Philip v Wi [2019] PGNC 193; N7918 (15 July 2019)

N7918

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 510 OF 2018

BETWEEN:
KILEN PHILIP
Plaintiff

AND:
ANTON ARA WI, TONY AIAGU, ANDREW AIAGU
& KUYA WALUBUGO
Defendants

Waigani: Thompson J
2019: 10^th July - 15^th July

Indefeasibility of Title - mere allegation of fraud - requirement to produce evidence of actual fraud - requirement to take formal step to challenge title

Cases Cited:

Papua Club Inc v Nusuam Holdings Ltd (No.2) (2004) N 2603
Koitachi Ltd v Walter Schnaubelt and another (2007) PGSC 11
John Andrea v Timothy Morase (2013) PGNC 124
Godowan Investments Ltd v Michael Wambea and others (2018) N7263

Legislation Cited:

Section 33 Land Registration Act

Counsel:

Mr. Inua, for the Plaintiff
Mr. Bon, for the Defendants

15^th July, 2019

1. THOMPSON J: The Plaintiff is seeking a Declaration that she is the registered
proprietor of the property on State Lease Volume 25,Folio 6096 Lot 22 Section 249
Hohola, and orders for vacant possession of the property.

2. The Defendants assert that the Plaintiff acquired the title invalidly, and allege
fraud against her. It is not clear if they allege constructive or actual fraud, but it is
alleged only against her. In essence, the Defendants say that the property was acquired by their father, Aiagu Arago, ("AA") from the National Housing Corporation, and that after he died intestate in February 2018, they should have been entitled to have the property transferred to them.

3. It should be noted that the identity of who exactly constituted the persons entitled
to receive any of the estate, was not shown. The evidence was that AA had left five wives, and numerous children, while these proceedings are only being defended by one wife and one son, so their status has beneficiaries of the estate is not known.

4. The Plaintiff says that in October 2017, she entered into a contract with Aiagu
Arago to purchase the property for K240,000.00,that she and AA executed the contract of sale and transfer, she paid the purchase price, some of it in cash, and the property was duly transferred to her. The transfer was entered on the Certificate of Title on 26 October 2017.

5. If so, then the property was not owned by Aiagu Arago when he died on 25
February 2018, it did not form part of his estate, and could not pass to his family.

6. The contract was not in evidence. However, the Defendants alleged that AA could not have signed the contract because he was too ill, and that therefore the Plaintiff has forged his signature, or in some other unspecified way fraudulently acquired the title.
They say that AA would have told them of any sale, and that as he didn't, there could not have been a sale. They assert that the fact that the Plaintiff paid some of the purchase price in cash, was a breach of the contract and therefore fraudulent. They say they have reported the matter to Lands Department Fraud and Complaints unit, who will refer it to the Police Fraud Squad.

7. As the Contract was not in evidence, and as the Defendants were not parties to the contract, there was no basis for the Defendants to assert that payment in cash was a breach of the contract. Further, a mere breach of contract is not fraud. It is simply a civil matter which may entitle the party alleging a breach to sue the other party for damages or specific performance. There was no suggestion, and no evidence, that AA had alleged non-payment or any other breach of the contract. The only evidence was that AA performed his part of the contract by accepting the payment and by completing the transfer to the Plaintiff. There was no evidence that a cause of action for breach of contract had vested in AA before his death, which might have survived for the benefit of the estate.

8. The basis of the referral to the Fraud Squad by the Lands Department, as set out in their letter, is difficult to follow and is unsupported by any evidence. It is not relevant to these civil proceedings, unless evidence has been produced. The Defendants have not produced any medical evidence that in October 2017 the vendor was incapable of moving or signing his name. There was evidence in the letter from the National Housing Corporation dated 24 April 2019 that the vendor had been in contact with them in 2016 and 2017 about obtaining a replacement title because the original document had been burnt in a fire. A replacement title was duly issued and entered on the title on 4 December 2016, and a transfer to AA was entered on the title on 11 January 2017. The only other entry is the subsequent transfer to the Plaintiff which was entered on 26 October 2017.

9. There was some speculation as to the reason why AA did not tell Defendants of
the sale, but there was no evidence. The Defendants did not produce any evidence of
AA's signature, or produce any handwriting expert to say that the signature on the
contract was not AA's signature. The Defendants did not allege or produce any evidence of, any breaches of the statutory requirements and procedures for registration of the title.

10. In short, they have not produced any evidence at all to support their allegation of fraud.

11. Under Section 33 of the Land Registration Act, the registered proprietor has
indefeasible title against anyone except, relevantly, where there is fraud. It is well-
established by cases including Papua Club Inc v Nusuam Holdings Ltd (No.2) (2004) N 2603 and Koitachi Ltd v Walter Schnaubelt and another (2007) PGSC 11, that in order to amount to fraud under Section 33 of the Act, the fraud must be of the registered proprietor or actual fraud.

12. Cases such as John Andrea v Timothy Morase (2013) PGNC 124 and Godowan
Investments Ltd v Michael Wambea and others (2018) N7263 have confirmed that it is not sufficient to simply to allege fraud - the person making the allegation must prove it. He must take clear, distinct and legal steps to challenge the title, and establish the fraud.

13. It has now been nineteen months since the Plaintiff became the registered
proprietor of the land. After the Plaintiff issued District Court Ejectment proceedings, the Defendants made a complaint to the Lands Department, but despite opposing those proceedings, and opposing these proceedings, they have not issued any proceedings themselves, and have not taken any formal legal step to challenge the title.

14. The evidence to show fraud cannot be merely suspicion or opinions or speculation. There must be actual evidence of gross breaches of the statutory requirements for registration tantamount to fraud, or evidence of forgery or other fraudulent conduct in the issue of the title. The Defendants have not alleged or produced evidence of any breaches of the statutory requirements. They have not produced any medical or handwriting evidence showing forgery.

15. In the absence of evidence of fraud, whether actual or constructive, pursuant to Section 33 of the Land Registration Act, the Plaintiff as registered proprietor holds indefeasible title.

16. The Plaintiff did not produce evidence of any financial loss sustained as a result of being kept out of her land. There is therefore no basis for an award of damages.

17. For these reasons, I make the following orders:

1. A Declaration is granted that Kilen Philip is the registered proprietor of the property on State Lease Volume 25 Folio 6096 Lot 22 Section 249 Hohola.

2. The Defendants and any other persons occupying the said property are to give vacant possession within 10 days.

3. If vacant possession is not given, the Plaintiff is granted leave to issue a writ of possession to enforce the judgment for possession.

4 The Defendants are to pay the Plaintiffs costs on a party/party basis, to be agreed or taxed.
___________________________________________________________________
Inua Lawyers: Lawyer for the Plaintiff
Gibson Bon Lawyers: Lawyer for the Defendants