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Sengus Investments Ltd v Puio [2022] PGNC 459; N9999 (26 October 2022)

N9999


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS NO. 784 OF 2016


BETWEEN
SENGUS INVESTMENTS LTD.
Plaintiff


AND
WILLIAM PUIO
Defendant


Waigani: Shepherd J
2019: 18th February & 13th March
2022: 26th October

      
LAND – State Lease – indefeasibility of title – meaning of “fraud” in Land Registration Act, s.33(1)(a) – actual fraud – constructive fraud – actual fraud proven – declaration made that plaintiff is lawful registered proprietor of State Lease – cancellation of defendant’s fraudulent transfer of title – consequential orders.


PRACTICE & PROCEDURE – incorrect citation of corporate name of party – Court’s power to amend incorrect name of party – National Court Rules, Order 8 Rule 50 – no prejudice to other party.


Cases Cited:


Muku v Yama (2019) N7948
Kanari v Wiakar (2009) N3589
Kulunga v International Education Agency of Papua New Guinea Ltd (2011) SC1106
The Papua Club Inc v Nusaum Holdings Ltd (No. 2) (2004) N2603


Legislation:

Land Registration Act 1981, s.33(1)(a); s.161(1)
National Court Rules, Order 8 Rule 50


Counsel

Mr Dane Mel, for the Plaintiff
Mr Isaac David, for the Defendant


DECISION


26th October, 2022

  1. SHEPHERED J: This is a decision as to who holds lawful title to a residential property where there are two official owner’s copies of the State Lease in existence for the same allotment of land. One of those official owner’s copies of the State Lease is registered in the name of the plaintiff company. The other official owner’s copy of the State Lease is registered in the name of the defendant as the result of registration of a disputed transfer instrument. The plaintiff company alleges that the defendant obtained registration of the disputed transfer by fraudulent means. The Court must decide which of the two parties has valid title to the property.

BACKGROUND

  1. The plaintiff is a family company owned by Ango Wangatau and his wife Lena Wangatau.
  2. The plaintiff company (Sengus) by its managing director Mr Wangatau asserts that Sengus is the lawful registered proprietor of a portion of State leasehold residential land known as Allotment 6 Section 32, Boroko, National Capital District being all the land more particularly described in State Lease Volume 95 Folio 119 (the property).
  3. Sengus purchased the property from the National Broadcasting Commission (NBC) for the sum of K150,000 pursuant to a contract for sale dated 28 April 2003. For reasons that were unexplained at trial, settlement of Sengus’s purchase of the property was delayed until August 2009. However, it is not disputed by the defendant that Sengus became the registered proprietor of the property when the stamped and Ministerially-approved transfer instrument in respect of conveyance of title from the NBC to Sengus for the property was duly registered by the Deputy Registrar of Titles against the original of State Lease Volume 95 Folio 119 as Transfer registered no. S.52541 on 14 August 2009.
  4. The property is unusually large by Port Moresby residential standards. It has an area of 2.2611 hectares, approximately 6.45 acres. There are two 3-bedroom houses and a garage used as a workshop on the property.
  5. In 2009 the directors of Sengus engaged the defendant to be the caretaker of the property at a wage of K300 per fortnight, this arrangement being terminable at will by Sengus, presumably on a fortnight’s notice by Sengus. The defendant is a relative of Mr Wangatau.
  6. After commencing his duties as caretaker of the property, the defendant entered into tenancy arrangements with various persons who paid rent to the defendant and who occupied dwellings and a garage workshop on the property without the consent or knowledge of Sengus. The defendant also allowed a number of his own relatives to reside on the property without having sought the consent of Mr Wangatau as managing director of Sengus.
  7. One of the 3-bedroom houses on the property was gutted by fire because of alleged negligence on the part of an occupier who the defendant had allowed to reside in that house.
  8. In early 2015 Sengus gave the defendant repeated notice both verbally and in writing for the defendant and his occupiers to vacate the property. The defendant ignored those notices.
  9. By letter dated 8 May 2015 Sengus gave notice to the defendant to vacate the property within 7 days and forewarned to the effect that a claim could be made by the company against the defendant for business losses and damages sustained by Sengus if the defendant failed to render up vacant possession of the property.
  10. By the end of July 2015 the defendant had still refused to give vacant possession of the property.
  11. Sengus, in an endeavour to obtain peaceful repossession of the property, then offered to make a payment in the sum of K5,000 to the defendant to assist with the resettlement of the defendant and his occupiers to some other location. Sengus’s resettlement offer of K5,000 was conveyed to the defendant by letter from Sengus dated 7 August 2015. The defendant refused to accept that offer.
  12. On 3 June 2016 Sengus, being continually frustrated by the defendant’s adamant refusal to give vacant possession of the property, commenced eviction proceedings DC No. 449 of 2016 against the defendant under the Summary Ejectment Act in Port Moresby District Court.
  13. On 17 August 2016 the defendant filed an affidavit in eviction proceedings DC No. 449 of 2016 in which he stated to the effect that Mr Wangatau had told him after Sengus purchased the property that the property had been purchased for him from consultancy fees owed to him and for services rendered by the defendant to Sengus in obtaining the earlier eviction in 2010 of squatters who had been on the property. The defendant also deposed in his affidavit that Mr Wangatau was supposed to have appointed him in 2000 as one of the directors of Sengus but that never happened. The defendant did, however, acknowledge in his affidavit that Sengus had paid him K300 per fortnight from 2009 until some date in 2015, which is when he was removed from Sengus’s payroll.
  14. Attached to the defendant’s affidavit filed on 17 August 2016 in Sengus’s eviction proceedings against him in DC No. 449 of 2016 is a photocopy of what purports to be the Owner’s Official Copy of State Lease Volume 95 Folio 119 in respect of the property. That photocopy bears on its last page a memorial of transfer of title from Sengus to “William Puio of Boroko” by registered transfer instrument no. S.73773 entered against State Lease Volume 95 Folio 1109 on 28 April 2016. The defendant deposed in his affidavit that the property is his because it was purchased by Sengus for him from money owed to him by Sengus.
  15. As soon as Mr Wangatau was served on 17 August 2016 with a copy of the defendant’s affidavit filed in the eviction proceedings DC No. 449 of 2015, he immediately consulted Jefferson Lawyers who, the very same day, 17 August 2016, wrote to the Police Fraud & Anti-Corruption Directorate at Konedobu, NCD and requested that an investigation be carried out into how the defendant had managed to obtain purported registration on 28 April 2016 of an alleged fraudulent transfer of the property into his name.
  16. On the same date, 17 August 2016, Jefferson Lawyers also wrote on instructions from Mr Wangatau to the Secretary of the Department of Lands & Physical Planning and requested an investigation into the purported registration of transfer of title to the property from Sengus to the defendant. Jefferson Lawyers pointed out in their letter that Sengus had never agreed to transfer title to the property to the defendant, that no contract of sale had ever been entered into between Sengus and the defendant and that at all material times the original of the Owner’s Official Copy of State Lease Volume 95 Folio 119 had remained in the custody of Sengus and had never been released to the defendant.
  17. On 10 November 2016 Magistrate Mr Bruno Kahio of Port Moresby District Court dismissed Sengus’s eviction proceedings DC No. 449 of 2015 against the defendant on the ground that there was a bona fide dispute as to title to the property and that therefore the District Court lacked jurisdiction under s.21(4)(f) of the District Courts Act Chapter 40 to deal with the matter.
  18. On 17 November 2016 Sengus instituted this present proceeding in OS No. 784 of 2016 in the National Court seeking, among others, a judicial declaration that it has indefeasible title to the property and an order for the eviction from the property of the defendant and his invitees.
  19. On 2 August 2017 Justice Kandakasi (as then was) directed that this proceeding continue on pleadings and directed Sengus to file a statement of claim pursuant to Order 4 Rule 35(1) of the National Court Rules.
  20. Sengus filed its statement of claim on 16 August 2017, pleading extensive particulars of fraud against the defendant as regards the defendant’s purported transfer of title to the property into his own name but claiming the same relief as had been sought in Sengus’s originating summons filed in OS No. 784 of 2016 on 17 November 2016.
  21. The defendant’s defence to Sengus’s statement of claim was filed on 24 August 2017. The defendant pleaded that 20 years earlier, in or about early 1997, Mr Wangatau had verbally engaged his services to follow-up and obtain payment from the Department of Works of an amount of K800,000 owed to another company named Wabag Quarry Ltd, of which Mr Wangatau was a director. The Department of Works made payment of K800,000 to Wabag Quarry Ltd in June 1997. The defendant pleaded in his defence in this present suit that he was supposed to have been paid K200,000 by Mr Wangatau for the role he had played in obtaining the release of the K800,000 from the Department of Works, but that Mr Wangatau only paid him K5,000, having allegedly been promised by Mr Wangatau that the latter would purchase him a property at a later time with the balance of K195,000.
  22. The defendant further pleaded in his defence filed on 24 August 2017 that in March 2009 Mr Wangatau told him he had purchased the subject property for him in consideration for the K195,000 which Mr Wangatau still owed him. The defendant has alleged in his defence that he and his wife and seven children moved onto the property with the permission of Mr Wangatau and that thereafter they have occupied a high covenant house which Sengus constructed there. The defendant has pleaded that after he and his family moved onto the property, he established a piggery and that he has been raising ducks and growing crops on the land. The defendant has further pleaded in his defence that in February 2016 employees of Sengus prepared a contract for sale of the subject property which resulted in registration of the transfer of the property from Sengus to the defendant. The defendant has denied all allegations of fraud on his part in obtaining registration on 16 April 2016 of transfer of title to the property into his own name. The defendant by his defence has denied that Sengus is entitled to any of the relief it has sought from this Court and that this proceeding is an abuse of process.
  23. A reply filed by Sengus on 6 September 2017 agreed to the effect that the company settled its purchase of the property from the NBC in 2009 but joined issue with the remainder of the defendant’s defence.

