W.S.NO. 287 OF 2008; Fred Angoman and Papaco No. 1 Limited v Independent Public Business Corporation Of Papua New Guinea and Glen Blake as the Managing Director of the Independent Public Business Corporation Of Papua New Guinea (2011) N4363

• Jurisdiction: Papua New Guinea
• Judge: Kariko, J.
• Judgment Date: 24 May 2011
• Court: National Court
• Citation: (2011) N4363
• Year: 2011
• Judgement Number: N4363

Full Title: W.S.NO. 287 OF 2008; Fred Angoman and Papaco No. 1 Limited v Independent Public Business Corporation Of Papua New Guinea and Glen Blake as the Managing Director of the Independent Public Business Corporation Of Papua New Guinea (2011) N4363

National Court: Kariko, J.

Judgment Delivered: 24 May 2011

N4363

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

W.S.NO. 287 OF 2008

BETWEEN:

FRED ANGOMAN

First Plaintiff

AND:

PAPACO NO. 1 LIMITED

Second Plaintiff

AND:

INDEPENDENT PUBLIC BUSINESS CORPORATION OF PAPUA NEW GUINEA

First Defendant

AND:

GLEN BLAKE as the Managing Director of the

INDEPENDENT PUBLIC BUSINESS CORPORATION OF PAPUA NEW GUINEA

Second Defendant

Waigani: Kariko, J

2011: 23 February & 24 May

CONTRACT – Contract of sale of land - Breach of contract – Specific Performance – Doctrine of laches – Unreasonable delay by plaintiff in pursuing its claim – Prejudice to the defendant - Whether specific performance the appropriate remedy

Facts:

The Plaintiffs filed this suit against the Defendants alleging breach of contract of sale of land and sought specific performance of the contract or damages in the alternative. After executing the contract, obtaining ministerial approval for the transfer of the land, and paying the appropriate stamp duty, the sale was never settled due to issues concerning the outstanding water rates for the property. After 4 years the Plaintiffs commenced these proceedings. In the meantime the Defendants sought to sell the land by public tender.

Held:

1. A defence that has not been pleaded cannot be argued; Uma More v UPNG [1985] PNGLR 41 and Papua New Guinea Banking Corporation v Jeff Tole (2002) SC694 applied.

2. Specific performance is a discretionary remedy founded on equitable principles and its grant will depend on many factors including the bona fide conduct of the parties.

3. Specific performance will not be ordered as a matter of course where a breach of contract is proven.

4. Specific performance may not be ordered where there has been unreasonable delay on the part of the plaintiff in prosecuting his claim and the delay has unfairly prejudiced the defendant; Mehmet v. Benson (1965) 113 CLR 295 and Lamshed v. Lamshed (1963) 109 CLR 140 followed.

5. Specific performance refused, damages ordered as the appropriate remedy.

Cases cited:

Papua New Guinea cases

Papua New Guinea cases:

Uma More v. UPNG [1985] PNGLR 41

Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694

Yooken Paklin v. The State (2001) N2212

Yange Lagan and Others v. The State (1995) N1369

Albert Baine v. The State (1995) N1335

Jonathan Mangope Paraia v. The State (1995) N1343

Overseas cases:

Mehmet v. Benson (1965) 113 CLR 295

Lamshed v. Lamshed (1963) 109 CLR 140

Textbook:

Chitty on Contracts, 28th Edition, Volume 1 General Principles

Counsels:

Mr K Iduhu, for the Plaintiffs

Mr D Gavara-Nanu, for the Defendants

24 May, 2011

1. KARIKO, J: The Plaintiffs filed this suit against the Defendants alleging breach of contract of sale of land, and have sought specific performance of the contract or damages in the alternative.

Facts

2. The relevant facts of this case, from the Agreed Statement of Facts and from evidence not disputed in court are as follows:

(a) In early 1999, while employed by the then Investment Corporation of Papua New Guinea (“ICPNG”), the first plaintiff was offered the sale of land situated in Korobosea N.C.D. and described as Allotment 4 Section 85 Boroko (“the Property”) for a purchase price of K37,000.

(b) The First Plaintiff accepted the offer and through the Second Plaintiff, a company owned by him as the sole shareholder, a contract for sale was entered into with the ICPNG (“the Contract”) which was executed on 24 August 1999.

(c) Although the Contract provided for a 10% deposit, K13,300 was paid (“the Deposit”).

