IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 23 of 2011

BETWEEN:

JOEL TAWI & STEVEN JOEL
Claimants

AND:

THE REPUBLIC OF VANUATU
First Defendant

AND:

PACIFIC AUTRONICS LIMITED
Second Defendant

Mr Justice Oliver A. Saksak

Mrs Mary Grace Nari for the Claimants
Mr Pakoasongi for First Defendant
Mr Jack Kilu for Second Defendant

Date of Hearing: 24th May 2012
Date of Judgment: 6th September 2012

JUDGMENT

1.	This a reserved judgment after the Court heard Counsel consenting to written submissions being filed within 14 days by the Claimant and the Defendants to file responses within 14 days thereafter and a further 7 days thereafter for the Claimant for replies.

2.	The Claimant had in fact filed their written submissions on 23rd May 2012. The First Defendant filed their written submissions on 24th May 2012. The Claimants filed replies to the First and Second Defendants' submissions on 28th June 2012 after the Second Defendant filed their written submissions on 14th June 2012.

3.	This case is made complicated by the fact that the Claimant started the original proceeding giving rise to the issues raised in this case before the Magistrate Court. Not only that, but the Second Defendant also started a claim in the Magistrate Court in Civil Case No. 29 of 2004 against the same person (as Defendant). This claim was filed first in time against Ernest Faatauira (deceased) for the sum of VT748,723. Later in 2006, these Claimants also filed a claim against Ernest Faatauira in Civil Case No. 72 of 2006 for a separate debt in the sum of VT578,128.

4.	In Civil Case No. 29 of 2004 judgment was entered by the Court in favour of the Second Defendant. When the defendant failed to make payments of the judgment sum the Second Defendant applied and obtained an Enforcement Warrant against the defendant's Leasehold Title 04/3024/011 (the title). Thereafter, the Second Defendant applied for a Caution to be placed on the Title on 7th April 2004. The first Warrant issued on 20th September 2005 expired on 20th October 2005 without the Sheriff executing it. It was renewed on 3rd May 2006 and expired again on 31st October 2006 without execution.

5.	In Civil Case No. 72 of 2006, the Claimants obtained summary judgment against the defendant on 28th January 2008. On the basis of this judgment, the Claimants and the defendant entered into an agreement whereby the defendant agreed to transfer his Leasehold Title to the Claimant Joel Tawi in satisfaction of his debt of VT678,128.

6.	On 17th June 2008, the Claimant Joel Tawi applied to the Director of Lands for registrations of the transfer of Lease Title 04/3024/011 to him pursuant to their agreement. The application was refused on the basis of the existing Caution placed by the Second Defendant.

7.	On 26th January 2011 and 3rd March 2011, the Claimant wrote to the Director requesting the removal of the Second Defendant's Caution but the request was declined.

8.	When the Second Defendant became aware of the Claimant's attempts to have the property transferred into his name he applied to renew the Execution Warrant. A third Warrant was then issued on 14th March 2011 and remains valid to date.

9.	Basically the Claimants' complaints are that –

(i)	The Caution is unlawful and that it should have been removed by the Director.
(ii)	Having refused to do so, the Director was negligent.
(iii)	The Enforcement Warrants were issued ultra vires the Magistrate's Court jurisdiction.

10.	The Claimants seek the following reliefs:-

(i)	An order requiring the Director to remove the Caution and register the transfer of Lease Title 04/3024/011 to the Claimants within 14 days from the date of judgment.
(ii)	An order setting aside the Enforcement Warrant dated 14th March 2011.
(iii)	And order requiring the Defendants to pay damages equally and severally in the sum of VT430,000 within 21 days from the date of judgment.
(iv)	Interests at 5% per annum from date of judgment to final settlement of the judgment sum.
(v)	Costs.

11.	The Claimants have raised two issues for consideration by the Court which are –

(i)	Who can lodge a caution, and whether the Caution was valid?
(ii)	On the question of the Enforcement Warrant, whether the Magistrate Court has the power to order seizure of a registered interest?

