In the Matter of Luabar Logging Pty Ltd and In the Matter of the Companies Act (Ch145) [1988] PNGLR 124

• Jurisdiction: Papua New Guinea
• Judge: Bredmeyer J
• Judgment Date: 08 July 1988
• Citation: [1988] PNGLR 124
• Court: National Court
• Year: 1988
• Judgement Number: N671

Full Title: In the Matter of Luabar Logging Pty Ltd and In the Matter of the Companies Act (Ch145) [1988] PNGLR 124

National Court: Bredmeyer J

Judgment Delivered: 8 July 1988

1 Companies—Companies Act—winding up—creditor's petition—effect of a lease not approved under s69 Land Act

REAL PROPERTY—Approval of certain dealings—Dealing of "no effect" till Ministerial approval obtained—Lease not approved—Possession given and taken—Whether rent recoverable—Land Act (Ch185), s69.

LANDLORD AND TENANT—Agreement for lease—Approval of Minister required—Lease of "no effect" until approved—Effect of lack of approval—Possession given and taken—Whether rent recoverable—Land Act (Ch185), s69.

The Land Act (Ch185), s69, provides that certain dealings in land (including relevantly leases) shall not be made without the approval of the Minister. S69(2) provides that until the approval is given—a lease "is of no effect" and s69(3) provides in effect that the section is not breached if the document creating the relevant interest in land is expressed to "be subject to the approval of the Minister".

Held:

That notwithstanding the provisions of s69 of the Land Act, where the parties had acted on an unapproved lease and the tenant had gone into possession with the knowledge and approval of the landlord, the tenant was estopped from saying that the lease was of no force and effect and the landlord could sue for and recover the rent owing.

McCosker and King v Kuster [1967–68] PNGLR 182, followed.

Cases Cited

The following cases are cited in the judgment:

Gaudron v Mackay (1936) 60 WN (NSW) 11.

McCosker and King v Kuster [1967–68] PNGLR 182

Marks v Jolly (1938) 38 SR (NSW) 351; 55 WN 125.

Petition

This was a creditor's petition for the winding up of a company, on the ground of inability to pay its debts (s240(1)(e) of the Companies Act (Ch145)), the debt relied upon being rent unpaid.

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Bredmeyer J: This is a creditor's petition for the winding up of a company on the ground of inability to pay its debts—which is a ground for winding up under s240(1)(e) of the Companies Act (Ch145). The notice under that section, dated 2 November 1987, does not recite a written lease. It says that the company owes K5,400 for rent due on premises at allotment 2, section 73, Rabaul from 1 December 1986 to 31 August 1987.

Neither the petition nor an affidavit by the petitioning creditor refers to a written lease. In the petitioning creditors affidavit she claims "agreed rent" for the stated period at K600 per month. Clearly that is nine months at K600 per month = K5,400.

Mr Rod Patterson, who is a lawyer and a director of the defendant company, says that the rent is claimed under a lease dated 2 January 1986 which is stamped but not approved under s69 of the Land Act (Ch185). Under that lease the rent is K600 per month for the first year (commencing from 1.2.86) and K650 per month for the second year. Thus the arrears of rent for the period 1.12.86 to 31.8.87 would be two months at K600 per month and seven months at K650 per month = K5,750. I consider that the rent is not in fact claimed under the lease.

In case I am upset on that finding, I now turn to the company's argument ably put by Mr Konecny. He says...