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SPRY, V-P
[1] This is an appeal from an order of the High Court, by which the learned
judge, in exercise of the powers conferred on him by section 116(8) of the
Government Lands Act (Cap.280), extended the duration of a caveat registered
under that Act pending the outcome of a suit for specific performance.
[2] It seems to me that the appeal depends on the determination of a single
question of law.
Subsection (8) empowers the court, on an application for such extension and
"upon such evidence as the court may require", to make such order as the
court thinks fit. The question is, in what circumstances and on what
evidence ought such an extension to be granted.
[3] The learned judge said¬:
"I think the cases on injunction stand somewhat on a different footing.
There, the applicant is seeking the indulgence of a court without having any
other right or remedy. Here, a caveat has already been lodged in accordance
with a right given to a purchaser by law. He has now filed a suit for
specific performance and seeks extension of the caveat with the object of
making specific performance, if he gets it, meaningful."
[4] He then, without any consideration of evidence, granted the extension
sought. Mr. D.N. Khanna, who appeared with Mr. Da Gama Rose for the
appellant, submitted, as he did in the High Court, that the extension of a
caveat and the granting of an injunction are in essence the same and should
be governed by the same principles.
[5] Mr. Gautama, who appeared with Mr. Akram for the respondent, submitted
that just as a purchaser has a right to lodge a caveat, so, if he has been
served with a notice under subsection (6) of section 116 and has filed a
suit for specific performance, he should have a right to an extension of his
caveat. He contended that it is fundamentally fallacious to identify the
extension of a caveat with the grant of an injunction.
[6] None of the advocates who appeared before us was able to cite any
authority on this question and I am not aware of any. In the absence of
authority, I cannot, with respect, accept Mr. Gautama's argument. I agree
that a purchaser may enter a caveat as of right and that the registration of
the caveat, in addition to giving notice of his claim, affords it a
temporary protection. Once, however, the owner of the land moves to have the
caveat removed, the whole position changes.
[7] The caveator has now to go to the court, and the court clearly has a
discretion. Had the legislature intended the filing of a suit, during the
period of notice, to operate to extend a caveat, it could very easily so
have provided.
[8] If I am right in this, it seems to me that a court faced with an
application for the extension of a caveat is substantially in the same
position as a court faced with an application for an interlocutory
injunction. The result will be exactly the same if the application is
allowed, in so far as any alienation will be precluded pending the
determination of the suit. In either case the court has a judicial
discretion, and I can see no reason why different principles should apply
merely because the circumstances of the application are different.
[9] Mr. Khanna argued that before an injunction will be granted, a court
must be satisfied, not only that the applicant has a prima facie case, but
also that, on the evidence, the court feels a high degree of assurance that
he is likely to succeed. I think, with respect, that that is too high a
standard. Mr. Khanna cited two English cases but both were concerned with
mandatory injunctions, where other considerations apply.
[10] In Breston v. Luck (1884) 27 Ch. D. 497, Baggallay, L.J., said, at page
505:¬
"Of course, in order to entitle the Plaintiffs to an interlocutory
injunction, though the Court is not called upon to decide finally on the
right of the parties, it is necessary that the Court should be satisfied
that there is a serious question to be tried at the hearing, and that on the
facts before it there is a probability that the Plaintiffs are entitled to
relief."
[11] So far as I am aware, that is still good law. In that case, the court
was of the opinion that, on the evidence before it, there was a contract
between the parties, and Baggallay, L.J., went on¬
"That gives the Plaintiffs a prima facie right to have matters kept in
status quo to this extent, that their rights under that agreement shall not
be defeated before the hearing."
[12] On the other hand, in an earlier case, Hadley v. London Bank of
Scotland Ltd. 46 E.R. 562, Knight Bruce, L.J., considered the defendants
more likely to succeed than the plaintiff on the question whether or not
there was a binding contract between them and then weighed the balance of
convenience.
[13] Turner, L.J., said that where a clear valid contract of sale is shown,
the court will not permit the vendor to transfer the legal estate and he
implied that an injunction would not be granted if there were doubt as to
the enforceability of a contract. As I understand the effect of these
authorities, what the applicant for an interlocutory injunction has to show
is that he
has a prima facie case with a probability of success.
[14] If the court is in doubt, it will decide the issue on the balance of
convenience; with the onus on the applicant to show that the inconvenience
he would suffer from the refusal of an injunction is greater than that which
the respondent would suffer from the grant of one (Child v. Douglas 43 E.R.
1057). I see no reason to apply any different principles as regards the
extension of a caveat.
