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Hedmon v Nauru Lands Committee [1980] NRSC 8; [1969-1982] NLR (A) 154 (15 August 1980)

[1969-1982] NLR (A) 154

IN THE SUPREME COURT OF NAURU

Civil Action No. 3 of 1979

WALLY D. HEDMON

v.

(1) THE NAURU LANDS COMMITTEE
(2) MARTINA IKA AS TRUSTEE FOR PETER IKA
(3) THE NAURU LOCAL GOVERNMENT COUNCIL
(4) CHRISTINA KARL AS GUARDIAN AD LITEM FOR JOHNNY HEDMON

15th August, 1980.

Land - transfer inter vivos - customary supervision and control by the Council of Chiefs - now exercised by the Nauru Lands Committee - additional to requirement of President's consent under section 3 of the Lands Act 1976.

Land - transfer inter vivos - procedure - application to Nauru Lands Committee - referred to President by Committee - gazettal of transfer by Committee.

Land - transfer inter vivos - application to transfer made by plaintiff on behalf of himself and his brother - brother non sui juris - no authority for plaintiff to act on his behalf.

Action for a declaration that a transfer of land from the plaintiff to the second defendant gazetted by the first defendant is void, and for orders consequential thereon. During a meeting of the plaintiff’s family held by the first defendant to discuss how the estate of the plaintiffs deceased father should be shared, the second defendant asked for a child, P., of whom she is the trustee by Nauruan custom, to receive a share. The plaintiff replied that P. should not share in the plaintiff’s father's estate but that provision would be made by P. by himself and his brother, J., out of their mother's estate. The distribution of the mother's estate had already been decided upon and gazetted; if any share in the land comprised in that estate were to be given to P., it would have to be by way of transfer inter vivos, for which the consent of the President was required under section 3 of the Lands Act 1976. The Secretary of the first: defendant made a record of the discussion and, after it had been read over to all those present, they all signed it, including the plaintiff .Subsequently, after a considerable delay, the Committee sought the President's consent for the transfer to the second defendant as trustee for P. of one-third part of the respective shares the plaintiff and J. in their mother's estate. The President consented to the transfer and it was then notified in the Gazette by the first defendant. At all material times J. was non sui juris by reason of weakness of intellect. The plaintiff’s case was that he did not agree to give to P. a share in his mother's estate but agreed only that he and J. would provide for P. out of their respective shares.

Held: (1) On the facts, the plaintiff agreed that he and J. would transfer to the second defendant as trustee for P. a one-third part of the shares which they had respectively received of their mother's estate.

(2) The Nauru Lands Committee, as successor to the Lands Committee of the Council of Chiefs, has a power and duty to supervise and control the transfer of land by Nauruans into vivos. That power is additional to the President's power to withhold consent to any transfer.

(3) In the absence of any other system for the registration of transfers of land, it is necessary that transfers should be notified in the Gazette. In order to ensure that, the proper procedure to be adopted is for a person wishing to transfer his land to apply to the Nauru Lands Committee which, if it is satisfied that he is the owner of the land and that the transfer is proper by Nauruan custom, refers the application to the President for his consent; if the consent is given, the Committee has then to notify the transfer in the Gazette.

Mrs. M.L. Billeam for the plaintiff
D.G. Lang for the first defendant
R. Kaierua for the second defendant
D.G. Lang for the third defendant
The fourth defendant in person

Thompson, CJ:

Late in 1975 Theresa Hedmon died. She left, surviving her, her husband Hedmon and her two sons, Wally (who is the plaintiff) and Johnny. Early in 1976 the Nauru Lands Committee decided that Hedmon, Wally and Johnny should share her estate equally. Hedmon's share was a life interest only; on his death it would automatically pass to Wally and Johnny in equal shares. Johnny is mentally retarded; presumably for that reason the Nauru Lands Committee agreed that his share should vest in Hedmon as trustee for him.

Soon after the Nauru Lands Committee's decision regarding Theresa's estate was published, Hedmon himself died. He had been married twice; Theresa was his, second wife. Three children of his first marriage survived him; they were Augustine Hedmon, Dagauwe Hedmon and Martina Ika.

