SC2078
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 16 OF 2019

BETWEEN
TSC INDUSTRIES LIMITED
Appellant

AND
JOE KOIM
Respondent

Waigani:  Kariko, Berrigan and Numapo, JJ
2020: 16th December
2021: 25th February

APPEAL – Section 16 of the Fraud and Limitations Act – whether cause of action founded on fraud or upon specialty – appeal dismissed.

Cases Cited
Papua New Guinea Cases

Papua New Guinea Banking Corporation v Tole (2002) SC694
Yakasa v Piso (2014) SC1330 
Amiau v Yalbees (2020) SC2046
Oil Search Ltd v Mineral Resources Development Corporation (2010) SC1022
Hiwi v Rimua (2015) SC1460

Overseas Cases

Bomanite Pty Ltd v Slatex Corp Australia Pty Ltd  (1991) 32 FCR 379 

References cited
Section 16(1)(a) of the Frauds and Limitations Act

Counsel

N. Tame, for the Appellant
D. Mel, for the Respondent
DECISION ON APPEAL
25th February, 2021

1.	BY THE COURT: This an appeal against the decision of the National Court on 11 February 2019 in proceedings WS No. 699 of 2017, TSC Industries Limited v Joe Koim in which Hartshorn J dismissed the entire action for being statutorily time barred and ordered the plaintiff to pay the defendant’s costs on a full indemnity basis.  

Background

2.	The dispute concerns a property, section 32, Allotment 14, contained in State Lease Volume 34, Folio 124 located at 6 Mile, Port Moresby in the National Capital District.  On 24 November 2010 the respondent purchased the property from the appellant company.  The contract was executed by Angelo Cresseri, since deceased, as director on behalf of the company.  The sale was formally registered on 15 December 2010.  

3.	The respondent then mortgaged the property to Fincorp Finance Limited (Fincorp) which was registered on 26 October 2011.  On 28 October 2013 the Acting Registrar of Titles, Benjamin Samson, summoned the respondent to produce to him the original title to the property for the purpose of deregistration of transfer.  By letter of 5 November 2013 the respondent denied any impropriety in the transfer.  By letter of 11 August 2014 the Acting Registrar of Titles again sought the owner’s copy of the title, failing which action would be taken under the Land Registration Act.  The Acting Registrar then summoned Fincorp to deliver the owner’s copy for cancellation.  Fincorp responded that the claims needed to be proven in court.  On 27 November 2014 the Acting Registrar advised Fincorp that it had invoked his powers under s 161 of the Land Registration Act to cancel the transfer to the respondent. By decision of 9 December 2014 the Acting Registrar gave notice of his intention to issue an official copy of the State Lease to the appellant under s 162 of the Act on the basis that the owner’s copy had been lost or destroyed. The decision was gazetted on 15 December 2014. The Acting Registrar then cancelled the transfer to the respondent and his mortgage to Fincorp and on 9 February a State Lease was issued to the appellant.

4.	The respondent commenced proceedings OS(JR) 647 of 2016 seeking judicial review of the decisions by the Acting Registrar to give notice to issue a replacement lease to the appellant, to transfer the respondent’s interest in the State Lease and to registrar the transfer of the State Lease to the appellant.

5.	On 9 December 2016 her Honour Justice Nablu granted interim orders restraining the appellant from dealing with the property, and on 26 October 2017 stayed the JR proceedings pending determination of WS No. 699 of 2107.

6.	WS No. 699 of 2017 was commenced by the appellant on 31 July 2017 seeking that the contract for sale of the land and its transfer to the respondent be declared fraudulent, illegal, and null and void ab initio, and seeking orders that the property be registered in the name of the appellant.  As above, the proceedings were dismissed for being time barred on 11 February 2019.

Preliminary Application 

7.	At the commencement of the hearing before us, the appellant made an application for the respondent to be replaced in the proceedings by his wife, Jacklyn Koim, in her capacity as the administrator of the respondent’s estate, following his death in 2019.  

8.	There was no objection to the application which the respondent’s lawyers indicated was in accordance with instructions.  The application was granted. 

Objection to Competency

9.	On 28 February 2019 the respondent filed a notice of objection to competency.  The respondent sought to withdraw the objection at the hearing before us, which application was also not opposed, and was granted.  

10.	We proceeded to hear the merits of the appeal. 

Grounds of Appeal 

11.	The Appellants’ notice of appeal contains four grounds of appeal.  

12.	Ground 3.1.4 and Ground 4 were abandoned at the hearing. All remaining grounds have been considered in rendering this decision.  In summary, it is claimed that the learned trial judge erred in finding that fraud was the only cause of action on which the proceedings were brought.  

