Joshua Nick and ANZ Clothng Limited v Saka Ben Wia and Benik Holdings Limited (2020) N8262
| Jurisdiction | Papua New Guinea |
| Judge | David, J |
| Judgment Date | 07 April 2020 |
| Court | National Court |
| Citation | (2020) N8262 |
| Docket Number | WS NO.1198 OF 2015 |
| Year | 2020 |
| Judgement Number | N8262 |
Full Title: WS NO.1198 OF 2015; Joshua Nick and ANZ Clothng Limited v Saka Ben Wia and Benik Holdings Limited (2020) N8262
National Court: David, J
Judgment Delivered: 7 April 2020
N8262
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO.1198 OF 2015
BETWEEN:
JOSHUA NICK
First Plaintiff
AND:
ANZ CLOTHNG LIMITED
Second Plaintiff
AND:
SAKA BEN WIA
First Defendant
AND:
BENIK HOLDINGS LIMITED
Second Defendant
Waigani: David, J
2020: 7th April
EQUITY – claim for rectification and specific performance – interest in land – contract for sale to be in writing – rectification not appropriate vehicle to address uncertainty - claim dismissed.
Cases Cited
Alotau Enterprises Pty Limited and Allen Enterprises Pty Limited v Zurich Pacific Insurance Pty Limited (1999) N1969
Augwi Ltd v Xun Xin Xin (2014) SC1616
Board of Management, Holy Spirit Primary School v Moses Sariki (2013) N5446
Fred Angoman v IPBC of PNG (2011) N4363
Galem Falide v Registrar of Titles and The State (2012) N4775
Hiwi v Rimua (2015) SC1460
Letina Rau v Albert Kone (2014) N5804
Louis Medaing v Ramu Nico Management (MCC) Ltd (2011) SC1144
Mamun Investment Ltd v Nixon Koi (2015) SC1409
Reference by the East Sepik Provincial Executive (2011) SC1154
Shaw v Commonwealth of Australia [1963] PNGLR 119
Supreme Court Reference No 4 of 1980 [1982] PNGLR 65
Treatises cited:
JD Heydon, Cross on Evidence, Butterworths, Fifth Edition, 1996
G E Dal Pont et al, Equity and Trusts in Australia, Fourth Edition, Lawbook Company, 2007
Peter W Young et al, On Equity, Lawbook Company, 2009
Counsel:
Allan Mana, for the Plaintiffs
P. Ben Lomai, for the Defendants
JUDGMENT
7th April, 2020
1. DAVID, J: INTRODUCTION: The plaintiffs claim declarations that any contract for sale purportedly entered into between them and the defendants to dispose of and transfer the second plaintiff’s proprietary interest in the land described as Allotment 64 Section 52 Hohola (Gordon’s) in the National Capital District and contained in State Lease Volume 29 Folio 53 (the Property) to the second defendant was null and void as a result of false misrepresentation, that no valuable consideration was given by the defendants in exchange for the transfer of the Property, that no written contract was executed contrary to Section 2 of the Frauds and Limitations Act, and the transfer of title to the Property was contrary to Section 33(1)(h) of the Land Registration Act. The plaintiffs also claim damages.
2. The plaintiffs claim in the alternative the equitable relief of rectification asserting that the conveyance conducted pursuant to a contract for sale resulting in the transfer of their proprietary interest in the Property on 20 June 2005 be rectified to reflect a purchase price based on current market valuation and then for the defendants to specifically perform the rectified contract by paying the purchase price based on current market valuation.
3. These proceedings were commenced by writ of summons filed on 2 September 2015 which was later amended by amended writ of summons filed on 14 September 2015. The plaintiffs’ claim is pleaded in the amended statement of claim endorsed on the amended writ.
4. By their defence filed on 18 November 2015, the defendants denied liability. In their defence, they, amongst others, averred that:
1. the first plaintiff and the first defendant are biological brothers, the first defendant being the elder brother;
2. the first defendant put up the money for the plaintiffs to start their business and it was the first defendant who secured the title to the Property through his contacts and using his resources.
