Yeng v George [2020] PGNC 377; N8653 (30 November 2020)

N8653

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1427 OF 2019

BETWEEN:
TANGOI YENG
Plaintiff

AND:
MARITHA GEORGE
Defendant

Madang: Narokobi J
2020: 26^th October, 30^th November

RES JUDICATA – Whether claim to occupy business premises has been previously determined by the court – whether damages appropriate in the circumstances

ORDERS – Nature of orders to do justice in the circumstances of the case pursuant to ss 158(2) and 155(4) of the Constitution

The plaintiff and the defendant were previously in a relationship. They worked together as business partners in a carpentry business. The relationship went bad and they went their separate ways, except that the defendant still occupies the business premises. The plaintiff wants vacant possession of the business premises and control of the tools and equipment. The defendant says that the issues are res judicata.

Held:

(1) The plaintiff’s claim is not res judicata as the issue has not been determined by a court of competent jurisdiction.

(2) The plaintiff is entitled to occupy the premises as the sole shareholder and director of the company.

(3) All tools, equipment and assets obtained by the parties or through the company Yeng’s Enterprises Ltd prior to 1 February 2015 being an estimate of the time of separation shall be the joint property of the plaintiff and the defendant.

(4) Since the plaintiff and the defendant are no longer in a relationship the most appropriate course of action now is to order the sale of the tools, equipment and assets by auction and the proceeds shared equally between the plaintiff and the defendant.

Cases Cited:

O'Neill v Eliakim (2016) SC1539

Counsel

Mr T Yeng, in person
Mr F Sarry, representative of the Defendant, with leave of the court

JUDGEMENT

30^th November, 2020

1. NAROKOBI J: This is a trial to determine control of a business and for damages for loss of business. In essence the trial is to determine the issue of liability.
   

Background

2. The current proceeding is not the first one that the plaintiff and the defendant have been locked in. They have been to the village court, the district court and twice in the National Court before. This is the third time now the matter has come back to the National Court.
   
3. The basic story is that the plaintiff and the defendant were previously in a relationship. They worked together as business partners in a carpentry business through a company called Yengs Enterprise Ltd. The relationship went bad and they separated, except that the defendant still occupies the business premises. The plaintiff wants vacant possession of that business place and return of his tools and equipment. He also claims for loss of business. On the other hand, the defendant argues that the plaintiff left on his own accord and is not welcome back. She further says that the plaintiff has not followed the requirements of the Companies Act 1997 to remove her as a director and shareholder of Yengs Enterprises Ltd.
   

Issues

4. The main issue of contention in this proceeding is whether the plaintiff is precluded from his claim on the basis that it is res judicata?
   

The Plaintiffs Case

5. The plaintiff has filed proceedings seeking vacant possession from a property described as Section 10, Lot 21, Binnen Road, Madang, Madang Province so that he can occupy it and conduct his business. He also claims loss of business for the time he has not been running his business. Additionally, he claims possession of the tools and equipment on the premises.
   
6. In support of his claim he relies on the following affidavits:
   
   1. Tangoi Yeng – filed 21 April 2020;
   2. Tangoi Yeng – filed 16 July 2020; and
   3. Tangoi Yeng – filed 28 August 2020.
      
      7. A summary of what each affidavit states is set out hereunder.
         

Deponent	Evidence
Tangoi Yeng – filed 21 April 2020	Says that he is the legitimate owner of the company Yengs Enterprises Ltd. The defendant is not a shareholder and director of Yengs Enterprises Ltd. Seeks possession of the property described as Section 10, Lot 21, Binnen Road, Madang, Madang Province and control of the assets and equipment. Provides a copy of the company extract dated 19 September 2019 which shows him as the director and shareholder of Yengs Enterprises Ltd. The extract does not show the defendant as a shareholder or a director of Yengs Enterprise Ltd Provides copy of an order issued in the proceedings HRA 140 of 2017 which dismissed the defendant’s claim for fraud in removing her as a shareholder and director of Yeng’s Enterprises Ltd.
Tangoi Yeng – filed 16 July 2020	Provides reference from various satisfied clients of the work he has done for them.
Tangoi Yeng – filed 28 August 2020	Provides a letter dated 13 August 2020 from Mr Peter Sagerom an Assistant Director of the Commerce, Industry and Tourism Branch of the Madang Provincial Administration which says that Tangoi Yeng should be occupying the working space at Section 10, Lot 21, Binnen Road, Madang, Madang Province.

