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Fonohema v Piukala [2001] TOLawRp 53; [2001] Tonga LR 286 (15 November 2001)

IN THE LAND COURT OF TONGA
Land Court, Nuku'alofa

L 8/2001

Fonohema

v

Piukala

Ford J
22, 23, 24, 27, 28 August, 6, 7, 11, 12 September 2001; 15 November 2001

Land law – agreement for sale and purchase of ‘api – unclear terms of contract
Contract law – agreement for sale and purchase of ‘api – unfair and oppressive – voidable
Law practitioners — conflict of interest – abused relationship of trust

The plaintiff returned to Tonga with his family after living in the United States for 24 years. He saw an advertisement for a property in Ha'ateiho and was immediately interested. He and his brother visited the 'api and met with the owner Kelepi Piukala, the defendant. Kelepi was a law practitioner with 12 years experience. When the plaintiff saw the defendant's property in August 2000 he liked it and after a period of negotiation he agreed to buy it. His wife returned from the States and the family eventually moved into the house on about 1 Dec 2000. Thereafter, major problems started to develop between the parties over what exactly had been agreed to in the purchase agreement. Matters came to a head in the early months of 2001. In March the defendant wrote to the plaintiff ordering him to vacate the property within 10 days. The defendant, with the assistance of security guards, attempted to forcibly evict the plaintiff's wife from the property. The electricity and telephone supplied to the property was cut off by the defendant. On 11 May 2001 the Chief Justice granted the plaintiff an injunction on his ex parte application which was intended to maintain the status quo pending the hearing of the substantive proceeding. The injunction prohibited the defendant from entering the allotment at Ha'ateiho and from disconnecting or interfering with the supply of electricity, water and telephone services to the property. That injunction remained in force. The court was required to determine exactly what the parties agreed to in the course of their negotiations. The plaintiff sought specific performance of the verbal agreement.

Held:

1. The Court was satisfied that the plaintiff signed the agreement dated 12 September confident that the defendant had simply recorded therein all the terms of their verbal agreement. He did not know what the agreement, in fact, said but he trusted Kelepi the lawyer. As the plaintiff did not know what the agreement contained, there was no consensus ad idem and, therefore, the 12 September written agreement was invalid.

2. The defendant was acting as solicitor to both parties and as such he was in a fiduciary relationship to the plaintiff. The defendant not only failed to fulfil the conditions incumbent upon him, but he went further and abused the relationship of trust and confidence by taking advantage of the plaintiff's almost total ignorance of the land laws of Tonga to negotiate an agreement that, from the plaintiff's perspective, based on the defendant's interpretation, was both unfair and oppressive. The verbal agreement was voidable at the plaintiff's option.

3. The Court ordered that within one month the defendant was to give to the plaintiff's solicitor a letter of surrender which shall be signed by the defendant, his wife and his eldest son (the heir), agreeing that the allotment be surrendered in favour of the plaintiff.

4. If the plaintiff was registered as holder of the allotment, he was to pay to the defendant the balance of $36,000, less the losses and damages allowed of $19,000, namely, the sum of $17,000, at the rate of $300 per month, without interest.

5. If the defendant's wife or heir did not sign the surrender or Cabinet did not consent thereto, then leave was reserved to the plaintiff to come back to Court for further relief including damages, loss, and compensation as appropriate.

6. The plaintiff and his family were entitled to remain in occupation of the allotment until further order of the Court. The plaintiff was entitled to costs.

Cases considered:

Demerara Bauxite Co v Louisa Hubbard [1923] PC 673

Gillespie and sons v Gardner [1909] SC 1953

Prasad v Morris [1993] TLR 73 (CA)

Statute considered:

Land Act (Cap 132)

Counsel for plaintiff : Mr Niu
Counsel for defendant : Mr Tu'utafaiva

Judgment

After residing in Utah in the United States for some 24 years, the plaintiff, Viliami Ma'ilei Fonohema, (often referred to during the hearing simply as Ma'ilei) returned to Tonga for a visit in July 2000. The primary purpose of the visit was to attend the Ha'ateiho reunion. Ma'ilei's American-born wife, Sharon, and their five children aged between 5 and 14 years, accompanied him. Ma'ilei had originally come from the village of Ha'ateiho.