ISSUES

  1. Having perused the pleadings and having heard the evidence and submissions made for each of the parties in this case, I consider that the issues that fall for determination by the Court are these:

(1) Whether registration of transfer of title to the property from Sengus to the defendant was obtained by fraudulent means?

(2) If registration of the transfer of title was obtained by fraud, what judicial declarations and orders should the Court make?

LAW

  1. The Land Registration Act 1981 of Papua New Guinea enshrines within it the principles of the Torrens Title system of land registration which has long underpinned ownership much of the land in Australia and New Zealand. The general principle is that an indefeasible title is conferred on the registered proprietor of an instrument of title to land, such as a 99-year State lease or a certificate of title to freehold land, subject only to the protective exceptions provided for in Section 33(1) of the Act: Muku v Yama (2019) N7948 (Cannings J).
  2. The principal exception to indefeasibility of title under the Land Registration Act 1981 is Section 33(1)(a) which states:

33(1) The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except—
(a) in the case of fraud; ...

  1. What then constitutes “fraud” for the purposes of s.33(1)(a) of the Act? The passage of years since Papua New Guinea’s Independence in 1975 has seen differing judicial pronouncements on whether actual fraud is the only determinant for setting aside registration of contested title or if constructive fraud not amounting to actual fraud can justify a successful challenge to a title which would otherwise be incapable of forfeiture as being indefeasible under the Act.
  2. In Kanari v Wiakar (2009) N3589 Cannings J addressed the meaning of “fraud” in the context of indefeasibility of title under the Act and observed that there are two schools of judicial thought. His Honour said at paras. 21 to 24:

“ 21. On the one hand, in Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215 the Supreme Court (Amet J and Salika J, Brown J dissenting) held that if the circumstances of a forfeiture or transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title.

