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Steamships Ltd v Kopaol [2020] PGNC 350; N8567 (7 October 2020)

N8567


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS. NO 60 OF 2014


BETWEEN:
STEAMSHIPS LIMITED
Plaintiff – Cross Defendant


AND:
ROBERT KOPAOL
First Defendant - Cross Claimant


AND:
HENRY WASA, REGISTRAR OF TITLES
Second Defendant


AND:
BENNY ALLAN, MINISTER FOR LANDS AND PHYSICAL PLANNING
Third Defendant


AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant


AND:
NATIONAL HOUSING CORPORATION
Cross Defendant to Cross Claim


Waigani: Kangwia J
2020: 18th August & 04th September


LAND LAW – plaintiff seeking declaratory orders from court confirming it is the registered owner of property – plaintiff also seeks injunctions against defendants from dealing with the property – property previously given as gift to the first occupier who later sold to plaintiff – first defendant also had title to same property when sold to him by the NHC – the first owner who sold property to the plaintiff is considered as valid – NHC had no title to property and its second sale to the first defendant was illegal and void ab initio as it was dealing with property it had no ownership –
DECLARATIONS AND ORDERS - transfer of property by NHC to First Defendant quashed as null and void ab initio - sale and transfer of property by Sir Tore Lokoloko to Plaintiff is lawful and valid - replacement title registered by the Registrar of Titles valid - Plaintiff is registered owner of property.


Counsel


G. Nigs, for the Plaintiff
S. Wanis, for the First Defendant
J. Bakaman, for the Second & Third Defendants
M. Tol, for Cross Defendant to Cross Claim


04th September, 2020


1. KANGWIA J: The Plaintiff by an amended statement of claim filed on 05 March 2015 sought various orders over property described as Section 33 Allotment 7, Granville, City of Port Moresby (property hereon). The main orders sought are as follows;


  1. A declaration that the Original Owners Copy of State Lease over the property in the possession of the First Defendant and any other State Lease in respect of the property is cancelled and is therefore void.
  2. A declaration that the Plaintiff is the registered owner of the property.
  1. An order that the subsequent transfer of Title in the property, dated 16 July 2013 to the First Defendant by the Second Defendant is null and void and of no legal effect.

2. The Plaintiff also sought permanent and interim injunctions against the First Defendant, general damages, special damages and economic loss both past and future.


3. The First Defendant by an amended cross claim filed on 10 April 2015 sought the following orders;


  1. The State lease obtained by the Plaintiff be declared null and void, it having been obtained under fraudulent circumstances.
  2. An order that the Second Defendant cancel the Plaintiffs title and confer a new title to the First Defendant.
  3. An order that the First Defendant is the legal owner of the property.
  4. Permanent injunctions against the Plaintiff from any trespass on the First Defendant’s property.

4. Both parties also claimed interest and costs


5. The proceeding relates to a claim over ownership of the property which was originally owned by the National Housing Corporation (NHC hereon) who is the Cross-Defendant. The Plaintiff and the First Defendant each hold a title over the same property as verified by the owners copy, they possessed.


6. The Plaintiff’s claim arose after the First Defendant entered the land and started cleaning the property on it claiming that he was the registered proprietor of the property.


7. The Plaintiff claimed that the First Defendant entered the property without any authorization or permission by it as the registered proprietor. It was claimed that the Plaintiff purchased the property for K1, 500, 000. 00 from its earlier legal owner, Sir Tore Lokoloko (Sir Tore hereon) who had been given the property as a free gift by the State. It was also claimed that the Plaintiff obtained the ownership title to the property through a replacement title, after the Owners Copy was lost.


8. The First Defendant contended that the Original Owners Copy of the title was in his possession. He obtained it through a transfer of title under a contract of sale with the NHC as compensation and replacement property over another NHC property in Mendi, which was occupied by purported landowners.


9. The First Defendant further claimed that the title to the property that he held conferred on him a prior ranking interest to that of Sir Tore; that the transfer from NHC to Sir Tore was under fraudulent circumstances.


