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Lever Solomons Ltd v Attorney General [2012] SBHC 60; HCSI-CC 333 of 2011 (17 July 2012)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)

Civil Claim No. 333 of 2011

BETWEEN

LEVER SOLOMONS Ltd
Claimant

And

ATTORNEY GENERAL
(Representing Commissioner of Lands)
First Defendant

And

ATTORNEY GENERAL
(Representing Registrar of Titles)
Second Defendant

Mr Radclyffe for the Claimant
Mr Banuve for the First and Second Defendants

Date of Hearing: 15th May 2012

Date of Judgment: 17th July 2012

Judgment

1. The Claimant is a company. It holds Fixed Term Estates in various Provinces in the Solomon Islands. This case involves those on Guadalcanal close to Henderson airport at Tenaru in an area known as Hells Point. The area acquired that name during the Second World War. It was used to both dump and dispose of unexploded ordinance left after the war. There are still considerable quantities of unexploded ordinance to be found and disposed of and an arrangement ^[1] was entered into between the Solomon Islands Government ("SIG") and the United States Government for the further training of officers from the Royal Solomon Islands Police Force. SIG was obliged to provide land to be used for the training and Hells Point was thought to be the most appropriate area. In January 2011 the First Defendant wrote to the Claimant giving it one months notice of his intention to resume possession of part of the land ^[2] for the purposes of such training. The Claimant seeks declarations from the court that the First Defendant had no power to give notice to resume the land in question and for consequential declarations flowing on from the actions of the defendants in carrying out the resumption of possession.

2. The Court of Appeal has already explained the nature of resumption and the legal consequences of it occurring in the Wong case^[3]:

"The contentions of the appellant proceed upon a fundamental misconception of the nature of the reservation. This may be most simply explained by observing that a fixed-term estate is, essentially, a kind of leasehold. The lease grants possession of the land for a term of years, specifying the payment of rent and imposing certain limits on the uses to which the land may be put. The reservation expressly gives to the landlord – here, the Commissioner – the right to re-enter and resume possession in certain specified events, namely the intention to use the land for public purposes and subject to notice and certain limited compensation, in short, the right to bring the term to an end."

3. This case is slightly different and the difference is best explained by looking at the history of the land. It is said the Claimant had, since 1972, owned the perpetual estate or a freehold interest in the land. Exactly what sort of interest it did own may be of relevance but there is no evidence, documentary or otherwise, which settles that question. What can be said with certainty is everyone agrees section 100 of the Lands and Titles Act [Cap. 133] ('the Act") applied to whatever interest the Claimant held. The section reads:

100.—(1) With effect from the 31st December 1977, any perpetual estate registered in in the name of, or on behalf of, any person who is not a Solomon Islander shall automatically convert to a fixed-term estate of 75 years at an annual rent after the first seven years (which shall be a rent-free period) calculated as a percentage of the unimproved capital value of such estate at a rate not exceeding 8 per centum.

(2) When a freehold interest is registered under the provisions of this Act and that interest is shown to be owned by a person who is not a Solomon Islander then the provisions of subsection (1) shall apply to convert such interest to a fixed-term estate in like manner as that applicable to a perpetual estate.

Everyone agrees that the land owned, in whatever form, by the Claimant was automatically converted to a 75 year fixed- term estate ("FTE") by operation of section 100 of the Act.

4. The Claimant says because there was an "automatic conversion" there was no grant instrument prepared and signed and therefore no reservation such as described in Wong. It says it did not agree to the First Defendant having the power to resume and argues there is no express power in the Act to entitle the First Defendant to otherwise resume possession.

5. That state of affairs does not accord with the provisions of the Act and may, in fact, place the Claimant in a very difficult situation. Part VII of the Act dealt with "Land Ownership" following independence. In basic terms it says that no person, other than a Solomon Islander, can own land for a period of more than 75 years. Person does include a company ^[4] and what is meant by own is set out in Part VIII of the Act. In respect of a fixed-term estate in section 113 of the Act the definition is:

"A fixed-term estate in land consists of the right to occupy, use and enjoy for a period of time fixed and certain at the time of the grant thereof, the land and its produce, subject to the payment of any rent and the performance of any obligations for the time being incident to the estate, and subject to such restrictions as may be imposed by or under this Act or any other written law."