13.	His Honour’s finding that the cause of action was founded on fraud is critical because it is not in dispute that pursuant to s 16(1)(a) of the Frauds and Limitations Act, a cause of action based upon tort, which includes fraud, must be brought within six years of the date on which the cause of action accrued.

14.	The appellant claims that his Honour erred as the proceedings were also brought upon causes of action arising from the power of attorney executed by Angelo Cresseri, in his personal capacity, on 11 November 2010 granting the respondent power of attorney over his affairs, and for non-compliance with the Companies Act. 

15.	We find no error in his Honour’s decision.  

16.	Firstly, it is clear on the face of the amended statement of claim that the proceedings expressly challenged the transfer of the property to the respondent on the basis of fraud.   

17.	It is well established that unless there is foundation in a plaintiff’s pleadings no evidence, and no damage or relief of matters not pleaded can be allowed: Papua New Guinea Banking Corporation v Tole (2002) SC694. It is also clear, however, that undue rigidity in the application of procedural requirements should not be allowed to compromise the substantive goal of the Court, which is “to do justice between parties according to law”: Yakasa v Piso (2014) SC1330; Amiau v Yalbees (2020) SC2046.  As the Court explained in Yakasa v Piso (supra) at [66], the essential function of pleadings is to state with sufficient clarity the case that must be met. 

18.	On its face the amended statement of claim failed to expressly plead a claim in speciality.  It claimed fraud and pleaded as particulars in support of that claim that there was a lack of compliance with the Companies Act and that the power of attorney did not give any power to the respondent to dispose of the appellant’s land or transfer title to himself.

19.	It was only at the hearing of submissions on the respondent’s application to have the proceedings dismissed for being time barred that the issue of specialty was raised by the appellant.  It was the only basis upon which the appellant sought to argue that the matter was not time barred.  The submissions did not address the Companies Act, nor what time limits might apply in the event of non-compliance, which do not assist the appellant in any event.

20.	It is not necessary for the purposes of these proceedings to consider in detail the nature of a speciality other than to say that “any contract in the form of a deed is a specialty”: Oil Search Ltd v Mineral Resources Development Corporation (2010) SC1022; Hiwi v Rimua (2015) SC1460.  An action upon a speciality is one brought to enforce that contract.  Pursuant to s 16(3) of the Frauds and Limitations Act, an action upon a specialty shall not be brought after the expiration of twelve years commencing on the date on when the cause of action accrued.

21.	Not only did the claim fail to expressly plead a cause of action in speciality in this case, its terms both expressly and in substance made it clear that the appellant did not seek to rely on the terms of the power of attorney in any way, rather it claimed that the power of attorney was fraudulently made and was thus “unlawful, illegal, null and void ab initio”.   Moreover, the power of attorney, on the appellant’s own case, was not its own to enforce.   

22.	Furthermore, as his Honour correctly pointed out at [20]:  

“Even if the transfer of the property was occasioned by the fraudulent act of the defendant based upon the power of attorney, and I make no comment on that, a cause of action founded on that fraudulent act must be brought within six years of the date that the cause of action accrued.  That the power of attorney in the form a Deed may be sued upon within 12 years and not six years does not detract from the requirements in s. 16(1)(a) Frauds and Limitations Act.”

23.	Finally, although it is not necessary to our decision, we note that whilst it is claimed that the respondent transferred the property to himself in November 2010 and that he did so fraudulently under the power of attorney, the facts as pleaded in the statement of claim and set out in supporting affidavit material state that the contract for sale of the property was executed by Angelo Cresseri himself, purportedly on behalf of the appellant company as its director, not by the respondent purporting to act on behalf of Angelo Cresseri under the power of attorney.  It is also unclear what role, if any, the power of attorney is said to have had in relation to registration.  Seen in that context the power of attorney is of even less relevance.

24.	Accordingly, we make the following orders.  

Orders 

(1)	Jacklyn Koim, as Administrator of the estate of the late Joe Koim, is substituted as respondent.
(2)	The respondent is granted leave to withdraw the notice of objection to competency filed 29 September 2020.
(3)	Each party are to bear their own costs in relation to each of the above applications.
(4)	The appeal is dismissed.
(5)	The appellant shall bear the costs of the respondent on a party party basis, to be taxed if not agreed.
_______________________________________________________________ 
Nicholas Tame Lawyers: Lawyer for the Appellants	
Mel & Henry Lawyers: 		Lawyer for the Respondent