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Kimbu v Credit Corporation Finance Ltd [2025] PGNC 32; N11154 (14 February 2025)

N11154

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 176 OF 2023

BETWEEN:
ALFRED KIMBU
Plaintiff

AND
CREDIT CORPORATION FINANCE LIMITED
Defendant

WAIGANI: WOOD J
8 MARCH, 16 APRIL 2024; 14 FEBRUARY 2025

TRIAL – Claim for breach of contract and specific performance – agreement by parties for sale of property – the plaintiff failed to provide certain information to his financier and take certain action towards settlement – the actions of both parties required examination, including whether the plaintiff was entitled to specific performance regarding the contract of sale

Counsel

Ms. Kimbu and Mr. C Nakisi for the plaintiff
Ms. M Saroa for the defendant

1. WOOD J: BACKGROUND: The trial before the Court on 8 March 2024 and 16 April 2024 related to the hearing of the plaintiff’s Writ of Summons and Statement of Claim filed on 3 May 2023 (the Claim).
   
2. At the trial, the plaintiff relied upon the following affidavits, namely:
   
   1. the Affidavit in Support of Alfred Kimbu sworn on 1 May 2023 and filed on
      3 May 2023;
   2. the Affidavit of Alice Kimbu sworn and filed on 8 May 2023;
   100. the Affidavit of Alfred Kimbu sworn and filed on 24 November 2023.
        
3. At the trial, the defendant relied upon the following affidavits, namely:
   
   1. the Affidavit of Ignatius Lare sworn on 15 May 2023 and filed on 16 May 2023;
   2. the Affidavit of Marilyn Saroa sworn on 15 May 2023 and filed on 16 May 2023; and
   100. the affidavit of Marilyn Saroa sworn on 6 December 2023 and filed on 7 December 2023.
        
4. There was no cross examination of witnesses at the trial, nor did either party object to any parts of the other party’s affidavits.
   
5. The property which is the subject of the proceeding is located at Allotment 56, Section 48, North Waigani, and which is more particularly described in State Lease Volume 23, Folio 5539 (the Property). The Property was mortgaged to the defendant, which is Credit Corporation Finance Ltd, under Mortgage No. S.22503 by Serah Pakira, who later defaulted on the loan repayments. Given subsequent acts of default by Ms Pakira under her loan agreement and mortgage with the defendant, the defendant tendered the Property for sale as mortgagee, following which, on 23 April 2021, the plaintiff submitted a Tender Bid Form for the Property in the amount of K660,000.
   
6. In a letter from the defendant to the plaintiff dated 4 May 2021
   (the 4 May letter), the defendant informed the plaintiff that his offer of K660,000 to purchase the Property was accepted and that he was given 48 hours from the date of the letter to make a 10% deposit and pay the balance in full within 14 days.
   
7. The plaintiff commenced National Court proceeding WS No. 200 of 2021 on
   5 May 2021, in which he named Serah Eme Pakira as the first defendant and Credit Corporation Finance Limited as the second defendant (National Court proceeding WS No. 200 of 2021).
   
8. In a letter from the defendant’s Tenders Committee to the plaintiff dated
   27 October 2021, the defendant informed the plaintiff, in part, that due to the plaintiff’s failure to comply with the terms of the 4 May letter, the defendant retracted its acceptance of the plaintiff’s offer to purchase the Property and would refund to him the initial payment of K66,001 as well as a further payment of K100,000 that was made to the defendant by the plaintiff’s company (Massive Investments Limited).
   
9. In a letter from the defendant to the plaintiff dated 29 October 2021, the defendant informed the plaintiff, in part, that anyone ‘... placed on the Property’ were required to vacate the Property within 14 days of the letter.
   
10. On 29 November 2021, the following orders were made in National Court proceeding WS No. 200 of 2021.
    

THE COURT ORDERS THAT:

1. The Plaintiff shall make the payment of K483,999.00 to the Second Defendant before or by Monday, 13 December 2021.
   
2. In the event that the Plaintiff satisfies term 1 of this Order, the appropriate documentation shall be completed between all parties to arrange the sale agreement.
   