[15] I now turn to the evidence. An affidavit was filed on behalf of the
respondent. Mr. Khanna has rightly criticized it, for it is a most
unsatisfactory document. For the purposes of this judgment it is unnecessary
to say more than that all it even purports to show is that the respondent
had lodged a caveat and that he had filed a suit for specific performance of
an agreement for sale. The affidavit also contains a bare statement that the
respondent has a good cause of action but being the opinion of a layman,
unsupported by any facts, that cannot carry any weight. I am inclined to
agree with Mr. Khanna that even if there had been no affidavit in reply, it
would not have justified the extension of the caveat.
[16] However, the appellants filed an affidavit in reply. In it, they admit
that there was a contract of sale entered into between themselves as vendors
and the respondent as purchaser but they say that this contract was
determined by mutual agreement.
[17] The respondent made no attempt to reply to these allegations and they
therefore remain unrebutted. Mr. Gautama submitted that it would have been
improper to put in a further affidavit. He argued that there is no
prescribed procedure and that in any case an excess of affidavits is
undesirable. I cannot agree. The position would be different if the
respondent's affidavit had averred facts and the appellant's denied them.
[18] Here, the respondent’s affidavit gives no material facts and the only
real evidence of fact is that contained in the appellant's affidavit. In
these circumstances, it seems to me that a replying affidavit was essential.
There was no need for it to be prolix but it should have made clear which of
the facts alleged by the appellant were denied. I think the leave of the
court would have had to be obtained to file such an affidavit, but I do not
think that any court, in the circumstances, would have refused it.
[19] Mr. Gautama submitted that it was implicit from the filing of the
plaint that the respondent did not accept the appellant's contentions. In a
broad sense, that is true, but the contents of a plaint are not evidence.
There is no evidence to show whether the respondent denies all the facts
alleged by the respondent or some of them or admits the facts but argues
that in law they produce a result different from that claimed.
[20] Mr. Gautama also argued that the facts alleged by the respondent were
inherently improbable. That argument might have carried weight if the facts
were in issue but cannot be considered when those facts are affirmed on oath
and have not been rebutted.
[21] In those circumstances, it seems to me, on the evidence before the
court, that an interlocutory injunction could not have been granted and
therefore that an extension of caveat ought to have been refused.
[22] That being so, it is unnecessary to consider the balance of convenience
or the various other aspects of the matter that were aired before us There
are, however, two matters that I must mention. First, in the course of his
address to us, Mr. Gautama referred to section 52 of the applied Transfer of
Property Act, 1882, of India, which provides that immovable property in
issue in a suit cannot be alienated to the prejudice of a party to the suit,
and submitted that it applies to land registered under the Government Lands
Act. I am inclined to agree, but I am reluctant to express a firm opinion,
as we do not have the benefit of any finding by the learned judge and the
question was not fully argued before us. It would not appear from the record
that it was ever part of the respondent's case in the High Court that an
extension of the caveat ought to be granted by way of reinforcing the
provisions of section 52, which I assume to be Mr. Gautama's argument now,
nor does it appear to have been the reason which led the learned judge to
grant the extension.
[23] Moreover, the effect of extending a caveat, which, as I hews said, is
similar to that of an injunction, appears more restrictive than that of
section 527 since the former precludes the r0gistration of a transfer or
mortgage, while section 52 only makes a disposition voidable at the instance
of a successful party to the suit. I do not therefore think that section 52
i.e. relevant to this appeal, while the removal of the caveat will not
affect such rights, if any, as are protected by the section.
[24] Secondly, the respondent failed to annex to his affidavit a copy of the
caveat of which he sought the extension. In my opinion, no caveat should
ever be extended unless an authenticated copy of it is before the court.
[25] A caveat protects a specific interest and the evidence adduced in
support of an application for extension must relate to that interest and no
other. I would allow the appeal and set aside the order of the High Court,
substituting an order that the application be dismissed.
[26] I would give the appellant his costs in this Court and in the High
Court, but I would not give a certificate for two advocates. As the other
members of the Court agree, it is so ordered.
MUSTAFA, J.A.
[27] I agree that the appeal be allowed and I concur in the order proposed
by the learned Vice-President. I have only this to add. For my part I would
prefer to reserve to a future occasion the question whether the same
principles apply to the extension of a caveat as to the granting of an
interlocutory injunction.
[28] In my view it is unnecessary to decide this point for the purposes of
this appeal. Here the respondent had filed a plaint, but the contents of a
plaint are only allegations, not evidence.
[29] The affidavit filed in support of the application to extend the caveat
was worthless as evidence. The appellant had filed an affidavit in reply
which, if true, would mean that the contract between the parties was
determined by mutual consent. The trial judge was empowered to deal with the
application, in the words of section 116(8) of Cap. 280, "upon such evidence
as the court may require.” On the respondent's side no evidence was put in
at all; only the appellant had put in evidence in the form of an affidavit.
[30] In the circumstances the trial judge was in error in granting the
appellant's application to extend the caveat.
[31] On this Ground I would allow the appeal.
LUTTA, J.A.
[32] I agree. |
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