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Supreme Court of Samoa |
IN THE SUPREME COURT OF SAMOA
HELD AT APIA
BETWEEN:
PETER AH HIM
of Malifa, Samoa, Businessman.
Plaintiff
AND:
HANNAH LEULUA’I
of Lelata, Samoa, Housewife.
Defendant
Counsel: Mr H Schuster for the Plaintiff
Ms R Drake for the defendant
Hearing: 19 April 2002 and 8 October 2002
Submissions: 4 November 2002
Decision: 24 December 2004
DECISION OF JUSTICE VAAI
The defendant a married woman aged 54 years is the registered owner of a quarter acre section at Lelata near Apia upon which stands her rundown house which badly needs repairs. By a written Sale and Purchase Agreement dated the 19th day of August 1999 the defendant sold her land and building to the plaintiff at a price of $100,000 to be paid by instalments of:
(a) $30,000 to be paid by way of deposit on the date of execution of the agreement,
(b) $30,000 to be paid on or before the 30th September 1999, and
(c) $40,000 to be paid on or before the 31st December 1999.
The full purchase price of $100,000 was not paid until July 2000. Although the defendant has received and disposed of the $100,000 she has refused to execute the deed of conveyance resulting in the plaintiff commencing these proceedings against the defendant for specific performance. She alleges in paragraph 4 of her Statement of Defence that:
Background
The defendant and the plaintiff have been engaged in a sexual relationship since about 1990 or 1991. The relationship initially was not a continuous one as the defendant and her husband did return overseas and came back on occasions. In 1996 the defendant and husband returned to Samoa to settle and the sexual relationship resumed onto 1998 when the defendant’s husband departed Samoa permanently and the relationship became somewhat open and their activities became more frequent mostly at the defendant’s house. Her family owned lands at Lelata which was subdivided and subsequently sold. Through the defendant the plaintiff bought three sections which were owned by the defendant’s father, the defendant’s mother and the defendant’s sister. Deeds of conveyances for the transactions transferring lands from the defendant’s mother and sister to the plaintiff were arranged by the plaintiff’s solicitor to show that the purchaser of the lands was the defendant who in turn reconveyed the same parcels of land to the plaintiff. On the parcel of land bought by the plaintiff from the defendant’s father the plaintiff constructed two separate flats for renting out. Adjoining the two parcels of land which the plaintiff purchased from the mother and sister of the defendant are two quarter acre sections registered under the name of the defendant; one of the quarter acre sections was sold by the defendant to the plaintiff while the defendant’s husband was living in Samoa; the other quarter (¼) acre section with the defendant’s house thereon is the subject of these proceedings (hereinafter referred to as the “subject land”).
The defendant’s claim
The defendant maintained she did not wish to sell her land; instead of selling she had agreed with the plaintiff to a land exchange; she reluctantly agreed to exchange her land with the plaintiff’s land on which the two flats are constructed (hereinafter referred to as the plaintiff’s land) after much persistence from the plaintiff. She was also told by the plaintiff that she will benefit from the exchange by giving away her rather dilapidated house for the plaintiff’s two flats which she can use for living and for renting out.
The defendant also alleges that before the Agreement for Sale and Purchase was executed she was told by the plaintiff of legal advice from the plaintiff’s solicitor as follows:
(a) Documentation of the land exchanges between the plaintiff and the defendant cannot be done;
(b) The Agreement for Sale and Purchase of the defendant’s land will be executed first;
(c) The plaintiff will after the execution of the Agreement for Sale and Purchase transfer his land to the defendant;
(d) The Agreement for Sale and Purchase has to have a figure as the purchase price.
As a result of the legal advice the plaintiff and the defendant discussed and agreed on the figure of $100,000. It is also the defendant’s notion that the $100,000 was for her use, and no one, including the plaintiff’s wife, must find out about the $100,000; she is free to use the money she needs and any amount left over at the time the plaintiff transfers his land to the defendant to complete the exchange shall be returned to the plaintiff.
On the day she signed the Agreement for Sale and Purchase, she went to the office of the solicitor on instructions from the plaintiff; she has been to the same office on prior occasions to execute conveyances of her land and of her mother’s and sister’s lands to the plaintiff. She was given the $30,000 cheque by the plaintiff. After she signed the Agreement she questioned the solicitor, Mr Fepuleai, why the land exchange was not done and to which she was told it can be done; in fact it’s a lot easier. As she turned to talk to the plaintiff about the land exchange she was kicked in the leg to keep quiet; she then walked out to her car but the plaintiff followed and retrieved the $30,000 cheque from her because the plaintiff did not want his wife to find out about the cheque. In fact it was pre arranged that the plaintiff will open a bank account for the defendant and the plaintiff will deposit the purchase price into her account.