10. The Plaintiff in response claimed that the NHC did not properly transfer the title to the First Defendant.


11. At the commencement of the trial the Plaintiff and the First Defendant were unable to call all the witnesses they proposed to be cross-examined. After discussions both parties were granted leave to rely on the affidavits of witnesses who could not be called to give evidence. Those witnesses who were present gave sworn evidence and were cross-examined.


12. The Second and Third Defendants filed a verified list of documents that they had in their custody in relation to the property, primarily to assist the Court. There was no appearance for the Fourth Defendant.


13. The NHC as Cross Defendant in the Cross-Claim also filed a verified list of documents it had under its custody.


14. To prove its case the Plaintiff tendered into evidence by consent various affidavits annexed with documents and called three witnesses. Their evidence collectively related to what they did while they were employed by the Plaintiff. They also annexed various documents pertaining to the property. It is not necessary to recite their evidence as they were not discredited in cross-examination.


15. They then called witnesses namely Doris Gedare, Deborah Onga and Rose Kitimou Pakop who gave oral evidence as follows:


  1. Doris Gedare:

This witness is the company lawyer for the Plaintiff. She filed two affidavits from her personal knowledge in the proceeding. On 15 February 2014 she was present at the signing of the contract of sale between the Plaintiff and Sir Tore.


Present also was the Plaintiff’s Chief Accountant and Sir Tore’s son. The Plaintiff paid a company cheque for the purchase. There was an oversight on their part for not dating the Contract of sale. The endorsement was also not dated by Lands Department. She was not aware of the registration of the documents but numerous follow-ups were made for the registration of the transfer. The title under the Plaintiffs name was obtained through a corrigendum in the National Gazette for a replacement title which was finally registered on 21 March 2013.


As to a handwritten note she stated that it was a confirmation by NHC that the owners copy of the State lease was not with them. The Plaintiff wrote to the Registrar of Titles on the issue of title. The Plaintiff was involved in the transactions in 2010 but the registration of the title was in 2013 and there was no need for any qualification by NHC.


  1. Deborah Onga

This witness is a senior lawyer with the Plaintiff who deals with property matters. She was not in employment at that time and not part of the contract but her affidavit confirmed company records.


  1. Rose Kitimou Pakop

This witness was the legal Administration officer with the Plaintiff. Her evidence was that she took instructions from lawyers on documents. The documents in her affidavit were from company records prior to her employment.


16. For the First Defendant Mr. Wanis of counsel by leave, also tendered into evidence by consent two affidavits of witnesses who were unable to be physically present to give oral evidence. The evidence of the four witnesses who gave oral evidence are as follows:
.

  1. Robert Kopaol

This witness is the First Defendant and Cross Claimant. He verified two affidavits filed as his and were tendered into evidence by consent. His evidence was that there was constructive fraud involved.


In cross-examination he stated that the then Managing Director for NHC one Paul Asakusa proposed by letter to compensate him. When asked whether the property in issue was mentioned in the letter of proposal his reply was that the letter answered that question.


When asked of a payment of K150, 000. 00 to the NHC he stated that it was for the first property in Mendi. He further stated that the current property was a replacement property. He stated that the property was unoccupied.


He further stated that from 2008 after the contract of sale was executed to 2013 when the title was finally registered, he was busy and did not pursue further to have the property registered earlier.


When put to him that there was no record of transfer and no date on the owners copy and that offer, acceptance and consideration principles were not present, he was adamant that the property was a replacement property and that the title he had was first in time and proper.


He could not recall the exact date but in 2013 he got the owners copy from NHC. He did not see the National Gazette on corrigendum and that was one of the reasons why he changed lawyers. He also affirmed that receipts attached to his affidavit were rental payments for the property.


  1. Jonah Sasingan

This witness was the acting Principal Legal Officer for NHC at the time of the transaction between NHC and the First Defendant. He verified three affidavits that he deposed to in this matter. He stated that the conveyancing section prepared the documents and he as PLO was the only one to sign them.


