Unggai Bena Local Level Government v Herepe [2003] PGDC 35; DC476 (8 April 2003)

DC476

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 868 OF 2002

BETWEEN

Unggai/Bena Local Level Government
Complainant

V

George Herepe
First Defendant

Boda Bros Auto Repairs Ltd
Second Defendant

REASONS FOR DECISION

26th March, 15th and 8th April, 2003

KORONAI, PM: This action was taken under the Summary Ejectment Act Chapter 202 by the Complainant against the defendants over property situated at Section 51 allotment 1 in the town of Goroka.

Counsel
AS. Kintall for Complainant.
J. Atuwaiyo for defendants.

FACTS:

The Complainant is a Local Level Government Body established under the Organic Laws on National and Local Level Government, and owner of property at Section 51 allotment 1 in the town of Goroka.

The first defendant is a principal of the second defendant, a business concern, specialising, in auto repairs.

In October 2000, the former managers of the Complainant, through a verbal agreement with the first defendant, allowed the second defendant to occupy and use the premises at section 51, allotment 1 in the town of Goroka. This was a purported verbal lease arrangement pending approval by the Complainant when it holds it's meeting to consider it. This did not eventuate and on the 31st of May, 2002, the president of the complainant wrote to the manager of the second defendant giving them notice to vacate this property owned by the Complainant citing the following reasons:-

1. That since you have occupied the premises in October, 2000 you have not been constant in your rental payments.

2. That you have gone ahead and renovated, and altered the premises without. prior approval from Unggai Bena LLG.

3. That since you occupy the premises there has not been a lease agreement binded between the both parties at the time of occupancy.

In this letter, it was claimed that formalities for rent were not entered into and therefore the defendants were in illegal occupation of premises at section 51 allotment 1.

In reply of 7th June 2002 the first defendant stated that they had been making payments directly to their previous Manager when he personally approached them pending a resolution from the complainant regarding fixed rental fees. This letter also spoke of a lease agreement to be ratified by the Complainant for a fixed rental amount and this was to have been facilitated by the previous management.

In the defendants other letter of 20th September, 2002, the defendants were prepared to move out of the Complainant's premises at section 51, allotment 1 after their expenses of K50,000.00 spent in upgrading the premises were reimbursed by the Complainant.

The matter was not resolved resulting in parties going before the Court and an order was made against the defendants to give up possession of the said property on 29th July, 2002 and which was set aside upon a successful application by the defendants on 21st November, 2002. Matter was then adjourned Sine die on 2nd December 2002 when parties failed to appear. It was then set for hearing on 26th March, 2003 and 1st April, 2003 and finally for a decision on it today.

ISSUES:

There are certain issues raised and which must be decided and these are:-

1. Whether there is a lease agreement between the parties entitling the defendants to occupy the complainant's property at section 51, allotment 1, in the town of Goroka.

2. Whether a verbal agreement for lease between the defendants and the Complainant's previous Manager over section 51, allotment 1, without the Complainant's ratification was a legally binding tenancy agreement between the parties.

3. Whether the payments by the defendants of K3000.00 is evidence of a lease agreement and failure to continue to pay rent amounted to determination of this verbal lease agreement of October, 2000.

4. Whether notice to vacate the said property and subsequent Court proceedings amounted to a determination of any tenancy agreement between the parties.

5. Whether the defendants can claim value of renovations done to this property without the authority of the Complainant.

6. Whether defendants have any equitable interests or rights that needed to be protected from giving up immediate possession of the property in question.

THE LAW:

The Provisions of Summary Ejectment Act Chapter 202 applies to this Case under either section 3 or 6 depending on the findings of this Court is respect of the issues involved.

FACTS:

The following facts not in dispute are that the Complainant is the registered owner of property situated at section 51, allotment 1 in the town of Goroka and the defendants occupied this property in October, 2000 without a written tenancy agreement between them and the Complainant. In their President's letter of 315t May, 2002, the defendants were given twenty - one days notice to vacate the said premises and the defendants have neglected to do so saying they had to be reimbursed their expenses of K50,000.00 spent in upgrading the property before they would vacate the said property. They had paid a total of K3000.00 to the Complainant as rental payments and are now in arrears. The Complainant have since entered into a tenancy agreement with Mountain Motors at rentals of K2,500.00 per month which they have been unable to perform as a result of defendants' refusal to deliver up possession of the said property and this Court proceedings.

