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ANZ Bank (PNG) Ltd v Yawi [2014] PGNC 243; N5663 (10 April 2014)

N5663

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 517 OF 2013

BETWEEN

ANZ BANK (PNG) LTD
Plaintiff

V

MAITA YAWI
Defendant

Lae: Sawong, J.

2013: 9th October,

2014: 10th April

INJUNCTON – application for interim order - mandatory injunction for defendant to give up vacant possession of property – property initially subject of bank mortgage – property sold by sheriff auction to defendant – property subject of an undischarged mortgage – property registered to defendant through fraudulent means – plaintiffs orders granted - Order 14 Rule 10 of the National Court Rules.

Case Cited:
Papua New Guinea Cases

Agotoi Trading Limited v NCDIC (1990) PNGLR 2
Kuima Security Services Limited v Helandi Co. Ltd.
Yama Group of Companies Limited v PNG Power Ltd (2005) N831

Overseas Cases

Bishop v Bridgeland Securities [1990] 25 FCR 311

Dean - Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525; (2002) 55 NSWLR 64
Redland Bricks Ltd v Morris (1970) AC 625 at 665

Counsel:

K. Gamoga, for the Plaintiff
K. Aisi, for the Defendant

10th April, 2014

1. SAWONG, J.: This ruling relates to two Notices of Motion, one by each party. The motions were heard together and I reserved a ruling.
   
2. The first motion in time is the motion by the plaintiff which was filed on the 1st of July 2013. In it the plaintiff seeks the following reliefs:
   
   1. That an interim order in the nature of a mandatory injunction to compel the defendant to vacate and give possession of the State Lease Volume 93 Folio 129, Allotment 1, Section 148, East Taraka, Lae, Morobe Province to either the plaintiff or the Court, pursuant to Order 14 Rule 10 of the National Court Rules.
      
   2. Alternatively Summary Judgment be entered in favor of the plaintiff against the defendant pursuant to Order 12 Rule 38 (1) (2) of the National Court Rules for the defendant to give vacant possession of the said property to the plaintiff forthwith, with the assistance of police if necessary.
      
   100. Alternatively, in addition the defendant pay security for costs pursuant to Order 12 Rule 1 of the National Court Rules into the National Court Trust Account in the sum of K30,000.00 or such reasonable sum the Court deems appropriate.
        
3. The plaintiff's motion is supported by the affidavit of Barry Pensa filed on the 1st of July 2013.
   
4. The Defendant relies on its Amended Notice of Motion filed on the 2nd of October 2013. In it's Amended Notice of Motion the defendants seeks the following orders:
   
   1. Pursuant to Order 12 Rule 40 of the National Court Rules, the proceedings be dismissed for being frivolous, vexatious and disclosing no reasonable cause of action and abuse of Court process.
      
   2. Alternatively pursuant to Order 5 Rule 2(a)(b) and Rule 4(1) of the National Court Rules, leave be granted in this proceedings for the National Court Sherriff to be joined as the first defendant in the proceedings.
      
   100. Alternatively the proceedings WS 528 of 2013 and Appeal No.39 of 2013 be consolidated with these proceedings.
        
   4. Cost of the application be paid by the plaintiff.
      
5. The Defendant relies on the affidavit of Mr. Aisi filed on the 19th of July 2013, the affidavit of Maita Yawi filed on the 15th of July 2013 and further affidavit of 19th of July 2013.
   
6. Before I deal with the arguments and the evidence in respect of the two applications it is necessary to set out a brief summary of facts of this case. These facts are contained in the various affidavits each of the parties relied on. I summarize them for the purposes of these ruling.
   
7. The plaintiff (ANZ Bank) granted a loan to one Isaac Minicus to purchase the said property located on Section 148, Allotment 01, East Taraka, Lae, Morobe Province.
   
8. The loan was secured by a registered mortgage over the said property and another property in Port Moresby both owned by Isaac Minicus.
   
9. The title to the property shows that the property was:
   
   1. Transferred to Isaac Minicus 1-12506 produced on the 11th of July 2006 and entered on the 17th of July 2006
      
   2. Mortgage No. 12507 – ANZ Banking Group Limited produced 11th of July 2006 and entered 17th July 2006.
      
10. Minicus defaulted in his loan repayments in 2012 and the bank pursuant to its powers contained in the registered mortgage, foreclosed and advertised the property for sale. A third party was a successful bidder in 2013.
    
11. The plaintiff then entered into formal contractual relationship with the third party transferring vacant possession to the third party.
    
