Rangip v Yeung [1998] PGDC 2; DC25 (17 February 1998)

Unreported District Court Decisions

[1998] PNGDC 3 - TOM RANGIP & OTHERS V ROLAND YEUNG & ANOTHER

[1998] PNGDC 3

PAPUA NEW GUINEA

[DISTRICT COURT OF JUSTICE]

NO 1698 OF 1997

TOM RANGIP, BOWAZE PTY LTD and PARADISE CORPORATION PTY LTD (Complainants)

v

ROLAND YEUNG and GOLDEN GATE PTY LTD (Defendants)

Port Moresby

G Manuhu PM

5-6 February 1998

10 February 1998

17 February 1998

PRACTICE AND PROCEDURE - Application for joinder

SUMMARY EJECTMENT - Summary Ejectment Act (Chapter 202) - interest in property established by lease agreement - effect of new lease agreement on original lease agreement - original lease agreement repudiated when landlord executed a new lease with a third party

Representation:

Counsel/Representative:

Applicant: Ms Solomon

17 February 1998

G MANUHU PM:

N1>[1]      This case may be described as an untidy case. It started initially as ejectment proceedings under the Summary Ejectment Act (Chapter 202) for the Defendants to vacate property described as Portion 1536 Granville (formerly Portion 97 Granville) contained in the Aerodrome (Business Concessions) Lease Volume 1 Folio 12 (Lease No. 038) ("the property"). The case has dragged for some time during which, amongst other things, various restraining orders were given here and there; a vehicle was allegedly wrongfully confiscated, and allegations of theft, bribery and fraud were made against one of the parties.

N1>[2]      The application at hand is the latest twist in the matter. The application is being pursued by Kevaru Investments Pty Ltd ("Kevaru") who wants to be joined as a Cross-Defendant on the basis that it has an existing interest in the said property by virtue of a lease agreement with the landlord.

N1>[3]      I will grant Kevaru's application for joinder as Cross-Defendant. There is sufficient evidence to show that it has an existing lease agreement with the landlord, the Central Province Development Corporation Limited ("CPDC"), and, as such, has a real interest in the property and, consequently, the ejectment proceedings.

N1>[4]      It is necessary to set out the background of the proceedings and the pertinent issues so that everyone concerned may be able to appreciate that I have noted, understood and duly considered their arguments. As far as I am able to ascertain from the evidence, Bowaze Pty Ltd ("Bowaze"), Paradise Corporation P/L ("Paradise") and Golden Gate Pty Ltd ("Golden Gate") are companies owned or partly owned by the First Defendant, Tom Rangip. There is no dispute that the landlord of the subject property is CPDC. On 14 September 1990, by a valid lease agreement the property was leased to Bowaze for a term of 10 years for a rental of K34,800.00 per annum. However, the property was in fact occupied by the sister company, Golden Gate.

N1>[5]      Roland Yung, a Defendant herein, as well as Shirley Rong, Han Ting Rong, and Lan Zhen Li were all employed by Golden Gate but the man that started the entire dispute was Ngai Yan Han. According to Mr Yung, Mr Han was a 24 per cent shareholder of Golden Gate. Mr Rangip says that he was the "principal owner" of Golden Gate. I am not sure if anyone else held shares in Golden Gate but Mr Rangip's must have held more than 24 per cent.

N1>[6]      On 1 September 1997, Mr Han of Golden Gate agreed to sell all interests in Golden Gate to Kevaru which happened to be owned by the above-named Shirley Rong and Han Ting Rong who had resigned from Golden Gate on 3 July 1997. It was also agreed that a new lease agreement between Kevaru and CPDC would be entered into:

"We have informed the landowner CPDC for the above mentioned matter. CPDC has agreed to arrange a new lease agreement between CPDC and Kevaru Investments P/L." [sic]

N1>[7]      The new lease had in fact been pre-arranged, as it appeared to have been executed on 1 August 1997. The transfer of interest to Kevaru was effective on 1 October 1997.

N1>[8]      Mr Rangip disputed the transfer of assets and the new lease agreement. In his affidavit of 16 December 1997, he deposed as follows:

N2>"1.      I knew Roland Yung some time back as I initially brought him to the country and then employ him as my Supermarket Manager at 7 mile.

