Max Umbu v Steamships Limited (2004) N2738

• Jurisdiction: Papua New Guinea
• Judge: Salika J
• Judgment Date: 03 December 2004
• Court: National Court
• Citation: (2004) N2738
• Year: 2004
• Judgement Number: N2738

Full Title: Max Umbu v Steamships Limited (2004) N2738

National Court: Salika J

Judgment Delivered: 3 December 2004

N2738

PAPUA NEW GUINEA

[In the National Court of Justice

WS 499 OF 2003

Between

MAX UMBU – Plaintiff

And

STEAMSHIPS LIMITED - Defendant

WAIGANI : SALIKA, J

16, 22 June, 03 December, 2004

Headnotes:

Mortgages – Mortgagers default – Claim to possession under Mortgagee – Statutory Rights

Constitution – Section 41 of Constitution not applicable

Cases Cited:

Tarere v ANZ Banking Group (1988) PNGLR 201,

ANZ Banking Group v Kila Wari (1990) N801,

Bank of Papua New Guinea v Muteng Basa (1992) PNGLR 271,

Papua New Guinea Banking Corporation v Barra Amevo v Ors (1998) PNGLR 240,

Papua New Guinea Banking Corporation v Pala Aruai and Freeway Enterprises Limited (2002) N2234

Bank of Papua New Guinea v Muteng Basa (1992) PNGLR 271.

Mr E Waifaf for Plaintiff

Mr I Sheppard for Defendant

03 December, 2004

The plaintiff is a former employee of the Defendant company who was made redundant on 3 December 2002 following the down sizing of the Defendant’s various businesses, including its Merchandise Division where the plaintiff was formerly employed. The plaintiff graduated with a Bachelor of Economics from the University of Papua New Guinea, Waigani Campus in 1998 and in May of that year began employment with Ela Motors at its Port Moresby Head Office. In November 1999 the plaintiff won a position as System and Administration Manager for the Defendant Automotive Division in Lae. He served a 3 months probationary period and was confirmed thereafter on a permanent basis. He served the Defendant in that capacity until it became known that the Division was going to be closed. Pending the closure of the Defendants Automotive Division throughout the Country the plaintiff successfully applied and won the position of Inventory Audit Manager with the Defendants Merchandise Division in Port Moresby. The plaintiff took up this position on or about 26 August 2002 upon acceptance of a written offer from the Defendant.

The plaintiff says that without prior knowing the defendants plan to close the operations of its Automotive Division throughout the Country he made enquiries about joining the Defendants Home Ownership Scheme. He was informed that he was eligible to join the scheme. The plaintiff identified a property on Section 106, Allot 13, Wagtail Street, Lae, Morobe province as the property he wanted to purchase under the scheme. Approval was granted to the plaintiff to buy the property. In February 2002 the plaintiff entered into a contract of sale between Glen Ming Chen and Chun Ming Huang to buy the property from them for K95,000.00

In the meantime following the Defendant\s approval for the plaintiff to purchase the property the plaintiff entered into an agreement between himself and the defendant to secure a loan of K46,200.00 from the Defendant to purchase the property.

In so doing he executed with the defendants the following documents in order to secure the loan:-

(a) Steamships Home Ownership Scheme Deed

(b) The Deed of Priority executed between himself, the Defendant and the ANZ Bank.

(c) Memorandum of Mortgage – quite apart from the ANZ Bank Mortgage.

(d) Irrevocable Authority to deduct from his Salary – quite apart from the one for ANZ Bank.

The Plaintiff also executed a memorandum of Mortgage with the ANZ Bank to secure the balance of the purchase price for the property through a separate loan in the sum of K49,800.00. The plaintiff says that since settlement on the 11 March 2002 he has been duly repaying the loans without any difficulty until 25 October 2002 when the Defendant through it’s Divisional Manager Brian Walstenholme terminated him from his employment for no particular reason. From this termination he was reinstated until 2 December 2002 when he was advised that he had been made redundant and put off the payroll.

On the 3rd December 2002 the plaintiff wrote to the defendant to inquire about his continued employment with the defendant but got no response. He wrote again on 20 January 2003 making the same inquiry but received a negative response. Then on 13 March 2003 the plaintiff went to see the Defendant’s Human Resource Manager Chris Taukuro who issued him the letter of cessation of his employment but back dated the termination to 2 December, 2002.

The plaintiff alleged he was terminated unfairly and unlawfully without regard to principles of natural justice.

In the meantime because the plaintiff ceased getting paid on 2 December 2002 his loans from Steamship and the ANZ Bank started to become delinquent. He sought some assistance from the Defendant but the defendant demanded full repayment of its loan to the plaintiff within 21 days. The plaintiff was not able to meet the defendant’s demand.

On 14 April 2003 the defendant wrote to the plaintiff to vacate the property at Section 106 and Allotment 13, Wagtail Street in Lae.

The plaintiff says that the actions of the defendant in trying to evict him after displacing him from employment and refusing to re-employ him and demanding full payment of the loan money, is harsh and oppressive and that by virtue of Section 41(1) of the Constitution an unlawful act which is enforceable under s.155(4) and S.23 of the Constitution.

The plaintiff alleged that he has suffered damages and faces the possibility of loosing his property in Lae. He seeks the following reliefs:-

(a) Damages for breach of Contract of Employment.

(b) A declaration that the Defendants actions to claim his property is unlawful pursuant to Section 41(1) of the Constitution.

(c) An order that the loan amount of K46,200.00 advanced by the Defendant to the plaintiff under the Home Ownership Scheme be deemed sufficient compensation to the plaintiff taking into account his particular circumstances pursuant to s.23 and s.155(4) of the Constitution.

(d) An order that the Defendant be restrained from seeking out the plaintiffs property under mortgage.

(e) Alternatively, that the plaintiff be given liberty to repay the loan over the balance of the 7 year period remaining and without interest or at an interest rate the court sees fit.

(f) An order for special damages.

(g) Interests

(h) Costs, and

(i) Such other orders the Court deems fit.

The defendant filed a defence and a cross-claim to the plaintiffs claim. The defendant admits that the plaintiff was employed as it’s Systems and Administration Manager. The defendant also admits that the plaintiff did enter the Home Ownership Scheme to purchase a house on Allotment 13 Section 106, Wagtail Street, Lae.

The plaintiff on his own behalf gave evidence orally and also tendered into evidence an affidavit by himself. The defendant called Lologa Gerega who was called to tender an affidavit...