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HDD Development Ltd v Vaike [2022] SBHC 44; HCSI-CC 225 of 2019 (8 July 2022)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case no. 225 of 2019

BETWEEN

HDD DEVELOPMENT LIMITED
(Owner of the FTE in PN 192-004-137)
Claimant

AND:

MAYBELLYN VAIKE AND FAMILY
Defendant

Date of Hearing: 8 June (Closing Submissions)
Date of Ruling: 8 July 2022

Ms Kilua S and Ms Soaika J for the Claimant
Mr Kwaiga L for Defendant

JUDGMENT ON CLAIM FOR POSSESSION OF LAND

Introduction and Background

1. Defendant and her family (“defendants”) resided on Parcel Number 192-004-137 (“PN 137”) for a very long time from 1999 - 2018. Claimant bought PN 137 from the former owner, Lever Solomons Limited (“LSL”) on or around 29/5/2018. On 17/4/2019, claimant filed this claim to remove defendants from PN 137.
2. Claimant’s title was entered in the register on or around 29/5/2018. Claimant’s title will be protected against defendants or anyone else, under the principle of indefeasibility of title. Indefeasibility is guaranteed under our Torrens system mirrored in the Land and Titles Act (Cap 133) as amended in 2014 – “LTA”. The register is conclusive evidence of ownership, unless defendants can demonstrate that they have interests that can be recognised as exceptions under Section 110 of the LTA. Section 110 of the LTA relevantly stated: -
   • “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.” (My underlining).
3. Defence raised two main rights and interests which are likely to defeat claimant’s indefeasible title. First right/interest is prescription under Section 225 (8) (a), (b) and (c) read with Section 224 (1) of LTA. Second right/interest is overriding interest under Section 114 (g) and (i) of the LTA.

Issues for Trial

4. There are two (2) issues. The 2 issues relate to the 2 main rights and interests defendants assert. The 2 issues were isolated in a ruling Court delivered on an application for summary judgment on 8/10/2021. Counsel essentially adopted the 2 isolated issues for trial. Briefly re-stating the 2 issues: -
   • (i) Whether defendants acquired adverse possession (by prescription), under Section 225 (8) (a), (b) and (c) as read with Section 224 (1) (a) and (2) of the LTA? and or,
   • (ii) Whether defendants are entitled to overriding interests pursuant to Section 114 (g) and (i) of the LTA?
   • Adverse possession (by prescription) interests and rights – Section 224, 225 of LTA?
5. Defendants lived on PN 137 for about 19 solid years, toiling the land, erecting buildings on the land and have even buried their deceased father on the land. In a way defendants have an expectation that they own the land having lived on it for such a long time. I will examine the basis for such expectation.
6. Defendants through their deceased father had a failed arrangement with the previous owner of PN 137 (LSL). Defendants entered into an agreement with LSL to purchase PN 137. Offer was dated 4/03/1999 (Page 38 Court Book). Purchase agreement was executed on 10/05/1999 (Page 43). Purchase price was $15,000.00 inclusive of survey fees (Page 43). Defendants paid $4,000.00 to LSL on 11/03/1999 (Page 40). And PN 137 should have transferred to defendants on or around 26/05/1999 (Page 42).
7. In 2018, however LSL had a change of mind and sold PN 137 to claimant at a much higher price, around $800,000.00 (Page 98). LSL alleged defendants did not make full payment on the agreed purchase price. So LSL rescind the agreement (See also paragraph 2 of my last ruling on 8/10/2021).
8. Rescinding the agreement, LSL sold PN 137 to claimant in 2018. Defendants refused to move out. Defendants believed that they have unregistered legal and equitable rights and interests to reside and develop the land, on the basis of the purchase agreement. I ruled earlier for the agreement not to be used as evidence to battle out rights and obligations between claimant and defendants herein. Claimant herein was not privy to that contract (See paragraphs 1, 2, 3 and 5 of my ruling delivered on 8/10/2021). I repeat and maintain that same stand.
9. But that agreement can be used to explain defendants’ occupation of PN 137. Defendants relied on the agreement to reside on PN 137 from 1999 – 2018. LSL did not take positive steps to protest against defendants’ presence on PN 137 for about 19 years. Positive protest steps like written notices to vacate, court action or meetings to tell defendants to move out. Because LSL did not take positive protest steps to remove defendants, I will conclude that there was implied consent from LSL for defendants to reside on PN 137 for 19 years from 1999 – 2018, on the basis of the agreement. Implied consent and the agreement have nothing to do with claimant. Claimant only came into the scene in 2018.
10. Harsh positive protest action from LSL came in 2018. LSL sold PN 137 to claimant. For 19 years LSL did not take positive steps to evict defendants from PN 137. So what rights and interests will defendants have accrued against LSL’s registered interest by 2018, in adverse possession (by prescription?).
11. Defendants say they have acquired interests through adverse possession (by prescription) under Section 225 (8) (a), (b) and (c) as read with Section 224 (1) (a) (2) of LTA. I have contemplated on the provisions of Section 224 and Section 225, since the last ruling in October 2021. I have come to the firm conclusion that one is entitled to adverse possession (by prescription), if he/she has peaceful, overt and uninterrupted adverse possession of an estate against the registered owner (uninterrupted occupation for 12 years) and had obtained High Court order confirming the same (Section 224 (1) (a) and (2) of the LTA).
12. It follows that I ruled in October 2021 and say that defendants have had 12 years uninterrupted adverse possession (by prescription) over PN 137 by year 2011 against LSL. However, defendants still fell short of full eligibility to be entitled to 12 years uninterrupted adverse possession (by prescription) in the absence of High Court order.
13. The next prudent question is, in spite of that short fall, can defendants still sustain rights and interests to 12 years uninterrupted adverse possession (by prescription) under Section 225 (8) (a), (b) and (c) of LTA? Section 225 (8) (a), (b) and (c) lists 3 instances of interruption, whereby 12 years uninterrupted adverse possession can be disturbed. The 3 instances of interruption to adverse possession in Section 225 (8) (a), (b) and (c) must connect back to eligibility under Section 224 (1) (a) and (2). That is to say if you are not eligible to 12 years uninterrupted adverse possession by prescription through High Court order, under Section 224 (1) (a) and (2) then you are also not eligible to adverse uninterrupted possession under Section 225 (8) (a), (b) and (c). Accordingly, defendants are not entitled to uninterrupted adverse possession by prescription for lack of High Court order. What about defendants claim for overriding interests and rights?

