IN THE HIGH COURT OF SOLOMON ISLANDS

CIVIL JURISDICTION

Civil Case Number 368 of 2013

BETWEEN:		MONICA VALI					-	Claimant

AND:		COMMISSIONER OF LANDS			-	First Defendant												
AND:		REGISTRAR OF TITLES				-	Second Defendant

AND:		JQY ENTERPRISES LIMITED			-	Third Defendant

Date of Hearing: 	16th/11/2016 (Trial); 10th/02/2017 (Closing submissions).
Date of Judgment: 	24th February 2017.

Mr. P. Afeau for the Claimant.
Mr. J. Muria Junior for the First and Second Defendants.
Mr. A. Hou for the Third Defendant.

KENIAPISIA; PJ:
JUDGMENT
Introduction
1.	Commissioner of Lands (“COL”) granted Fixed Term Estate (“FTE”) in Parcel Number 191-037-52 (“PN 52”) and Parcel Number 191-107-53 (“PN 53”) to claimant on or around 13/12/2002.  Claimant remain owner of the two parcels until 30th April 2013.

2.	COL granted FTE’s in the two parcels to the third defendant on or around 30th April 2013, after, what COL purport to be a determination of claimant’s estates through Forfeiture proceedings.

3.	At trial; there were no cross examination of witnesses, who had deposed sworn statements (“ss”). Counsels agreed that they will make closing submissions on points of law only and on ss already filed. First and Second defendants chose not to produce evidence, at all, saying submissions will be made on points of law only. Sworn statements are in the agreed bundle of documents and by consent of counsels admitted for use as evidence, under Rule 13.6. 

Background

4.	To appreciate what transpired, the following chronology of events are summarised from the claimant’s undisputed and unequivocal ss evidence:

4.1	November 2002 – COL granted FTEs in PN 52 and PN 53, to claimant.

4.2	2002 – 2006 – Claimant was struggling to evict government redundant workers who continue to occupy the two parcels.

4.3	2006 – Claimant erected fence around the two parcels.

4.4	2009 – Claimant put her agents to occupy the two parcels.

4.5	2007 – 2012 – Claimant engaged various specialists to draw up and cost her plans to develop the two parcels.

4.6	November 2012 – Claimant lodged her application to develop the two parcels to Honiara City Council.

“Meanwhile and prior to November 2012”

4.7	24th October 2012 – COL issued Forfeiture Notice to the claimant.  COL alleged that claimant breached the “grant” condition to build a house in thirty (36) months on the two parcels.  And so COL wanted to resume back the two FTEs, exercising its Forfeiture Rights.

4.8	11th April 2013 – COL issued a Re-Entry Notice on claimant, following the Forfeiture Notice.

4.9	24th April 2013 – COL offered FTEs in the two parcels to JQY Enterprises Limited (“JQY”).

4.10	30th April 2013 – COL granted FTEs in the two parcels to JQY.

4.11	17th May 2013 – AG wrote eviction letters to occupants of the two parcels.

4.12	October 2013 – Claimant filed these proceedings.

Claimant’s Case

5.	Claimant say Forfeiture (“F”) and Re-entry (“R”) by the COL is null and void as adjudged against the law on F in Sections 136 – 139 of the Land and Titles Act (Cap 133).  Claimant seeks declaratory orders against the validity of the F and R.  And consequential relief to cancel the FTE’s in the two parcels, granted to JQY and re– instate the same to claimant on the ground of mistake.

First and Second Defendants’ Case

6.	First and Second Defendants contend in defence that the F and R were valid, because the relevant notices were posted to the claimant’s known address, relying on the postal rule. Counsel pleaded this in defence. At submissions, counsel did not carry this further. In answer to questions from the Court, on F Notice and R, counsel agreed that notice before F must be specific for each parcel. And on R, counsel agreed with counsel for claimant that R is complete upon physical R. Physical R may however constitute actions such as to pin up notice on the property.  

