SC1536
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA No. 89 OF 2015 AND SCA 90 OF 2015

BETWEEN

NALI HOLE
Appellant

AND
ALLAN MANA
Respondent

Waigani: Salika, DCJ; Poole & Geita, JJ
2016: 28th June

PRATICE AND PROCEDURE – transfer of property – allegations of fraud – by way of a writ of summons.

PRACTICE AND PROCEDURE – award of costs on indemnity basis is a matter of courts discretion.

Cases Cited:

Open Bay Timber Limited v PNG Forest Authority and Ors – N5109	
Rex Paki v MVIL SC1015

Counsel:

Mr D Mamu, for the Appellant
Mr A Mana, in Person

28th June, 2016;

Introduction

1.	BY THE COURT; SCA 89 of 2015 and SCA 90 of 2015 are two separate appeals from two separate proceedings namely OS 702 of 2014 and WS 832 of 2015 and from two different judges over one and the same property and the appeals were heard together,  in OS 702 of 2014 Allan Mana sought a declaration that he was the owner of the property the object of the proceedings while in WS 832 of 2015 the appellant in this case moved by way of a Notice of Motion for orders to restrain Allan Mana from evicting the appellant from the subject property and stay Allan Mana from moving into the subject property.

2.	 On 18 June 2015 in OS 702 of 2014, the learned trial judge ordered the following:-

“1.	The plaintiff is the indefeasible title holder of the property described as Section 72 Allotment 8, Boroko (Kuku Place, Korobosea) (the property) within the meaning of Section 33 of the Land Registration Act.
2.  The defendant, her servants, agents, family members and/or tribesmen cease occupation of, vacate and otherwise give vacant possession of the property to the plaintiff forthwith, failing which police shall be empowered to evict the defendant, her servants, agents, family members and/or tribesmen from the property forthwith.
3.	Costs on an indemnity basis.
4.	The defendant is at liberty to apply for interim injunction but based on issuing a claim based on fraud.
5.	Pursuant to Order 2 Rule 15 of the National Court Rules the time for entry of this order is abridged to the time of settlement by the Registrar, which shall take 	place forthwith.”

3.	The appellant aggrieved by these orders filed an appeal on the following grounds:-
“3.1	His Honour erred in law in determining the matter summarily in favour of the 	respondent when the matter was returning for summary determination of the plaintiff/respondent’s claim for respondent’s failure to appear in Court and prosecute his claim diligently and expeditiously.            
3.2	His Honour erred in law in not giving any weight or failed to give any weight at all of the evidence alleging fraud by the appellant and declared indefeasibility of title held by respondent.
3.3	His Honour erred in law in declaring that the title held by the respondent was indefeasible and at the same contradicted that by granting liberty to the appellant 	to file proper proceeding by way of writ of summons pleading fraud, to challenge 	indefeasibility of the title.
3.4	In summarily declaring determining the matter and that the respondent had indefeasible title to the subject property, His Honour erred in law and gave less 	weight or otherwise gave no weight at all to the serious allegations of fraud 	raised by the appellant challenging indefeasibility of the purported title held by the respondent for the purpose of Section 33 of the Land Registration Act.
3.5	His Honour wrongly exercised his discretion to award cost on indemnity basis against the appellant when there was no default(s) on the part of the 	defendant/appellant to justify such penalty.
3.6	The judgment is on one or more of the grounds above unsafe and unsatisfactory.”

4.	On 3 July 2015 Her Honour Justice Polume-Kiele dismissed the appellant’s application and said that the orders of Kandakasi, J made earlier still stood as no appeal had been filed against his orders,

5.	To understand the background of the matter it is only appropriate to tell the history of the case.

6.	National Housing Corporation (NHC) was the owner of the property described as Section 72, Allotment 8, Volume 114, Folio 230, Boroko (Korobosea). National Capital District (the property).

7.	The property was fraudulently transferred to Franzeur William Solien (Franzeur) on 11 October by his mother, a Trister Solien.  At the material time, Franzeur was a minor and therefore did not have legal capacity. Franzeur’s father Francis Douglas Solien, (Solien) had been the occupant of the property until his death on 21 June 1998.

8.	The issue of the irregular transfer of the property to Franzeur was raised by a John William Ford (Ford) (Solien’s brother) and this subsequently led to criminal charges against Trister Solien.  

9.	Trister Solien was tried, found guilty and convicted of fraud on 11 May 2012.

10.	NHC became aware of the fraudulent transfer of the property in about April 2012 when the matter was brought to its Managing Director, Tarcicius Maganaua’s attention upon a complaint by Ford.

11.	Ford claimed to have some sort of an interest in the said property.

12.	On 22 May 2012, Tarcicius Muganaua wrote to the Registrar of Titles and requested an immediate revocation and cancellation of the illegal transfer of the title of the property to Franzuer and to reinstate the ownership of the property to the NHC pursuant to the powers vested in the Registrar of Titles under s.162 of the Land Registration Act.