Mrs Fonohema told the court that, although they had originally intended to stay only about six weeks in Tonga, they found that their children loved the place so much, and their father's family in particular, that they wanted to stay in the country and go to school here.

The plaintiff and his wife then made what obviously would have been a momentous decision in their lives. They decided to move to Tonga permanently. Towards the end of July, Mrs Fonohema returned to the States to terminate the lease on their home and to transfer her business to someone else. The plaintiff remained in Tonga with the children.

At that stage the family was anticipating acquiring some land and building a new home. They had no specific location in mind but they were working on an anticipated budget figure of about T$30,000.

The plans regarding the new home all changed, however, one day in early August 2000 when the plaintiff's brother drew his attention to a notice which had appeared in the "Taimi 'o Tonga" newspaper. The notice related to a property in Ha'ateiho which was for sale, lease or rent. The full text of the translated notice reads as follows:

"NOTICE

TOWN ALLOTMENT TO RENT, LEASE OR OWN ABSOLUTELY

I have an 'api which is situated at Ha'ateiho, its size is 1r 24p to a person who wants to rent, lease or own absolutely. Situated on it is a brick house with four bedrooms plus master room (private facilities) fully furnished with double beds in each room & etc, large lounge/sitting-room, fully furnished and also conference table with 8 seats and etc. kitchen with stove, fridge and etc, 3 toilets/bathrooms, a 3000 gallons cement water tank. You are welcome to inspect.

And also my town allotment which is situated at Vave Road, Kolomotu'a, its size is 30 perches. It is needed to be released to be owned absolutely according to law by any person. No house has been built on it. Obtain the map and the details from telephone 29-098. Make contact as soon as possible to telephone 29-098."

The plaintiff was immediately interested in the Ha'ateiho property and he and his brother visited the 'api and met with the owner who was the defendant, Kelepi Piukala. Kelepi (as he was mainly referred to throughout the hearing) is a law practitioner. He has been a law practitioner for some 12 years. Up until recently he apparently practised law in both Vava'u and in Tongatapu. He told the court, however, that he has now closed down his Neiafu office and at the time he advertised his house for sale, he was operating his practice from his home at Ha'ateiho.

When the plaintiff saw the defendant's property in August 2000 he liked it and after a period of negotiation he agreed to buy it. His wife returned from the States and the family eventually moved into the house on about 1 Dec 2000. Thereafter, major problems started to develop between the parties over what exactly had been agreed to in the purchase agreement. Matters came to a head in the early months of this year. In March the defendant wrote to the plaintiff ordering him to vacate the property within 10 days. The court heard evidence as to how the defendant, with the assistance of security guards, attempted to forcibly evict the plaintiff's wife from the property. There were also allegations of physical assaults which are alleged to have taken place in early April followed by alleged malicious criminal prosecutions. The electricity and telephone supplied to the property was cut off by the defendant. The situation by this time had obviously become very serious.

On 11 May the Chief Justice granted the plaintiff an injunction on his ex parte application which was intended to maintain the status quo pending the hearing of the substantive proceeding. The injunction prohibited the defendant from entering the allotment at Ha'ateiho and from disconnecting or interfering with the supply of electricity, water and telephone services to the property. That injunction continues to remain in force.

Because of the existence of the interim injunction, the case was afforded some urgency. The hearing took place over a nine-day period in August/ September and then, at counsels' request, closing submissions were presented in writing. In effect, the court is now being asked to decide exactly what the parties, in fact, agreed to in the course of their negotiations.

Virtually all of the witnesses were subjected to searching cross examination. There were some sharp conflicts in the evidence which, because the events are of relatively recent origin, cannot, unfortunately, all be attributed to memory lapse.

