Nuku’alofa— The Land Court has rejected an application by the Tonga Development Bank (TDB) to strike out a land claim by Vila Malia Vaka’uta, ruling that the case raises issues that must be properly examined at trial.
The ruling, delivered by Justice Tupou KC, rejected the Bank’s argument that the claim was filed outside the legal 10-year limitation period.
The dispute centres on Lease No. 5442 in Ma‘ufanga, Tongatapu, which was registered in Vila’s name in 1993. Her husband Sione Lilo Vaka’uta had borrowed money from the Bank and allegedly used the property as security.
When the loan fell into arrears, the Bank obtained a default judgment in 1992 for more than $113,000 against both husband and wife.
Consent Order Grants Possession
In May 1997, a consent order was issued allowing the Bank to take possession of the land until the debt was fully repaid or until October 12, 2043. This order effectively placed the property under court authority, giving the Bank legal control over the lease subject to those conditions.
It was not until February 14, 2023, that Vila said she became aware of the situation, after receiving a letter from the Minister of Lands informing her that the property was subject to a court order.
The judgment then outlines a key issue in dispute, stating that the land was not mortgaged to the Bank and that she remains in possession of the original lease.
The timing of that notification appears linked to the Bank’s attempt to transfer the lease to Jian Jun Zheng, who, according to the court judgment, is the current occupier of the land.
According to the judgment, the Bank applied to have the land transferred to Zheng, but the application was withheld because the plaintiff still held the original lease document. This attempted transaction likely prompted the Ministry of Lands to review the legal status of the lease and notify Vila.
Claims Eviction and Damages
She subsequently filed proceedings seeking several orders, including eviction of the current occupier, cancellation of the proposed transfer, and damages exceeding $100,000 for loss of use of the land over more than 20 years.
The TDB applied to strike out the claim under Order 8 Rule 8 of the Supreme Court Rules, arguing that it disclosed no reasonable cause of action because it was time-barred under the Land Act. The Bank said the limitation period began in May 1997 when the consent order was issued, and expired in 2007.
Vila opposed the application, maintaining that she had no knowledge of the proceedings or the consent order until 2023, that she had never been properly served, and that the application was premature.
Strike-Out a Last Resort
In considering the application, Justice Tupou emphasised that striking out a claim at an early stage is a measure of last resort and should only be granted where a case is clearly “hopeless.”
The Court found that determining whether the claim was time-barred was not straightforward. While the consent order dated back to 1997, it allowed the Bank to retain possession until the debt was fully repaid or until 2043, meaning the timing of any limitation period could depend on when the debt was actually settled.
Justice Tupou identified several unresolved questions that can only be addressed at trial, including whether the plaintiff had notice of the consent order, when the debt was repaid, whether the Bank retained any rights after repayment, and whether it was entitled to transfer the land to a third party.
“These questions may be determined only by way of a full hearing and tested evidence,” the Court said in its ruling.
The Court concluded that it could not say the claim was certain to fail. It agreed with the plaintiff that the strike-out application was premature and dismissed the Bank’s application.
Vila was awarded costs, to be fixed by the Registrar if not agreed between the parties.
Ms T. Tapueluelu and F. Vaihu appeared for the TDB, while Miss A. Kafoa represented the plaintiff, Vila Malia Vaka’uta.