13.	Based on NHC’s request dated May 2012, the Registrar of Titles on 31 August 2012 cancelled the transfer of the title to Franzeur.

14.	At around the same time, Ford fraudulently procured a court order on 12 June 2012, purportedly in proceedings OS 731 of 2012, which vested title to the property in Ford.  The court order has been proven to be a fraud and the Registrar of Titles on 16 October 2012 cancelled the transfer of the title to Ford.

15.	Ford signed a contract for sale of land with Allan Mana in relation to the property, on 6 September 2012 on his representation that he owned the property.  Mana had increased his initial offer of K600, 000.00 to K800, 000.00 as a few other potential purchasers had been approached to buy the property.

16.	Ford had used the fraudulent court order to evict occupants of the property on 1 October 2012.

17.	Allan Mana had set out to build a house on this block after purchasing from Ford and had gone through the trouble of sourcing architectural drawings.  He had the property valued on 9 October 2012 for purposes of a bank loan based on the 6 September 2012 contract of sale.  Westpac Bank granted him a loan on 22 November 2012.  After investing the time, funds and effort on all these undertakings, he had to forego this arrangement after discovering Ford was not the title holder.

18.	However, having expended resources on this endeavor, he maintained an interest in the property.  In particular, he engaged with NHC to express his interest to purchase the property once NHC’s title was vindicated.  This eventuated on 6 May 2013 when the National Court affirmed NHC’s title in the property.  NHC subsequently offered to sell the property to Allen Mana eight (8) days later on 14 May 2013.

Grounds of Appeal

1.	His Honour erred in law in determining the matter summarily in favour of the Respondent when the matter was returning for summary determination of the Plaintiff/Respondent’s claim for Respondent’s failure to appear in Court and prosecute his claim diligently and expeditiously.

2.	His Honour erred in law in not giving any weight or failed to give any weight at all of the evidence alleging fraud by the Appellant and declared indefeasibility of title held by Respondent.

3.	His Honour erred in law in declaring that the title held by the Respondent was indefeasible and at the same contradicted that by granting liberty to the Appellant to file proper proceeding by way of Writ of Summons pleading fraud to challenge indefeasibility of the title.

4.	In summarily declaring, determining the matter and that the Respondent had indefeasible title to the subject property, His Honour, erred in law and gave less right or otherwise gave no weight at all to the serious allegations of fraud raised by the Appellant challenging indefeasibility of the purported title held by the Respondent for the purpose of s.33 of the Land Registration Act.

5.	His Honour wrong exercised the discretion to award cost on indemnity basis against the Appellant when there was no default(s) on the part of the Defendant/Appellant to justify such penalty.

6.	The judgment is on one or more of the grounds above unsafe and unsatisfactory.

Dealing with the grounds of appeal

19.	The matter of OS 702/14 Allan Mana v Nali Hole was taken out by Allan Mana for vacant possession of Section 72 Allotment 8 Boroko, Kuku Place, Korobosea, National Capital District, because Nali Hole was then resident on that property despite the National Housing Corporation and Allan Mana serving notices to quit and vacate the property.

20.	The application for vacant possession was based on Section 33 of the Land Registration Act in that Mana had an indefeasible title to the property.  The proceedings OS 702/14 came to an end when the learned trial judge confirmed the indefeasible title and granted vacant possession of the subject property to Mana.  His Honour also ordered costs on an indemnity bases against the appellant and time was abridged.

21.	More importantly, during the course of the proceedings His Honour told the appellant’s lawyer that the title to the property spoke for itself and that if he wanted to challenge the title, he could pursue that in another proceedings alleging fraud.  His Honour at page 275 of the Appeal Book said:-

“The plaintiff is seeking to get his title and that is of course subject to whatever proceedings you bring based on fraud and that is going to be by way of Writ of Summons”.

22.	The issue of fraud could not be raised in that proceeding.  The appellant was given free sound legal advice to institute allegations of fraud proceedings by way of a writ of summons and to plead particulars of the fraud.  This position is supported by numerous decisions of the National Court such as the case of what Canings, J  in Open Bay Timber Limited v PNG Forest Authority and Ors – N5109 said:-

Allegations of actual fraud are better prosecuted by writ of summons and statement of claim. Indeed there is a strong argument to say that an allegation of actual fraud against a private individual or corporate body, even if it is to be agitated alongside conventional grounds of judicial review, must unless the leave of the Court is obtained to dispense with the requirements of the Rules be prosecuted by writ of summons. Order 4, Rule 2(1)(b) (where writ of summons required) of the National Court Rules states that "proceedings shall be commenced by writ of summons ... where a claim made by the plaintiff is based on fraud. Particulars of the alleged fraud would have to be pleaded under Order 8, Rule 30 (fraud etc).

