Iewago v Yaubihi [2007] PGNC 60; N3211 (3 August 2007)

N3211

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 203 OF 2007

BETWEEN:

CES and GERDA IEWAGO
Plaintiffs

AND:

DR. NOEL YAUBIHI
Defendant

Waigani: Davani, .J
2007: 10 July
3 August

Counsel:

R. Mulina, for plaintiffs/applicants
J. Goava, for the defendant/respondent

DECISION

3 August, 2007

1. DAVANI .J: Warner Shand Lawyers, for and on behalf of the plaintiffs, moved their Notice of Motion filed on 1 June, 2007 seeking the following orders;

1. To set aside National Court order dated 21 March, 2007 staying these proceedings;

2. Summary Judgment;

3. Costs and other orders.

2. ـThe defe dant opposepposes the application through his lawyers. However, the defendant did not file a Defence nor did he file affidavits. The plaintiffs filed several affidavits and rely on these.

Background

3. &#16 plaintiffs and defendafendant were parties to a Contract of Sale (‘Contract’) where the plaintiffs entered into Contract with the defendant to purchase property described as Section 84 Allotment 11 Mirigini Avenue Boroko, National Capital District. (‘the property’). This occurred on 20 March, 2006.

4. The defendant as owner, subject only to the completion of the purchase from the National Housing Commission, entered into the Contract with the plaintiffs. I will refer to the defendant’s relationship with the NHC and whether it affects the Contract, later below.

5. On the same day, thendefe sant signed a transfer of the property to the plaintiffs.

6. &#1622 September, 2006, the, the plaintiffs paid stamp duty with respect to the Contract and transfer, on the sale of the property.
<#160;;ټ With regard to the purchase of the property by the dthe defendefendant fant from trom the National Housing Corporation, the plaintiffs sent the defendant relevant documentation to formalize this purchase on 7 November, 2006.

8. ;&#16n receipt oipt of the the documentation, the defendant returned the same unsigned. On 31 October, 2006, he initiated Distrourt eding No. 2591 of 2006, for the eviction of the plaintiffs from the propertyperty, whi, which thch the plaintiffs defended. These proceedings were for alleged payment of rentals. At the conclusion of the trial, the District Court made the following orders;

(i) That the tenancy or Rental Agreement which was made verbally in March 2005 is to be honoured and given effect to by both parties until such time it is mutually terminated.

(ii) That all rental arrears which remain outstanding since date of the said Tenancy/Rental Agreement are to be settled by the defendant to the Complainant without deduction within one (1) month from the date of this order.

(ii) That the defendant is prevented from undertaking further repair works and alterations to the property without the authority of the complainant.

9. ;&#16 proceedingedings were were determined on the issue of rentals alone however, no decision was made on the summary ejectment of the plaintiffs from the prop

100; Since May 200y 2007, th7, lhe plae plaintiffs complied with the orders of the District Court by paying outstanding rental arrears of K13,000.00 in instalments of K12,505.00 and K2425.00.

11. ҈Sthce thn, the plai plaintiffs have attempted to settle the conveyance of the property to no avail. The plaintiffs then filed these proceedings seeking spe perfce ofcontract, in particular;

1.

1. An o An order rder for specific performance of the agreement dated 20 March, 2006;

2. That the defendant exchange contracts and transfers of the property with the National Housing Corporation for perusal and execution to enable the sale to proceed within 7 days of the date of such order;

3. That in the event the defendant fails to comply with the orders, that the Registrar of the National Court be empowered to effect the sale and purchase of the property by and between the defendant and National Housing Corporation and to finalize the agreement and transfers with respect to the property between the plaintiffs and the defendant;

4. That the District Court proceedings no. DC 2591 of 2006 is stayed until the trial of this matter;

5. Costs and other orders.

Issues

12. The facts demonstratt tha pthe plaintiffs entered into the Contract of Sale with the defendant when the defendant had yet to obtain title of the property from the National Housing Corporation. Therefore the issues I perceive are these;

1. Whether the Contract between the plaintiffs and the defendant provided for such a situation i.e purchase by the plaintiffs from the defendant subject to the defendant purchasing from the National Housing Corporation?