22. In that case the registered proprietor of a State lease had his lease forfeited in dubious circumstances. The Minister for Lands then exempted the land from public advertisement and a new lease was issued. This all happened in a short space of time while there was an appeal pending against the Minister’s decision to grant the lease to a new lessor. Amet J, as he then was, said:

“The issues in this case raise for determination the principle of indefeasibility of title under the Torrens land registration system that hitherto has been applied in this jurisdiction. I do not believe that the system is necessarily appropriate in circumstances such as this, where an individual landowner is deprived of his title to land by irregular procedures on the part of officials and of the Department of the State, to the advantage of a private corporation. I do not accept that quite clear irregularities and breaches of the statutory provisions should remain indefeasible. I believe that, although these irregularities and illegalities might not strictly amount to fraud, they should nevertheless still be good grounds for invalidating subsequent registration, which should not be allowed to stand. To not do so would be harsh and oppressive against the innocent individual leaseholder ...”

23. This wide view of “fraud” – it includes irregularities that are tantamount to fraud and constructive fraud – has been followed in the National Court decisions of Sheehan J in Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959, Sevua J in Hi-Lift Company Pty Ltd v Miri Setai [2000] PNGLR 80 and Injia DCJ in Ramu Nickel Ltd v Temu (2007) N3252.

24. On the other hand, a narrower view was recently favoured by the Supreme Court (Gavara-Nanu J, Mogish J and Hartshorn J) in Koitachi Ltd v Walter Schnaubelt (2007) SC 870. The Court held that the Emas Estate case was distinguishable on its facts as it concerned a registered proprietor whose State Lease was forfeited and then allocated and registered in the name of a third party. As to the Garamut case, that was said to concern a challenge to the issue of a State lease on the grounds that procedures in the Land Act were not complied with. The Court adopted the view of fraud taken in the National Court decision of Gavara-Nanu J in The Papua Club Inc v Nusaum Holdings Ltd (No. 2) (2004) N2603 where his Honour stated:

“ The word ‘fraud’ in Section 33(1)(a) of the Land Registration Act is not defined anywhere in the Act, but Section 45(1) makes it clear that fraud means more than constructive or equitable fraud. ... It is implicit from these provisions that “fraud” in s.33(1)(a) means fraud committed by the registered proprietor or actual fraud. That is the only ground upon which a registered proprietor’s title can be rendered invalid.”

  1. I note that Gavara-Nanu J elaborated further and said this in Nusaum Holdings Ltd (No 2) at page 84:

“ The authorities establish that it must be fraud committed by the registered proprietor if the interests of the registered proprietor are to be impeached. In other words, there has to be actual fraud with personal dishonesty and moral turpitude established against the first defendant if the claim of fraud against it is to succeed. ”

However, without deciding, his Honour also left open the possibility that the broad equitable supervisory powers given to the Supreme Court and National Court by s.155(4) of the Constitution may enable the Courts, in the exercise of such inherent powers, to invalidate land titles and correct anomalies which have occurred in serious violation of mandatory statutory procedures, such as those set out in the Land Act 1996.

  1. Notwithstanding that there are two conflicting judicial views as to what constitutes “fraud” for the purpose of s.33(1)(a) of the Land Registration Act 1981, I consider it appropriate in this instance to first consider whether there is compelling evidence of actual fraud having been committed by the defendant in obtaining transfer of title to the property into his own name by registration of transfer instrument no. S.73773 against State Lease Volume 95 Folio 119. If there is such evidence, a finding of actual fraud would a fortiori require the granting of the relief sought by Sengus. However, if the commission of actual fraud by the defendant cannot be established on the evidence, only then would the issue of irregularities and misconduct amounting to constructive fraud on the part of the defendant in obtaining the transfer of title to the property into his own name become relevant for consideration by this Court.

THE EVIDENCE

  1. At trial Sengus relied on two affidavits sworn by Mr Wangatau; an affidavit filed on 17 November 2016 and a later affidavit filed on 23 April 2018. No notices for cross-examination of Mr Wangatau pursuant to s.36(1) of the Evidence Act were served on him prior to trial by the defendant’s lawyer. The content of Mr Wangatau’s two affidavits was therefore not subjected to any cross-examination at trial and the matters deposed to by him in his two affidavits stand uncontested by the defendant.
  2. As to the case for the defendant, at trial the defendant sought to rely on two affidavits: the defendant’s own affidavit filed on 20 December 2016 and a subsequent affidavit sworn by Mr Luke Kembol filed on 19 July 2018. However the Court declined to admit Mr Kembol’s affidavit into evidence at trial as he had failed to present himself for cross-examination at trial despite notice to do so under the Section 36(1) of the Evidence Act having been served on him and because no affidavit had been filed explaining Mr Kembol’s intended absence at trial. In the result, the defendant’s affidavit filed on 20 December 2016 was the only affidavit material adduced at trial for the defendant. That affidavit evidence was the subject of cross-examination of the defendant by counsel for Sengus.
  3. On 9 November 2018 the Court ordered Sengus to serve summonses on the Deputy Registrar of Titles and the Secretary for the Department of Lands and Physical Planning for their production at the commencement of trial of all documents in their respective control relating to registration of transfer of title to the property into the name of the defendant. Term 3 of the Court’s order of 9 November 2018 was specific and was worded as follows:

“ 3. The Plaintiff shall no later than Friday 14 December 2018 file and serve on the undermentioned persons Summonses for Production to Give Evidence at trial on Tuesday 12 February 2019 at 9:30 am:

(a) the Deputy Registrar of Titles: for production of all documents in his possession, custody or control relating to or which gave rise to registration of Transfer Instrument number S.73773 from Sengus Investment Limited to William Puio which was registered against replacement Official Copy of State Lease Volume 95 Folio 199 on Thursday 28 April 2016, including production of the originals or a true copy of the said registered Instrument, the relevant Contract for Sale and the State Lease.