Overriding interests – Section 114 (g) and (i) of LTA

14. Defendants also claim overriding interest pursuant to Section 114 (g) and (i) of the LTA. Section 114 (g) and (i) of LTA states:-
    • “ The owner of a registered interest in land shall hold such interest, in land subject to such of the following overriding interest as may, for the time being, subsist and affect the same, without there being noted on the register:-
    • (g) the rights of a person in actual occupation of the land or in receipt of the rents and profits thereof, same where injury made of such person and the rights are not disclosed.
    • (i) rights acquired or in the process of being acquired by virtue of any law relating to the limitation of actions or by prescription. (My underlining)
15. The first overriding interest in Section 114 (g) which even though not registered, but can still defeat the registered interest of LSL only require that defendants be in actual occupation of PN 137. Like I covered above defendants are in actual occupation of PN 137 for 19 solid years. Defendants toiled on the land, built on the land and buried their deceased father on the land. Defendants were in actual occupation of the land (PN137) from 1999 to 2018. Court of Appeal in Paza laid down one condition upon which actual occupation can be established in law – that is lawful occupation - as in occupation with consent of the registered owner. For the defendants to be eligible under Section 114 (g), they must have been in actual occupation of PN 137 with consent/authority/permission from LSL.
16. The evidence shows that from 1999 - 2018, defendants were in actual occupation of PN 137 with permission from LSL. Like I found above defendants have resided on PN 137 for 19 years with implied consent from LSL on the basis of the agreement. The agreement and part payment ($4,000.00) coupled with no positive protest steps from LSL explained why defendants were in actual occupation of PN 137 for 19 solid years up until 2018. I am satisfied defendants were in actual occupation of PN 137 having met the condition set by Court of Appeal in Paza. Defendants have acquired overriding interests by actual occupation subsisting against LSL by 2018.
17. Actual possession just simply means you are physically living on the land and using the land as though you own the land, with permission from the registered owner. Here permission was implied due to LSL’s lack of positive protest steps to resist defendants’ actual occupation since May 1999. Whether the lack of positive protest steps was due to the purchase agreement or any other reason, the fact still remain, that defendants have actual occupation of PN 136 for 19 solid years since May 1999.
18. The second overriding interest in Section 114 (i), which even though not registered, but can still defeat the registered interest of LSL, only require that defendants have acquired some rights recognised by any law relating to limitation of actions or prescription. On the law relating to rights recognised by prescription, I already refused such entitlement above. What about any rights defendants may have that is recognised in any law relating to limitation of actions? This is where I will examine the Limitation Act (Cap 18) – “Limitation Act”.