He was aware of two sales on the same property by NHC. He refused to sign on the transfer to Sir Tore because the then Managing Director decided to cancel the offer to Sir Tore as he had also failed to comply with conditions of sale under the give-away scheme. He was also not aware of the signing on behalf of the NHC in the contract of sale to Sir Tore but the lawyer who signed it acted ultra vires. He also stated that he witnessed the sale from NHC to the First Defendant which was the proper one.


  1. Bugave Gabina

This witness was the acting General Manager Properties for NHC. He had been with the NHC for 39 years. He verified his affidavit filed in this case. He told the Court that the property was owned by NHC. Sir Tore was approved as a tenant. NHC made an offer under the Government Home ownership scheme.


The property was sold to Sir Tore but he did not make any payment for three years. The management terminated the sale and the property became a rental property. Sir Tore participated in two other properties as rental and under the Morgan Scheme and did not qualify for another property hence the termination of offer. Through a management decision the property was sold to a new purchaser.


He was not aware of the second contract of sale between Sir Tore and the Plaintiff which was not recognized by NHC as it was done outside the normal NHC procedures. He was not aware of a contract of sale and transfer of the property to Sir Tore through former Managing Director David Dambali and legal officer Elizabeth Bowada.


He was also not aware of a free gift to Sir Tore or another sale on the property. Sir Tore was offered the property as per the government scheme for K32, 000. 00 which he failed to pay. The termination letter to Sir Tore was a normal practice. When served the notice the tenants on the property refused to sign it.


  1. Romily Kila Pat.

This witness was the former Secretary for Lands between 2013 and 2015. He verified his affidavit which were shown to him. He recalled receiving some correspondence from the Managing Director of the NHC that NHC had terminated the sale to Sir Tore and transferred it to the First Defendant. He described the transfer as legitimate as mandated by NHC. He confirmed that the original owner’s copy was given to the First Defendant after ensuring all process were in order for the transfer which was recognized in their electronic records. He considered that the purported State lease to Sir Tore was void as NHC had already cancelled the sale to him.


17. In submissions Ms Nigs for the Plaintiff and Cross Defendant through a written submission handed up with leave submitted that initially the State gave the property to Sir Tore as a gift for his services to the country. After that Sir Tore sold the property to the Plaintiff.


18. It was submitted that the First Defendant’s title was void for fraud and illegality.


19. On the alleged fraud against the Plaintiff under five alleged fraud conducts Ms. Nigs submitted that the Plaintiff denied committing fraud. It was then submitted that the Plaintiff was not a part of the process for replacement title between the Second Defendant and Sir Tore; that the Plaintiff only came into the picture when Sir Tore made the offer to sell the property. Sir Tore presented the Plaintiff a replacement title which is as good as the original owners copy.


20. It was also submitted that the Second and Third Defendants were negligent for failing to register the title to the Plaintiff on the date the title was produced at the office of the Third Defendant of production to the office of the Third Defendant. It was alleged in submissions that it took two years for the First Defendant’s title to be registered and they offered no explanation.


21. It was further submitted that the actions, inactions and omissions directly caused the Plaintiff to suffer injury. The Second and Third Defendants owed a duty of care as corporate citizens. The Registrar of Titles breached its duty of care when it failed to register the title, failed to update its records and failed to consider that a prior title existed before issuing another.


22. It was further submitted that the Plaintiff had proven that the State had given the property to Sir Tore as a gift; that he was alive when he entered into a contract of sale with the Plaintiff and there was no fraud involved. The contract was settled with a consideration of K1.5 million payment to Sir Tore. The owners copy went missing and a replacement copy was issued on 23 October 2010.


23. It was finally submitted that the Defendants have failed to establish fraud against the Plaintiff in order to overturn the Plaintiffs title. The Plaintiff has on the other hand proven fraud and negligence against the Defendants. Therefore, it was submitted that all the relief sought by the Plaintiff in the amended statement of claim should be granted with costs and damages to be assessed and the First Defendants cross-claim should be dismissed with costs.