The Second Defendant raised the same two issues. But the State as First Defendant raised the issue of whether the Director of Land Records was negligent in registering the Caution and maintaining it to date? This then is the third issue. And the fourth issue must follow that if negligence was found, whether the Claimants are entitled to damages as claimed?

12.	The Claimants argue and submit that on the basis of section 93(1) of the Land Leases Act and the case authority of Inter Pacific Ltd v. Sulis [2007] VUCA 26 and Ratua Development Ltd v. Ndai [2007] VUCA 23, the Second Defendant had no interest in the land and they could not register a Caution against it. Further, they submit that under section 98 of the Land Leases Act "pending Court proceedings" means pending proceedings in the Supreme Court as defined in section 1. As such, the issue of the enforcement warrants by the Magistrate Court was done ultra vires the powers of that Court.

13.	The First Defendant makes distinctions between the Sulis Case and the Ratua Case with this case and submits the Director acted in good faith in registering the Caution and further submits that under Part 14 of the Land Leases Act the Director does not have the adjudicative power or discretion to determine whether a person's interest under section 93(1)(a) is valid or not.

14.	The Second Defendant submits that section 93(1)(a) permits them to lodge a Caution to protect their interests in the land. Further, they argue that the Caution was never lapsed, extended or renewed but that it has remained active to date relying on Section 96(2) of the Land Leases Act. Regarding the issue of the Magistrate's Court jurisdiction to issue and Enforcement Warrant, they rely on Rules 14.1 to 14.50 of the Civil Procedure Rules No. 49 of 2002, and in particular Rule 14.16(1) which states:-

"Property That May Be Seized Under Enforcement Warrant"
The Court may issue an Enforcement Warrant authorizing an enforcement officer to seize and sell all real and personal property (other than exempt property) in which an enforcement debtor has a legal or beneficial interest."
They place emphasis on the term "real property".

DISCUSSIONS

15.	On the first issue of who can lodge a caution, it is clear from the ruling of the Court of Appeal in Ratua's Case at paragraph 29 of the judgment that "any registered interest in land "in section 93(1)(a) of the Land Leases Act must be read as meaning "any interest in a registered lease." But the Court of Appeal went on to say: "The words "or otherwise" have an important function because equitable rights in respect of a leasehold interest can certainly arise other than under an unregistered instrument i.e under a contract for sale and purchase not itself capable of registration (see S.22(5)), perhaps the most common use for a Caution…"

Earlier on in their judgment, the Court of Appeal had discussions on Sections 93, the Constitutional provisions under Chapter 12 Articles 73, 74, 75, 79(1) and 80, sections 15, 18, 23, 4 and 14 of the Land Leases Act Cap. 163 and at paragraph 25 the Court said this –

"It is self-evident from these provisions that the person registered and protected are the proprietors of the leasehold estate in land, that is, the lessees."(emphasis, added).

16.	It is clear from the facts that the Second Defendants were and are not the lessees of Title 04/3024/011 but they had shown to the Director that the lessee of that Title had an outstanding debt of VT748,723 the recovery of which the Court had issued an Enforcement Warrant, the subject of Civil Case No. 29 of 2004 issued in the Magistrate's Court. (See Annexure JMP1 of the statement of Jean Marc Pierre). That would in my view qualify the second claimant within the meaning of "or otherwise" in section 93(1)(a) of the Land Leases Act. It was on that basis that the Director approved the application having satisfied himself as to the process having been complied with he therefore register the Caution. The questions therefore are (a) whether the Second Defendant had an interest "otherwise" to apply for a Caution?; (b) Having done so, was the Caution valid?; and (c) was the Director negligent in doing so?

17.	The question in (a) is answered in the affirmative. The question in (b), the answer is in the affirmative. And finally the question in (c), the answer is in the negative. The Court accepts the argument and submission by the First Defendant that the Director acted in good faith and there is no evidence that he acted on legal advice unlike in the Sulis Case which is clearly distinguished in that respect.