The plaintiff alleges in paragraph 4 of his statement of claim, and this is the thrust of his whole case, that in September 2000 he and the defendant reached a verbal agreement in the following terms:

"(a) that the plaintiff would pay $20,000 as deposit, and upon such payment, the defendant would hand over to him a letter of surrender signed by him and his heir, Kelepi Nuku Piukala, by which the defendant would surrender the allotment in order that the plaintiff would apply to hold it as his town allotment;

(b) that in addition to handing over the letter of surrender the defendant would also hand over possession of the allotment and the brick house with all the furniture and contents as they had inspected and agreed plus the motor car registered no. C 7697 of the defendant;

(c) that the plaintiff would pay the balance of the purchase price of the house and its contents and of the car, that is $36,000 over 10 years, without interest, at $300 per month;

(d) that the defendant would pay and clear all debts for electricity, telephone and water used by him on the allotment prior to the date of possession."

In his statement of defence the defendant admitted the verbal agreement but said that it was put into writing on 12 September 2000. The defendant went on to qualify his admission of the verbal agreement by saying, inter alia:

(i) in relation to the furniture and contents:

The furniture and contents were in the house to be used by the plaintiff, "only because of love and sympathy by the defendant towards the plaintiff and his family in their wish to occupy the house".

(ii) in relation to the car:

The car was never part of the agreement, "however, it was indicated by the defendant to the plaintiff that there may be times when the defendant is out of the country and the car may be left with the plaintiff until the defendant returns to Tonga."

Neither of these unusual and rather vague alleged arrangements were referred to in the 12 September agreement. After the plaintiff moved into possession of the property in December he immediately realised that the defendant had taken the furniture and the car.

Later on, after taking advice, he was also shocked to realise that the defendant was not proposing to hand over the letter of surrender, so that he (the plaintiff) could apply to obtain title to the allotment, until after the expiration of the 10 year period. These various factors and their consequential implications became the main issues in this litigation.

The 12 September agreement was produced in evidence. It required the defendant to provide the plaintiff with a letter of surrender signed by his next heir and then it made provision for the plaintiff to pay the deposit of $20,000 and the balance of $36,000 at the rate of $300 per month over 10 years.

The defendant pleaded that the 12 September agreement was "written confirmation" of the verbal agreement reached earlier but I do not accept that because it relates only to paragraphs (a) and (c) and makes no reference whatever to the matters agreed to in paragraphs (b) and (d) of the verbal agreement, namely, the house, the car, the contents and furniture, and outstanding bills for property services.

In his closing submissions, counsel for the defendant submitted that the 12 September agreement is, in fact, the whole of the agreement reached between the parties and not just confirmation of the earlier verbal agreement. It is necessary, therefore, at this point for the court to make findings on the exact status of the two agreements.

Turning first to the verbal agreement, considerable evidence was given relating to the negotiations that took place between the plaintiff and the defendant. I do not propose to canvass all that evidence in this judgment but, in summary, I can say that the plaintiff has satisfied me to the required standard of proof in civil cases, that the parties did, in fact, enter into an oral contract, the terms of which are as set out in paragraph 4 of the statement of claim.

I should say at this point that on the issue of credibility generally, although there were some inconsistencies in the plaintiff's evidence (which I found inconsequential in the overall case), I formed a very clear view that the plaintiff and all his witnesses were doing their best to give the court their true recollection of all the matters they talked about in their evidence. On the other hand, I am afraid that I did not form the same favourable view about the evidence given by the defendant. In a number of critical areas, I found his evidence vague and confusing and in many respects it simply lacked credibility.

In his closing submissions, counsel for the plaintiff drew attention to what he submitted was evidence of some collusion between the defendant and his wife which was reflected in her evidence. I agree with counsel's analysis of the particular passage of the evidence which he referred me to in this regard.

Accepting, as I do, that there was a verbal contract between the parties in the terms set out in paragraph 4 of the statement of claim, I now pass to consider the written agreement dated 12 September 2000.

