Investment Corporation of Papua New Guinea (Cross–Claimant) v Jimmy Maladina, Bernard Avery, David Lightfoot, John Beattie and Kelly Naru Trading as Carter Newell Lawyers (First Cross–Defendants) and Nusaum Holdings Limited (Second Cross–Defendants) (2004) N2603

• Jurisdiction: Papua New Guinea
• Court: National Court
• Date: 03 September 2004
• Citation: (2004) N2603
• Docket Number: The Papua Club Inc v Nusaum Holdings Limited, Investment Corporation of Papua New Guinea, The Registrar of Titles, The Independent State of Papua New Guinea and The Minister for Lands
• Year: 2004

Full Title: The Papua Club Inc v Nusaum Holdings Limited, Investment Corporation of Papua New Guinea, The Registrar of Titles, The Independent State of Papua New Guinea and The Minister for Lands; Investment Corporation of Papua New Guinea (Cross–Claimant) v Jimmy Maladina, Bernard Avery, David Lightfoot, John Beattie and Kelly Naru Trading as Carter Newell Lawyers (First Cross–Defendants) and Nusaum Holdings Limited (Second Cross–Defendants) (2004) N2603

National Court: Gavara–Nanu J

Judgment Delivered: 3 September 2004

1 STATE LEASES—Land Act 1996, PARTS II and X—s4, s57(2), s59(9), s68, s69(1), s70, s71, s73, s74, s75, s76, s77, s78, s79 and s119—Scheme of the Land Act 1996 for State Leases—Upon the expiration of a State Lease, the ownership of land reverts back to the State—A lessee or a sub–lessee of a State Lease has no perpetual rights and interests in leasehold land.

2 LANDLORD AND TENANT—Lease—Duration—Uncertainty—No lease is created when the term of the lease is uncertain—Requirements of a valid lease—Right of the landlord to determine a lease—A lease which fetters such right is against public policy and the scheme of the Land Act 1996.

3 REAL PROPERTY—Land Registration Act (Ch191), s33—Fraud—Registration of land—Registered proprietor's title is indefeasible, unless such title is obtained through fraud or through serious or gross irregularities arising out of the breaches of the mandatory statutory procedures under the Land Act 1996—In the latter cases, fraud is not the essential element to invalidate title—Fraud means actual fraud or fraud by the registered proprietor.

4 PRACTICE AND PROCEDURE—Pleadings—Fraud—fraud is a serious matter and therefore the plaintiff who alleges fraud must plead the particulars of fraud by setting out the facts upon which fraud is alleged—Fraud must be strictly proven.

5 LANDLORD AND TENANT—Lease—Merger—Unregistered Deed of Lease merging in the registered Sub–Lease—Deed being executory or preparatory agreement to the Sub–Lease—Deed being superseded by the Sub–Lease—Sub–Lease being the governing document—Doctrine of merger—Definition and the applicability of merger.

6 REAL PROPERTY—Sale of property—Allegations of unconscionable conducts against the vendor and the purchaser—No evidence of the plaintiff being at a disadvantage or at a special disadvantage—Parties dealing with each other on an equal footing—Conduct not unconscionable—Circumstances in which unconscionable conduct may arise.

7 LAWYERS—Lawyers Act 1986—Professional Conduct Rules 1989, s8, s9 and s10—Ethics—Conflict of interest—'Chinese Wall' arrangement—There is conflict of interest where a lawyer or a firm of lawyers acts for two clients who have conflicting and incompatible interests—Loyalty of the lawyers or the firm of lawyers being divided between the two clients—Breach of Professional Conduct Rules—Improper conduct resulting from technical breaches—No real prejudices being suffered by the clients—Clients acquiescing in the lawyers' conduct—Such clients have no recourse to legal remedy against the lawyers or the firm.