(b) the Secretary for the Department of Lands and Physical Planning: for production of all documents in his possession, custody or control relating to the purported sale of Allotment 6 Section 32, Boroko, National Capital District being all of the land described in State Lease Volume 95 Folio 119 from Sengus Investment Limited to William Puio which resulted in registration of the transfer of that property to William Puio on Thursday 28 April 2016. ”

  1. The trial set down for 12 February 2019 did not proceed as both Deputy Registrar of Titles Mr Ala Ane and Acting Secretary of the Department of Lands and Physical Planning Mr Oswald Tolapa filed affidavits on 11 February 2019, the day before trial, deposing that the files which their respective offices should have held for the documentation the subject of the production summonses which had been duly served on them could not be located despite searches having been made for those files. Both Mr Ane and Mr Tolapa requested an extension of time for them to continue their searches for the files referred to in the Court’s order of 9 November 2018. On 12 February 2019 the Court vacated the trial date and adjourned the case to the next day for directions.
  2. On 13 February 2019 the Court granted the extension of time requested by Mr Ane and Mr Tolapa and fixed 18 February 2019 as the new date for trial. Mr Ane and Mr Tolapa were required by order of the Court made on 13 February 2019 to produce at the commencement of trial on 18 February 2019 at 1.30 pm the documents the subject of the summonses previously served on them.
  3. The trial duly commenced soon after 1.30 pm on 18 February 2019. Deputy Registrar of Titles Mr Ane and Acting Secretary Mr Tolapa both appeared in person and through their counsel Mr Simon Hahory, a legal officer with the Department of Lands and Physical Planning, explained to the Court that despite extensive search neither the Office of the Registrar of Titles nor the Department of Lands and Physical Planning had been able to locate any documents relating to the defendant’s alleged acquisition of title referred to in the two production summonses other than conveyancing documents in connection with Sengus’s purchase of the property from the NBC. Mr Hahory said to the effect that a land administration file for the property is held by the Department of Lands & Physical Planning and that the Office of the Registrar of Titles has a separate file which it holds for the property but that neither of those two files hold any records of the alleged conveyance of title from Sengus to the defendant. Mr Hahory said to the Court that all that could be found were conveyancing documents from the NBC to Sengus. Mr Hahory then produced to the Court the originals and certified true copies of:

(a) the officially stamped and Ministerially-approved Contract for Sale dated 28 April 2003 in respect of Sengus’s purchase of the property from the NBC for the sum of K150,000; and

(b) the blue official Transfer Instrument no. 2003-072 dated 19 March 2004 evidencing the transfer of title to the property from the NBC to Sengus.

  1. Following the appearance in Court of Mr Ane, Mr Tolapa and Mr Hahory, the Court adjourned the trial for approximately 30 minutes to allow counsel for Sengus and counsel for the defendant to inspect the originals and certified true copies of the NBC’s Contract for the sale of the property to Sengus and the Transfer Instrument which had conveyed title to the property from the NBC to Sengus and which was later registered as Transfer no. S.52541 against State Lease Volume 6 Folio 119 on 14 August 2009.
  2. When the Court resumed the trial at 2.15 pm on 18 February 2019 photocopies of the Contract for Sale and Transfer Instrument from the NBC to Sengus were admitted into evidence on application by Mr Dane Mel, counsel for Sengus, and were marked Exhibit ‘A’. Mr Mel then tendered into evidence the uncontested two affidavits of Mr Wangatau respectively filed on 17 November 2016 and 23 April 2018. This was followed by counsel for the defendant, Mr Isaac David of the Public Solicitor’s Office, tendering the defendant’s affidavit filed on 20 December 2016 into evidence and the defendant was then sworn and cross-examined by Mr Mel on the content of his affidavit.
  3. On completion of cross-examination of the defendant on 18 February 2019, the evidence for both parties was closed and the Court adjourned the case to 13 March 2019 for submissions.
  4. The originals of the NBC’s Contract for Sale and Transfer Instrument in connection with the transfer of title of the property from the NBC to Sengus were returned by staff of the National Court Registry of the National Court to a representative of the Office of the Registrar of Titles on 21 February 2019.
  5. Mr Mel for Sengus submitted at trial that the evidence shows beyond shadow of a doubt that the transfer of the property from Sengus to the defendant registered against State Residence Lease Volume 95 Folio 119 on 28 April 2016 (the purported transfer) was the end result of a fraudulent transaction.
  6. The defendant’s evidence as to how he acquired registration of the purported transfer is almost non-existent. The only affidavit evidence given by the defendant as to the circumstances which gave rise to registration of the purported transfer of the property into his name is contained in his affidavit filed on 20 December 2016. The defendant deposes in the first part of his affidavit that he was owed K195,000 by Mr Wangatau after he had received a token payment of K5,000 in cash in June 1997 out of a promised ‘success fee’ of K200,000 for efforts taken by the defendant in obtaining a payment of K800,000 owed by the Department of Works to Mr Wangatau. Reproduced hereunder is the remainder of the defendant’s sole affidavit tendered in evidence for him. The defendant Mr Puio stated on oath in his affidavit, reproduced below without editorial correction, that after he requested Mr Wangatau in June 1997 to give him the remaining K195,000 which the defendant claims he was owed by Mr Wangatau, this is what then occurred:

“ 17. [Mr Wangatau] said you are my cousin. If I give you back your K195,000.00 you will just waste it so I have invested it into a company and will buy you a property and give it to you.

18. Because he was my First Cousin, I trusted him and left.

19. I waited patiently and kept asking him when he will buy me that property. He would say he was still looking for one. Until in March 2009, one Felix, one of Mr. Wangatau’s longtime employee, called me and said Mr Wangatau wanted to see you immediately into his office at Comfort Inn, Boroko. When I arrived there, Mr Wangatau said he bought a property for me at 6 mile, Section 32, Allotment 06, (hereafter ‘Six Mile Property”).

20. He said before you have the Six Mile Property, you will get the Titles for the Boroko Property (that’s where the Comfort Inn is Section 24, Allotment 23 & 24) and five properties in Kindeng, Western Highlands Province (that is Portions 192 & 193).

21. He said those properties were bought in 2002 after lodging Transfer Instruments, he followed up to get the titles but unsuccessful.

22. In 2009, I went to the Registrar of Titles’ Office at Lands Department, checked through the files and got the titles for him. After that, he gave contract of sale documents for the Six Mile Land and said that’s your property.

23. The Title of the Property was under the Defendant’s name, so Mr Wangatau told me to sign a company application to become a Director of Sengus Investment Limited and own the Six Mile Property through being a Director of Sengus Investment Limited. I did sign the Application and Mr. Wangatau took it away.

...

