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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 224 OF 2021
BETWEEN:
JACK TULIA
- Plaintiff-
AND:
LABI AMAIU
-First Defendant-
AND:
NATIONAL HOUSING CORPORATION
-Second Defendant-
AND:
THE REGISTRAR OF TITLES
-Third Defendant-
AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
-Fourth Defendant-
Waigani: Tamade AJ
2022: 12th August;30th September
EQUITY - Whether proceedings seek equitable or statutory relief- section 155(4) of the Constitution and Schedule 2.2.2 of the Constitution-
equity follows the law
FRAUDS AND LIMITATIONS – Plaintiff sitting tenant – property sold to First Defendant without Plaintiff’s knowledge – Plaintiff eligible party to purchase property – National Housing Corporation Act, Section 38 - wrong jurisdiction invoked in Originating Summons – section 18 of the Frauds and Limitations Act - Constitution Section 155 (4) not pleaded – no allegations of equitable fraud pleaded in Originating Summons.
Cases Cited:
Mamun Investment Ltd v Koim [2015] PGSC 9; SC1409
Camilus v Mota [2022] PGSC 17; SC2210
Kove v Po'o [2022] PGSC 37; SC2231
Powi v Southern Highlands Provincial Government [2006] PGSC 15; SC844
Papua New Guinea Banking Corporation (PNGBC) v Tole [2002] PGSC 8; SC694
Legislations Cited:
Frauds and Limitations Act 1988
Counsel:
Mr. Hebrew Babe, for the Plaintiff
Mr. Elah Nalea, for the First Defendant
30th September, 2022
1. TAMADE AJ: This is a ruling on two Notice of Motions filed by the parties in these proceedings, one filed on 30 June 2022 and the other filed on 2 August 2022 basically seeking leave to convert these proceedings into pleadings and or for leave to discontinue the matter and one by the First Defendant seeking to dismiss these proceedings.
Brief Facts
2. The Plaintiff claims that it was a sitting tenant of a National Housing Corporation property described as Section 20 Allotment 24, Boroko, National Capital District in which he entered into a Tenancy Agreement on 4 September 2012 which was subsequently renewed.
3. The Plaintiff states in evidence that unknown to him, the National Housing Corporation sold the subject property to the First Defendant on or about 29 January 2015 whilst the Plaintiff was still in occupation of the property. The Plaintiff alleges that he is the most eligible person to purchase the property pursuant to section 38 of the National Housing Corporation Act. He was therefore unaware of the sale of the subject property to the First Defendant, Mr. Labi Amaiu.
4. The Plaintiff first instituted proceedings described as WS 549 of 2015- Jack Tulia v Hon Labi Amaiu and Ors on 17 April 2015 challenging the transfer of the subject property to Mr. Amaiu however on 26 October 2017, those proceedings were dismissed for disclosing no reasonable cause of action.
5. The Plaintiff appealed that decision to the Supreme Court in SCA No. 169 of 2017- Jack Tulia v Hon Labi Amaiu and Ors however those proceedings were dismissed for want of prosecution on 25 February 2019.
6. The Plaintiff subsequently applied for a Slip Rule Application in the Supreme Court however those proceedings were also dismissed on 1 July 2021. The Plaintiff afterwards filed these proceedings.
7. The First Defendant has also filed District Court proceedings seeking to evict the Plaintiff on the subject property in proceedings described as DC No. 605 of 2017 because the Plaintiff has taken steps to challenge the title held by the First Defendant over the subject property, proceedings in the District Court were dismissed on 29 March 2022.
Issues for determination
Are these proceedings statutorily time-barred pursuant to section 16(1) of the Frauds and Limitations Act?
8. The Supreme Court held in the case of Mamun Investment Ltd v Koi[1] that a cause of action in regard to a State Lease on allegations of fraud does not run from the date fraud was discovered but from the date, the transfer or registration was entered on the title deed. This was what the Supreme Court said:
“...The date that the plaintiffs' cause of action accrued at the latest, was 13th December 1990, the registration date of the transfer of title. Consequently, as the respondents' action is founded on simple contract and on tort and it was brought after the expiration of six years commencing on the date on which the cause of action accrued, it is caught by s. 16 (1) Frauds and Limitations Act.”
9. The Plaintiff’s pleadings in the Originating Summons plead that the transfer of the subject property to the First Defendant occurred on 29 January 2015. The cause of action in this matter would therefore accrue on 29 January 2015 and the six-year period would lapse on or about 29 January 2021. These proceedings were filed on 29 September 2021.
10. The Plaintiff, on the other hand, argues that these proceedings seek equitable relief and therefore it is not subject to section 16(1) of the Frauds and Limitations Act but is subject to section 18 of the Frauds and Limitations Act.
11. Section 16(1) and section 18 of the Frauds and Limitations Act is reproduced herein:
16. LIMITATION OF ACTIONS IN CONTRACT, TORT, ETC.
(1) Subject to Sections 17 and 18, an action–
(a) that is founded on simple contract or on tort; or
(b) to enforce a recognizance; or
(c) to enforce an award, where the submission is not by an instrument
under seal; or
(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,
shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.
