N10870

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 149 OF 2021 [IECMS]

BETWEEN:
CHINA RAILWAY CONSTRUCTION ENGINEERING GROUP (PNG) REAL ESTATE CO., LIMITED
Plaintiff

AND
ALA ANE IN HIS CAPACITY AS ACTING REGISTRAR OF TITLES-DEPARTMENT OF LANDS & PHYSICAL PLANNING
First Defendant

AND
JOHN ROSSO IN HIS CAPACITY AS MINISTER FOR LANDS AND PHYSICAL PLANNING
Second Defendant

AND
BENJAMIN SAMSON IN HIS CAPACITY AS SECRETARY-DEPARTMENT OF LANDS & PHYSICAL PLANNING
Third Defendant

AND
THE DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Fourth Defendant

AND
MACATA ENTERPRISES LIMITED
Fifth Defendant

Waigani: Dowa J
2024:  17th May and 28th June
PRACTICE AND PROCEDURE-application for variation of consent orders -circumstances where consent orders can be varied or set aside discussed –
MORTGAGES - Mortgagor's default - Claim to possession and ownership by mortgagee of registered mortgage - Statutory rights under Part VII of the Land Registration Act for Mortgagee’s power of sale discussed.
PRACTICE AND PROCEDURE-Application for enforcement of court orders-consent orders meant to be effective and binding on parties who have conscientiously entered -orders to give effect to finality in litigation in the public interest- application for enforcement orders granted.

Cases Cited:
PNG Ports Corporation Ltd v Canopus No. 71 Ltd [2010] PGNC 203; N4288
Simon Mali v the State (2002) SC690
Bank of Papua New Guinea -v- Muteng Basa [1992] PNGLR 271
Papua New Guinea Banking Corporation -v- Bara Amevo [1998] PNGLR 240
 Max Umbu -v- Steamships Limited (2004) N2738
 Bank of South Pacific Ltd -v- Dennis Pundia (2012) N4747 
 Samuel Aiye Nema -v- Rural Development Bank Ltd (2013) SC1243

Counsel:
B Sinen, for the Plaintiff
T Tai, for the Fifth Defendant

DECISION

28th June 2024

1.	DOWA J: This is a decision on two competing applications by the Plaintiff and the fifth Defendant. 

2.	The Plaintiff applies by Notice of Motion seeking orders for the enforcement of consent orders of 18th February 2022 entered between the Parties in this proceeding and the proceeding in WS 307 of 2021 -China Railway Construction Engineering Group (PNG) v Thomas Amaiu and Macata Enterprises Limited. 

3.	On the other hand, the fifth Defendant seeks orders for the extension or variation of the consent orders of 18th February 2022. I will deal with the applications together.

Consent Orders of 18th February 2022

4.	It is necessary to set out the full terms of the consent orders of 18th February 2022 for context and easy reference. The full terms of the consent orders are:

“1. The Fifth Defendant shall pay a sum of Ten Million Kina (K10,000,000.00) to the Plaintiff, China Railway Construction Engineering Group (PNG) Real Estate Co., Limited as full and final settlement of proceedings entitled WS No. 307 of 2021, China Railway Construction Engineering Group (PNG) Real Estate Co., Limited vs. Macata Enterprises Ltd & Ors and OS (JR) No. 149 of 2021, China Railway Construction Engineering Group (PNG) Real Estate Co., Limited vs. Macata Enterprises Ltd & Ors.
	
2.	The Settlement value in Term Number 1 shall be paid by a sum of One Million Kina (1, 000,000.00) in cleared funds as an advance payment to the China Railway Construction Engineering Group (PNG) Real Estate Co., Limited by 30 April 2022 by the Fifth Defendant and balance of the Nine Million Kina (K9, 000,000.00) shall be paid in eight (8) quarterly instalment of One Million One Hundred Twenty-Five Thousand Kina (K1,125,000.00), within a period of 24 months in accordance with the Countersigned Schedule of Repayments attached to this Order.
3.	The Secretary for Department of Lands & Physical Planning, Benjamin Samson in consultation with the Registrar of Titles, Ala Ane, shall issue registered State Leases in respect of land described as Allotments 1,2,3,4,5,6,7,8,9,10,11,12 and 13, Section 734, Hohola, NCD and Allotments 11 and 12, Section 351, Hohola, NCD in favour of Macata Enterprises Limited within 30 days from the date of the Order and shall inform the Plaintiff, the Fifth Defendant and their respective lawyers by written correspondence of the same.
4.	The Plaintiff in consultation with the Fifth Defendant shall discharge the Fifth Defendant’s existing mortgage within 14 days of this Orders in a duly completed Discharge of Mortgage Application in the relevant form in respect of Portion 1564 Milinch Granville, Fourmil Moresby, NCD contained in the State Lease Volume 23, Folio 89 which has been subdivided as per registered Survey Catalogue No. 49/3916. The Plaintiff and its lawyers shall serve the Discharge of Mortgage by hand and email on the Registrar of Titles.