24. For the First Defendant Mr Kerowa also through a written submission handed up by leave, submitted that the Plaintiffs claim should be dismissed with costs and under the cross-claim default judgment be entered against the Second, Third and Fourth Defendant (NHC).


25. It was submitted that the First Defendant was the legitimate owner of the property as the NHC transferred the title to the property first in time. After the transfer the NHC no longer had the title to the property to sell it. It was submitted that a replacement title was fraudulently created on the manufactured reason that the original title was lost. Therefore, Sir Tore did not have a good title.


26. It was also submitted that the Plaintiff had full knowledge of the serious legal and procedural irregularities in the process undertaken but proceeded to enter into a contract of sale with Sir Tore. The Plaintiff took part in the fraudulent creation of a replacement title and obtained the title fraudulently; that the company was not a bona fide purchaser.


27. In submissions the First Defendant itemized fifteen reasons as supporting their submission that the Plaintiffs case should fail. The reasons ranged from irregularities committed in the process from purchase to registration of title and failures by the Plaintiff.


28. For the Second & Third Defendants Mr. Bakaman submitted that two titles over one property was a matter that could have been resolved administratively as it was not a unique case. It could not be resolved because the matter was aggressively contested. However, the Torrens system on indefeasibility of title applies. The court had a discretion to void a title if it was obtained through fraud.


29. The law governing transfer of title over State leases is the Land Registration Act of 1981. Under s 33 of the Act it creates a legal and equitable interest in land. The interest also confers a right, power or privilege over, in or in connection with the land. Section 33 also provides exceptions to the registration of a lease.


30. The relevant parts in s 33 are in the following terms:


33. Protection of registered proprietor.


(1) The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except—

(a) in the case of fraud; and

(b) the encumbrances notified by entry or memorial on the relevant folio of the Register; and

(c) the estate or interest of a proprietor claiming the same land under a prior instrument of title; and...
31. Under the PNG Torrens Title system of land registration, the registration of a lease vests indefeasible title in the registered proprietor subject to the exceptions under s 33 (1) of the Land Registration Act, one of which is fraud. (see Mudge v Secretary for Lands [1985] PNGLR 387).


32. The law relating to fraud under the Land Registration Act is clear. Pursuant to s 25 (7) of the Land Registration Act it is an offence attracting a penalty of no more than K4,000. 00 to fraudulently register or procure registration of a folio of the Registrar. Section 33 (1) (a) of the Land Registration Act also provides the grounds upon which a registered title can be rendered invalid.


33. Fraud can be actual or constructive. Actual fraud requires strict proof. Constructive fraud occurs under unsatisfactory circumstances in the transfer of title. In this country there is Supreme Court authority in support of the constructive fraud approach. (see Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215; Kol Koki v Moeka Morea (2016) SC 1588; PNG Deep Sea Fishing LTD. v Luke Critten (2010) SC 1126; Lae Bottling Industries v Lae Rental Homes Ltd (2011) SC 1120).


34. The Supreme Court authorities on constructive fraud will be followed in this case as they are considered good law.


35. From the evidence and submissions of counsels the dispute is primarily between the Plaintiff and the First Defendant. The other Defendants were named because they were involved as facilitators.


36. The copies of the titles held by the Plaintiff and the First Defendant are valid copies however, they are wrought with confusion as to the circumstances under which the titles were obtained in relation to the proprietorship and interest in the property. The documents in turn opened the floodgate for confrontation when both parties proceeded to exercise their rights which were validly conferred on them by the transfer documents.


37. The dispute is an overt reflection of high incompetence of officials employed by the NHC, Lands and Physical Planning and the Registrar Generals Office as facilitators. It is hard to comprehend how two land titles could have been processed and given to two different persons on the single property by employees of the facilitating entities.


38. Be that as it may, the issue that arises from the evidence and submissions is; “Which party had the better right to the property. In other words, who is the proper title holder?” To ascertain this issue the evidence needs to be revisited and considered in light of the contentious issues.