(d) Statutory approval under section 128 of the Lands Act was obtained on 28 January 2000.

(e) The appropriate stamp duty was paid and the Contract and transfer instrument duly stamped.

(f) Completion of the sale did not occur. While the First Plaintiff made numerous communications for settlement of the sale there was very slow reaction and response from the ICPNG who offered two reasons for the delay in settlement. Firstly the ICPNG informed the First Plaintiff that the owner’s copy of the title deed had gone missing but the excuse changed to issues concerning the arrears in the water rates for the Property. After months of waiting for a settlement statement from ICPNG as the vendor, the Plaintiffs prepared its own statement and sent it to the ICPNG by letter dated 29 May 2002 but received no response.

(g) While waiting for completion, the assets of the ICPNG including the Property became vested in the Privatisation Commission established under the Privatisation Act 1999.

(h) By letter dated 9 July 2001, the ICPNG purportedly gave notice to the Plaintiffs to settle the balance of the purchase price or the sale would be withdrawn (“the Notice”). The Plaintiffs did not respond to this letter and neither the ICPNG nor the IPBC have ever advised the Plaintiffs that the sale was withdrawn.

(i) In 2002 after the Privatisation Act was repealed and the Independent Public Business Corporation Act 2002 (“IPBC Act”) enacted, the assets of the Privatization Commission including the Property became vested in the Independent Public Business Corporation (“IPBC”), the Second Defendant.

(j) Pursuant to the IPBC Act and in particular sections 31(3) and 50(1) and (4) the relevant Minister published a notice the National Gazette No. G33 on 6 April 2004 vesting the assets and liabilities of the ICPNG in the IPBC.

(k) The First Plaintiff then turned to the IPBC and resumed his follow-ups on the completion of the sale of the Property and wrote to the First Defendant on 24 May 2006 in this regard.

(l) The IPBC advised by letter written by the First Defendant on 15 June 2007 that the Property had been placed on public tender and sold to a third party.

(m) But that proposed sale appears to have fallen through and the registered title to the Property remains with the ICPNG.

(n) The Second Defendant, the IPBC has to date refused to complete the sale of the Property to the Second Plaintiff.

3. Based on these facts, the Plaintiffs filed this action on 21 March 2008 and have claimed a breach of the Contract, seeking an order for specific performance or in the alternative, damages including the refund of the deposit of K13,300. They say IPBC is liable because the assets and liabilities of the ICPNG vested in the IPBC under the IPBC Act.

Defence

4. In its amended Defence, the Defendants asserted that:

(a) The IPBC was not privy to the contract;

(b) section 50 of the IPBC Act does not vest the assets and liabilities of the ICPNG in the IPBC; and

(c) the Plaintiffs did not suffer any damages and are not entitled to the relief sought.

In court, the Defendants did not argue the first two grounds of its defence.

Issues

5. The parties agreed that the issues for determination are:

(a) Whether or not the First Defendant is estopped from denying liability by virtue of the vesting of the assets and liabilities of ICPNG in it and or its conduct in dealing with the Property.

(b) Whether or not a cause of action is founded against any of the Defendants.

(c) Whether the Plaintiffs are entitled to seek specific performance of the Contract of Sale and/or damages against the Defendants.

Was the contract terminated?

6. In final submissions, the Defendants again did not argue the first two issues and merely submitted that the court should refuse the relief claimed.

7. I am satisfied that the notice in the National Gazette No. G33 on 6 April 2004 vested all interests and obligations arising from the Contract in the IPBC as trustee of ICPNG.

8. Mr Gavara-Nanu of counsel for the Defendants properly stopped short of claiming that the failure to settle after the Notice amounted to the Contract being terminated. I understood his submissions to be saying that because the Plaintiffs:

(a) did not settle when given notice by ICPNG in 2001; and

(b) then in 2005 did not object to the Property being placed on public tender,

there was no valid contract for specific performance to be claimed, and no damages were shown to have been suffered and none could be ordered except the reimbursement of the deposit monies. I had some difficulty in following the submissions but I gathered the Defendants were suggesting that the contract was terminated, and even if it was not, the Plaintiff did not suffer any damages except for the deposit paid.

9. I reject the assertion that the Contract was terminated after the Plaintiffs failed to pay the balance of the purchase price. The Plaintiffs were at all times seeking settlement of the sale but could not do so for the failure of ICPNG initially and then the IPBC to finalise the settlement...