3. title to the Property was lawfully transferred to the second defendant in March 2005 with valuable consideration and the second defendant has had title to the Property since the transfer;
5. as biological brothers, the first plaintiff orally agreed to transfer the title to the Property to the second defendant in consideration of the first defendant providing finance for the benefit of the plaintiffs;
6. discussions between the first plaintiff and first defendant were genuine family discussions between brothers for the first defendant to help the first plaintiff who had no resources at the time to start his business hence, did not amount to misrepresentation;
7. the cause of action premised under Section 2 of the Frauds and Limitation Act was statute-barred under Section 16 of the Frauds and Limitations Act as had been judicially determined by Hartshorn, J in proceedings commenced by WS No.628 of 2015 (Comm);
8. the first defendant fraudulently transferred the title to the Property to the second plaintiff while the Property was mortgaged to the Bank of South Pacific Limited in the pretext of a lost title;
9. the mortgage in favour of Bank of South Pacific Limited was discharged on 17 February 2015 upon full settlement of the loan by the first defendant;
10. the plaintiffs have capitalised on the use of the Property by leasing it out to one Bige Petroleum Limited for some years and applied the rent collected to their own use; and
11. the action was not maintainable in law as fraud has not been pleaded or properly pleaded under Section 33 of the Land Registration Act and Order 8 Rule 30 of the National Court Rules.
5. The plaintiffs’ claim is now premised only on the equitable relief of rectification.
BRIEF BACKGROUND
6. The first plaintiff and first defendant are biological brothers. The first defendant is the elder brother. The first plaintiff and first defendant worked collaboratively over some months to secure the Property, a 99 year Business (Light Industrial) lease commencing on 13 January 2005 and ending on 12 January 2104 through a direct grant from the Independent State of Papua New Guinea processed under the auspices of the Department of Lands & Physical Planning pursuant to Section 92 of the Land Act. On 8 March 2005, the title to the Property was formally issued to the second plaintiff. On 20 June 2005, the title to the Property was transferred to the second defendant purportedly conveyed to it pursuant to a contract of sale of land entered into between the second plaintiff and the second defendant dated 31 May 2005 for a purchase price of K5,000.00.
EVIDENCE
7. The plaintiffs’ evidence consists of the sworn oral testimonies of the first plaintiff himself and Chief Sergeant Felix Rayabrum and that contained in his affidavit sworn on 28 August 2015 and filed on 3 September 2015 (Exhibit A). Only the first plaintiff was subjected to cross-examination.
8. The defendants’ evidence consists of the following affidavits.
1. Supplementary Affidavit of Saka Ben Wia sworn and filed on 14 October 2015 (Exhibit 1);
2. Affidavit of Saka Ben Wia sworn on 2 November 2015 and filed on 3 November 2015 (Exhibit 2);
3. Further Affidavit in Support of Saka Ben Wia sworn and filed on 6 October 2017 (Exhibit 3);
5. Affidavit of Saka Ben Wia sworn on 1 October 2018 and filed on 26 October 2018 (Exhibit 5).
9. Mr. Wia was not subjected to cross-examination.
PLAINTIFFS’ EVIDENCE
Joshua Nick
10. The first defendant is his biological brother.
11. He is a director and controlling shareholder of the second plaintiff company.
12. The second plaintiff was incorporated on 19 March 2001.
13. At all material times, the second plaintiff had an indefeasible title over the Property which was the subject of a direct grant from the State to the second plaintiff pursuant to Section 92 of the Land Act and the State Lease was dated 3 March 2005.
14. The second defendant was incorporated on 17 May 2005.
15. The second defendant was incorporated for the sole purpose of subsequently acquiring the title to the Property to fulfil the first defendant’s personal interests.
16. In order to induce him to transfer the title to the Property to the second defendant, on or about 3 March 2005, the first defendant made the following representations and statements (the representations) to him:
1. The second plaintiff was in the process of being deregistered as a company.
2. In the event the second plaintiff was deregistered, the title to the land would be lost absolutely.
3. The only way of securing title to the land was by transferring title to the Property to the yet to be incorporated second defendant which entity would then carry his interests in lieu of the second plaintiff.
17. At the material time, he had no personal, financial, commercial or any other motivation to transfer the newly issued title to the Property to any third party.
18. The representations to him were made orally in numerous discussions he had with the first defendant in March 2005.
19. The representations were untrue, in particular:
1. The second plaintiff was at no time in the process of being registered as a company;
2. There was absolutely no prospect of the newly issued title to the Property being lost; and
3. There was no necessity to transfer the issued title to the Property to another entity, other than,...
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