Wickham v Attorney General [2017] SBHC 140 – Detailed Summary

SECTION 1: CASE HEADER

Citation: Wickham v Attorney General [2017] SBHC 140; HCSI-CC 30 of 2015

Court: High Court of Solomon Islands

Date of Hearing: 23 October 2017

Date of Judgment: 5 December 2017Judge: Brown J

Procedural Posture: Claim for declarations relating to the purported forfeiture of a fixed term estate by the Commissioner of Lands and for rectification of the land register to restore the claimants as registered proprietors.

SECTION 2: FACTS

Procedural Background

• The claim was filed on 9 February 2015 after the claimants discovered that their registered fixed term estate (parcel no. 191-014-13) had been transferred to the 3rd defendant, Victoria Alai.

• The Commissioner of Lands later consented to a further transfer of the same property to the 4th defendant, John Wong Chee Kong, on 29 January 2016, which the Commissioner later acknowledged.

• The claimants sought declarations that the forfeiture of their estate was unlawful and a nullity, and orders for rectification of the land register to restore their ownership. Material FactsOwnership and Use of the Land

• The claimants purchased the property from Shell Company (Pacific Islands) Ltd in March 1995.

• A residence existed on the land at the time of purchase but was later removed.

• From around 2009, the claimants fenced the property and, from 2011 until the proceedings, permitted various persons to reside on the land.

• The claimants remained in possession of the land at all material times.

Notices Leading to Forfeiture

• A notice before forfeiture dated 13 February 2008 required the claimants to erect a residential building of specified value, failing which forfeiture would occur.

• The claimants denied any obligation to erect such a building and disputed the validity of the requirement.

• A notice of re-entry dated 28 September 2012 was issued, relying on alleged non-compliance with the earlier notice.

• The claimants denied receiving these notices, which were sent to addresses in Fiji. Actions of the Commissioner of Lands

• The Commissioner relied on the alleged forfeiture to transfer the land to the 3rd defendant.

• Despite issuing forfeiture notices, the Commissioner continued to accept rent payments up to November 2012.

• The Commissioner never entered into possession of the land or obtained a court order enforcing re-entry.

Subsequent Transfers

• The 3rd defendant was registered as owner in October 2013.

• The 3rd defendant later sold the property to the 4th defendant for $300,000.

• At the time of the transfer, a caveat existed on the title, and the Commissioner consented to the transfer.

• The 4th defendant failed to make proper inquiries that would have revealed the caveat and ongoing dispute.

SECTION 3: ISSUES

1. Whether the Commissioner of Lands validly exercised the power of forfeiture under the Land and Titles Act, including:

• whether the notice before forfeiture was lawfully issued;
• whether the notice of re-entry was validly grounded.

2. Whether the right of forfeiture had been waived by the Commissioner through continued acceptance of rent.

3. Whether lawful re-entry or possession had occurred, as required to effect forfeiture under s 136 of the Land and Titles Act.

4. Whether the transfers of the land to the 3rd and 4th defendants were valid, given the alleged forfeiture and the state of the register.

5. Whether the statutory bar under s 139(2) of the Land and Titles Act prevented the claimants from obtaining relief.

6. Whether the Court had power to order rectification of the land register under s 229, and whether the circumstances justified such rectification on the basis of mistake.

SECTION 4: RULE

A. Statutory Framework — Land and Titles Act

1. Section 132(4)

• The Commissioner of Lands has the power to vary or add obligations operates in relation to obligations already contained or implied in the estate.

2. Section 136 — Forfeiture of Fixed Term Estates

• A right of forfeiture may be exercised:“by entering upon and remaining in possession of the land”; or“enforced by action in the High Court.”

• Acceptance of rent after breach may constitute waiver of the right of forfeiture.

3. Section 139 — Relief Against Forfeiture

• Limits the Court’s ability to grant relief in specific situations, including:

• where proceedings for re-entry have been brought and no appearance entered;
• where relief is not sought within six months of forfeiture or re-entry.

• Section 139 operates in circumstances where forfeiture has occurred.

4. Section 229 — Rectification of the Register

• The Court may order rectification where:

• a registration has been “obtained, made or omitted by fraud or mistake”; or
• the Court is otherwise empowered under the Act.

B. Associated Principles Applied by the Court

• A valid forfeiture requires compliance with statutory requirements, including lawful exercise of re-entry or court enforcement.

• A notice of re-entry cannot stand if it is founded on an invalid or unsupported notice before forfeiture.

