Wanema Trading Ltd v Tabudubu Ltd [2008] PGDC 85; DC842 (10 March 2008)

DC842

PAPUPA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]
Civil Jurisdiction

DC N0 1807 OF 2006

WANEMA TRADING LIMITED
Complainant

V

TABUDUBU LIMITED
Defendant

PORT MORESBY: Pupaka, PM

2008: 10th March

Orders for possession of property – Eviction orders to enable possession of property – Alternative orders for damages to be assessed – Orders sought on the bases of non compliance with a previous District Court order – Previous court order, though unaffected and un-appealed may have been ultra vires the powers of the District Court and void able per se – Orders currently sought are in excess of District Court jurisdiction and also misconceived – Applicant’s relief is in damages and not specific performance.

Counsel:

Prudence Apera, Company Secretary, for the Complainant /Applicant
No appearance for the Defendant /Respondent

10th March 2008

PUPAKA, PM: This matter comes before me as an ex parte application, by way of a motion upon notice for the following orders:

1. Possession to occupy the premises situated at Section 28, Allotment 2, Ela Beach Kiosk, be granted to the Complainant /Applicant within thirty (30) days;
   
2. In default thereof, a warrant to deliver in the prescribed form be issued forthwith to the members of the Police Force to enter and deliver possession forthwith;
   
3. Alternatively the Defendant /Respondent to pay damages and costs to be assessed;
   
4. Any further and such orders that the court deem fit. (sic)
   

These orders are sought on the bases that the defendant /respondent has failed to give possession of the property described above to the complainant /applicant as per a previous District Court order that, in a way, obligated the defendant to act, such as to allow possession to remain in the complainant.

The previous order, also from the Port Moresby District Court, reads:

1. The Defendant allows the complainant to exercise the option to renew the initial Lease Agreement as per the terms of the said Lease Agreement and continue to operate the trade store for another term.
   
2. The Defendant is at liberty to increase the rental amount of K2000.00 per month by CPI annually.
   
3. The Defendant shall pay the costs of this proceeding. (sic)
   

That order, which is dated 10th May 2007, was apparently made inter partes and was granted as a result of the following pleadings and facts:

The complainant signed a lease agreement with the defendant on 3rd September 2001 for the lease of the property on Section 28, Allotment 2, otherwise possibly known as the Ela Beach Kiosk. The lease was for 5 years, beginning 3rd September 2001 and ending 3rd September 2006, with an option for renewal for another 5 years. However as the lease was coming to an end, the defendant advised the complainant on 1st July 2006, that there would be no renewal, thereby terminating the complainant’s right of option.

That non extension notice prompted the complainant to commence this proceeding on 3rd August 2007. The complainant said it was not given a chance to decline the option under the lease agreement. It said that it had invested money in the property and it did up all the renovation work. The complainant therefore sought orders restraining the defendant from evicting it from the property "until the court further deal with the case."

Evidence produced in court for the hearing is unclear but the presiding magistrate granted orders compelling the defendant to allow the complainant to exercise the option in the lease for another 5 year term and ordered the defendant to pay the complainant’s costs. The presiding magistrate further said that the defendant was at liberty to increase the rental amount of K2000.00 per month, taking into account annual CPI adjustments.

The 10th May 2007 decision apparently remains binding upon the parties. It seems there has been no appeal against it. However the defendant is said to have changed the locks and has contracted with a third party who now occupies the premises, presumably plying the same trade as did this complainant. That is why the complainant has come again to court to ask for the orders it now seeks in the current application.

The 10th May 2007 Decision

The 10th May 2007 decision or order is current and is binding as I said but the defendant has obviously decided to ignore the order altogether. It has also failed to appeal against it, which is a pity because it cannot just ignore court orders, regardless of whether the orders are in his favour or not and indeed whether or not the order is void able.