N2>2.       Due to other commitments I allow him to manage Golden Gate Pty Ltd Supermarket. However, unknown to me he allows non-payment of rents to CPDC to lapse for six months allows an opportunity to organise Kevaru Investments to simply walk in and take over stock, staff and management of Golden Gate P/L." [Sic]

N1>[9]      Mr Rangip maintains that he, as principal owner, was never advised and did not give consent to the transfer. He had also referred the dispute to the Fraud Squad as fraud was suspected.

N1>[10]    From Mr Rangip's claims, there is a cause of action against Mr Han for the alleged unauthorised transfer of Golden Gate's interests to Kevaru; but Mr Han is not occupying the property. There may also be a cause of action against Mr Yung for assisting in the unauthorised transfer of interests; but Mr Yung is not occupying the property. Bowaze may have a cause of action against CPDC for breach of the lease agreement but CPDC is not a party herein. Accordingly, all of these issues are none of this Court's business.

N1>[11]    These are ejectment proceedings under the Summary Ejectment Act and will remain as such. The Court is only interested in identifying any right, title or interest in the occupation of the property. The Court will require the parties to produce, either a current Certificate of Title or a current Lease Agreement to the property. Anyone without such a document or its equivalent should not remain on the property.

N1>[12]    At this juncture, I am at a loss to find an explanation why Roland Yung and Golden Gate are Defendants in the case. The Complainants should have sued Kevaru which is claiming interest in the subject property. The said Defendants should never have been sued. This brings us to the main dispute which is a tussle between Bowaze and Kevaru as to which of them has an existing agreement with CPDC in relation to the property.

N1>[13]    Kevaru has tendered before the Court a copy of a lease agreement with CPDC. The lease stipulates a term of one year commencing 1 August 1997, for an annual rental of K47,734.32.

N1>[14]    Bowaze has also tendered a copy of its lease agreement with CPDC. It was dated 14 September 1990, for a term of 10 years at an annual rental of K34,800.00.

N1>[15]    It is clear that the new agreement was entered into during the term of the first agreement. There are claims that Bowaze defaulted in its rental payments but the Court is not sure as to whether this was the reason for executing a new lease. There is no evidence from CPDC on how it entered into a new arrangement when it already had one for the property. It is not clear if CPDC expressly terminated the original agreement.

N1>[16]    Prima facie, therefore, Bowaze and Kevaru are on equal terms in the contest over the property. They both have a valid lease agreement with CPDC. To this extent, I was thinking about the old maxim of equity that first in time is first in right. This would mean that the property should go back to Bowaze. But I think this case is slightly different. This dispute has the element of a deliberate action by CPDC to execute a new lease whilst the first was still in existence. Such action may also be interpreted, and of this I am satisfied, as a termination of the first agreement.

N1>[17]    In Pacific Contract Law, Roebuck, Srivastava and Nonggorr (1987) UPNG Press at 709 the writers stated:

"Breaches of contract may be put into three categories: failure to perform, repudiation, and self-imposed inability to perform which is really a sub-category of repudiation. Breaches usually arise where a party fails to perform what he promised to do under the contract, because he fails to pay or deliver on time, or perhaps his goods or workmanship is faulty. Repudiation takes place where a party expressly or impliedly says that he will not carry out his part of the contract. The third category is of cases where a party makes it impossible for himself to perform his part; if A has contracted to sell his car to B and then sells it to C, he has no car with which to perform the contract." (my emphasis)

N1>[18]    In this case, by entering into a new arrangement with Kevaru, CPDC has impliedly (if not expressly) repudiated the original lease agreement. CPDC has opted for a lucrative deal of K47,734.32 instead of K34,800.00 per annum. Alternatively, by leasing the property to Kevaru, CPDC has made it impossible for itself to perform its part in the first agreement.

N1>[19]    But a breach alone does not put an end to a contract.

"A party cannot unilaterally terminate a contract by breaking it. It is the acceptance of that breach by the other party as repudiation and as a termination of the contract which puts an end to the contract." (Ibid)

N1>[20]    I have been advised by the Complainant's representative that it has a pending case in the National Court against CPDC for breach of the lease agreement. In so doing, Bowaze has accepted that its lease agreement with CPDC has been terminated, hence, the suit for damages.

N1>[21]    This means that the only existing agreement for the subject property is between Kevaru and CPDC. Anybody else found on the property should not be there and I will issue a Warrant of Ejectment against that person.

N1>[22]    Orders accordingly.