Leonard Gaua v Joe & Theresia Amir

• Jurisdiction: Papua New Guinea
• Citation: (2010) N3891
• Date: 29 January 2010
• Court: National Court
• Year: 2010

Full : WS NO 1298 OF 2008; Leonard Gaua v Joe & Theresia Amir and Robert Buku & Anton Lavu and Alfred Seeto – JT Tyres (2010) N3891

National Court: Cannings J

Judgment Delivered: 29 January 2010

N3891

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1298 OF 2008

LEONARD GAUA

Plaintiff

V

JOE & THERESIA AMIR

First Defendants

ROBERT BUKU & ANTON LAVU

Second Defendants

ALFRED SEETO – JT TYRES

Third Defendant

Kimbe: Cannings J

2009: 15, 17 September, 7 October,

2010: 29 January

LAND – unjust enrichment claim by plaintiff who erected buildings on defendant’s land without consent of defendant – defendant earning income from rental of land and buildings – whether plaintiff should be compensated by defendant

EQUITY – unjust enrichment – elements of cause of action

The plaintiff erected two buildings on land owned by the first defendant without her knowledge or consent while she was absent, but with the consent of her brothers (the second defendants). The first defendant returned three years later and leased the land and buildings to the third defendant for the purposes of conducting a business. The plaintiff made an unjust enrichment claim against the first defendant on the basis that she had been enriched at his expense, therefore he should be paid a proportion of the rent she received over an eight-year period and general damages. The first defendant said that she owed the plaintiff nothing.

Held:

(1) To succeed in an action for unjust enrichment a plaintiff must prove three things:

· that the defendant has been enriched by the receipt of a benefit; and

· that the defendant has been enriched at the plaintiff’s expense; and

· that it would be unjust to allow the defendant to retain that benefit.

(2) The first defendant had been enriched by having two buildings, which were income-earning assets, erected on her land at no expense to her, therefore increasing the value of the land and providing her with extra income.

(3) The first defendant had been enriched at the plaintiff’s expense as he spent his own money erecting the buildings.

(4) It would be unjust to allow the first defendant to retain the benefit she had derived as the plaintiff had acted in good faith, as had other parties concerned, and he had not received anything for the work, effort and money he invested in the land.

(5) The plaintiff therefore established a cause of action in unjust enrichment and it was appropriate that he be compensated by the first defendant paying him K40,000.00 within three months.

Cases cited

The following cases are cited in the judgment:

Ansett Transport Industries Pty Ltd v Reginald Walter Eginton (1971) No 645

Aquip Pty Ltd v Gastrouevo [1987] PNGLR 491

Breckwoldt & Co (New Guinea) Pty Limited v Harold Gnoyke (No 2) [1975] PNGLR 195

Maip Pty Ltd v Ambra Coffee Estates Pty Ltd [1995] PNGLR 25

Mathew Tolanas v Collins Gipe (2008) N3536

Pius Koroguen v Christine Wagen (2008) N3422

Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159

Counsel

L Gaua, the plaintiff, in person

G Linge, for the First Defendant

29th January, 2010

1. CANNINGS J: In 1997 Leonard Gaua erected two buildings on a piece of land near Kimbe owned by Theresia Amir. Mr Gaua did not realise at that time that Mrs Amir was the owner. Mr Gaua thought the owners were Robert Buku and Anton Lavu – they are Mrs Amir’s brothers – so he entered into an agreement with them which allowed him to erect the buildings in return for paying them rent.

2. In late 1999 Mrs Amir returned from Aitape where she had gone to live with her husband, Joe Amir. She was surprised to find the buildings on her land but did not complain. In April 2000 she entered into a lease agreement with Alfred Seeto who has since then rented the land, including the two buildings, for K1,300.00 per month. He runs a business there called JT Tyres.

3. Mr Gaua is aggrieved by what has happened. He says he spent a lot of money improving the land by erecting the buildings and developing the site but Mrs Amir is reaping the benefits of his work. He seeks compensation from Mrs Amir. The legal basis of his claim is not clearly defined. At one stage it looked like a breach of contract claim. But after the evidence was presented and Mrs Amir’s counsel, Mr Linge, exposed the difficulties Mr Gaua would have in establishing the existence and breach of any contract (particularly as there was no contract between Mr Gaua and Mrs Amir) the claim switched to one of unjust enrichment.

4. The question is whether Mr Gaua can establish a cause of action in unjust enrichment against Mrs Amir. To do so he must prove the three elements:

1 that the defendant has been enriched by the receipt of a benefit; and

2 that the defendant has been enriched at the plaintiff’s expense; and

3 that it would be unjust to allow the defendant to retain that benefit.

5. If he proves those three things the court can award a remedy by way of restitution (Pius Koroguen v Christine Wagen (2008) N3422). A common example of unjust enrichment is where a person has paid money under a mistake of fact to another person who has no right in law or conscience to receive it (Ansett Transport Industries Pty Ltd v Reginald Walter Eginton (1971) No 645; Breckwoldt & Co (New Guinea) Pty Limited v Harold Gnoyke (No 2) [1975] PNGLR 195; Aquip Pty Ltd v Gastrouevo [1987] PNGLR 491; Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159; Mathew Tolanas v Collins Gipe (2008) N3536 and see generally Goff & Jones, The Law of Restitution, 2nd edn, 1978, pp 13-14).

HAS MRS AMIR BEEN ENRICHED BY THE RECEIPT OF A BENEFIT?

6. Yes. There are two buildings on her land, which she did not pay for, which have increased the value of the land and which are income-generating assets. Mrs Amir testified that the buildings are not as valuable as Mr Gaua claims – he says he spent K197,000.00 developing the site in 1997 – and that she actually laid the...