3. In the event that the Plaintiff fails to make payment in the method described by the date outlined in term 1 above:
   
   1. The whole proceedings against the Second Defendant stands discontinued.
      
   2. The Second Defendant shall refund the total sum of K176,001.00, that is payments made by the Plaintiff in its attempt to settle the purchase price and this payment shall be made to the Plaintiff before or by Wednesday ,15 December 2021; but
      
   3. If vacant possession is not given to the Second Defendant by Monday, 13 December 2021, the Plaintiff shall pay in the following manner:
      
      1. 65% of the refund amount in the sum of K114,400.65 to be paid before or by Wednesday, 15 December 2021; and
         
      2. 35% of the refund amount in the sum of K61,600.35 to the Plaintiff once the property is vacated subject to term 4 of this order.
         
   4. The Plaintiff, his family members, servants and/or agents shall vacate and remove all chattels, tangible assets, possessions belonging to the Plaintiff from the Property described as Section 48, Allotment 56, North Waigani, National Capital District (Property) before or by Monday,13 December 2021; and
      
   5. The First Defendant shall prosecute its application to dismiss the proceedings and/ or cross claim against the Plaintiff.
      
4. The Plaintiff shall give vacant possession of the property to the Second Defendant in reasonably good condition as it was in prior to the Plaintiff occupying the property and any damaged occasioned to the property will be repaired by the Second Defendant, at the expenses of the Plaintiff and First Defendant.
   
5. The Second Defendant shall enter the Property to conduct property inspections from Monday, 13 December 2021 as part of its tender process.
   
6. As at the date of this order, the Plaintiff shall not make any further improvements or structural developments on the Property.
   
7. The parties return to Court on Tuesday, 14 December 2021 to inform the Court on payment status.
   
8. Time for entry of this order is abridged to the date of settlement by the Registrar which shall take place forthwith.
   
11. Following the orders referred to in paragraph 10 above, the defendant prepared a document entitled ‘Mortgage Sale of Property’ (the Mortgage Sale of Property), which it forwarded to the plaintiff. The Mortgage Sale of Property is annexure I in the affidavit of Marilyn Saroa filed on 16 May 2023. In
    clause 2 of the Mortgage Sale of Property, it was agreed that the purchaser (Alfred Kimbu who is the plaintiff in this proceeding) had made the payment of K176,000 (being the amounts of K66,000, K100,000, K10,000) to the Vendor (being Credit Corporation Finance Ltd which is the defendant in this proceeding) and upon ‘..... execution and Exchange of the Contracts shall pay to the Vendor pay the balance of the purchase price of K483,999 within twenty-one (21) days from the date of execution of the contract’.
    
12. As stated in the above-mentioned affidavit of Marilyn Saroa, as the Mortgage Sale of Property was executed by the plaintiff on 16 February 2022, payment of the amount of K483,999 was to be made by the plaintiff before or by 9 March 2022.
    
13. In a letter from the defendant to the plaintiff dated 4 March 2022, the defendant attached a revised Settlement Statement as at 4 March 2022 and a copy of an e-mail dated 4 March 2022 from Marilyn Saroa to Alice Kimbu. The letter stated, in part, that ‘... if this matter is not settled before 9 March 2022, we will have no option but to terminate the agreement for breach of contract.’
    
14. In a letter from the defendant to the plaintiff dated 9 March 2022, the defendant informed the plaintiff that:
    
    ‘Credit Corporation regrets to inform you that the Mortgage Property Sale Agreement dated 31 January 2022 (Agreement) is terminated effective as at close of business, today 9th March 2022.
    

Under the Agreement, you as the Purchaser are in breach of clauses 1.3 and 2.1 of the Agreement that require either finance approval to be in place or payment be made to Credit Corporation Finance Limited as Vendor, within 21 days from date of execution of the contract, that is, before or by close of business, 9th March 2022.

The settlement has not occurred nor has any payment been received by Credit Corporation Finance Ltd.

The deposit placed with us will be refunded upon the necessary associated costs with this sale have been settled.’

15. On 30 June 2022, the following orders were made in National Court proceeding WS No. 200 of 2021:
    
    1. The Consent Orders made on 29 November 2021 are therefore perfected in the terms of these orders.
    2. As a result of the non-compliance of the Court Orders of 29 November 2021, the proceedings are dismissed against both Defendants.
    3. Each party shall take up their rights under the Court Orders of 29 November 2021.
    4. The Plaintiff shall give vacant possession of the subject property to the Second Defendant forthwith as per their rights as the mortgagee over the subject property.
    5. Summary judgment is entered for the First Defendant on her cross claim to be assessed on trial on assessment of damages.
    6. The Plaintiff shall meet the costs of the Defendants in these proceedings.
    7. Time is abridged to the date of these orders to take effect forthwith.
       
