SC1729
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REVIEW NO. 85 of 2017

BETWEEN:
THOMAS YETUIN
Applicant

AND:
DOMINION INFORMATION SYTEMS LTD
First Respondent

AND:
JUNIOR JOHN JIMBERI
Second Respondent

Waigani: Collier, Frank and Anis JJ
2018: 30th October

SUPREME COURT – Review of National Court decision – whether substantive relief could be granted following interlocutory applications and without trial

REAL PROPERTY LAW – claim that title to property obtained by fraud – subsequent sale of property to bona fide purchaser for value

PRACTICE AND PROCEDURE – where substantive relief granted following interlocutory applications and without a trial – allegations of fraud – Order 12 Rule 37(b) of the National Court Rules

Cases cited:

Emmas Estate Development Pty Ltd v John Mea [1993] PNGLR 215

Counsel:

Mr. T. Yetuin, Applicant in person	
No Appearance for the First Respondent
Mr. Z. Gelu, for the Second Respondent

JUDGMENT

30th October, 2018 

1	COLLIER, FRANK & ANIS JJ: This is an application to review the whole of the decision of the National Court in WS No 757 of 2010 dated 23 May 2017 in which the primary Judge made orders in favour of the first respondent, Dominion Information Systems Ltd (DIS), in relation to the Title to the property described as Allotment 54 Section 240 Hohola (the Property). Essentially, the primary Judge held that the applicant had obtained title to the Property by committing fraud. 

2	In this review, the applicant is seeking that the Court quash the orders of 23 May 2017, dismiss the National Court proceedings in WS No 757 of 2010 in its entirety and make an order that he is the rightful owner of the Property. 

3	As a preliminary matter, we note that the applicant, having lost his right of appeal by operation of the time limit prescribed by the Supreme Court Rules, required leave to review the orders of the National Court dated 23 May 2017 and sought such leave pursuant to the inherent powers of the Supreme Court as described in s 155(2)(b) of the Constitution. The application for leave to review was granted by a single Judge of the Supreme Court on 20 October 2017. 

Background

4	Prior to 2004, the Property was owned by Mr Jacob Yalamen. DIS alleged that it entered into an agreement with Mr Yalamen, the vendor, to sell the Property to DIS and the managing director of DIS, Mr Luke Luther, made a deposit of K7,000.00 in Mr Yalamen’s account. 

5	There was some dispute between the parties as to the role of key parties at that time, however Mr Yetuin alleged that he was a director of DIS, and DIS alleged that Mr Luther was its sole shareholder and managing director.

6	It appears that at some time in 2004, while Mr Luther was overseas, the property was sold by Mr Yalamen to Mr Yetuin, who became the registered proprietor. Mr Yetuin subsequently sold the property to Mr Jimberi, who became the registered proprietor on or about 2 September 2008.

7	Mr Jimberi claimed that, at all times, he was a bona fide purchaser for value within the meaning of the Land Registration Act.
8	On 29 October 2008, DIS lodged a caveat with the Department of Lands pursuant to s 82 of the Land Registration Act in respect of the property, claiming fraud on the part of Mr Yetuin.

National Court proceedings

9	DIS commenced proceedings against Mr Yetuin and Mr Jimberi in the National Court in 2010, alleging that Mr Yetuin had obtained title to the Property by fraud and that, therefore, title had not subsequently passed to Mr Jimberi. DIS sought substantive orders including that Mr Yetuin had obtained title to the property by fraud, that the transfer of the property to Mr Yetuin and subsequently to Mr Jimberi was null and void, that the Registrar of Titles record DIS as the owner of the property and that DIS be given vacant possession of the property.

10	On 8 November 2010, the primary Judge heard two interlocutory applications – one brought by DIS and one brought by Mr Jimberi, who was the second defendant in those proceedings. DIS sought interim orders against the two defendants to restrain them from private dealings on the Property and from collecting the rent from the rental property, and against the Registrar of Titles to prevent any further entries on the Register or dealings with the Property. Mr Jimberi sought to have the proceeding dismissed summarily or, in the alternative, to have himself removed as a party. 

11	After almost seven years, the primary Judge delivered a judgment ex tempore on 23 May 2017. The primary Judge made the following orders:

1.	The first defendant [Mr Yetuin] obtained the title to the property described as Allotment 54 Section 240 Hohola, being the whole of the land described in the State Lease Volume 14 Folio 33 by committing fraud. 

2.	The transfer of the said property to the first defendant was and is, therefore, null and void, and of no legal effect. 

3.	Consequent upon the preceding two Orders, the transfer of the said property from the first defendant to the second defendant [Mr Jimberi] was without legal basis, and, thus, null and void, and of no legal effect. 

4.	The first defendant having obtained titled to the subject property fraudulently, he did not pass onto the second defendant valid title pursuant to a contract of sale entered into between them.

5.	Consequent upon the preceding Orders, the plaintiff company [DIS] was and is entitled to the said property upon the conclusion of the Contract of Sale between it and Mr Jacob Yalamen, and, thus, the legitimate and rightful owner and proprietor of the said property.

6.	The Registrar of Titles enter on both the Owner’s Copy and the Department of Lands and Physical Planning Copy of the Certificate of Title to the State Lease the Plaintiff company as the duly registered owner and proprietor of the said property. 

7.	The second defendant give the plaintiff company vacant possession of the subject property with immediate effect.

8.	The defendants pay occupational fees, and any other fees that may have been unlawfully imposed in respect of the property and that these be assessed upon the production of proper evidence.

9.	The two defendants pay the plaintiff company its costs of this proceeding.

10.	Consequent upon the preceding Orders, any outstanding orders and preceding between these parties in respect of this matter in any lower courts and/or tribunals are hereby set aside or dissolved.