39. To have a better perspective of the dispute, a brief chronology of the undisputed facts and events from the evidence in Court, needs to be highlighted and they are as follows:


Chronology of Facts and Events on the part of the Plaintiff:


  1. Sir Tore was the first occupier of property on s.33 allotment 07 Granville.
  2. On 16 October 1987, the then Managing Director for NHC Jack Bagita offered Sir Tore the property for sale. There is no evidence of what happened to this offer.
  3. Under National Gazette No 65 dated 05 October 1989 the property was offered to Sir Tore as occupant for a consideration of K40, 375. 300 under the “Sale of Government housing” scheme. There is no evidence of what transpired after the offer.
  4. The evidence shows that sometimes in or around 1991 the government at that time made a decision to give Sir Tore a State property of his choice as a gift for his services to the country as a Governor General.
  5. There is evidence through documents tendered into evidence by consent, that various Government Departments including NHC took steps to give effect to the government decision.
  6. The State Solicitor by a letter dated 06 June 1998 to the Secretary for Finance and Planning suggested that-
  7. On 21 February 1992 the then Managing Director for NHC James Vuia Simet by a reply letter to Sir Tore’s lawyers after a meeting with the Prime Minister and his Department Secretary, that he would advise his staff to give effect to a refund of monies by NHC to Sir Tore and arrange title to be transferred to Sir Tore.
  8. By that letter the inference that can be drawn is that a refund by NHC could have been for the purchase price for the property under the earlier contract of sale or for monies spent on maintenance on the property he was occupying. There is no evidence of any refund to Sir Tore.
  9. By a letter dated 03 June 1992 the State Solicitor informed the Lawyer for Sir Tore that he had requested the Finance Department to refund monies incurred on the transfer by Sir Tore and get NHC to transfer the Title to Sir Tore.
  10. On 19 March 1996 the State Solicitor sent a letter enclosed with a settlement statement with Sir Tore on the property to the Managing Director of the NHC and copied to the Secretary for the Prime Ministers Department.
  11. On 02 June 2008 a contract of sale was executed between NHC and Sir Tore. Transfer instrument was also signed over property on s33 lot 07 Granville.
  12. On 21 May 2008 upon an application for remission of rent on the property by NHC Managing Director Ludwig Maliha a remission of Rent was granted under the hand of John Painap as the Lands Minister’s delegate.
  13. 07 January 2008 through a letter to Sir Tore the then Managing Director Paul Asakusa Terminated an unverified offer on the property. There is no evidence as to which offer for sale was terminated.
  14. On 30 March 2009 the Deputy Registrar of titles advertised a notice to issue an official copy of the State lease over the property on the basis that the original copy had been lost.
  15. In 2012 a number of hand written notes between NHC employees Pala and Topi revealed that the property was a gift to Sir Tore without any consideration and suggested that the file should be closed.
  16. By an undated contract of sale between Sir Tore and the Plaintiff, Sir Tore transferred the property to Steamships Limited.

40. Chronology of facts and events on the part of the First Defendant that led to the current proceedings are these:


  1. The NHC permitted the First Defendant to occupy and buy a property on Section 4 allotment 9 in Mendi. Landowners occupied it and it seems he was displaced.
  2. By a letter dated 21 February 2008 to the Managing Director of NHC, the First Defendant raised his concerns over the neglect and negligence of the NHC by allowing landowners to occupy his property in Mendi.
  3. He proposed to the NHC options of either compensation or a big property in Port Moresby to him from NHC.
  4. By a letter dated 27 February 2008 the Managing Director acknowledged the First Defendant’s letter and informed him that a small portion of the second option (which referred to a property) was available, if convenient. In the same letter the Managing Director admitted failure and wrote off another property on section 34 Allotment 12 to the First Defendant.
  5. On 24 March 2008 the NHC entered into a Contract for Sale with the First Defendant and transferred the property on section 33 allotment 07 Granville to the First Defendant for a consideration of K 150, 000. 00. The owners copy of the lease was given to the First Defendant and thereafter registered by the Registrar General.
  6. On 06 March 2014 the Plaintiff commenced the current proceeding against the First Defendant and others.