However I must state for the record that the entire decision is void able and seems to be ultra vires the District Court’s powers. For instance the aggregate value of the order granted was over the financial jurisdiction of the District Court. Whereas the relief claimed was only for restraining orders against the defendant, to prevent the latter from evicting the complainant from the property ‘until further orders’, the previous court actually granted a different set of orders. That bit about ‘until further orders’ seems to have been an obvious error of pleading because there was no other order sought apart from the restraining order. Since no other orders were sought in the Summons and Complaint besides the restraining orders, the court should not have granted the orders it did.

Strangely the presiding magistrate granted an order which was not sought in this proceeding. Further there were no amendments of proceedings to facilitate or enable the 10th May 2007 order to be granted.

Therefore, in as much as the presiding magistrate coerced the defendant into a relationship and business decision and commitment it clearly was not obligated to in anyway; the decision was bad in law. In any event the complainant’s relief could only be in damages and not specific performance. So in the circumstances one may wonder in amazement as to what the presiding magistrate was really thinking at the time.

The argument that the complainant "invested lots of money in that property and did up all the renovation work" is no reason to grant the order. If the complainant was led to believe it would be allowed to exercise the option it can only seek damages at the most. If the complainant invested money by doing renovation, unless he was expressly permitted to do so by the landlord, it cannot relay on unauthorized work to secure an extended lease. The work may well have been running repairs to the place that the complainant was obligated to do from time to time anyway, for its own convenience. In any case an exercise of option is purely commercial, in accord with the convenience of both parties – not just one of the parties.

I have been compelled to say what have stated, in relation to the 10th May 2007order, because it needs to be mentioned. There is no appeal against that order, and more importantly, this instant court is no appeal court so it cannot alter the order. Besides the order was made inter partes so this Court cannot touch it in anyway. Nevertheless the apparent defects in the order ought to be highlighted. Needless to say it only needs an appeal to void it.

Orders sought by this Application

The complainant wants an order from this Court granting it power to have possession of the premises situated at Section 28, Allotment 2, otherwise known as the Ela Beach Kiosk, within thirty (30) days. It would also need a warrant to deliver in the prescribed form to be issued to members of the Police Force to enter and deliver possession if there is no voluntary delivery of possession. Nevertheless the available evidence shows that there is a third party in occupation of the property currently. There would be any number of inconveniences caused as a consequence of a grant of the first order sought.

On the other hand the complainant has not lost any opportunity to seek damages against the defendant. Whilst granting the order may, in effect, be seen to be enforcing the previous order, the aggregate value of a possession order will exceed this Court’s jurisdiction by miles. Moreover, there is no evidence that an extended lease agreement has already been struck and signed between the parties. The defendant has not come out to negotiate. The terms of any possible agreement are yet to be ironed out. It is therefore not proper to grant the order sought. In fact, on the bases of a lack of an agreement, though due to no fault of the complainant, this current application of the complainant is totally misconceived.

In the alternative the complainant sought from the defendant /respondent damages and costs to be assessed. Again this claim is based upon a premise that there is no need for an agreement on extended lease to be in place. It is one thing for the District Court, or any court, to compel parties to execute a business agreement, but it is another thing altogether to enforce an agreement that may be reached as a result of the order though, whether or not it is achieved as a result of free agreement or compulsion.

The previous court order allowed for an agreement, to extend the lease, to be worked out between the parties. Despite that there is no agreement in place here as yet, albeit due to the lack of cooperation from the defendant.

Conclusion

The complainant seems to have an arguable case. It apparently secured the grant of an order that is yet to be enforced, including finding agreement on the terms of an extended lease. As I said above, this lack of agreement is not due to any fault of the complainant. It is the defendant who seems to be flaunting the first court order. The complainant has no doubt suffered considerable loss and it would continue to miss out on opportunities.

Nevertheless the complainant still has the right to seek damages in an appropriate forum. It would need to institute proceedings to that effect first though, and then prosecute it.

In the end this application by notice of motion ought to be dismissed for being misconceived and it will be. The complainant of course reserves the right to commence fresh proceedings, seeking damages, if it so wishes. It has, as yet, not lost that right by the particular outcome in this application.

________________________________________________

Prudence Apera, Company Secretary, for the Complainant
There has been no representation for the Defendant