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Papua New Guinea Harbours Board v Hargy Oil Palms Pty Ltd [1995] PGNC 51; N1384 (12 December 1995)

Unreported National Court Decisions

N1384

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 86 OF 1995
PAPUA NEW GUINEA HARBOURS BOARD
v
HARGY OIL PALMS PTY LTD

Waigani

Sawong J
5 May 1995
12 December 1995

PRACTICE & PROCEDURE - Entry of summary Judgment - Recovery of rent due under a lease

LANDLORD AND TENANT - Agreement for lease.

APPROVAL OF MINISTER REQUIRED - Effect of lack of approval - Possession given and taken - whether rent recoverable - Land Act (Ch 185).

LANDLORD AND TENANT - Agreement for lease - Lease not registered - Effect of lack of registration - possession given and taken.

LANDLORD AND TENANT - Application for Summary Judgment for unpaid rent - whether non approval by Minister and or non registration of lease amount to serious questions law for consideration.

Cases Cited:

The following cases are cited in the judgment:

Luabar Logging Pty Ltd [1988] PNGLR 124

Ningiga v Koavea [1988-89] PNGLR 312

Wal Wine v Bill Giglma [1990] PNGLR 462

Danny Jabos v Kasper Kwaidu, Unreported Judgment N1051 of 1991

12 December 1995

SAWONG J: Thesion on this matter wasr was to have been handed down on 19th May 1995, but on 18th May 1995 both counsel advised the Court to delay handing down a decision, as both parties were entering intotiations to settle the matt matter.

It appears from recent correspondence to my associate that the matter has not been amicably resolved, and the parties hae requested that the Court hand down its decision.

By a Notice of Motion, the Plaintiff claimed the following orders:

“A. ҈ de Orire directing ting the entry of Judgment for the Plaintiff in these &#p60; edoces pngsuanr to O to Order 12 Rule 38;

B. &##160;; Cosp>

C &p>C.&#16. n&#And such further Orer Orders as the Court thinks fit.”

In support of its relief, an affidavit dd to e Steupa wled.& Mr Ts the Acting Ding Directirector, Finance and Administration of thef the Plai Plaintiffntiff.

Mr Tupa deposed that there was in existence between the parties, a Lease Agreement. The leas dated 21 March, 1ch, 1990 and it was for a term of 15 years commencing on 1 July 1990.

He further deposed that, under the terms of the lease, the Defendant as lessee, agreed to pay toPlaintiff an annual rent ofnt of K520,772.00 payable by equal quarterly payments. He further de that the Defe Defendant had not paid any of rentals for the period 1991 to 1994 inclusive and there was therefore due to the Plaintiff an amount of K1,683,088.p>

He further deposed that, under the term of the lease ease agreement it was agreed between the parties that the Defendant would pay interest at the rate of 15% per annum on overdue monies. The amount of interest due, for the same period referred to above, amounted to a sum of K252,463.00.

Before I deal with the application for entry of summary judgment, I wish to deal a preliminary point of law raised by the defendant. M60; Mr And for the Defendefendant has raised the point that as the Lease Agreement was neither approved by the Minister under s. 69 of the Land Act, (Ch 185) nor was it registered under s. 49 (1)...of tnd Registration Act, it wast was not enforceable against the Defendant.

Firstly, in relation to the argument that the lease is unenforceable because it has not been approved under s. 69 of the Land Act, I say this. Tis no doubt that a lease ease agreement exists between the parties. This was not challenged by the Defendant. The only challen the DefenDefendants tummary judgment being entered against it, is that, that thet the Lease Agreement was not approved by the ter foer for Lands und 69 o Land Act (Ch 185h 185) and or that the agreement was not rnot registered pursuant to s. 49 (1) of the Land Registration Act. IndersMr Anderson’s 17;s argument correctly, it is as s as follows. He submitted that the lease is void and of no effect aus a debt created under it (i.e. under the Lease Agreement) cannot be recovered because of e of non compliance with s. 69 of the Land(Ch 185). In the alternative he, that that the lease ease is also void because the agreement has not been registered under s. 49 (1) of the Land Registration Act, and accordingly any debt created under the agreement cannot be recovered.

