Jacob Klewaki Wama v Alois Jally (2012) N4575

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

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

N4575

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NOS 19 & 33 OF 2011

JACOB KLEWAKI WAMA

Plaintiff

V

ALOIS JALLY

Defendant

Madang: Cannings J

2011: 16 December,

2012: 3, 10 February

Incorporated associations and companies – educational institution – Education Act, Section 101: “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 Papua New Guinea Ltd v Francis Kulunga (2010) N3991

Young Wadau, Chairman of the Board of Governors, Tusbab Secondary School v Rose August, Acting Chairman, Teaching Service Commission (2009) N3614

ORIGINATING SUMMONSES

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

Counsel

J Maingu & J K Wama (in person) for the plaintiff

Y Wadau, for the defendant

10 February, 2012

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 Square Church, Lecturer in Bible Studies at the Madang Lighthouse Bible School, Village Court Chairman for Sisiak and Wagol and a former Mayor of Madang. His intention was to change lives through religious teachings.

4. Mr Wama says that Joel Banam, who has given evidence for the defendant, saying that he established the school, assisted only in a minor way in its establishment. Mr Banam’s wife, Shirley Banam, was appointed as manager of the school when it first started but only on a caretaker basis.

5. Mr David Mulul has given evidence in support of the plaintiff’s position. He testifies that he was the Education Adviser for Madang Province from 1984 to 1987 and his responsibilities included certification of permitted schools. Mr Wama approached him for assistance during that period, so he arranged a formal inspection of the school and recommended its certification as a permitted school for pre-school to grade 6. As a result the certificate of registration was granted in 1987.

6. Mr Wama says that in 1991 he placed the school under management of MCA Inc, which was incorporated that year, and that he was the original chairman and public officer of MCA Inc, which is the registered proprietor of the land on which the school is based. He doubts whether MCA Inc has ever had a registered constitution governing its affairs. The constitution that the defendant has adduced in evidence is, he says, “full of Christian fantasies” and was shelved before it was registered.

7. Mr Wama says that the school was well managed until the mid-1990s but in 1996 he learned that Westpac Bank was trying to impound the school’s assets to satisfy a debt of K75,000.00, being the balance of a loan that had been improperly obtained in the school’s name by Mr and Mrs Banam for private purposes. Mr Wama alleges that Mr and Mrs Banam left Madang for Bougainville “leaving the school at the mercy of the Bank”.

8. Mr Wama was elected to the National Parliament in 1997 and says that this gave him less time to devote to school affairs. During 1998 and 1999 he employed Mr Gabriel Poka, an accountant, as project officer for the school. Mr Poka deposes that he bailed the school out of its financial difficulties and managed implementation of various projects sponsored by Mr Wama including extension of the library (worth K30,000.00), a new double classroom (K75,000.00), library books (K6,000.00) and a freezer (K4,000.00). Mr Andrew Morosa, former Campus Manager of Madang Teachers College, has given evidence that Mr Wama appointed him as caretaker manager of the school from 1999 to 2001. Specific tasks he completed were settlement of the outstanding loan with Westpac Bank and obtaining Department of Education approval for the school to enrol students to sit for the grade 10 national examinations. Mr Morosa says that Madang Christian Academy was widely regarded as a private school sponsored by Mr Wama.

9. Mr Wama says that concerns about mismanagement of the school, including misappropriation, led the board of trustees of MCA Inc to decide at a meeting on 24 October 2001 to establish MCA Ltd. He says that by that time the board consisted of only two persons, himself and Mrs Jossie Mari. The company was incorporated on 23 October 2002 and was intended to “replace” MCA Inc. Despite the school’s...