Evangelical Lutheran Church of PNG v Gunar Gee

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 11 January 2019
• Citation: (2019) N7635
• Court: National Court
• Year: 2019
• Judgement Number: N7635

Full : WS NO 1220 OF 2017; Evangelical Lutheran Church of Papua New Guinea ( Plaintiff) v Gunar Gee (First Defendant) S W Realty Limited (Second Defendant) Frank Wamahembe Maru & Marina Maru (Third Defendant) Benjamin Samson, Acting Registrar of Titles (Fourth Defendant) Harriet Kokiva, Acting Registrar of Companies (Fifth Defendant) The Independent State of Papua New Guinea (Sixth Defendant) (2019) N7635

National Court: Cannings J

Judgment Delivered: 11 January 2019

N7635

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1220 OF 2017

EVANGELICAL LUTHERAN CHURCH OF PAPUA NEW GUINEA

Plaintiff

V

GUNAR GEE

First Defendant

S W REALTY LIMITED

Second Defendant

FRANK WAMAHEMBE MARU & MARINA MARU

Third Defendant

BENJAMIN SAMSON, ACTING REGISTRAR OF TITLES

Fourth Defendant

HARRIET KOKIVA, ACTING REGISTRAR OF COMPANIES

Fifth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Sixth Defendant

Madang: Cannings J

2018: 10 November, 8 December,

2019: 11 January

LAND – government land – State Leases – indefeasibility of title – meaning of “fraud” in Land Registration Act, Section 33(1)(a) – whether actual fraud must be proven – whether proof of constructive fraud is sufficient.

COMPANIES – removal (deregistration) of company from company register – powers and functions of Registrar of Companies as representative of defunct company: Companies Act, Section 372 – property of company removed from register vests in Registrar: Companies Act, Section 373.

TRUSTS – constructive trusts – whether property of defunct company held in trust for another corporation.

REMEDIES – appropriate relief re title in a case of fraud – whether title should be declared null and void – whether property of defunct company held in constructive trust – whether property vested in Registrar of Companies – whether to order Registrar to transfer defunct company’s interest in property to another corporation.

The plaintiff claimed that it had a beneficial interest in a State Lease over a residential property by virtue of a constructive trust between it and another company that had been the registered proprietor of the State Lease. The other company was removed from the register of companies and became defunct in 1996. The plaintiff claimed that when the other company became defunct its property vested in the Registrar of Companies under Section 373 of the Companies Act, who was obliged in accordance with the constructive trust to transfer it to the plaintiff. Instead, the other company’s interest in the State Lease was transferred to the third defendants, who became the registered proprietors. The plaintiff claimed that the third defendants, assisted by the deliberate or negligent acts or omissions of other defendants, had acquired the State Lease in a case of fraud. The plaintiff sought declarations and orders that the transfer to the third defendants was null and void and that the State Lease vests in the Registrar of Companies who is required to transfer it to the plaintiff. Damages and other consequential relief were also sought. Only one of the defendants (not the third defendants) made submissions at the trial. It was argued that the plaintiff lacked standing so the proceedings should be summarily dismissed; and as to the merits, that there was no evidence of fraud, and the third defendants should remain as registered proprietors, and all the plaintiff’s claims for relief should be refused.

Held:

(1) The plaintiff had a sufficient and real interest in the subject of the proceedings. The proceedings were not summarily dismissed.

(2) The plaintiff proved constructive fraud, as the State Lease was transferred to the third defendants by a defunct company, in circumstances that were peculiar, irregular and suspicious.

(3) The defunct company, prior to its removal from the register of companies, held its interest in the State Lease in constructive trust for the plaintiff, and if it still existed would be equitably bound to transfer that interest to the plaintiff.

(4) The State Lease did not vest in the Registrar of Companies under Section 373 of the Companies Act when the company became defunct.

(5) However, the Registrar of Companies was authorised and obliged by Section 372 of the Companies Act to take steps to effect a transfer of the State Lease to the plaintiff.

(6) The transfer of the State Lease to the third defendants was declared null and void and quashed. The Registrar of Companies was ordered, pursuant to Section 372 of the Companies Act, to do all things necessary to transfer the State Lease to the plaintiff. Other relief including damages sought by the plaintiff was refused.

