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Haidu v Mamaloni [2010] SBHC 68; HCSI-CC 393 of 2009 (26 October 2010)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)

Civil Claim No. 393 of 2009

BETWEEN:

NASON HAIDU
(Representing Former Guguha Land Purchase Cooperative Society)
Claimants

And:

MARY MAMALONI, ANITA MAMALONI and SOLOMON MAMALONI Jnr
First Defendants

And

ROBERT KUARE
Second Defendant

And

ATTORNEY GENERAL (Representing Registrar of Cooperatives)
Third Defendant

And

ATTORNEY GENERAL (Representing Registrar of Titles)
Fourth Defendants

Mr Tagini for the Claimants
Mr Togamae for the First Defendants
Mr Muria for the Second and Third and Fourth Defendants

Date of Hearing: 21st September 2010
Date of Judgment: 26th October 2010

Judgment

1. This is an application, made by the First Defendants, to strike out proceedings and is put forward on the basis that the claim is frivolous or vexatious or discloses no reasonable cause of action.

2. The Claimant is a representative of Guguha Land Purchase Cooperative Society (GLPCS). There is no dispute that once GLPCS owned some land in Isabel Province known as Holokama Plantation. The land was sold to the First Defendants. The Claimant says the land was wrongly and fraudulently sold to the First Defendants by the Second Defendant who was the liquidator appointed by the Registrar of Cooperative Societies, the Third Defendant, after the Registrar had cancelled GLPCS's registration as a cooperative society. The registration was cancelled in March 1996 and the sale took place in 2001.

3. The claim was filed on 2nd October 2009. The relief sought is an order declaring the Claimant to be entitled to Perpetual Estate PN 108-002-2 (Holokama Plantation, the land formerly owned by GLPCS), an order rectifying the title and an order that title be transferred in the name of the Claimant (to hold in trust for the former members of GLPSC).

4. The statement of the case recites a short history of the land and claims the Third Defendant wrongly cancelled the Registration of GLPCS and that the subsequent liquidation was mishandled by the Second Defendant. The way the statement of the case is phrased almost suggests the Claimant is seeking a review of the Second and Third Defendants actions and decisions but no actual claim for relief is made in those terms. In all probability this is because those actions and decisions took place in the late 1990's and are well outside the period allowed in the Rules[1] for judicial review. Instead the claim is for the rectification of title and is based on fraud.

5. The Rules [2] require a claimant to state specifically any fact that is relied upon to support an allegation of fraud. The Claimant has, at paragraph 13 of the statement of case, given some particulars. He says the Second Defendant is very closely related to the First Defendants. He says the Second Defendant failed to put up public notices indicating that the land was for sale. He alleges the Third Defendant gave assurances to members of GLPCS they would, in effect, be given first refusal. The Second Defendant was, according to the Claimant, aware of this assurance. It is further alleged that no public notice of tender was given by the Second Defendant. The final specific fact relied on is the Second Defendant failed to give an account for the proceeds of sale.

6. It is well settled that a court should use its powers to dismiss a claim at this stage in the proceedings sparingly and only in the clearest of cases. If the pleadings are defective then rather than strike out the claim the court should consider ordering amendments to cure the defects. That approach is reinforced in this jurisdiction by the provisions set out in Chapter 1 of our Rules, in particular, the Overriding objective [3] and the power to dispense with rules "in the interests of justice" [4]. This does not mean a court can just simply disregard any or all requirements set out in the rules. The decision to allow such latitude can only be made after due consideration of the relevant circumstances in a particular case.

7. The general impression given by the Statement of Case is the fraud relied on is not so much stated as implied. Paragraph 13.1 says, "The Second Defendant (the liquidator) is a very close relative of the First Defendants (the purchasers)". The italics are mine. The implication is because of the close family relationship there must have been fraud. Whilst it may have been imprudent for the liquidator to have sold the land to close relatives, it was not necessarily fraudulent. There is nothing more in the sworn statements read into evidence to say why the family relationship was, in itself, fraudulent.

8. In paragraph 13.2 it is stated the liquidator, "knowingly failed to put up any public notice for the sale...". This, "...despite (an) assurance" given by the Registrar of Cooperatives that the former members of GLPCS would be given priority. The implication seems to be that no notices were put up in order to hide the sale. Apart from the fact that there is evidence notices were put up, maybe not in the immediate vicinity of the land but certainly in Buala, this again is only an implication that there might have been fraud. In this regard, it is possible the liquidator was negligent or simply incompetent. From his own evidence the Claimant was aware of the liquidation and the possibility of a sale to the Mamaloni family [5] as early as September 1998. As to notices he says he, "... did not see any notices". The statement by the Claimant only implies fraud, again it does not state exactly how the actions of liquidator or the purchasers were fraudulent.

9. Paragraph 13.3 is really a repetition of the previous paragraph. The clear evidence is the notice of sale and the tender were contained in the same document. I can only repeat what is said above.

10. Finally the Claimant says the liquidator did not account for the sale proceeds. The evidence does not support that contention. The sworn statement of Benjamin Inukoru filed 19th July 2010 shows accounts of sorts were produced to the then Registrar of Cooperative Societies [6] and there was a subsequent distribution of funds based on the "Balance Sheet Statement". In any event the Claimant does not say how or why this is fraudulent in respect of the sale.

11. It must be borne in mind that fraud has a distinct meaning in law. It carries with it the stigma of dishonesty. Allegations of fraud are therefore treated very seriously by the court. It is the reason the Rules require a party to, "state specifically any fact that is relied on to support an allegation of fraud". That means the facts are stated and the party should also show how they support the allegation of fraud. It is not enough for the claimant to simply say, "This happened" or "The Defendant did that" and leave the court to somehow arrive at a finding of fact by implication. In some cases it will be obvious what the alleged fraud is. It is not in the present case. That is a serious and possibly fatal flaw in the pleadings and the case. I have said, possibly fatal because, as indicated above[7], the court will not strike out a claim if defects can be remedied by amendment.

12. I do not believe amendments can be made to the claim which would satisfy a court that there are questions to be answered about fraud. From the evidence I have seen the best that can possibly be said is there was imprudent, incompetent, even negligent behaviour from both the then Registrar of Cooperative Societies and the liquidator. There is no evidence of impropriety or fraud. I also bear in mind the course of dealings concerning the liquidation of GLPCS stretched over a period of 5 years and that the sale to the First Defendant took place nearly 9 years ago. Whilst there may be evidence of conduct giving rise to a claim in damages, and I emphasise here that I make no finding of fact in that regard, the relief sought by the Claimant is for rectification of the title. Section 229 of the Lands and Titles Act does give the court power to order rectification but only on the grounds of fraud and mistake. No amendment to the pleadings in this case would raise sufficient questions for the court to consider ordering rectification on the basis of fraud or mistake. In the circumstances I order the Claim to be dismissed as disclosing no reasonable cause of action.

Chetwynd J

^[1] Solomon Islands Courts (Civil Procedure) Rules 2007
^[2] Rule 5.3 (e)
^[3] Rules 1.3 and 1.4
^[4] Rule 1.14
^[5] See paragraph 5 of the sworn statement of Nason Haidu filed 10^th February 2010
^[6] Exhibit BI5
^[7] See paragraph 6