Supreme Court Justice Harrop, in his reserved judgment of October 13, 2014: Civil Case 195 of 2006, has found that the Valuer General, Menzies Samuel, acted lawfully in 2006 regarding the forfeiture of a 1994 lease between lessee Gilbert Dinh (Dinh Van Than) and lessor John Pamavari, Lessor over Urelapa Island.

The judge also upheld a counterclaim by Silver Holdings Limited (SHL), a Vanuatu company in which Robert Herd, through his family trust is an equal shareholder, finding that SHL acquired the lease as a bona fide purchaser and has a title preferable at law to any title Dinh may have had.

Parties to the case were: Gilbert Dinh (Claimant) and Menzies Samuel – Valuer-General; Director of Lands; Silver Holdings Ltd; Tahe Pamavari as executor of the Estate of John Pamavari (Deceased); Allen Palmer and George Palmer; and Urelapa Ltd first to sixth Defendants respectively.

As have been the various dealings with this South Santo island, the judgment, is long (almost 16,000 words!) and complicated.

In a nutshell, however, Justice Harrop found that a notice of forfeiture of the lease was properly served and in plenty of time before it was acted upon by the Valuer General and that Dinh’s case failed, basically, because although he had ample opportunity to apply for relief against forfeiture he failed to do so.

Justice Harrop, in case his conclusion as to the invalidity or not of the Valuer General’s forfeiture was wrong, also considered what relief, if any, ought to have been granted to Dinh if his claim had been granted.

Dinh’s losses, the judgment says, were not caused by what the lessors did, but rather by what Dinh failed to do. Dinh must take responsibility for any failure on the part of the VG.

It is now impossible to grant any practical remedy in respect of the land, the judgment says, however deserving Dinh might otherwise have been. That is because he had a clear opportunity over a period of more than two months to have input into the question of whether the forfeiture was invalid and whether it should be enforced by the VG. He did not take that opportunity and effectively waived his opportunity later to complain about the VG’s decision. An order quashing the VG’s decision may in principle be of value as a basis for a claim for indemnity damages but the Act says that no indemnity shall be payable to “any person who has himself caused or substantially contributed to the damage by his fraud or negligence…” The combination of the passage of time and the issuing of not one but two new leases over the same land means that events have overtaken this case.

Dinh had the opportunity to obtain an injunction to prevent any dealings with the land while the Supreme Court heard his complaints but he did not do so. That allowed the issue of the two new leases. If the only new lease was that to Urelapa Ltd, which has the original lessor’s two younger sons as Directors, the situation may have been different. But here we also have SHL, an intervening purchaser on the face of it in good faith and for value without any notice of Dinh’s complaints about the VG’s decision at the time it acquired it’s lease in late 2006.

Further, Justice Harrop says, any such claim on Dinh’s part would now appear to be statute-barred since the relevant events occurred in 2006.

Regarding SHL’s counterclaim, the Court heard that Dinh was aware of the interest of Herd and Terry Hannam from June 2006 well before the critical transactions in mid-November 2006 but failed to take reasonable steps to ensure that SHL or any other prospective purchaser was aware of his claim. He could easily have lodged a caution against the title or obtained a Court injunction and served it on Herd and Hannam. Furthermore, by the end of August or early September 2006 Dinh said he was aware that Herd was working with the landowners to create a new lease replacing his lease. In the face of this tangible threat, he still did nothing to protect his claim or to inform SHL of it.

For all these reasons Justice Harrop dismissed Dinh’s claim in its entirety and upheld SHL’s counterclaim with the result that its lease over Urelapa Island prevails.

SHL’s costs on its counter claim and those of all defendants in Dihn’s claim were awarded against him.

The future course of the other two proceedings, which the Appeal Court consolidated with this one, including what should be done about the adjourned appeal by the State are to be discussed at a Court Conference on December 10, 2014.

The full jugment is available on Paclii:

THE HISTORY OF THE CASE – from the Introduction to Justice Harrop’s judgment

On June 3, 1994 John Pamavari as lessor and Gilbert Dinh as lessee signed a commercial lease 04/2952/002 (the 002 lease) in respect of Urelapa Island. Dinh paid Pamavari Vt 7.5 M as rent in advance for the duration of the 75 year lease at Vt 100,000 a year.