2. Can the Court order the defendant to enter into a contract with the National Housing Corporation?

3. Thereafter, can the Court then order that the defendant execute a Contract of Sale between the plaintiffs and him?

4. Whether the plaintiffs should make a claim for damages rather than the orders it seeks?

Issue no. 1 - Did the contract provide for purchase of the property by the plaintiffs subject to the defendant purchasing the property from the National Housing Corporation?

13. Tht Con factSalr must set oset out these conditions. Paragraphs in the Contract that are of relevance are;

1. "2. DEPOSIT AND BALANCE PURCHASE PRICE

(a) The Vendor acknowledges that the Purchaser has paid the amount specified in item 7 (the ‘deposit’) as per the Third (3rd) Schedule of the contract.

(b) The purchase price less the deposit is payable on completion plus or minus any adjustments to be made by and between the parties pursuant to Clause 4 hereof within fourteen (14) days of notification to the Purchaser or their lawyers that this Agreement has been duly stamped pursuant to the provisions of the Stamp Duties Act and upon the Vendor delivering to the Purchaser or their lawyers.

(i) the Lessee’s copy of the relevant State Lease for and forming part of the property (or in the event that the State Lease has not issued the Vendor shall execute and deliver such other documentation as the Purchasers may reasonably require and submit to the Vendor for the purpose of enabling or facilitating registration of the Purchasers as proprietor of the interest held therein by the Vendor);

(ii) A registrable Transfer or Transfers thereof as the case may be from the Vendor to the Purchasers duly executed by the Vendor which Transfer/s shall be prepared by or on behalf of the Purchasers and handed to the Vendor’s lawyers at the time of execution and exchange hereof;

(iii) the Vendor’s Statutory Declaration to accompany documents lodged for registration as required by the Registrar of Titles;

(iv) any other documentation reasonably required by the Purchasers to ensure that the Purchasers have the benefit of this Agreement promptly and to facilitate the transfer of the said property into the name of the Purchasers promptly." (my emphasis)

2. "4. RENTS, PROFITS AND EXPENSES

The Vendor shall be entitled to the rents and profits and shall pay or bear all State rental rates taxes and other outgoings up to and including the date of completion or date of occupation whichever is the earlier from which date, the Purchasers shall be entitled to and shall pay or bear the same respectively and any necessary appointment thereof shall be made and adjusted on completion."

3. "5. SUBJECT TO TENANCY

The property is sold subject to the existing tenancies as specified in item 8."

4. "10. DEFAULT, FORFEITURE OF DEPOSIT, ETC

If the Purchasers defaults in the observance or performance of any obligation imposed on him or by virtue of this Agreement, the Vendor shall be entitled to terminate this Agreement and thereafter either to sue the Purchasers for breach of Contract or to resell the property as owner by auction, tender or private contract and the deficiency (if any) arising on such resale and all expenses of and incidental to such resale or attempted resale and the Purchasers default shall be recoverable by the Vendor from the Purchasers as liquidated damages provided that proceedings for the recovery thereof be commenced within Twelve (12) months of the termination of this Agreement. Any increase in price shall belong to the Vendor.

The Vendor may retain any money paid by the Purchasers on account of the purchase as security for any deficiency arising on a resale or for any damages or compensation (including any allowance by way of occupation fee or for rents or profits from Purchases who has been in possession of the property or in receipt of the rents or profits thereof awarded to him for the Purchaser’s default)."

14. &ـIn essenessence, Cle, Clause 2 (b) (i) and (iv) provide that the balance of the purchase price is payable on completion and that the vendor should also ee andver any other documentation for the purpose of enof enablinabling or facilitating registration of the purchaser as proprietor of the property.

15. & Does this this include a situation such as this where the vendor has yet to be registered as owner of the property?

16. Tai plffstivideece is that that he wrote to the dent exing, st othe others, trs, the ouhe outcome of investigations with the National Housing Corporation because the defendant had mentioned to uringperioor about June, Jue, July orly or Augu August 2005, that he had little knowledge of conveyance matters and was still uncertain of the status of his purchase of the property from the National Housing Corporation. It was during these investigations that Mr Iewago discovered that the property was still owned by the National Housing Corporation and that title had to be issued in the defendants name before transfer of the property to both him and his wife. Mr Iewago informed the defendant of this by his letter dated 14 September, 2005 and deposes to this in par. 19 of his affidavit sworn on 2 February, 2007.

