Aufe v Pii [2018] PGNC 425; N7501 (12 September 2018)

N7501

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

CIA NO. 114 OF 2016
PHILO AUFE, MAVE BETTINA& SARTO INDAIDO AS NHC TENANTS
Appellant

V
RICHARD PII
First Respondent

AND
NATIONAL HOUSING CORPARATION (NHC)
Second Respondent

Waigani: Thompson, J
2018:12^th September

SUMMARY EJECTMENT-Appeal from District Court-failure to take into account document not tendered in evidence-failure to hear Motion-required to show formal steps such as issue of proceeding in order to show a bona fide dispute on Title-substantial miscarriage of justice.

Counsel:
Mr.D.Aigila, for the Appellants

Mr. A. Luke, for the Second Respondents

12^th September, 2018

1. THOMPTION J: This is an Appeal from the decision of the District Court, whereby the learned Magistrate granted summary ejectment to the First Respondent, and declined to hear the Notice of Motion filed by the Appellants.
   
2. The relevant chronology of events is:
   

The District Courts hearing was on 24/06/2016.

The Appellants filed a W.S.616/2016 on 30/06/2016

The Respondents filed Submissions on 01/07/2016.

The Appellants filed submissions on 04/07/2016.

The Appellants filed a notice of Motion on 14/07/2016.

The Decision was delivered on 12/08/2016.

3. When the Appellant filed their submissions on the 04/07/2016, they attached a copy of WS. 616/2019, which had been filed on 30/06/2016. As the writ was produced after the hearing had already concluded, it was not in evidence, and the Magistrate declined to consider the Writ, and declined to hear the motion filed on 14/07/2016.
   
4. At this point, the proper cause of action would have been for the Appellants to have applied to the Magistrate to re-open the case and call evidence which was not available at the date of the hearing.
   
5. This was not done, and the Writ was not in evidence. Prima facie, the Magistrate therefore did not err in failing to take into account a matter that was not in evidence before her. She also did not err in not hearing the Motion filed after the hearing, as her decision on the substantive hearing would have the effect of resolving the subject of Motion one way or another, in any event.
   
6. At the conclusion of the hearing, the Magistrate would have been entitled to find, on the evidence then before her, that there was no evidence sufficient to support their challenge to the title. Regardless of whether or not the property should have been sold to the first Defendant, the only legal bases put forward by the Appellants at the hearing to support their challenge to the title, was that they were aware of the sale and that property should have been offered to them as the sitting tenants. However, S38 of the National Housing Corporation Act (“the NHC Act”) gives the NHC prima facia had no legal obligation to offer to sell the property to the Applicants.
   
7. The conduct of the Applicant merely attaching the Writ to their submissions, instead of applying to re-open the case and adduce fresh evidence, was wrong, and it very likely led the learned Magistrate to error. It is clear from her decisions that she was fully aware of the law, namely, that a person challenging title had to show that they taken a formal step to make the challenges, such as issuing a Writ and there was no evidence of the Appellants having done that at the hearing.
   
8. Nevertheless, as the extension of the Writ became known to the Magistrate, the proper course then would have been for her to summon both parties to appear, and require them to be heard whether or not the case should be re-opened to allow an Application for Leave to tender new evidence.
   
9. If this had been done, the Writ may have been but in evidence. The Magistrate may then have had the opportunity to consider para, 13 (g) of the Statement of Claim, which alleges that the second Defendant sold the property to the first Defendant who was not the sitting tenant.
   
10. Section 28 of the NHC Act sets out the functions of the NHC. The relevant functions are S28 (1) (c ) whereby it can sell houses to eligible persons, and (d) make advances to eligible persons and to approve applications to enable them to buy their own homes. Under S(2) the Minister has to declare a person to be an approved applicant. Under S3, the NHC has to declare a person to be an eligible person.
    
11. There was no evidence before the Magistrate and there is no evidence before the National Court, that either the Minister or the NHC made any such declaration in relation to the first Defendant to be an eligible person because he doesn’t come within any of the requirements for having limited and so on, as he did not require assistance to pay the purchase price. Under section 1, an eligible person does not mean eligible to buy a property.
    
12. So under section 28, the only power given to NHC to sell houses is to either eligible persons or to approved applicants.
    