Occupy is further defined in the Interpretation and General Provisions Act:

""occupy" includes use, inhabit, be in possession of or enjoy the land or premises to which the word relates, otherwise than as a mere servant or for the mere purpose of the care, custody or charge thereof;"

The definition of an FTE is very close to those of a lease to be found in English law. For example in Woodfall's Law of Landlord and Tenant ^[5] a lease is defined as:

"The grant of a right to the exclusive possession of land for a determinate term less than that which the grantor has himself in the land"

When one looks at the definition of a perpetual estate it can be seen the only difference is the rights included in the grant are not limited in duration:

"A perpetual estate in land consists of the right to occupy, use and enjoy in perpetuity the land and its produce, subject to the payment of any rent and the performance of any obligations for the time being incident to the estate, and subject to such restrictions as may be imposed by or under this Act or any other written law." ^[6]

6. Strictly speaking the main heading of Part VII, "LAND OWNERSHIP", is misleading because no one person "owns" land in the way ownership is commonly understood. It could be said the Preamble to the Constitution vests real ownership of all land in the people and government of Solomon Islands. This is much the same as the concept in England and Wales where it is said all land belongs to the Crown. In that jurisdiction an estate in fee simple (or freehold estate) traditionally involved an interest in land, the right to use it, which lasted as long as there were heirs to inherit it. That is the "fee" element in the nomenclature used. In both Solomon Islands and in England and Wales a person does not own the land he owns an estate in the land and in Solomon Islands there are only two types of estate, an FTE and a perpetual estate^[7].

7. With both types of estate the registered owner can dispose of it "either in whole or in part" and in both estates such a disposal "for a limited period" must be by way of a lease:

"s.113(2)(b) a disposition, other than by the Commissioner, of the whole or part of the estate for a limited period shall be by way of lease in accordance with the provisions of this Act;"

In the case of an FTE the limited period must be "less than the whole remaining portion of the period for which the estate was granted". What is important to note from the statutory provisions is the only person who can grant an FTE is the Commissioner of Lands. This is also explicit in the provisions of section 102 of Part VII of the Act:

"Perpetual estates converted under the provisions of this Part shall be held by the Commissioner on behalf of the Government of Solomon Islands."

The Claimant could not have become the owner of an FTE other than by way of a grant from the Commissioner. Furthermore, the Claimant could only have become the registered owner of the FTE by registering the grant. That is provided for in section 104 of the Act:

"Any person who has become entitled to a fixed-term estate under this Part shall, within six months of the receipt of the same from the Commissioner, submit the grant of the fixed-term estate to the Registrar for registration free from all fees and stamp duties."

The section is not couched in permissive terms it says the person shall submit the grant.

8. If the Claimant did not obtain a grant or did not register a grant then it could be argued it has no registered interest in the land. Section 109 of the Act makes it plain that interests are only conferred by registration:

"(b) the registration of a person as the owner of a fixed-term estate shall vest in that person the fixed term described in the grant thereof, together with all implied and express rights and privileges belonging or appurtenant thereto and subject to all implied and express obligations, liabilities and incidents of that estate;"

Section 117 of the Act provides that a registered interest can only be created in accordance with the Act:

"No registered interest in land shall be capable of being created or disposed of except in accordance with this Act and every attempt to create or dispose of such interest otherwise than in accordance with this Act shall be ineffectual to create, extinguish, transfer, vary or affect any such interest."

So, even though the Act "automatically converted" any relevant interests owned by the Claimant as at 31st December 1977, registration of those changed interests was not similarly automatic. The process required to register any changed interest was set out in the sections in Part VII following section 100, in particular section 104 set out earlier. Could it be argued the process which led to registration was other than in accordance with the Act and was therefore totally ineffectual? In other words, does the Claimant have a registered interest or one which is registrable?