In 1967 Martina gave birth to a son, George Peter Dogodag Ika, now apparently generally known as Peter Ika. In accordance with Nauruan custom Hedmon and Theresa asked Martina to let them have him to bring up. So, while he was still only a month old, Martina took him to them. From that time until Theresa's death, and possibly until Hedmon's, Peter lived with Hedmon and Theresa and was brought up by them. Unfortunately they did not apply to adopt him formally; if they had done so, the circumstances giving rise to these proceedings would not have arisen.

As well as Peter, Wally lived with his parents. In 1970 he married; his wife is Kusaian. From 1970 they both lived with his parents and Peter. At a late stage - apparently in 1975 - Wally and his wife applied to adopt Peter; Hedmon and Theresa gave their support by signing the-application. But because Wally's wife is not a Nauruan, she and Wally could not adopt Peter, who is a full Nauruan. The application was discontinued. However, the fact that it had been made was known to the Nauru Lands Committee when it met on 14th July, 1976, to decide who should have a share in Hedmon's estate. It had been brought to their attention on the previous day by one of the Committee’s members.

At the meeting Wally, Augustine, Martina and Dagauwe were present. Whether Johnny was also present is uncertain. Mr. Doguape, the Vice-Chairman of the Nauru Lands Committee, gave evidence that he was. Wally gave evidence that he was not. Augustine and Martina stated that they did not remember. The minutes of the meeting do not include his name among those present; the minutes were signed for him by Wally. But, for reasons which will become apparent later in this judgment, I am satisfied that it is immaterial for the purposes of these proceedings whether Johnny was there or not.

It is not disputed that at some stage of the meeting Wally offered to make some provision for Peter Ika from Theresa's estate. But what it was that he said and what he intended by it are the principal issues in this action. Whatever he actually said, the Nauru Lands Committee subsequently wrote to the President informing him that Wally and Johnny wished to transfer to Peter Ika a one-third share in Theresa's estate and asking for his consent under section 3 of the Lands Act 1976. The President gave his consent and early in 1978 the Nauru Lands Committee published in the Gazette a notice of the transfer. They delayed sixteen. months after the meeting before sending the letter to the President; and they gazetted, unnecessarily, soon after the meeting that Hedmon's "lifetime only" interest in the one-third share of Theresa's estate had passed to Wally and Johnny in equal shares. Mr. Doguape has given evidence that that was due to a mistake on the part of the Committee, which it rectified late in 1977 when Martina came to ask about the transfer of the land to her as trustee for Peter. Martina has denied that she made the complaint but she is an interested party and Mr. Doguape is not. Where the evidence of interested and disinterested parties conflicts, that of the disinterested party is, other considerations being equal, to be preferred. So in this case I accept Mr. Doguape's evidence on that point.

The present action by Wally is for a declaration that the transfer was void and that the one-third share in Theresa's estate which was purported to be transferred in fact belongs equally to Johnny and himself. He is also seeking a declaration that the royalties received before the commencement of this action by Martina for phosphate mined from the lands of Theresa of which the one-third share was purported to be transferred to her as trustee for Peter should be regarded as totally discharging any obligation undertaken by Wally. Finally, he is seeking an injunction to restrain the Nauru Local Government Council from paying to Martina any more royalties for phosphate mined from that land. That application is, I think, misconceived, as the Nauru Local Government Council is required by section 8(2) of the Nauru Phosphate Royalties (Payment and Investment). Act 1968-1978 too pay the royalties only to the persons who are for the time being the owners of the land; so it must pay royalties to whoever this Court declares to be the owner. An injunction is not required, nor is it appropriate.

The second defendant, Martina as trustee for Peter, is seeking a declaration that the transfer is valid. The fourth defendant, Christina Karl as guardian ad litem of Johnny, is seeking a declaration that the transfer of any part of Johnny's share of Theresa's estate is invalid. No remedy is sought against the first and third defendants, except for the injunction to which I have already referred.