I accept that the parties had intended that the verbal agreement should be reduced to writing. I also accept the plaintiff's evidence, however, that after living in the United States for 24 years, he had difficulty understanding written Tongan and he, therefore, wanted to take the written agreement which the defendant had prepared in the Tongan language, away with him before he signed it so that he could go through it properly and understand it.

At the point in time the plaintiff was referring to in this regard, the parties were in the living room of the defendant's house at Ha'ateiho which the defendant had been using as his law office. The defendant had drafted the written agreement on his computer. He said that he read out the terms of the agreement from the computer screen to the plaintiff to see if he wanted any changes made before signing. He told the court that the plaintiff said that everything was perfect and so he printed off several copies of the agreement and they both signed.

The defendant said that before signing the agreement, he also signed, in the plaintiff's presence, the letter of surrender. The letter of surrender was dated 3 September 2000. The defendant said that he would have typed the letter of surrender up on that day and then sent it over to his son in Australia to sign as his heir. The son had signed and returned it that same week. In cross-examination it was put to the plaintiff that the defendant had handed him the signed letter of surrender on 12 September, the same day that the written agreement had been signed. The plaintiff strongly denied this assertion. He said that the first time he had seen the letter of surrender was when it was produced in court as an exhibit. He said that he had never seen the letter of surrender prior to then.

The plaintiff's evidence in relation to the 12 September agreement was that he was unsure, first of all, as to whether the 12 September agreement had, in fact, been made and signed on that particular day. The plaintiff denied that the defendant had read out the terms of the agreement from the computer screen. He said, in evidence which I accept, that the agreement when printed off the computer was in the Tongan language and while he was trying to look at the document the defendant, who was seated alongside him, was continually talking. The plaintiff, therefore, said that he would take it home and go through it and he started to walk out of the room with it but the defendant at that point said:

"No, no, no, give it to me, give it back to me, it's only between you and me."

The plaintiff told the court that at that point he agreed to sign the agreement and he left it with Kelepi at his home. The plaintiff said that he was not given a copy, nor was he given a copy of or shown a copy of the letter of surrender. He said that the defendant told him that he was going to get his son to sign the letter of surrender when he next went to Australia and he (the defendant) would then be bringing the document back with him to Tonga. I accept the plaintiff's account of these particular exchanges.

Even though the plaintiff did not understand what was in the 12 September agreement, I accept that he trusted the defendant in the knowledge that he was a solicitor and he was, therefore, confident that the written agreement did no more than embody the terms of the verbal agreement which the parties had earlier concluded.

As I have already mentioned, the written agreement did not, in fact, record all the terms of the verbal agreement. It said nothing whatever about the brick house or about the furniture and contents or the car, nor did it mention the agreement reached regarding the clearing of outstanding debts relating to electricity, telephone and water services to the property.

The agreement is dated 12 September. The defendant said that he had typed it up on his computer and had read its contents from the screen to the plaintiff before it was signed that day. The plaintiff's recollection is that it was not signed on 12 September but sometime prior to then. I prefer the plaintiff's evidence in this regard and it is consistent with the wording of the document itself. Paragraph 2, for example, states that the letter of surrender, "shall be signed jointly by the next heir ...". If, as the defendant maintained, the letter of surrender had already been signed by the next heir and a copy of the signed document was before the parties on 12 September, then paragraph 2 would not have been expressed in the way that it was.

The letter of surrender is actually dated 3 September 2000, which was a Sunday. It, therefore, contravenes clause 6 of the Constitution and is invalid. When that was put to the defendant and he was shown clause 6 of the Constitution, his response simply was, "I did not know that provision" — a surprising statement, I would have thought, from a law practitioner with some 12 years experience.

The plaintiff's counsel submitted that there was a more sinister explanation and he suggested that the defendant may have deliberately dated the letter of surrender with the date of a Sunday so that the 12 September agreement would be unenforceable and he would not have to refund the $20,000 deposit which the plaintiff had paid. I would not go that far even though there is some evidence to support that proposition. For one thing, the allegation was not put to the defendant in cross-examination for his response.

