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Fera v Ologa [2004] SBHC 24; HC-CC 268 of 2003 (16 March 2004)

HIGH COURT OF SOLOMON ISLANDS

Civil Case Number 268 of 2003

JOHN FERA

-V-

HENRY OLOGA AND LR ENTERPRISES LIMITED
AND COMMISSIONER OF LANDS AND REGISTRAR OF TITLES

High Court of Solomon Islands
(Palmer C.J.)

Hearing: 12^th February 2004
Ruling: 16^th March 2004

A. Radclyffe for the Plaintiff/Respondent
Mrs. A. Tongarutu for the second Defendant/Applicant
Mrs. J. Gordon for the third Defendant
S. Toito’ona for the fourth Defendant
First Defendant in person

Palmer C.J.: The claim of the Plaintiff/Respondent (“the Plaintiff”) as against the first Defendant is based on a contract dated 16^th December 1999, for the sale and purchase of the fixed-term estate in Parcel Number 191-044-9 also described as Lot 1491/VII/H (hereinafter referred to as “the Land”), for the sum of $15,000.00. Although a part payment of $12,000.00 had been made by the Plaintiff, no transfer of the title had been concluded.

In the meantime, the first Defendant re-sold the Land to the second Defendant/Applicant (“second Defendant”) for the sum of $10,000.00. Under this second agreement, a transfer was concluded in January 2001 and the second Defendant registered as the owner, on or about 15^th January 2001.

The Plaintiff’s claim as against the second Defendant (the third and fourth Defendants joined as necessary parties), is for the rectification of the land register under section 229(1) of the Land and Titles Act (cap. 133), under the ground of mistake. The Plaintiff alleges that registration had been obtained, made or omitted by mistake.

The second Defendant on the other hand, denies allegation of mistake whether in the purchase, transfer or registration of the Land. It denies knowledge of any prior dealings over the Land as between the Plaintiff and the first Defendant, and denies knowledge of any mistake which may have given rise to the registration in its favour.

First Defendant filed his Statement of Defence on 25^th November 2003. He did not dispute sale of the Land to the Plaintiff in 1999, or its re-sale to the second Defendant in 2001.

The second Defendant filed its Notice of Motion on 10^th February 2004 under Order 27 rule 4 of the High Court (Civil Procedure) Rules, 1964 (“the Rules”) to have the pleadings in the Statement of Claim filed 16^th October 2003 struck out as disclosing no reasonable cause of action. It also relies on the inherent jurisdiction of the court, although this was not expressly stated, to have the pleadings stayed and or dismissed as frivolous or vexatious, or an abuse of the process of the court.

Rule 4 of Order 27 of the Rules gives power to the Court to strike out any pleading where it discloses no reasonable cause of action or where it is shown to be frivolous or vexatious. The second Defendant says that the pleadings disclose no reasonable cause of action. This is primarily a question of law and the court is required to confine its consideration to the pleadings not the evidence^[1].

The issue before this court is whether the pleadings in the Statement of Claim based on the claim of mistake disclose any reasonable cause of action. The crucial point to note about a claim of mistake under section 229(1) of the Land and Titles Act is that the registration must be directly linked to the mistake alleged; that is, that registration had been obtained, made or omitted by fraud or mistake.

When an action is anticipated under subsection 229(1), then subsection 229(2) of the Land and Titles Act must not be overlooked, for it provides a defence to a bona fide purchaser for value and who is in possession. This means that unless it can be shown on the balance of probabilities that the second Defendant knew about the alleged mistake, registration cannot be rectified.

It is incumbent on the Plaintiff to demonstrate in his Statement of Claim that the pleadings disclose particulars of knowledge of the mistake alleged, at the outset. The Statement of Claim of the Plaintiff must not only provide sufficient particulars of the mistake alleged, he must also state the facts which showed that the second Defendant had knowledge of that mistake and that the mistake had resulted in the registration of the second Defendant as owner of the Land.

The pleadings should be struck out only in plain and obvious cases (Mayor, etc., of the City of London v. Horner^[2]; Kemsley v. Foot and Others^[3].); the powers of the court to strike out should be exercised only where the case is beyond doubt and that it is satisfied there is no reasonable cause of action (South Hetton Coal Co. v. Haswell, etc., Co.,^[4]). If the Statement of Claim discloses some cause of action, or raise some question fit to be decided by the court, the mere fact it is weak, and not likely to succeed, is no ground for striking out (Davey v. Bentinck^[5]; Moore v. Lawson^[6]). But even if the pleadings could be struck out as disclosing no reasonable cause of action, where the court is satisfied that some material averment has been omitted, it will not dismiss the action but give leave to the Plaintiff to amend. On the other hand, if the court is satisfied that no amendment will cure the defect it will dismiss the action (Rep. of Peru v. Peruvian Guano Co.^[7]; Goodson v. Grierson^[8]; Woods v. Lyttleton^[9].).