A key provision in the lease was that Dinh would build a tourist resort on the island. There were conflicting opinions as to the development of the island and further agreements reached between the lessors and lessee during the years between 1994 and 2006 but with no real advances towards development having been made the lessors took steps to forfeit the lease.

The situation was made somewhat more complex by Pamavari, in 2002, signing a power of attorney in favour of his sons, Allen and George Palmer in respect of any matters arising in respect of the lease.

In February 2005 Allen Palmer wrote to Dinh offering him a final goodwill payment of Vt 30 million to surrender the lease and return the land. Dinh rejected this officer indicating he intended to sell the land for Vt 81 M and he was prepared to offer the lessor first option to purchase.

A fourth notice before forfeiture was issued against Dinh in March 2006. Dinh did not communicate with the lessor, nor did he apply to the Valuer General for relief.

On May 17, 2006, Pamavari, through his attorney Palmer, declared that the 002 lease was forfeited and that he was referring the matter to the Valuer General (VG) exercising the role of Lands Referee, requiring him to enforce the right of forfeiture pursuant to the Land Leases Act.

On May 23, 2006 the VG had received all relevant documents.

Although there was no direct proof of service of the notice of forfeiture on Dinh it must have been received prior to May 24, the date on which his lawyers wrote to the VG alleging the forfeiture was the result of a failed attempt by Palmer to buy the lease, that it was being done with an ulterior motive and must not be enforced by the VG.

Critically, that letter did not arrive at the VG’s office until 4.15 pm on May 31 and was not seen by Mr Samuel until the following morning.

By then Mr Samuel had already signed and issued a written determination confirming forfeiture noting that Dinh had submitted no application for relief.

The cancellation of the lease was registered on June 14, 2006.

When Dinh learnt of the determination he approached the then Minister of Lands, Maxim Carlot Korman, and asked him not to approve any new lease of the Urelapa Island because he wished to challenge the forfeiture in Court. He says the Minister assured him that he would not do so. Dinh also requested of George Kerby, a Senior Enforcement Officer in Lands Department that no new lease be issued.

On June 21, 2006 Dinh filed a Supreme Court claim seeking rectification and declarations.

On 13 November 2006, however, a new lease over the same land numbered 04/2952/004 was signed between John Pamavari as Lessor and Allen and George Palmer as Lessees. A day later, this lease was transferred to Silver Holdings Ltd (SHL) whose representative, Robert Herd, said acquired the lease without knowledge of any claim against the title or of any issue about the validity of the forfeiture of the 002 lease. Nor was it aware of any Court proceedings or injunction preventing the dealing with the title to the island. Had it been so aware, Herd said, SHL would not have settled the transfer transaction, which occurred on December 15, 2006.

Justice Saksak at Luganville dismissed Dinh’s case but Dinh appealed. On April 30, 2010 the Appeal Court ruled that because SHL had not clearly been served with the claim and its interests would obviously be affected if Dinh’s claim succeeded, the appeal was allowed and the case remitted to the Supreme Court. Regrettably it has taken over four years to be heard.

In the meantime, in March 2011 the Director of Lands cancelled SHL’s 004 lease.

SHL claimed the cancellation was invalid because in February 2010 Justice Fatiaki had made restraining orders in another case (CC 147 of 2009) which involved a dispute over the assets of SHL, principally between Mr Herd and Terry Hannam. SHL claimed the Director of Lands wrongly regarded the company as being struck off and in any event acted in breach of the restraining order. That claim remains unresolved and is stayed pending the outcome of this case.

Making matters even more complicated, after cancellation of the 004 lease, a new lease in favour of Urelapa Ltd whose directors are Allen and George Palmer, was issued.

In civil case 34 of 2011 Justice Saksak directed the registration of that new lease title. The State appealed. That appeal also is yet to be decided.

On 18 April, 2013 the Court of Appeal ordered that all these cases be consolidated and that Justice Saksak’s orders be stayed.

Now that Dinh’s claim has been dismissed and SHL’s counter claim upheld, the remaining matters will proceed by way of Court Conference on December 10, 2014.

The full judgment is available on Paclii:

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