8. During submissions he submitted he had obtained a court order in the District Court which ordered the defendant to vacate the premises in DCC 122 of 2015. That order was appealed in CIA 153 of 2015. The National Court set aside the District Court order and directed the parties to determine the issue of ownership and status of defendant’s claim to the property.
   
9. He further submits that the defendant then initiated another proceeding in HRA 140/17, claiming fraud against the plaintiff, Investment Promotion Authority, Department of Commerce and the State. HRA 140/17 was dismissed.
   
10. He seeks orders for the defendant to vacate the property, for an inventory of the assets and for the defendant to pay for the loss of business.
    

Defendant’s Case

11. The defendant has filed a Defence to the statement of claim. She says that the plaintiff has left the property on his own accord. The main Defence of the Defendant is that the plaintiff left on his own accord in February 2015 and has not come back since then. She says that she holds equal shares in the company Yengs Enterprises Ltd, and the plaintiff is not entitled to the relief sought.
    
12. The defendant relies on the following affidavits to support her case:
    
    1. Francis Sarry – filed 10 August 2020;
    2. Maritha George – filed 21 August 2020;
    3. Maritha George – filed 21 August 2020;
       
13. A summary of what each affidavit states is set out hereunder.
    

Deponent	Evidence
Francis Sarry – filed 10 August 2020	Says that the defendant cannot vacate the property as the court has already decided on the issue.
Maritha George – filed 21 August 2020	Says that the District Court has already decided the issue in CIA 153/16.
Maritha George – filed 21 August 2020	Says that the issues have been determined in DCC 102 of 2015 and CIA 153/16 and are therefore res judicata.

14. In her submissions, the defendant states and I quote:
    

“On or about February 2015 the plaintiff announced to his children that he won’t be around for some time and that the defendant would manage the business during his absence. He left the property on his own accord taking with him the company’s motor vehicle and all the finances.”

15. She further submits that there was non-compliance with Companies Act before the transfer of the shares. She claims there was non-compliance with s134 of the Companies Act.
    
16. She concludes her submission by stating that the matter is now res judicata.
    

The Law

17. Res judicata was explained in the Supreme Court in O'Neill v Eliakim (2016) SC1539 in the following terms:
    

28. In Herman Gawi v PNG Ready Concrete (1983) unnumbered, unreported, Bredmeyer J. reproduced the following passage from The Doctrine of Res Judicata by Spencer-Bower and Turner 1969 2nd ed p1, as in his view it stated the law clearly and succinctly:

“In English jurisprudence a res judicata, that is to say a final judicial decision pronounced by a judicial tribunal having competent jurisdiction over the cause or matter in litigation and over the parties thereto, disposes once and for all of the matters decided, so that they cannot afterwards be raised for re-litigation between the same parties or their privies. The effect of such a decision is twofold. In the first place, the judicial decision estops or precludes any party to the litigation from disputing against any other party thereto in any other litigation, the correctness of the earlier decision in law and fact. The same issue cannot be raised again between them, and this principle extends to all matters of law and fact which the judgment decree or order necessarily established as the legal foundation or justification of the conclusion reached by the Court. In the second place, by virtue of the decision the right or cause of action set up in the suit is extinguished, merging in the judgment which is pronounced. Transit in rem judicatam. The result is that no further claim may be made upon the same cause of action in any subsequent proceedings between the same parties or their privies.”

18. The essence of res judicata is that it prevents a party to relitigate a claim again before the court as it has been substantively determined.
    

Considerations

19. I find that the business was started by Tangoi Yeng as the founder, financier and Managing Director of the company, “Yeng’s Enterprise Ltd”. He started the company because he was a skilled tradesman attested to by the number of references he attaches to his affidavit. The company was commenced in 1992 where the plaintiff was the sole owner of a small-scale business called Jeng Handcraft Enterprise. The plaintiff then incorporated a company which bears the surname of the plaintiff “Yeng’s Enterprises Ltd”. The company was incorporated together with the defendant on 15 October 2008.
    
20. It was the company under the management of Tangoi Yeng the Department of Commerce leased the premises at Section 10, Lot 21, Binnen Road, Madang, Madang Province to Yengs Enterprises Ltd. I refer to the letter dated 13 August 2020 from Mr Peter Sagerom an Assistant Director of the Commerce, Industry and Tourism Branch of the Madang Provincial Administration to confirm this.
    
