Marie Iravela v Benjamin Samson

• Jurisdiction: Papua New Guinea
• Judge: Gavara-Nanu J
• Judgment Date: 06 March 2018
• Citation: (2018) N7212
• Court: National Court
• Year: 2018
• Judgement Number: N7212

Full : OS (JR) No 320 of 2015; Marie Iravela as the Administrator of the estate of late Jophiel Iravela v Benjamin Samson, Registrar of Titles and Romily Kila-Pat, Secretary for Department of Lands & Physical Planning and John Dege, Managing Director for the National Housing Corporation and the Independent State of Papua New Guinea and Remdy Investment Limited (2018) N7212

National Court: Gavara-Nanu J

Judgment Delivered: 6 March 2018

N7212

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 320 OF 2015

BETWEEN

MARIE IRAVELA as the Administrator of the estate of

late Jophiel Iravela

Plaintiff

AND

BENJAMIN SAMSON, Registrar of Titles

First Defendant

AND

ROMILY KILA-PAT, Secretary for Department of

Lands & Physical Planning

Second Defendant

AND

JOHN DEGE, Managing Director for the National

Housing Corporation

Third Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Defendant

AND

REMDY INVESTMENT LIMITED

Fifth Defendant

Waigani: Gavara-Nanu J

2017: 3rd May

2018: 6th March

WILLS PROBATE & ADMINISTRATION – A retired public servant paying off a National Housing Corporation house – House purchased under a Government Home Ownership Scheme – Government Home Ownership Scheme governed and regulated by statute - National Housing Corporation not transferring property to the purchaser – Purchaser dying intestate - Whether property formed part of the deceased’s estate – Whether the Administrator of the estate has rights and interests over the property.

REAL PROPERTY – Sale of National Housing Corporation houses – Formerly Housing Commission houses – Government housing policy – Government home ownership scheme for public servants – Houses to be sold to “approved” and “eligible” tenants – Sale of houses restricted to public servants occupying the houses – Houses declared by the Minister as “special category” houses earmarked for sale to approved and eligible tenants – Special terms and conditions of sale.

REAL PROPERTY – A National Housing Corporation “special category” house – A private lawyer and a businessman offering to purchase the house – National Housing Corporation accepting the offer – National Housing Corporation selling the house to the lawyer and businessman - Whether sale of the house to a person other than an approved and eligible purchaser legal.

REAL PROPERTY - Indefeasibility of title – Fraud – Torrens system of land registration – Common law notion - Whether title obtained by fraud – Whether fraud against the registered proprietor established – Actual fraud – Land Registration Act, Chapter No. 191; s. 33 – Fraud not pleaded - Whether fraud can be relied upon to invalidate registered proprietor’s title – Whether sale of the house to a person other than an “approved” public servant who paid off the house null and void.

EQUITY – Fraud – ‘Actual fraud’ a common law remedy – Land Registration Act; s. 33 – Whether the deceased an “approved person” to buy the house has remedy in equity – Constitution; s. 155 (4) – Court having wide and unfettered discretionary power – Court’s power to make orders in the nature of prerogative writs “and such other orders as are necessary to do justice” – Court’s power to tailor its remedial processes to suit particular circumstances of a particular case.

EQUITY – Vendor and purchaser - Agreement – Special and unique features of the agreement – Agreement giving rise to ‘a fiduciary relationship’ between vendor and purchaser – Vendor an agent of the State – Purpose of the agreement –Implementation of government’s housing policy for public servants – Government home ownership scheme - Good faith – Confidence – Vendor stronger and dominant – Purchaser weak and vulnerable –- Power imbalance between vendor and purchaser - Vendor having fiduciary power and obligations to protect the interests of the purchaser – Abuse of fiduciary power – Purchaser a beneficial owner.

Facts

The plaintiff is a daughter of late Jophiel Iravela (“the deceased”) who died at the Port Moresby General Hospital in 2010. At the time of his death, the deceased was living in a then Housing Commission (“the Commission”) house with his family. The property is described as Section 51 Allotment 41, Boroko, National Capital District (“the property”). The deceased lived in the property for many years.