16. Mr Alfred Kimbu filed a Notice of Appeal in Supreme Court appeal
    SCA No. 93 of 2022 against the above-mentioned decision made on 30 June 2022 in National Court proceeding WS No. 200 of 2021, however, that appeal was dismissed by the Supreme Court on 28 April 2023 following the hearing of an Objection to Competency.
    
17. In a letter from the defendant to the plaintiff dated 7 May 2023, the defendant informed the plaintiff of a number of matters, including that the defendant required the plaintiff to comply with the orders in terms 3 and 4 of the orders made on 30 June 2022 in National Court proceeding WS No. 200 of 2021, whereby he vacate the Property by 10 May 2023.
    

Analysis of the issues

18. The plaintiff stated in paragraph 22 of his affidavit filed on 24 November 2023 that as a result of the matters stated in the defendant’s letter dated 10 December 2023 (in which he claims the plaintiff was purportedly in breach of the Contract of Sale of 31 January 2022 to refuse to settle the completion of the sale), he commenced this proceeding. In the Claim, the plaintiff alleges that his cause of action is against the defendant for breach of contract for breaching the Contract of Sale of 31 January 2022 (which document is formally entitled as the Mortgage Sale of Property). The plaintiff also seeks other orders, including specific performance to compel the defendant to settle on the Mortgage Sale of Property and transfer the Property to the plaintiff, plus other damages, costs and interest.
    
19. The evidence of the plaintiff is detailed in the above-mentioned affidavits, which he relied upon at the trial. In the plaintiff’s affidavit filed on 24 November 2023, he stated that ‘The balance of the purchase price was agreed to be paid by my Financier, the National Development Bank which had approved my loan and was ready to finance the purchase of the subject property for paying the balance of the purchase price (see Annexure “F” for the Offer letter confirming this).’
    
20. In relation to the above cited extract from the plaintiff’s affidavit, and after having reviewed annexure F in his affidavit filed on 24 November 2023 (Annexure F), I am not satisfied that the National Development Bank (NDB) had agreed to finance the purchase price simply as stated by the plaintiff. Rather, Annexure F is a letter of offer from NDB and states that the ‘Facility’ was being offered on a number of terms and conditions, including that:
    
    1. the borrower was stated as ‘Bara Holdings Ltd (IPA No. 1-87415)’; and
       
    2. ‘Borrower to provide written confirmations that all Group Tax, Company Tax, and VAT is paid up to date in conformity with the IRC guidelines. (Provided either by external accountant or provision of the last 12 months receipts from the IRC.)’
       
21. Even though the Mortgage Sale of Property was between the plaintiff and the defendant, I consider it was the case that NDB was providing finance to Bara Holdings Ltd for the purchase of the Property (and not to the plaintiff), but if I am wrong on this point (which I do not consider is the case), at the very least, the plaintiff was required to provide the information to NDB that is detailed above in paragraph 20. There was no evidence adduced by the plaintiff that he complied with that requirement.
    
22. Furthermore, the plaintiff made a number of other assertions in his affidavit filed on 24 November 2023, including at paragraph 18 – ‘The appointed date for settlement proposed to by parties was 09th March, 2022. This date was however, subject to unforeseen factors which were likely to delay the settlement and/or prevent parties to settle on that date including the internal procedures of other organisations such as Internal Revenue Commission, Department of Lands and Physical Planning, and the Plaintiff’s Financiers, National Development Bank, amongst others. And this was reiterated in our letter of 17th March, 2022.’
    
23. In relation to the above issue, the plaintiff did not provide any details and evidence of what he said were the ‘unforeseen factors’. Rather, I consider from the evidence, that the plaintiff did not provide all relevant information to NDB and attempted to deflect attention away from the fact that he failed to provide the relevant information to NDB.
    