Section 35 read with Section 9 of the Limitation Act (Cap 18)

19. Section 35 (1) of the Limitation Act (Cap 18) provides:
    • “At the expiration of the prescribed period to bring an action or to commence arbitration, for the recovery of any land or profits therefore or for the enforcement of any easement therein, the title of the person to the land or the right of the person to such profits or easement shall be extinguished.” (My underlining)
20. We read in Section 9 (2) of the Limitation Act that the expiration or limitation time period prescribed for a person to bring an action or arbitration to recover land is 12 years. LSL should have complained about and brought actions to recover or evict defendants from PN 137 by year 2011. That was 12 years from 1999 when defendants have actually moved in to occupy PN 137 (actual occupation). So by limitation of actions defendants have acquired an unregistered interest, strong enough in law to defeat LSL’s registered interest in 2011. That unregistered interest is given to defendants by virtue of the law on limitation of actions. Accordingly, LSL’s registered interest in PN 137 became extinguished/void by operation of law (Section 35 (1) of Limitation Act) in 2011, in favour of defendants.
21. Claimant submit that limitation of actions must be determined in terms of when the cause of action accrued. Claimant say cause of action accrued in May 1999 when defendants were alleged to have breached the purchase agreement. That is correct. LSL should have insisted on full payment in May 1999 and or protest against defendants’ actual occupation of PN 137. Claimant insist that the cause of action accrued only when adverse possession was made complete. Here defendants do not have adverse possession to dispossess LSL by prescription. I already ruled above that defendants do not have adverse possession right by prescription and hence did not have adverse dispossession rights against LSL by 2011. But I also say above that defendants have extinguished LSL’s registered interest by limitation of actions in 2011 and by actual occupation in 2018. Actual occupation and limitation of actions both begun to run (accrue) in May 1999. So the cause of action for LSL to recover PN 137 accrued in May 1999 at time of defendants’ actual occupation.
22. Claimant also relied on certain provisions of the Limitation Act that do not assist its case. Section 5 is the general limitation period of 6 years for general actions. But for land it has a specific limitation of 12 years under Section 9. Sections 20 and 37 will only come into play if LSL was taking action to evict defendants in 2011 or 2018. The most relevant provisions are Sections 35 and 9. I already discussed Sections 35 and 9 above and concluded in favour of defendants. The application of Section 35 (1) to extinguish LSL’s registered interest in PN 137 in 2011 does not prejudice against the provisions of the LTA (Section 35 (2)), because actual occupation and or limitation of actions are rights earned under the LTA. They are rights that cannot be seen on the register but are equally strong enough to defeat the registered interest of LSL by implication from other provisions of the LTA (by virtue of Section 110 of the LTA).

Conclusion and Orders

23. LSL’s registered interest became extinguished/void in 2011 (by limitation of actions) and 2018 (by actual occupation). The unregistered interests and rights meant, LSL no longer has any valid interest as per the register to transfer to claimant in 2018. Defendants’ unregistered equitable interests given by the law of limitation of actions and actual occupation already subsisted in law, by 2011 or 2018. I dismiss the claim and all the reliefs sought therein with cost to be assessed if not agreed. Defendants are the owners of unregistered equitable interests and rights in PN 137. The register should reflect this new ownership rights and interests. The unregistered equitable interests and rights are by order of the High Court consistent with the provisions of Section 110 of the LTA read with Section 114 (g) and (i).

THE COURT
JUSTICE JOHN A KENIAPISIA
PUISNE JUDGE