Kilori v National Housing Commission [1991] PGLawRp 458; [1991] PNGLR 48 (25 January 1991)

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LANDLORD AND TENANT - Termination of tenancy - Denial of landlord’s title by tenant - Effect of - Executed conditions of tenancy - Acknowledgement of landlord - Tenant estopped from denying title - Landlord entitled to treat denial of title as forfeiture - Summary Ejectment Act (Ch No 202), s 6.

A tenant entered into possession of a dwelling house and signed a document titled “Conditions of Tenancy”, the effect of which was to make him a tenant from week to week. The landlord gave notice to quit and obtained an order for possession under s 6 of the Summary Ejectment Act (Ch No 202). On appeal against this order, the tenant disputed the landlord’s title.

N1>(1) Execution of the “Conditions of Tenancy” in which the tenant acknowledged the landlord as such, estopped the tenant from denying the landlord’s title.

N1>(2) The effect of the tenant’s putting the landlord’s title in dispute was to disclaim or repudiate the relationship of landlord and tenant and to entitle the landlord to treat that disclaimer or repudiation as an act of forfeiture entitling him to recover possession.

Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd (1951) 68 WN (NSW) 225, adopted and applied.

This was an appeal from an order of the District Court granting possession of premises pursuant to s 6 of the Summary Ejectment Act (Ch No 202).

BRUNTON J: The appellant appealed against an order of the District Court, Goroka, made under the Summary Ejectment Act (Ch No 202):

“that the defendant give possession of the premises namely Section 15 Lot 13 West Goroka, to the Complainant within seven days from today (7th June 1990)”.

N2>“1. that the Magistrate erred in Law that the Appellant had no right or licence to occupy Section 15 Lot 13, West Goroka.

N2>2. that the magistrate erred in law in finding that the Respondent is the registered owner of the property in the absence of production of a title deed or registered in evidence.

N2>3. that the magistrate misdirected himself in holding that Section 15 Allotment 13, West Goroka was allocated to the Appellant as a condition of his employment as a schools inspector and therefore was wrong in law ...”

The magistrate set out in writing the facts of the case and his reasons for judgment as follows:

“The appellant is a school inspector and public servant with the Department of Education and attached or on secondment to the Division of Education, Eastern Highlands Province.

In early 1989, the Department of Education appointed the appellant as school inspector in Enga Province in that year. On his transfer to Enga Province the Division of Education, Eastern Highlands Province had expected the premises occupied by the appellant to be vacated by his transfer. These particular premises are located at Section 15 Lot 13, West Goroka. It was expected that as soon as the appellant vacates these premises his replacement would occupy it on a one out, one in, basis. The appellant however refused to transfer to Enga Province and was still occupying the premises in question.

The Division of Education, Eastern Highlands Provinces wanted to put another school inspector, who was replacing the appellant into this house but this was not possible because the appellant was still occupying the house. Because of his refusal to transfer to Enga Province, the appellant was later suspended without pay by the Department of Education. He was then served with notice to quit the premises. The appellant refused to quit and as a result he is summonsed under s 6 of Summary Ejectment Act.

The respondent called three witnesses, Mr Omahe, the Assistant Secretary, Education, Eastern Highlands Province, Mr Aita, the Provincial Secretary and Mr Ohoreta, the Housing Officer. The evidence adduced by complainant through these witnesses is as follows:

‘The defendant is a School Inspector attached to Division of Education, Eastern Highlands Province. By virtue of his position as a School Inspector he was moved into the premises Section 15 Lot 13, West Goroka when he was first appointed in 1988. Section 15 Lot 13 was allocated to Division of Education, Eastern Highlands Province to accommodate its officers particularly the school inspectors.

That since then these premises were occupied by various school inspectors on a one out, one in, basis for the last eight years and that the appellant was the last one to occupy it on that basis. That in early 1989 the appellant was appointed school inspector in Enga Province, he refused to take up his post there for 1989. He was then suspended without pay. He refused to vacate the premises which he has no right to remain in.’

The appellant attempted to show that he has the right to remain in the premises. He says that he applied personally through National Housing Commission on 22/6/88 and was allocated that house. He says that he has the right to remain in the premises because he was only suspended from duty and not terminated or resigned.

