Robert Marshall and Maureen Aisha Kusanan v Spirit Haus Limited, Himony Tom Lapiso and Goroka Coffee Exchange Limited (2004) N2630

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi J
• Judgment Date: 03 September 2004
• Court: National Court
• Citation: (2004) N2630
• Docket Number: Spirit Haus Limited v Robert Marshall, Maureen Aisha Kusanan and Australia and New Zealand Banking Group (PNG) Ltd
• Year: 2004
• Judgement Number: N2630

Full Title: Spirit Haus Limited v Robert Marshall, Maureen Aisha Kusanan and Australia and New Zealand Banking Group (PNG) Ltd; Robert Marshall and Maureen Aisha Kusanan v Spirit Haus Limited, Himony Tom Lapiso and Goroka Coffee Exchange Limited (2004) N2630

National Court: Kandakasi J

Judgment Delivered: 2 or 3 September 2004

1 PRACTICE AND PROCEDURE—Order of trial—Propriety of trial first on cross–claim—Preferable to try all related issues together to minimize costs and better utilization of judicial time—Inappropriate to try cross–claim first except in exceptional circumstances—Plaintiff has burden to establish his claim—Defence cannot establish plaintiff's case—Defence can only be required to answer a case established against him or her.

2 LAWYERS—Professional conduct—Lawyers duty—Lawyers duty bound to ensure avoidance of wastage of Court's time—Duty entails identifying real meritorious issues for trial and eliminate unnecessary issues—Provide a near accurate estimate of length of witnesses testimonies and length of trial—Inform Court of all developments including earlier decisions if any on matters in issue—Breach of duty—Referral to Lawyers Statutory Committee—s15 Professional Conduct Rules.

3 FOREIGN INVESTMENT—Whether foreigners can own majority shares in a company through a trust deed—Legality of trust deed—Trust deed in breach of relevant legislation—Deed illegal and therefore unenforceable—Running of business without certification by relevant statutory authority—Amounts to criminal offence—Liable for prosecution—s3, s25, s41 and s41A Investment Promotion Authority Act.

4 COMPANIES—Execution of contract with or for a company—Document not signed under company seal—Effect of—Contract not for and by company—Duties of directors—Onerous duty under the Companies Act—Contract in apparent conflict of interest by company director—Effect of—Breach of fiduciary duty and breach of provisions of the Companies Act—Contract avoidable by company—Director liable to criminal prosecution—Capacity of shelf–company to enter into contract—Lack of actual capacity to enter into—Gives no valuable consideration—No legally binding and enforceable contract—s112, s115 and s118 of Companies Act 1997.

5 STAMP DUTY—Document and instrument subject to stamp duties—Lack of stamp duty—Document or instrument inadmissible in evidence before the Court unless correct stamp duty and penalty is paid—Sections of the Stamp Duties Act.

6 LAND LAW—Leases—Not in usual form—Uncertainty in party—Purported witness to the purported lease agreement unfamiliar with terms of lease—Alterations not endorsed—Original not produced—Evidence called in support of existence of lease inconsistent and incredible—No legally binding agreement found.

7 EVIDENCE—Calling of—Extrinsic evidence against written record—Unless coming within a known exception inadmissible and unreliable—Admissibility of copies of purported agreements with no stamp duty—Whether purported agreements exist in fact and entered into between the parties—Evidence called in support contain illogical, inconsistent and incredible accounts—Evidence rejected—Finding against authenticity of documents.

8 CONTRACTS—Parties—Uncertainty of parties—Fundamental element missing—Contract in breach of statutory provisions or requirement—Illegal and therefore unenforceable unless relevant legislation provides otherwise—Contracting with self company—Ability of—Lack of capacity to pass valuable consideration—No binding contract.

9 EMPLOYMENT—Employment of non–citizens—Work permit required—Only a factually existing employer with capacity prove work and pay agreed salary can apply for—Shelf–company lacks capacity—Where it purports to employ and applies for work permit amounts to fraud against legislation, department and the State—Section of the Employment of Non–Citizens Act.

10 MIGRATION—Work visa or entries—Application for—Application by person on basis of purported employment with Shelf–company—Effect of—Fraud on legislation, department and the State—Grant of such application a nullity—Section of the Migration Act.