11.	Time for entry of these Orders is abridged to the time for settlement of the Orders by Registrar, which shall take place forthwith. 

12	His Honour referred to Emmas Estate Development Pty Ltd v John Mea [1993] PNGLR 215 and the doctrine of indefeasibility of title in cases of fraud concerning the transfer of interests in Torrens System land. His Honour noted:

“The cheque that went to the – was paid rather to the seller, the gentleman who was living at Tabubil, Mr Jacob Yalamen, was a cheque drawn on the company’s account, first plaintiff company’s account and was specifically for the purchase of that property. In the contract of sale that property – of course the plaintiff company’s name features as the purchaser. In the subsequent fraudulent contract of sale in the absence of Mr Luther, the owner Proprietor of the firm, proprietor of the property rather… is the first defendant and the transferee is the second defendant. And there are other documents as annexed in Mr Luther’s detailed sworn deposition that demonstrate that there were some wrong doing taking place that resulted in the property being registered in the name of the second defendant.

I am satisfied from all of that that there was fraud perpetrated on the plaintiff company by the first defendant.”

13	It is common ground that, for certain reasons, Mr Yetuin in no way participated in the proceedings before the National Court, and further that the finding of fraud by his Honour was made without a trial conducted on that issue. 

Consideration

14	At the hearing today there were appearances by the applicant Mr Yetuin and the second respondent Mr Jimberi. There was no appearance by DIS, however Mr Yetuin and Counsel for Mr Jimberi both submitted that DIS had not participated at all in the review proceedings to date. Mr Yetuin also drew to the Court’s attention to the fact that the Chief Justice had dispensed with the requirement that DIS endorse the Review Book.
 
15	Mr Yetuin seeks to review the decision of the National Court on thirteen grounds, however at the hearing today, the key issue was the finding of fraud by the primary Judge in the absence of a proper trial on that issue. 

16	Counsel for Mr Jimberi filed submissions supporting Mr Yetuin’s position on this point. Both Mr Yetuin and Mr Jimberi supported an order of the Supreme Court quashing the decision of the primary Judge in the National Court proceedings.

17	An allegation of fraud is a very serious matter. A party against whom fraud is alleged is entitled to be properly heard, and to advance his or her defence against that allegation. This is recognised by Order 12 rule 37(b) of the National Court Rules, which provides that a claim by a plaintiff based on an allegation of fraud may not be disposed of summarily. His Honour below did precisely that, contrary to Order 12 rule 37(b). 

18	Further, we note that the primary Judge granted the substantive relief sought by DIS, including insofar as concerned allegations of fraud against Mr Yetuin, on the basis of two interlocutory applications brought by DIS and Mr Jimberi relating to restraint orders and removal of Mr Jimberi as a party from the proceedings. No substantive hearing had occurred at that stage justifying the granting of this substantive relief.

19	In our view it is clear that the orders made by his Honour cannot stand.

20	The question remaining however is the additional orders this Court should make. Mr Yetuin seeks, effectively, a declaration that he is the rightful owner of the property and that title to the property be restored to him. Counsel for Mr Jimberi sought an order that the matter be remitted to the National Court.

21	In circumstances where the primary proceedings in the National Court concerned an application by DIS for orders identifying it as the rightful owner of the property because of, inter alia, alleged fraudulent dealings between Mr Yetuin and Mr Jimberi where Mr Yetuin voluntarily sold the property to Mr Jimberi, it is unclear how Mr Yetuin could possibly justify an order that title to the property be restored to him. At today’s hearing, Mr Yetuin submitted that his concern was that Mr Jimberi continued to owe him money in the amount of approximately K70,000 in relation to the sale of the property. However, this is a separate contractual issue, apparently unrelated to the original claim of DIS, and could potentially have been the subject of a cross-claim by Mr Yetuin against Mr Jimberi (but apparently was not). There is no basis for an order in these terms as sought by Mr Yetuin.

22	Second, in circumstances where DIS has not participated in the review process, and – it appears – has been content for Mr Jimberi to reside at the property for several years, we query the utility of the matter being remitted to the National Court. DIS has not made any submissions to the Court supporting such an order. However, Counsel for Mr Jimberi properly submitted that his client’s title to the Property remained under a cloud in circumstances where there were proceedings alleging fraud in the relevant transfers. Counsel for Mr Jimberi further submitted that neither the Registrar of Titles nor Mr Yalamen had been named as parties in the National Court proceedings. Certainly, if fraud is alleged – and substantiated – the Registrar of Titles should be a party because remedies are potentially available against the Registrar in respect of the rectification of the Register. 
23	To that extent, we consider that, ultimately, there is utility in the proceedings being remitted to the National Court, and properly dealt with. Until that time, however, we consider that there should be no dealings with the title to the property.

24	Finally, Mr Yetuin and Mr Jimberi are at odds in respect of where costs should lie. Mr Jimberi submits that he is a bona fide purchaser for value and that, therefore, his costs should be borne by DIS and Mr Yetuin. However, we also note that Mr Yetuin has been successful in this application, and in the ordinary course costs follow the event.

25	In our view, given that the merits of the case remain entirely unclear and unresolved, and where Mr Jimberi supported the grant of the relief sought in this review, the appropriate order is that costs in this review be costs in the cause of the National Court proceedings. 

Order

26.      It is ordered that:

(i)	The application for review be upheld.
(ii)	The whole of the judgment and orders of the National Court made on 23 May 2017 in WS No 757 of 2010 be quashed.
(iii)	The proceedings be remitted to the National Court.
(iv)	Until further order of the National Court there be no dealings in the title to the property described as Allotment 54 Section 240 Hohola.
(v)	Costs of this review be costs in the cause of the National Court proceedings.
________________________________________________________________
Zachery Gelu: Lawyers for the Second Respondent