24. At paragraph 19 of the plaintiff’s affidavit filed on 24 November 2023 he stated – ‘On or about 07th March , 2022 the Plaintiff’s Financiers, National Development Bank due to their external processes and procedures which the Plaintiff had no control over, could not settle on the appointed date, 09th March, 2022, due to their own internal procedures and process and instead proposed for parties to settle on 18th March, 2022 which was a week later. National Development Bank indicated and/or advised the Defendant that they would have all funding ready and available by 18th March, 2022.’
    
25. In relation to the above issue, the plaintiff did not provide any particulars and evidence of what he said were the so-called external processes and procedures over which he claims he had no control. Again, I consider from the evidence that the plaintiff did not provide all relevant information to NDB and attempted to deflect attention away from the fact that he failed to provide the relevant information to NDB.
    
26. In the affidavit of Marilyn Saroa filed on 16 May 2023, she annexed a copy of her affidavit filed on 10 March 2022 in National Court proceeding WS No. 200 of 2021 (the 10 March affidavit). In the 10 March affidavit, Ms Saroa stated that on 7 March 2022, she forwarded (by e-mail) a letter dated 4 March 2022 from the defendant to Alice Kimbu, Karen Nugi, Abel Kandapake of NDB and Ignatius Lare of the defendant, enclosing a revised Settlement Statement. The letter dated 4 March 2022 is annexure A to the 10 March affidavit, while the e-mail sent by Ms Saroa on 7 March 2022 and the revised Settlement Statement are annexure B to the 10 March affidavit.
    
27. Ms Saroa stated in paragraph 3 of the 10 March affidavit that, ‘On the same day, Monday, 7 March 2022, Mr Abel Kandapaki, the officer in charge of the Plaintiff’s loan application, responded “Only outstanding issue is financial statements and company income tax returns for the years. May be they will provide today.” Annexed hereto and marked with the letter “C” is a true copy of email dated 7 March 2022 (with trail) from Abel Kandapaki in response.’
    
28. Ms Saroa went on to state in paragraph 4 of the 10 March affidavit that, ‘As the settlement did not occur on 9 March 2022 and no further advice on satisfying the outstanding loan requirement, the Mortgage Property Sale agreement was terminated today.’
    
29. In relation to the above matters, I have read annexure C to Ms Saroa’s
    10 March affidavit and am satisfied that NDB was waiting for the plaintiff to provide NDB with certain financial statements and company income tax information, and it was for that reason that NDB refused to provide confirmation at that time that it would provide the required funds for the purchase of the Property.
    
30. In the affidavit of Marilyn Saroa filed on 7 December 2023, she deposes that on 4 March 2022, the defendant agreed for the plaintiff to have certain minor corrections made to the Settlement Statement and that settlement would proceed at 3 p.m. on that date. She further stated in that affidavit that ‘...the Plaintiff’s lawyers gave no indication of readiness to proceed to settlement by 3pm so requested his lawyer to consider settlement take place on Monday, 7 March 2022 and further reiterated that settlement is to be concluded be Wednesday, 9 March 2022. This was also communicated to the Plaintiff’s financier, National Development Bank, specifically Mr Abel Kandapaki.’
    
31. On the basis of the above matters, I am satisfied that the defendant had given the plaintiff sufficient opportunities to secure funding to purchase the Property, including on the following occasions:
    
    1. the defendant agreed to entering into a consent Order with the plaintiff in National Court proceeding WS No. 200 of 2021, the effect of which was that on 29 November 2021, the Court made a number of orders, including that the plaintiff was required to make the payment of K483,999 to the defendant before or by 13 December 2021, however, the plaintiff did not secure funding by that date;
       
    2. as stated in the affidavit of Ignatius Lare filed on 16 May 2023, as the plaintiff executed the Mortgage Sale of Property on 16 February 2022, payment of the balance of the purchase price was to be made by the plaintiff before or by 9 March 2022. The requirement to pay that amount by 9 March 2022 arose in accordance with clause 2.1 of the Mortgage Sale of Property which states as follows:
       

‘The Purchaser made payment of the sum of K176,001.00 (inclusive of the 10% deposit of K66,000.00 and two installment payments of K100,000 and K10,000 respectively) to the Vendor and shall upon execution and Exchange of the Contracts shall pay to the Vendor pay the balance of the purchase price of K483,999.00 within twenty-one (21) days from the date of execution of the contract.’

