The National Council of Young Mens Christian Association of Papua New Guinea (Inc) v Firms Services Limited Trading As Rageau Manua & Kikira Lawyers and Niumi Warkia and Rhonda Owane and Westpac Bank (PNG) Limited and The Registrar Of Titles (2010) N4569

• Jurisdiction: Papua New Guinea
• Judge: Gabi J
• Judgment Date: 01 October 2010
• Court: National Court
• Citation: (2010) N4569
• Docket Number: OS NO. 305 of 2010
• Year: 2010
• Judgement Number: N4569

Full Title: OS NO. 305 of 2010; The National Council of Young Mens Christian Association of Papua New Guinea (Inc) v Firms Services Limited trading as Rageau Manua & Kikira Lawyers and Niumi Warkia and Rhonda Owane and Westpac Bank (PNG) Limited and The Registrar of Titles (2010) N4569

National Court: Gabi J

Judgment Delivered: 1 October 2010

N4569

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 305 OF 2010

BETWEEN

THE NATIONAL COUNCIL OF YOUNG MENS CHRISTIAN ASSOCIATION OF PAPUA NEW GUINEA (INC)

Plaintiff

AND

FIRMS SERVICES LIMITED trading as RAGEAU MANUA & KIKIRA LAWYERS

First Defendant

AND

NIUMI WARKIA

Second Defendant

AND

RHONDA OWANE

Third Defendant

AND

WESTPAC BANK (PNG) LIMITED

Fourth Defendant

AND

THE REGISTRAR OF TITLES

Fifth Defendant

Lae: Gabi, J

2010: 1st October

CONVEYANCING – contract of sale and transfer of land by second and third defendants holding themselves out as executives of plaintiff – sale and transfer of land facilitated by first defendants - allegations of fraud involved in transactions – wrong mode of commencing proceedings – proceedings to be initiated by writ of summons – both application seeking to amend originating summons and to set aside ex parte order dismissed – originating summons converted to pleadings – plaintiffs to file statement of claim – defendants to file defence and/or cross-claim pursuant to National Court Rules

Facts:

The brief facts are that the second and third defendants, holding themselves out as Treasurer and Acting Secretary respectively of the plaintiff, and the first defendant executed a Contract of Sale of Land and Transfer on 5th March 2009 in respect of a piece of land situated at Section 104, Allotment 6, Lae, Morobe Province, contained in State Lease Volume 79 Folio 118. The first defendant facilitated the conveyance. It is alleged that at the time of sale the Board members of the plaintiff were Henry Pital as Chairman, Francis ToMangana as General Secretary, Andrew Kuloko, John Ilam and Dotti Kero as ordinary Board members. The plaintiff’s case is that the second and third defendants, who hold no official positions in the Board of the plaintiff, had no authority to enter into a contract of Sale of Land and Transfer with the first defendant. The sale and transfer of the property to the first defendant was unlawful and fraudulent and the registration of the transfer of title of the property in favour of the first defendant may be set aside pursuant to section 33 of the Land Registration Act. The plaintiff is alleging fraud in the sale of land and transfer of title.

There are two applications before the Court; one by the plaintiff for leave to amend the Originating Summons filed on 16th June 2010, and the other by the first defendant to set aside or discharge the ex-parte injunction granted on 17th June 2010 and to dismiss the entire proceeding for disclosing no cause of action.

Held:

1. Both applications are dismissed;

2. The Originating Summons filed on 16th June 2010 is converted to pleadings;

3. The plaintiff shall file a Statement of Claim within the next 30 days; thereafter, the pleadings shall take their normal course, by the defendants filing their Defence and Cross-Claim, if any, under the prescribed time period as stipulated by the National Court Rules and for pleadings to continue thereafter;

4. Each party shall pay their own costs of these applications;

Cases Cited

B. Fortunaso Pty Ltd vs. Bank of South Pacific & Ors [1992] PNGLR 275

Dent vs. Thomas Kavali [1981] PNGLR 488 at 490

Douglas Charles Dent vs. Thomas Kavali [1981] PNGLR 488

Mainland Holdings Ltd and Others vs. Stobbs and Others (2003) N2522

Mark Ekepa and Others vs. William Gaupe and Others (2004) N2694

Mount Hagen YMCA vs. Mamun Investments & Ors [1991] PNGLR 337

National Capital District Interim Commission vs. Bogibada Holdings Pty Ltd [1987] PNGLR 135

Ok Tedi Mining Ltd vs. Niugini Insurance Corporation [1988-89] PNGLR 425

Pacific Native Timber (PNG) Ltd vs. Andrew Donaldson (2005) N2933

Patterson Lowa & Ors vs. Wapula Akipe [1991] PNGLR 265

Taumaku Morea vs. Central Provincial Government [1978] PNGLR 415

Wamena Trading Ltd vs. Civil Aviation Authority of Papua New Guinea (2006) N3058

Counsel

S. Tedor, for the Plaintiff

L. Manua, for the First Defendant

J. Kais, for the Second & Third Defendants

RULING

1st October, 2010

1. GABI J: Introduction: There are two applications before the Court; one by the plaintiff for leave to amend the Originating Summons filed on 16th June 2010, and the other by the first defendant to set aside or discharge the ex-parte injunction granted on 17th June 2010 and to dismiss the entire proceeding for disclosing no cause of action.

