Gregory Puli Manda v Yatala Limited and Daryl Haste (2009) SC974

• Jurisdiction: Papua New Guinea
• Court: Supreme Court
• Date: 30 April 2009
• Citation: (2009) SC974
• Docket Number: SCA NO 23 OF 2003
• Year: 2009

Full Title: SCA NO 23 OF 2003; Gregory Puli Manda v Yatala Limited and Daryl Haste (2009) SC974

Supreme Court: Gavara-Nanu, Batari & Manuhu JJ

Judgment Delivered: 30 April 2009

JUDGMENT

CONTRACT—Sale of property—Agreed Purchase Price was K155,000.00—Appellant purchaser unable to settle due to shortfall of K7,750.00—Parties agreed to vary lease back clause in Contract of Sale to accommodate shortfall—Settlement completed after variation—Appellant subsequently claimed rental arrears on the basis of original clause—Appellant denied shortfall and contested variation agreement—Respondent raised and relied on agreement to vary—Whether there was a shortfall—Whether agreement to vary enforceable—Whether sufficient consideration.

Cases Cited:

Papua New Guinea cases

Brinks Incorporated and Brinks Air Courier Australia Pty Ltd v Brinks Pty Ltd (1997) N1567; In The Matter of an Application by Timothy Mathew O’Dwyer trading as O’Dwyer & Bradley Solicitors of Brisbane, Australia v Arnold Theodorus Derks (2007) N3226; New Ireland Development Corporation Ltd v Arrow Trading Ltd (2007) N3240; Pinpar Developer Pty Ltd v TL Timber Development Pty Ltd (2006) N3075; PNG Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396 PNG; Steamships Trading Co Ltd v Garamut Enterprises Ltd (2000) N1959

Overseas cases

D. & C. Builders Limited v Rees [1966] QBD 617 and Williams v Roffey Bros. & Nicholls (Contractors) Ltd [1991] C.A. 1.

30 April, 2009

1. BY THE COURT: This is an appeal against the decision of Salika J. delivered on 14th February 2003 in the National Court at Waigani which dismissed the Appellant’s claim for, among other things, rental arrears and an order for eviction.

2. The appeal relates largely to calculations of payments for sale of property. In our consideration of the appeal, therefore, it is appropriate to, in addition to other evidence, pay particular attention to the relevant primary documentary evidence which comprises of the Contract of Sale, the various correspondence between the parties and their respective banks, the Settlement Statements and copies of settlement cheques.

What are the issues?

3. The claim in the court below was for rental arrears of K21,000.00 pursuant to a lease back clause in a contract of sale of property the parties had entered into earlier in relation to the same property. The Respondents contested the claim on the basis that the lease back clause in the Contract of Sale had been varied to accommodate the Appellant’s shortfall at the time of settlement of sale of the property, and; consequently, the Appellant could not maintain a claim pursuant to the original clause. The Appellant counter argued that he did not incur any shortfall, and; further that, the shortfall in question was for the discharge of the mortgage which payment was the Respondents’ responsibility.

4. The initial issue, therefore, is whether there was a shortfall. This is a question of fact. If there was indeed a shortfall, the next issue would be whether there was a valid and enforceable variation of the lease back clause in the Contract of Sale. This is a question of mixed fact and law. The nature of the alleged variation would have to be determined and considered in accordance with the appropriate principles of contract law.

5. It is convenient to consider the appeal in this manner rather than labour on each ground of appeal. The grounds of appeal are individually and collectively interconnected to the identified questions. Answers to these questions would determine ultimately whether the trial Judge’s decision should be overturned.

Was there a shortfall?

6. Towards the end of 1999, the Appellant became interested in acquiring the Respondents’ property, a block of units, described as Allotment 9 Section 4 Matirogo National Capital District, which had been placed on the property market by sales agent Puritau Real Estate. Negotiations between the parties through the agent eventually resulted in the agreed sale price of K155,000.00.

7. The Appellant made a 10 per cent deposit of K15,500.00 into the trust account of Puritau Real Estate on 4th November 1999 and secured the sale. The Appellant then organized for a bank loan of K131,750.00 from...