of outstanding rental. The propose intention was placed before the Claimant but was refused for unknown reason.

13. I accept eleven years to 2008 is sufficient time to develop the land. However, is it not a big deal to ignore the Defendants' reasons for delay as stated in their case in paragraph 7 above, and the fact they have intention to start a new should they be given another chance. Are those excuses reasonable enough in the circumstances alluded, which the Claimant had been well versed with? If the Counsel for the Claimant could affirm in submissions that the purported sub-lease is still valid and the Defendants are still the legal owners, then why should the Claimant refuse to accept the payments of the outstanding rental when the Defendants actually intended to pay?

14. Any reasonable person would appreciate the delay was caused by events which were not controlled by the Defendants. Being in Lata for ten years since 2006 as nurses where communication is a real problem. Then posted to Auki and then ethnic tension. And worst of all no response from Town and Country planning Board in relation to their building plan. What else more could have been done. Eventually they found out that someone had occupied the land.

15. It could appear the legal rights of the Defendants are still recognized though there was intervention by the third party. That reflects a clear implication that the lease had never been rescinded and the Defendants are still remain joint owners of the land. They have expressed interest to start a new if they are given the second chance. This could mean the Claimant have to deal with the illegal occupier through some processes under its powers.

16. There are facts that are in favour of the Defendants, which require consideration. Quite apart from that, there are real issues, which are contentious between the parties in relation to facts and law. Therefore, it is most appropriate in the circumstances not to grant the summary judgment but the case should go to trial to test those issues.

Orders:

1. Application for summary judgment refused.

2. Cost is paid to the Defendant.

3. Case adjourn to 17/10/2013 9:30 for mention.

The Court.