5.	The Fifth Defendant shall execute and serve by email and by hand to the Plaintiff and its lawyers, within 7 days from receiving the titles to the land from the Registrar of Titles, a duly completed Mortgage Registration Application in the relevant form, in respect of land described as Allotments 3, 4, 5 and 6, Section 734, Hohola, NCD, in favour of China Railway Construction Engineering Group (PNG) Real Estate Co., Limited as security in consideration of its acceptance of the Fifth Defendant’s settlement proposal.

6.	The Registrar of Titles, Ala Ane, shall register the Mortgage Registration application that has been duly executed and endorsed by the Fifth Defendant as the Mortgagor and the Plaintiff as the Mortgage under Term 5 within 14 days of being served by the Plaintiff or its lawyers subject to the creation of Titles under Term 3 of this Orders. 

7.	On account of the Fifth Defendant’s failure to pay the advance payment of K1, 000,000.00 by 30 April 2022 or the agreed quarterly repayment of K1,125,000.00 in accordance with the Repayment Schedule agreed to under Term 2 of this Consent Order, the Plaintiff shall enforce the registered Mortgage as it considers appropriate in respect of the land or property described as Allotments 3, 4, 5 and 6, Section 734, Hohola, NCD. 

8.	The Stay Order and interim restraining Orders dated 23 November 2021 and extended thereafter is discharged forthwith.

9.	Parties shall bear their own costs of this proceeding and the related proceeding in WS 307 of 2020.

10.	Entry of Orders are abridged to take place upon Court signing them.”
(underlining mine)

5.	For completeness, the Schedule of Repayment referred to in Term Two of the Consent Order is set out below:

MACATA ENTERPRISE LIMITED REPAYMENT SCHEDULE
Description	Due Date	Amount	
Advance payment	30th April 2022	K1,000,000.00	
1st Quarterly payment	01 June 2022	K1,125,000.00	
2nd Quarterly payment	01 October 2022	K1,125,000.00	
3rd Quarterly payment	01 February 2023	K1,125,000.00	
4th Quarterly payment	01 June 2023	K1,125,000.00	
5th Quarterly payment	01 October 2023	K1,125,000.00	
6th Quarterly payment	01 February 2024	K1,125,000.00	
7th Quarterly payment	01 June 2024	K1,125,000.00	
8th Quarterly payment	01 October 2024	K1,125,000.00	
			
Total		K10,000,000.00	

6.	The Plaintiff alleges the Fifth Defendant has failed to comply with the Repayment Terms of the Consent Order, apart from a one-off payment of Three Hundred Thousand Kina (K300,000.00) in or around November 2022 and as at the date of this application the Fifth Defendant is behind the repayment schedule with arrears of K7,450,000.00.

7. 	The Plaintiff therefore seeks to enforce the Court orders as per Term Seven (7) of the Consent Orders. By Notice of Motion, the Plaintiff seeks the following orders:

1.	Pursuant to Order 16 Rule 13 (1), Order 14 Rule 33 (a), Order 14 Rule 34 (3) and 12 Rule 1 of the National Court Rules, the Plaintiff be vested with ownership over the vacant portions of land described as:
(1) 	Section 734 Allotment 3 Hohola, NCD, on State Lease Volume 102 Folio 149; 
(2) 	Section 734 Allotment 4 HOHOLA, NCD, on State Lease Volume 102 Folio 150; 
(3) 	Section 734 Allotment 5 HOHOLA, NCD, on State Lease Volume 102 Folio 151; and
(4) 	Section 734 Allotment 6 HOHOLA NCD, on State Lease Volume 102 Folio 152;

presently under mortgage registered to the Plaintiff, in accordance with Consent Orders of 18 February 2022 in this proceeding.
2.	Pursuant to Order 16 Rule 13 (1), Order 14 Rule 34 (3), Order 14 Rule 34 (5) and Order 12 Rule 1 of the National Court Rules, the Second Defendant or Third Defendant shall approve and execute the appropriate Ministerial Approval within 7 days upon being served with the duly stamped Instrument of Transfer of Land and other associated contract documents.
3.	Pursuant to Order 16 Rule 13 (1), Order 14 Rule 34 (3), Order 14 Rule 34 (5) and Order 12 Rule 1 of the National Court Rules, the First Defendant shall register and vest ownership in the Plaintiff of the following lands:

