Jacob Klewaki Wama v Alois Jally (2012) N4575

• Jurisdiction: Papua New Guinea
• Date: 10 February 2012
• Citation: (2012) N4575
• Docket Number: OS NOS 19 & 33 of 2011
• Court: National Court
• Year: 2012

Full Title: OS NOS 19 & 33 of 2011; Jacob Klewaki Wama v Alois Jally (2012) N4575

National Court: Cannings J

Judgment Delivered: 10 February 2012

Incorporated associations and companies—educational institution—Education Act, s101: “permitted school”—dispute over ownership and management of permitted school.

In 1987 a school was established and certified as a “permitted school” under the Education Act. The school was initially managed by an unincorporated group of interested persons, including the plaintiff. In 1991 an association was incorporated to run the school. The plaintiff was its original chairman. In 2002 the plaintiff incorporated a company, intending to use it as a vehicle to manage the school’s affairs but he was subsequently convicted of misappropriation and served time in prison. In 2006 the defendant became chairman of the association but the plaintiff did not agree with his appointment and in 2011 sought to use the company to resume control over the school, which had in the meantime continued to operate under management of the association. The defendant resisted the plaintiff’s attempts to take over management of the school. The plaintiff and the defendant each commenced proceedings by originating summons seeking orders and declarations against the other regarding ownership and control of the school. The proceedings were consolidated and a trial was conducted, the purpose of which was to determine which legal entity (the association or the company) owns and is entitled to control the school and the respective roles of the parties in that entity.

Held:

(1) As the association was incorporated for the purpose of managing the school and its incorporation took place ten years prior to incorporation of the company and as it is the registered proprietor of the land on which the school operates and it has for 20 years been the entity that has been operating the school, it should be regarded as the owner of the school; and a declaration was made accordingly.

(2) The plaintiff has no role in the affairs of the association as by virtue of the rules of the association he ceased to be a member of it upon his criminal conviction in 2002; and a declaration was made accordingly.

(3) Further declarations and orders were made for the purposes of determining and clarifying that the association is the legal entity that owns and is entitled to control the school, the defendant is the chairman of the association and the plaintiff is not a member of and has no role in the association and has no role in control or management of the school except with the approval of the governing body of the association.

Cases cited

The following cases are cited in the judgment:

International Education Agency of PNG v Francis Kulunga (2010) N3991; Young Wadau v Rose August (2009) N3614

ORIGINATING SUMMONSES

These were proceedings regarding a dispute over ownership and management of a non-government school.

1. CANNINGS J: This case concerns a dispute over ownership and control of a non-government school, the Madang Christian Academy. The school is in Madang town and has about 400 students. It has been operating for 24 years as a “permitted school” under a certificate of registration granted by the Secretary for Education under the Education Act. The dispute is between:

• the plaintiff Mr Jacob Klewaki Wama, who asserts that he is the person primarily responsible for establishment of the school and who in 2002 established a company in which he is the sole shareholder and director called Madang Christian Academy Ltd (“MCA Ltd”) to operate it; and

• the defendant Alois Jally, who claims chairmanship of the board of trustees of Madang Christian Academy Incorporated (“MCA Inc”), an entity established in 1991 under the Incorporated Associations Act to run the school.

2. The dispute came to a head at the beginning of last year when Mr Wama appointed a new principal of the school and attempted to install a new management team at the school premises at Section 157, Allotment 1, Madang, near the Provincial Government headquarters. There was almost a physical confrontation at the school between Mr Wama and various people aligned with him and Mr Jally and those aligned with him. They each commenced separate proceedings by originating summons, which have since been consolidated, and the court on 23 February 2011 made interim orders that allowed Mr Jally to manage the school until further order of the court, pending final determination at a trial of the issues of ownership and control. The specific issues are:

1 Which legal entity owns and is entitled to control the school? MCA Ltd or MCA Inc?

2 What roles do the plaintiff and the defendant have in the controlling legal entity?

3 What declarations and orders should the court make?

1 WHICH LEGAL ENTITY OWNS AND IS ENTITLED TO CONTROL THE SCHOOL?

The plaintiff’s position

3. Mr Wama argues that his company, MCA Ltd, owns and should be entitled to manage the school. He says that he established the school, using his own money, in 1986. He provided his family’s assets as security for bank loans and arranged acquisition of the land on which the school was established and still operates. He was at the time a senior pastor with the National Four...