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McCarthy v Samoa National Provident Fund [2014] WSSC 212 (18 December 2014)

IN THE SUPREME COURT OF SAMOA
McCarthy v Samoa National Provident Fund [2014] WSSC 212

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

IN THE MATTER
Of an Application Seeking Enforcement of the Applicants Fundamental Rights under Article 4 of the Constitution.

BETWEEN:

THERESA McCARTHY for herself and in respect of BLUE PACIFIC HOTEL LTD.

Applicant

AND:

THE SAMOA NATIONAL PROVIDENT FUND a body corporate established under the National Provident Fund Act 1972 and carrying on business at Apia.
First Respondent

AND:

RUTH & KHOSROW MOGHBELPOUR, Business Partners.
Second Respondent

AND:

MINISTRY OF NATURAL RESOURCES & ENVIRONMENT a Ministry of the Government of Samoa.
Third Respondent

Counsel: L T Malifa for applicant
T Toailoa for first respondent
C Vaai for second respondent
Attorney Generals office for third respondent

Decision: 18 December 2014

JUDGMENT OF NELSON J
(Motion to strike out)

Background

1. By Statement of Claim dated 11 September 2012 the first respondent (“NPF”) issued proceedings against Blue Pacific Hotel Ltd. (“the Hotel”) for possession of premises leased to the Hotel and the recovery of outstanding rental arrears. The action was based on a Deed of Lease dated 19 September 2010 which expired on 31 December 2011. The demised premises under the Lease was Lot 426 Plan 5908 Land Reference 31/317 Land area 0a.1r.34.4p upon which the Hotel is said to be located.
2. Both NPF and the Hotel were at all material times represented by counsel. After various adjournments judgment by consent was entered in favour of the NPF on 27 May 2013 in the sum of $205,496.87 being the outstanding arrears plus costs as fixed by the Registrar. It was a further term of the judgment that the Hotel its employees servants and agents vacate the premises by 01 September 2013.
3. Despite the terms of the consent judgment, possession of the Hotel has not been given to NPF. Instead the Hotel owner, the present Applicant (“McCarthy”) has filed an application for Constitutional relief alleging that her right to a fair trial under article 9 was infringed by the judgment entered on 27 May 2013. She furthermore seeks “enforcement of her fundamental right to ownership” of the land in question which she claims was fraudulently deprived by the actions of the respondents individually and/or as a conspiratorial group. To that end she claims compensation in excess of $10 million plus professional fees and costs.
4. All respondents have filed Motions to strike out the application on various grounds. These include the fact that the applicant has no locus standi as the Lease and judgment involve the Hotel and not her, that following loss of her land by mortgage sale to NPF she became disentitled and no longer has any legal interest in the property, that this is a “back door” appeal of the Supreme Court judgment, that her claim is statue barred pursuant to the provisions of the Limitation Act 1975, that the matter is res judicata as it has already been dealt with by the courts judgment, that her claim has no reasonable prospect of success, that there is no or insufficient evidence of fraud and the claim is frivolous vexatious, an abuse of court and should be struck out.

Applicants arguments

5. In response the applicant has raised the issue of the courts jurisdiction to strike out an application brought pursuant to article 4 to enforce fundamental rights under the Constitution. This is not a novel argument. It has been raised many times by applicants counsel without success. The last occasion was in Malifa v Land and Titles Court & Others and in its judgment of 07 November 2014 the Court of Appeal said at paragraph 26:

“The Supreme Court has statutory power under Rule 70 in combination with Rule 206 of the Supreme Court (Civil Procedure) Rules 1980; and an inherent jurisdiction to strike out where, inter alia, a claim is untenable or without substance. That power or jurisdiction must be exercisable ............notwithstanding that a supposed constitutional breach is being raised.”

This matter should now be regarded as settled. No special protection endures for baseless Constitutional applications.

6. The applicant places much emphasis on the argument that the access road at the heart of this dispute and upon which part of the Hotel is built viz. Toamalama Street was not ever or was improperly dedicated as a public road. As such she remains the owner thereof and attempts to whittle away or remove her title infringes her Constitutional right to ownership of the land. In this regard she must be referring to article 14 regarding compulsory acquisition of land as no other fundamental rights provision of the Constitution would appear applicable. Quite how this argument assists her is not clear as she lost her lands at mortgagee sale to the NPF when she defaulted in payment of her loan and the NPF foreclosed.
7. Further, as pointed out by the respondents this overlooks the fact that the original Scheme Plan prepared and submitted by the applicant for subdivision of her lands made provision for Toamalama Street. Following normal procedure this was designated a public road on subsequent survey plans. The argument being she cannot now complain about a state of affairs which she initiated.
8. It also seems clear she did not previously complain about the illegality or otherwise of the matter. And that she benefited financially from it over the years. Factors which go to the merits of her claim and whether or not it is “appropriate” that the applicant be granted Constitutional relief and/or compensation as claimed.
9. The applicant has raised the issue of fraud on the part of the respondents individually and/or collectively. She seems to be alleging that the failure to follow what she maintains were the proper procedures is tantamount to fraud. She also alleges the judgment of 27 May 2013 was part and parcel of this fraud. But does not particularise how or why following incorrect procedures amounts to fraud (which requires proof of dishonesty), constructive or otherwise. Or how she makes the quantum leap to the allegation that the entry of a consent judgment by duly represented parties is part of the fraud.
10. As stated by their Lordships in the leading Three Rivers Case [2001] 2AllER513:

At page578 per Lord Millet:

“An allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.” (emphasis is mine).