27. All along, I knew that the Six Mile Property was mine because Mr Wangatau bought it from my own money.

28. On 2nd February 2016, Mr Felix called me into his office, and said the Directors of Sengus Investment Limited held a meeting recently and resolved that Sengus Investment Limited transfer the Title of Six Mile Property to Mr. William Puio and he can go away with it.

29. Mr. Felix showed me a meeting minute signed and stamped. He then told me to sign the Contract and Transfer Instruments. After that, we both came to the Lands Department Office and lodged them.

30. As far as I can recall, Mr. Felix has been working with Mr. Wangatau since 1994 or 1995, around there. He said he was the Property Manager of Sengus Investment Limited.

31. Eventually, in April 2016, I got the Title to the Six Mile Property transferred to my name. Hence I am the registered proprietor of the above Six Mile Property.

32. I was only given a copy of the Contract of Sale signed on 02nd February 2016. The Company’s Meeting Minutes and rest of the documents were withheld by Felix.

Annexure “C” is the true copy of the Contract of Sale signed on 02nd February 2016.

Annexure “D” is the true copy of the Title of Six Mile Property.

33. The Title has already passed on from Defendant to me and it is now in my name. I was advised by my lawyers that it is an abuse of process of the Court for the Plaintiff to seek a Declaration that it is the Indefeasible Title Holder when the Title has been transferred to my name already.

SWORN at Boroko ) [signature of defendant]
the 19 of December 2016 ) DEPONENT
[etc] ”

  1. I make the following observations at this juncture regarding the defendant’s affidavit:
  2. At trial the defendant was cross-examined by Mr Mel on his affidavit. The responses given by the defendant to Mr Mel’s cross-examination were significant. The defendant conceded on oath during cross-examination to the effect that he had experience with the lodgement of conveyancing documents at the Office of the Registrar of Titles. I surmise that the defendant must therefore have known that any contract of sale and transfer instrument lodged for registration at the Office of the Registrar of Land Titles requires prior lodgement at the Stamp Duties Office of the Internal Revenue Commission for assessment as to whether any stamp duty is payable by the purchaser on the conveyance. However the defendant, when questioned by Mr Mel during cross-examination at trial, said to the effect that he and Mr Felix never went to the Stamp Duties Office to lodge his Contract for Sale dated 2 February 2016 (the purported Contract) between himself and Sengus for assessment, even though the first main page of the photocopy of the purported Contract which is annexure “D” to the defendant’s affidavit bears an endorsed stamp duty mark. The defendant did not explain in cross-examination how the purported Contract came to be stamped at the Stamp Duties Office.
  3. Further evidence which was given by the defendant during his cross-examination by Mr Mel at trial on 18 March 2019 is recorded at pages 22 to 23 of the transcript of proceedings heard that day and is set out below:

MR MEL: So, you say that Sengus, the plaintiff, had offered to sell you the property [and that] you signed the contract in February 2016, is that right?

A: Yes.

Q: But then on 16 June 2016 that same company that offered to sell you the property commenced eviction proceedings against you, is that right?

A: Yes.

Q: Now, those are two totally different things, are they not? They are not consistent. On the one hand you are saying they offered to sell you the property, you signed the contract; on the other hand, they commenced eviction proceedings against you. Those are two opposite acts, are they not?

A: The letter of offer or contract of sale was done. After that, the eviction was – they give me an eviction because when the chairman or the manager, he was – he could be not aware that that property was sold to me. The property was sold to me early. And then he got a – he gave me a summons later after I got the title.

Q: Yes.

A: So the company management or whatever the people [were] inside there they transferred the title to me and the man himself like Ango Wangatau, the complainant, he could not be aware. I have never known that but until [later] when I [was] surprised that I got a summons for eviction.

Q: Okay, just a last question. You would not sell the property for K15,000, would you?

A: I cannot sell it for K15,000.

Q: You would not sell it for K15,000, is that right?

A: No, I cannot.

  1. Turning now to the evidence given at trial by Mr Wangatau in support of Sengus ‘s case, that evidence is in stark contrast to the inconsistencies, confusion and paucity of evidence adduced for the defendant at trial.
  2. Mr Wangatau’s first affidavit filed on 17 November 2016 sets out the circumstances which prompted Sengus to commence this present proceeding OS No. 784 of 2016. Those circumstances have already been outlined by me in the background section to this decision and I do not intend to repeat that history here. However, it is Mr Wangatau’s uncontested second affidavit filed on 23 April 2018 that contains the substance of the evidence for Sengus in this suit.
  3. On completion of the parties’ evidence at trial, it was submitted for Sengus by Mr Mel that the purported Contract for Sale dated 2 February 2016 which is photocopied as annexure “D” to the defendant’s affidavit and the purported Transfer Instrument registered no.S.73773 referred to on the last page of the photocopy of the defendant’s purported Official Owner’s Copy of State Lease which is annexure “E” to his affidavit, all of which documents are relied on by the defendant as evidence of his title, are forgeries.
  4. Mr Wangatau deposes in his second affidavit that Sengus never resolved to sell the property to the defendant at any time. Mr Wangatau challenges the authenticity of the purported Contract relied on by the defendant. He deposes at para. 9 of his second affidavit as follows:

“ 9. I question the genuineness of this contract because:

(i) the front page is numbered p. 11;

(ii) second page is number p.13;

(iii) p.11 is missing;

(iv) the font throughout the contract is inconsistent;

(v) the signature on [the] contract for plaintiff does not belong to Mr Leyagon or me and I do not recognise that signature;

(vi) the plaintiff’s company seal affixed on the contract is different from the original and correct one (which is affixed to p.12 of the Contract for Sale between National Broadcasting Commission and the plaintiff dated 28 April 2003, see annexure ‘E’ of Affidavit in support of Ango Wangatau filed 20 November 2016) in that the font, layout and size of letters is different;

(vii) purchase price of K15,000 is grossly undervalued and unrealistic;

(viii) plaintiff has always used Steeles Lawyers/Pato Lawyers and Mel and Hennry Lawyers in drafting its contracts for sale of land and does not prepare its own;

(ix) pages 3 – 8 are an exact replica of the corresponding pages of the Contract for Sale of Land prepared by Pato Lawyers for the initial purchase of the property from NBC; and

(x) the contract does not have the stamp of the Department of Lands & Physical Planning on it to indicate requisite statutory approval.”

