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In the Matter of an Application by Stephen and Patsy Tong [2008] PGNC 221; N3441 (29 July 2008)

N3441

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

MP 17 OF 2008

IN THE MATTER OF THE
TRUSTEES AND EXECUTORS ACT

AND:

IN THE MATTER OF AN
APPLICATION BY STEPHEN AND
PATSY TONG

Waigani: Hartshorn, J.
2008: 18 July,
: 29 July

APPLICATION FOR VESTING ORDER – Section 29(1)(g) and (h), Trustees and Executors Act - Property vested in Registrar of Companies as Trustee

Facts:

The applicants Mr and Mrs Tong applied for a vesting order under s 29 (i),(g), (h) of the Trustee Act. They contend that they should be registered as the proprietors of State Lease Volume 13, Folio 60 as they are the current owners of the land contained in that state lease. The entities currently registered as the proprietor of the state lease and as having a leasehold interest in the state lease are deregistered companies. The Tongs contend that the 2 companies before they were deregistered, held their interests in the land as Trustee for subsequent owners. The Tongs further contend that they have requested the Registrar of Companies to convey or transfer the interests of the 2 deregistered companies in the land to them pursuant to s.29(g) Trustee Act, but for a period of more than 28 days the Registrar has failed or refused to comply with the request.

Held:

1. The Registrar of Companies holds as trustee the interest of the 2 deregistered companies in the Land on behalf of the Tongs, and has refused or neglected to convey that interest to the Tongs after being requested to do so.

2. The Registered Proprietorship of State Lease Volume 13 Folio 60, Allotment 16 Section 54 Varahe Street, Gordons (NCD) is vested in Stephen Tong and Patsy Tong pursuant to section 29(1)(g) and (h) Trustees and Executors Act (Chapter 289).

Counsel:

Mr. I. R. Shepherd and Mr. H. Leahy, for the Applicants
Mr. A. Tongayu, for the Registrar of Companies

29 July 2008

1. HARTSHORN, J: This is an application for a vesting order under s. 29(1) (g) and (h), Trustees and Executors Act (Trustee Act) by the applicants Mr. and Mrs. Stephen and Patsy Tong (Tongs).

2. The Tongs contend that they are the registered proprietors of sub-lease no. 37914 and consequently are entitled to be registered as the proprietors of State Lease Volume 13 Folio 60, as it is the current State Lease in respect of the same piece of land which is now known as Allotment 16 Section 54 Hohola (the Land).

3. The entity currently registered as the proprietor of State Lease Volume 13 Folio 60 is Longreach Clothing Co Ltd. This company was deregistered on 19th December 1996. The entity registered on State Lease Volume 13 Folio 60 as having a leasehold interest, Peter Lovell Pty Ltd, was also deregistered on 31st July 1995.

4. By virtue of s. 373(1) Companies Act, the property of the 2 deregistered companies vests in the Registrar of Companies (ROC).

5. The Tongs contend that as the interests in the Land that the 2 deregistered companies had, which included the right to registration, were supposed to be transferred to other entities and eventually to the Tongs, the 2 companies before they were deregistered, held their interests in the Land as Trustee for those subsequent owners.

6. As a consequence, pursuant to s. 373(3) Companies Act, the ROC holds the interests of the 2 deregistered companies as Trustee for the subsequent owners.

7. The Tongs further contend that they have requested the ROC to convey or transfer the interests of the 2 deregistered companies in the Land to them pursuant to s.29 (g) Trustee Act, but for a period of more than 28 days the ROC has failed or refused to comply with the request.

8. Section 29(1) (g) and (h) Trustee Act relevantly is as follows:

.... where-

(g) a trustee jointly or solely entitled to or possessed of any land, or entitled to a contingent right in any land-

(i) has been required, by or on behalf of a person entitled to require a conveyance of the land or a release of the right, to convey the land or to release the right; and

(ii) has wilfully refused or neglected to convey the land or release the right for 28 days after the date of the requirement, the National Court may make an order-

(h) vesting the land in such person, in such manner and for such estate as the Court directs;

9. The ROC contends inter alia, that the Tongs should have applied under s.373(8) Companies Act as s.373 applies to the property of a deregistered company vesting in the ROC. Further, the Tongs are out of time to apply under s. 373(8) as any such application must be made within 6 years of the removal of the subject company from the register of companies.

10. No submissions were made on behalf of the ROC that the ROC disputed the factual basis upon which the Tongs were making their application or that the ROC disputed that the ROC holds the interests of the 2 deregistered companies in the Land on behalf of the subsequent owners. The application was opposed on the basis that the Tongs had applied under an incorrect statutory provision, they were out of time under that provision and there were other court proceedings concerning the Land. The other proceedings referred to were not properly before me and so I give no consideration to them.

11. As to whether the provisions of the Trustee Act can be used by the Tongs instead of s. 373(8) Companies Act, s.2(1) Trustee Act relevantly provides that the Trustee Act applies to trusts, except as otherwise expressly provided. In s.1 Trustee Act, the definition of "trust" includes an implied or constructive trust. It is not expressly provided in the Companies Act that the provisions of the Trustee Act do not apply in circumstances where a particular trustee is the ROC.

12. To my mind therefore, the Tongs are able to avail themselves of the provisions of the Trustee Act. I note as an aside, that under s. 373(8) Companies Act there is provision for the court to allow a longer period than "within six years" for an application to be made under that section. The issue of whether the Tongs were out of time to bring this application under the Trustee Act was not raised by the ROC but I am satisfied that they are not out of time pursuant to s. 53 (1) (b) Trustee Act.

13. I am satisfied from the evidence filed on behalf of the Tongs that they are the proprietors of sub-lease no. 37914, that the land the subject of that sub-lease is now known as Allotment 16 Section 54 Hohola and that the new State Lease in respect of that land is Volume 13 Folio 60.

14. I am further satisfied that the ROC holds as trustee the interest of the 2 deregistered companies in the Land on behalf of the Tongs, and that the ROC has refused or neglected to convey that interest to the Tongs after being requested to do so. Consequently, the Tongs are entitled to the relief that they seek under the Trustee Act.

15. Accordingly I make the following orders:

a) The Registered Proprietorship of State Lease Volume 13 Folio 60, Allotment 16 Section 54 Varahe Street, Gordons (NCD) is vested in Stephen Tong and Patsy Tong pursuant to section 29(1)(g) and (h) Trustees and Executors Act (Chapter 289).

b) The time for settlement of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

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Pacific Legal Group: Lawyers for the Applicants
Office of the Registrar of Companies: Lawyer for the Registrar of Companies