18. CLAIMS FOR SPECIFIC PERFORMANCE, ETC.
Section 16 does not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief
12. The Plaintiff has relied on the case of Camilus v Mota[2] in which the Supreme Court discussed what is actual fraud or constructive fraud also known as equitable fraud in transfer of State Leases;
“[Per Manuhu J and Narokobi J] “Fraud” for the purpose of section 33(1)(a) of the Land Registration Act 1981 means actual fraud or constructive fraud. Consequently, as a matter of practice, when fraud is pleaded, it would be open to the court to find actual fraud or, in the alternative, constructive fraud in circumstances where, for instance, the process of transfer of title or lease was irregular or unlawful or unconscionable.
[Per Manuhu J and Narokobi J] The conclusion reached by the trial judge was that there was no actual fraud but there was constructive fraud. Constructive fraud is sometimes called equitable fraud. Constructive fraud is fraud in equity to which s 16 of the Frauds and Limitation Act does not apply. The trial judge correctly held, that pursuant to s 18 of the Frauds and Limitation Act, a claim in equity, such as constructive fraud, is not affected by s 16.”
13. As to whether a declaratory order sought is an equitable relief, the Deputy Chief Justice in the Supreme Court case of Kove v Po’o[3] defined equitable relief as;
“...On my part, I consider it important to start with a proper understanding of the meaning of the phrase “equitable reliefs or remedies”. What does that phrase mean or what are such reliefs? These kinds of reliefs or remedies are those developed by the courts of equity from about the time of Henry VIII. The Chancery Division Courts in England are responsible for these developments. They were developed to provide more flexible responses to changing social conditions or needs as opposed to those developed based on precedent-based common law remedies. Equity is said to operate on the conscience of a particular person, usually, a defendant’s knowledge, state of mind, and motives which may be relevant to whether a remedy should be granted or not. Hence, equity is often said to do what the law cannot do to do justice but cannot be done in contradiction of an available legal remedy or position. In Coecon Ltd v. John Robert Steele (2004) N2532, I made this clear in the following terms:
“[it is] trite law that equitable principles such as the doctrines of laches and acquiescence come into operation to do what the law cannot do in terms of providing a remedy where there is no legal remedy available in the interest of doing substantial justice. I referred to this principle in Bank of South Pacific Limited v. The Public Curator as Administrator of The Estate of the late Geno Iari, Paul Wagun & Ors. That was in the context of legal and equitable mortgages. There, I reiterate the trite legal position that equity cannot apply in conflict with a legal remedy. This means where there is an available legal remedy; no equitable remedy can override that which the law already provides for.”
14. Of importance to note is that there are two divergent views on whether declaratory reliefs are equitable reliefs and or are statutory reliefs. His Honour the Deputy Chief Justice in Kove v Po’o[4] explained this as follows placing the importance of the Court to review the pleadings to ascertain the true nature of the reliefs sought:
...In Nodepa Plantation Ltd v. Balat (2020) SC1927, per the majority of David and Yagi JJ with Kassman J dissenting, noted at [26] that, there appears to be two positions on the question of whether a declaratory relief is an equitable relief. One view is as per the decision in NCDC v. Bogibada Holdings Pty Ltd [1987] PNGLR 135, which was cited in Mamun v. Koi (supra). The other view is per the decision in Douglas Dent v. Thomas Kavali & Ors (1981) PNGLR 488 and others, including, Mamun v. Koi (supra). The first of the two view is that a declaratory relief is an equitable relief and as such, s 18 of the FLA would apply. The other view is that a declaratory relief is a statutory remedy which has its origins in the latter words of s 155(4) of the Constitution. It is therefore necessary to examine the pleadings in each case to determine the true nature of the relief sought. The majority in Nolepa v. Balat (supra) subscribed to the latter view.
15. In Mamun v Koim[5], the Supreme Court held that:
“...As to declaratory relief and whether it can be categorised as equitable relief, we have considered the following cases:
a) in Douglas Dent v. Thomas Kavali and Ors [1981] PNGLR 488, Bredmeyer J considered the power of the National Court to grant a declaratory judgment. He stated that he considered that the National Court's jurisdiction or power to grant a declaratory order comes from in particular the latter words of s. 155 (4) Constitution. His Honour went on to state that:
"Likewise, I consider that the power of the pre-Independence Supreme Court of Papua New Guinea to grant a declaratory order did not come from O.4 r.11 but rather from the statutory provisions conferring on that court powers of the Court of Chancery in England."
His Honour then in detail considered that statutory history "which produced that result."
b) in NCDIC v. Bogibada Holdings Pty Ltd and Anor [1987] PNGLR 135, Kapi DCJ (as he then was) stated that:
"Declaratory relief is an equitable remedy and, therefore, the jurisdiction of the court is to be found in the principles of equity in England which have been adopted as part of the law in Papua New Guinea."