Quite apart from those matters, however, I am satisfied that the plaintiff signed the agreement dated 12 September confident that the defendant had simply recorded therein all the terms of their verbal agreement. He did not know what the agreement, in fact, said but he trusted Kelepi the lawyer. His confidence, however, was misplaced. Kelepi was abusing his trust.

As is stated in Halsbury, 4th edition, vol 9, para 288:

"It is essential to the validity of a contract that the contracting parties should either have assented or be taken to have assented to the same thing in the same sense, or, as it is sometimes put, that there should be consensus ad idem ... Where, on the consideration of the evidence in the light of these principles, it is impossible to show unequivocally that the parties assented to the same thing in the same sense, then the alleged contract may be vitiated by mistake.

A contract, although assented to by all parties, may be voidable by one of them on the ground that his consent was obtained by ... undue influence ..."

Accepting these principles, I find that, as the plaintiff did not know what the agreement contained, there was no consensus ad idem and, therefore, the 12 September written agreement is invalid. In any event, I would have held that it was voidable because it was obtained by undue influence arising out of a fiduciary relationship and in my judgment the verbal agreement would also have been voidable, at the option of the plaintiff, for that very same reason.

Although undue influence was not pleaded, it was well canvassed in evidence and the Court of Appeal in Prasad v Morris [1993] TLR 73, recognised that in those circumstances the issue should not be excluded. I specifically invited counsel to address me on the issue of whether there was a fiduciary relationship between the plaintiff and the defendant and I am grateful to both counsel for making very helpful submissions on the point.

The evidence relevant to the issue came from both the plaintiff and the defendant. Thus, in cross-examination the plaintiff said:

"I signed because I trusted the guy. He had grey hair and everything. He was a nice guy. He was a lawyer. He said you don't need a lawyer, I'll do the whole thing."

And later:

"He told me he's a lawyer and he's this and that."

Then, in response to questions from the court, the plaintiff said:

"He told me he's a lawyer from Vava'u and from Tonga on the first day we met. He told me that he was going to take care of everything as a lawyer."

The defendant did not deny having said these things. In his own evidence in chief he said:

"We agreed I would prepare the agreement. He asked me to do it. He said he did not want to go to another lawyer to spend money."

The plaintiff's evidence is corroborated on this aspect of the case by his wife, who I found to be a completely credible witness. She told the court about a telephone conversation that she had with her husband when she was still in the States and she wanted to know whether he had got anything in writing relating to the transaction. She said that her husband told her that he trusted the man he was dealing with because he was an attorney and he would be taking care of all the legal documents himself. Mrs Fonohema told the court that those assurances cleared up her concerns.

The legal principles relevant to fiduciary relationships were well summed up by Lord Parmoor, delivering the judgment of the Privy Council in Demerara Bauxite Co v Louisa Hubbard [1923] PC 673 at 681, in these terms:

"The principle has long been established that, in the absence of competent independent advice, a transaction of the character involved in this appeal, between persons in the relationship of solicitor and client, or in a confidential relationship of similar character, cannot be upheld unless persons claiming to enforce a contract can prove affirmatively that the person standing in such confidential position has disclosed, without reservation, all the information in his possession, and can further show that the transaction was in itself a fair one, having regard to all the circumstances. In order that these conditions may be fulfilled it is incumbent to prove that the person who holds the confidential relationship advised his client as diligently as he should have done had the transaction being one between his client and a stranger, and that the transaction was as advantageous to his client as it would have been if he had been endeavouring to sell the property to a stranger. This principle is one of wide application, and must not be regarded as a technical rule of English law. An apt illustration of its application to Scots law is to be found in the case of Gillespie and sons v Gardner [1909] SC 1953, to which their Lordships were referred during the argument, and which states that a bargain between the law-agent and his client cannot be supported unless the law-agent can show that the bargain was fair and entered into without concealment of any kind."

