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Solomon Islands Terminal Services Ltd v Minister for Lands and Housing [2023] SBHC 158; HCSI-CC 253 of 2021 (8 December 2023)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 253 of 2021

BETWEEN

SOLOMON ISLANDS TERMINAL SERVICES LIMITED
Claimant

AND:

MINISTER FOR LANDS AND HOUSING
(Represented by the Attorney General)
First Defendant

AND:

COMMISSIONER OF LANDS
(Represented by the Attorney General)
Second Defendant

AND:

REGISTRAR OF TITLES
(Represented by the Attorney General)
Third Defendant

Date of Hearing: 27 April 2023
Date of Oral Decision: 8 December 2023

Mr B Titiulu for the Claimant
Ms F Fakarii for the First, Second and Third Defendant

RULING

1. These proceedings concern two parcels of land being the fixed term estate parcel number 192-004-1200 and parcel number 192-004-1201. On 22 August 2022 the parties filed a document headed Agreed Facts and Issues. Paragraphs 1 to 8 of the Agreed Facts are as follows:
   • “1. The Claimant is a company duly incorporated under the laws of Solomon Islands.
   • “2. The First Defendant is empowered under Section 71(1) and (2) of the Land and Titles Act as amended (Cap 133) to decide any land within Solomon Islands required for public purpose or other obligations stipulated under section 71 of the Land and Titles Act.
   • “3. The Second Defendant is empowered under Section 3 of the Land and Titles Act (Cap 133) to jointly administer the Land and Titles Act with the Lands Board.
   • “4. The Third Defendant is responsible under Section 6 of the Land and Titles Act to administer land registries.
   • “5. On or about 8 August 2011, the Claimant applied to the Second Defendant for an area adjacent to the Western end of the Honiara International Airport.
   • “6. By letter dated 12 December 2012, the Second Defendant offered the Claimant fixed term estates comprised in Lot 2219 of LR83/R.
   • “7. The Claimant accepted the Second Defendant’s offer and the Second Defendant proceeded to issue the Grant Instruments respectfully for parcel numbers 192-004-1200 and 192-004-1201 in the prescribed form to the Claimant for a grant term of fifty years.
   • “8. On or about December 17, 2012 the Second Defendant proceeded to issue Grant Instruments in respect of parcel number 192-004-1200 granting a term of 50 years from 1st December 2012 and Grant Instrument in respect of parcel number 192-004-1201 granting a term of 50 years from 1^st December 2012.
2. The grant instrument for parcel number parcel number 192-004-1200 contains the following at clause 3:
   • “The Grantor hereby grants to the Grantee(s) an estate in the land comprised in parcel number 192-004-1200 for a term of 50 years from the first day of December 2012. The grant is subject to the reservation in favour of the grantor of the right, subject to one month’s notice being given in writing to the Grantee(s) to resume, without payment to the Grantee(s) of any compensation for unimproved land but upon payment to the Grantee(s) of compensation of actual loss sustained in respect of improved land, such portions of the land comprised in the estate as may at any time required for the construction of roads or other public purposes.”
3. The grant for parcel number 192-004-1201 is in the same terms except the parcel number for 192-004-1201 appears in place parcel number 192-004-1200. Section 132(1) of the Land and Titles Act authorises the Second Defendant to grant fixed term estates for a period not exceeding 99 years. It provides:
   1. “132.- (1) The Commissioner may, subject to the provisions of this Act -
   2. (a) transfer to any person the perpetual estate in any land held by him for such an estate; or
   3. (b) grant to any person a fixed-term estate in any public land for a period not exceeding ninety-nine years:
   • Provided that where the land concerned was compulsorily acquired under Division 2 of Part V it shall not be transferred or granted as aforesaid without the prior written consent of the Minister.”
4. The prescribed form for the grant of a fixed term estate pursuant to section 132 of the Land and Titles Act is found in Form 2 of the Schedule to the Land and Titles (General) Regulations. Clause 3 of that form provides:
   • “3. The Grantor HEREBY GRANTS to the Grantee(s) an estate in the land comprised in PARCEL NUMBER (f)............for a term of............years from the..........day of...........19.......
   • *The GRANT is subject to the reservation in favour of the Grantor of the right, subject to one month's notice being given in writing to the Grantee(s), to resume, without payment to the Grantee(s) of any compensation for unimproved land but upon payment to the Grantee(s) of compensation for actual loss sustained in respect of improved land, such portions of the land comprised in the estate as may at any time be required for the construction of roads or other public purposes*.”
5. The terms of the grant were therefore in terms of that prescribed by Form 2 in the Schedule to the Land and Titles (General) Regulations. The Second Defendant was the Grantor of the parcels and the Claimant was the Grantee. The Grantee by accepting the grant has accepted the conditions of the grant.
6. Paragraphs 9 to 12 of the Agreed Facts are as follows:
   • “9. On the 6^th of June 2019, the Second Defendant issued Notices of Resumption to the Claimants regarding the intention to resume fixed term estates over parcel 192-004-1200 and 192-004-1201 for public purposes in accordance with Clause 3 of the Grant of Fixed Term Estate dated 17 December 2012.
   • “10. The Resumption Notices were served on the Claimant on 11^th of June 2019.
   • “11. On the 13^th of June 2019, the Second Defendant wrote to the Claimant stating that compensation will only be paid for the actual loss sustained in respect of the actual value of the improvements on the land.