It is also alleged that since her sexual relationship with the plaintiff spanning from 1990 to the execution of the Agreement for Sale and Purchase in 1999 the plaintiff exercised improper and undue influence over the defendant by physically and emotionally abusing her, by demanding and being provided with a spare key to the defendant’s house so that he can visit any time of the night; by providing the defendant with a mobile phone so that the plaintiff can keep track of her; by providing the defendant with a wedding ring and being over-jealous when the defendant talked to other men; by giving her monies, controlling her finances and virtually running her life. In support of her allegations she produced a written statement of eleven (11) foolscap pages expounding her memoirs of love life, hatred abuse and confusion. She also produced as exhibits numerous love notes they left for each other which clearly indicated that the plaintiff and the defendant despite their marital status were very much in love. Two photographs showing her bruised face were also produced which she alleges were taken in New Zealand three weeks after she was physically abused by the plaintiff in November 1999. Unfortunately for the defendant she overlooked to check the reverse side of the photographs which had the dates August 1991 written on them which she admitted under cross examination were the dates she wrote.
Since the inception of the love affair the defendant had expected the plaintiff to do and pay for repairs to her house because the plaintiff promised her he will, but he kept coming up with excuses and buying up properties elsewhere. His failure to renovate the defendant’s house despite his business successes has been a constant source of resentment for the defendant. I quote from page 4 paragraphs 4, 5 and 6 of her written statement:
“Now my house has to wait he’s going to build a big guesthouse at his Malifa compound then again, he said “be patient” and then another land has come up for sale and he wanted to buy. He bought Saleufi land this time next door to Bluebird, then it goes on to more land buying, this time China town.”
“He said darling, this little Chinaman is going to be the most famous and most successful businessman in Samoa, and included me in all his plans, he said darling we are going to be very happy you’ll see, just bear with me and be patience (still no renovating) then later on he approached me again; lots of money has been spent on his village people - - - - .”
“More and more excuses as always for not helping me at all or to act on his promises - - - - .”
Instead of renovating her house as promised she was one day asked by the plaintiff to exchange her house with his two flats which she flatly refused. When she finally agreed it was the plaintiff who arranged with his solicitor Mr Fepuleai to prepare the deed of exchange which for reasons already stated culminated in the execution of the Agreement for Sale and Purchase. After the execution of the Agreement she felt uneasy but she was promised by the plaintiff that she will never loose her land; they will always live close to each other as she is his second wife because his married wife does not turn him on any more. She was given a wedding ring and was threatened with a bullet in her head if she was caught flirting with other men. She responded by telling the plaintiff she too has a gun so she can also kill and she was not bluffing. He got abusive as he often did and took the gun from her. Incidents of physical abuse were quite common sometimes resulting in near blackout. Although she described the plaintiff as abusive and violent she also labels him persuasive and manipulative and blames herself for:
“I fall too easily for all his tricks and the three little words : “I love you”.”
Concerning the $100,000 paid by the plaintiff into her bank account she was told by the plaintiff:
“- - - - its our money you can always use whatever is left then give that back at the time of the exchange - - - “(Page 6 paragraph 4).
“So I used the money, I even send money for my children and Peter encouraged me to go for a trip to visit my children, I was surprised because he was always against my trips to New Zealand; so it all happened. I just did as I was told, always following instructions - - -" (Page 6, paragraph 5)
Before the execution of the Agreement the plaintiff was supporting the defendant financially and on at least one occasion in 1996 he paid the defendant’s for airfare for her return trip from New Zealand.