21. On the evidence before me I find that from 2008 to 2015 the plaintiff and the defendant were business partners, and that around February or March 2015 that relationship broke down, and the plaintiff left the business. This is evidenced by the adultery allegation the defendant claims against the plaintiff for being involved with one Vanessa Basse.
    
22. I find that when the plaintiff and the defendant entered into a relationship, the plaintiff invited the defendant to be a business partner and issued shares to her and also made her a director of the company.
    
23. I do not make any findings on the issue of whether the defendant was illegally removed as a shareholder and director as that decision was made by the Investment Promotion Authority and the Department of Commerce. I am bound to recognize the name of the shareholder and director on the current company extract. At this point in time, it does not recognize Maritha George, the defendant so she is not a shareholder nor a director of the company.
    
24. I find that the proceedings styled as HRA No 140 of 2017 was to challenge the decision to remove the defendant from the company but it was dismissed. The orders sought in that proceeding was that her removal from the company as a shareholder and director was illegal and contrary to the Companies Act. The court dismissed the proceedings. So from the reasons of the decision, the issue is now res judicata and Maritha George is no longer a shareholder or director of Yengs Enterprise Ltd.
    
25. I also find that when the court decided the appeal in CIA 153 of 2016 it allowed the defendant to continue to occupy the premises at Binen Road but required the parties to resolve the issue of ownership of Yengs Enterprise Ltd. The National Court gave liberty to both parties to come to the National Court to resolve the issues before the District Court. In my view this means that the defendant will remain on the property until it is decided who owns the business and when that is decided the issue of occupation of the premises will be determined. The issue is therefore not res judicata.
    
26. The issue of ownership has now been resolved by the Commerce Department and the Investment Promotion Authority recognizing the plaintiff as the shareholder and director of the company and not the defendant. The defendant attempted to challenge that decision in HRA No 140 of 2016 by suing Peter Sagerom as Director of Commerce Trade and Industry, Madang Province, Registrar of Companies, the Investment Promotion Authority and the State but was not successful. On 14 November 2018 the court ruled that all relief sought in the statement of claim is refused and the proceedings are dismissed.
    
27. As a result of these findings, the issue of ownership of the company is now determined and the plaintiff must occupy the premises at Section 10, Lot 21, Binnen Road, Madang, Madang Province and recommence his business under the name of Yeng’s Enterprises Ltd.
    
28. In relation to the tools, equipment and assets on the company premises, they are the joint property of both the plaintiff and the defendant, because both the plaintiff and the defendant operated together from 2008 to 2015, some eight (8) years and unless the parties come up with an arrangement on ownership, the items will be sold and the proceeds distributed equally between them.
    
29. I cannot make any findings on loss of business because the court had made an order on 16 August 2017 in CIA No 153 of 2016 for the defendant to remain in the premises at Section 10, Lot 21, Binnen Road, Madang, Madang Province and continue the business until the issue of ownership is determined.
    

Orders

30. So what orders should I make given all my findings. Section 158(2) of the Constitution implores the courts to give paramount consideration to the dispensation of justice. Section 155(4) of the Constitution confers on the National Court inherent power to make, in such circumstances as seem to it proper, such orders as are necessary to do justice in the circumstances of a particular case.
    
31. In light of the circumstances of this case, I make the following orders:
    
    1. Maritha George vacate the premises at Section 10, Lot 21, Binnen Road, Madang, Madang Province within 14 days from this order.
    2. All tools, equipment and assets on the premises at Section 10, Lot 21, Binnen Road, Madang, Madang Province, prior to 1 February 2015 shall be the joint property of the plaintiff and the defendant.
    3. The Sheriff will attend the property and do an inspection, inventory and valuation of all the tools, equipment and assets on the property within seven (7) days from today.
    4. If the parties are not able to reach an understanding on how best to share the tools, equipment and assets within 21 days from today, the Sheriff will conduct an auction and the proceeds of the sale will be shared equally between them.
    5. Each party has the first right of refusal of purchasing the property from the other party at half the valued price.
    6. The claim for loss of business and damages is dismissed.
    7. Each party will bear its own costs.
    8. Time is abridged.
    9. Filed is closed.