17. Accordo C tuse a0 of the cohe contract, in the event of default by the purchaser in the observance or performance of any obligation im on h virt the act, the vendor is entitled to terminate the agreement and thnd thereafereafter eter eitherither sue the purchaser for breach of contract or to resell the property as owner by auction, tender or private contract and the deficiency arising on such resale shall be recoverable by the vendor from the purchaser as liquidated damages.

18. ـ In this case, ase, it is not the purchaser who is at fault but the vendor. The vendor was to have complied with Clause 2 of the contract by delivering t purc’s lawyers at settlement other documentatiotation required by the purchaser to ensurensure that the purchaser has the benefits of the agreement and to facilitate transfer of the property into the purchaser’s name. This would mean the delivery to the purchaser’s lawyer at settlement of duly signed contract and transfer by the defendant as purchaser and the National Housing Corporation as vendor. I note from Mr Wilson’s letter dated 29 May, 2007 to the defendants lawyer, marked as Annexure ‘D2’ to Ces Iewago’s letter sworn on 1 June, 2007 that the documentation has been prepared by the NHC lawyers. All that was required was for the transfer to be signed under seal by the NHC because there are no monies owed by the defendant to the NHC. In that letter also, the plaintiffs’ lawyer advised that there was a balance of K74, 051.12 owing to the defendant payable upon receipt of Title and Transfers from the defendant and the NHC.

19. Becausehef tilufa of e resp response from the defendant’s lawyers, the plaintiffs filed these proceedings seeking specific perfor of tbjectract.

20. Iponse to the first irst isst issueissue, yes, yes, the, the contract does provide for such a situation.

Issue no. 2 – Can the court order the defendant to enter into a contract with the National Housing Corporation?

21. &The Ns the docu documentatentation ready to be signed by the defendant. The defendant has not filed a Defence nor has he filed affidavit material to show what his position is in relation to his refusal to allow settlement to take place. The court is left with a situation where contracts have exchanged between plaintiffs and defendant, deposit monies paid by the plaintiffs, expenses incurred by the plaintiffs in relation to renovation of the property, and no response from the defendant as to his position in relation to the whole matter.

22. This is teferred to Moni>Mondo Merchants Pty Ltd v Melpa Properties Pty Ltd and Koang No. 47 Pty Ltd N1863 where the plaintiff brought an action for specificormand damagaine first defendant for breach each of coof contracntract of t of sale and purchase of property in Mt Hagen. The facts of that case were that before completion of the contract, the first defendant terminated the sale and resold the same property to a third party being the second defendant. In determining the proceedings the court had to consider whether there was a valid contract between the parties. The court found that was a valid contract and that the contract was effected when deposit monies, stamp duties and ministerial fees were paid and when the contract were executed by the parties.

23. In this case, I findethera is a contract because deposit monies, stamp duties and ministerial fees have been paid and contract was executethe ps.

160; There is no issue asito meristerial appl approvalroval beca because tuse the defendant has not raised it, at least it is not properly before the court and I am aware that the defendant has never raised it.

25. In relation tosthe d conue,ssue, yes.

Issue no. 3 – Thereafter, can the court then order that the defendant ee a cct of betwhe plaintiffs and him.

26. &160; BasedBased on MondoMondo Merchants Pty Ltd (supra) and the law, yes. But in this case, the contract has already been executed by both parties.

27. &##160;&#part that,court isrt is nots not in a in a posi position to say otherwise because the defendant has not shown any interest in defending the proceedings.

Issue no. 4 - Whether the plaintiffs shou should make a claim for damages rather than the orders it seeks?

28. &#1t necilsarbec, because iuse in this case, there was a contract entered into by the parties which has been breached and which the plaintiffs now seek to be enforced. I find that the defendant has failed to show any ground or cause as to why the contract should not be enforced. Furthermore, the contract involves a house and property and I find that damages is not an appropriate remedy.

29. Ar plaentiffs entitled tled to summary judgment?

30. ;The tiffs seek seek summarummary judgment pursuant to O. 12 r. 38 of the National Court Rules. O. 12 r. 38 ;

<. Summary judgement. (13/2)

(1) Where, on application by the plaintiff iiff in reln relationation to any claim for relief or any part of any claim for relief of the plaintiff—

(a) there is evidence of the facts on which the claim or part is based; and

(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,

the Court may, by order, direct the entry of such judgement for the plaintiff on that claim or part, as the nature of the case requires.

