IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

A & J WULF ENTERPRISES LIMITED
a duly incorporated company having its head office at Apia
Plaintiff

AND:

THE NATIONAL PROVIDENT FUND
a body corporate created under the National Provident Fund Act 1972
First Defendant

AND:

THE REGISTRAR OF LANDS
an office created by the Land Registration Act 1992 / 1993
Second Defendant

Counsel: Mr KL Enari for the Plaintiff
Mr P Meredith for the First Defendant
Mr D Clarke for the Second Defendant

Decision: 14 July 2004

DECISION OF JUSTICE VAAI

The plaintiff is a family company of Mr and Mrs Wulf which in 1998 borrowed substantial amounts of monies from the First Defendant and other financial institutions to complete the purchase of land at Tufuiopa near Apia and the construction of a building thereon. Security for the loans was a first mortgage over the Tufuiopa property and other lands at Tiavi.

By July 2001 the Plaintiff’s loan repayments were deeply in arrears not only with the First Defendant but also with the ANZ Bank. By default notice dated 24th July 2001 the First Defendant demanded the Plaintiff to remedy the then default of $142,851.68 by the 31st August 2001. In response the Plaintiff requested the First Defendant to allow the Plaintiff to sell its lands at Tiavi to cure the default and inject cash into the Plaintiff’s business but the request was denied by the First Defendant.

In October 2001 the ANZ Bank as Second Mortgagee exercised its power of sale under its mortgage but the sale did not proceed presumably through the absence of bidders. In March 2002 the First Defendant in the exercise of its power as mortgagee to sell received an offer of $850,000 for the Tufuiopa property. The Plaintiff was notified and given seven days to match the offer. The Plaintiff in an attempt to stop the sale lodged a caveat with the Second Defendant for registration. Registration of the caveat was refused and the sale of the Tufuiopa property for $850,000 proceeded and the deed of conveyance registered. The Plaintiff says the First Defendant undersold the Tufuiopa property by $3,136,000 because in September 2000 the government valuer valued the Tufuiopa property at $3,986,000. By selling the Tufuiopa property at $850,000 with the knowledge of the government valuation the Plaintiff say the First Defendant was negligent.

As against the Second Defendant the Plaintiff says the Second Defendant was acting ultra vires when it refused to register the Plaintiff’s caveat.

The First and Second defendants have both moved to strike out the statement of claim. The law relating to the exercise of the power of the Court to strike out a statement of claim is well settled as all three counsels acknowledged. See R. Lucas & Son Ltd v O Brien / 1978) 2 NZLR 289; Drummond-Jackson v British Medical Association (1970) 1 All ER 1094; Nagle v Feilden (1966) 2 QB 633; A-G of the Duchy of Lancaster v London & N.M. Railway (1892) 3 Ch 274.

The First Defendant says the statement of claim discloses no cause of action so that pursuant to Rule 70 Supreme Court (Civil Procedure Rules) 1980 the claim against the First defendant should be struck out. Counsel for the Defendant however concedes that the gist of the plaintiff’s complaint is negligence; it is alleged that the First Defendant was negligent when it exercised its power of sale as mortgagee. Paragraph 21 of the statement of claim gives the particulars of negligence namely:

(a)	failing to obtain a valuation before agreeing on the purchase price to the purchaser;

(b)	failing to inform the Plaintiff that negotiations were being conducted with the purchases;

(c)	failing to advise the Plaintiff during negotiations between the parties that it had already accepted the offer of the purchaser;

(d)	failing to take into account the valuation of September 2000 which took into account the cost of the new building on the land; and

(e)	failing to follow its decision to discuss the sale with the Plaintiff prior to its conclusion.

The First Defendant has in support of the application to strike out filed affidavit denying the allegations of negligence. In determining however whether the statement of claim should be struck out the Court must proceed on the assumption that the facts pleaded are true. See Attorney General v Prince & Gardner (1998) 1 NZLR 262; and Taiene Paina v Public Trustee (unreported decision of Sapolu CJ 30/7/98).

Paragraph 5 of the statement of claim alleges that the land and improvements were valued by the government valuer in September 2000 at $3,986,000 and paragraph 19 alleges that the same land and improvements were sold by the First Defendant in March 2002 at $850,000 when it exercised its power of sale.