41. As a start, it is undisputed that the land and property on the land in dispute belonged to the State. It is also undisputed that Sir Tore was the first occupier of the property.


42. Through a 99-year State lease the NHC became the custodian and agent over the property on behalf of the State. The NHC had a right to dispose of the property in issue under various schemes established by the government.


43. From the evidence and documents tendered into evidence by consent, it is apparent that in or about 1991 the government of the day decided to give a property of his choice to Sir Tore as a gift for his services.


44. There is no evidence that Sir Tore chose a property. It can be safely assumed that Sir Tore preferred the property in issue as he was occupying it at that time.


45. After the property became a gift to Sir Tore it effectively removed any right or standing of the NHC to deal with the property. The State as the owner of the property could not lawfully enter into a contract of sale with Sir Tore. The NHC also could not enter into a contract of sale with Sir Tore or anyone else over the property.


46. Under usual circumstances, a contract of sale would be attached with conditions and the consideration to give formal effect of the sale and transfer. This could not occur over the property which the State gave as a gift.


47. The State had no system like the NHC to transfer its properties. That responsibility was bestowed by the State on the NHC as custodian of State property.


48. There is evidence that the State Solicitor as the Chief Legal Advisor to the government, made a transfer to Sir Tore with a settlement statement on behalf of the State without a contract of sale. There is further evidence that the State Solicitor forwarded the copies of the transfer and the settlement statement to the NHC, Lands and the Prime Minister’s office for registration of the title. 49. Upon the transfer, the property became a private property of Sir Tore subject only to State lease condition.


50. The only thing the NHC was required to do on behalf of the State, was to facilitate the registration and delivery of the Owners Copy of the lease to Sir Tore since the owner’s copy was with the NHC all this time. The NHC failed to register the transfer and deliver the Owners Copy to Sir Tore after the transfer was acted upon by the State Solicitor.


51. On 02 June 2008 David Dambali the then Managing Director for NHC entered into another Contract of Sale with Sir Tore including the transfer instrument on the same property. On March 2009 the Secretary for Lands, Pepi S. Kimas granted a remission of rent on the application of David Dambali then managing Director for NHC.


52. Since the Owners copy was not with NHC, the then Managing Director applied for a replacement title to Sir Tore.


53. It is obvious from the evidence that, pending registration and issuance of the Owners copy, Sir Tore relied on the transfer instrument and sold the property to the Plaintiff for a consideration of K1.5 Million kina through an undated contract of sale.


54. The Registrar General issued a substitute title to Sir Tore on the basis that the owner’s copy had been lost. All this time the Owners copy had been with the NHC.


55. While the process of substitute title was pending the process, the NHC terminated a purported offer and on 24 March 2008 entered into a Contract of Sale with the First Defendant over the same property for a consideration of K150, 000. 00.


56. On or about 27 April 2009 the Registrar of Titles issued the replacement title to Sir Tore. The next day the title was registered. Sir Tore sold the property to the Plaintiff on 26 August 2010.


57. Sir Tore was deemed to be first in time as the owner of the property by virtue of the property being a gift to him in or around early 1992 and later through the transfer document from the NHC. Since the property became a private property the NHC no longer had a say on what happened to the property. Even without the Owners copy of the lease, Sir Tore held a valid ownership of the property. There was no time limit within which a title could be registered. 58. He was entitled to do whatever he wanted with the property, and his sale to the Plaintiff was also valid.


59. It is also undisputed that the NHC transferred the title to the First Defendant on 24 March 2008 and eventually it was registered by the Registrar General. That was done prior to the transfer of substitute title to the Plaintiff, hence the claim by the First Defendant that he was first in time in the transfer of title which made him the valid proprietor.


60. In normal situations the First Defendant would be first in time to be recognized and or endorsed as the title holder because his Contract of Sale and transfer instrument was registered prior to Sir Tore.