“- - - - He was always a sweet person. So Peter paid my fare in June 1996 to return to Samoa.” (Page 3 paragraph 5)
So in 1996 the plaintiff was regarded as a sweet character. In the same year he bought a quarter acre section (adjoining the subject land) from the defendant to finance the purchase of a pick up truck for the defendant and her husband to assist with their plantation which in the following year was declared a failure and the pick up truck was resold. The plaintiff demanded and was given the monies from the sale because as the defendant puts it:
“- - - I refused, but he was getting to the stage of I should do as was told he gets very aggressive sometimes, so I ended up giving him the $6,500 cash. - - - “
So in 1997 the plaintiff was perceived by the defendant as demanding and occasionally aggressive and in 1999 he was described as abusive, violent and deceitful. The defendant’s real complaint and resentment towards the plaintiff in my view is expressed in page 5 paragraph 9 and page 8 paragraph 5 of her written statement:
“- - - I kept telling Peter, I just don’t know what’s going on, nine years we had this affair nine years you have promised me lots of things and nothing is done. I have done all you have asked of me to do and nothing in return. Peter knows, these are always my words to him; do you realize I don’t owe you anything; you took my $6,500 of my pick up, took my gun, you had all the lands you have asked for, you had the key to my house, you have all of me etc and I all I get is empty promises - - - -"
“ - - - I trusted him, I was faithful, I was his wife in a way. A wife away from his legal wife. I played my past as instructed but now I know and realized what a wasted 10 years. Not a thing done to my house, I really, really trusted Peter, I have never doubted him, never thought of the consequences - - -"
The Plaintiff’s Claim
Since 1991 when he came to Samoa to set up business the plaintiff has undoubtedly been recognized as one of the most successful businessman. Other than lands purchased from the defendants and her family he has acquired real estate in the town area and outside of town. He denied requesting the defendant to exchange her house with his two flats; her house was rundown while his two flats were recently constructed; a land exchange was never agreed to. It was the defendant who was in need of cash to travel to New Zealand who requested the plaintiff for $20,000 and the plaintiff required security. She offered $100,000 for her land which the plaintiff accepted and Mr Fepuleai was instructed to attend to the documentation. Before the Agreement was signed Mr Fepuleai asked the defendant if she wanted to seek other legal advice and the defendant replied in the negative. Mr Fepuleai then proceeded to explain to them the contents of the Agreement. She did not query Mr Fepuleai why a land exchange cannot be done. He did admit however that there was a discussion of land exchange; but the subject was raised by the defendant when she asked the plaintiff if the exchange of lands can be done when she gives back the $100,000. In response to her request he agreed to discuss the land exchange when the money is paid back. He denied giving the defendant a wedding ring, a mobile phone, a bruised face, any threatening remarks or exercised any form of undue influence over her or controlled her life. Neither did he promise to renovate her house or use it for any of his business activities. He did give her monies when she asked but he never managed her financial affairs.
Mr Fepuleai gave evidence. He testified that the day before the Agreement was signed he met with the plaintiff and the defendant at his office at 12 noon and obtained from the plaintiff instructions for the sale. He verified the instructions with the defendant and on the following day before the Agreement was signed he asked the defendant if she wanted to take the Agreement away for separate legal advice. She appeared normal on both occasions and she declined separate legal advice. She did not ask why a deed of exchange cannot be done but Mr Fepuleai did hear both parties talking about an exchange of flats. In July 2000 deed of conveyance was drawn up for execution when the plaintiff advised Mr Fepuleai that all monies due under the Agreement have been paid and because the defendant refused to come in to sign he therefore sent her the deeds. Mr Fepuleai accordingly denies the allegation by the defendant that she went to Fepuleai’s office and told Mr Fepuleai she refuse to sign because there are a lot of things Mr Fepuleai does not know.
A valuation of the subject land was commissioned and the valuation report produced as exhibit showed the current market value of the land (excluding the house) as at August 1999 was $78,000. The same land valuer told the court that the house had an approximate value of $5,000.
Undue Influence
Since the decision of the English Court of Appeal in Allcard v Skinner [1887] UKLawRpCh 151; (1887) 36 Ch D 145 a clear distinction has been drawn between those cases commonly referred to as cases of actual undue influence and cases commonly referred to as cases of presumed undue influence. In cases of actual undue influence the court will uphold a plea of undue influence only if it is satisfied that such influence has been affirmatively proved on the evidence whereas in cases of presumed undue influence the nature of the relationship between the parties will lead the court to presume that undue influence has been exerted unless evidence is adduced proving the contrary.
Both counsels have canvassed in their legal submissions both classes of influence undoubtedly because the defendant here appears to rely on both actual and presumed undue influence. It is accepted and common ground that the relationship of husband and wife does not give rise to the presumption of undue influence: National Westminster Bank Plc v Morgan [1985] UKHL 2; (1985) AC 686; but exceptionally it may if on the facts the other party acquired a dominating influence and a manifestly disadvantageous transaction is proved, then there would be room for the court to presume that it resulted from the exercise of undue influence. Where there is evidence that a husband has taken unfair advantage of his influence over his wife, or her confidence in him, it is not difficult for the wife to establish her title to relief: See Re Lloyds Bank Ltd, Bomze v Bomze (1931) 1 Ch 289 at 302.