  1. Mr Wangatau further deposes in his second affidavit to the effect that:
  2. Mr Wangatau confirms in his second affidavit that Mr Leyagon was never an employee of Sengus. Mr Wangatau concludes his affidavit by deposing at paras. 13 and 14:

“ 13. I can further confirm there was no authority or approval given, including by way of a resolution passed by plaintiff or through any other document or arrangement authorising Mr Leyagon to sell the property to anyone including defendant or to authorise Mr Leyagon to act on its behalf in negotiations and sale. As such, he had no authority whatsoever to act on plaintiff’s behalf including purporting to sell its property to defendant.

14. It is unfortunate that Mr Leyagon passed away in or about late July 1996. I firmly believe the defendant claimed Mr Leyagon’s involvement in sale of subject property to him in order to create confusions and make it impossible for Mr Leyagon himself to verify defendant’s claims.”


  1. After assessment of the evidence adduced at trial for each of the two parties, I make the following findings of fact:

(1) I find that the Contract for Sale dated 2 February 2016 relied on by the defendant as the source of his alleged title to the property was a fabrication because:

(a) the date of the purported Contract at Item 1 of the Schedule on page 9 was not handwritten, as would normally be expected to be the case for a negotiated contract for sale executed by the last of the parties to sign, but was instead given a pre-printed date of “02-02-2016”;

(b) the purchase price of K15,000 for the property given at Item 5 of the Schedule on page 10 of the purported Contract was an absurdly low value for a property at February 2016, particularly when the defendant admitted that the property had been purchased by Sengus from the NBC almost 13 years earlier in April 2003 for K150,000. The defendant conceded in cross-examination that he himself would never sell the property for K15,000, obviously because that was far too low and a totally unrealistic sale price for the property;

(c) I infer as a fact that the purchase price of K15,000 stated in item 1 of the Schedule in the defendant’s purported Contract was intentionally understated to minimise payment of any ad valorem stamp duty assessed as being payable on the purported Contract, assuming that the purported Contract was actually lodged at the Stamp Duties Office, which is in itself doubtful;

(d) as to stamp duty, the duty stamp for “K0000.00” which is endorsed on the upper right hand side of the first main page of the purported Contract is clearly a forgery because the serial number at the upper left of that endorsed duty stamp has been deliberately overwritten by pen in ink so as to disguise the under-printed serial number obviously taken from another document;

(e) furthermore, the printed text for recitals (a), (b) and (c) in the body of the first main page of the purported Contract has been intentionally indented from the right-hand side margin towards the centre of the page so as to allow for the imprint of the duty stamp to appear there first – with text then flowing around that duty stamp – whereas if that duty stamp were genuine it would have been affixed over the text for recitals (a), (b) and (c) and the text would have extended in the normal manner across the page to the right-hand side margin of the first main page of the purported Contract;

(e) evidence of the imprint of the common seal used by Sengus after its incorporation down to the time of trial is to be found on the last page of Sengus’s contract for its own purchase of the property from the NBC in 2003, a photocopy of which contract prepared by Pato Lawyers is annexure “E” to Mr Wangatau’s first affidavit.

(f) the imprint of the purported common seal of Sengus affixed on the last page of the defendant’s purported Contract is different from the common seal which Mr Wangatau deposed has never left his possession;

(g) I therefore find that some person purchased a fake common seal for Sengus in an endeavour to replicate Sengus’s common seal for the purpose of affixing that fake common seal to the defendant’s purported Contract.

(h) the fake common seal was intentionally imprinted over a signature of a person on the last page of the purported Contract in such a way as to partially disguise that signature;

(i) if, as the defendant infers in his evidence and in his pleadings, the signature under the common seal affixed on the last page of the purported Contract was the signature of the late Felix Leyagon, that part of the signature which is still visible to left-hand side of the common seal is very different to the signature of the late Felix Leyagon depicted on page 2 of the latter’s application dated 31 July 2002 for registration of Mr Leyagon’s company Lelufe Consultants Limited submitted to the Office of the Registrar of Companies on 11 July 2002, a copy of which application is Annexure “D” to Mr Wangatau’s second affidavit’

(j) that part of the signature which is still visible to the left-hand side of the common seal affixed on the last page of the purported Contract is clearly not the signature of Mr Wangatau, whose signature is markedly different and is clearly shown opposite the jurat on the last pages of his two affidavits;

(k) clause 5(e) of the purported Contract states: “This Agreement is subject to and conditional upon the approval of the Minister for Lands and Physical Planning under the provisions of Section 128(1) of the Land Act 1996 ... and unless and until such Approval is obtained shall have no force ... ”
– but there is no evidence anywhere in the defendant’s purported Contract, nor adduced for the defendant at trial, that this Contract ever obtained Ministerial approval under s. 128(1) of the Land Act 1996, proof of which Ministerial approval by way of a stamp signed by the Minister or his delegate on both a contract for sale and its corresponding transfer instrument is a procedural pre-requisite to registration by the Registrar of Titles of a transfer instrument against its relevant State Lease or other instrument of title.

(l) the defendant, by his own admission at para. 22 of his affidavit, had access to title documents for other properties owned by Sengus which the defendant says he retrieved for Sengus from the Office of the Registrar of Titles in 2009 and which I infer would have included copies of stamped and Ministerially-approved contracts for Sengus’s purchase of those other properties;

(m) the layout of the defendant’s purported Contract is the clumsy result of a “copy and paste” exercise using the Microsoft Word word-processing application, evidenced by use of different fonts; this is because the main first page and the last three pages of the Contract are in Times New Roman font whereas all other pages are in Arial font.

(n) further evidence of the use of the “copy and paste” tool in Microsoft Word when creating the purported Contract as a forged document is the fact that the printed page numbers in the footers of the pages of the purported Contract are out of sequence: for instance the footer for the cover sheet of the Contract states it is “Page 11”; the first main page for the Contract has a footer which states it is “Page 13” whereas it is page 1; and the last page has a footer that erroneously states it is “Page 12”, except that there are 11 pages to the main body of the Contract, not 12 pages.