The law relating to transactions between solicitor and client is clear. Halsbury, 4th edition, vol 44, para 118 states:

"The relationship of solicitor and client is regarded in equity as a fiduciary relationship, and the rule of equity that a transaction inter vivos is presumed to have been procured by undue influence until the contrary is shown applies to transactions between solicitor and his client."

I have no difficulty in concluding on the facts of the present case that, at all material times, the defendant was acting as solicitor to both parties (he, of course, being one of those parties) and as such he was in a fiduciary relationship to the plaintiff. Equally, I have no difficulty in concluding on the facts of this case that the defendant not only failed to fulfil the conditions incumbent upon him which Lord Parmoor spoke about, but he went further and abused the relationship of trust and confidence by taking advantage of the plaintiff's almost total ignorance of the land laws of Tonga to negotiate an agreement (here I am referring to both the verbal agreement and the 12 September written agreement) that, from the plaintiff's perspective, based on the defendant's interpretation, was both unfair and oppressive.

In his closing submissions, counsel for the plaintiff referred specifically to a paragraph in the 12 September agreement which had, of course, been drafted by the defendant, which counsel described as "a false statement". Mr Niu then went on to submit:

The whole paragraph is fraudulent and the defendant knowingly and deliberately wrote it to mislead and deceive the plaintiff that it was true and that the letter of surrender was in fact the letter of transfer of the title of the allotment from him to the plaintiff. With his knowledge of the law and the proper procedures to be taken to effect a transfer of title by surrender, there is no question that the defendant knew that paragraph 1 of the agreement was wrong, false and would mislead the plaintiff, whom he knew was not familiar with the land laws of Tonga."

I do not think that that submission overstates the position.

At another point in his submissions, Mr Niu suggested that his client, the plaintiff, who was a steel worker in the States, "is not very bright". Again, I think that that is a fair assessment. I also consider that the defendant picked up that point very early in the piece and he proceeded to take full advantage of the situation at every opportunity. I suspect that the actual moment in time when the defendant first began to sense that the plaintiff was not particularly bright came during their very first meeting when the plaintiff, rather naively, freely admitted the total amount of cash he had at his disposal, which was hardly the mark of an astute negotiator. The defendant had shown him around every room in the house and had told him that, with the property, he would sell all the furniture and the car outside and he asked whether he could make a down payment of $5,000. In response, the defendant said, "I've got $30,000". The plaintiff told the court that Kelepi's reply to that was, "what, come back and we will talk."

Describing part of the same first meeting, the plaintiff's brother, Titali, who I found to be another reliable witness, gave the following evidence in chief:

"Witness: He (the defendant) told us we would be very lucky, we would have the house, all the contents inside the house, nothing would be taken including the car. The car was parked outside the house. It was a red car. He told us that he would move out from the house and he would not take anything from the house.

Counsel: Any mention of costs?

Witness: No.

Counsel: You ask?

Witness: We wanted to know. He told us he doesn't want to give us any amount. I do not know the reason. He said we will leave but if we will be lucky we will have the house and we left.

Counsel: How would you know whether you would be lucky?

Witness: He told us to go and pray a lot and if our prayer is good we would have the house."

Instead of telling the plaintiff to go and pray a lot, what the defendant should have been recommending at that point in time or shortly thereafter, in terms of his fiduciary obligations, was that the plaintiff should obtain competent independent advice in relation to the whole transaction or, at the very least, he should have advised him diligently and honestly on every aspect of the transaction. The defendant failed on both counts and I have no hesitation in concluding that both agreements were obtained through undue influence and are, therefore, voidable.

I have already found the written agreement of 12 September to be illegal. The plaintiff, however, does not seek to set aside the earlier verbal agreement which I have found to be voidable at his option. On the contrary, he now seeks an order that it be specifically performed.

There are obvious defects in the verbal agreement which resulted from the failure of the defendant to properly fulfil his fiduciary duty. No provision is made, for example, to cover the situation of the widow's constitutional entitlement to the allotment in the event of both the defendant and his son (the heir) dying before the agreement crystallised. No provision is made as to what might happen should Cabinet not approve the surrender or if there was a default in the payment of the monthly instalments of $300.

