N9869
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS No. 415 OF 2020
BETWEEN:
MARGARET SABUMEI   
Plaintiff

AND:
JONAH LUMUWE
First Defendant

AND:
NATIONAL HOUSING CORPORATION 
Second Defendant

Goroka: Mugugia, AJ
2022: 1st & 8th September

PRACTICE AND PROCEDURE – Plaintiff’s application for restraining order against the First Defendant, and an order for lodgment of caveat over property – Dispute of facts – Allegation of fraud - Whether appropriate mode of proceedings utilised – Conversion to pleadings.  

Cases Cited:

Andakelka Ltd. v. Petronas Ltd (2010) N3976

Counsel:

V. Move, for the Plaintiff
G. Gendua, for the First Defendant
A. Luke, for the Second Defendant 

DECISION

 8th September, 2022
1. MUGUGIA, AJ: The Plaintiff’s motion (Court document number 2), and the First Defendant’s motion returned to Court for hearing before me on 1st September 2022. I only dealt with the Plaintiff’s motion which sought a restraining order against the First Defendant (Term 1), and an order for lodgment of a caveat on the title to the subject property described as Section 09, Allotment 31, Goroka, Eastern Highlands Province (Term 2).

2. At the outset, Counsel for the Plaintiff Ms Move informed the Court that according to a recent court file search conducted on the Court file, it was ascertained that orders were made by Neill J on her client’s motion on 11th February 2021, but no formal orders were taken out by them. Neill J’s notations on the Court file show that the matter was before him on 11th February 2021. On that date, Ms Move appeared for the Plaintiff, and Mr Gendua appeared for the First Defendant. These were Neill J’s notations on the Court file:

“Order in terms of paragraph 2 of the motion Doc. 2. Registrar of Titles to place caveat and return copies to be forwarded to Department of Lands and Physical Planning and Mr Gendua. If no State Lease issued, Minister and Secretary of Department of Lands and Physical Planning injuncted from approving any transfer of title and First Defendant injuncted from attempting to transfer title.”

3. On the face of it, Term 2 of the Plaintiff’s motion was granted by Neill J. All the Counsels agreed that there was no utility in pursuing Term 1 of the Plaintiff’s motion because the First Defendant was already residing on the subject property, and events have already overtaken the order sought. 

4. The Court documents before me showed that a District Court Order was made on 16th October 2013, restraining the Manager of the Second Defendant (NHC) in Goroka from evicting the Plaintiff’s father Ishmael Lily (now deceased) until the Health Department paid the arrears to the NHC. The NHC’s servants and agents were also restrained from evicting him until all issues are lawfully settled.  

5. The Court documents also showed that the NHC terminated the Plaintiff’s Tenancy Agreement over the subject property on 16th April 2015.
 
6. I had raised issues with Counsels concerning the ‘District Court Order’, the ‘Mode of proceedings’ and ‘Whether there are facts in dispute’. They addressed me on all these issues.  

District Court Order

For the Plaintiff

7. The Plaintiff’s evidence in late Ishmael Lily’s affidavit filed on 16th December 2020 is set out below:

7.1. He had been a tenant to the NHC owned property described as Section 09, Allotment 31, Goroka, Eastern Highlands Province since the early 1980s by virtue of a Tenancy Agreement which was terminated by a letter dated 16th April 2015 from one Mr Morgan Kaiulo, the General Manager-Property Management, NHC. 

7.2. The termination of his Tenancy Agreement stemmed from a breach of Clause 2 and 3(a) of the Tenancy Agreement which particularly provides for the payment of rentals which had accrued to a total of K129,690.00, as claimed in the letter.   

7.3. Prior to that, he was served a notice dated 16th December 2014 from Mr John Dege, the then Managing Director of the NHC, to settle the arrears or vacate the said property. On the date when the notice was served on him, he was a serving public servant under the National Department of Health at the Goroka Provincial Hospital. The rental to be paid fortnightly was K17.50, which was to be settled through salary deductions.

7.4. The deductions prior to 2000 were made using the NHC deduction code until after 2000 the rental deduction code was changed to Health rent code. This meant that his fortnightly deduction of K17.50 was diverted to the Department. Internal Memos dated 21st June 2013 and 4th May 2018 were circulated within the Department of Health to rectify this. 

7.5. The arrears of K129,690.00 had accrued not because of his failure to settle fortnightly but as a result of the failure by the Department’s Accounts Section to change the code back to the NHC deduction code.

