Jimm Trading Ltd v Baoro Laxton

• Jurisdiction: Papua New Guinea
• Judge: Sakora J
• Judgment Date: 04 February 2015
• Citation: (2015) N5851
• Court: National Court
• Year: 2015
• Judgement Number: N5851

Full : WS No. 746 of 2013; Jimm Trading Ltd v Baoro Laxton and Grace Laxton and Judith Nikijuluw and Vada No.10 Limited trading as Century 21 Siule Real Estate (2015) N5851

National Court: Sakora J

Judgment Delivered: 4 February 2015

N5851

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS No. 746 of 2013

BETWEEN:

JIMM TRADING LTD

Plaintiff

AND:

BAORO LAXTON

First Defendant

AND:

GRACE LAXTON

Second Defendant

AND:

JUDITH NIKIJULUW

Third Defendant

AND:

VADA NO.10 LIMITED trading as CENTURY 21 SIULE REAL ESTATE

Fourth Defendant

Waigani: Sakora J

2013: 06 March

2015: 04 February

NATIONAL COURT CIVIL JURISDICTION-Summary jurisdiction of the court-Dismissal of proceedings –Statement of claim disclosing no reasonable cause of action-Frivolous and vexatious claims-Inherent jurisdiction of the court to terminate summarily proceedings bad in law-defective pleadings-for the orderly;efficient and effective administration of justice-National Court Rules,O 8 r 27, O 12 r 40(1).

CONTRACT LAW-Doctrine of privity of contract-Law of Agency-Principal and agent-Conveyancing- Role of Lawyers-Citation of case law-Doctrine of Stare Decisis-Lawyers Act ,s 60, Constitution, ss 155(1 ) to (4) (inclusive),158,160 to 164(inclusive), and Schs.2.8 and 2.9,Constitution.

Councel:

L Kari, for the Plaintiff

G Purvey, for the third and Fourth Defendants

JUDGEMENT

04 February, 2013

1. SAKORA J: On 6 March 2013, I heard the applications in respect of the Notice of Motion filed on behalf of the 3rd and 4th defendants. The one in respect of the Notice of Motion filed on behalf of the plaintiff company was not moved,upon and objection raised by Mr Purvey of councel for the applicants, as being short served on the day of the hearing, and thus in breach of the National Court Rules(NCR).

2. The 1st and 2nd defendants have not pleaded to the plaintiff’s writ of summons. They reside in New Zealand and they do not appear to have been served with the process.

3. The 3rd and 4th defendants invoked the relief available under O 12 r 40(1) NCR, seeking dismissal of the proceedings as against them. It was contended that the statement of claim does not disclose a reasonable cause of action and thus frivolous and vexatious, or otherwise an abuse of process.

4. The 3rd and 4th defendants also invoked the relief provided under O8 r 27 NCR, which is somewhat similar language to that under O12 r 40 (1) NCR in support of their application.

5. The background factual circumstances giving rise to the plaintiff’s claim involve disputes over the ownership of a rental property the subject of a State Lease (being folio 1385 Volume 6), described as Allotment 6 Section 56 East Boroko in the National Capital District(NCD). The rental of this property to a third party, Al-Amin Holdings Limited by the 3rd and 4th defendants on behalf of the 1st and 2nd defendants, also gives rise to the plaintiff’s claim of reimbursement to it of the rental monies.

6. The 3rd defendant is sued in his capacity as an employee of the 4th defendant, proceeded against in its corporate name. It is the plaintiff’s claim that, in a purported claim of ownership of the subject property by the 1st and 2nd defendents, the 3rd defendant acting on their behalf upon instruction from them, negotiated the lease of the property to Al-Amin Holdings Limited for a term of five years commencing 1st January 2011.

7. The 4th defendant conducts the business of a duly registered real estate agent on behalf of clients, both corporate and individual. It acts as a selling agent for the sale of corporate and residential properties. It also acts as agent and property manager in the lease of commercial and residential properties. It asserts that it is in the latter capacity that it was engaged by the 1st and 2nd defendants in respect of the property in question.