The Evidence

2. The following affidavits have been filed in this matter: (i) affidavit of Henry Pital dated 15th June 2010; (ii) affidavit of Francis ToMangana dated 15th June 2010; (iii) affidavit of Sialis Tedor dated 16th June 2010; and (iv) affidavit of Lionel Manua dated 9th July 2010.

Facts

3. The brief facts are that Niumi Warkia and Rhonda Owane, holding themselves out as Treasurer and Acting Secretary respectively of the plaintiff, and the first defendant executed a Contract of Sale of Land and Transfer on 5th March 2009 in respect of a piece of land situated at Section 104, Allotment 6, Lae, Morobe Province, contained in State Lease Volume 79 Folio 118. The first defendant facilitated the conveyance. It is alleged that at the time of sale the Board members of the plaintiff were Henry Pital as Chairman, Francis ToMangana as General Secretary, Andrew Kuloko, John Ilam and Dotti Kero as ordinary Board members.

Cause of action

4. The affidavit evidence before the Court clearly shows the plaintiff’s cause of action. The plaintiff’s case is that Niumi Warkia and Rhoda Owane, who hold no official positions in the Board of the plaintiff, had no authority to enter into a contract of Sale of Land and Transfer with the first defendant. The sale and transfer of the property to the first defendant was unlawful and fraudulent and the registration of the transfer of title of the property in favour of the first defendant may be set aside pursuant to section 33 of the Land Registration Act. The plaintiff is alleging fraud in the sale of land and transfer of title. I am of the view that the plaintiff clearly has a cause of action against the defendants.

Declaration

5. The counsel for the first defendant submitted that the plaintiff is seeking declaration, which is a mere prayer for relief, and the claims are in very broad and general terms, which makes it impossible for the defendants to respond to the allegations. He argued that the proceeding will not succeed for the following reasons: (i) the plaintiff has not pleaded a cause of action known in law; (ii) the plaintiff failed to plead the legal or constitutional basis for the Court’s jurisdiction to grant the orders; (iii) the first defendant has an indefeasible title unless the plaintiff can apply to declare the title invalid under section 33 of the Land Registration Act; and (iv) as the plaintiff claims fraud, it must proceed by way of a writ of summons and plead particulars of fraud pursuant to O.4 r.2 and O.8 r.30 of the National Court Rules.

6. It is clear that the power of the Court to make declaratory orders is derived from

s. 155(4) of the Constitution: National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135; Ok Tedi Mining Ltd v. Niugini Insurance Corporation [1988-89] PNGLR 425; Douglas Charles Dent v. Thomas Kavali [1981] PNGLR 488; Patterson Lowa & Ors v. Wapula Akipe [1991] PNGLR 265; Mount Hagen YMCA v. Mamun Investments & Ors [1991] PNGLR 337 and B. Fortunaso Pty Ltd v. Bank of South Pacific & Ors [1992] PNGLR 275.

7. In National Capital District Interim Commission v. Bogibada Holdings Pty Ltd (supra), Kapi DCJ (as he then was), made two observations. First, where granting of declaratory orders sought would not settle the dispute between the parties, declaratory orders should be refused. Secondly, declaratory orders are made according to the principles of equity adopted under Schedule 2.2 of the Constitution.

8. The principles applicable to the grant of declaratory orders are: (i) there must exist a controversy between the parties; (ii) the proceedings must involve a right; (iii) the proceedings must be brought by a person who has a proper or tangible interest in obtaining the order; (iv) the controversy must be subject to the court's jurisdiction; (v) the defendant must be a person having a proper or tangible interest in opposing the plaintiff's claim; and (vi) the issue must be a real one. It must not be merely of academic interest, hypothetical or one whose resolution would be of no practical utility: Ok Tedi Mining Ltd v. Niugini Insurance Corporation (supra). In that case, Kapi DCJ (as he then was) said at 247:

“Before going into the nature of the objection made, it is useful at this stage to outline the present status of the law in Papua New Guinea with regard to declaratory orders. It was considered that under O 4, r 11, of the old...