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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
WS 1360 OF 2018
BETWEEN:
HENRY ROO RAU
Plaintiff
AND:
PETER HARRIS
Former Resident Mine Manager
First Defendant
AND:
DES FANNING
Former Community Relations Superintendent
Second Defendant
AND:
BARRICK (NIUGINI) LIMITED
Third Defendant
WABAG: KANGWIA J
27 JANUARY & 6 JUNE 2025
CIVIL JURISDICTION – Breach of lease agreement – lease agreement for 25 years at K10,000 per month - legal requirements not satisfied – whether lease agreement enforceable.
Cases cited
Jonathan Mangope Paraia v The State (1995) N1343
PNGBC v Tole (2012) SC694
Mary Kai Yanopa & Ors v Doughty Limited & Ors (2016) N6333
Hiwi v Rimua & Ors (2015) SC1460
Putput Logging Pty Ltd v Philip Ambalis [1992] PNGLR 159
Spirit Haus Ltd v Robert Marshall (2004) N2630
Counsel
Henry Roo Rau, Plaintiff in person
No appearance for the second and third defendants
J. Munnull for the third defendant
1. KANGWIA J: The Plaintiff claimed K3 million from the Defendants as outstanding rental arrears under a lease agreement signed on 10 January 1993 over demised property described as Section 9 Allotment 2 contained in State lease Volume 15 Folio 15 situated at Laiagam in the Enga Province.
2. The facts according to the statement of claim and the various affidavits of the Plaintiff show that the Plaintiff was employed as Community Relations Officer for Placer (PNG) Ltd the predecessor company of the Third Defendant. Through an oral agreement with the Second Defendant the Plaintiff entered and signed a lease agreement with the First and Second Defendants on 10 January 1993 for the named property at a rate of K10,000 per month for 25 years. It is alleged that the demised property was to be used by the lessee as Tenants Community Relations Office base and storage shed.
3. When the rent fell due in 1993 the Plaintiff sent invoices for payment, but the rent for 1993 was never paid. When the Rent for 1994 was invoiced a payment of K578 was made as bond fee and undertakings were given for the payment of the outstanding amount. Then upon further demand in 1998 a payment of K10,000 was made to the Plaintiff. Thereafter no payments were made. When no payments were forthcoming, the Plaintiff gave notice through a warning letter to shut down the property.
4. Having received no reply to the warning letter, the Plaintiff on 24 September 1998 terminated the lease and shut down the property. Proceedings were instituted on 26 October 2018 some 20 years after the day the lease was terminated.
5. The First and Second Defendants made no appearance to defend the action. The Third Defendant denies ever entering into a lease agreement with the Plaintiff in January 1993 for 25 years at K10,000 per month and relies on the affidavits of Lanyata Lelata filed 14 February 2020, affidavit of Hoko Stephen filed 5 January 2020 and affidavit of George Koi filed 11 December 2024 to submit that the proceeding should be dismissed on the grounds that:
6. The issue therefrom is whether the agreement is enforceable under the given circumstances.
7. It is a general principle of law that the onus rests on the Plaintiff to prove the loss suffered. (See Jonathan Mangope Paraia v The State (1995) N1343). It is not good enough to say this is what I lost so you give it to me.
8. It is also a settled principle of law that where parties have reduced their agreement into writing, the document should be allowed to speak for itself to the exclusion of any extrinsic evidence to add to, subtract from, or in any manner vary or contradict or qualify the agreement. (See Curtain Brothers (QLD) Pty Ltd & Kinhill Kramer Pty Ltd v The Independent State of Papua New Guinea [1993] PNGLR 285; Odata Ltd v. Ambusa Copra Oil Mill Ltd (2001) N2106).
9. The law to be applied in a breach of contract claim as in the present case is that the pleadings must disclose a cause of action, and the Plaintiff must prove it with credible evidence as to the terms of the contract. (See PNGBC v Tole (2012) SC 694).
10. In the present case the pleadings in the statement of claim appears inherently suspicious and legally flawed.
11. However, as the claim is founded on a breach of contract the grounds relied on by the Third Defendant shall be the basis of any determination the Court makes.