9. The problem with pursuing that argument is twofold. First, there is a long line of cases including Frazer v. Walker^[8], Breskvar v. Wall ^[9] and more lately City of Canada Bay Council v. F & D Bonaccorso Pty Ltd^[10]. The first problem is best illustrated by part of Barwick CJ's judgment in the Breskvar case:

"The Torrens system of registered title of which the Act is a form is not a system of registration of title but a system of title by registration. That which the certificate of title describes is not the title which the registered proprietor formerly had, or which but for registration would have had. The title it certifies is not historical or derivative. It is the title which registration itself has vested in the proprietor. Consequently, a registration which results from a void instrument is effective according to the terms of the registration. It matters not what the cause or reason for which the instrument is void."

There is no question the system as established by the Act is a Torrens type system. That has been said in this jurisdiction on more than one occasion. The reasoning of Barwick CJ would apply here. This is the indefeasibility principle which is said to underpin the Torrens system. Most of the cases where the indefeasibility of registered ownership has been litigated involve subsequent transactions and void documents and, on that basis, it may be possible to distinguish this case from them.

10. The second problem with the argument is more difficult to deal with. There is no evidence one way or another about the existence of any grant. The Claimant says in evidence there was no grant. By that I take the evidence to mean there was no formal document setting out the grant. It is impossible for there not to have been a grant; that is the only way an FTE can be brought into existence. The First Defendant seems to support that view. The present Commissioner seems to accept the Second Defendant registered the FTE "without a grant instrument". There is no evidence from the Second Defendant. We are left not knowing how the registration came about. We do not have evidence from any one about the exact terms of the registration. Of course it has to be accepted the present Registrar is not the Registrar who dealt with the registration and we are dealing with events some 30 years removed. Similarly, the evidence for the Claimant comes from someone who was not an officer of the company or indeed involved in any way with the company in 1977, the time of the initial events that give rise to this case. There is simply no contemporaneous evidence available.

11. If that were the only evidence which would resolve this case it would be impossible to come to any certain decision as to whether the Claimant has a registered interest or merely one which is undoubtedly registrable. The question may, in any event, not be one which should be asked. The reasoning in the Frazer v. Walker line of cases suggests a decision is not made by reference to the document leading to registration or the process of registration but by looking at the terms of the registration, what appears on the register. In other words the answer should be discernible by looking at the certified copy of the register which is exhibited as annexure JW1 to Mr Whiteside's sworn statement.

12. That exercise is not as straightforward as it sounds though and by itself would not provide an answer. The reason why is because of section 114 of the Act. The section deals with overriding interests; that is interests to which the registered estate is subject to even though they do not appear on the Register. The section states:

The owner of a registered interest in land shall hold such interest subject to such of the following overriding interests as may, for the time being, subsist and affect the same, without their being noted on the register—

(a) not relevant

(b) not relevant;

(c) rights of compulsory acquisition, resumption, entry, search and user conferred by this Act or any other written law;

(d) unless otherwise stated in the grant the obligations set out in section 133;

(e) to (i) not relevant;

Provided that the Registrar may direct the registration of any of the liabilities, rights and interests hereinbefore defined in such manner as he thinks fit.

It is worth pointing out the mention in section 114(c) of "resumption" is the only mention appearing in the Act. However, the section makes it clear the right of resumption is an overriding interest and need not be noted on the register. Just looking at the register, or the certified copy, may not be enough. If there is a right of resumption it is an overriding interest and would not, necessarily, appear on the register.