But the practice of classifying cases of undue influence invited criticism from Lord Clyde in the House of Lords decision in Royal Bank of Scotland v Etridge (No.2) 2001)4 All ER 449 at 477:
“I question the wisdom of the practice which has grown up, particularly since Bank Of Credit And Commerce International SA v Abbody (1992)4 All ER 855 of attempting to make classification of cases of undue influence. That concept is in any event not easy to define. It was observed in Allcard v Skinner [1887] UKLawRpCh 151; (1887) 36 Ch D 145 at 99 (per Lindley) that “no Court has ever attempted to define undue influence.” It is something which can be more easily recognized when found than exhaustively analysed in the abstract. Correspondingly the attempt to build up classes or categories may lead to confusion. The confusion is aggravated if the names used to identify the classes do not bear their actual meaning. Thus on the face of it a division into cases of “actual” and “presumed” undue influence appears illogical. It appears to confuse definition and proof.”
In any event it has been accepted since the decision of the House of Lords in National Westminster Bank Plc v Morgan (supra) that before any transaction can be set aside for undue influence whether actual or presumed, it has to be shown that the transaction constituted a manifest disadvantage to the complaining party seeking to avoid it. See also Goldsworthy v Brickwell (1987) Ch 378 at 405; Midland Bank Plc v Sheppard (1988) 3 All ER 17 at 22; and Bank of Credit and Commerce International S.A. (1989) 1 QB 923 at 964.
Presumed Undue Influence
The defendant alleged in her statement of defence that the plaintiff exercised undue influence over her as they were in a sexual relationship at the time while her counsel submitted that the relationship amounted to a common law man and wife association. It is accepted that they did have an extra marital relationship spanning for some nine years from about 1990 or 1991 to 2000. I also accept from the defendant’s written statement and testimony that the relationship blossomed into an illicit intimate one when the defendant’s husband left Samoa permanently for overseas in 1998 some twelve months before the Agreement was signed. It was from about 1998 that they were engaged in leaving love notes for each other at the defendant’s house – they could not have done so while the defendant’s husband was living at the house; and indeed if a wedding ring was given and worn by the defendant it will also be during this period. She also categorically told the court under cross examination she was not dependant on the plaintiff for support as she had her own income. Consequently in my view the relationship cannot be labelled as one of common law husband and wife. It remains, as counsel for the plaintiff has in my view correct termed it, an illicit love affair; and it is totally irrelevant whether the defendant, a well educated woman, was given a wedding ring by the plaintiff.
It is also suggested that the relationship between plaintiff and defendant involved a great deal of reliance and trust by the defendant of the plaintiff. Counsel for the defendant submits that the relationship was of such a nature that the plaintiff became the ascendant partner and the defendant trusted and feared the plaintiff. Now when the defendant and her husband moved back to Samoa they did not have much money; the defendant said in page 2 last two lines of her statement:
“We did not have any money, we have spent all our money that we have saved to uproot everyone and paid for a container of all our personal effects; we did not have that much money and Peter knew that - - - “
On the other hand the plaintiff is an established and a very successful businessman who (despite his motives) did assist the defendant and her husband financially. When the defendant’s husband left Samoa permanently all the defendant had to her name was the subject land, her work and the love affair and she continued to receive monies on the side (to use her terminology) from the plaintiff.
There is nothing in her testimony or her statement which gives rise to the need for her to consult the plaintiff about anything financial or of material benefit except of course here constant nagging about the plaintiff’s failure to repair her house while the plaintiff continued to accumulate his wealth and her assumptions that she was included in the plaintiff’s future plans and will therefore benefit from the plaintiff’s successes as a businessman. If she is correct in her accusations then the thrust of her complaint is really against the plaintiff for breach of promise.
When she and her husband wanted a pickup for their plantation she did not want to use her land as security for a loan quite correctly so because they would not have been able to service the loan and loose her land so the only course of finance available was to sell her land which the plaintiff did buy. Although she and her husband continued to have argument about finance she tried to convince the court that it was her love and persistent persuasion by the plaintiff (Paragraph 2 page 3 of her statement) which caused her to sell her land. The truth of the matter is that she and her husband were operating a plantation about seven (7) miles from home and they needed to buy a vehicle to service it. The circumstances of the relationship did not create any degree of reliance and trust or any form of partnership whereby the plaintiff acquired ascendancy over the defendant. As a result the first prerequisite to the evidential shift in the burden of proof from the defendant to the plaintiff in presumed undue influence has not been discharged by the defendant. I will deal with the second prerequisite when I deal with the Agreement itself.
Actual Undue Influence
In support of actual undue influence counsel for the defendant submit that during the course of the relationship the plaintiff became increasingly aggressive and manipulative and on several occasions had physically abused the defendant who became scared of him. The submission of undue influence here overlaps with the principle of duress as there are allegations of improper pressure and threats levelled by the defendant against the plaintiff.