(1)	Section 734  Allotment 3 Hohola NCD, on State Lease Volume 102 Folio 149;
(2)	Section 734 Allotment 4 HOHOLA, NCD, on State Lease Volume 102 Folio 150;
(3)	Section 734 Allotment 5 HOHOLA, NCD, on State Lease Volume 102 Folio 151; and 
(4) 	Section 734 Allotment 6 HOHOLA NCD, on State Lease Volume 102 Folio 152
 within 7 days upon Ministerial Approval being granted by the Second or Third Defendant.

4.	The Fifth Defendant to pay the Plaintiffs costs of and incidental to this application on a solicitor client basis.

5.	Any other Orders this Court considers appropriate.”

8. 	The Notice of Motion is supported by the following Affidavit material:

a)	Affidavit of Lieng Chang sworn 13 December 2023 and filed 14 December 2023 
b)	Affidavit of Benard Sinen sworn and filed 6 March 2024.
c)	Affidavit of Benard Sinen sworn and filed 10 April 2024.
d)	Affidavit of Service of Benard Sinen sworn and filed 9 May 2024.
e)	Unsealed Affidavit of Benard Sinen sworn 17 May 2024.

Summary of the Plaintiff’s Evidence 
 
9.	This is the summary of the evidence as submitted by counsel for the Plaintiff with minor edits and modifications. The principal parties to the proceedings signed a Consent Order, which was endorsed by the Court, on 18 February 2022 agreeing to resolve this proceeding and the proceeding in WS 307 of 2021 China Railway Construction Engineering Group (PNG) v Thomas Amaiu and Macata Enterprises Limited as between the Plaintiff and the Fifth Defendant as principal parties.

10.	To secure the repayment of the Ten Million Kina (K10,000,000.00) the Fifth Defendant agreed to register the Plaintiff’s mortgage interest on the title deeds for four portions of land, Allotments 3, 4, 5 and 6, Section 734, Hohola, NCD, as security.

11.	Pursuant to the Consent Orders, the Fifth Defendant agreed to pay the Plaintiff K10,000,000.00 in accordance with the Repayment Schedule of the Consent Orders referred to in paragraph 5 above. After paying an initial sum of K 300,000.00, the fifth Defendant failed to comply with the repayment Schedule and by the end December 2023, the arrears stood at K 7,450,000.00.

12.	In preparation to enforce its Mortgagee Rights under the Land Registration Act and Term Seven (7) of the Consent Order, the Plaintiff procured a Valuation Report for the portions of subject land to determine the appropriate market value of the lands. CJ Valuers were engaged to value the subject portions of land and produced the following valuation report: 

(1)	Residential Lease for lands located at Section 734 Allotment 3-5 Hohola NCD, on State Lease Volume 102 Folios 149-151 collectively valued at K4,200,000; and
(2)	 Business Lease for land located at Section 734 Allotment 6, Hohola NCD, on State Lease Volume 102 Folio 152 valued at K3,840,000.00.

13.	The collective or total value of the four portions of land revealed by the Valuation Report was K8,040,000.

14.	On 14 June 2022, the Plaintiff’s lawyers served a Notice of Mortgage Default on the Fifth Defendant informing of its default with the terms of the consent Orders.

15.	On 9 May 2023, the Plaintiff’s Lawyers served a final demand letter on the Fifth Defendant’s lawyers demanding compliance with Repayment Schedule of the Consent Orders.

16.	On 19 September 2023, the Plaintiff caused a Mortgagee Sale Notice to be published in the Post Courier inviting suitable Tender Offers for the 4 portions of land mortgaged to the Plaintiff. The tenders closed on 6th October 2023. By close of business 6 October 2023, the Plaintiff’s authorized representatives contacted its agent, the Plaintiff’s Lawyers and made an offer to accept the transfer of the 4 portions of land valued at K8,040,000 in accordance with the Valuation Reports from CJ Valuers dated 21 June 2022.