Having considered the evidence of both sides I am satisfied that the appellant was granted permissive occupancy because of his position as a school inspector. I find that the appellant did not apply personally through the National Housing Commission to get these premises, that on 22/6/88 he only signed a ‘Conditions of Tenancy’ after he was moved in there as a School Inspector. His permissive occupancy to these premises ended when he was appointed School Inspector in Enga Province and he was no longer attached to the Division of Education, Eastern Highlands Province. His replacement in Eastern Highlands Province is entitled to move in to those same premises. Even if he is only suspended, in my view, he is still not entitled to remain in the premises as he is no longer attached to the Division of Education, Eastern Highlands Province. The fact that he applied for those premises to purchase them, under the Government Purchase Scheme, does not give him any right to claim it as his house or right to remain in the premises until approval is given by the National Housing Commission and an agreement on condition to purchase is signed. Also in my view there is no need for the National Housing Commission to produce title over those premises because the house is owned by the State. Only a person other than the State can produce title to show that he has the title over the premises from the State.”

The facts of the case showed that the appellant was a public servant, who signed a document called “Conditions of Tenancy” on 22 June 1988 with the then National Housing Commission. Paragraphs one and two of the Conditions read:

N2>“1. The tenancy shall commence on the 22nd day of June 1988 and shall be from week to week ending at 12 midnight on any Saturday and determinable by at least one week’s notice in writing by the Commission or by the tenant, so that such tenancy shall be determined not before the end of the next completed week of tenancy. If the tenant vacates the house without giving proper notice, one week’s rent will be payable in lieu thereof.

N2>2. The rent is at the rate of seventeen kina fifty toea per fortnight and shall be paid monthly in advance to Saturday to the National Housing Commission or to the agent or officer of the Commission.”

There then followed five covenants which placed numerous obligations on the tenant, and no obligation at all on the Commission (landlord). In terms of sharing the obligations of landlord and tenant, the tenant had no rights on the face of the conditions.

The appellant was a tenant from week to week, and his occupancy of section 15, lot 13, West Goroka, could be terminated by the landlord, on one week’s notice.

The evidence before the District Court was that the appellant was a schools inspector, and public servant with the Department of Education. In early 1989, he was ordered to move to the Enga Province. The appellant did not want to take this transfer. He refused to move and was suspended without pay. The authorities in the Eastern Highlands wanted his house to put someone else into it. That persuaded the National Housing Commission to commence this action.

On 3 October 1989, the appellant was given seven days notice to vacate the premises. The effect at law of that was to determine the tenancy. A summons was issued against the appellant and he appeared in the District Court on 29 November 1989. The case was adjourned to 8 December 1989 to enable the appellant to get a lawyer. On that date the matter was adjourned again, first to 11 December 1989 and then to 23 January 1990, to allow the attendance of Mr Miva for the appellant. Mr Miva did not appear and the matter was adjourned to 26 January 1990 with costs to the respondent. On 26 January 1990, no appearance was made by the appellant or his counsel and an ex parte eviction order was made. This order was successfully set aside after the appellant and his lawyer explained their absences and the matter was put to trial. The decision of the District Court on the trial was that an order for the appellant’s conviction, under s 6 of the Summary Ejectment Act (Ch No 202), was to be made.

N2>“6(1) Where a person without right, title or licence is in possession of premises, the owner may make a complaint to a magistrate of a 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.

(a) does not appear before the District Court at the time named in the summons; or

(b) appears and does not show reasonable cause why possession of the premises should not be given,

the Court may, on proof of the manner of the complaint, issue a warrant directed to a member of the Police Force requiring him, on or before a day specified in the warrant,

In the light of the Conditions of Tenancy, the magistrates reasons show an obvious error, but the error does not necessarily mean that the appellant would succeed in his appeal. The error is this. At law the relationship between the appellant and the respondent was that of tenant and landlord. The conditions of tenancy created that relationship. Once the conditions of tenancy were signed, subject to covenants which the Underlying Law implies, such as the landlord granting the tenant quiet enjoyment, and the landlord’s implied covenant to keep the premises in a fit and habitable condition, it was the conditions of tenancy which regulated the relationship between the parties. Once the parties signed the conditions of tenancy, at law, they were bound. The vested legal right in the tenant was a tenancy from week to week. Although this was not as big a right as a tenancy from month to month, or from year to year, or for a period of months or years, nevertheless in law it is quite different from a licence to occupy premises. The appellant was a tenant, he was not a licensee, he did not have “permissive occupancy” as was implied by annexure B to the affidavit of Andrew Sawera dated 1 August 1989 and in the judgment of the magistrate.