18.	The second major issue by the Claimants is about the Enforcement Warrants issued by the Magistrate Court for the seizure and sale by the Sheriff of Leasehold Title 04/3024/011. Under paragraphs 9, 10 and 11 of their claims, the Claimants challenge the basis of the extensions of the Warrants after the first expiry date on 31st October 2006. Under paragraph 12, they challenge the jurisdiction of the Magistrate Court in issuing the Warrant in the first place.

19.	There is no doubt that the Warrants were issued pursuant to Rule 14 of the Civil Procedure Rules No. 49 of 2002. The Warrant issued on 14th March 2011 is a Money Order in Form 22, Rule 14.13 with the following details:-

Enforcement Debtors:	Ernest Faatauira and Donald Restuetune	
Amount recoverable:	T748,723 – Total judgment sum	
VT 3,000	– Enforcement Cost	
VT 15,000	– Legal Costs	
VT498,668	– 10% interest from 11th May 2004 to 8th February 2011, a total of 2,431 days.

Total -	__________
VT1,265,391	

20.	The Warrant is issued to the Sheriff with authority to:-

"1. Immediately seize the Enforcement Debtor's property Leasehold Title No. 04/3024/011 located at Luganville, Santo, the proceeds of sale of which would sufficiently cover the total debt of VT1,265,391 and sell the said property by public auction.

2. Out of the proceeds of sale, levy your expenses of enforcing this warrant, pay the sum of VT1,265,391 to the Claimant's lawyers, and pay any monies remaining to the Enforcement Debtor.

3. In the event that you are unable to sell property Leasehold Title No. 04/3024/011, you are hereby authorized to enter and seize the said property and deliver vacant possession of the said property by way of transferring the Lease Title No. 04/3024/011 to the Claimant.

This Warrant ends on execution of this Warrant.

Dated this 14th day of March 2011.

Seal of the Court (Magistrate Court) 

(Signed)."

This power of seizure is available under Rule 14.13(2) of the Rules.

21.	The term "Court" is not defined under this Part or in the Definitions Part 20. There are however parts of these Rules where the Court is specifically stated as the Supreme Court or the Magistrate Court but in the majority part of the Rules there are references only to "the Court". For example, in Rule 14.16(1) as quoted earlier in paragraph 14 above. In the context in which it is used in Rule 14.16(1), the Court must mean either the Supreme or Magistrate Court. However, it is my view that this is worthy of qualification to extending the meaning of "the Court" to mean "the Court with competent or relevant jurisdiction."

22.	Clearly the Magistrate Court has jurisdiction to try all civil cases "(a) in which the amount claimed or the value of the subject matter does not exceed VT1,000,000 except claims relating to permanent physical damage" – see section 1, Magistrates' Court (Civil Jurisdiction) Act [CAP. 130].

23.	On the Warrant dated 14th March 2011, it is obvious the amount of accumulated debt has exceeded the VT1,000,000 maximum limit of the Court's jurisdiction. Further, the Warrant has authorized the Sheriff to seize and sell land within Lease Title 04/3024/011. On the subject of leases, the Land Leases Act [CAP. 163] must relevantly be considered and applied. All references to "the Court" in this Act must be taken to mean the Supreme Court – Section 1 defines "the Court" as meaning the Supreme Court.

24.	There must in my view be a qualification here also where land within a leasehold title has a value of VT1,000,000 or less, it is my view that the Magistrate Court has jurisdiction to issue a warrant directing the Sheriff to seize and sell such land. And where real property under a leasehold title becomes the subject of an enforcement process, the Court must first hold a hearing to determine the value of the property as a preliminary pursuant to Section 4 of the Magistrate's Court Act. Based on the evidence and representations made at the hearing, the Court will determine whether or not the claim comes within its jurisdiction. If it finds that it does not, the Court shall refer the claim to the Supreme Court – Section 4(3).

25.	There is nothing in the evidence by the First and Second Defendants that this process was complied with by the Magistrate Court. For that omission, the Enforcement Warrant dated 14th May 2011 is hereby declared invalid, void and of no legal effect.