Third Defendant’s Case

7.	As expected, third defendant says that it has no knowledge about the F and R allegations, against the COL.  Nevertheless, JQY admitted that COL granted FTEs in the two parcels, to it, on 24th April 2013, for valuable consideration and got registered on 30th April 2013.  Third defendant’s case hang squarely on the validity of the F and R processes executed by the COL, and the subsequent grant COL made to JQY. In submissions, counsel say that his client paid consideration, and that JQY is in possession with having title and does not have to be in “actual possession” of the parcels – a defence it is entitled to under Section 229 (2) of LTA. That defence, though not pleaded, was submitted on, by counsel. Therefore JQY’s title is indefeasible. And on mistake that is an issue for the First and Second Defendants to answer to.
Issue (s)

8.	Three issues settled for trial are at page 15 of the Court Book.  Court narrow down and summarise the three agreed issues in twofold:  Firstly is the issue on validity of the F process.  Whether COL had waived its forfeiture right when it accepted rentals from claimant at material time of F right arising due to breach or simply whether the F proceedings were validly executed.  Second is whether R that followed F had been validly executed?
The Law

9.	The relevant provisions on the law relating to F and R are in Sections 136 – 139 of the Lands and Titles Act (Cap 133), as amended. – (“LTA”).  Court will summarise the law as brief as follows:

9.1	Section 136 (1) – COL has right to F, if FTE holder failed to pay “rent” or failed to meet “obligations” contained in the “grant”.

Section 136 (2) -  Two ways COL can exercise F :

(i)	Re-entry and take possession of land.
(ii)	Recovery action in High Court.

Section 136 (3) – Forfeiture Right is deemed to have been waived in two ways:

(i)	COL accepts rental when Forfeiture Right has arisen.
(ii)	Should have become aware of the breach.

9.2	Section 137 - Forfeiture of an estate means FTE holder’s rights ceased to exist.

9.3	Section 138 - COL “shall” not exercise F, unless it has given notice to the FTE holder.

9.4	Section 139 - FTE owner aggrieved by F action taken by COL, may seek relief in the High Court.

Was Forfeiture of PN 52 validly executed?

10.	Claimant produced evidence that no F Notice as required by Section 138 of LTA was given in respect of PN 52.  Forfeiture Notice and R Notice were issued in respect of PN 53 only.  There is no evidence before the Court that similar notices were issued in respect of PN 52.  Claimant admitted receiving F Notice and R Notice for PN 53, though very late.  Claimant on the other hand denied receiving similar notices for PN 52.  COL offered no explanation, because it choose not to give evidence.  Claimant’s evidence therefore remained intact.

11.	Under Section 138 of LTA, COL “shall” not exercise F right, unless it has given notice to the FTE owner.  Accordingly, Court found that F of PN 52 was erroneous in law, in that no F Notice was issued in respect of PN 52, as a mandatory pre-requisite, under Section 138 of LTA.  So COL did not resume back PN 52 at all, at any time. If the COL did not resume back FTE title to PN 52, then it follows, COL could not validly grant, what it did not own in the first place.  It was a mistake for COL to have granted FTE in PN 52 to JQY; subsequently.  The grant was therefore null and void.  Court can order rectification under Section 229 (1) of LTA – where it is satisfied that any registration has been obtained, made or omitted by fraud or mistake.

12.	The defence under Section 229 (2) of LTA, is not available to JQY on the facts before the Court.  Although JQY has acquired PN 52 for valuable consideration, JQY is yet to be in “actual possession” of the land.  And Court also found that JQY, had it exercised due care and diligence, would have discovered that no F proceedings were validly executed over PN 52, because there was no “F notice” issued; to start with.  JQY knew or ought to have known that it could only be granted valid title to the property after F proceedings had been completed; title in favour of the claimant forfeited and title to the property re-vested with the COL.  As prudent and intelligent business entity, JQY ought to have proper caution by checking with the Registrar of Titles Office.  This is a public office and documents are available for public scrutiny on payment of a fee.  For this neglect or default, JQY is deemed to have knowledge, of the dealings contained in the said FTE register, at the material time.  Had JQY checked, it would have noticed that no F Notice was given in respect of PN 52, because no document could show that.  Had JQY checked it would have seen that there is adverse possession – claimant’s fence and agents still on the property. That should have triggered alarm bell that PN 52, FTE, is still with the claimant.  JQY had simply failed to exercise due diligence and proper caution as reasonable, prudent and intelligent business entity/persons ought to have done. 

13.	In view of the aforementioned, Court order rectification of PN 52, on the ground of mistake.  Court is satisfied that in the circumstances, JQY had knowledge of the mistake (deemed to have) due to its neglect and default and therefore is deemed to have substantially contributed to the mistake by his neglect or default (Section 229 (2) of LTA). Court did not consider waiver, because F proceedings were fatally flawed, substantially, right from the start, when there was no notice to precede F. 