EVIDENCE:

Evidence from the defendant claimed that those was a verbal agreement between them and the previous Management of the Complainant to rent this premises but rental figures were not settled until I a formal ratification by the Complainant at its meeting of it's members and this never took place. The defendants however paid K3000.00 to the Complainant's management on 29th August 2001, 11th January 2002 and 20th February, 2002. They were no other payments. They were no rental payments made prior to that or after these payments up until I the time of this, proceedings. The evidence supported the fact that the, renovation carried out by the defendants were done without a proper tenancy agreement in place and without the consent of the Complainant.

Evidence from defendants and Complainant is clear that no agreement shall bind the Complainant until it is ratified by it in a general meeting of its members. It is shown by the fact, admitted by the defendants, who acted on a purported verbal agreement with the Complainant's former Manager, and moved into the said premises pending ratification by the Complainant in it's Meeting and which did not take place.

Instead they were given twenty one days to vacate the said property, which they have failed resulting in the previous and this proceedings, as the Complainant has since entered into a proper tenancy agreement with Mountain Motors.

From the whole of the facts as supported by the evidence it is clear that there was no tenancy agreement between the Complainant and the defendants over the said property before the defendants moved into it in October, 2000. This payment of K3000.00 made to the Complainant's management were advance payments and do not represent current Market rentals for this property for there was no agreement between the defendants and Complainant on the amount of rentals to be paid by the defendants for use of their property. It does not stipulate period when rentals are due and was not a continuous payment to show there existed any agreement be they temporary, verbal or written. Therefore, there is no legal binding tenancy agreement between the defendants and Complainant over the use and occupation of property at section 51, allotment 1, in the town of Goroka.

Failure by the defendants to make continuous monthly rental payments has in itself, determined this verbal tenancy agreement of October, 2000 if such existed. This fact is proven when the defendants are given notice to vacate within twenty - one days and subsequent Court proceedings following their failure to do so. This in itself determines any previous tenancy agreement whether verbal or written that may have existed between the parties.

Their entering into a tenancy agreement with Mountain Motors is clear indication that the Complainant's have no prior tenancy agreements with the defendants or anyone else over their property at section 51, allotment 1, in the town of Goroka. As there was no tenancy agreement between the Complainant and the defendants, showing rights of the parties, any expenses undertaken by the Complainant, or as in this case by the defendants, over the use of the said property is not recoverable.

As the facts show, the defendants were occupying the Complainant's property illegally since October 2000 and that they have no rights, whether legal or equitable, to continue to occupy the said property of the Complainant. Proceedings under the Summary Ejectment Act provisions are intended to give full and peaceful possession of land or property illegal or unlawfully occupied to the owner who has undisputed and clear titles to them. See HERMAN GAWI - PNG READY MIXED [1984] PNGLR 74. Here it is not disputed by the defendants that the Complainant is the owner of premises at section 51, allotment 1, in the town of Goroka.

As to money expended by the defendants, in renovating the said property, without any formal tenancy agreement and consent of the Complainant, they could, if they still insist on its, recovery, take the appropriate action in the National Court of Justice.

CONCLUSION:

From the above reasoning it is clear that defendants are illegally occupying the Complainant's premises at section 51, allotment 1, in the town of Goroka and they must give up It s possession, peacefully, to the Complainants or be forced by this Court to do so.

The defendants are businessmen and a business concern and they should follow modern business practices and must ensure that everything including proper lease or rental agreements are in place before moving into and occupying the Complainant's premises at section 51, allotment 1, in the town of Goroka.

FORMAL ORDERS:

1. The defendants are ordered to Vacate and de liver up possession of property at section 51, allotment 1, in the town of Goroka, to the Complainants within two days of the date of this order; and

2. In default a Warrant to that effect will be issued to Inspector Wawia of Police Station, Goroka to forcefully enter and remove the defendants from the said property and deliver it's possession to the Complainants.

3. The defendants are to meet the Costs of the Complainant's, such Costs are to be agreed upon, if not taxed.

A.S. Kintau: Complainant
John Atuwaiyo: Defendant