Augwi Ltd v Xun Xin Xin (2014) SC1616

• Jurisdiction: Papua New Guinea
• Judge: Injia, CJ, David & Gabi JJ
• Judgment Date: 17 October 2014
• Citation: (2014) SC1616
• Docket Number: SCA No 100 of 2012
• Court: Supreme Court
• Year: 2014
• Judgement Number: SC1616

Full Title: SCA No 100 of 2012; Augwi Ltd v Xun Xin Xin (2014) SC1616

Supreme Court: Injia, CJ, David & Gabi JJ

Judgment Delivered: 17 October 2014

SC1616

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA No 100 of 2012

BETWEEN:

AUGWI LTD

Appellant

AND:

XUN XIN XIN

Respondent

Waigani: Injia, CJ, David & Gabi JJ

2014: 25th February,

16th, 17th October

REAL PROPERTY - Action for specific performance of contract of sale of land - Mistake as to price of the land under sale - Appeal from award of damages in preference over specific performance

Facts:

The parties in this appeal entered into a contract of sale over a vacant piece of land situated in Port Moresby that was owned by the respondent. The purchase price for the land was agreed at K45,000. The contract was given statutory approval under the Land Act. The respondent refused to complete the contract citing amongst other reasons that there was a mistake as to the value of the land because its real value was K100,000. The appellant brought an action claiming specific performance and damages as alternative remedies. The trial judge found that the contract was valid and enforceable but declined to grant specific performance and ordered damages to be assessed. The appellant appeals against the part of the judgment that relates to the choice of remedy.

Held:

(1) The existence of a valid and enforceable contract for the sale of land is a precondition to the grant of specific performance.

(2) Specific performance is an equitable remedy that is available to compel an unwilling vendor to perform the contract by completing the sale of land.

(3) Specific performance is available as a matter of course in a contract of sale of land except where, inter alia, the purchaser is guilty of laches in bringing the action for specific performance or the property the subject of the contract no longer exists.

(4) The price of land is a fundamental term of the contract that is required to be specified in a written contract and no extrinsic evidence is allowed to contradict or alter the contracted price.

(5) Order for specific performance should have been ordered in the circumstances of this case.

Cases Cited:

PNG Cases cited:

McCoster & King v Kusher [1967-68] PNGLR 182

Daba Hisjunes Pty Ltd v Turner ond Davey Electrical Pty Ltd [1974]PNGLR 164

Kiddie v Pavey (2004) N2513

PNGBC v Barra Amevo and Bari Investments trading as Kainantu Pharmacy, Lennie Aparima and Orito Aparima [1998] PNGLR 240

Fred Angoram v Independent Public Business Corporation of Papua New Guinea (2011) N4363

Phillip Taudevin v Charles Theseira and Theresa Theresa [1995] PNGLR 56

Wal Wine v Bill Giglmai [1990] PNGLR 462

Arnold Ningiga v Peter Lare Koavea [1988-89] PNGLR 312

Jacobs v Kwaindu [1991] PNGLR 366

Pamela Ipu Pangu v lan Ellery (2007) N3227

Kwila Insurance Corporation v Kwangtun Pty Ltd [1992] PNGLR 200

Mondo Merchants Pty Ltd v Melpa Properties and Konag No.47 Ltd (1999) N1863

Koang No 47 Ltd v Mondo Merchants Ltd [2001] 5C675

Curtain Brothers (Queensland) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285

Overseas cases cited:

Dougan v Ley (1946) 71 CLR 142

Turner v Bladin and others [1910] CLR 463

Mehemet v Benson (1965) 113 CLR 295

Lamshed v Lamshed (1963) 109 CLR 140

Price v Starnge [1946]1 Ch 337

Statutes referred to:

Land Act (Ch..)

Statute of Frauds and Limitations 1988

Texts and treatises referred to:

Halsbury's Laws of England (4th ed), Vo116, par 1306.

Counsel:

L Manua, for the Appellant

K Frank, for the Respondent

16th October, 2014

1. INJIA CJ & DAVID J: This is an appeal from a decision of the National Court given in an action for specific performance of a contract for the sale of land (the contract).

