CIA 189 of 2008; Hi Tech Industries Limited v Papua New Guinea Institute of International Affairs Inc. and: Ivan Pomaleu, Acting Registrar of Companies and: Raga Kavana, Registrar of Titles (2012) N4585

• Jurisdiction: Papua New Guinea
• Court: National Court
• Citation: (2012) N4585
• Date: 19 January 2012
• Year: 2012

Full Title: CIA 189 of 2008; Hi Tech Industries Limited v Papua New Guinea Institute of International Affairs Inc. and: Ivan Pomaleu, Acting Registrar of Companies and: Raga Kavana, Registrar of Titles (2012) N4585

National Court: Hartshorn, J.

Judgment Delivered: 19 January 2012

An Appeal from a decision of the Registrar of Companies pursuant to s. 408 Companies Act - whether property of a deregistered company held in trust - whether Registrar of Companies entitled to deal with property of a deregistered company held in trust

Facts

This is an appeal from a decision of the Registrar of Companiesto transfer a property for K1.00 to the Papua New Guinea Institute of International Affairs Inc. The transfer was purportedly pursuant to the Registrar's powers under s372 and s373 Companies Act. Hi Tech Industries Ltd was granted leave to appeal the Registrar's decision on 3rd November 2008. The Institute and the Registrar oppose the appeal. The grounds of appeal are that the Registrar did not have authority to sell the Property to the Institute as he held it in trust for HiTech, that the Registrar did not comply with s372 and s373 Companies Act, that no notice was given to Hi Tech of the Registrar's intention to transfer the property to the Institute and that the Registrar did not exercise his statutory powers in a bone fide manner.

Held:

1. Longreach, prior to its deregistration, held the state lease to the Property on trust for Hitech.

2. The decision of the Registrar to purport to sell the Property to the Institute pursuant to s372 and s373 Companies Act was a breach of s373 and s374 and was wrong.

Cases Cited:

Papua New Guinea Cases

Mudge v Secretary for Lands [1985] PNGLR 387; Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215; The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603; Papua Club Inc v Nusaum Holdings Ltd (2005) SC812; Dumal Dibiaso Incorporated Land Group v Kola Kuma (2005) SC805; Koitachi Ltd v Walter Schnaubelt (2007) SC870; Commissioner General of Internal Revenue of Taxes v Bougainville Copper Ltd (2008) SC920

Overseas Cases

Assets Company Ltd v Mere Roihi and Others [1905] AC 176; Austin Nichols & Co v Stiching Lodestar [2007] NZSC 103; Crossco No. 4 Unlimited & Ors v Jolan Ltd & Ors [2011] EWCA Civ 1619; Davidson v Registrar of Companies [2010] NZHC 1497; Paragon Finance Plc v D.B. Thakerar & Co (A Firm) [1998] EWCA Civ 1249

1. HARTSHORN, J: This is an appeal from a decision of the Registrar of Companies, the second respondent (Registrar), to transfer a property for K1.00 to the Papua New Guinea Institute of International Affairs Inc., the first respondent (Institute). The transfer was purportedly pursuant to the Registrar's powers under s372 and s373 Companies Act. Hi Tech Industries Ltd, the appellant (HiTech) was granted leave to appeal the Registrar's decision on 3rd November 2008. The Institute and the Registrar oppose the appeal. The property in question is known as Allotment 12 s54 Hohola contained in State Lease Volume 13 Folio 56 (Property).

2. Hi Tech appeals on the grounds that the Registrar did not:

a) have authority to sell the Property to the Institute as he held it in trust for HiTech.

b) comply with s372 and s373 Companies Act when he sold the Property to the Institute as those provisions did not permit him to dispose of property that he holds on trust.

c) give notice to Hitech of his intention to transfer the Property to the Institute, contrary to the principles of natural justice.

d) exercise his statutory powers in a bona fide manner by not advertising the Property for sale either by public auction or tender, and his conduct was tantamount to fraud.

3. The Institute submits that, there is no evidence that the Property was held in trust for Hitech, either by Longreach Clothing Co Ltd the registered proprietor (Longreach) or the Registrar, the lease agreement between Hitech and Longreach was void and so there was no restriction on the Registrar selling the Property to the Institute. Further, the Registrar did comply with the Companies Act, was not obliged to give notice of his intention to sell the property to the Institute to Hitech, was not fraudulent in the transfer and that the Institute has an indefeasible title to the Property.

4. The Registrar submits that the Property was not held in trust and that the Registrar was not a trustee as alleged. The Registrar had the appropriate authority to deal with the property as he saw fit. The Registrar complied with s372, s373 and s374 Companies Act and there is no evidence of any trust. The Registrar dealt with the head lease only and not the sublease. The Registry acted in good faith in transferring the Property and he was not required to give notice to HiTech. Any interest that Hitech has is confined to the sublease.

5. The appeal is brought pursuant to s408 Companies Act, which is as follows:

“(1) A person who is aggrieved by an act or decision of the Registrar under this Act may appeal to the Court within one month after the date of notification of the act or decision, or within such further time as the Court may allow.

(2) On hearing the appeal, the Court may approve the Registrar’s act or decision or may give such directions or make such determination in the matter as the Court thinks fit.”

6. No decisions were referred to this court concerning an appeal under s. 408 Companies Act, but it is evident that the appeal falls into what the Supreme Court in Commissioner General of Internal Revenue v. Bougainville Copper Ltd [2008] SC920 described as the fourth...