   • “12. On or before 17^th July 2019, the Second Defendant advised the Third Defendant that the Second Defendant had re-entered the Claimants fixed-term estates and that the fixed term estates for parcel numbers 192-004-1200 and 192-004-1201be cancelled as a result of the resumption”
7. The parties have agreed on the issues before the Court. These appear in the Agreed Facts and Issues document filed on 19 August 2022 as:
   • “1. Whether or not the First Defendant breached the Land and Titles Act when it did not make a declaration pursuant to section 71 of the Land and Titles Act specifying that the fixed term estates parcel numbers 192-004-1200 and 192-004-1201 are required for a public purpose.
   • “2. Whether or not the Second Defendant acted ultra vires his powers when it proceeded to resume the fixed term estates in parcel numbers 192-004-1200 and 192-004-1201 without a gazetted declaration by the First Defendant of the nature of the “public purpose”.
   • “3. Whether or not the cancellation of the register of the fixed term estates in parcel numbers 192-004-1200 and 192-004-1201by the Third Defendant is unlawful and void.
   • “4. Consequent upon the grant of declarations in questions 1 and 2 in the affirmative, whether or not the Second Defendant:
     • a. Should pay damages to be assessed for the improvement on parcel numbers 192-004-1200 and 192-004-1201
     • b. Should pay compensation to be assessed by the High Court pursuant to Section 83 of the Land and Titles Act (Cap 133)
   • “5. Consequent upon the grant of declaration in question 3 in the affirmative, whether or not the Third Defendant should restore the name of the Claimant on the Fixed Term Estate Register in parcel numbers 192-004-1200 and 192-004-1201.
8. The Claimant first refers to section 100 of the Land and Titles Act. That section provides:
   • “100.- (1) With effect from the 31st December 1977, any perpetual estates registered in the name of, or on behalf of, any person who is not a Solomon Islander shall automatically convert to a fixed-term estate of 75 years at an annual rent after the first seven years (which shall be a rent-free period) calculated as a percentage of the unimproved capital value of such estate at a rate not exceeding 8 per-centum.
   • (2) When a freehold interest is registered under the provisions of this Act and that interest is shown to be owned by a person who is not a Solomon Islander then the provisions of subsection (l) shall apply to convert such interest to a fixed-term estate in like manner as that applicable to a perpetual estate.
   • (3) "Unimproved capital value" referred to in subsection (1) shall have the same meaning as "unimproved value" as defined by regulation 2 of the Local Government (Rating of Land) Regulations.
9. Section 100 therefore is the conversion to a fixed term estate of lands that were privately owned prior to 31 December 1977 by non-Solomon Islanders. It is agreed that the Claimant did not own the land comprised in parcel numbers 192-004-1200 and 192-004-1201 prior to 31 December 1977. The Claimant has referred the Court to the Court of Appeal decision in Lever Solomon Ltd v Attorney General [2013] SBCA 11. That case dealt with the power of the Second Defendant to resume a fixed term estate where the estate was not created by a grant instrument but by the operation of section 100. The Court of Appeal referred to section 114(c) and said that the right of resumption is an overriding interest and need not be noted on the register. The Court then said at paragraph [77]:
   • “[77] In this case there is simply no evidence of any reservation of a right of resumption. The grant is made pursuant to s 100, and not s 132. It is impossible to import the Form 2 need into a s 100 grant, absent evidence. As the Judge found, s 114 itself does not create a right of resumption, contrary to the respondents’ submission below.”
10. Then at paragraph [78] the Court said:
    • “Even if we assumed, contrary to the evidence, there was some notional grant it does not aid the respondent. Page 2 of the register makes the appellant's FTE subject to "The covenants, obligations, liabilities etc. Contained or implied in the Instrument of Grant." But there is no evidence that any such notional grant reserved a right of resumption.”
11. In the Levers case the Court made it plain that the reason why there was no power of resumption in that case was because there was no grant instrument reserving the right to resume. In the present case there was an instrument of grant and that did reserve the right of resumption. There is good reason to differentiate between land that became a fixed term estate by the operation of section 100 and land that was granted on the agreed condition set out in Form 2.
12. After the Court of Appeal decision in Levers there was a change in the law. The Land and Titles (Amendment) Act 2016 created a new section 142A in the Land and Titles Act. That section provided:
    • “142A Resumption of certain fixed term estates
      • (1) This section applies to a fixed term estate created under section 100.
      • (2) The Board may resume all or part of the estate to use the relevant land for public purposes by:
        • (a) giving the owner of the estate 6 months written notice of the resumption; and
        • (b) paying the owner reasonable compensation for the resumption.
      • (3) In determining the amount of reasonable compensation for the resumption, the Board must consider the following:

(a) whether the owner of the estate has improved the land and, if so, the value of the improvements;

(b) the remaining period for which the owner would have held the estate if it were not resumed;

(c) the condition of the land subject to the estate at the time of resumption.”