17.	On 4 December 2023, the Plaintiff’s Lawyers wrote to the Fifth Defendants and its Lawyers, by email and by post enclosing a letter of same date, proposing to accept the transfer of the 4 portions of land valued at the consideration of Seven Million Seven Hundred and Forty Thousand Kina (K7,740,000.00) as complete settlement of the K10,000,000.00 agreed under the Consent Orders.

18.	The fifth Defendant and its lawyers did not respond, resulting in the current enforcement proceedings. 

19.	The matter came before the Court on 20 December 2023 for hearing of the Plaintiff’s Notice of Motion filed 14 December 2023 at which time it was adjourned by consent to 10 January 2024 to progress the matter in the following manner:

1.	The matter be adjourned for 3 weeks to allow for parties to nominate a separate independent valuer to review and provide its views on the correctness of the Valuation Report Prepared by CJ Valuers 

2.	Based on the Report by the nominated Valuer, the Fifth Defendant would execute all necessary documents to transfer the land to settle the judgment debt under the consent orders.

20.	By mutual agreement, LJ Hooker was appointed as independent valuer to review the CJ Valuers Valuation Report. The Plaintiff says by oversight and inadvertence, LJ Hooker prepared a completely new Valuation Report for the land instead of the review and letter of opinion as requested in the letter of instruction. LJ Hookers subsequently prepared an opinion by letter dated 16 February 2024 reconfirming the correctness of the Valuation Report of CJ Valuers dated 21 June 2022.

21.	On 26 March 2024, Representatives of the Plaintiff and the Fifth Defendant together with their lawyers met in conference to discuss settlement possibility. Based on the meeting, the Fifth Defendant proposed a Buy Back option where:

1.	They would agree to transfer the 4 portions of land to the Plaintiff at the nominal price of K10,000,000 to settle the judgment debt; and

2.	In return they would reserve the first right of refusal to buy back the land at nominal value of K10,000,000.00

22.	The matter was adjourned once more when the matter returned on 27 March 2024 and the parties were directed to finalize settlement discussions and return with consent orders resolving the application. On 8th April 2024, the Plaintiff’s lawyers emailed to the Bristle Lawyers a copy of a draft Consent Order and a Memorandum of Understanding covering the Fifth Defendant’s proposed Buy Back Option. Bristle Lawyers responded by email declining the consent to the signed Memorandum of Understanding and the draft Consent Orders.

23.	As the parties could not reach agreement as per directions of his Honour, Kandakasi DCJ, the parties have now submitted to the Court for the determination of the issues raised in the application.

The Fifth Defendant’s Notice of Motion

24.	In response to the Plaintiff’s application, the fifth Defendant filed two Motions: the first Notice of Motion was filed on 21st December 2023. It relates to an application for an extension of time to pay the K 10,000,000.00 and for a fresh valuation of the subject properties. The motion was not formally moved, it seems the events have overtaken the utility of the reliefs sought in that Motion in that:  firstly, a new and fresh valuation of the property was done by LJ Hooker jointly appointed by the parties as per the directional orders issued by his Honour, Kandakasi DCJ, on 20th December 2023.; secondly the application was filed five months ago, and the relief for the extension of time to comply with the consent orders is now subsumed in the identical relief sought in the second Notice of Motion   

25.	In the second Notice of Motion filed 8th April 2024, the fifth Defendant seeks the following orders:

1.	Pursuant to section 155(4) of the Constitution, term 7 of the consent order of 18th February 2022 be varied to read as “on account of the fifth defendant’s failure to pay the sum of K10,000,000.00 by 01st October 2024, which is the due date for the last installment payment given in the repayment schedule agreed to under term 2 of this consent order; the Plaintiff shall enforce the registered mortgage as it considers appropriate in respect of the land or property described as allotments 3, 4, 5 and 6 Section 734, Hohola, NCD”.
	
26. 	The fifth Defendant relies on the following affidavits in support of the Notice of Motion:

1)	Affidavit of Thomas Amaiu sworn and filed 19th December 2023.
2)	Affidavit of Thomas Amaiu sworn and filed 8th April 2024.
3)	Supplementary Affidavit of Thomas Amaiu sworn and filed 9th May 2024.
	4) Affidavit of Tai Yai sworn and filed 29th April 2024.
		