At times during the hearing there were suggestions by Mrs. Billeam, representing the plaintiff, that the Nauru Lands Committee did not act: in good faith. But they were not taken further; as fraud has not been pleaded by the plaintiff, it would not have been proper to take them further without first obtaining leave to amend the pleadings. What has been alleged is that the Committee did not record accurately what Wally said to it and acted on the basis of that record rather than what he actually said or intended by what he said.

Mr. Doguape has given evidence that the minutes of the meeting record all that was said. However, he has agreed that the person making the record did not take a shorthand note but wrote the whole minute out in extensor at the time. While Mr. Doguape may believe that the Committee's scribe rites down everything said, it seems most unlikely that he is physically able to do so, and highly likely that he paraphrases what is said so as to get the gist of it on record. It is noteworthy, in this regard, that none of those present the meeting who gave evidence in these proceedings gave an account of what was said which tallied precisely with what is recorded in the minutes or with the accounts of one another. This is not surprising both because of the lapse of time since the meeting (over four years) and their own strong interests in the subject matter of the proceedings; such interests are likely to have coloured their recollection, however honest they may have tried to be. For a similar reason I do not consider as significant the evidence of what Wally said to Mr. Doguape in February, 1978, when he went to complain about the transfer. In any case, I prefer the evidence of Mr. Doguape, i.e. that Wally told him that he regretted having made the offer to transfer the land, to that of Wally, i.e. that he complained that the Nauru Lands Committee had made a mistake.

While I do not accept that the minutes of the meeting of 14th July, 1976, contain a verbatim account of what Wally said to the Committee, I have no doubt that it is a substantially accurate account of what he said. The minutes were read over to all those present, including Wally, and he signed them as being correct. If the record of what he said had not been correct in substance I think it unlikely that he would have signed it. It was a statement which he must have realised was strongly detrimental to his interests. He cannot read or write but he appears, from the way he gave evidence, to be of at: least average intelligence. I cannot believe he would have signed the minutes if the substance of the statement recorded as having been made by him was incorrect.

I find as fact, therefore, that he did say substantially what is recorded. That is “I have another thing to say. Peter to co-share in our mother's estate and not our father's (I and Johnny) and Martina will be trustee.”

I am also satisfied that an intelligent bystander, knowing Peter's place in the family and hearing that said, would have thought it to mean "Johnny and I will give Martina as trustee for Peer a share in our mother's estate equal to our own, but he is not to have any share in our father's estate." Was that sufficient to warrant the Nauru Lands Committee informing the President that Wally and Johnny wished to transfer a one-third share in Theresa's estate to Martina as trustee for Peter, and seeking his consent to the transfer, and then subsequently gazetting it?

In considering this question it has to be remembered that what may be called the basic freehold title of Nauruans to their land is a customary title, not a statutory title. Dealings with that freehold title - as distinct from the granting of leases and other interests in the land - were customarily regulated by the Chiefs. Indeed, freehold is probably not a particularly appropriate description of the title, because custom places restrictions on rights of transfer. Transfers had always to be effected under the supervision and control of the Chiefs. In 1921 to that was added the requirement (added for the benefit of the British Phosphate Commissioners, not of the Nauruans) of the Administrator's consent to transfer; that has now become requirement of the consent of the President under section 3 Lands Act 1976. I reiterate that it is additional to, not in place of, the customary control by the Chiefs, exercised now by the Nauru Lands Committee, which is the statutory successor to the customary Lands Committee of the Council of Chiefs. The procedure when a Nauruan wishes to transfer his freehold title to any land to another person is that he goes and informs the Nauru Lands Committee. The Committee then seeks the President's consent and gazettes the transfer, thus ensuring. that it is formally recorded and enabling note to betaken of it by the Department of Lands and Survey. It is in the light of that practice that Wally's statement must be viewed. He made it in the course of a discussion about his father's estate and as the basis for excluding Peter from consideration for any share of that estate. It was obviously made with serious intent:. The Committee was entitled to believe that he was putting in motion the procedure leading to the gazettal of the transfer. He signed the minute; no further written application was required. Indeed, I am satisfied that it was what Wally intended at the time. Peter had lived with him like a young brother in the same house for eight years. Not long before July, 1976, he had tried to adopt Peter. It is no wonder that he should have been willing to have him co-share in his mother's estate. His later change of mind does not alter the fact that on 14th July, 1976, he intended that Peter should share in his mother's estate.