13. It is also necessary to consider the provisions of section 110 of the Act. The very section which creates the principle of the indefeasibility of title also sets out exceptions:

The rights of an owner of a registered interest, whether acquired on first registration or whether acquired subsequently for valuable consideration or by an order of court, shall be rights not liable to be defeated except as provided by this Act, and shall be held by the owner, together with all privileges and appurtenances belonging thereto, free from all other interests and claims whatsoever, but subject—

(a) to the leases, charges and other encumbrances and to the conditions and restrictions (if any) affecting the interest, and shown or referred to in the land register or implied by this Act; and

(b) to such liabilities, rights and interests as affect the same and are declared by section 114 (which relates to overriding interests) not to require noting in the register:

Provided that nothing in this section shall be taken to relieve an owner from any duty or obligation to which he is subject as a trustee.

The defendants' contend that section 114 creates a right of resumption and section 110(b) must mean the Claimant's interest is subject to such a right. I do not accept the argument the two sections create a right if one did not otherwise exist. All they mean is if there is such a right which "affects the same" it is effective even if no mention of it appears on the register.

14. Nor do I accept the Claimant's contention that a right of resumption cannot be implied. Taken together, Section 109 set out earlier^[11], section 110 and section 114 clearly indicate such a right can be implied. Is there an implied right of resumption in respect of the Claimant's title? From earlier discussions ^[12] it is apparent there must be a grant or disposition of the fixed-term estate to the Claimant from the Commissioner. Section 134 requires every "transfer or grant" to be "in the prescribed form". The prescribed form is Form 2 to be found in the Lands and Titles (General) Regulations^[13]. Even if the grant is a deemed grant or one which, by operation of law, (i.e. section 100) occurred automatically it would still have to be a grant in the prescribed form. The right of resumption is clearly set out at clause 3 of Form 2. It can be deleted "if inapplicable". In other words it is possible the right can be excluded, presumably either by agreement or at the Commissioners discretion. Just as there is no evidence to conclusively show there was or was not a written grant instrument there is no conclusive evidence to indicate whether that part of clause 3 was negotiated out of the grant in 1977. There is certainly no contemporaneous evidence. Because that part of clause 3 is noted as to be deleted if inapplicable the default position must be a grant is subject to a right of resumption. In other words there must be a conscious act to exclude the right otherwise it applies. The Claimant cannot show, on the balance of probabilities, the default position did not apply to whatever kind of grant there may have been.

15. I find there was an implied right of resumption. There is no suggestion I am aware of that the resumption was for anything other than public purposes. The claim must fail. The only issue which is possibly unresolved is the resumption of the whole of parcel 192-018-63. As I understood the arguments, submissions and the defence, SIG agree they do not need all the land comprised in that parcel and unused land or land not needed for the training facility will be returned to the Claimant. An order in those terms is not necessary at this time but feel I must grant leave to the Claimant so it can return to court to seek an appropriate order should negotiations about what is to be returned, fail.

16. As for costs, they should follow the event. The Claimant shall pay the defendants' costs to date, such costs to be assessed by the Registrar of the High Court on a standard basis if not agreed. Any additional costs incurred in returning to court in connection with the leave granted above shall be dealt with at the relevant time.

Chetwynd J

^[1] See annexure SD2 to the sworn statement of Silva Dunge filed 1^st December 2011
^[2] See annexure JW5 to the sworn statement of John Whiteside filed 28^th October 2011
^[3] Anthony Chee Ming Wong v. Attorney General and Commissioner of Lands SI-CAC 3 of 2010
^[4] Section 16 of the Interpretation and General Provisions Act [Cap. 85] and see also section 126 Lands and Titles Act [Cap.133]
^[5] Sweet & Maxwell, Release 48 May 2004 para.1.0003
^[6] Section112(1) Lands and Titles Act [Cap.133]
^[7] Section 2 ibid
^[8] Frazer v. Walker [1967] 1 AC 569
^[9] Breskvar v. Wall (1971) 126 CLR 376
^[10] City of Canada Bay Council v. F & D Bonaccorso Pty Ltd and Others [2007] NSWCA 351
^[11] See paragraph 9
^[12] See paragraph 7
^[13] See page 4882 in Vol VII. Of the Revised Laws of Solomon Islands (the Green Book)