(o) I accept Mr Wangatau’s evidence as a proven fact that pages 3 to 8 of the defendant’s purported Contract are an exact replication of the same pages copied from Sengus’s contract prepared by Pato Lawyers for Sengus’s purchase of the property from the NBC in 1993, meaning that the remaining pages of the defendant’s purported Contract were “copied and pasted” from some other contract for sale and then amalgamated with copies of pages taken from Sengus’s own contract for its purchase of the property back in 1993 so as to create the defendant’s purported Contract.

(p) the defendant agreed during cross-examination, and I find as a fact, that he had experience in lodgement of conveyancing documents at the Office of the Registrar of Titles.

  1. I find that the defendant’s purported Official Owners’ Copy of State Residence Lease Volume 95 Folio 119 which is evidenced by a photocopied version attached to the defendant’s affidavit as annexure “E” was also fabricated because:

(a) neither Deputy Registrar of Titles Mr Ala Ane nor Acting Secretary for the Department of Lands and Physical Planning Mr Oswald Tolapa were able to produce at trial, when summonsed to do so, any records whatsoever held by their respective Offices in respect of:

(i) the defendant’s purported Contract dated 2 February 2016; or

(ii) the defendant’s Instrument of Transfer purportedly registered against State Residence Lease Volume 95 Folio 119 as Transfer S.73773 on 28 April 2016; or

(iii) the issuance by the Office of the Registrar of Titles of the defendant’s purported Official Owner’s Copy of State Residence Lease Volume 95 Folio 119.

(b) the defendant failed to produce in evidence at trial:

(i) the original of his purported Official Owner’s Copy of State Residence Lease Volume 95 Folio 119; and

(ii) any copy of Transfer Instrument registered number S.73773, the original of which, if it existed, would have been held by the Office of the Registrar of Titles with a further copy held on the land administration file for the property kept by the Department of Lands and Physical Planning.

(c) given the defendant’s acknowledgement during cross-examination that he had experience in dealing with conveyancing matters at the Office of the Registrar of Titles, I find that the defendant colluded with a person or persons unknown at the Office of the Registrar of Titles to fabricate his purported Official Owners Copy of State Lease Volume 95 Folio 119 which bears an equally fabricated memorial of purported Transfer Instrument registered number S.73773.

  1. In addition to these findings, I observe that at trial no evidence was adduced and no submission was made for the defendant to challenge why both Deputy Registrar of Titles Mr Ane and Acting Secretary for the Department of Lands and Physical Planning Mr Tolapa could not explain how purported Transfer Instrument registered number S.73777 was said by the defendant to have been registered against State Residence Lease Volume 95 Folio 119. The defendant had no receipt or other documentation to prove that he had even lodged his purported Contract and purported Transfer Instrument dated 2 February 2016 for processing and registration at the Office of the Registrar of Titles.
  2. According to Deputy Registrar of Titles Mr Ane, the only records which are held by the Office of the Registrar of Titles for the property and for State Volume 95 Folio 119 relate to Sengus’s own acquisition of the property from the NBC in 2003 as proven by the production to the Court of the original of the Contract for Sale between Sengus and the NBC dated 28 April 2003 and that Contract’s corresponding transfer instrument bearing proof of Ministerial approval under ss. 128 and 129 of the Land Act 1996, photocopies of which documentation were admitted into evidence as Exhibit “A” after inspection by both counsel and without demur by counsel for the defendant.

CONCLUSION


  1. Based on the preceding findings I am satisfied on the evidence that actual fraud was committed by the defendant in his endeavours to obtain title to the property. I consider that a total of three documents relating to title were forged either by the defendant himself or by the defendant in collusion with others: namely his purported Contract, the purported Transfer Instrument said to have been registered as instrument S.73773 and the purported Official Owner’s Copy of State Lease Volume 95 Folio 119 held by the defendant which, except for the addition of the memorial of the forged Transfer Instrument, was a facsimile of Sengus’s own Official Owner’s Copy of the subject State Lease still held by Sengus.
  2. The evidence of actual fraud is compelling. It approaches the criminal standard of proof. I consider that actual fraud by the defendant has been amply proven by Sengus within the meaning of s.33(1)(a) of the Land Registration Act 1981. Therefore, no issue can now arise as to whether the conduct of the defendant was less than actual fraud but amounted to constructive fraud. The Court is satisfied that actual fraud has occurred in the circumstances of this case and that the defendant’s purported transfer of title to the property to him is ineffective in law and must not be allowed to stand.
  3. All of the purported title documentation on which the defendant has relied for the purpose of his assertion to title to the property is void and ineffective at law. Title to the property has never passed from Sengus to the defendant. As this was a case of actual fraud for the purposes of s.33(1)(a) of the Land Registration Act 1981, Sengus is accordingly entitled to the substantive relief it has sought in its statement of claim. The Court will therefore make judicial declarations and orders similar to those pursued by Sengus in this suit. Costs will follow the event.
  4. The defendant and all other occupiers of the property will be given one month to vacate and render up peaceable possession of the property to Sengus, in default of which serious consequences as outlined in the Court’s substantive order below will follow.
  5. If the defendant considered that he had a genuine claim against Mr Wangatau or against Sengus for alleged breach of promise to pay certain consultancy fees, the defendant should have filed a cross-claim in this proceeding or commenced separate court action against Mr Wangatau to test the validity or otherwise of that claim. However, whatever grievance the defendant may have held against Mr Wangatau or Sengus, that discontent could not conceivably ever have justified the actionable fraud on title to the property which the defendant by himself or in collusion with others has now been proven to have been so unlawfully perpetrated against Sengus.