27.	The summary of their evidence is that the fifth Defendant was unable to sell off certain portions of land to secure funds to pay off the Plaintiff’s agreed sum as per the repayment schedule. The fifth Defendant has recently entered into agreements with two potential buyers which they hope to sell certain portions of land to pay the agreed debt. The fifth Defendant indicated the earlier that the legitimate valuation report should be the one done by LJ Hookers on 2nd June 2024 for the correct value of the properties. More recently the fifth Defendant argued that the value of the properties has appreciated since the last valuation done on the properties suggesting that the market value of the mortgaged lands may be more than the agreed sum for settlement. Finally, the fifth Defendant says, the last date for the repayment is scheduled for 1st October 2024 and therefore it seeks the Court to vary or extend the time for the repayment to that date, 1st October 2024.

The Issues

28.	The main issues for consideration are:

a. 	Whether the Court grants the fifth Defendant’s request for variation of term seven (7) of the Consent Order of 18th February 2022.
b. 	Whether the Court grants the enforcement orders sought in the Plaintiff’s Notice of Motion.

Consideration of the Issues

29.	Before considering the main issues I need to deal with a preliminary issue raised by the counsel for the fifth Defendant. Counsel for the fifth Defendant submits that the Plaintiff’s Notice of Motion filed 14th December 2014 is incompetent as it did not properly invoke the jurisdiction of the Court. The Plaintiff sought enforcement of the Consent Orders seeking transfer and registration of the four properties. The application is made pursuant to Order 16 Rule 13 (1), Order 14 Rule 33(a) and Order 12 Rule 1 of the National Court Rules.	 In my view Order 14 Rule 33 (a) and Order 12 Rule 1 of the National Court Rules is sufficiently cited to invoke the jurisdiction of the Court and thus the fifth Defendant’s argument is rejected.

Main issues- The Fifth Defendants Notice of Motion

30.	I will deal with the fifth Defendant’s Notice of Motion first. If it is successful, it will not be necessary to rule on the Plaintiffs Notice of Motion.

31. 	Turning to the fifth Defendant’s application, the facts relied on by the parties are common. The parties signed a consent order on 18th February 2022. The terms of the orders are clear. Briefly, an agreement for payment akin to a judgement was entered in favour of the Plaintiff for K 10,000,000.00 against the fifth Defendant. The fifth Defendant is to settle the judgment debt by quarterly installments of K 1,125,000.00 and the last of such repayment is to be made on 1st October 2024. To secure the Plaintiff’s interest, the fifth Defendant mortgaged certain portions of land specifically described in the consent order which were registered with the Register of Titles.  In the event of the failure by the fifth Defendant to repay the debt as scheduled, the Plaintiff shall enforce the terms of the registered Mortgage.
 
32.	The fifth Defendants main contention is that it has had some difficulties in raising funds to pay and it be given some more time to pay. The fifth Defendant says it has entered into some agreements with potential buyers of some portions of land and as such be given time to complete those transactions to raise the necessary amount to settle the debt. After all, it argues, that the last installment payment is scheduled for 1st October 2024, by which time, the fifth Defendant is hopeful of raising sufficient funds to settle the agreed sum in full. The fifth Defendant also submits that the value of the subject properties has appreciated over the last couple of years for prime lands, and it is unjust for the transfer of the properties under Mortgage which are valued more than K 10,000,000.00.

33. 	I have considered the submissions of the fifth Defendant and here is my ruling on the application. 

34.	The circumstances where a consent order can be varied or set aside is discussed by the Supreme Court in Simon Mali v the State (2002) SC690. Such circumstances include mistakes, fraud, irregularities, lack of authority just to name a few, considering the need for the finality of litigation in the public interest. In the Simon Mali case, the Court relevantly stated this on finality of orders:
“The general rule is that a perfected judgment cannot be recalled or varied, for the public interest requires that the judgment when it is entered should conclude the litigation: in public interest reipublicae ut sit finis litium . . . Until the final judgment is entered, the court retains a power to reconsider the matter, but when entered, the jurisdiction to reconsider is gone . . . Where the litigant has the right to set aside the judgment on the ground of fraud, however, the fraud must be alleged in a fresh action brought to try the issue (Flower v. Lloyd (11); Jonesco v. Beard (12)). Similarly, where the judgment is entered by consent and a party alleges that the agreement pursuant to which the order was entered is void or voidable (Harvey v. Phillips (13); Hudderfield Banking Co Ltd v. Henry Lister & Sons Ltd (14)) the issue must ordinarily be litigated in a fresh action (Wilding v. Sanderson (15); Rayner v. Rayner (16)).”