The plaintiff, as is his right, nevertheless seeks specific performance of the verbal agreement and submits that if the agreement is frustrated, for any of the reasons I have just touched upon or any other reason beyond the control of the parties, then the court is able to remedy the matter by granting further appropriate relief.

In his detailed and concise submissions, counsel for the defendant raised 4 principle grounds against the plaintiff's claim. I have already dealt with two of those grounds. For completeness, I now touch briefly on the remaining grounds.

First, it is said that the Land Court has no jurisdiction to order specific performance of the agreement because using the "ejusdem generis" principle of statutory interpretation, the Land Court, under section 149(1)(b) of the Land Act (Cap 132), can only hear and determine any "disputes of title, claims of title and questions of title", and this is not such a case.

It is not necessary for me to determine in this case whether that analysis is strictly correct because for present purposes the plaintiff accepts it as being so. The plaintiff, however, submits in response that in this proceeding the court is required to determine the question of title affecting land because, if specific performance is ordered and the defendant is required to submit to Cabinet his letter of surrender, then his title to the allotment "may end as if he had died, and the only court which can answer such a question is the Land Court."

I agree with that analysis and hold that this Court does have jurisdiction.

The other ground advanced by counsel for the defendant was that both agreements, ie the verbal agreement and the 12 September written agreement, were either null and void because of section 6 of the Land Act or illegal and unlawful because of sections 12 and 13 of the Land Act. I need only deal with the verbal agreement.

The defendant's submission was that the verbal agreement was caught by these provisions because it purports to effect "an out-and-out sale" of an allotment and is therefore null and void.

The term "out-and-out sale" is not defined in the Land Act but it would cover a transaction purporting to be an absolute or outright sale of an allotment. I do not see the verbal agreement in question falling within that category. Under the verbal agreement, the defendant agrees to surrender his allotment in order that the plaintiff might then apply to hold it. An agreement of that nature is not an illegal out-and-out sale of an allotment within the meaning of section 6 of the Act. Rather it is a lawful procedure specifically recognised in the Land Act by virtue of which a holder may surrender his interest in an estate or an allotment. The Land Registration Officer, Sione Uele, gave extensive evidence as to how the procedure operates in practice. Once the surrender is consented to by Cabinet, of course, the former landholder has no say in relation to its subsequent allocation.

Moreover, section 12 of the Land Act is a penal provision and, for that reason, it would need to be even more strictly construed in favour of an alleged offender. The verbal agreement in the present case is not in my view a sale or attempted out-and-out sale of land.

Finally, the defendant relies on section 13 of the Land Act and submits that the verbal agreement is illegal by virtue of that provision. Again, section 13 is a penal provision and it would, therefore, need to be strictly construed. My analysis of section 13 is that, just as section 12 was intended to deter landholders from purporting to sell land outright in the Kingdom to unsuspecting purchasers, section 13 is intended to deter landholders from entering into any agreement for profit or benefit relating to the use or occupation of his holding other than pursuant to leases, sub-leases, permits and other methods specifically provided for in the Land Act. The verbal agreement in the present case is not, and in my view does not purport to be, such an agreement.

I, therefore, reject the various grounds advanced by the defendant in opposition to the plaintiff's claim. In any event, I find the whole notion of the defendant now arguing forcefully against the legality of the agreements which he drafted and entered into at a time when he was acting as solicitor for both parties, quite repugnant.

As part of the relief claimed, the plaintiff seeks an appropriate deduction from the balance payable of $36,000 on account of the proven damages or loss. The various amounts are summarised by counsel in his submissions under this head as follows:

"Furniture: $23,000

Car: $6,000

And also damages:

For attempted eviction on 9/4/01: $1,500

For electricity and telephone disconnections on 9/5/01: $500

For malicious prosecution: $500"

These figures total $31,500. The plaintiff's submission is that he will, therefore, only need to pay $36,000 less $31,500, in other words, $4500 at $300 per month.

