Dale v Simi [2015] PGNC 316; N10926 (20 August 2015)

N10926

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 440 OF 2013

JURGEN DALE, DIRECTOR, ALLIED TECHNOLOGY INSTITUTE
First Plaintiff

ALLIED TECHNOLOGY INSTITUTE
Second Plaintiff

V

JOHN SIMI, DIRECTOR, NEIMBAKI KINS LTD
First Defendant

NEIMBAKI KINS LTD
Second Defendant

Madang: Cannings J
2014:18^th October,
2015: 3^rd March, 20^th August

LAND – unjust enrichment claim by plaintiffs who erected buildings on defendants’ land without consent – whether plaintiff should be compensated by defendant – unjust enrichment – elements of cause of action.

The plaintiffs rented a block of land from the defendants. The plaintiffs used the land as the base for a training institution. After two years of occupation the parties were in dispute over the rent. The defendants gave the plaintiffs a notice to quit. In the meantime, the plaintiffs had erected two new buildings and a fence on the land. The plaintiffs eventually left, after occupying the land for two years, nine months. They paid the outstanding rent, then commenced proceedings against the defendants, claiming compensation of K120,000.00, representing the costs incurred in erecting the buildings and the fence. The plaintiffs’ cause of action was unjust enrichment.

Held:

(1) To succeed in an action for unjust enrichment a plaintiff must prove three things:

• that the defendant has been enriched by the receipt of a benefit;
• that the defendant has been enriched at the plaintiff’s expense;
• that it would be unjust to allow the defendant to retain that benefit.
  

(2) The defendants had been enriched by having two buildings, and a fence erected on their land at no expense to them, therefore increasing the value of the land.

(3) The defendants had been enriched at the plaintiffs’ expense as the plaintiffs spent their own money improving the land.

(4) It would not be unjust to allow the defendants to retain the benefit they had derived, as (a) the plaintiffs did not seek the defendants’ permission to improve the land; (b) the plaintiffs had been behind in the rent for long periods; (c) it was unfair to expect the defendants to pay for the plaintiffs’ lack of business sense; (d) the defendants had made it known to the plaintiffs that they were welcome to come and remove their property.

(5) The plaintiffs failed to establish a cause of action in unjust enrichment. There being no other basis on which the defendants could be ordered to compensate the plaintiffs, all relief sought in the originating summons was refused.

Cases Cited

The following cases are cited in the judgment:
Pius Koroguen v Christine Wagen (2008) N3422
Leonard Gaua v Joe & Theresia Amir (2010) N3891

Counsel
B Tabai, for the Plaintiffs
B W Meten, for the Defendants

20^th August 2015

1. CANNINGS J: The plaintiffs rented a block of urban land at Wagol in Madang town from the defendants. The second defendant is the registered proprietor of the land and the first defendant is the owner and managing director of the second defendant. The plaintiffs used the land as the base for a training institution.

2. After two years of occupation the parties were in dispute over the rent. The defendants claimed that the plaintiffs were behind in the rent. The plaintiffs claimed that the defendants had substantially and unreasonably increased the rent. The defendants gave the plaintiffs a notice to quit. In the meantime the plaintiffs had erected two new buildings (used as classrooms) and a fence on the land. The plaintiffs eventually left, after occupying the land for two years, nine months. They paid the outstanding rent, then commenced originating summons proceedings against the defendants, claiming compensation of at least K120,000.00, representing the costs incurred in erecting the buildings and the fence. The plaintiffs’ cause of action is unjust enrichment.

ELEMENTS

3. To establish a cause of action in unjust enrichment against the defendants, the plaintiffs must prove the three elements of the action:

1. that the defendants have been enriched by the receipt of a benefit; and
   
2. that the defendants have been enriched at the plaintiffs’ expense; and
   
3. that it would be unjust to allow the defendants to retain that benefit.
   

4. If they proves those three things the court can award a remedy by way of restitution (Pius Koroguen v Christine Wagen (2008) N3422; Leonard Gaua v Joe & Theresia Amir (2010) N3891).

HAVE THE DEFENDANTS BEEN ENRICHED BY THE RECEIPT OF A BENEFIT?

5. Yes. The defendants were enriched by having two buildings, and a fence erected on their land at no expense to them, therefore increasing the value of the land.

HAVE THE DEFENDANTS BEEN ENRICHED AT THE PLAINTIFFS’ EXPENSE?

6. Yes. The defendants were enriched at the plaintiffs’ expense as the plaintiffs spent their own money improving the land.

WOULD IT BE UNJUST TO ALLOW THE DEFENDANTS TO RETAIN THAT BENEFIT?

7. No. It would not be unjust to allow the defendants to retain the benefit they had derived, as (a) the plaintiffs did not seek the defendants’ permission to improve the land; (b) the plaintiffs had been behind in the rent for long periods; (c) it was unfair to expect the defendants to pay for the plaintiffs’ lack of business sense; and (d) the defendants had made it known to the plaintiffs that they were welcome to come and remove their property.

WHAT ORDERS SHOULD THE COURT MAKE?

8. The plaintiffs have failed to establish a cause of action in unjust enrichment. There being no other basis on which the defendants could be ordered to compensate the plaintiffs, all relief sought in the originating summons is refused. Costs will follow the event.

ORDER

(1) All relief sought by the plaintiffs is refused and the proceedings are wholly dismissed.

(2) The plaintiffs will pay the defendants’ costs of the proceedings on a party-party basis, which shall, if not agreed, be taxed.

(3) The file is closed.

_____________________________________________________________
Tabai Lawyers: Lawyers for the Plaintiffs
Meten Lawyers: Lawyers for the Defendants