32. The plaintiff concedes in paragraph 15 of the Claim that the settlement date was 9 March 2022. Notwithstanding that the plaintiff says in paragraph 16 of the Claim that his financiers proposed a new date for settlement of the Property to 18 March 2022, his lawyer was not able to put forward any argument or case authority at the trial to demonstrate that the defendant was required to accept that request.
    
33. For the above reasons, the plaintiff’s claims in this proceeding are dismissed.
    
34. I also consider there are two additional reasons why the plaintiff’s claim for specific performance should fail. The first reason is that under the Mortgage Sale of Property, because payment of the amount of K483,999 was to be made by the plaintiff before or by 9 March 2022 (which did not occur), I note that the plaintiff did not commence this proceeding until 3 May 2023, whereby over 13 months had elapsed. Specific performance is an equitable remedy and the delay in commencing the proceeding is a significant period, including that the plaintiff has had the benefit of remaining in the Property.
    
35. Secondly, the value of the Property may have changed. It is a requirement for the sale of real property that the terms be agreed in writing. In other words, internal decisions would need to be made by the defendant about the value for which the defendant would be prepared to sell the Property. I consider it would not be equitable to grant relief for specific performance in circumstances where factors may have changed over the period of 13 months.
    

Conclusion

36. On the basis of the matters detailed above, I consider the defendant’s actions did not constitute a breach of contract (as claimed by the plaintiff). Nor do the defendant’s actions give rise to an order for specific performance. I also note in paragraph 36 of the Claim that the plaintiff makes a claim for what he says is unreasonable, unfair and unjust conduct by the defendant. On the basis of the above matters detailed by me, I also find that there is no merit in that claim. The relief sought by the plaintiff is refused and the proceeding is dismissed.
    
37. I note in paragraph 31 of the Claim that the plaintiff says he made various improvements and renovations to the Property. Even if the plaintiff made certain improvements and renovations, I consider it has no bearing on his substantive claims, because the plaintiff’s right to remain in the property would be contingent upon a successful claim in this proceeding.
    
38. I note that the plaintiff did not seek repayment of the deposit or any of the other money paid by him towards the Property. In this regard, I note the details of clause 11 of the Mortgage Sale of Property regarding any act of default. By mentioning this issue, I do not make any determination about the issues, nor does it necessarily mean that the plaintiff is entitled to any reimbursement of any type. Conversely, it may be the case that the defendant considers it has certain rights in relation to the money paid by the plaintiff under the Mortgage Sale of Property or other rights arising out of the dispute. Ultimately, the plaintiff is required to vacate the Property. It is a matter for either party to this proceeding to consider if they have any outstanding issues in relation to any amounts paid by the plaintiff under the Mortgage Sale of Property or any other matters related to the Property.

Orders

39. In the circumstances, I make the following orders:
    
    1. The plaintiff’s claim in National Court proceeding WS No. 176 of 2023 is dismissed.
       
    2. A declaration is granted that the defendant (Credit Corporation Finance Limited), shall be given vacant possession of the land at Section 48, Allotment 56, Waigaini, National Capital District and which land is more particularly described in State Lease Volume 23, Folio 5539.
       
    3. An order is granted that the plaintiff, his relatives, family and agents and all other occupants on the land at Section 48, Allotment 56, Waigaini, National Capital District and which land is more particularly described in State Lease Volume 23, Folio 5539, shall immediately vacate the land, following the expiry of 30 days from 14 February 2025.
       
    4. An order is granted that the Police Station Commander of Waigani Police Station and with all other necessary assistance from other members of the Royal Papua New Guinea Constabulary, if requested by the defendant, shall take all necessary action following the expiry of 30 days from 14 February 2025, to evict the plaintiff, his relatives, agents and all other occupants on the land at Section 48, Allotment 56, Waigaini, National Capital District and which land is more particularly described in State Lease Volume 23,
       Folio 5539.
       
    5. The injunctive orders made in this proceeding on 26 May 2023 are discharged.
       
    6. The plaintiff shall pay the defendant’s costs of and incidental to the proceeding on a party/ party basis, which shall be taxed, if not agreed.
       
    7. Time is abridged.

__________________________________________________________________
Lawyers for the plaintiff: Kimbu & Associates
Lawyers for the defendant: Credit Corporation Finance Limited