Order to return $59k
21 March, 2023, 12:15 pm
Fiji Court of Appeal judge Justice Susantha Lecamwasam ordered the Lands Ministry director to return $59,625.60 to Nadi residents Arvin Kumar and Priya Narayan after he found the penal rent imposed by the director was “unreasonable” at 50 times the annual rent of the property in question.
Mr Kumar and Ms Narayan were told by the director of lands in January 2019 to pay the penal rent of $59,625.60 before they could sell the state land located at Lot 28, Navakai Foreshore Reclamation for $650,000.
The penal rent was imposed for non-development on the state land as Mr Kumar and Ms Narayan had failed to erect a building for residential purposes within the stipulated time as required by the lease.
“I do not doubt, nor do the appellants dispute, that the director of lands was well within his statutory powers to impose a penal rent for default of the conditions of the lease,”Justice Lecamwasam said in his February 24, 2023, ruling.
“However, the question that needs to be asked is whether the penalty imposed was reasonable and proportionate to the default of which it seeks to mitigate the impact. I find that a simple mathematical comparison between the penal rent of $59,625.60 against the annual rent of $1200 suffices to decide that the former is disproportionate.
“I refrain from embarking on an unnecessary theoretical expedition of the constituent elements of unreasonableness as I find such an exercise redundant in the face of obvious injustice.
“The penal rent imposed is approximately 50 times that of the annual rent, which leads to the natural conclusion that the director of lands has acted unreasonably in imposing such a harsh penalty.
“As stated previously, the director of lands has the statutory power to impose the penal rental. However, the absence of guidelines or regulations, it is required to impose a penal rent that is commensurate with the annual rent.
“Therefore, the penal rent imposed as a condition to consent for transfer is unjustified and unlawful.”
Justice Lecamwasam also ordered the Attorney-General to pay $5000 in costs to Mr Kumar and Ms Narayan.