8. And the 3rd defendant was and acted in the capacity of an employee of the 4th defendant.

9. In its defence filed on 20 August 2013,the 4th defendant asserts that the lease agreement was entered into between the 1st and 2nd defendants and Al-Amin Holdings Limited, such lease agreements have been drawn up by conveyancing lawyers upon instructions.

10. It is further asserted in its Defence that the lease agreement was prepared by the lawyers in the conduct and discharge of their professional legal duties and responsibilities.

11. In this respect, the 4th defendant further asserts in its Defence that it had no knowledge nor information/advice that the 1st and 2nd defendants were not the legal proprietors of the subject property. In paragraph (5) of the Defence, the 4th defendant pleads that in the preparation of the lease agreement, the lawyers identified the 1st and 2nd defendants “as the registered proprietors and by definition the legal owners of the property”.

12. Finally, it is part of the 3rd and 4th defendants’ Defence (paragraph (5)(c) and (7)(c)that, firstly, they acted only as agents and managers of the subject property and did not prepare the lease agreement,and, secondly, that there was no obligation on their part to conduct any property searches,such obligation being the legal responsibility of the conveyancing lawyers.

13. The plaintiff claims in a purported claim of ownership of the subject property by the 1st and 2nd defendants,the 3rd defendant negotiated with them and A-Amin Holdings Limited for the latter to lease the property on 5 years lease commencing 1st January 2011. A formal lease agreement was entered ino between the parties, pursuant to which the lessee had paid certain monies to the 4th defendant.

14. It is part of the plaintiffs claim that these monies were paid between 1st January 2011 and 31st October 2012, totalling K101,000.00 (inclusive of the K4000.00 bond fee).

15. The sum total of the plaintiff’s claim is that, whilst alleging unlawful conveyancing of the subject property on behalf of the 1st and 2nd defendants,who did not own the property, the 4th defendant had defaulted on its obligation to conduct a ‘due diligence search’ to determine the rightful owner.

16. Thus, it is asserted, the 4th defendant and its employee the 3rd defendant are liable for the rental monies paid by the lessee. The only grievance of the plaintiff in the end is (pursuant to paragraph (18) of the Statement of Claim) in relation to those rental monies, and claims those monies, with the usual ancillary reliefs of interest and costs.

17. It would appear, therefore, that the initial purported issue of unlawfulness in the conveyancing of a property that the plaintiff claimed was the registered owner, is of no, or no immediate concern for the plaintiff. It just wants those rental monies!

18. In relation to the plaintiff’s assertion in its Statement of Claim that the conveyancing of the property was unlawful, and that the 4th defendant ought to have undertaken a ‘due diligence’search to determine the proprietorship of the property in question, the 4th defendant, after firstly defining the proper role and fuction of a registered real estate agent, invokes and relies on s 6o of the Lawyers Act 1986. The provision, which is headed Offences, is in the following terms:

(1) It is an offence for a person who has not been admitted to practise a lawyer-

(a) to practise, or purport to practise,as a lawyer; or

(b) to hold himself out or represent himself to be a lawyer;or

(c) to permit other person to use his name as being admitted to practise as a lawyer.

Penalty: A fine not exceeding K1, 000.00

19. Other activities undertaken on the pretence of being a lawyer are specifically proscribed under sub-ss (2) to (7)(of this provision, carrying similar penalties. But they are not of immediate pertinence of the plaintiff’s claim of want of professionalism in the conveyancing of the subject property.

20. This claim of the plaintiff is, therefore, baseless and without merit.

21. The principles governing the courts exercise of its discretion whether to grant or refuse the reliefs available under the two Orders and their respective rules (NCR) that are relied on for the application, are well settled in this jurisdiction. These orders are produced hereunder as follows:

Order 12 r 40

40. Frivolity, etc.

(1) Where in any proceedings it appears that in relation to the proceedings generally or in relation to any claim for relief in the proceedings –

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

Order 8 r 27

27. Embarrassment, etc.

See ss 155(1),(2)...