2. By way of background facts, the parties in this appeal entered into a contract of sale over a vacant piece of land situated in Port Moresby that was owned by the respondent. The purchase price for the land was agreed at K45,OOO. The contract was given statutory approval under the Land Act. The respondent refused to complete the contract citing amongst other reasons that there was a mistake as to the value of the land because its real value was K100,OOO. The appellant brought an action claiming specific performance and damages as alternative remedies. The trial judge found that the contract was valid and enforceable but declined to grant specific performance and ordered damages to be assessed. The appellant appeals against the part of the judgment that relates to the choice of remedy.

3. At the hearing, the respondent contested the appeal on grounds pertaining to the validity of the contract on two grounds. First, the respondent argued that the contract was invalid and unenforceable because the contract was entered into in breach of s 128 and s 129 of the Land Act which prohibit the sale of unimproved State lease land. Secondly, the term of the contract had lapsed by the time statutory approval was granted.

4. The appellant argued the respondent did not challenge the trial judge's finding that the contract was valid and enforceable and it is not open to the respondent to raise those matters in this appeal.

5. The finding by the trial judge that the contract was valid and enforceable did not favour respondent. The respondent chose not to contest that finding by an appeal or cross appeal. At the hearing of this appeal, the respondent's counsel raised extensive arguments concerning the legality or validity of the contract and that the term of the contract in any event had lapsed. The two matters raised by the appellant are founded on statutory defences. Those defences were not pleaded in the Defence and Cross Claim as a statutory defence as required by the rules of court: see National Court Rules, Order 8 Rule 14. At the trial the respondent led evidence on these matters and argued that the trial judge should allow the respondent to raise those matters. The respondent submitted that those matters have been substantiated by the evidence and the action should be dismissed for those reasons. The judge did not address these material and arguments in his decision. The respondent did not challenge the lack of such finding and the trial judge's finding that the contract was valid and enforceable by way of an appeal or cross appeal.

6. Counsel for the respondent argued that notwithstanding an appeal or cross appeal of its own, the respondent should be permitted to raise the statutory defence in the appeal because they raise important points of law that this Court should consider in the interest of justice. However we are not referred to any case authority or provision in the rules of court that support this argument.

7. In our view, it is not open for the respondent to raise the point in this appeal. The principles that support this position are well established in this jurisdiction. With the exception of matters concerning the jurisdiction of the Court which may be raised at any stage of the hearing, a party aggrieved by a decision of the Court in the case should properly invoke this Court's jurisdiction to challenge the decision or part of the decision that the party is aggrieved by the decision or part thereof, by filing its own appeal.

8. The choice of an appropriate remedy amongst the remedies claimed in an originating process is in the Court's discretion. The appellant claimed damages as an alternative remedy in the statement of claim endorsed on the writ and it was open to the trial judge to consider damages as an alternative remedy. In Papua New Guinea, specific performance and damages in a contract for sale of land are available as alternate remedies but not both: Mondo Merchants Pty Ltd v Melpa Properties and Koang No.47 Ltd (1999) N1863. The question is whether the exercise of discretion was erroneous in the circumstances.

9. In choosing damages over specific performance, the trial judge assessed and considered the evidence given at the trial, both oral and affidavit evidence. He found, inter alia, that there was a mistake as to the value of the land at the time the contract was concluded which rendered it inequitable and inappropriate for the contract to be performed by way of specific performance. He found that there was undisputed evidence that the land was valued at over Kl00,000. For this reason, he refused to award specific performance and instead, entered judgment for damages to be assessed. The trial judge summed up his findings in the following words:

"There is overwhelming evidence that the defendant signed the contract for sale on her own free will and that she agreed to sell the property for K45,000. What then is the remedy for the plaintiff Whilst I find that the defendant had agreed to sell the property for K45,000 there is undisputed evidence that the property was worth at least Kl00,000 at the time the contract was signed. The lowest possible price the property could be sold at that time according to the defendant's affidavit is K55,000. Clearly therefore, the mount of K45,000 was much lower than the commercial value of the property even at that...