11 Igiseng Investments Limited v Starwest Constructions Limited and Igiseng–Okmanip Business Group Inc (17/12/03) N2498, Rimbink Pato v Ruben Kaiulo, Electoral Commissioner of Papua New Guinea and Miki Kaeko & Ors (29/08/03) N2455, Jack Livinai Patterson trading as Pattersons Lawyers v.Teachers Savings and Loans Limited (19/02/04) N2516, Wyatt Gallagher Bassett (PNG) Limited v Benny Diau& Anor. (16/08/02) N2277, Graham Mappa v PNG Electricity Commission [1995] PNGLR 170, Motor Vehicles Insurance (PNG) Trust v James Pupune [1993] PNGLR 370, Tian Chen Limited v The Tower Limited (08/11/02) N2313, Wal Wine v Bill Giglmai [1990] PNGLR 462, Fly River Provincial Government v Pioneer Health Services Limited (24/03/03) SC705, Investment Promotion Authority v Niugini Scrap Corporation Pty Ltd; Investment Promotion Authority v James Sinton Spence (03/06/01) N2104, Odata Limited v Ambusa Copra Oil Mill Limited and National Provident Fund Board of Trustees (06/07/01) N2106, Mathew Petrus Himsa & Anor. v Richard Sikani & Anor (08/11/02) N2307, Jack Livinai Patterson v National Capital District Commission (05/10/01) N2145, Curtain Brothers (QLD) Pty Ltd & Kinhill Kramer Pty Ltd v The Independent State of Papua New Guinea [1993] PNGLR 285, Papua New Guinea Forest Authority v Concord Pacific Limited, Paiso Company Limited and The Independent State of Papua New Guinea (No 2) (2003) N2465, Overseas Cases Cited:, Brown v Dunn (1879) R (HL, Bank of New Zealand v Simpson [1900] AC 182, Horsfall v Braye (1908) 7 CLR 629), Re Smith and Fawcett Ltd [1942] AC 304; 1 All ER 542 referred to

___________________________

N2630

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1581 OF 2000

SPIRIT HAUS LIMITED

Plaintiff

AND:

ROBERT MARSHALL

First Defendant

AND:

MAUREEN AISHA KUSANAN

Second Defendant

AUSTRALIA & NEW ZEALAND BANKING GROUP (PNG) LTD

Third Defendant

AND

ROBERT MARSHALL

First Cross Claimant

AND:

MAUREEN AISHA KUSANAN

Second Cross Claimant

AND:

SPIRIT HAUS LIMITED

First Cross Defendant

AND:

HIMONY TOM LAPISO

Second Cross Defendant

AND:

GOROKA COFFEE EXCHANGE LIMITED

Third Cross Defendant

GOROKA: KANDAKASI, J.

2004: 17th - 20th May

10th – 12th, 16th August

2nd September

PRACTICE & PROCEDURE – Order of trial – Propriety of trial first on cross-claim – Preferable to try all related issues together to minimize costs and better utilization of judicial time – Inappropriate to try cross-claim first except in exceptional circumstances - Plaintiff has burden to establish his claim – Defence cannot establish plaintiff’s case – Defence can only be required to answer a case established against him or her.

LAWYERS – Professional conduct – Lawyers duty – Lawyers duty bound to ensure avoidance of wastage of Court’s time – Duty entails identifying real meritorious issues for trial and eliminate unnecessary issues – Provide a near accurate estimate of length of witnesses testimonies and length of trial - Inform Court of all developments including earlier decisions if any on matters in issue – Breach of duty – Referral to Lawyers Statutory Committee - Section 15 Professional Conduct Rules.

FOREIGN INVESTMENT – Whether foreigners can own majority shares in a company through a trust deed – Legality of trust deed – Trust deed in breach of relevant legislation – Deed illegal and therefore unenforceable - Running of business without certification by relevant statutory authority – Amounts to criminal offence – Liable for prosecution - Sections 3, 25, 41 and 41A Investment Promotion Authority Act.

COMPANIES - Execution of contract with or for a company – Document not signed under company seal – Effect of – Contract not for and by company - Duties of directors – Onerous duty under the Companies Act - Contract in apparent conflict of interest by company director – Effect of – Breach of fiduciary duty and breach of provisions of the Companies...