So far as Wally is concerned, therefore, the transfer to Martina, as trustee for Peter, of his half-share of his father's one-third share of Theresa's estate was and is valid. But other considerations arise in respect of the transfer of Johnny's half-share of that one-third share. Medical evidence has been given that Johnny is mentally subnormal and is unable to manage his own affairs. While it is undoubtedly common in Nauru for members of a family to choose one.-of their number to speak for them in proceedings before the Nauru Lands Committee, only those who are capable of managing their affairs can properly be regarded as having the capacity to choose such a representative. There is, in fact, no evidence that Johnny ever chose Wally to act for him, although it seems that Wally as acted for him on occasions in matters other than proceedings before the Nauru Lands Committee. So Wally had no authority to bind Johnny or to agree on his behalf to transfer any Part of his share of Theresa's estate to Peter or to any one as trustee for Peter. Possibly the knowledge of Peter's history blinded the Committee, which knew of Johnny's subnormality, to the improper course it was taking in accepting on his behalf. When it informed the President that Johnny had applied to transfer a share of Theresa's estate, it was making a statement which was incorrect. When it gazetted the transfer of his share of Theresa's estate, it acted without authority and the transfer was invalid.

The plaintiffs claim, therefore, fails. But Johnny is entitled to a declaration that the transfer of his one-half share of Hedmon's one-third share in the lands comprising the estate of Theresa is invalid and of no effect. That declaration is made accordingly.

Two further matters necessitate the making of orders ancillary to that declaration. First, Johnny is entitled to have repaid to him by Martina one half of all phosphate royalties received by her as trustee of Peter in respect of phosphate mined from the lands comprising Theresa's estate. I direct that accounts of those royalties be taken by the Registrar. Second, as Johnny is non sui juris, neither that money nor future phosphate royalties can be paid to him personally. The Nauru Lands Committee, in accordance with Nauruan custom, appointed a trustee for him, namely Hedmon. Hedmon is, of course, dead. There being no trustee, it is appropriate for this Court to appoint one. I have seen Johnny in Court. He was ill-dressed and neglected. I have heard the evidence of Augustine Hedmon that Johnny has wandered from relative to relative. Obviously-no one person has been caring for him properly. Wally, his only full brother, has spent a good deal of time out of Nauru. In those circumstances it seems that Johnny's interests will be served best if the Nauru Trustee Corporation is made trustee for the purpose of receiving phosphate royalties on Johnny's behalf, holding and investing them on his behalf and paying out the interest and, if necessary; the capital only for the benefit and maintenance of Johnny, and only in such amounts and to such persons as will ensure its use for that purpose. The experience of the Corporation's personnel should ensure the enforcement of the order against Martina for repayment of royalties wrongly paid to her.

With regard to costs, Wally has failed to establish, is claim and is not entitled to costs. Martina has been only partially successful; and, to the extent that she has been unsuccessful, she was at fault in taking advantage of Wally's purported representation of Johnny when she was well aware that Johnny was mentally subnormal. She should bear her own costs. The Nauru Lands Committee also made a serious error in gazetting the transfer of Johnny's share. It should tear its own costs. The Nauru Local Government Council has been represented throughout the proceedings. It did not apply to be dismissed from the action before trial but the plaintiff did not press his claim against it at the trial. The Council, is entitled to its costs of preparing for entering an appearance and serving a defence and of the interlocutory proceedings, but not of representation at the trial. These costs are to be paid by the plaintiff. The fourth defendant, Christina Karl as guardian ad litem of Johnny Hedmon, has been entirely successful but has apparently incurred no costs. Unless she satisfies me that she has done so, she will not be entitled to any order for costs.