ANCILLARY MATTER – CORRECTION OF CORPORATE NAME OF PLAINTIFF COMPANY


  1. There is one further matter that requires attention by the Court. It is noted that the company extract from the Office of the Registrar of Companies for Sengus which is annexure “A” to Mr Wangatau’s first affidavit filed on 17 November 2016 shows that the proper corporate name of the plaintiff is “Sengus Investments Ltd.” (sic), not “Sengus Investment Limited”, which is the name in which the company has been cited as plaintiff for the purpose of this proceeding. No issue regarding this minor discrepancy in the spelling of the name of the plaintiff company was raised by the defendant in this suit.
  2. The Court has wide powers of amendment of any document filed in civil proceedings. Order 8 Rule 50 of the National Court Rules relevantly provides:

50. Amendment

(1) The Court may, at any stage of any proceedings, on application by a party or of its own motion, order, on terms that any document in the proceedings be amended, ... in such manner as the Court thinks fit.

(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings.

(3) Where there has been a mistake in the name of a party, Sub-Rule (1) applies to the person intended to be made a party as if he were a party.

  1. Order 8 Rule 50 enables the Court to correct any errors in the name of a party provided no prejudice is caused to the other party. As the defendant did not raise any issue regarding the name of the plaintiff company cited in this proceeding, there can be no prejudice to the defendant if the proposed minor correction to the spelling of the plaintiff’s name were to be made, the purpose for which amendment would be to avoid multiplicity of proceedings and to prevent the incurring of totally unnecessary costs and waste of the Court’s limited time and resources if Sengus’s action had to be reheard.
  2. I note that Kulunga v International Education Agency of Papua New Guinea Ltd (2011) SC1106 (Gavara-Nanu, Cannings, Kariko, JJ) involved a case where constructive fraud in the grant of title had been alleged in the National Court. The then current registered proprietor of the title in dispute was not cited as a party to the proceeding. This was a ground in the appeal by the appellant who sought to have the National Court proceedings quashed. The Supreme Court dismissed this ground of appeal because it ruled that to terminate National Court proceedings simply on the ground that the respondent had sued the wrong party, which could have been cured by joinder of the current registered proprietor, would prejudice the respondent’s interest in the land and deny the respondent its right to have had its claim of fraud against the appellant tested in court.
  3. I consider that in the present case it is necessary to ensure that Sengus’s title to State Lease Volume 95 Folio 119 is protected against further challenge. I will therefore exercise the power of the Court on its own motion pursuant to Order 8 Rule 50(1) of the National Court Rules to order that the name of the plaintiff company where it appears in the originating summons and all other court process filed in this proceeding OS No. 784 of 2016 be amended to read “Sengus Investments Ltd.” and that the Registrar of Titles be ordered to correct the name of the registered proprietor in State Lease Volume 95 Folio 119 from “Sengus Investment Limited” to “Sengus Investments Ltd.”. I observe that the Registrar of Titles already has statutory power to make such a correction pursuant to s.161(1) of the Land Registration Act 1981.

ORDER


  1. The terms of the final Order of the Court are as follows:
    1. A declaration is made that Sengus Investments Ltd. is the lawful registered proprietor of all that property known as Allotment 6 Section 32, Boroko, National Capital District being all the land described in State Residence Lease Volume 95 Folio 119 containing an area of 2.2611 hectares together with all improvements constructed thereon.
    2. A declaration is made that the transfer of title to the property described in State Residence Lease Volume 95 Folio 119 purportedly conveyed to William Puio by Transfer Instrument no. S.73773 allegedly registered on 28 April 2016 is void for fraud within the meaning of Section 33(1)(a) of the Land Registration Act 1981.
    3. The Registrar of Titles shall forthwith upon service of this Order promptly do all things required to give effect to the preceding two declarations of this Court, including correction of the Register of State Leases in respect of State Residence Lease Volume 95 Folio 119 (the Title) as follows:

(a) cancellation of any record of registration of void Transfer Instrument S.73773 should any such record be found to exist;

(b) pursuant to Section 161(1) of the Land Registration Act 1981 and this Order correction of the name of the lawful registered proprietor of the Title from “Sengus Investment Limited” to “Sengus Investments Ltd.”.

4. The Registrar of Titles shall make the correction referred to in term 3(b) hereof on the original of the Owner’s Official Copy of the Title forthwith upon production by Sengus Investments Ltd. of that company’s Official Copy for that purpose and, upon that correction having been made, the Official Copy shall be promptly returned by the Registrar of Titles to Sengus Investments Ltd. or to its agent duly authorised in writing to receive back the Official Copy of the Title.

5. William Puio shall by himself or by his lawyer the Public Solicitor forthwith deliver up to the Registrar of Titles the original and any copy of William Puio’s void Owner’s Official Copy of the Title no later than 12 noon on Tuesday 1 November 2022 and provide proof of such delivery to Mel & Hennry Lawyers by 5.00 pm that same afternoon, in default of either or both of which events William Puio shall appear before this Court in person on Thursday 3 November 2022 at 9.30 am to show cause why he should not be dealt with for contempt of this Court.

6. William Puio and all of his family, relatives, associates, employees, agents and other invitees who presently occupy Allotment 6 Section 32, Boroko, National Capital District or any part thereof shall no later than 12 noon on Wednesday 30 November 2022 give up vacant peaceful possession of the said land and property to Sengus Investments Ltd. and they shall not within that period or at any other time damage or destroy any dwellings, buildings, structures or other improvements on the said land and property and shall not after 12 noon on Wednesday 30 November 2022 enter the said land and property or interfere in any way with the peaceful enjoyment of the said land and property by Sengus Investments Ltd.

  1. The Police are authorised from 12 noon on Wednesday 30 November 2022 onwards to take such steps as may reasonably be necessary to give effect to the preceding two declarations and terms of this Order.
  2. Pursuant to Order 8 Rule 50(1) of the National Court Rules, the name of the plaintiff company cited in all Court process filed in this proceeding is amended to “Sengus Investments Ltd.” in lieu of “Sengus Investment Limited”.
  3. William Puio shall pay Sengus Investments Ltd.’s costs of this proceeding on a party-party basis, such costs to be taxed if not agreed.
  4. The time for entry of this Order is abridged to the time of signing by the Court which shall take place forthwith.

Judgment accordingly.
__________________________________________________________________
Mel & Hennry: Lawyers for the Plaintiff
Public Solicitor: Lawyer for the Defendant


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