Per Lord Hobhouse of Woodborough at page 569:

“The law quite rightly requires that questions of dishonesty be approached more rigorously than other questions of fault. The burden of proof remains the civil burden – the balance of probabilities – but the assessment of the evidence has to take account of the seriousness of the allegations and, if that be the case, any unlikelihood that the person accused of dishonesty would have acted in that way. Dishonesty is not to be inferred from evidence which is equally consistent with mere negligence. At the pleading stage the party making the allegation of dishonesty has to be prepared to particularise it and, if he is unable to do so, his allegation will be struck out.” (again emphasis is mine).

Lord Hope of Craighead:

“On the other hand it is clear that as a general rule, the more serious the allegation of misconduct, the greater is the need for particulars to be given which explain the basis for the allegation. This is especially so where the allegation that is being made is of bad faith or dishonesty. The point is well established by authority in the case of fraud.”

Lord Hutton quoting Buckley, LJ in Belmount Finance Corp Ltd v William Furniture Ltd [1979] 1 All ER 118 at 268:

“An allegation of dishonesty must be pleaded clearly and with particularity. That is laid down by the rules and it is a well-recognised rule of practice............The facts alleged may sufficiently demonstrate that dishonestly is allegedly involved, but where the facts are complicated this may not be so clear, and in such a case it is incumbent upon the pleader to make it clear when dishonesty is alleged. If he uses language which is equivocal, rendering it doubtful whether he is in fact relying on the alleged dishonesty of the transaction, this will be fatal; the allegation of its dishonest nature will not have been pleaded with sufficient clarity.

Discussion

11. It will not be necessary to deal with the individual arguments of each of the respondents. But I am grateful to counsels for their well presented submissions. On the matter of the judgment and alleged violation of the applicants fair trial right I fail to see how a consent judgment entered by applicants counsel on her behalf and presumably on her instructions amounts to a breach of her right to a fair trial. She was at the relevant time legally represented, she was given every opportunity to be heard and the file shows at least one adjournment was granted to her counsel on his application “to receive further instructions.” Judgment was entered by consent on 27 May 2013 in the presence of and with the acquiescence of her then lawyer. Counsels competence and honesty has not been questioned. There is no basis for alleging breach of her right to a fair trial.
12. As to her application seeking enforcement of her fundamental right to ownership, there seems to be some confusion as to her Constitutional rights under article 14. That article is in two parts: sub-article (1) protects citizens from compulsory acquisition of land without timely adequate compensation or redress; and sub article (2) which exempts various laws from the operation of (1). Article 14 in full reads:

“Rights regarding property – (1) No property shall be taken possession of compulsorily, and no right over or interest in any property shall be acquired compulsorily, except under the law which, of itself or when read with any other law, -

Requires the payment within a reasonable time of adequate compensation therefore; and

Gives to any person claiming that compensation a right of access, for the determination of his interest in the property and the amount of compensation, to the Supreme Court; and

Gives to any party to proceedings in the Supreme Court relating to such a claim the same rights of appeal as are accorded generally to parties to civil proceedings in that Court sitting as a court of original jurisdiction.

(2) Nothing in this Article shall be construed as affecting any general law –

(a) For the imposition or enforcement of any tax, rate or duty; or

(b) For the imposition of penalties or forfeitures for breach of the law, whether under civil process or after conviction of an offence; or

(c) Relating to leases, tenancies, mortgages, charges, bills of sale, or any other rights or obligations arising out of contract; or

(d) Relating to the vesting and administration of the property of persons adjudged bankrupt or otherwise declared insolvent, of infants or persons suffering under some physical or mental disability, of deceased persons, and of companies, other corporate bodies and unincorporated societies, in the course of being wound up; or

(e) Relating to the execution of judgments or orders of courts; or

(f) Providing for the taking of possession of property which is in a dangerous state or is injurious to the health of human beings, plants or animals; or

(g) Relating to trusts and trustees; or

(h) Relating to the limitation of actions; or

(i) Relating to property vested in statutory corporations; or

(j) Relating to the temporary taking of possession of property for the purposes of any examination, investigation or inquiry; or

(k) Providing for the carrying out of work on land for the purpose of soil conservation or for the protection of water catchment areas.”

13. The article does not in my respectful view create a fundamental right to ownership of land as claimed by the applicant. It is far more limited in scope and only serves to protect citizens from their land being compulsorily acquired without payment of adequate compensation within a reasonable time. It goes on to require the setting up of a mechanism “under the law” governing payment of adequate compensation within a reasonable time and for redress where this has not been done. Access to the law and to the courts is thereby Constitutionally guaranteed. Finally sub-article (2) necessarily exempts various laws from the operation of sub-article (1).
14. As no party other than the Government is given power “under the law” to compulsorily take land it is clear the article was designed to cover cases where the Government compulsorily takes the lands of a private citizen. For example the taking of land for public purposes pursuant to the Taking of Land Act 1964. Which sets up a regime for the taking of customary or freehold land for defined public purposes, the procedure to be followed and for the assessment of adequate compensation inclusive of rights of appeal to the Supreme Court and Court of Appeal.
15. Article 14 does not apply to the Applicants case as none of her land was taken compulsorily. Roads such as Toamalama St were designated as public roads with her approval and consent as per her original scheme plan submitted for the purpose of approving the subdivision of her lands. Such approval was required by law. The irregularities and defects in the process which she now complains about do not in my respectful view raise the issue of a compulsory acquisition of land in breach of article 14.
16. As to the allegation of fraud it is very difficult to see in accordance with the application filed how fraud even if properly pleaded and proved can amount to a breach of the applicants Constitutional rights under article 14.

Decision

17. As it stands the application has no prospect of success. In accordance with established principle it is accordingly struck out.
18. Costs follow the event. The respondents are entitled to costs. If the parties are unable to reach agreement as to reasonable costs payable by the applicant the matter can be brought back to the court.
    

JUSTICE NELSON