International Education Agency of Papua New Guinea Limited t/a Mount Hagen International School v Francis Kulunga (2010) N3991

• Jurisdiction: Papua New Guinea
• Judge: Makail, J
• Judgment Date: 09 April 2010
• Citation: (2010) N3991
• Docket Number: OS NO 60 OF 2010
• Court: National Court
• Year: 2010
• Judgement Number: N3991

Full Title: OS NO 60 OF 2010; International Education Agency of Papua New Guinea Limited t/a Mount Hagen International School v Francis Kulunga (2010) N3991

National Court: Makail, J

Judgment Delivered: 9 April 2010

N3991

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 60 OF 2010

BETWEEN

INTERNATIONAL EDUCATION AGENCY OF PAPUA NEW GUINEA LIMITED

t/a MOUNT HAGEN INTERNATIONAL SCHOOL

Plaintiff

AND

FRANCIS KULUNGA

Defendant

Mount Hagen: Makail, J

2010: 01st & 9th April

INJUNCTIONS - Interlocutory injunctions - Grant of - Extension of - Principles of.

REAL PROPERTY - State lease - Title - Indefeasibility - Fraud - Actual and constructive - Effect of - Land Registration Act, Ch 191 - Section 33.

PRACTICE & PROCEDURE - Parties - Wrong party - Joinder of parties - Amendment of originating summons - Additional reliefs - National Court Rules - Order 5, rule 8(1)(b) & Order 9, rule 50(1).

Cases cited:

Rosemary John -v- James Nomenda & Ors: WS No 1818 of 2005 & OS No 446 of 2005 (Consolidated) (Unnumbered & Unreported Judgment of 18th January 2010)

Mudge -v- Secretary for Lands [1985] PNGLR 387

Emas Estate Development Pty Ltd -v- John Mea & Ors [1993] [PNGLR 215

Steamships Trading Company Limited -v- Garamut Enterprises Limited & Ors (2000) N1959

The Papua Club Inc -v- Nusaum Holdings Limited (No. 2) (2004) N2603

Hi Lift Co Pty Ltd -v- Miri Setae & Ors [2000] PNGLR 80; (2000) N2004

Ramu Nickel Limited & Ors -v- Honourable Dr Puka Temu & Ors (2007) N3252

Elizabeth Kanari -v- Augustine Wiakar & Registrar of Titles (2009) N3589

Koitachi Farms Limited -v- Walter Schnaubelt (2007) SC870

Paul Tohian & The State -v- Tau Liu (1997) SC566

Kamapu Minato -v- Philip Kumo & The State (1998) N1768

John Bokin & Ors -v- The State & Ors (2001) N2111

Counsel:

Ms V Palts, for Plaintiff

Mr T Dalid, for Defendant

INTERLOCUTORY RULING

09th April, 2010

1. MAKAIL, J: There are two applications before me for decision. They are:

1. The plaintiff’s application by amended notice of motion filed on 4th March 2010 for joinder of parties and leave to amend the originating summons to seek additional reliefs pursuant to Order 5, rule 8(1)(b) and Order 9, rule 50(1) of the National Court Rules respectively; and

2. The defendant’s application by notice of motion filed on 09th March 2010 to dismiss the proceeding for not disclosing a reasonable cause of action, frivolous and vexatious and an abuse of process pursuant to Order 12, rule 40(1)(a)-(c) of the National Court Rules or alternatively to set aside an ex-parte interim injunction of 22nd February 2010 pursuant to Order 12, rule 8 of the National Court Rules.

2. This two applications arose from a dispute between the plaintiff and the defendant over a land described as allotment 5, section 29, registered as a State lease in Volume 15, Folio 157. The grant of title was made to the defendant by the State through a delegate of the Minister for Lands and Physical Planning on 30th October 2009. The land is located adjacent to where the plaintiff’s international school is currently located in the town of Mt Hagen. The plaintiff claimed that it applied to the Minister for Lands and Physical Planning for the grant of title to the land. The defendant also claimed that JK Wills Limited, a company in which he is the managing director is the registered proprietor and had every right to enter and deal with the land. As a result of the dispute, the plaintiff obtained an ex-parte interim injunction on 22nd February 2010 to restrain the defendant from entering and dealing with the land until the dispute is determined by the Court.

