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Papua New Guinea District Court |
[2000] PNGDC 2 - ANDREW OGOGO V JOAN PAIKE
PAPUA NEW GUINEA
[DISTRICT COURT OF JUSTICE]
CASE NO: DCC. 3117/99
BETWEEN
ANDREW OGOGO
COMPLAINANT
AND
JOAN PAIKE
DEFENDANT
Port Moresby
Geita M
25 April 2000
PRACTICE AND PROCEDURE – Summary Ejectment Procedures – genuine equitable interest established in defence- equity proven- recovery of possession stayed- defendant’s equity protected- defendant expressly empowered to service mortgage- paid in full.
Counsel
Complainant in Person
Defendant in Person
REASONS FOR DECISION
GEITA M: The complainant has come to this court by way of an ordinary complaint to have the defendant evicted from his property viz. Section 252 Allotment 5 Gerehu Stage 2. Normally such complaints are best coming into court pursuant to S.6 Summary Ejectment Act Ch No. 202. This section clearly spells out the circumstances under which it may be used. Although the complainant has not used the black letter word of section 6, his intentions is clear in that the general provisions of the section are being relied upon.
The brief facts of the case are these. The complainant resigned from work in 1989 with a view running a small business at his home in Bereina. The complainant took out a load from the Rural Development Bank of Papua New Guinea and purchases a PMV and opened up a trade store and petrol station. Around 1992 his business closed down, making it difficult for the complainant to finance his loan with the Bank.
According to the complainant the keys to his house were left with the defendant and her family before he left for his home in Bereina. The complainant did not mention anything about mortgaging his house to the Bank to the defendant. All he said was that she was her sister and trusted her to take care of the property in good faith. The complainant admits defendant paying off his loan with the Bank totalling K15, 917.01. This was made possible through fortnightly repayments from her salary since 1981.
The defendant deposed in her affidavit that since the complainant was returning to his home village he needed someone to take care of the house. He gave the keys to the defendant’s husband at Boio village in Kubuna and invited them to come into the house in Gerehu. According to her the complainant never told them about using the property in dispute as a collateral to purchase his new PMV. Obviously the title deed was surrendered to the Bank.
The complainant’s overt dealings came to light in 1992 when the Bank notified him of exercising their right over the property due to no servicing of his loan. That was the first time the defendant and his family knew that the complainant to further his ends was using them. It was than that she realised her role as a caretaker of the property.
When informed by the defendant of his predicaments, the complainant, now having lived in that property since 1989 felt obliged to bail his brother out. In her own words and I quote, “I went with him to the Bank to see if I could in any way get back the house because I had nowhere to go to. His in-law C. Apori who was working at the Bank at the time, had discussions with us and made necessary arrangements for me to take on the responsibility and pay off the debt of K15917.01.”
On 15 August 1997 the defendant completed repaying the complainants outstanding loan together with interest totalling approximately K19, 000.00. Upon payment of the appropriate de-registration fees title documents to the property was handed over to her. The house was also renovated by the defendant at a cost of K6500, with fencing included. At the time of going to court title documents still remain in the custody of the defendant, claiming that she has some interest in the property.
There is no evidence before the court to show who has title to the property after de-registration of the mortgage. On the face of it, it would seem that the property in question is still jointly owned by the complainant and his wife as joint tenants. It is not disputed by the defendant that the complainant owned the property up until 1997 when he defaulted in his loan repayments. From that year onwards the complainant took over the defendant’s loan liability and eventually cleared the loan debt.
The defendant since 1989 had been in permissive occupancy of the property upon the invitation of the complainant. However unknown to the defendant, the complainant mortgaged the property to the Bank in 1989.
The defendant now claims that she has a genuine equitable interest in the property and as such the complainant cannot exercise his right of eviction and repossess both under the Summary Ejectment Act provisions of the District Courts Act.
It would seem that the complainant is relying on S. 6 Summary Ejectment Act provisions to remove the defendant from his property. Although his complaint does not use the exact words of the section they are reflective of s.6 provisions. The complainant is claiming that the defendant is illegally in possession of his property. Section 6. Summary Ejectment Act reads:
N2>“(1) Where a person without right, title or licence is in possession of premises, the owner may make a complaint to a magistrate of District Court to recover possession of the premises, and the magistrate may issue a summons in the prescribed form to the person in illegal occupation.
N2>(2) Where the person summoned ... appears and does not show reasonable cause why possession of the premises should not be given ... issue a warrant directed to a member of Police Force ... to enter, by force into the premises and to give possession of the premises to the complainant.”
In this case the relationship between the complainant and defendant are not those of a lessor/lessee.
One other legal issue here is the question of the existence of a mortgage. The complainant, prior to leaving for his home , mortgaged the house to the Bank without informing the complainant. Like most mortgages the essential nature of it is that it is a conveyancing of a legal or equitable interest in property, with a provision for redemption, i.e., that upon repayment of a loan or the performance of some other obligation the conveyance shall become void or the interest shall be reconveyed. In this case the Bank took custody of the title deed in order to prevent a purchase of the legal estate without notice of the mortgagee’s rights. When the defendant paid up all the complainant’s debts/loan repayments the said title deed was surrendered to her. By then she had been possession of the property all that time.
The next question is who can redeem? The law is that redemption is usually sought by the mortgagor, but the right to redeem is not confined to him and may be exercised by any person interested in the equity of redemption, however small his interest.
