Housing Authority of Fiji has been ordered to pay $24,005.04 plus costs to a former sub-lease property owner in Naitasiri within a month for imposing a penalty fee without a lawful basis.
Court records show the plaintiffs, Ilaisa Nakiatagovaki and Vasimaca Lacabuka, had purchased the property for $70,000 in 2020 but struggled financially during the COVID-19 period, so they decided in 2022 to sell the property for $120,000 by entering into a sale and purchase agreement with a buyer.
Clause 2 of the sub-lease stated that the plaintiffs were required to obtain the consent of the Housing Authority for the transfer to the new buyer, where the Housing Authority agreed to provide consent on condition that the plaintiffs paid a $12,000 penalty once the deal was successful, via email exchanges between the parties.
In March 2023, the plaintiffs sought clarification from the Housing Authority on the provision that required them to pay a penalty fee.
The Housing Authority wrote to the plaintiffs to confirm that approval for the consent was subject to payment of the penalty fee of $12,000 to be made on the settlement date and that its conditional approval was valid for three months.
Because of the delay in settling the purchase, Housing Authority made changes to the penalty fees, increasing penalties on lessees who failed to build within two years from the grant of a lease for residential leases ‘to $5000 or 20 per cent of the sale price, (whichever is greater)’.
The plaintiffs eventually paid the increased penalty fee of $24,005.04 so the transfer could be effected, but subsequently filed proceedings in court to recover the payment.
In his decision delivered on September 5, Justice Dane Tuiqereqere found there was no lawful basis for the Housing Authority to impose any penalty fee on the plaintiffs when they sold the property in 2023. As such, the plaintiffs succeed with their originating summons.
Justice Tuiqereqere has also ordered that the plaintiffs are entitled to the cost of $25000 to be paid by Housing Authority within a month.