23.	We agree that allegations of fraud should be prosecuted by way of a Writ of Summons.

24.	Grounds 3.1, 3.2, 3.4 and 3.6 of the appeal are premised on a misapprehension of practice and procedure on allegations of fraud.  The appellants were not entitled to mount fraud allegations in proceedings OS 702/14.  They were advised to pursue fraud allegations by way of a writ of summons.  The appellant did file WS 832/15 to pursue the fraud allegations.

25.	After Kandakasi, J’s ruling in proceedings in OS 792 of 2014, the appellants filed a Writ of Summons WS 832 of 2015 alleging fraud against Allan Mana.  After filing of the writ the appellant applied to stay Mr Mana from moving into the property and from evicting her.  In considering the stay application, Polume-Kiele, J asked some pertinent questions of counsel as to whether the plaintiff (appellant here) had title to the property.  Kandakasi, J had already recognized Mr Mana’s title to the property and declared that Mr Mana had an indefeasible title to the property.   That issue was therefore res judicata.

26.	The application for stay before Polume-Kiele, J came about after a writ of summons alleging fraud was filed.  Polume-Kiele, J dismissed the appellants applications to stay Mr Mana from moving into the property and from evicting her.

27.	The orders of Polume-Kiele, J in our opinion were in order.  She asked the appellant lawyers if his client had title to the property and the answer was “No” his client did not have title to the property.  

28.	To us, Polume-Kiele J made no error in her ruling to refuse the stay and eviction application because Allan Mana was now the registered proprietor of the subject property and entitled to vacant possession.

29.	The appellant’s argument appears to be that the application to stay was to preserve the status quo until the issue of the fraud allegations were dealt with in the WS proceeding.  Evidence however was that by then the appellants had been evicted and there was no status quo to be maintained, the status quo then was that Allan Mana had moved into the property.

30.	Her Honour said:-
“with regards to allegations of fraud, that is a matter in which the applicant/plaintiffs are at liberty to pursue in another forum.  But with regards only to the urgent application to stay, this Court refuses to grant the orders that are being sought,”
31.	What Her Honour said was not suggesting that the appellant should appeal to the Supreme Court, far from it.  The allegations of fraud contained in the Writ of Summons (WS 832 of 2015) were not dismissed by Her Honour.  The Writ of Summons remains to be prosecuted.  Only the application for stay of Mr Mana moving in and evicting his client were dealt with and dismissed.  The Writ of Summons proceedings must proceed by way of proper evidence being called.  The appellant is at liberty to proceed with her WS.  The application for stay of Kandakasi, J’s orders were properly before Her Honour and with respect she dealt with them quite properly in her deliberations. 

32.	Ground 3.5 says that the learned trial judge wrongly exercised his discretion to award costs on an indemnity basis against the appellant when there was no default on their part.  However considering the factual circumstances in the matter that Allan Mana had a valid indefeasible title to the property, if the appellant was aggrieved that Mana had obtained title by fraudulent means, then she was entitled to file a Writ of Summons alleging the fraud and particulars of the fraud.  The appellant was defrauded by a John William Ford, who was not a party in these proceedings.  The appellant was obliged to give vacant possessions as there was no utility in taking unnecessary judicial time for the learned trial judge to make his point sink into the appellant’s counsel.  

33.	In Rex Paki v MVIL SC1015, the Supreme Court said:- 

“The award of costs on an indemnity basis is discretionary.  An order for costs may be made where the conduct of a lawyer or a party to the proceedings is so improper, unreasonable or blameworthy that he should be so punished by such an order.  The question is whether the conduct of the appellant in this matter is such as that it caused the respondent to incur unnecessary costs.”

34.	The appeal book pages 270 to 278 have records of what transpired between the bench and counsel.  What was to be a 5 minute matter as indicated by counsel, turned out to be a 18 minute matter.  The matter took longer to dispose off because of the conduct of the appellant’s lawyer in not comprehending the issues at hand and also because the appellant was as His Honour put it “fighting the wrong people” and “as I keep on saying to you, your client has a cause of action against Mr John Ford.”  In other words, the learned trial judge was of the opinion that these proceedings should never have been defended by the appellant.  We are satisfied that the appellant and her counsel caused unnecessary anxiety and caused Mr Allan Mana unnecessary time and costs to attend to this matter.  Mana was entitled to the orders he was seeking and that was simply vacant possession of the property which he had a clear title to.

35.	We are of the opinion that it was open to the learned trial judge on those circumstances to exercise his discretion in the way he did for those reasons.  This ground of appeal is therefore dismissed as well as having no merit.  

36.	The orders of the Court are that this appeal is dismissed.  Costs of the appeal are awarded to the respondent.

________________________________________________________________
Haiara Lawyers			: Lawyer for the Appellant		
Lawyer for the Respondent	: In Person