Regione v Palms Tavern Pty Ltd [1988-89] PNGLR 150 (28 April 1989)

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LANDLORD AND TENANT - Termination of tenancy - Forfeiture - Re-entry - Bringing of proceedings equivalent to re-entry - Jurisdiction of District Court - Where lease “duly determined” - Bringing of proceedings founds jurisdiction - Summary Ejectment Act (Ch No 202), s 3(1)(a).

INFERIOR COURTS - District Courts - Jurisdiction - Summary ejectment proceedings - Jurisdiction where lease “duly determined” - Bringing of proceedings constitutes re-entry - Bringing of proceedings founds jurisdiction - Summary Ejectment Act (Ch No 202), s 3(1)(a).

Under the Summary Ejectment Act (Ch No 202), s 3(1), proceedings for possession of premises may be brought in the District Court where “(a) the term or interest of a lessee of premises held by him has ended or been duly determined”.

Where a lease contains a clause allowing the landlord to re-enter for breach of a covenant and where the breach is complete, because the bringing of proceedings for possession is equivalent to actual entry, it amounts to due determination of the lease and brings those proceedings within the jurisdiction of the District Court under s 3(1)(a) of the Summary Ejectment Act.

This was an appeal from the District Court in proceedings for recovery of possession of leased premises which proceedings were dismissed for want of jurisdiction.

BREDMEYER J: This is an appeal against an order of the Port Moresby District Court dated 4 October 1988 striking out two complaints. The first complaint relates to Lot 5 on Deposited Plan 34, a block of land situated at Badili. It states that the plaintiff is the owner of Lot 5 and leased the Lot to the defendant for 35 years. The defendant was required to pay all rates and taxes. The complaint states that the defendant has breached the lease in that it has failed to pay rates and taxes since 1982 to date and that it has subdivided the land into three allotments and subleased it without the consent of the plaintiff. The complainant claims: (a) possession of the premises, (b) damages for breach of the agreement, and (c) mesne profits from the date of the service of the notice to quit until delivery of possession. The second complaint is between the same parties and for some curious reason also has the same District Court number — No 12 of 1988. It relates to the adjoining Lot 6 and recites that the plaintiff leased this land to the defendant for 15 years and that the defendant has breached the lease in the following ways:

(a) a rental instalment of K256 for the month of September 1987 was not paid on time and when it was later paid that payment was rejected.

(b) the defendant failed to pay rates to the National Capital District Interim Commission from 1982 to date.

(c) the defendant failed to “replace, repair and keep and maintain in a clean and good condition” the interior of the building and the fixed improvements.

The plaintiff claimed: (a) possession of the premises, (b) damages for breach of the said agreement, and (c) mesne profits from the date of serving the notice to quit until delivery of possession.

The defendant requested particulars of the claim for damages and for mesne profits and, although these were not formally supplied, the defendant tendered an affidavit setting out the arrears of rates owed to the National Capital District Interim Commission. The arrears to May 1988 on Lot 5 were K18,724.85 and on Lot 6 were K16,392.28. After numerous adjournments and preliminary objections in the District Court, the magistrate, on 4 October 1988, struck out the complaints, said the case was to be referred to the National Court, and ordered each party to pay its own costs. The reasons for the striking out were twofold. The first was that, although the Summary Ejectment Act (Ch No 202) was not pleaded in either complaint, the appellant was seeking to rely on it. The magistrate ruled that this case did not come within ss 3, 4, 5 or 6 of the Act and hence the District Court had no jurisdiction to hear the case for ejectment. Secondly, the learned magistrate considered that the damages claimed exceeded K10,000 and thus exceeded the jurisdiction of the District Court.

I consider that the complaints were correctly dismissed by the magistrate although I differ with him slightly on the reasons. The Summary Ejectment Act (Ch No 202) confers power on the District Court to give ejectment orders in the circumstances set out in ss 3, 4, 5 and 6 of the Act. I consider that s 3 properly applies to the facts of these two complaints. Section 3 reads:

(a) the term or interest of a lessee of premises held by him has ended or has been duly determined; and

the lessor of premises may make a complaint to a Magistrate of a District Court against the person for the recovery of the premises ...”

Each lease has a clause allowing the landlord to re-enter on breach of a covenant. The complaints do not recite that the landlord has re-entered, indeed it is clear that he has not re-entered and the defendant lessee is still in possession of each Lot. Re-entry is also known as forfeiture, see Halsbury’s Laws of England (3rd ed), vol 23, par 1389. At par 1395, it states:

“Actual entry is not necessary in order to take advantage of the forfeiture. Where the cause of forfeiture is complete, the landlord can bring an action to recover possession, and the bringing of the action is equivalent to actual entry.”

So this action, if proved, amounts to a due determination of the lease and thus brings it within the scope of s 3.

“(4) in a complaint under this section against a lessee or occupier the complainant may add a claim not exceeding K500 for rent or mesne profits (or both) down to the day appointed for hearing or to any preceding day named in the complaint ...”

It is clear to me that the plaintiff is claiming much more than K500 on each complaint. In a situation like this, the plaintiff can state in the complaint that he claims K10,000, which is the limit of the District Court’s jurisdiction, and abandon the excess above K10,000, or he could say the same thing to the magistrate at a hearing. It would have been appropriate for the plaintiff to have said that, as the defendant was applying to have the case struck out as exceeding the jurisdiction of the District Court under s 21 of the District Courts Act (Ch No 40). As there was no such application I consider that the magistrate was entitled to regard the claim as being outside his jurisdiction.

A minor reason for dismissing the complaint in relation to Lot 6 relates to the claim that one instalment of rent for K256 was outstanding for the month of September 1987. The complaint alleged that that was a breach of covenant and was one of the breaches which justified an order for recovery of possession. Under s 4 of the Summary Ejectment Act, recovery of premises when the rent is in arrears is only possible when the lease is held on a weekly, monthly or quarterly tenancy or for a term not exceeding three years. The lease of Lot 6 is a lease for 15 years.

I consider the learned magistrate was right in dismissing these complaints and thereby paving the way for the plaintiff to bring the same action if he wants to in the National Court. If he does do so, he should combine the two complaints in the one action. I also consider that it is in the plaintiff’s best interests to do so because the National Capital District Interim Commission can sue him for the K35,000 land rates which are outstanding. Even though under the leases Palms Tavern Pty Ltd is required to pay those rates, the plaintiff is primarily responsible to pay them. If the plaintiff were to proceed in the District Court, the only way he could do so would be by abandoning the excess. By so doing he is not able to sue Palms Tavern Pty Ltd for the excess, yet he remains liable to the Interim Commission for the whole sum.

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Papua New Guinea Law Reports

Regione v Palms Tavern Pty Ltd [1988-89] PNGLR 150 (28 April 1989)

Papua New Guinea Law Reports - 1988-89