35.	The failure to secure the funds to comply with the consent orders is not a good reason for the variation of the consent orders. The orders were entered by consent of the parties after various settlement negotiations. It is endorsed by the Court and has become the final order in the two proceedings that was before the Court. It is final and meant to take immediate effect on entry of the judgment. The variation can only be done on existence of circumstances highlighted in the Simon Mali case or with the consent of the parties on approval by the Court. In the present case, the Plaintiff has not consented to the request for variation, and on the contrary, the Plaintiff is seeking enforcement of the orders in its application. The Court notes there is no justifiable reason for the variation of the orders. The contention by the fifth Defendant that the variation is in order as the date fixed for the last payment has not lapsed is misconstrued. Term 7 of the Consent Orders is clear that if the fifth Defendant defaults or fails to keep up with the repayment schedule, the Plaintiff shall enforce the terms of the consent order including the rights created under the registered mortgages. 

36.	The Court notes the fifth Defendant’s argument that the value of the subject properties has increased and would have exceeded the amount ordered in the consent orders and for that reason time be given for the fifth Defendant to secure the funds to pay the Plaintiff to redeem the properties. However, in my view, any increase in the value of the portions of land, the subject of the proceedings that are earmarked for transfer under the Mortgage agreements, is not a relevant consideration for the variation of the consent Order.
 
37.	The consent orders were signed or executed by the parties personally through their authorized representatives after settlement negotiations and much thought. They are clearly expressed and meant to be given legal effect. They were endorsed by his Honour, Kandakasi DCJ. The orders are final and binding on the parties. The parties, especially the Plaintiff, rely on these orders and seek to enforce the orders. They cannot be varied or even extended for compliance without any reasons, let alone a good reason. For the foregoing reasons, the fifth Defendant’s application for variation of the orders is refused.

The Plaintiffs Notice of Motion

38. 	I now turn to the Plaintiff’s Notice of Motion. Without repeating the terms of the Notice of Motion, suffice to state that the Plaintiff is seeking enforcement action under the terms of the Consent Orders. There is no dispute that the fifth Defendant defaulted in its repayment schedule under Term Two (2) of the Consent Orders entitling the Plaintiff to seek enforcement as per Term 7 of the Consent Orders. 

39. 	The Plaintiff was required to make 8 installment payments of K 1,125,000.00 per quarter, the last payment scheduled for 1st October 2024. After making an initial payment of K 300,000.00, the fifth Defendant defaulted. By December 2023, the arrears stood at K 7,450,000.00.

40.	The Plaintiff is now seeking an order for the vesting of ownership and transfer of titles over the properties, Allotments 3, 4, 5, and 6, Section 734, Hohola, NCD presently mortgaged to the Plaintiff. The Plaintiffs application is to enforce its rights and interests under the terms of the Consent Orders and secured by the registered Mortgages.

The Law

41.	It is important to note that the Plaintiff is furthering its interest secured by the registered Mortgages pursuant to Part VII (Sections 61 to 81) of the Land Registration Act. This is necessary because a registered Mortgage is only an interest created under Sections 62 and 63 of the Land Registration Act to secure repayment of a debt and nothing more. Under Section 64 of the Act, a Mortgage creates an obligation on the debtor/mortgagor to keep up with his repayments. Where a Mortgagor defaults, the Mortgagee/creditor shall issue a demand letter for payment under Section 67 of the Act and where the debtor/Mortgagor continues to default the creditor/Mortgagee is entitled to sell the Mortgaged land to recover the debt pursuant to Section 68 of the Act. Section 74 of the Act provides for the entry and possession of the mortgaged property by the Mortgagee/Creditor.

42.	The law on a Mortgagee’s right to take possession and sell mortgaged property is settled in this jurisdiction. Refer: Bank of Papua New Guinea -v- Muteng Basa [1992] PNGLR 271, Papua New Guinea Banking Corporation -v- Bara Amevo [1998] PNGLR, Max Umbu -v- Steamships Limited (2004) N2738, Bank of South Pacific Ltd -v- Dennis Pundia (2012) N4747 and Samuel Aiye Nema -v- Rural Development Bank Ltd (2013) SC 1243.