8 Don Pomb Polye v Jimson Sauk Papaki [2000] PNGLR 166, Embda Limited Trading as Tribal Plumbers v Tropical Habitat Limited N2067, Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215, Gulf Provincial Government v Baimuru Trading Pty Ltd N1794, Hi Lift Co Pty Ltd v Miri Setae [2000] PNGLR 80, In the Matter of Public Prosecutor's Reference against Hon Michael Nali MP N2399, Kora Gene v Motor Vehicles Insurance (PNG) Trust [1995] PNGLR 344, Mudge v Secretary for Lands [1985] PNGLR 387, Pacific Foam Pty Ltd v Zurich Pacific Insurance Pty Ltd (1998) N1745, The Papua Club Inc v Nusaum Holdings Ltd [2002] PNGLR 230, PNG Forest Products Pty Ltd and Inchcape Berhad v The Independent State of Papua New Guinea and Jack Genia, The Minister for Forests [1992] PNGLR 85, Roselyne Cecil Kusa v Motor Vehicles Insurance (PNG) Trust N2328, Steamships Trading Company Ltd v Minister for Lands and Physical Planning N1959, Tau Gumu v PNGBC (2002) N2251, The Administration of the Territory of Papua and New Guinea v Blasius Tirupia; In Re Vunapaladig and Japalik Land [1971–72] PNGLR 229, William Maki v Michael Pundia [1993] PNGLR 337, Allen v Flood [1898] AC 1, Ashburn Anstalt v Arnold [1988] 2 All ER 147; [1989] Ch 1, Assets Company Ltd v Mere Roihi [1905] AC 176, Bater v Bater [1950] 2 All ER 458, Blackwell v Barroile Pty Ltd (1994) 123 ALR 81, Breskvar v Wall (1971) 126 CLR 376, Blomley v Ryan (1956) 99 CLR 362, Buttler v Fairclough and Another (1917) 23 CLR 78, Charles Clay & Sons Ltd v British Railways Board [1971] 1 All ER 1007; [1971] Ch 725, Clifford Davis Management Ltd v WEA Records Ltd [1975] 1 All ER 237, Commonwealth Bank of Australia v Amadio (1983) 151 CLR 447, Conlan (as Liquidator of Oakleigh Acquisitions Pty Ltd) v Registrar of Titles and Others (2001) 24 WAR 299, Egerton v Brownlow 10 ER 359, Frazer v Walker [1967] AC 569, Friedman v Barret, Ex parte Friedman [1962] Qd R 498, Fruehauf Finance Corporation Pty Ltd v Feez Ruthning (a firm) [1991] Qd R 558, Griffiths v Ellis [1958] NZLR 840, Hart v O'Conner [1985] 2 All ER 880; [1985] AC 1000, Hisset v Reading Roofing Co Ltd [1969] 1 WLR 1757; [1970] 1 All ER 122, Horwood v Millar's Timber & Trading Co Ltd [1917] 1 KB 305, Knight Sugar Co Ltd v Alberta Pty & Irrigation Co. [1938] All ER 266, Knupp v Bell (1968) 67 DLR (2nd ed) 256, Lace v Chandler [1944] 1 KB 368; [1944] 1 All ER 305, Law Society of NSW v Harvey (1976) 2 NSWLR 154, Lawrence v Lord Norreys (1890) 15 App Cas 210, Leggott v Barett (1880) 15 Ch D 306, Lindsay and Ziegler (1986) 60 ALJR 387, Lloyds Bank Ltd v Bundy [1974] 3 All ER 757, Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491, Miller v Minister for Pensions [1947] 2 All ER 372, National West Minister Bank PLC v Morgan [1985] AC 686, Naylor, Benson & Co Ltd v Krainische Industrie Gessellschaft [1918] 1 KB 331, Neat Holdings Pty Ltd v Karajan Pty Ltd (1992) 67 ALJR 170, Neville v Dominion of Canada News Ltd [1915] 3 KB 556, Palmer v Johnson (1884) 13 QBD 351, Prudential Assurance Co Ltd v London Residuary Body [1992] 3 All ER 504, Quinn v Leathem [1901] AC 495, Re Dellow's Will Trusts [1964] 1 All ER 771, Redmond v Permanent Trustee Company (NSW) Ltd (1916) 22 CLR 84, Registrar of Titles (WA) v Frazon (1975) 132 CLR 611, Richardson v Mellish 130 ER 294, Scruttons v Midland Silicones Ltd [1962] 2 WLR 186, Sevenoaks v London Chatham (1879) 11 Ch. D 625, Svansio v McNamara (1956) 96 CLR 186, Tanzone Pty Ltd v Westpac Banking Corporation [1999] ATPR 46–195, Temperton v Russell [1893] 1 QB 715, Templeton v Leviathan Pty Ltd (1921) 30 CLR 34, Wenlock v Moloney [1965] 1 WLR 1238 referred to

The plaintiff owned the land described as Section 3, Allotment 4, Douglas Street, Granville, Port Moresby, through its trustees who held the Crown Lease (State Lease) over the land, which was contained in Volume 5 Folio 1027, for a term of 66 years commencing on 29 June 1939, and expiring on 20 December 2005. The land was held in trust for the plaintiff until 1975, when the plaintiff was incorporated under the Associations Incorporation Act 1966. Upon the incorporation of the plaintiff, the title in the land became vested in the plaintiff.

In 1977, the plaintiff and the second defendant entered into negotiations for the plaintiff to transfer the land to the second defendant so that the second defendant could construct a high rise building on the land. In the negotiations, it was agreed that part of the building would, upon its completion, be leased back to the plaintiff for its exclusive use as its 'new premises' ('the Club premises').

On 5 July 1978, the plaintiff and the second defendant signed a Deed of Lease ('the Deed') which provided the basis for the second defendant to construct the high rise building as was previously agreed to between them. One significant feature about the Deed was that the plaintiff would pay K1.00 per annum in...