Cases cited

The following cases are cited in the judgment:

David Mota v Albert Camillus (2017) N6810

Dumal Dibiaso ILG v Kola Kuma (2005) SC805

Elizabeth Kanari v Augustine Wiakar (2009) N3589

Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215

Eric Kiso v Bennie Otoa & Ken Wutnalom (2013) SC1222

Hi Tech Industries Ltd v PNG Institute of International Affairs Inc (2012) N4585

Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80

Institute of International Affairs Inc v High Tech Industries Ltd (2014) SC1577

Iravela v Samson (2018) N7212

Kapiura Trading Ltd v Bullen (2012) N4903

Koitachi Ltd v Walter Schnaubelt (2007) SC870

Kol Toki v Moeka Morea (2016) SC1588

Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120

Lae Rental Homes Ltd v Viviso Seravo (2003) N2483

Mark Lakani v Gabe Ikupu (2015) N6067

Mosoro v Kingswell Ltd (2011) N4450

Mudge v Secretary for Lands [1985] PNGLR 387

NCDIC v Crusoe Pty Ltd [1993] PNGLR 139

Open Bay Timber Ltd v Minister for Lands & Physical Planning (2013) N5109

PNG Bible Church Inc v Paul Wagun (2013) N5297

PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126

Ramu Nickel Ltd v Temu (2007) N3252

Rosemary John v James Nomenda (2010) N3851

Ruth Don v Public Curator (2017) N6869

Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959

Tagan v Nawara (2015) SC1443

Tau Gumu v PNGBC (2002) N2251

Vaki Vailala v National Housing Corporation (2017) N6598

Vitus Kais v Sali Tagau (2016) N6159

West New Britain Provincial Government v Kimas (2009) N3834

Yakananda Business Group Inc v Minister for Lands (2001) N2159

STATEMENT OF CLAIM

This was an application for declarations and orders regarding a State Lease.

Counsel

S Gor & J Kihanges, for the Plaintiff

Y Wadau, for the First Defendant

S Maliaki, for the Fourth & Sixth Defendants

11th January, 2019

1. CANNINGS J: This case is about a residential property in Alamanda Street, Kalibobo in the town of Madang. The formal description of the property is Section 34, Allotment 17, Madang Town, Madang District. The third defendants, Frank Wamahembe Maru and Marina Maru, are the registered proprietors of the State Lease over the property, by virtue of a transfer registered on 23 August 2017.

2. The plaintiff is the Evangelical Lutheran Church of Papua New Guinea (“the Church”), a corporation established by the Evangelical Lutheran Church of Papua New Guinea Act 1992.

THE PLAINTIFF’S CLAIMS

3. The Church maintains that it should be the registered proprietor of the State Lease over the property.

4. The Church claims that it had a beneficial interest in the State Lease by virtue of a constructive trust between it and another company that was previously the registered proprietor of the State Lease: Lutheran Church (Madang) Ltd. That company acquired the State Lease through a transfer registered on 7 August 1978. But the company was removed from the register of companies and became defunct on 11 March 1996. It was never restored to the register. It was still defunct when on 23 August 2017 it transferred the State Lease to Mr and Mrs Maru.

5. The Church claims that when Lutheran Church (Madang) Ltd became defunct, its property, including the State Lease, vested in the Registrar of Companies under Section 373 of the Companies Act and could only be disposed of by the Registrar of Companies under the Companies Act in accordance with the constructive trust in favour of the Church.

6. Instead, Lutheran Church (Madang) Ltd’s interest in the State Lease was transferred to Mr and Mrs Maru who became the registered proprietors, the Church alleges, in a case of fraud. The Church claims that the fraudulent transfer to Mr and Mrs Maru was enabled by the deliberate or negligent acts or omissions of other defendants:

· Gunar Gee, the first defendant, who held himself out as property manager of Lutheran Church (Madang) Ltd, and negotiated the sale of the property to Mr and Mrs Maru;

· S W Realty Ltd, the second defendant, a real estate company that was also involved in the sale of the property to Mr and Mrs Maru;

· Benjamin Samson, Acting Registrar of Titles, the fourth defendant, who registered the transfer of the State Lease to Mr and Mrs Maru;

· Harriet Kokiva, Acting Registrar of Companies, the fifth defendant, in whom, the plaintiff claims, the State Lease should have been vested when Lutheran Church (Madang) Ltd became defunct.

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