Counsel for the Plaintiff confirmed that the cause of action against the First Defendant is based on negligence and relies on the English Court of Appeal decision in Cuckmere Brick Co. Ltd v Mutual Finance Ltd (1971) 2 All ER 633. I have had the benefit of perusing the English, Australian and New Zealand authorities referred to by both counsels in their well prepared submissions and as a result the application by the First Defendant to strike out must fail as the Plaintiff has an arguable case based on negligence. But there are paragraphs in the statement of claim which do not support allegations of negligence against the First Defendant and should be struck out. These are paragraphs:

10.	From July 2001 to early 2002 the Plaintiff sought assistance from Board members of the First Defendant and from the Prime Minister and Ministers.

11.	The said Board members and politicians assured the Plaintiff that it would receive some chance to make good its default.

12.	The First Defendant has in the past given such opportunities to other borrowers in worse situations than the Plaintiff.

I direct that the First Defendant to file a statement of defence and / or counterclaim within 21 days. I reserve the question of costs until the hearing of the action.

I now proceed to consider the application by the Second Defendant to strike out. The Second Defendant’s strike out application is advanced on four grounds namely:

(i)	There is no cause of action against the Second Defendant.

(ii)	The claim against the Second Defendant is statute barred by virtue of section 38 Land Registration Act 1992/1993.

(iii)	A claim that the Second Defendant acted ultra vires is an action in Administrative law and is properly pleaded by way of a prerogative writ. A remedy sought by way of prerogative writ does not entitle the plaintiff to a claim for damages.

(iv)	In any event a claim that the Second Defendant acted ultra vires will not necessarily amount to the tort of negligence and there has been no claim of negligence alleged against the Second Defendant.

The allegations in the statement of claim against the Second Defendant is expressed in three paragraphs namely:

16.	The Plaintiff sought to have a caveat entered against the title of the said land but the Second Defendant rejected the said caveat and did not register it.

17.	The Second Defendant was acting ultra vires when it rejected the registration of the Plaintiff’s caveat.

18.	As a result of the Second Defendant’s failure to act the Plaintiff was unable stop the First Defendant from proceeding with its sale and consequently the Plaintiff suffered loss of $3,136,000.

In its prayer the Plaintiff seeks against the Second Defendant an order:-

(i)	that the Second Defendant was acting ultra vires when it refused to register the caveat.

(ii)	damages against the First Defendant and / or the Second Defendant in the sum of $3,136,000. 

The Second Defendant in his statement of defence explained why he refused to register the caveat:-

(i)	The caveat was received by the Department of Lands, Survey and Environment on 5 March 2002.

(ii)	The Plaintiff had no other interest in the land except as the registered proprietor.

(iii)	The caveat did not sufficiently state the nature of the estate or interest claimed and the ground upon which the claim was founded.

It is blatantly clear from the pleadings and the submissions that the only reason why the Plaintiff lodged the caveat was to stop the sale of the land by the First Defendant and it is also blatantly clear why the Second Defendant pursuant to section 27 Land Registration Act refused to register the caveat. Section 21 Land Registration Act confers the right to lodge a caveat against dealings upon any person:

(a)	claiming to be entitled to or to be beneficially interested in any land estate or interest authorised to be included in the Land Register by virtue of any unregistered agreement or other instrument or transmission or of any trust, expressed or implied, or otherwise howsoever.

I accept the argument by counsel for the Second Defendant that the only interest the Plaintiff had in the land was as a registered proprietor. As registered proprietor, the Plaintiff cannot pursuant to section 21 Land Registration Act, be said to claim an interest in the land by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied or otherwise howsoever.

Section 2 defines instrument as any document or documents in a set affecting land or an interest in land which may be registered pursuant to this Act; and includes instrument of title. And since the Plaintiff cannot be said to be claiming by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied or otherwise howsoever pursuant to section 21, it is not entitled to lodge a caveat in an attempt to prevent the mortgagee from proceeding with the sale: See Re An Application By Haupiri Courts (1969) NZLR 353 where Richmond J considered similar wording under a similar provisions in the NZ Land Transfer Act 1952; namely whether the registered owner is a person legally entitled to lodge a caveat. Adopting the same conclusion as Richmond J I find that the plaintiff as the registered owner is not entitled to lodge a caveat pursuant to section 21 merely because he is the registered owner. The plaintiff must go further and establish to the satisfaction of the Second Defendant circumstances beyond its status as the registered proprietor which distinctly gives rise to a specific interest in the land. The Registrar was therefore entitled to refuse registration of the caveat and the claim against the Second Defendant must accordingly fail and is struck out.

The Second Defendant is entitled to costs which I fix at $200.00.

JUSTICE VAAI