Statute barred
12. Under this ground Mr. Munull for the Third Defendant while relying on the case of Hiwi v Rimua & Ors (2015) SC1460 submits that under s 16 of the Frauds and Limitations Act an action founded on contract cannot be brought after six years, yet the Plaintiff commenced proceedings 14 years after the term of 6 years lapsed and is statute barred and the entire proceeding should be dismissed.
13. In the cited case the Plaintiff claimed K74.5 million as damages for breach of contract. The National Court dismissed the claim as statute barred for filing the proceedings after 20 years pursuant to s 16 of the Frauds and Limitations Act. The Plaintiff appealed against the dismissal to the Supreme Court. The Supreme Court while dismissing the appeal held that the type of contract upon which the appellants action was founded on was simple contract and not a speciality hence statute barred by 20 years.
14. The Plaintiff in this proceeding argues the contrary and states that there was no delay. He took steps to seek payment of the outstanding by sending letters. The respondents’ responses and the two payments already made, brought the proceeding to be within time.
15. It is not disputed that the lease agreement was entered into between Placer Dome (PNG) Pty Limited (Placer) and Henry Roo Rau on 10 January 1993. It was signed by Peter Harris as Resident Mine Manager and witnessed by Des F. Fanning for Placer while the Plaintiff also signed and was witnessed by Annas Komen. It is therefore a simple contract. It appears the Plaintiff terminated the lease agreement on 03rd September 1998 for non-payment of rent after giving one month notice as stipulated in the agreement. The termination date appears from a letter dated 03 August 1998 sent by the Plaintiff giving one month notice to shut down the premises.
16. After the one month given from 03 August 1998 the termination would have become effective on 03 September 1998.
17. Therefore, the Plaintiffs cause of action accrued on 03rd September 1998 being the date of termination and lapsed on 03rd September 2004 being the six years’ time limitation prescribed under s 16 of the Frauds and Limitations Act.
18. The Plaintiff commenced this proceeding on 26 October 2018 which is 14 years after the cause of action accrued. The proceeding is by operation of law statute barred pursuant to s 16 of the Frauds and Limitations Act.
19. The only explanation given by the Plaintiff is that there was no delay because 2 payments were made, and assurances were given by the Defendants to pay.
20. If the Court was inclined to accept the Plaintiffs explanation it would still not come to his aid. From material before the Court K578 was paid on 22 June 1994 while K10,000 was paid on 23 September 1998. The proceeding was not instituted within six years after these payments were made, and the proceeding is still statute barred.
21. If the Court was also inclined to treat the assurances given by the Defendants as a basis to deem the proceedings to be within the time limits, then the most recent assurance appears to be the one given by Jack Scott on 23 September 1998. That letter also does not come to the aid of the Plaintiff with respect to the six years’ time limitation.
22. The Plaintiffs assertion that the termination letter dated 17 August 2013 from Lipu Yungukali the Regional Co-ordinator made the proceeding to fall within time is flawed when the letter states that the Plaintiff terminated the contract with Placer (PNG) Ltd in 1998 and not Barrick (Niugini) Ltd as current Manager. Therefore, the cause of action accrued when the Plaintiff terminated the agreement according to the lease agreement and not when Lipu Yungukali sent him the last letter.
23. There is also no evidence of any payment made after the termination to bring forward the date the cause of action accrued. Under the circumstances the proceeding is statute barred pursuant to s 16 of the Frauds ad Limitations Act.
Registered proprietor
24. From evidence provided by the Third Defendant it appears that the lease agreement was legally flawed when the Plaintiff was not the registered proprietor of section 9 allotment 2 Laiagam. According to the latest record kept at the Registrar of Titles attached to the affidavit of Hoko Stephen the business State lease dated 14 July 2009 has Lau Itau as the registered proprietor. According to a letter from the Deputy Registrar of the Office of the Registrar of Titles addressed to Jonn Munnull Lawyers, it states that the Registered proprietor of State lease Volume 15 Folio 153 Allotment 2 Section 9 Laiagam is Lau Ita and the second purported lease under Henry Roo Lau is a fake Title.
25. The Plaintiffs explanation that Lau Ita the registered proprietor was his father who had since died, and he was entitled to sue is not supported by any evidence or record from Public Curator as administrator of the deceased estate or any record kept by the Registrar of Titles and his argument that he is the proprietor of the State lease has no substance.