7.6. On 16th October 2013, he successfully obtained an order from the District Court in Goroka, staying his eviction on the said property by the NHC. That order has not been discharged either by the District Court or any other Court and continues to be in force. [Annexure “C” is a copy of the Court Order]   

7.7. On 25th September 2014, he suffered from a stroke and was monitored for 6 – 12 months until September 2015. Whilst in his sick bed and not clearly conscious, he was forced to sign a Statutory Declaration on 8th April 2015, authorising the First Defendant to pay his rentals, and thereafter liaise with the NHC for the transfer of ownership as he was unable to pay. Never had he in the Statutory Declaration Form transferred ownership or tenancy to the First Defendant. He needed the accommodation for purposes of his employment with the Goroka Provincial Hospital.     
  
7.8. While on sick leave, he was evicted from the said property which was in breach of the Order of 16th October 2013 that had not been set aside or discharged. He is currently out of the property which is now occupied by the First Defendant.
 
8. Ms Move submitted that the Defendants’ conduct breached the District Court Order. The NHC was adequately notified of the District Court Order but evicted her client. 

For the Defendants

9. Mr Gendua submitted that on the face of it, there is a breach of the District Court Order. After the Plaintiff was evicted, his client liaised with the NHC and signed the Tenancy Agreement. 

10. Mr Luke said that he was not aware of this order. He submitted that the District Court Order was made prior to the eviction, and maybe the NHC’s lawyers were not aware of it. 

‘Mode of proceedings’ and ‘Whether there are facts in dispute’. 

11. The Office of the Public Solicitor filed the Plaintiff’s Originating Summons on 16 December 2020, claiming the following substantive relief:

“1. A declaration that the purported termination of the Tenancy Agreement of the Plaintiff as tenant of the property described as Section 09, Allotment 31, Goroka, Eastern Highlands Province on 16 April 2015 is void.

2. A declaration that the First Defendant was not entitled to be regarded as tenant of the described property as he had illegally assumed tenancy by virtue of a statutory declaration dated 8 April 2015, signed by the Plaintiff under duress and of which does not clearly show a transfer of tenancy and ownership to the First Defendant.

3. An order that the Second Defendant forthwith restore tenancy of the property described as Section 09 Allotment 31, Goroka, Eastern Highlands Province to the Plaintiff’s name as and to the extent necessary to show the restoration with the Second Defendant.

4. An injunctive order permanently restraining the First and Second Defendants,  their agents and servants from accessing, changing and making entries in the Title 	documents kept at the Lands Department Head Office at Eda Tano Haus, Waigani, National Capital District.

5. Such further Orders that the National Court sees fit.”

12. Ms Move submitted that the substantive issue is the validity of the transfer of tenancy by the NHC to the First Defendant. 

13. I enquired with Counsels whether there were facts in dispute. They all submitted that there were. Mr Luke submitted that the subject property is owned by his client (NHC), and the facts are in dispute.

14. Order 4, Rule 3 of the National Court Rules sets out the tests whether to file an Originating Summons or a Writ of Summons.

15. Proceedings in which there is unlikely to be a substantial dispute of fact is amongst those which are appropriate to be commenced by originating summons: (National Court Rules, Order 4, Rule 3(2)(b)). 

16. Ms Move submitted that there is an allegation of fraud. Mr Gendua submitted that fraud has been raised by the Plaintiff’s lawyer, and as such, the proceedings should be by way of a writ of summons. Mr Luke submitted that the Plaintiff is alleging duress and fraud. The current mode of proceedings is not proper. The Plaintiff should go by way of a writ of summons.  

17. Order 4, Rule 2(1)(b) of the National Court Rules states that proceedings shall be commenced by writ of summons where a claim made by the plaintiff is based on an allegation of fraud. 

18. A plaintiff pleading fraud must commence proceedings by writ of summons: Andakelka Ltd. v. Petronas Ltd (2010) N3976. 

19. In the present case, the documentations before me show that that there are issues of fact for determination, and issues to be defined. The appropriate mode of proceedings is a writ of summons.      

20. Pursuant to Order 4, Rule 35(1) of the National Court Rules, the Court may order that the proceedings continue on pleadings. The Court may, on or after making an order under Rule 35(1), make an order for the filing of a statement of claim (Order 4, Rule 35(2)(b)).
  
21. The way forward in dealing with this matter is for the proceedings to be converted to a Writ of Summons and Statement of Claim. In the exercise of my discretion, I make these orders:

1. The Plaintiff’s Originating Summons filed on 16 December 2020 is to continue on pleadings.  

	2. The Plaintiff shall file a Statement of Claim within 30 days. 

3. Parties are to bear their own costs. 

4. Time is abridged to the time of settlement, to take place forthwith. 

The Court orders accordingly.

________________________________________________________________
V. Move: Lawyer for the Plaintiff
G. Gendua: Lawyer for the First Defendant
NHC Inhouse Counsel: Lawyer for the Second Defendant