16. I am of the view that declarations that plead section 155(4) of the Constitution and or rely on section 155(4) of the Constitution embody equity and therefore should be regarded as equitable declarations and also equitable remedies where the statute is silent on the remedy available, but equity always follow the law. Mr Babe for the Plaintiff relies on the case of William Powi v Southern Highlands Provincial Government[6] which sets out the perimeters for the application of section 155(4) of the Constitution as:
From the foregoing, we are of the view that, there are about five important features or attributes of s. 155 (4) of the Constitution. These are as follows:
1. The provision vests the Supreme and National Court with two kinds of jurisdictional powers, namely orders in the nature of prerogative writs and the power to make "such other orders as a necessary to do justice in the particular circumstances of a case" before the Court;
2. Although the power is inherent, it is not a grant of jurisdiction to cover all and every other situation and for the creation and grant of new rights. Instead, it is a general grant of power to the Court to develop and grant such remedies as are appropriate for the protection of rights already existing and granted by other law, including the Constitution;
3. Where remedies are already provided for under other law, the provision does not apply;
4. The provision does not grant the Supreme Court power to set aside or review the decision of another Supreme Court regardless of number it is constituted, except as may be provided for by any law; and
5. A person seeking to benefit from that provision has an obligation to demonstrate a case of his rights or interest being affected or that he stands to suffer much damage or prejudice and he has no remedy available under any other law.
17. The Court therefore is tasked with the duty to analyse the relief claimed by the Plaintiff whether it is one which seeks equitable relief which would fall within the confines of section 155(4) of the Constitution and whether the evidence adduced supports such a claim. In the case of fraud, the Court must then assess whether it is an actual fraud that has been alleged and or constructive fraud also referred to as equitable fraud and I am also in agreement with the view in
Camilus v Mota[7] that where the Court does not find actual fraud, it is open to the Court to find equitable fraud based on irregularity, unlawfulness or unconscionability.
18. Mr Nalea of the First Defendant has argued that the Plaintiff is not entitled to claim equitable fraud as the pleading in the first relief in the Originating Summons does not plead section 155(4) of the Constitution as the jurisdictional basis to claim that it is seeking an equitable relief. It follows to my mind the principle of pleadings that a party must plead with sufficient particularity in his claim.[8]
19. The Plaintiff’s claim as pleaded in the Originating Summons filed on 29 September 2021 is as follows:
20. I find that the pleadings in the Plaintiff’s Originating Summons is vague and does not spell out clearly what is the allegation of fraud. Term 2 of the Originating Summons refers to section 36 which is an incorrect provision and perhaps the correct provision is section 38 which refers to options to purchase where a tenancy agreement has been in force for two years with a sitting tenant, the NHC may offer to the tenant an option to purchase the subject property. I am of the view that the option to purchase is not a right as claimed by the Plaintiff and therefore an allegation premised upon a non-existing right is misconceived and cannot hinge upon section 155(4) of the Constitution or be coated as a right. There is the age-old equitable maxim that “equity follows the law”.
21. I find that there is no right the Plaintiff alleges to protect and or that has been infringed disclosed in this case. I also find that the claims for equitable fraud are misconceived as there is no allegation of equitable fraud and or any kind of fraud in the pleadings by the plain reading of the pleadings in the Originating Summons.
22. This draws the correlation to proceedings instituted by the Plaintiff in WS 549 of 2015- Jack Tulia v Hon Labi Amaiu and Ors on 17 April 2015 that those proceedings were dismissed as it disclosed no reasonable cause of action. It is also clear in these proceedings that no reasonable cause of action has been disclosed. I am of the view that no amount of amendment to the claim and or conversion to a Statement of Claim can cure the very serious defect in that there is no right owed to the Plaintiff that needs protection from the Court. The hands of justice are that of law and equity enshrined under section 155(4) of the Constitution and adopted from common law as part of the underlying law through Schedule 2.2.2 of the Constitution in this case, it cannot work in the Plaintiff’s favour as “equity follows the law”.
Conclusion
23. In answering the issues for determination. This Court finds that:
24. I find that the First Defendant has been a bona fide purchaser of the subject property having purchased it in January 2015 and has since been defending proceedings filed by the Plaintiff in Court and has been prejudiced by not enjoying his legitimate right to the subject property over the years since the litigation on the subject property has been pursued by the Plaintiff.
25. These proceedings shall be dismissed for the reasons in this decision.
26. The Court therefore makes the following orders:
Orders accordingly.
______________________________________________________________
Hebrew Babe Lawyers: Lawyers for the Plaintiff
Paul Othas Lawyers: Lawyers for the First Defendant
[1] [2015] PGSC 9; SC1409 (24 February 2015)
[2] [2022] PGSC 17; SC2210 (4 March 2022)
[3] PGSC 37; SC2231 (29 April 2022)
[6] [2006] PGSC 15; SC844 (4 August 2006)
[7] Supra N2
[8]9 Papua New Guinea Banking Corporation (PNGBC) v Tole [2002] PGSC 8; SC694 (27 September 2002)
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