12. On 28th of January 2013 the plaintiff wrote to the defendant advising him to vacate the land. In the meantime, on or about the June or July 2012 the Sherriff of Papua New Guinea advertised an auction for the sale of the said property. The property was to be auctioned on the 28th of July 2012.
    
13. On the 28th of July 2012 the auction took place. The auction was conducted pursuant to a judgment debt between Kuima Security Services Limited and Helandi Co. Ltd in proceeding WS No. 819 of 2011 (see Annexure A2 Maita Yawi's affidavit of 12th July 2013).
    
14. At the auction the defendant was a successful bidder who bided for K300, 000.00.
    
15. Subsequently by Contract of Sale dated 5th of December 2012 the Sherriff of Papua New Guinea sold the property to the defendant. The defendant then in consideration paid the sum of K300,000.00 by way of a bank cheque made payable to the National Court Sherriff's Trust Account. Thereafter the contract was settled and the defendant took procession of the property in late 2012.
    
16. Subsequently the plaintiff filed eviction proceedings in the District Court but that proceeding was dismissed as the District Court ruled that it had no jurisdiction to determine the dispute between the parties as there was a bona fide dispute in relation to the title over the property.
    
17. The defendant has been relying on a Title Deed having his name entered as proprietor on 20th March 2013 from the Sherriff in satisfaction of a Writ of Levy of Property in proceedings No. 819 of 2011 between Kuima Security Services Ltd v Helandi's & Co. Ltd. (I will say a little bit more in relation to these proceedings later on in this judgment).
    
18. On the 4th of April 2013, the plaintiff's lawyers raised a complaint with the Registrar of Titles in relation to the discharge of mortgage, replacement of lost title and transfer by the Sherriff to Maita Yawi. As a result of investigations the Registrar of Titles found that:
    

a) The plaintiff held the original Title Deed

b) It's mortgage had never been discharged

c) That title to the property was never lost

d) And replacement file was created solely to effect the transaction between the Sherriff and the defendant.

19. Subsequently the Registrar of Titles revoked or cancelled the entry of the defendant's name on the Register of Titles upon him being satisfied that there had been fraud being committed. The Deputy Registrar of Titles subsequently wrote to the defendant and the Sherriff cancelling those dealings and entries. The Registrar of Titles then restored the interest of Minicus and the ANZ bank on the Title Deed. The records of the Registrar of Titles now show that the property is registered to Isaac Minicus with a registered mortgage in favor of the plaintiff.
    
20. I now turn to consider the motions and the reliefs sought by the parties. Both Counsels have filed written extract of submissions and both made oral submissions. I have read and considered carefully all the evidence and the submission relied on by each of the parties.
    
21. From those submissions a number of issues arise for consideration. These are, inter alia;
    
    1. Whether a mandatory injunction ought to be granted to compel the defendant to vacate and give up possession of the said property to the plaintiff.
       
    2. Alternatively whether summary judgment ought to be entered in favour of the plaintiff against the defendant.
       
    3. Alternatively or in addition the defendant pays security for cost.
       
    4. Whether proceedings ought to be dismissed as being frivolous, vexatious and disclosing no reasonable cause of action.
       
    5. Whether the sheriff of PNG should be granted leave to be joined as party to the present proceedings.
       
    6. Whether the proceedings in WS528 of 2013 and Appeal No. 39 of 2013 be consolidated.
       
22. As the plaintiffs motion is first in time, I deal with that one first. In the course of my reasoning I also intend to cover the issues raised by the defendant.
    
23. The plaintiff's primary relief is for mandatory injunctive relief. The relief sought is pursuant to Order 14 Rule 10 of the National Court Rules.
    
24. Mr. Gamoga submitted that the plaintiff's application for mandatory injunction was principally to restore the property to its former condition. He submitted that this is a discretionary remedy, taking into account all the relevant circumstances of the case. He submitted, in considering this, the Court should consider the following relevant consideration:
    
    1. Whether the plaintiff has shown a very strong probability upon the facts of grave damage occurring to him in the future.
       
    2. Whether damages would be an adequate remedy if damage does occur in the future.
       
    100. The question of costs to the defendant of complying with a mandatory order in relation to which a distinction is to be drawn between a case where the defendant has acted unreasonably towards the plaintiff and cases when the defendant has acted reasonably, though in the event wrongly.
         
