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Solomon Shell Products Co Ltd v Commissioner of Lands [2018] SBHC 70; HCSI-CC 315 of 2014 (27 March 2018)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION
Civil Case No. 315 of 2015

SOLOMON SHELL PRODUCTS COMPANY LIMITED
Claimant

COMMISSIONER OF LANDS, REGISTRAR OF TITLES, SHI WEI CHEN AND KING PAU PANG
1^st 2^nd 3^rd Defendant

Date of Hearing: 13 March 2018
Date of Judgment: 27 of April 2018

A. Radclyffe for Claimant
S. Banuve, Solicitor General for 1^st and 2^nd defendants
M. Pitakaka with M. Taku for 3^rd defendant.

Claim for relief against forfeiture of Fixed Term Estate and subsequent claim for rectification of the Register of the Fixed Term Estate in the claimant’s favour on the grounds of mistake.

BROWN J: The claimant seeks relief against forfeiture of the fixed term estate in parcel number 192-010-204 (the land) and rectification of the fixed term estate register by the registrar of titles in favour of Solomon shell products company limited on the grounds of mistake. The claimant seeks a further order that the third defendants be restrained from developing or occupying the land.

The claimant challenges the validity of the forfeiture of the claimants fixed term estate in the land. I am indebted to the claimants’ submissions. The statement of case recites that the claimant company, incorporated in Solomon Islands was the registered owner of the land situated at Ranadi, Honiara. The company purchased the land for $100,000 in 2012. The Commissioner of lands consented to the transfer to the claimant company on 12 October 2012.

In 2013 the claimant applied to the Honiara City Council for permission to develop the land. The company has carried out land refill and reinforcement of the sea wall in preparation for building construction. A building permit had been granted to the claimant.

The claimant company’s postal address as stated on the fixed term estate register is P.O. Box 730, Honiara. No notice before forfeiture or notice of re-entry was served on the claimant by the first defendant.

The claimant claims there were and are no grounds for forfeiture of the land. The claimant has paid the annual land rental for the years to 2014 and the Commissioner of lands has accepted the payments.

On 1 July 2013 the Commissioner of lands granted a fixed term estate in the land to the third defendants.

The claimant seeks rectification of the title to the land in favour of the claimant on the grounds of mistake. The Commissioner of lands had no right to grant title to the third defendants as she had no valid grounds for forfeiting the claimants’ title and the forfeiture process, if any, was defective. The claimants’ solicitor wrote to the Commissioner of lands on 25 September 2014 complaining about this matter but as at the date of the statement of case has had no reply.

The third defendants are not bona fides purchases for value in possession of the land.

In support of the statement of case the claimant submits in order for a forfeiture to be valid a notice before forfeiture must be served on the registered land owner. [Section 138 of the Land and Titles Act]. In this case the unchallenged evidence of Martha Qora, a director of the claimant company is that no notice is before forfeiture or re-entry was served on the claimant. That is admitted in the first and second defendants’ amended defence at page 4 of their bundle of documents. In view of that admission the forfeiture process was invalid and the claimant is entitled to the relief sought including rectification of the register in the claimant’s favour on the grounds of mistake.

The claimant further states the mistake resulted in the registration of the third defendants. The third defendant only obtained title as a result of the invalid forfeiture. If there had been no forfeiture the third defendants would not have been offered the land. That is the link between the mistake and the registration.

The claimant submits in the third defendants want to claim an indemnity from the Commissioner of lands under section 230 of the land and titles act, that is a matter for them and is not so these proceedings.

It is further submitted by the claimant, in their defence, the third defendant’s claim to be bona fides purchases for value in possession of the land and without notice of the mistake. They therefore rely on section 229 (2) of the land and titles act. It is submitted that from the suspicious circumstances surrounding the third defendants acquisition of the land the court should hold that they were aware of the mistake and contributed to it by their actions and has a result they cannot rely on section 229 (2).