The deceased was one of the “approved” public servants who were given an offer by the then Department of Urban Development, which was responsible for managing the Commission houses, to buy the houses they were living in. This arrangement was made pursuant to a government home ownership scheme known as “Morgan Home Ownership Scheme”, the purpose of which was to assist public servants own homes. The offers were made in a standard letter which was sent to all the approved tenants. The tenants were given an option to purchase the houses either through fortnightly salary deductions over a period of time or through an outright payment in one lump sum. The deceased chose the first option. He signed an “Irrevocable Salary Deduction Authority” form to pay K46.00 every fortnight from his pay towards the purchase price until he paid off the property.

The Commission houses that were sold to the approve tenants were declared “special category houses” by the Minister for Urban Development and were published in a National Gazette together with the names of the approved tenants and the properties they were buying. The houses were selling at specially reduced prices at K11, 960.00 or K8,060.00. Only a limited number of houses were sold at slightly higher prices.

The deceased, with the assistance of his son, paid off the house in 1992. When National Housing Commission Act, Chapter No. 79 was repealed and superseded by the National Housing Corporation Act, 1990, the powers, functions and liabilities of the Commission were automatically assumed by the Corporation.

On 9 February, 2015, the fifth defendant through its Managing Director, Mr. Turai Elemi, who is a well-known lawyer and businessman, wrote to the Corporation’s Manager responsible for NCD and Central Province, Mr. Edwin Oropa, offering to purchase the property, which he described was in a run-down condition. The fifth defendant offered K380,000.00 for the house. As a result, Mr. Oropa ordered site inspections of the property. Two site inspection reports were submitted to Mr. Oropa, but they contained false and misleading information and they heavily favoured the fifth defendant over the plaintiff, in that the reports stated that the people living in the property were “default tenants” living illegally in the property. These claims were false. The reports strongly recommended that the property be sold to the fifth defendant, which it was claimed was financially capable of developing the property.

On 16 February, 2015, the Corporation’s Acting Managing Director, Mr. John Dege wrote to the fifth defendant offering the property for K512,050.00. The fifth defendant through Mr. Elemi accepted the offer and paid the purchase price in one payment with a bank cheque.

The property was transferred to the fifth defendant on 1 April, 2015. The transfer was made despite a caveat being lodged by the plaintiff.

From 1992 to 2015, the plaintiff, who was on 16 May, 2015, granted Letters of Administration to administer the deceased’s estate, on numerous times tried unsuccessful to get the Commission, then subsequently the Corporation to transfer the property to the deceased and his family.

On 6 March, 2015, a Senior Estate Officer of the Corporation , after making reconciliations on the payments made for the property by the deceased and after confirming that the deceased had paid off the property, recommended to the General Manager of the Properties Division of the Corporation that the property be transferred to the deceased’s next of kin (family). Despite this recommendation, on 1 April, 2015, the Corporation through its’ Acting Managing Director transferred the property to the fifth defendant.

Held

1. There is no evidence of actual fraud, viz, fraud committed by the fifth defendant under s. 33 of the Land Registration Act, Chapter No. 191. The actions of the fifth defendant could at best only draw suspicions. The fifth defendant’s title therefore cannot be invalidated on the basis of fraud under s. 33 of the Land Registration Act, because “fraud” under this section means actual fraud or fraud committed by the registered proprietor: The Papua Club v. Nusaum Holdings Ltd & Ors (No.2) (2004) N2603, discussed and adopted.

2. The conduct of the Acting Managing Director of the Corporation, Mr. John Dege in facilitating the transfer of the property to the fifth defendant was fraudulent in nature and was in breach of s. 47 of the National Housing Corporation Act 1990. The transfer of the property to the fifth defendant was therefore illegal and null and void.

3. The property is part of the estate of the deceased because it constituted a thing or a chose in action in which the deceased had equitable right and interest, enforceable by law. It did not make any difference even if those rights and interests were contingent: John Kasaipwalowa v. The Sate [1977] PNGLR 257; The State...