61. That is not the case here. Sir Tore was given the property on s33 lot 07, Granville as a gift in or around early 1992. The NHC was no longer the owner of that property, yet it offered to sell it to Sir Tore.


62. There is evidence that the settlement and transfer between the State Solicitor on behalf of the State and Sir Tore was executed in or around 1992. The State Solicitor sent copies of the settlement and transfer documents to the NHC and Secretary for the Prime Ministers Department for registration of the transfer. This action by the State Solicitor demonstrated that the government’s decision to give the property to Sir Tore as a gift had been given effect to.


63. The only thing that the NHC could do under these circumstances was to cause registration of the transfer and release the owners copy. It is evident that that the NHC failed to do this and caused the delay in registering the transfer to Sir Tore. The settlement had been completed by the State Solicitor and the title held by the NHC.


64. These events clearly indicate that the NHC through its Managing Director was well aware or ought to have known that the property was given to Sir Tore as a gift and not for sale.


65. The NHC who had the owners copy had to cause registration of the transfer and release the owners copy. It is evident that NHC failed to do this and caused the delay in registering the transfer to Sir Tore.


66. It is plain that the actual transfer to Sir Tore occurred in 1992. Therefore, the ownership by Sir Tore was first in time as opposed to the ownership to the First Defendant and subsequently the Plaintiff.


67. The contract of sale between Sir Tore and NHC only gave effect to the decision of the State to give the property to Sir Tore as a gift. There is no requirement that a registration of title is to be executed within a prescribed time period. The execution of title by the First Defendant and Sir Tore after a long delay did not affect the validity of their respective titles.


68. The registration of transfers and issue of new Owners copies of the lease by the Registrar General through a corrigendum was lawful and valid. It gave final effect to the government’s decision to give the property to Sir Tore as a gift in 1992 which the NHC miserably failed to do.


69. The totality of the evidence and the chronology of factual evidence derived, clearly identifies the NHC as completely incoherent, lacking in communication bordering on incompetence in its dealings with the property.


70. Despite the knowledge by then NHC Managing Director (James Vuia Simet), that the property was a gift by the State to Sir Tore, it is very obvious that the NHC employees from subsequent Managing Directors down to Senior Managers and Legal Officers either genuinely lacked knowledge or plainly ignorant of the crucial information, that the property on s33 lot 07 was a State gift to Sir Tore.


71. It is also apparent that there was no record with the NHC that the State through the government of the day gave the property to Sir Tore as a gift in 1992 or thereabouts. There is also no evidence in the NHC records or anywhere else, that the decision of the State to give the property to Sir Tore was either withdrawn, revoked or altered.


72. That seems to be the basis upon which employees of NHC and the former Secretary for Lands were adamant in cross examination at the trial, that the sale of the property by NHC to the First Defendant was the valid one.


73. Lack of knowledge also seems to be the basis from which Housing Minister John Kaupa in a corrigendum erroneously declared that Sir Tore was already dead and the sale and transfer to the Plaintiff was fraudulent.


74. It is also demonstrated by the Decision of Managing Director Paul Asakusa. He terminated an unverified offer to sell the property. By his actions it is apparent that he was not aware that the property was a gift from the State to Sir Tore and no longer NHC property.


75. I accept the evidence that Sir Tore in person signed the contract of sale on 26 August 2010 followed by the settlement and transfer. I refuse to accept the allegation that the transactions were fraudulent. The transfer to the Plaintiff was registered three years after sale and transfer on 21 March 2013. Registration of transfer cannot occur without a contract of sale and transfer.


76. It is not in dispute that the registration of the replacement title was issued after the demise of Sir Tore on 13 March 2013. However, he had lawfully transferred the title while he was alive. He was entitled to sell it in any manner he preferred, as it was his property and no longer NHC property.


77. There was no evidence that late registration and issuance of the Owners copy constituted fraud nor are they unlawful as there is no time limit under law. Registration only confers indefeasibility of title.


