Vaki Vailala v National Housing Corporation
Jurisdiction | Papua New Guinea |
Citation | (2017) N6598 |
Date | 20 January 2017 |
Court | National Court |
Year | 2017 |
Full : WS No 799 of 2014; Vaki Vailala v National Housing Corporation and the Honourable Fabian Pok MP and Romilly Kila-Pat, Secretary, Department of Lands and Physical Planning and Independent State of Papua New Guinea (2017) N6598
National Court: Cannings J
Judgment Delivered: 20 January 2017
N6598
PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE
WS NO 799 OF 2014
BETWEEN
VAKI VAILALA
Plaintiff
AND
NATIONAL HOUSING CORPORATION
First Defendant
AND
THE HONOURABLE FABIAN POK MP
Second Defendant
AND
ROMILLY KILA-PAT, SECRETARY,
DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Third Defendant
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant
Waigani: Cannings J
2015: 3, 11 November,
2017: 20 January
LAND – government land – State Leases – indefeasibility of title – meaning of “fraud” in Land Registration Act, s33(1)(a) – whether actual fraud must be proven – whether proof of constructive fraud is sufficient.
GOVERNMENTAL BODIES – National Housing Corporation – sale of dwellings – National Housing Corporation Act 1990 – Corporation’s duty to comply with provisions of Act when deciding whether to sell dwelling house and to whom it can be sold.
REMEDIES – appropriate relief re title to residential property in a case of fraud – whether to order that title be declared null and void – whether appropriate to order that property vested in National Housing Corporation be offered for sale to long-term occupier of property .
The plaintiff claimed that a residential property vested in the National Housing Corporation, which he had occupied for 21 years, was sold by the Corporation (the first defendant) to the second defendant in irregular circumstances, contrary to the National Housing Corporation Act. He claimed that it was a case of fraud, such that the second defendant’s title should be declared null and void and forfeited. He asked that the Corporation be ordered to offer the property for sale to him for the amount at which it had been valued, when the Corporation offered to sell him the property on previous occasions. The defendants argued that the second defendant was the registered proprietor, who had indefeasible title, that there was no fraud, that the Corporation had acted fairly and in accordance with its governing legislation in selling the property to the second defendant who was a bona fide purchaser who had purchased the property in good faith, that the plaintiff was for the bulk of the period of his occupation of the property an illegal and unfaithful tenant and that all relief sought by him should be refused. A trial was conducted to determine whether any relief sought by the plaintiff should be granted.
Held:
(1) Under Papua New Guinea’s Torrens Title system of land registration for alienated government land, registration of a lease vests, subject to limited exceptions, an indefeasible (unforfeitable) title in the registered proprietor subject only to the exceptions in Section 33(1) of the Land Registration Act. Most significantly Section 33(1)(a): “in the case of fraud” (Mudge v Secretary for Lands [1985] PNGLR 387).
(2) “Fraud” means actual fraud or constructive fraud. Constructive fraud exists where the circumstances of a transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title.
(3) The plaintiff proved constructive fraud, as the sale of the property to the second defendant was unlawful (contrary to Division IV.4 (sale of dwellings etc) of the National Housing Corporation Act), the circumstances of sale were peculiar, irregular and suspicious and the offer to the plaintiff in 2013 was unreasonable.
(4) It was in the interests of justice that the sale and the transfer of the State Lease from the Corporation to the second defendant be declared null and void and the Corporation be ordered to again offer the property for sale to the plaintiff.