25. He relied on Agotoi Trading Limited v NCDC [1990] PNGLR 2, Redland Bricks Ltd v Morris (1970) AC 625 at 665, Yama Group of Companies Limited v PNG Power Ltd (2005) N831.
    
26. As to the principles for injunctive reliefs he submitted that the Court should be satisfied of the following criteria:
    
    1. Whether there are serious issues to be tried
    2. Whether damages would be an adequate remedy.
    100. Whether the balance of convenience favour the grant of injunctive relief.
    4. Undertaking as to damage
    5. Intent of justice.
       
27. He submitted that, applying the above principles to the facts of this case, the plaintiff has shown very strong probability upon the facts of grave damage occurring to it in the future. The evidence shows that the plaintiff has valid, enforceable legal title or interest in the property pursuant to its mortgages and that the defendant's title is a sham and obtained by fraud.
    
28. Mr. Aisi didn't address the issues raised by plaintiff in its Notice of Motion. Instead he concentrated on his own motions.
    
29. Order 14 Rule 10 of the National Court Rules reads:
    

"10. Preservation of property

(1) In proceedings concerning any property, or in proceedings in which any question may arise as to any property, the Court may make orders for the detention, custody or preservation of the property.

(2) An order under Sub-rule (1) may authorize any person to enter any land or to do any other thing for the purpose of giving effect to the order.

(3) In proceedings concerning the right of any party to a fund, the Court may order that the fund be paid into Court or otherwise secured."

30. Rule 10 is general discretionary power given to the National Court, to make orders for the detention, custody or preservation of the property".
    
31. I accept Mr Gamoga's submission in respect of the relevant and applicable principles on mandatory injunctions on the issue of preservation of property.
    
32. As was said in Redland Bricks Ltd v Morris (supra) "a mandatory injunctions could only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future".
    
33. From all the evidence it is clear to me that the plaintiff advanced funds to Isaac Minicus to buy this particular property. That advance or loan was secured by a registered mortgage from Isaac Minicus to the plaintiff which was entered on the Title Deed of the said property. The plaintiff therefore has a legal and equitable interest on the property for monies advanced to Isaac Minicus and a legally registered mortgage over the property.
    

34. The registered proprietor who had ownership over the said property at all material times was Isaac Minicus. Helandi's and Co. Ltd was not the registered proprietor of the said property.

35. There was no judgment debt between Kuima Security Services and Isaac Minicus. Helandi's & Co. Ltd were not at any material time the registered owner of the said property. It is therefore obvious on the face of the record that the auction of the property by the Sherriff was illegal, unauthorized and void. It is quite clear to my mind that the Sherriff had auctioned the property owned by somebody else, namely Isaac Minicus who had, at no time owed any monies to Kuima Security Services Limited. It follows therefore the Writ of Levy of Property and the auction that was executed on the property did not belong to the judgment debtor namely Helandi's & Co. Ltd. In other words the Sherriff had acted wrongly and unlawfully in auctioning and selling the property belonging to someone else namely Isaac Minicus.
    

36. The defendant has sought to dismiss the proceedings either as an abuse of Court process, vexatious and frivolous or as showing no reasonable cause of action. It is not clear to me exactly what basis the defendant relies on. In my view, the way the principle relief is formulated creates confusion and ambiguity. The reliefs in Order 12 Rule 40 are set out in alternatives, that is a party must choose which of the grounds in that particular rule it wishes to rely on. To invoke or attempt to rely on all of the grounds as is pleaded in this case, in my view creates confusion and lacks clarity. It does not plead precisely the relief it seeks to rely on. Be that as it may, in my view after considering all the evidence from both sides it is quite clear to my mind that the proceedings between the plaintiff and the defendant cannot be described as frivolous or vexatious by any stretch of imagination. I hold the opinion that the pleadings as pleaded by the plaintiff and as demonstrated by the evidence so far relied on by the plaintiff and to some extent by the defendant show clearly that the plaintiff in its' pleadings has demonstrated more than a reasonable cause of action.

Application to Join Sherriff

37. The defendant has sought an alternative relief in that it also seeks leave to join the Sherriff as a defendant in the proceedings. Such a relief is sought pursuant to Order 5 Rule 2(a) and (b) and Rule 4(1) of the National Court Rules.

38. Order 5 Rule 2 reads:

"Joinder of parties generally. (8/2)

Two or more persons may be joined as plaintiffs or defendants in any proceedings—

(a) where—

(i) if separate proceedings were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and

(ii) all rights to relief claimed in the proceedings (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or

(b) where the Court gives leave to do so."