26.	The effect of this declaration is that there are now two competing claims against Ernest Faatauira. The Court is informed this defendant is deceased and there is no known administrator of his estate. However, it is clear from Civil Case 29 of 2004 that there is the Second Defendant, Donald Restuetune, whom the Court takes judicial notice is still alive. In Civil Case No. 72 of 2006, Ernest Faatauira is the only defendant. The Advice of Registration Dealing dated 7th April 2004 show Ernest Faatauira as the only registered proprietor.

27.	On 28th January 2008, when a summary judgment was obtained against him, the defendant must have known about the outstanding judgment sum against him in Civil Case No. 29 of 2004. On 17th April 2008 when he agreed to transfer his lease title 04/3024/011 to the Claimant without any consideration fully aware of the Second Defendant's claims which were slightly higher than the Claimant's and which was a claim and judgment debt first in time, Ernest Faatauira was plainly dishonest. Therefore an agreement made under those circumstances cannot be recognized as valid to be capable of being enforced in any Court of law.

28.	In or about June 2008, the Claimant would have known also about the Second Defendant's claim and proceeding which was the first in time to his. Yet there is no evidence by them to show they took reasonable steps to –

(a)	Apply to be joined as a Party to Civil Case No. 29 of 2004; and
(b)	Challenge the issue of the Enforcement Warrant first issued on 3rd May 2006.
(c)	If that challenge was unsuccessful, he would have been entitled to file an appeal against the decision to this Court.

The Claimants did none of those but waited until 3rd May 2011 to file this current proceeding. That was some three years later. And the proceeding is with respect, an appeal in disguise which is an abuse of process.

29.	This brings me to the conclusion that the Claimants are only partly successful in their claims against the Defendants. For the reasons earlier provided, the orders sought by the Claimants under paragraphs 1, 2, 3, 4 and 5 of their reliefs are hereby declined. The order sought under paragraph 2 is granted in terms of a declaration made under paragraph 25 of this judgment. However, no damages will be awarded for reasons provided above.

30.	Under paragraph 6 of their reliefs, the Claimants have sought other orders as deems fit by the Court.

31.	Civil Case No. 29 of 2004 and Civil Case No. 72 of 2006 have as a result of this proceeding made their own natural exit and transfer out of that Court into this Court by this proceeding because the amounts claimed have now exceeded the jurisdiction of the Magistrate Court. Further, once a leasehold interest is brought into issue, the matter falls squarely within the jurisdiction of this Court.

32.	The necessary orders therefore are –

(i)	That Civil Case No. 29 of 2004 and Civil Case No. 72 of 2006 be hereby transferred out of the Magistrate's Court into the Supreme Court Registry.

(ii)	Civil Case No. 72 of 2006 be consolidated into Civil Case No. 29 of 2004 and be dealt with together as one proceeding entituled as follows:-

"BETWEEN:	PACIFIC AUTRONICS LTD	
	First Claimant	
		
AND:	JOEL TAWI & STEVEN TAWI	
	Second Claimants	
		
AND:	ERNEST FAATAUIRA & DONALD RESTUETUNE	
	Defendants"	

33.	This has now placed the Claimants on equal footing. Much expense, costs and time have been incurred and experienced by all parties. The Court has a duty to deal with cases justly to ensure all the overriding objectives in Rule 1.2 of the Rules are observed an adhered to. In that regard, substantial justice would be done to both Claimants if this Court, subject to what counsel further submits orally on this point, will be mindful to issue an updated Enforcement Warrant under Rule 14.16 in the terms of the previous warrant.

34.	With respect to costs, the First Defendant deserves their full costs of the proceeding on the standard basis as agreed or determined by the Court. As regards the Second Defendant, they are entitled only to half of their costs of the proceedings as agreed or taxed.

DATED at Luganville this 6th day of September, 2012.

BY THE COURT

OLIVER A. SAKSAK
Judge