13. Further powers are given under section 37, which provides that NHC may sell houses to eligible person or to an approved applicant or to a person who exercises option under section 38 (1) .
    
14. Section 38 (1) provides that when a tenancy agreement has been in force for two years, the NHC may sell the house to the sitting tenant. This could not have applied to the First Defendant, as he was not the sitting tenant. There was also no evidence that he was an approved applicant or an eligible person. The First Defendant is therefore not covered by section 37 of the NHC Act, and so the applicants had arguable grounds for challenging the power of the NHC to sell the property and issue the title to the First Defendant.
    
15. Pursuant to these provisions, the Applicants may have been able to successfully challenge the validity of the title issued to the First Defendant. They may not have been able to establish their own entitlement to purchase the house. However, as sitting tenants, they would have had sufficient standing to resist an ejectment application by a person who was not the lawful title owner.
    
16. Possession of a house is a significant issue. The failure to raise this issue in the proper way during the hearing, was the fault of the Applicants. Nevertheless, in view of the significant issue, the learned Magistrate erred in not calling upon the parties to be heard as to whether or not the case should be re-opened and the fresh evidence considered. The fresh evidence could have been found by the Magistrate to be sufficient to show that the property was bona fide in dispute.
    
17. In the case of Pala v. Yop (2005) PNGNC 116, referred to by the Appellants Lawyers, the then Deputy Chief Justice set out the procedure to be followed when determining NHC tenancy and dealing with the property. They include giving the tenant the right to be heard before a decision is made. If the decision is to terminate, then written notice must be given. The procedure must be consistent with section 53 of the Constitution, which says that the State or State institutions such as the NHC must not unjustifiably repossess, forfeit, and extinguish or determine a person’s right or interest in a property.
    
18. In the present case the Applicants have the right and interest in the property, as sitting tenants. They were still the sitting tenants when NHC sold the property to the First Defendant, without any prior notice or termination of tenancy in March 2016.
    
19. The overriding factor in an appeal is under section 230 (2) of the District Court Act, whereby an appeal will only be allowed if it appears that, there has been a substantial miscarriage of justice.
    
20. For the reasons given earlier, I find that there was an error by the District Court in failing to direct the parties to appear and apply to re-open the case to adduce fresh evidence. Although, this by itself may seem to be not significant error, it has significant consequences, in that the Applicants were unable to relay on the documents which could show that they have bona fide dispute over the title, and therefore enable the Appellants to resist the application for ejectment. I find that this amounts to substantial mis-carriage of justice.
    
21. In view of the time and expense incurred by the parties to date, I consider it would be expedient for the court not to send the case back for a re-hearing, but to substitute with orders which the District Court should have made. I order :-
    

1. The District Court did not err in failing to hear the Motion filed on 14^th July 2016. The learned Magistrate could have heard the Motion and dismissed it for being an abuse of process, if that was her decision, but as the relief sought in that Motion would in any event or the other, it was not necessary to hear the Motion.
2. The District Court erred in making the decision, that there was no bona fide dispute between the parties to appear and be heard on the issue of re-opening the case to allow fresh evidence to be adduced, namely, the filing of the Writ of Summons as WS686 of 2016.
3. The error resulted in a substantial miscarriage of justice to the Appellants, who were thereby deprived of the opportunity to establish that, the First Defendants’ title was bona fide in dispute.
4. The District Court’s orders of 12^th August 2016 are quashed.
5. The Writ of Summons filed by the Appellants on WS 686 of 2016 is to be considered as though it had been put into evidence.
6. The Writ of Summons shows that the Appellants had taken a distinct, formal and legal step to challenge the First Defendants’ title which was unresolved at the time of the decision. (See John Yuka .V. Timothy Amorase (2013) PNC 124 and many others)
   
7. The Appellants have established under s21 (4) (f) of the District Court Act that the title to the property is bona fide in dispute.
   
8. The First Defendant/ First Respondent’s application for ejectment is refused.
   
9. The Applicants are to proceed to prosecute the proceeding on WS 686 of 2016 without delay.
   
10. As the error in District Court was due to the Applicants conduct, I will not make the usual order that costs follow the event, and instead, I order that the Appellant pay the Respondents’ costs

Public Solicitors Office: Lawyers for the Plaintiff
NHC in-house Lawyers: Lawyers for the First & Second Defendants.