Some of the so called love notes produced can perhaps be labelled as confusing and bitter but the overall picture portrayed by the notes is that a love affair did exist even though there may have been occasions of violence which I do not accept was rampart. The photographs produced by defendant showing her bruised face as evidence of violence by the plaintiff in 1999 I have ruled does not reflect favourably on the defendant as the date written by the defendant on the photographs are August 1991 at which time she was still living with her husband and attempts were made to change 1991 to 1999 on the photographs. Neither do I accept that the defendant was scared of the plaintiff as some of the love notes indicated she clearly spoke her mind and secondly in her written statement she did not take threat from the plaintiff:
“- - - He threatened me : “I’ll put a bullet in your head and a bullet in your friend’s head”, and I said I’ve got a gun too, I can kill too. He laughed at my statement, he knew I was not bluffing. - - -"
Frankly there is nothing concrete in her testimony and written statement which can support the claim of actual undue influence. In the light of my assessment of the evidence it does not on the balance of probabilities prove actual undue influence and it must accordingly fail
The Agreement for Sale and Purchase
Under the heading Presumed Undue Influence I dealt with the first pre-requisite which the defendant must meet to shift the evidential proof to the plaintiff and I ruled against the defendant. I will now deal with the second prerequisite namely that the transaction complained of is not readily explicable by the relationship of the parties.
The reason for dealing with the second limb of presumed undue influence under this heading is because the defendant also alleges that the Agreement was brought about by fraudulent misrepresentations by the plaintiff to the defendant so that in reality there are two issues to deal with here.
Issue One: The second prerequisite was summarized by Lindley LJ in Allcard v Skinner (supra) at page 185:
“But if the gift is so large as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary men act, the burden is upon the donee to support the gift.”
In adopting the same approach Lord Scarman in National Westminster Bank v Morgan (supra) expressed the view that manifest disadvantage to the complaining party must be shown before a transaction will be set aside for undue influence. Lord Nicholls in Royal Bank of Scotland v Etridge (No.2) (supra) at 461 labelled manifest disadvantage as causing difficulty and giving rise to misunderstanding because the label manifest disadvantage is being applied and understood in a way which does not accord with the meaning intended by Lord Scarman.
Again I have no difficulty after consideration of the testimonies and exhibits that the defendant did not suffer any disadvantage let alone manifest disadvantage. She did not gift her land or sold it at under value. She sold her land and house (with a then current market value of $83,000) for $100,000; she has spent the $100,000 and she is in no position to pay back that money. I do not accept that she did not want to sell her land; she was receiving monies on the side from the plaintiff presumably because her wages were insufficient for her upkeep and lifestyle and any visit to her children overseas was out of question unless the plaintiff offered to as he did in the past. She had two alternatives; she could either sell her land or borrow money against it; she chose to sell; she received more than a reasonable price for it and the fact that she selfishly wanted a lot more than $100,000 does not label the transaction as manifestly disadvantageous.
Issue 2: Again I am not in any way persuaded by the evidence that there was fraudulent misrepresentation by the plaintiff. When the parties saw the solicitor the day before the Agreement was signed, the solicitor verified with the defendant the terms of the Agreement. I also accept from the solicitor’s evidence that before the Agreement was executed his suggestion to the defendant to seek separate legal advice was declined. It is not the first occasion that the solicitor has attended to the defendant on land transactions. I accept that there was suggestion of land exchange, that the suggestion came from the defendant and the plaintiff was prepared to negotiate it if she pays back the $100,000. I accept the evidence of the solicitor that she did not ask the solicitor about deeds of exchange. I find it absurd that the plaintiff agreed to exchange his then two recently constructed flats with an old rundown house. It is even more absurd to suggest that the plaintiff an estate businessman agreed to pay $100,000 to the defendant for her unlimited and unconditional use until such time the plaintiff transfers his land to the defendant as part of the land exchange deal. To accept the allegation of the defendant is suggesting that the plaintiff’s business brains have been corroded by the love affair. She has openly stated in her written statement that she was used,
“I trusted him, I was faithful, I was his wife in way. A wife away from his legal wife. I played my part as instructed but now I know and realized what a wasted 10 years."
In my view taking an overall view of her written statement and oral testimony the defendant had the desire and she did expect to be part of the plaintiff’s life and share in his wealth; she has stated so many times he never kept his promises. A love affair has turned sour; the little Chinaman has chosen not to mix business with pleasure and hold onto his marriage.
I reject the allegation of fraudulent misrepresentation.
The plaintiff is entitled to the orders sought.
Specific performance is ordered.
Defendant is ordered to pay costs of $1,000.
JUSTICE VAAI
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