Learned Counsel Mr. Radclyffe submits that this Notice of Motion is irregular and should be dismissed in that the second Defendant had entered unconditional appearance and therefore waived its right to challenge the validity of the Plaintiff’s action. Whilst the effect of an unconditional appearance in certain situations may amount to a waiver of such right, it is not a waiver of the defendant’s right to dispute the Plaintiff’s claim. The second Defendant has right to challenge the Plaintiff’s claim under Order 27 rule 4 of the Rules. Note, it also has been held that such application may be brought even after pleadings have closed^[10]! This submission therefore must be dismissed.

Do the pleadings disclose some cause of action or raise some question fit to be decided by the court? Unfortunately, this question must be answered in the negative. The Statement of Claim has failed to provide sufficient particulars of any mistake as against the Defendants in this case. On the other hand, the pleadings might have disclosed that a fraud may have been committed by the first Defendant in re-selling the Land to the second Defendant. Fraud however does not form part of the claim of the Plaintiff. Secus, the pleadings disclose that the re-sale of the Land by the first Defendant had been done deliberately for pecuniary gain. That this was in breach of the agreement of 16^th December 1999 with the Plaintiff is a matter to be determined between them. The Plaintiff can claim damages for breach of contract. Note the claim for specific performance is not only discretionary, but must be subject to the requirements set out in subsections 229(1) and (2). Only where the Plaintiff succeeds for rectification can the court consider exercising its discretion in favour of specific performance.

Can an amendment cure the defect? Unfortunately this question must also be answered in the negative. There is nothing in the pleadings which suggests that the second Defendant had the requisite knowledge whether of a mistake or fraud. At paragraph 4 of his Statement of Defence filed 25^th November 2003, the first Defendant states:

“Consequently, I was facing substantial and genuine financial difficulty in sending my family home. That is, there was real concern for my family security and safety purposes here in town and thus forced me to sell the land to LR Enterprises to transport my family home.”

This defence of the first Defendant showed clearly that there was no suggestion of any mistake other than a deliberate act to resell the Land to the second Defendant. Naturally, in such situations, it would not be in the interest (albeit selfishly) of the first Defendant to disclose details of any prior sale to the second Defendant. This is entirely consistent with the submissions of the second Defendant that it was not aware of the earlier transactions or of any mistake. At paragraph 2(ii) of its Statement of Defence filed 3^rd November 2003 the second Defendant denies knowledge of breach of the contract between the first Defendant and the Plaintiff. At para. 2(v), it denies knowledge of the purchase by the Plaintiff or of any mistake. At para. 4(iii), it states that the Land had been clearly identified and ascertained with the first Defendant and confirmed by a surveyor. At para. 4(iv), the second Defendant states that it checked the land register for the Land for any caveats etc. before proceeding with the purchase, transfer and registration of the Land.

Taking all those factors into account, I am not satisfied that the Statement of Claim discloses some reasonable cause of action or some question fit to be considered by the court; the pleadings should be struck out. For the same reasons given above, I am not satisfied any amendment would cure the defect. Virtually no particulars of knowledge of any mistake or fraud have been disclosed in the pleadings, which is a crucial requirement in the successful prosecution of any claim for rectification under section 229(2) of the Land and Titles Act.

I have not considered exercising my powers under the inherent jurisdiction of this court to strike out pleadings which are frivolous or vexatious and or an abuse of the process of the court, in view of my findings above. But even if that were done, for arguments sake, and I was required to consider the affidavit evidence filed to date, I am still unable to find sufficient material which would support the claim of the Plaintiff that a mistake had been committed, that the second Defendant knew about it, and that it resulted in the registration of the Land in favour of the second Defendant. There is simply no evidence to show that the registration of the second Defendant as owner of the Land had been obtained, made or omitted by mistake. To the contrary, registration had been obtained as a direct result of a deliberate sale by the first Defendant. Unless there was evidence suggesting that the second Defendant knew about the earlier sale, this claim as against the second Defendant should also be dismissed as frivolous and vexatious.

Orders of the Court:

1. Strike out pleadings as against the second Defendant as having no reasonable cause of action.
2. Consequentially dismiss the action as against the second Defendant.
3. Consequentially dismiss the action as against the third and fourth Defendants.
4. Any costs incurred by the second, third and fourth Defendants must be borne by the Plaintiff.
   

The Court.

^[1] Wenlock v. Moloney [1965] 1 W.L.R. 1238; see also Davey v. Bentinck [1893] 1 Q.B. p. 188; and Republic of Peru v. Peruvian Guano Co., 36 Ch. D. p. 498.
^[2] (1914), 111 L.T. 512 C.A.
^[3] [1951] 2 K.B. 34, C.A
^[4] [1898] 1 Ch. 465
^[5] [1893] 1 Q.B. 185
^[6] 31 T.L.R. 418, C.A
^[7] 36 Ch. D. page 496
^[8] [1908] 1 K.B. 761
^[9] (1909), 25 T.L.R. 665, C.A
^[10] see Tucker v. Collinson, 34 W.R. 354 per Brett, M.R.