The claimant points to the evidence of the Commissioner of lands who has said that three officials in lands were dismissed as a result of the third defendants’ acquisition of the land. Shi Wei Chen denied any knowledge of wrongdoing but he failed to explain the dates on the letter of application (5/ 3 / 13) and the letter of offer (4/3/13). In his sworn statement filed on 19 May 2017 which in the witness box be said was true, he stated that the date on the application letter was a typographical error. It is evidence in court he did a complete about-face and told the court the date on the Commissioner of lands letter of offer was incorrect and the date on the application letter was correct. This is a major discrepancy engrossed to Mr. Chen’s credibility and casts doubt on the voracity of his evidence. The court could reasonably conclude that there was collusion between Mr. Chen and offices in lands that resulted in the third defendants obtaining the letter of offer so quickly. Mr. Chen admits she knew about the forfeiture. He went to the Ministry of lands to check the site plan to ascertain the parcel number and he collected the letter of offer from someone in lands but he denies having any conversation with anyone in the Ministry about the matter. That, it is submitted, is highly unlikely.

The claimant consequently pleads that the title to the land should be rectified and that the third defendants, their servants or agents be ordered to vacate the land and not re-enter it. The claimant also claims costs against the third defendants.

The first and second defendants by paragraph 4 of their further amended defence admit that there was no notice before forfeiture or notice of re-entry served on the claimant company. I accept there was no valid forfeiture of fixed term estate in parcel number 192-010-204.

By section 138 of the act, the Commissioner shall not be entitled to exercise the right of forfeiture until he has served on the owner of the estate and on every other person shown by the land register to be interested a notice specifying particular breach and requiring remedy of such breach within such a reasonable period as is specified in the notice. By section 139 (3) the High Court may under section 229 order rectification of the land register when it is satisfied that the claimant is entitled to such relief. This court is so satisfied the claimant is entitled to such relief in the absence of a proper notice before forfeiture having been served.

The third defendants however seek to denies the claimants entitlement to rectification despite the Commissioner of lands and registrar of titles admission that registration of the third defendants as owner had mistakenly being done.

The third defendants rely on section 229 (2) of the land and titles act which stipulates;

“the land register shall not be rectified so as to affect the title of and only who is in possession and acquired the interest for valuable consideration, unless such owner had knowledge of the commission, fraud or mistake in consequence of which the rectification is sought, or caused such permission, fraud or mistake or substantially contributed to it by his act, neglect or default.”

Both the claimant and the first and second defendants claim the third defendant had knowledge of the mistake.

Shi Wei Chen gave evidence in support of his claim. He was unable to explain the discrepancy between the date of the acting Commissioner of lands offer of grant, 4 March 2013 and the date of his application, 5 March 2013. In his sworn statement read in the proceeding, a statement dated 19 May 2017 the deponent said the discrepancy in the application date was due to a typographical error. In his evidence in court he said the application date was correct and the letter of offer was incorrect.

I find his evidence to be dissembling and accept the third defendants had knowledge of the absence of the proper order of offer and acceptance of the grant. This knowledge goes to support Mr. Radclyffe’s submissions for the claimant that there was a scheme in place to affect such mistake to the detriment of the claimant. When I look at the outcome as it affected employees of the Commissioner of lands it may be said that the acts were fraudulent.

A fresh to grant was given the by the Commissioner of lands to the 3rd defendants for a premium of $5000 together with annual rental payments. It can be seen from the certified copy of the fixed term estate register that the claimant company purchased the land in 2012 for the sum of $100,000. Whilst the valuable consideration given the Commissioner of lands in the sum of $5000 there is no relationship to the value of the land transferred in 2012 it may be said that the $5000 satisfies the requirement of section 229 of the act. When I consider however the discrepancy between the land value and that premiums sought by the Commissioner of lands coupled with the other evidence I am satisfied the third defendants had taken the land of aware of the Commissioners mistake [for a search of the register would have shown no forfeiture registered by the Register of Titles] and in circumstances which may be said to amount to fraud.

The 3rd defendant’s reliance on section 229 of the act must fail.

I accordingly make orders in terms of paragraphs 1, 2 and 3 of the claim filed on 30 September 2014.

The claimant shall have its costs of these proceedings against the third defendant.

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BROWN J