Proper parties
26. The proceeding is also legally flawed when the Third Defendant is a stranger to the lease agreement. Pleadings raise causes of actions and defences only between correct parties. To maintain a cause of action the proper parties to the proceeding must be named. In proceedings where vicarious liability is claimed the onus is on the Plaintiff to establish the nexus between the First and Second Defendants to the Third Defendant for the 3rd Defendant to be vicariously liable. (See Mary Kai Yanopa & Ors v Doughty Limited & Ors (2016) N6333).
27. The Plaintiff has not established on the balance of probabilities that the First and Second Defendants had ostensible authority to sign a lease agreement under which the Third Defendant who is not a party to the lease agreement can be liable. The Plaintiff has also failed to establish on the balance of probabilities the nexus or circumstances under which the Third Defendant can be held liable for the breach of the contract entered into with the predecessor company. The only assertion by the Plaintiff seems to be that the Third Defendant is sued as the successor to the lessee company. That assertion must be supported by evidence for the claim to succeed. No evidence to that effect has been offered by the Plaintiff. Under the circumstances, the claim is unenforceable against the Third Defendant.
Stamp Duties
28. The most important factor rendering the lease agreement unenforceable, is that the Plaintiff is relying on a lease agreement to claim rental arrears when the lease agreement has not satisfied the requirements under the Stamp Duties Act.
29. First, there is no evidence that stamp duties have been paid either by the Plaintiff or the Defendants as required by s 8 (1) (a) and (2) of the Stamp Duties Act. This provision states:
(a) the person or persons specified in Schedule 1 are liable for stamp duty payable in respect of an instrument; and
(2) A person who is liable for stamp duty under this Act is personally liable for payment of the stamp duty to the State in the manner provided for by or under this Act and, upon the stamp duty becoming due and payable, the amount of the stamp duty–
(a) shall be deemed to be a debt due to the State; and
30. Secondly, the lease agreement is not stamped pursuant to s 19 of the Stamp Duties Act.
31. This provision states:
19. UNSTAMPED INSTRUMENTS PRODUCED IN EVIDENCE
(1) Subject to this Act an instrument shall not-
(a) be pleaded or given in evidence, except in criminal proceedings; or
(b) be admitted being good, useful or available in law, unless it is duly stamped in accordance with the law in force at the time when-
(c) it was executed; or
(d) it came into the country
Whichever is the latter.
32. There is overwhelming authority which state that an unstamped document cannot be admitted into evidence until duty and penalty is paid. (See Putput Logging Pty Ltd v Philip Ambolis [1992] PNGLR 159; Spirit Haus Ltd v Robert Marshall (2004) N2630).
33. In the same vein a lease agreement for 25 years valued at K3 m would necessarily require that stamp duties are paid pursuant to s 49 of the Stamp Duties Act which provides:
49. PARTITION OR DIVISION.
(1) Where, on the partition or division of real property in the country or of the interest of a lessee under a lease relating to land in the country, a consideration is paid or given, or agreed to be paid or given, the principal or only instrument by which the partition or division is effected is chargeable with stamp duty as a transfer on sale of real property for that consideration.
(2) Where in a case referred to in Subsection (1) there are two or more instruments for completing the title of either party, Section 43, with the necessary modifications, applies.
(3) Duty chargeable under this section shall be denoted by an impressed stamp.
34. This provision requires that where consideration is paid or given or agreed to be paid over interest under a lease as in the present case the lease agreement is chargeable with stamp duty by denoting with an impressed stamp.
35. In the present case the lease agreement was for K10,000 per month and ought to have been denoted with an impressed stamp. However, the Plaintiff is relying on an unstamped lease agreement which on the face of the record is a breach of the requirement under the Stamp Duties Act.
36. Under the circumstances, the Plaintiff has failed to establish on the balance of probabilities that he or the Defendants complied with the legal requirements under the Stamp Duties Act, and the claim is therefore unenforceable.
37. For the foregoing reasons the proceeding shall stand dismissed in its entirety with costs to be agreed if not taxed.
________________________________________________________________
Lawyers for the third defendant: John Peter Munnull Lawyers
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URL: http://www.paclii.org/pg/cases/PGNC/2025/193.html