Arnold Ningiga v Peter Lare Koavea [1988-89] PNGLR 312

• Jurisdiction: Papua New Guinea
• Judge: Los J
• Judgment Date: 11 August 1989
• Citation: [1988-89] PNGLR 312
• Court: National Court
• Year: 1989
• Judgement Number: N740

Full Title: Arnold Ningiga v Peter Lare Koavea [1988-89] PNGLR 312

National Court: Los J

Judgment Delivered: 11 August 1989

N740

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

NINGIGA

V

KOAVEA

Waigani

Los J

25 July 1989

4 August 1989

11 August 1989

REAL PROPERTY — Approval of certain dealings — Transfer of land — Of no effect until ministerial approval obtained — Contract voluntarily entered into — No statutory protection until steps taken to obtain approval — Specific performance required — Land Act (Ch No 185), s 69.

VENDOR AND PURCHASER — Contract for sale of land — Ministerial approval required to transfer — Transfer not effective until approval obtained — Contract otherwise enforceable — No statutory protection until steps taken to obtain approval — Specific performance required — Land Act (Ch No 185), s 69.

VENDOR AND PURCHASER — Contract for sale of land — Option to purchase in lease exercised — Improvements effected — Improvements made not subject to covenants in lease — Change in relationship of parties.

The Land Act (Ch No 185), s 69, provides that land shall not be transferred without the approval of the Minister.

Parties entered into a memorandum of lease which included a covenant by the tenant not to effect improvements without the consent of the landlord and an option to purchase the property leased, which option was exercised and a contract of sale executed. After the contract was executed, the purchaser effected considerable improvements to the property. The vendor refused to complete and the purchaser sought specific performance.

Held

(1) Where parties have voluntarily entered into a contract for the sale of land, the party who is charged with the obligation to obtain the approval of the Minister under s 69 of the Land Act, cannot rely on s 69 as rendering the transaction ineffective until he has taken the necessary steps to obtain that approval.

McCosker and King v Kuster [1967-68] P & NGLR 182 and Re Luabar Logging Pty Ltd [1988] PNGLR 124, applied.

(2) Because the relationship of landlord and tenant changed to that of vendor and purchaser on the exercise of the option to purchase, improvements effected to the property thereafter were not subject to the covenant in the lease not to effect improvements without consent.

(3) In the circumstances, the vendor should be ordered to take all necessary steps, within one month, to obtain approval under s 69 of the Land Act to transfer the title of the property.

Cases Cited

McCosker and King v Kuster [1967-68] P & NGLR 182.

Re Luabar Logging Pty Ltd [1988] PNGLR 124.

Summons for Specific Performance

These were proceedings in which the purchaser under a contract for the sale of land sought specific performance thereof.

Editor's Note

An appeal to the Supreme Court has been lodged.

Counsel

F Talao, for the plaintiff.

I Wartovo, for the defendant.

Cur adv vult

11 August 1989

LOS J: By a writ of summons the plaintiff seeks to have the defendant comply with an agreement allegedly entered into between them over a property described as Allotment 16, Section 54, Boroko. The plaintiff says that through the Boiboi Real Estate agency he found a house for sale in Boroko (the subject of this dispute) and wanted to buy it. The defendant was introduced to the plaintiff as the owner of the house. The plaintiff says that he and the defendant entered into a lease agreement and eventually signed a memorandum of lease over the property. Apart from the normal conditions of the lease between the parties, included in the memorandum of lease was a clause giving an option to the plaintiff to buy the property on certain conditions.

The rent payable for the property was specified in the second schedule:

"THIS LEASE commences on the 15th day of April 1985 for a period of one year at the rental of FOUR THOUSAND AND EIGHT HUNDRED KINA (K4,800.00) per annum payable by instalments of FOUR HUNDRED KINA (K400.00) per month of which SIXTY FIVE (K65.00) is to be paid to the Housing Commission and THREE HUNDRED AND THIRTY FIVE KINA (K335.00) paid to the Landlord the first instalment to be paid on the 15th day of April 1985."

The plaintiff says that subsequently a contract of sale was signed between the parties confirming the sale and the conditions including a variation of the sale price. The plaintiff says that, in view of the imminent purchase of the property, he had effected substantial improvements and renovations at the cost of approximately K27,000. He claims that despite having done all that he could on his part, the defendant had not done anything to complete the sale and transfer the title over the property to him.

There is little dispute that a lease agreement was validly entered into between the plaintiff and the defendant. This conclusion was reached on two bases. First, there was a direct concession in the submissions of the defendant's lawyer. Secondly, the defendant relies on the covenants in the memorandum of lease especially covenants 1 (c) and (e) and the amount of rent in the second schedule. He cannot, on the one hand, say there was no valid lease agreement and, on the other hand, rely on the covenants in the lease.

1. THE TENANT'S COVENANTS

"The tenant covenants and agrees with the landlord as follows:

(c) Not at law or in equity except to an employee of the tenant to assign, transfer, underlet or part with the possession of the demised premises or any part thereof without the previous written consent of the landlord such consent not to be withheld in the case of a proved solvent and responsible person the onus of proving which shall be upon the tenant provided however that as a condition of consent to any assignment or subletting the landlord may require that the proposed assignee or subtenant shall enter into a direct deed of covenant with the landlord to observe and perform the covenants and conditions herein expressed and implied and provided further that the landlord's costs of such deed of covenant and of any investigation of the proposed assignee and of any investigation of the proposed assignee or subtenant are paid by the tenant [sic].

(e) Not to make any alterations or additions to or paint or paper the demised...