43.	In Muteng Basa’s case (supra), the Defendant was an employee of the Plaintiff Bank.  He obtained a staff housing loan at a concessional interest rate from the Bank.  Justice Brown (as he then was) held that:

“The mortgagor’s impecunious state does not preclude the mortgagee bank from exercising rights to possession found in the mortgage document and supported by the Land Registration Act Ch 191.”

44.	In Barra Amevo’s case (supra), Justice Sevua (as he was then) held that:

“[b]y law, and under the terms of the mortgage, the plaintiff, as the mortgagee, has the right to foreclosure because, the First Defendant, as the mortgagor, had defaulted in his obligations.  Sections 68 and 74 of the Land Registration Act, Ch191 confers a statutory right or power to the Plaintiff mortgagee to sell the property or take possession.”

45.	Similarly, in Max Umbu’s case (supra), Justice Salika (as he then was) held that:

“[t]he right to foreclose is also conferred by Section 74 of the Land Registration Act.  In circumstances where the Plaintiff defaulted on making the repayments the Defendant was at liberty to exercise its right under the mortgage and under the Land Registration Act to see the property and have vacant possession of the property.”

46. 	In the present case, the Mortgagor/fifth Defendant defaulted on the installment payments entitling the Mortgagee/Plaintiff to exercise the Mortgagee’s power of sale. The preconditions for the exercise of a Mortgagee’s Power of Sale under Sections 67, 68, 72 and 74 of the Land Registration Act has been complied with by:

(1)	Issuance of a Notice of Default dated 14 June 2022.
(2)	Appropriate Valuation of the Mortgaged Lands was obtained on 21 June 2022 and subsequently on 2 January 2024.
(3)	A Final Letter of Demand 9 May 2023.
(4)	Publication of a Mortgage Sale dated 19 September 2023.	

47.	The evidence shows the later valuation done by LJ Hooker on 2nd January 2024 was done at the request of both parties to the proceedings at the direction of his Honour, Kandakasi, DCJ. 

48.	The Court notes that apart from the steps taken by the Plaintiff to exercise its Power of Sale, the Plaintiff has also taken all reasonable steps to resolve this amicably by:

(1)	Giving the Fifth Defendant an opportunity to buy back the land at a nominal value in accordance with a Memorandum of Understanding.
(2)	Proposing to bear its own legal costs in this proceeding and the proceeding in WS 307 of 2021 for the enforcement of its rights under the Consent Orders of 18 February 2022.
(3)	Agreeing to bear the costs of the valuation report of 2 January 2024 and to bear a nominal share of the payment of the Stamp Duty for the transfer of the land.

49.	The evidence shows the fifth Defendant expressly refused to settle the matter under the terms proposed by the Plaintiff.

Conclusion

50.	In conclusion I am satisfied that the Plaintiff has established a case for the enforcement of the Consent Orders issued on 18th February 2022. The consent orders were reached after settlement negotiations. The orders were consciously and conscientiously signed by the parties themselves through their authorized officers. The terms are clear and binding and intended for the parties to rely on. There is no dispute that the fifth Defendant defaulted on the terms of the consent orders, entitling the Plaintiff to seek enforcement as per the terms of the orders and is therefore entitled to enforce the orders. The Court is inclined to grant the orders sought by the Plaintiff.

What orders should the Court make

51.	The Court notes the Plaintiff’s submission that apart from the reliefs sought in the Notice of Motion, the Court is invited to exercise its powers under Order 14 Rules 33 (1) and Order 14 Rule 34 (3) of the National Court Rules for the following orders:

(1)	The Plaintiff be permitted to execute the necessary documents for the transfer of the 4 portions of land at the nominal value or reserve price K10,000,000 in complete settlement of the judgment debt;

(2)	The Plaintiff be permitted to recover from the K300,000.00-part payment made by the Fifth Defendant, the reasonable expenses incurred and yet to be incurred for the exercise of the Powers of Sale including:

(i)	Payment of Valuation Reports prepared by LJ Hooker at K9,350.00.
(ii)	Payment for publication of Mortgage Sale Notice.
(iii)	Payment of Impressed Stamping at the Office of Stamp Duty at K500,000.00 as 5% of the transfer consideration of K10,000,000.00.
(iv)	Payment of Land Rentals at Department of Lands & Physical Planning at K89,025.00; and
(v)	Payment of Land Tax and Garbage at National Capital District Commission at K26,334.00.  