However, the conditions of tenancy signed by the appellant were so onerous that in reality he was little better than a licensee. He could be turned out into the streets on seven days notice. The mechanism for evicting him was an administrative arrangement whereby Provincial officials were able to influence the Housing Commission and determine who was to be allocated a house and when they were to leave a house.

The conditions of tenancy do not contain any express words which indicate that section 15, lot 13, was owned by the Housing Commission, but that may be implied from the general form of the conditions, which set out the name of Housing Commission at the top of the page, and then identify the house number, section number, and lot number to which the conditions apply. The appellant by signing the Conditions of Tenancy acknowledged he was entering into an agreement with the Housing Commission. As a matter of law he is estopped from denying that the Housing Commission is the owner of the house in question: see the authorities cited in Wine v Giglmai [1990] PNGLR 462. It is not necessary for the Housing Commission to put in evidence its title to the land, only that it show it had a tenancy agreement in which the tenant acknowledged the Commission as the landlord. Hill and Redman’s Law of Landlord and Tenant (15th ed) says that the landlord should give evidence of his title to relief in ejectment cases (at 606, s 447). “The relationship of landlord and tenant may be proved orally, but if there is a written agreement showing the terms, it must be produced in order to prove the expiration”: Ingram v Knowles [1853] EngR 79; (1853) 20 LT OS 208 — see footnote (g) at 608.

“... if an action to recover possession of land is brought by a landlord against his tenant, and the tenant, by his defence, denies the landlord’s title, that denial operates [at common law] as a disclaimer or repudiation of the relationship and the landlord is entitled to treat that disclaimer or repudiation as an act of forfeiture entitling him to recover possession in the action in which the plea is pleaded”: Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd (1951) 68 WN (NSW) 225 at 227, per Owen J.

It is necessary to consider whether this rule is applicable or appropriate in Papua New Guinea. The rule is based on the principle that one cannot approbate and reprobate — one cannot take advantage of the beneficial parts of a deed, or a lease, or a tenancy agreement, and reject the rest; in layman’s language “you cannot have your cake and eat it too”. A tenant who has entered into an agreement with a landlord should not be able to have the enjoyment of the landlord’s land, or his house and turn around and then deny that the landlord owns the house. If this was the law in England at Independence, as it was in New South Wales, it appears to be based upon sound reasoning and materiality. But there are also other reasons why tenants in Papua New Guinea should be subjected to this rule. In the case of statutory authorities like the Housing Commission, the State has, in many cases, not bothered to issue certificates of title in respect of the land owned by the authorities, or the certificates that have been issued are out of date, or the real property has been passed from one authority to another, or it is looked after under an agency arrangement by an authority on behalf of the State. In these circumstances the certificates of title either have never been issued, or regularised, or are in confusion. For these reasons I think that the English Common Law rule set out in Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd is circumstantially applicable in Papua New Guinea.

Mr Miva, for the appellant generally relied on Gwai v PNG Ready Mixed Concrete Pty Ltd [1984] PNGLR 74 for the proposition that there was a genuine dispute of title in this case, and that in order to found an action in ejectment the title should be produced. The Ready Mix case is distinguishable from the present case. Ready Mix was a dispute between a “granted applicant” and some squatters. This case is about parties who, in a formal document, acknowledged themselves to be landlord and tenant. In my view the law in the Ready Mix case does not apply here.

In this case it was unclear as to who held the certificate of title — the State, the Housing Commission, or the Provincial Government. What was clear was that the appellant, in a formal agreement, had acknowledged himself to be a tenant of the Housing Commission when he occupied section 15, lot 13, West Goroka. That tenancy was terminated on 3 October 1989 when he was given seven days notice to quit. For these reasons the appeal is dismissed with costs.

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Papua New Guinea Law Reports

Kilori v National Housing Commission [1991] PGLawRp 458; [1991] PNGLR 48 (25 January 1991)

Papua New Guinea Law Reports - 1991