3. In the originating summons filed on 19th February 2010, the plaintiff sought a single relief in a form of a declaratory order that the defendant is not the legal title holder of the land. In the proposed amended originating summons, marked as annexure “CL” to the affidavit in support of Clement Luis sworn and filed on 01st March 2010, it is noted that the plaintiff had sought five additional reliefs in the following:

1. A declaration that the plaintiff had acquired an equitable interest to the land;

2. A declaration that the conduct of the Registrar of Titles in issuing title for the land in the name of the defendant is unlawful;

3. A declaration that the conduct of the Minister for Lands and Physical Planning in approving the grant of title to the land to the defendant is unlawful;

4. A declaration that the conduct of the Minister for Department of Lands and Physical Planning and the State in preparing and issuing the State lease for the land to the defendant is unlawful; and

5. A declaration that the title issue to the defendant in respect of the land be declared null and void and stands cancelled.

4. I heard both applications on 1st April 2010. In relation to the defendant’s application, the defendant relied on three grounds to dismiss the proceeding. First, the defendant is not the correct or proper party to be sued in this proceeding because he is not the registered proprietor of the State lease. The registered proprietor is a company known as JK Wills Limited and according to section 17 of the Companies Act, 1997, JK Wills Limited has the capacity to sue and be sued in its own name and style. The plaintiff therefore, had wrongly sued the defendant. Secondly, JK Wills Limited as the registered proprietor of the State lease had an indefeasible title pursuant to section 33 of the Land Registration Act, Ch 191. Hence, its interest in the land is superior to that of the defendant and the Court should not disturb it. Thirdly, the plaintiff had failed to give notice of claim to the State under section 5 of the Claims By and Against the State Act, 1996. In the alternative, the ex-parte interim injunction should be set aside because first, the plaintiff had not shown that there are serious issues to be tried in this proceeding, secondly that the balance of convenience favoured the continuation of the interim injunction and finally, that damages is an adequate remedy.

5. The plaintiff conceded that JK Wills Limited is the registered proprietor of the State lease but strongly argued that at the time of instituting the proceeding, it had been unable to ascertain the title holder of the State lease because the title deed and other relevant documents pertaining to the grant of title to JK Wills Limited held by the Department of Lands and Physical Planning in Port Moresby had not been readily available. It also strongly argued that the proceeding should not be dismissed simply because it had sued the wrong party, rather JK Wills Limited should be added as a defendant to the proceeding in order to correct the defect so that the dispute between the parties could be properly and effectively resolved. Further, the proceeding should not be dismissed because it had raised fraud in relation to the grant of title to the defendant. It argued that there had been either actual or constructive fraud in the grant of title in this case.

6. I deal first with the defendant’s application to dismiss the proceeding on the ground of incorrect party. I accept the defendant’s submission that the proceeding should be dismissed because the plaintiff had sued or named a wrong party to the proceeding. It is clear that the dispute between the parties is over the land in which JK Wills Limited is the registered proprietor. I refer to annexure “R” to the affidavit in response of Francis Kulunga sworn on 01st March 2010 and filed on 2nd March 2010 for a copy of the title deed. JK Wills Limited is a company incorporated under the provisions of the Companies Act, 1997 and has the capacity to sue and be sued. Section 17(1)(a) of the Companies Act, 1997 gives JK Wills Limited the capacity to carry on or under take any business or activity, do any act, or enter into any transaction. It is pursuant to these powers that JK Wills Limited applied and obtained title to the land in the State lease. In my view therefore, it is the party that should have been sued or named as the defendant in this proceeding and not the defendant. To that extent, the proceeding is defective and ought to be dismissed. But there is the plaintiff’s application for leave to join JK Wills Limited to the proceeding which I must consider too. I shall return to deal with it in a moment.

7. The second ground of the defendant’s application to dismiss the proceeding is that, the proceeding do not disclose a reasonable cause of action. The defendant argued that JK Wills Limited held an indefeasible title to the land as it is the registered proprietor of the State lease. The plaintiff had neither pleaded fraud nor sufficiently demonstrated fraud in the proceeding. The plaintiff argued to the contrary. The doctrine of indefeasibility of title derived its origins from the Torrens title system of registration of alienation of government land where a person or entity holds title to the land free of any encumbrances. Section 33 of our Land Registration Act, Ch 191 which the defendant relied upon to assert JK Wills Limited’s title in this case, reinforces the doctrine of indefeasibility of title. However, according to section 33(1), a title may be overturned if there is fraud.

8. There are two views held by the Court in relation to proving fraud to overturn a title of a registered proprietor under section 33 of the Land Registration Act, Ch 191. There is...