In this case the defendant has successfully parted with the whole interest in the property with the whole interest in the property and she is entitled to redeem a mortgage of the property as being a person interested in the equity of redemption. In addition she was expressly empowered by the complainant to make mortgage payments due from him in respect of the property. She is therefore also entitled to be made a party to any action brought by the mortgagees to enforce his security. Since the defendant was the only person interested in the equity of redemption and the mortgage redeemed, the only encumbrance on the property, the mortgage was discharged and the property left free from encumbrance. Hence the Bank surrendered all title deeds to the defendant.
It is generally said that an equitable mortgage has no right to take possession. Certainly he has none at law, for he has no legal estate. But in equity she should be entitled to the same rights as if she had a legal mortgage. But in equity she should also be entitled to the same rights and there would seem to be no reason why he should not take possession under the doctrine of Walsh v Londale (1882) 21 Ch. D.9.
The end result is that the complainant cannot derogate from his own bargain by setting up the defendant to settle all his debts. I am satisfied that the defendant is entitled to redeem and may apply to the court for an order for sale and is apparently entitled to such an order as of right.
The relationship between the complainant and the defendant is likened to that of a tenancy at will. In that the defendant with the consent of the owner/complainant occupied that property rent free and for an indefinite period. The complainant cannot be said to be entitled to rent as there is no agreement in place. The essence of the tenancy is that either party can determine it at will. In this case the landlord has served a writ claiming possession of the land.
Under S.22 District Courts Act Ch. No. 40 I quote:
“Subject to this Act, a Court as regards a cause of action for the time being within its jurisdiction, shall, in proceedings before it:
(a) grant such relief, redress or remedy or combination of remedies; and
(b) give the same effect to every ground of defence or counter-claim, whether equitable or legal, as ought to be granted or given in a similar case by the National Court and in as full and ample a manner.”
In the case of Wine v Giglman [1990] PNGLR 462 at 471 Brunton AJ said:
“The law of equity was always used by the courts to ameliorate the injustices of the harshness of common law or statute. It is therefore available to develop the underlying law and to ease those pressures on litigants that arise from the inefficiencies of centralist and unreformed statute law. In the case of land administration there are good grounds for developing the law of equity to ensure justice is done in particular cases.”
In this case injustice has been dome and equity must be employed to restore fairness.
In the case of Greasley v Cooke [1980} 3 All E. R 710 the Plaintiff gave assurance to the defendant to remain in her house for as long as she wished and it was held that it was to be presumed that the defendant had acted on faith of these assurances. The burden on proof was on the Plaintiff to rebut this presumption and since they have failed to do so an equity was raised in her favour to stay on in the house for so long as she wished. The defendant had incurred expenditures and have prejudiced himself or acted in his detriment. Lord Denning MR did not think that that was necessary and said it would suffice if the party to whom the assurance was given acted in good faith of it in such circumstances that it would be unjust and inequitable for the party making the assurance to go back on it.
Now that the defendant’s equity is established what is the appropriate way in which it can be satisfied/ In Dillwyn vGlowely (1862) 4 De G F C J 517; Pascoe v Turner [ [1978] EWCA Civ 2; 1979] 2 All E R 945 and Voyce v Voyce (1991) 62 P & CR 209 there was an order for conveyancing of a fee simple estate, in Taylor Fashions Ltd v Liverpool Victorian Trustees Co Ltd (1991) 62 P & CR 209: a decree of specific performance of the renewal option in the lease, while in Unity Joint Stock Mutual Banking Association v King [1858] EngR 303; (1858) 25 Beav 72, a lien was imposed for the amount expanded where a father had allowed his son to occupy and expand money on his land.
In Dodsworth v Dodsworth (1973 228 Estates Gazette 1115 the defendant husband and wife spent around $700 on improvements to the plaintiffs bungalow in expectation, encouraged and induced by the plaintiff, that the defendant and the survivor of them could be able to remain in the bungalow as their home – for as long as they wished to do so.
The action here was a claim for possession by the owner. The Court of Appeal held that it would be wrong to give the defendants in interest, which would have the effect of making them, tenants for life upon them a greater and now extensive interest than that contemplated by the parties.
The proper was to protect the defendant’s equity in the circumstances was to declare that the money expanded on improvements must be repaid before a possession order could be obtained. (emphasis mine)
In another case the equity having been established, parties entered into an agreement that the defendant should be granted a long lease determinable on his death at a rent low enough to avoid her becoming a protected tenant under the Rents Act and with an absolute covenant against assignment.
I would adopt the statement made by the Court of Appeal in Dodsworth v Dodsworth (supra) as being entirely applicable to the facts of this case. “The proper was to protect the defendant’s equity in the circumstances was to declare that the money expanded on improvements must be repaid before a possession order could be obtained.” (emphasis mine)
I will go further and say that the money expanded on improvements (K6500) together with the mortgage payments due from the complainant in respect of the property totalling K15,917.01 must be repaid before a possession could be obtained.
I therefore make the following orders:
COURT ORDER
N1>1. The end result is that the complaint is dismissed;
N1>2. In order for the defendant’s equity to be protected it is declared that all monies expanded on improvements, together with mortgage payments due from the complainant in respect of the property must be repaid before a possession order could be obtained.
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