52.	The Court is inclined to grant the orders sought in the Notice of Motion. In respect of the other reliefs sought, the Court is also inclined to grant an order that the Plaintiff be permitted to execute necessary documents for the transfer of the four (4) portions of land at the nominal value of K 10,000,000.00 in complete settlement of the debt. This is compatible and consistent with the consent orders. It is also within the range of the market value assessed in the valuation reports, though not a determining factor.  More importantly a nominal value is necessary for the purposes of ascertaining or calculating the stamp duty chargeable on the transfers. The orders are therefore necessary to give effect to the enforcement orders envisaged by the consent orders.

53.  	In respect of the other monetary claims, they were not sufficiently argued at the time of hearing the applications, and I am reluctant to grant the additional claims for the expenses excepting those expenses ordinarily incurred for pursuing these applications which can be claimed as part of costs which shall again be subject to taxation.

COSTS

54.	The Plaintiff submits that the Fifth Defendant should bear the Plaintiff’s costs in this proceeding and the proceeding in WS 307 of 2021  (CC2) (IECMS) China Railway Construction Engineering Group (PNG) Real Estate Co, Limited v Thomas Amaiu & Macata Enterprises Limited on solicitor client basis given the hardship, inconvenience and the legal fees it has had to incur in this proceeding and in WS 307 of 2021 because of the actions of the Fifth Defendant in:

(1)	Non-compliance with Consent Orders and forcing the Plaintiff to incur legal fees to initiate enforcement proceedings. 
(2)	Seeking to set aside and vary a consent order without proper grounds in support causing the Plaintiff to incur unnecessary legal fees to respond to.
(3)	Refusing to consider the reasonable offers and concessions made by Plaintiff:

55.	The Plaintiff is also asking costs on solicitor/client basis for the same in accordance with the view held by the court in PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) PGNC 203; N4288.

56.	In my view, the issue of cost was not properly argued before the Court, especially regarding the payment of the costs of the two proceedings prior to the consent orders. The consent orders are clear. Parties are to bear their own costs and to order otherwise will be a variation or reversal of the order which I am not prepared to do. 

57.	As for the costs of the various applications before the Court, the Court will order that the fifth Defendant shall pay the same on solicitor/client basis. This is because firstly, the fifth Defendant failed to comply with the consent orders and secondly for making unmeritorious applications and thirdly for failing to meaningfully settle this matter as per directions of Court given by his Honour, Kandakasi DCJ despite attempts made by the Plaintiff for settlement.

Orders
58.      The Court orders that:
1.	The Plaintiff is vested with ownership over the vacant portions of land described as:
(1) 	Section 734 Allotment 3 Hohola, NCD, on State Lease Volume 102 Folio 149; 
(2) 	Section 734 Allotment 4 HOHOLA, NCD, on State Lease Volume 102 Folio 150; 
(3) 	Section 734 Allotment 5 HOHOLA, NCD, on State Lease Volume 102 Folio 151; and
(4) 	Section 734 Allotment 6 HOHOLA NCD, on State Lease Volume 102 Folio 152;

presently under mortgage registered to the Plaintiff, in accordance with Consent Orders of 18 February 2022 in this proceeding.
2.	The Second Defendant and/or the Third Defendant shall approve and execute the appropriate Ministerial Approval within 7 days upon being served with the duly stamped Instrument of Transfer of Land and other associated contract documents.
3.	The First Defendant shall register and vest ownership in the Plaintiff of the following lands:

(1)	Section 734  Allotment 3 Hohola NCD, on State Lease Volume 102 Folio 149;
(2)	Section 734 Allotment 4 HOHOLA, NCD, on State Lease Volume 102 Folio 150;
(3)	Section 734 Allotment 5 HOHOLA, NCD, on State Lease Volume 102 Folio 151; and 
(4)	Section 734 Allotment 6 HOHOLA NCD, on State Lease Volume 102 Folio 152 

within 7 days upon Ministerial Approval being granted by the Second or Third Defendant.

4.	The Plaintiff is permitted to execute the necessary documents for the transfer of the four (4) portions of land at the nominal value or reserve price K10,000,000.00 in complete settlement of the judgment debt.

5.	The Fifth Defendant to pay the Plaintiffs costs of and incidental to this application on a solicitor/client basis.

6.	Time be abridged.

Leahy Lewin lowing Sullivan Lawyers:      Lawyers for the Plaintiff
Bristle Lawyers:    Lawyers for the Fifth Defendant