Mondo Merchants Pty Ltd v Melpa Properties Pty Ltd and Koang No 47 Pty Ltd

• Jurisdiction: Papua New Guinea
• Judge: Hinchliffe J
• Judgment Date: 10 March 1999
• Citation: (1999) N1863
• Court: National Court
• Year: 1999
• Judgement Number: N1863

National Court: Hinchliffe J

Judgment Delivered: 10 March 1999

Hinchliffe J: In the Amended Originating Summons filed on the 3 of October, 1997 the plaintiff seeks the following relief:

"1. A declaration that the Contract for Sale of Land dated 29 April, 1997 entered into between the plaintiff as the "purchaser" and the defendant as the "vendor" for the purchase and the sale of the property described as Section 90 Allotment 2 being Volume 7 Folio 244 Town of Mt. Hagen, Western Highlands Province is a valid and legal contract.

2. A declaration that the defendant has failed to cite any ground or cause under the contract to terminate the said contract and therefore the defendant's subsequent refusal to perform the contract constitutes a fundamental breach of the said contract.

3. And Order directing the defendant to perform the contract as per the terms of the said contract dated 29 April, 1997 and damages including economic loss for breach of contract.

4. An Order restraining the defendant and its servants and agents from taking any action and or making any pledge or commitment by way of a sale or otherwise so as to dispose of the subject property until the completion of the whole of these proceedings.

5. Costs of this action.

6. Such further or other orders as this court may think fit."

It should be noted that the said Amended Originating Summons was filed when the only defendant was the now, first defendant. Since the said filing the second defendant has become a party to the proceedings. Hence any reference to the "defendant" in the said Amended Originating Summons is referring to the first defendant.

The plaintiff claims relief in the nature of an order for specific performance and damages against the first defendant for breach of a contract for the sale and purchase of a property in Mt. Hagen entered into between the plaintiff as purchaser and the first defendant as vendor.

The plaintiff claims that before the completion of the said contract the first defendant unilaterally opted to terminate the sale and purchase contract and resell the same property to a third party who is the second defendant to the proceedings and consequently the plaintiff has brought the proceedings against the first defendant.

On the 8 August, 1997 the Court ordered the restraining order as sought in No. 4 of the said Amended Originating Summons.

As far as the first defendant is concerned its position is fairly clear and it is precisely set out in Mr Dowa's written submissions dated on the 10 February, 1999.

He says, inter alia:

"Issues

The first and foremost issue is whether a contract has been negotiated and agreed to. There is no doubt a contract has been entered into. Under clause 5.3 of the contract, the contract was effected on the date when the deposit monies, stamp duties and ministerial fees were paid and when the contracts were executed by the parties. The terms of the contract are therefore binding on the parties.

The second issue is whether the first defendant is entitled to terminate the contract pending ministerial approval.

The contract for sale itself provides for the instances where a party can terminate a contract. Under clause 13 of the agreement, the only time when the vendor could terminate the contract is when the purchaser defaults in the observance or performance of any obligation imposed by the agreement. In the present case the purchaser was willing and performed his obligations and therefore no grounds exist for the termination of the contract for sale except for the reasons given by the first defendant.

Section 69 of the Land Act

Clause 18.1 of the contract for sale provides that the agreement is entered subject to statutory approval pursuant to Section 69 of the Land Act and will be of no effect until that approval is obtained. In the present case no ministerial approval has been granted and therefore the transfer is incomplete. The contract is not approved and therefore the plaintiff has no legal right in the property."

It therefore seems that the first defendant is relying on the "Section 69" argument to show the Court that what it did in relation to the contract of sale was quite valid. There was also evidence...