Section 69 of the Land Act (Ch 185) has been judicially considered in this jurisdiction. See Luaba LoggingLtd [1988[1988] PNGLR 124; Ningiga v Koavea [1988-89] PNGLR 312; Wal Wine v Bill Giglma [1990] PNGLR 462; Danny Jabos v Kasper Kwaindu (Unreported Judgment) N10 1991. In Re Luabar Logging Pty[1td [1988] PNGLR 124, 124, Bredmeyer J consider the application of s. 69 of the Land Act. The of that case were faie fairly short. In that case a creditor ptesented a petition to wind up the company on the ground the company was enable to pay its debts pursuant to s. 240 (1) (e) of the Companies Act (ch 1(ch 145). The notice under that sectid not recite a written Lean Lease Agreement between the parties. Ho, the creditor alleged tged that the company owed it rent d a certain premises for a certain period. At the hearing of the petition, the companympany argued that the rent claimed was unde Lease Agreement which wash was stamped but not approved under s. 69 of the Land Act (Ch 185). The ny argued that the leae leas void and thus a debt crea created under it cannot be recovered because of s. 69 of the Land Act (Ch 105) and because the parties byr express wards in Cl 9 declared that the lease should have have no force or effect until it was approved. It was held in that that,that, despite the provisions of s. 69 of the Land Act, where the parties had acted on an unapproved lease and the tenant hne into possession with the knowledge and approval of the land lord, the tenant was estoppetopped from claiming that the lease was of no force and effect and the land lord could sue for and recover the rent owing.

In my view, the principle of law that has been established by these authorities is that, a party who has consciously and freely entered into an agreement to lease land or buildings cannot subsequently change its mind and rely on s. 69 of the Land Act (Ch 185) as a defence.

It may be of interest to note here, that under Cl 9 of the lease in the present case, does not say that the lease will of no effect or force if it is not approved by the Minister. In fact it says diffey.&#1y. It says, “so far is this document constitutes an agreement to do any of the acts specified in s. 69 (1) of the Land Act (ch 185)...such agreement is subject to the approvalhe mir under the Land Land Act but in all other respects the oble obligations of the parties here under...are and remain enforceable from the date hereof notwithstanding that the approval has not been given or refused”.

And so by their own expressed agreement in Cl 9, the parties agreed that even if the Minister does not approve the lease or refuses to approve it, their respective rights and obligations remain intact and are enforceable.

In the present case, it is not disputed that there exist a Lease Agreement between the parties. The lease was for a te 15 f 15 years commencing on 1 January 1990. It is also not dis that that the parties have, for all intents and purposes, acted on and relied on the provisions of the agreement.

Ilows what I have said said that, I reject this argument. In my veiw submission is w is wits without any foundation and has no merit at all.

Mr Anderson also says that the lease is unenforcible because it has not been registered in accordance with s. 49 f the Land Registration Actn Act (Ch 191).

The requirement for the registration of a lease is prescribed by s. 49 (1) of the Land Registration Act, (Ch 191). It reads as follows:

“49. Creati Lease.

(1)&#(1) ; Where a propr etor intendntends to lease land for a life or lives or for a term of years exceeding three y he sexeculease in tescrirm, ae lease shall hall be rebe registered.”

The prescribecribed ford form of m of the lthe lease, referred to in s. 49 (1) of the Land Registration Act (Ch 191) is in form 5 of Schedule 1 of the Land Registration Regulations (Ch 191). If one looks at orm, and cand compares it with the document that was signed between the parties in this case, one will quickly see the differenc60; The difference are many, but just to highlight some of them, are these, the form, the lthe length, the details, etc. I am o view that the leaselease, the subject of this action is, certainly different from the form prescribed in the Regulations.