13. Counsel submits that it must have been an oversight by Parliament to restrict the compensations provisions of section 142A to fixed term estates created by section 100 and to not include estates created by section 132. Such an interpretation flies in the face of clear statutory interpretation. The Court must give meaning to the wording of the section. Levers drew a distinction between fixed term estates created by section 100 and those created by a grant instrument pursuant to section 132. The Court concludes that Parliament must have intended to restrict such provisions to grants created by section 100. To conclude otherwise would be to ignore the plain meaning of the section.
14. Counsel then submitted that there is no written law that confers the right of resumption to the Second Defendant. However, section 114(c) of the Land and Titles Act provides:
    • “114. The owner of a registered interest in land shall hold such interest subject to such of the following overriding interests as may, for the time being, subsist and affect the same, without their being noted on the register-
    • (a) ...
    • (b) ...
    • (c) rights of compulsory acquisition, resumption, entry, search and user conferred by this Act or any other written law;”
15. Applying section 114(c) the Claimant as the owner of a registered interest holds that interest subject to the right of resumption conferred by the Land and Titles Act or any other written law. As Counsel submits at paragraph 29 of his submissions “A right of resumption is one created and conferred by a written law.” Is there a right of resumption contained within the Land and Titles Act or any other written law?
16. Counsel for the Respondent has helpfully set out the answer as follows: The Interpretation and General Provisions Act provides at section 16(1):

“written law" means an Act, any subsidiary legislation or an imperial enactment;”

“subsidiary legislation" means any legislative provision (including a delegation of powers or duties) made in exercise of any power in that behalf conferred by any Act, by way of by-law, notice, order, proclamation, regulation, rule of court or other instrument;

"regulations" includes rules, by-laws, proclamations, orders, schemes, notifications, directions, notices, and forms;”

17. Section 260 of the Land and Titles Act provides power to the Minister to make Regulations under the Act. The Minister has done so. The Land and Titles (General) Regulations are made pursuant to that section. Regulation 3 of those Regulations provides:

“3. - (1) The Commissioner of Lands may from time to time prescribe the forms required for the purposes of the Act, and may amend, vary and revoke any form so prescribed.”

18. Form 2 is the Form prescribed for the grant of fixed term estates pursuant to section 132 of the Land and Titles Act. That form sets out the power relied on which was incorporated into the grant instrument as clause 3. It follows that the power of resumption is part of the written law.
19. Counsel for the Claimant then submits that section 8 of the Land and Titles (Amendment) Act 2014 prohibits the allocation of land within six months from the date of resumption without the direction of the Land Board. No evidence has been put forward to show it was re-allocated within six months. The fact that it is registered in the name of the Second Defendant is not re-allocation by the Second Defendant. He simply holds the land on behalf of the Government.
20. Counsel then submits that where land is required for a public purpose the process is by compulsory acquisition pursuant to section 71. While section 71 provides a mechanism for acquiring land for a public purpose that process can apply to land that is a perpetual estate or is customary land. It does not mean that it the only way land that is able to be acquired. The legal process previously outlined allows a condition for resumption to be part of the grant. The Claimant has agreed to take acquire the fixed term estate on that basis. The power to resume is clearly recognised in the sections of the Act and its amendments to which the Court has referred.
21. It follows that there was a power to resume so to answer the first issue is that the First Defendant did not breach the Land and Titles Act when he did not make a declaration pursuant to section 71 as the parcels were resumed as provided for in the grant instrument as prescribed by the form set out in the schedule.
22. Similarly the Second Defendant did not act ultra vires his powers when he resumed the parcels numbered 192-004-1200 and 192-004-1201 without a gazette declaration by the First Defendant as the resumption was not a compulsory acquisition pursuant to section 71 of the Land and Titles Act.
23. Regarding the third issue, for the reasons set out the cancellation of the register of the fixed term estate parcel numbers 192-004-1200 and 192-004-1201 by the Third Defendant was not unlawful and void.
24. Consequently the Claimant is only entitled to the compensation set out in the grant instrument. If not agreed then to be assessed. It appears that the provision of clause 3 was to put a person in the position of the Claimant in a position he would have been had the initial grant not been made. It will still have had the benefit of the use of the land for the 7 years it was registered in the name of the Claimant. The nature of a fixed term estate is that it is similar to a leasehold system which in this case would have reverted to the Second Defendant at the conclusion of the life of the estate. The cost of the improvements made to the land however could be said to include the premium paid to acquire the land. Without paying the premium the Claimant would not have been able to have access and make the improvements that were made.
25. The term used in the grant instrument was: “but upon payment to the Grantee(s) of compensation of actual loss sustained in respect of improved land”. The Claimant has suffered loss being the payment of the premium and the cost of making the improvements. Compensation should then be on that basis. If not agreed then to be assessed.

By the Court
Hon. Justice Howard Lawry
Puisne Judge