Cases cited:
The following cases are cited in the judgment:
Elizabeth Kanari v Augustine Wiakar (2009) N3589
Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215
Helifix Group of Companies Ltd v PNG Land Board (2012) SC1150
Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80
Kapiura Trading Ltd v Bullen (2012) N4903
Koitachi Ltd v Walter Schnaubelt (2007) SC870
Kol Toki v Moeka Morea (2016) SC1588
Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120
Lae Rental Homes Ltd v Viviso Seravo (2003) N2483
Mamun Investment Ltd v Nixon Koi (2015) SC1409
Mark Lakani v Gabe Ikupu (2015) N6067
Mosoro v Kingswell Ltd (2011) N4450
Mudge v Secretary for Lands [1985] PNGLR 387
NCDIC v Crusoe Pty Ltd [1993] PNGLR 139
Open Bay Timber Ltd v Minister for Lands & Physical Planning (2013) N5109
Ramu Nickel Ltd v Temu (2007) N3252
Rosemary John v James Nomenda (2010) N3851
Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959
Tau Gumu v PNGBC (2002) N2251
Vitus Kais v Sali Tagau (2016) N6159
West New Britain Provincial Government v Kimas (2009) N3834
Yakananda Business Group Inc v Minister for Lands (2001) N2159
STATEMENT OF CLAIM
This was an application for declarations and orders regarding a State Lease over a residential property.
Counsel:
B Ovia, for the Plaintiff
J L Talopa, for the first Defendant
M Philip, for the second Defendant
20th January, 2017
1. CANNINGS J: This case is about a residential property in the National Capital District, Section 6, Lot 25, Hanu Place, Boroko. The plaintiff, Vaki Vailala, a former public servant, aged in his 60s, and his family, have occupied the property since 1994. The property was until recently managed by the National Housing Corporation (the first defendant), and the plaintiff was required to pay rent to the Corporation. In late 2013-early 2014 the Corporation sold the property, and transferred the State Lease over it, to Hon Fabian Pok MP, the Minister for Defence (the second defendant), who is now the registered proprietor.
2. The plaintiff commenced proceedings in 2014 against those defendants and the Secretary for Lands and Physical Planning (third defendant) and the State (fourth defendant). He claims that the property was sold by the Corporation to the second defendant in irregular circumstances, contrary to the National Housing Corporation Act, and that it was a case of fraud. He argues that the second defendant’s title should be declared null and void and forfeited and that the Corporation should be ordered to offer the property for sale to him at a reasonable price.
3. The defendants argue that the second defendant is the registered proprietor, that he has indefeasible title, and that there was no fraud as the Corporation acted fairly and in accordance with its governing legislation in selling the property to the second defendant, who was a bona fide purchaser who had purchased the property in good faith. The defendants claim the plaintiff was for the bulk of the period of his occupation of the property an illegal occupier and an unfaithful tenant and all relief he seeks should be refused.
4. A trial has been conducted to determine whether any relief sought by the plaintiff should be granted.
UNDISPUTED FACTS
5. A number of undisputed facts have emerged from the evidence:
· The plaintiff moved into the property in January 1994. He was then an officer of the Department of Lands and Physical Planning. He is a surveyor by profession.
· In 2005 the plaintiff left the Public Service.
· In December 2005 the plaintiff arranged a valuation of the property by the Office of the Valuer-General. It was valued at K70,000.00.
· By a letter dated 28 February 2006, delivered to the plaintiff on 27 July 2006, the Corporation offered to sell the property to the plaintiff for an un-determined price. He accepted the offer, in principle, on 27 July 2006 and said “Please advise next course of action”.
· By a letter dated 18 February 2008 the Corporation again offered to sell the property to the plaintiff, for an un-determined price.
· In July 2009 the plaintiff and the Corporation entered into a written tenancy agreement, for the first time. The rent was K220.00 per fortnight.
· On 18 April 2012 the plaintiff wrote to the Managing Director of the Corporation, pointing out that he had occupied the property since 1994 and accepted two previous offers to sell the property to him but nothing had happened. He again expressed interest in purchasing the property. The Corporation did not respond to the letter.
· On 10 May 2013 the second defendant wrote, under the letterhead “Office of the Minister for Defence”, to the Managing Director of the Corporation expressing his interest in “any property that is available for sale by your organisation”, stating that he has housing allowances and finance and is prepared to pay the market value. He did not mention any particular property that he was interested in purchasing.
· On 30 October 2013 the Managing...
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