78. The Plaintiff was entitled to follow up with the Registrar General to obtain a replacement title after the owner’s copy went missing. These documents are a natural flow-on from a settled transfer by the former owner to the purchaser.


79. As to the termination there is no evidence of how the termination notice was served on Sir Tore or whether Sir Tore was aware of the termination. That is because on 26 August 2010 some two years after the termination, Sir Tore and the Plaintiff executed a contract of sale after a search at the Lands office showed that the property was registered to Sir Tore and there was no caveat or encumbrances by anyone. By a latter search a computer printout showed that the property was registered to the First Defendant.


80. From the competing evidence the transfer of title by NHC to the First Defendant was under circumstances with numerous discrepancies. The actions taken by then NHC Managing Director Paul Asakusa, were irregular, dubious, so unsatisfactory and tantamount to fraud.


81. Firstly, he sold to the First Defendant a property that he lacked authority over. The property was no longer owned by his employer, the NHC. The NHC was at the time of termination, an alien to the property. The Managing Director blindly dealt with a property that belonged to another person thereby causing unnecessary prejudice and harm to the First Defendant and subsequently the Plaintiff.


82. Secondly, there is no evidence that the NHC made an offer to the First Defendant to sell the property to him. The letter dated 07 January 2008 from the Managing Director to the First Defendant referred to in evidence, did not constitute an offer of property on section 33 lot 7, Granville.


83. Thirdly, there is no evidence that the First Defendant was a current occupant. Fourthly there is also no evidence that the First Defendant was an entitled person as required under s 35 of the Land Registration Act.


84. Finally, the price of K150, 000. 00 offered by the NHC Managing Director on the property which was situated in a prime location of the city is questionable. The property was eventually bought by the Plaintiff for K1.5 million kina.


85. The evidence through documents tendered show that the Plaintiff and the First Defendant implicated fraud against each other based on the titles they possessed. They have each claimed to be the bona fide purchaser. The then Housing Minister John Kaupa, also implicated fraud by the Plaintiff through a corrigendum advertisement in the National Gazette. Despite those allegations, fraud has not been proved to the required standard by those who alleged it.


86. In my considered view all the allegations referred to by both parties amounted to discrepancies. Despite that, the discrepancies revealed in the transaction between the NHC and the First Defendant are more serious and borders on constructive fraud. Under those circumstances the grant and registration of the title to the First Defendant is invalid and ineffective at law and must not be allowed to stand.


87. In passing it is a chasing game for the First Defendant to seek declaratory orders on a property he did not possess any legal or equitable interest. It is a futile attempt to seek orders over a property to which he is also presumed an alien to the property. Any evidence of occupancy could have given the Plaintiff or the First Defendant some credibility for the restraining orders sought which are of no consequence now.


88. The following orders are made.


89. It is declared that:


  1. The registered proprietor of s 33 lot 07, Granville was Sir Tore Lokoloko.
  2. The transfer of the property on s 33 lot 07, Granville by the NHC to the First Defendant (Robert Kopaol) on 16 July 2013 is quashed as null and void ab initio.
  3. The sale and transfer of the property on section 33 Lot 07, Granville, by Sir Tore Lokoloko to the Plaintiff (Steamships Ltd) is lawful and valid.
  4. The replacement title registered by the Registrar of Titles on 21 March 2013 is valid.
  5. The Plaintiff is the registered owner of the property.
  6. Default judgment is entered against the NHC as Cross Defendant in favor of the Plaintiff and the First Defendant to be assessed.
  7. The Fourth Defendant (National Housing Corporation) in the cross-claim shall pay the costs of the Plaintiff and the First Defendant (Robert Kopaol) in this proceeding and the cross-claim on a solicitor client basis to be taxed if not agreed.

________________________________________________________________
Gadens Lawyers: Lawyers for the Plaintiffs
Wariniki Lawyers: Lawyers for the First Defendants
DLPP In-house Lawyers: Lawyers for the Second & Third Defendants



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