Mrs Fonohema estimated the value of the furniture and contents removed from the house at $23,000. She described how she arrived at that figure and said that it was half the value of quotations she had received for new items of the same kind. Whilst I accept this evidence, I consider, having listened to the description of the furnishings given by the various witnesses, that the resulting figure is still probably on the high side because, after all, it is still second-hand, used furniture. I also find that Mrs Fonohema was genuinely mistaken over some of the items listed such as the television antenna, the two gas stoves with ovens, the gas bottles and one queen sized bed. In all the circumstances, I believe that a fair sum to allow under this head is $13,000.

The value claimed on the transaction for the loss of the car of $6000 is consistent with the evidence. The figure was not seriously challenged.

I find these matters to be integral elements of the claim before this Court, even accepting that they are not matters which would normally be associated with a Land Court claim, and I, therefore, propose to allow them. I am not so persuaded, however, in respect of the other items of damages claimed and I do not propose to allow them at this point in time. As no submissions were directed at this particular jurisdictional aspect of the claim, however, and as the Court did not invite such submissions, to avoid the risk of an injustice, I would, if the plaintiff so desired, entertain an application for leave to file further submissions solely in relation to this issue.

The plaintiff seeks an order that in the event that he does not become the landholder (for whatever reason) then the defendant is to repay the $20,000 deposit and pay damages in the sum of $2,500 plus interest at 10%.

Rather than make a fixed order now in those terms in respect of a contingency which may or may not arise in the future, the Court would prefer to have the flexibility to be able to deal with the situation and grant appropriate relief having regard to the known facts at the time. This flexibility is reflected in the order which I am about to make.

I can indicate however, that when it comes to final relief, the Court will be anxious to ensure, as far as possible, that the plaintiff is fully compensated for the wrongs which the defendant has inflicted upon him.

The plaintiff also seeks an order that the monthly payments should commence after such time as he is registered as the holder of the allotment. In his submissions in reply Mr Tu'utafaiva submits that there is no justification for delaying the commencement of the monthly instalments.

I find that the intention of the parties at the time the verbal agreement was entered into was that the monthly payments would commence as soon as the signed letter of surrender was handed over. The payments were not to be dependent upon the plaintiff taking title. At the same time I accept that although the plaintiff anticipated that there would be some delay before he would take title, he did not, then realize that he would have to wait at least 12 months before that event could take place. None of that was ever explained to him by the defendant who was acting as his solicitor and I am satisfied that if it had been explained, together with the other contingencies I have referred to, then the plaintiff would not have agreed to start making the payments immediately. The defendant should not be permitted to benefit from his own breach of fiduciary duty and so for that reason I propose to grant relief in the terms sought by the plaintiff. In doing so, I am mindful of the fact that the defendant has had the full use of the $20,000 deposit paid by the plaintiff.

In terms of the relief sought in the statement of claim, I now make the following orders:

1. Within 1 month of today's date the defendant will give to the plaintiff's solicitor a letter of surrender which shall be signed by the defendant, his wife and his eldest son (the heir), agreeing that the allotment with deed of grant book 140 folio 30 be surrendered in favour of the plaintiff.

2. That in the event that the plaintiff is registered as holder of the allotment, he shall pay to the defendant the balance of $36,000, less the losses and damages allowed of $19,000, namely, the sum of $17,000, at the rate of $300 per month, without interest.

3. In the event that, the defendant's wife or heir does not sign the surrender or Cabinet does not consent thereto, then leave is reserved to the plaintiff to come back to this Court for further relief including damages, loss and compensation as appropriate.

4. Until further order of the Court, the plaintiff and his wife and children are entitled to remain in occupation of the said allotment. (In this regard, the court is mindful of the evidence that the defendant has had the full use of the $20,000 deposit paid by the plaintiff.)

5. The plaintiff is entitled to costs, to be agreed or taxed.