(2) Without limiting Sub-rule (1), the Court may under that Sub-rule direct the entry of judgement for the plaintiff for damages to be assessed.
..."

31. &##160;aw in reln relation tion to summary judgment was settled by the Supreme Court in Bruce Tsang v Credit Corporation (PNG) i> [1PNGLR 112 and followed in Curtain Bros (Qld) Pty Ltd & Kinhill Kramer Pty Pty Ltd vLtd v the State [1993] PNGLR 285.

32. &#1 bothsieci ofns of the Sthe Supreme Court, the Court said at pg. 117 and 288 respectively:

"There are two elements involved in this rule;

(a) evidence of the facts proving the essential elements of the claim; and

(b) that the plaintiff or some responsible person gives evidence that in his belief there is no defence.

As to the second element, the plaintiff must show in absence of any defence or evidence from the defendant that in his belief, the defendant has no defence. If a defence is filed or evidence is given by the defendant, as in this case, the plaintiff must show that upon the facts and/or the law, the defendant has no defence. The plaintiff will not be entitled to summary judgment if there is a serious conflict on questions of fact or law. Whether a cause should go to trial on these issues will be determined on the facts of each case." (See also, Kumul Builders Pty Ltd v Post and Telecommunication Corporation [1991] PNGLR 299).

33. ;&#16this case, ase, I find find that the defendant does not have any defence at all. He has not filed a Defence nor has he file affi materials to support the position he has taken in relation to the transaction beon betweentween the plaintiffs and him. On the other hand, I have before me evidence filed by the plaintiffs which proves the essential elements of this claim and which show that in his belief the defendant does not have a Defence. It is on that basis that I will make an order for summary judgment.

Application to set aside

34. &&#160plaintiffstiffs also also seek to have the National Court orders of 21 March, 2007, set aside. He moves this application pursuant to O. 12 r. 8 of the NCR. This rule reads;

(1) The Court may, on terms, set aside or vary a direction for entry of judgement where notice of motion for the setting aside or variation is filed before entry of the judgement.

(2) The Court may, on terms, set aside or vary a judgement—

(a) where the judgement has been entered pursuant to Order 12 Division 3 (default judgement); or

(b) where the judgement has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or

..."

35. ـ I have heard tard that the National Court order of 21 March, 2007 staying the present proceedings was to allow the defendant to see through District Court proceedings DC 2591 of 2006. was be at the time thee the stay orders were made, the District rict Court proceedings had yet to be determined. The National Court was of the view that the plaintiffs had prematurely filed these proceedings.

36. ټ The District Cict Court proceedings were determined on 11 April, 2007. The lower court made orders with respect to payment of all outstanding rental ar and laintiff not to carry out renovation and maintenantenance works on the property. This the pthe plaintiffs have complied with. All these matters are deposed to in the affidavit of Ces Iewago sworn on 1 June, 2007.

37. Therefore I fiad thde unhos those circumstances the stay orders need not remain and should be set aside.

Formal orders ofcourt/p>

38.; The orders I make are these;

1

1. Sum. Summary mary judgmjudgment is entered for the plaintiffs in the following terms;

i. An order for specific performance of the agreement dated 20 March, 2006 between the plaintiffs and the defendant;

ii. That the defendant exchange contracts and transfer of the property with the National Housing Corporation for perusal and execution to enable the sale of the property to proceed within 14 days of the date of this order;

iii. The settlement of the conveyance between the plaintiffs and the defendant shall take place on Monday, 20 August, 2007 when all the necessary exchanges of cheques and documentation shall take place which includes the defendants delivery to the settlement venue of contract and transfer duly executed by the defendant as purchaser and the National Housing Corporation, as vendor, confirming sale of the property to the defendant;

2. The National Court’s orders of 21 March, 2007 are set aside;

3. The defendant pay the plaintiffs’ costs of this application and these proceedings to be taxed if not agreed;

4. Time is abridged to time of settlement to take place forthwith;

39. I will akt mrde o in selatielation to par. 3 of the orders sought in the plaintiffs’ statement of claim because there are proceduf enfent able t plaintiffs’ in the event the defendant refuses to comp comply wily with thth these oese orders.
________________________________

Warner Shand Lawyers: Lawyer for Plaintiffs/Applicants
Senal Consulting Services: Lawyer for the Defendant/Respondent