Was Forfeiture of PN 53 validly executed?

14.	As for PN 53, “F Notice” was actually issued and then R followed suit.  Forfeiture Notice was dated 24/10/2012.  And R Notice dated 13/4/2013.  Forfeiture Notice as required in Section 138 was actually given.  Evidence has also shown that claimant received this F Notice, though very late.  If F Notice was given though received late, was the execution of F proceedings valid; in terms of the law on R in Section 136 (2) of LTA?

15.	Section 136 (2) of LTA, required that for the COL to validly execute R after F, it must re-enter and remain on the land (PN 53).  This is because COL has opted to execute F through R rather than recovery action in the High Court. On the basis of case law, R is valid only if there is physical re-entry and physical repossession by the COL on PN 53.

16.	Evidence has shown that R Notice was dated 13/4/2013.  But the claimant say in evidence and not rebutted by COL, or JQY, that through her agents, she is still occupying PN 53 (and PN 52), at time of trial in 2016.  She erected a fence around the two parcels.  And her agent, Mr Ologa, is on the parcels, looking after her properties.  Accordingly, COL is yet to re-enter and re-possess, physically, this parcel.

17.	COL has yet to re-enter and repossess (physically) PN 53.  It means that F and R proceedings are yet to be completed. If F and R proceedings are yet to be duly completed, then title is still with the claimant and title has not reverted to the COL.  Therefore COL could not validly give what it did not own in the first place.  It follows that if COL had not resume back FTE title to PN 53, then it was a mistake for COL to have given PN 53 to JQY.  The grant was therefore null and void.  Court can order rectification under Section 229 (1) of LTA – where it is satisfied that any registration has been obtained, made or omitted by fraud or mistake.

18.	The defence under Section 229 (2) of LTA is not available to JQY on the facts before the Court.  Although JQY had acquired PN 53 for valuable consideration, JQY is yet to take “actual possession” of the land. And Court also found that JQY, had it exercised due care and diligence, would have discovered that no R was validly executed over PN 53, because there was no physical re-entry and no physical re-possession by the COL. There is still adverse possession, by the claimant’s fence and presence on the two parcels, through her agents. JQY knew or ought to have known, that it could only be granted valid title to PN 53, after R proceedings have been completed; claimant’s title forfeited; title re-vested in the COL and COL made physical re-entry and physical re-possession of PN 53. As prudent and diligent business entity, JQY ought to have proper caution by checking with the COL office, to ascertain physical re-entry and physical re-possession. For this act of neglect and default, JQY is deemed to have known that R is yet to be completed, at the material time. Had JQY checked, it would have noticed that no R was completed in respect of PN 53. There is still adverse possession, by claimant. That should have triggered alarm bell that PN 53, FTE is still with the claimant. JQY had simply failed to exercise proper caution as reasonable, prudent and intelligent business entity ought to have done. 

19.	In view of the aforementioned, Court order rectification of PN 53 on the ground of mistake. Court is satisfied that in the circumstances, JQY had knowledge of the mistake (deemed to have) due to its neglect and/or default and therefore is deemed to have substantially contributed to the mistake by its neglect or default (Section 229 (2) LTA) . Court did not consider waiver, because F proceedings and subsequent R were fatally flawed, substantially, right from the point of R. 

Rectification of land register

20.	As alluded to above, Court has power to rectify under Section 229 (1) of the LTA on the ground of mistake.  Court is satisfied claimant had amply demonstrated in this case that rectification should be ordered on the ground of mistake.  Court can accordingly make such an order.

Conclusion and Orders

21.	In conclusion, Court answered the issues posed for trial as follows:

21.1	The F process executed by the COL was invalid in respect of PN 52, because there was no Notice before F. And therefore the subsequent grant to JQY, was also a nullity due to mistake.

21.2	The R process executed by COL was invalid in respect of PN 53, because there was no proper R by the COL; to complete the F process.  And therefore the subsequent grant to JQY, was also a nullity, due to mistake.

22.	The Orders of the Court are:

22.1	Grant rectification orders that PN 52 and PN 53, the FTE registered in JQY are cancelled.

22.2	Grant further orders that the cancelled FTEs in PN 52 and PN 53 be re-instated back and registered to the name of the claimant.

22.3	Claimant’s costs are to be borne by the COL (70%) and JQY (30%).

THE COURT

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JOHN A KENIAPISIA
PUISNE  JUDGE