• Registration based on an invalid forfeiture constitutes a nullity and may be corrected by rectification.

• A purchaser who fails to make proper inquiries may contribute to mistaken registration.

SECTION 5: APPLICATION

Application to Issue 1 — Validity of the Forfeiture

• The Court held that the Commissioner lacked a lawful basis to issue the notice before forfeiture.

• Although s 132(4) permits variation or addition of obligations, no evidence established that any obligation requiring construction existed or had been validly imposed.

• In the absence of such an obligation, no basis existed upon which the power of forfeiture could be exercised.

• Accordingly, the notice before forfeiture was invalid and incapable of grounding forfeiture.

Application to Issue 2 — Validity of the Notice of Re-entry

• Because the notice of re-entry depended entirely on the earlier notice before forfeiture, its validity could not stand once that notice was found invalid.

• The notice of re-entry was therefore invalid.

• As a result, the forfeiture process failed at its foundation.

Application to Issue 3 — Waiver of the Right of Forfeiture

• The Court found that the Commissioner continued to accept rent payments up to November 2012.

• By accepting rent after the alleged breach, the Commissioner waived any right of forfeiture under s 136(3).

Application to Issue 4 — Absence of Lawful Re-entry or Possession

• The Court determined that the Commissioner had never entered into possession of the land and had not commenced any action for possession.

• As s 136 requires either entry and continued possession or enforcement by court action, neither requirement was satisfied.

• The Commissioner therefore did not validly exercise any right of forfeiture.

Application to Issue 5 — Validity of Transfers to the 3rd and 4th Defendants

• Because the forfeiture was invalid, the Commissioner had no power to transfer the land, rendering the transfer to the 3rd defendant a nullity.

• The 3rd defendant was aware that the claimants remained in possession, indicating knowledge of the defect in title.

• The transfer to the 4th defendant was likewise defective, as it was effected despite an existing caveat, without proper inquiry, and was consented to by the Commissioner in error.

• Any registration in favour of the 4th defendant would therefore have been caused or substantially contributed to by mistake or omission.

Application to Issue 6 — Applicability of Section 139(2)

• Section 139(2) did not apply, as its operation depends on the existence of a valid forfeiture.

• Since no valid forfeiture occurred, the statutory limitations imposed by that provision were inapplicable.

Application to Issue 7 — Rectification of the Register

• The Court held that the registration of the 3rd defendant was obtained by mistake, as it was based on an invalid forfeiture.

• Under s 229, the Court had authority to order rectification of the register.

• The subsequent transfer involving the 4th defendant was also affected by mistake and lack of proper inquiry.

• In the circumstances, rectification was justified to restore the claimants as registered proprietors.

SECTION 6: CONCLUSION

• The Court held that the purported forfeiture of the claimants’ fixed term estate was invalid and a nullity.

• The Commissioner of Lands had no lawful basis to forfeit the estate, had not validly exercised any right of re-entry, and therefore had no authority to transfer the land.

• The registration of the 3rd defendant as owner was invalid, having been obtained on the basis of a void forfeiture.

• The subsequent transfer involving the 4th defendant was also affected by mistake and defective process.

• The Court ordered that the land register be rectified under s 229 of the Land and Titles Act, restoring the claimants’ names as registered proprietors of the fixed term estate parcel no. 191-014-13.

• Costs were addressed separately following the substantive orders.

SECTION 7: PRECEDENT / LEGAL PRINCIPLES

• A right of forfeiture is only validly exercised where statutory requirements for re-entry or enforcement are satisfied.

• A notice of re-entry cannot stand where it is founded on an invalid or unsupported notice before forfeiture.

• A power to vary or add obligations cannot be exercised in the absence of existing obligations capable of variation.

• Acceptance of rent after an alleged breach may constitute waiver of the right of forfeiture.

• Statutory limitations on relief against forfeiture operate only where forfeiture is valid, and do not apply where forfeiture is a nullity.

• A transfer or registration based on an invalid forfeiture is a nullity and may be corrected.

• The court may order rectification of the land register where a registration has been obtained or effected by mistake, including where there was no authority to deal with the land.

• A purchaser who fails to make proper inquiries may contribute to mistaken registration.

SECTION 8: RATIO DECIDENDI

A purported forfeiture of a fixed term estate is a nullity where there is no lawful basis for forfeiture and the statutory requirements for its exercise are not satisfied; any subsequent transfer based on that forfeiture is therefore void.