39. Counsels have not assisted the court in the resolution of issue of whether the Sherriff of Papua New Guinea should be joined as a party. No detailed submission has been submitted except the assertions by counsel for the defendant. I have therefore been unable to find any authorities in Papua New Guinea directly on the point, that is involving Order 5 Rule 2. However some assistance maybe had from the New South Wales Civil Procedures handbook 2011 where the learned authors discuss the application of the equivalent of our provisions in Rule 6.19. Rule 6.19 is in similar terms as our Order 5 rule 2.

40. The learned authors in New South Wales Civil Procedure handbook 2011 state at page 279:

"The purpose of the rule is to allow the joinder of multiple plaintiffs or defendants into one proceedings provided that there are common questions of law or fact and the rights of relief claimed arose out of the same transaction or series of transactions. If these conditions are not fulfilled, leave of the court for the jointer is required....It is not sufficient, for example, there are common questions of law if the plaintiffs claims arise out of separate transactions...Payne v Young [1980] 145 CLR 609. "Transaction" is not restricted to breach of contract. Bendil v Anson [1936] 3 ER 326 at 330.

Proceedings by a Liquidator against a number of defendants alleged to have received unfair preferences from related companies cannot be combined in a single proceedings without leave merely because common issues as the date of the companies solvency would arise in respect of its transaction; the transactions are not the same "series of transactions": Dean - Willcocks v Air Transit International Pty ltd [2002] NSWSC 525; (2002) 55 NSWLR 64.

In determining whether to grant leave, the court should consider the just resolution of the disputes between the parties having regard to the desirability of limiting costs and delay: Dean – Willcock v Air Transit International Pty Ltd [2002] NSWSC 525; (2002) 55 NSWLR 64; Bishop v Bridgeland Securities [1990] 25 FCR 311. And the efficient use of the resources of the parties and the court: Dean - Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525; (2002) 55 NSWLR 64."

41. In the present case, the nature of the proposed claim against the Sherriff is not being disclosed by the defendant. But from reading the evidence that is available through the various affidavits in particular, the defendants proposed action against the Sherriff would be something else.

42. The defendant's cause of action against the Sherriff would be entirely a different matter, they are not the same transactions between the plaintiff and the defendant although they relate to the same property.

43. The reliefs against the Sherriff would also be quite different.

44. In my view to join the Sherriff in the proceeding would convolute the issues rather than crystallize the issues between the present parties.

45. As to whether the three proceedings should be consolidated, Mr. Aisi does not make submissions to convince me that the proceedings ought to be consolidated. However Mr. Gamoga in his submissions strongly urges the court not to consolidate the proceedings as the three proceedings namely WS No. 528 of 2013 Isaac Minicus v Maita Yawi and Others and Appeal no. 39 of 2013 Australia and New Zealand Banking Group PNG Limited and Isaac Minicus v Maita Yawi and the present proceedings are between different parties and in which parties seek different reliefs over the same property.

46. I have considered the nature of the pleadings in each of the proceedings and come to the conclusions that the proceedings in Appeal no. 39 of 2013 and the current proceedings should not be consolidated although they relate directly to the issue of the proper person who has or ought to have title to or over the said property.

47. In my view, the evidence from the plaintiff is overwhelming. The evidence is that, Isaac Minicus is the registered Title holder of the property, whilst the plaintiff has an un-discharged mortgage over the property. It has exercised its legitimate power of sale pursuant to the terms of the mortgage. The defendant does not have any title over the property. His purported title has been cancelled from the Register Of Titles. His claim if any is against the Sherriff of Papua New Guinea. He is at liberty to pursue that claim under a different and separate proceeding.

48. Accordingly I would grant the orders in terms of items 1 and 2 of the plaintiff's Notice of Motion.

49. I would dismiss the motion by the defendant.

50. Costs must follow the event.

51. I make the following orders:

1. That judgment be entered for the plaintiff against the defendant.
2. That the defendant, his servants and or agents deliver up vacant possession of the property described as State Lease Volume 93 Folio 129, Allotment 1, Section 148, East Taraka, Lae, Morobe Province to the plaintiff within fourteen (14) days from today.
3. That the motion by the defendant of 2nd of October 2013 be dismissed.
4. The defendant pays the plaintiffs costs, to be agreed if not to be taxed.

_____________________________---____________________________________
Gamoga & Co. Lawyers: Lawyers for the Plaintiff
Manase & Co. Lawyers: Lawyers for the Defendant