N10107

PAPUA NEW GUINEA
[IN NATIONAL COURT OF JUSTICE]

WS NO. 1199 OF 2018

BETWEEN:
EVANGELICAL LUTHERAN CHURCH OF PAPUA NEW GUINEA
-Plaintiff-

AND
PAUL ISIKIEL JUNIOR trading as MOMASE TIMBER SUPPLIERS
- First Defendant-

AND
P.I. HOLDINGS LIMITED
-Second Defendant-

Lae: Dowa J
2021: 03rd November
2023: 03rd February

LAND LAW – state lease -– plaintiff seeking declaratory relief of ownership of state lease –Indefeasibility of title under section 33 of Land Registration Act- Seeking orders for possession- and permanent injunctions - defendants dispute ownership of land based on difference in the name on title - Defendants’ equitable interest to remain on property is limited- Orders granted in favour of the Plaintiff.

DAMAGES-for unpaid rent – on same terms for holding over period on month to month-rent increment at K 500 per month at each anniversary-judgment for the Plaintiff.

Cases Cited.
Mudge -v- Secretary for Lands [1985] PNGLR 387
Godowan Investment Ltd v Wambea (2018) N7263
Jure Investment v Conlife (2018) N7286
Paga Hill Development Company v Daure Kisu (2014) N5683 
Laka v Nui (2013) SC1223
Robinson v Airlines Corp [1983] PNGLR 476
Medaing v Ramu Nico Management (MCC) Ltd (2011) SC1144
Waisime -v- Auskoa Enterprises Ltd (2019) N7727

Counsel:
K. Keindip appearing as City Agents for, Fiocco Nutley, for the Plaintiff
No Appearance for the Defendants

JUDGMENT

03rd February, 2023            

1.	DOWA J.  The Plaintiff claims against the Defendants judgment for possession of land and for unpaid rental on property described as Allotment 18 Section 70, Lae, Morobe Province.

Background Facts

2.	The Plaintiff, Evangelical Lutheran Church of Papua New Guinea (ELCPNG) is the registered proprietor of property described as Allotment 18 Section 70, Lae, Morobe Province, contained in State Lease Volume 3 Folio 230.  The property is divided into two parts.  One part is leased to late Ron Dixon and his estate.  The other part is occupied by the First and Second Defendants and their agents and servants, under an expired lease.

3.	In January 2013, the Plaintiff leased the premises to the Defendants under a lease agreement for 3 years.  After the expiry of the lease, the parties did not renew the lease, but the Defendants continued to occupy the premises, on a month-to-month basis.  During the occupation of the premises, the Defendants failed to pay the rent for the property.

4. 	In March 2018 the Plaintiff gave notice to the Defendants to vacate the part of the premises they were occupying, but the Defendants refused to vacate, resulting in these proceedings.  

The Proceedings

5.   In the Amended Statement of Claim the Plaintiff claims the following:

1)	a declaration that the Plaintiff as the registered proprietor of property, Lot 18, section 70 Lae is entitled to a vacant possession.
2)	an order that the Defendants and their agents deliver up possession of the part of the land they are occupying.
3)	an order for leave to issue a writ of possession.
4)	Injunctive orders against the Defendants.
5)	Damages for trespass for unlawful occupation.
6)	Judgment for K396,000.00 for unpaid rent.

6. 	The Defendants filed a defence, denying that the Plaintiff is the proprietor, and that they owe no unpaid rentals to the Plaintiff.
 
Trial 

7.	The trial in this matter commenced on 23rd September 2021 where counsel for the parties agreed to tender their respective affidavits by consent without cross-examination and agreed to file written submissions.  The matter was then adjourned to 3rd November 2021. Counsel for the Defendants did not appear.  Only counsel for the Plaintiff appeared and presented his arguments in Court.

Issues
8. 	The issues for consideration are:

a)	Whether the Plaintiff is the registered proprietor
b)	Whether the Plaintiff is entitled to judgment for possession.
c)	Whether leave be granted for issue of writ of possession.
d)	Whether the Plaintiff is entitled to judgment for unpaid rents.
e)	Whether Defendant is entitled to damages for trespass.

Evidence

9.	As alluded earlier, parties agreed to rely on their respective affidavits filed in Court.  The Plaintiff relies on the following affidavits.

	a)	Affidavit of Bernard Kaison sworn 12th and filed 13th February 2020.
b)	Affidavit of Bernard Kaison sworn 28th and filed 22nd January 2021.
c)	Affidavit of Bernard Kaison sworn and filed 30th June 2021.

10. 	The Defendants rely on the following affidavits:

a)	Affidavit of Edward Paul filed 14th February 2020.
b)	Affidavit in Support of Paul Ezekiel Junior sworn and filed 19th March 2020.

Whether the Plaintiff is the owner of the property. 

 11.	The Defendants dispute that the Plaintiff is the owner of the property, Allotment 18 Section 70 Lae.  In my interlocutory decision of 10th July 2020, I ruled that the Plaintiff is the owner of the subject property, and I will restate that position.  For clarity, I will offer my reasons:  The evidence of the Plaintiff’s ownership is given by Bernard Kaisom, the General Secretary for ELCPNG.  He annexes to his affidavit sworn and filed 13 February 2020 a copy of the State Lease.  The State Lease shows the registered proprietor as Evangelical Lutheran Church of New Guinea Property Trust.  The Defendants allege that the Plaintiff is not the same entity that appears on the State Lease of the property.  That contention appears to be so on the face of the title Deed.  

12.	However, the Evangelical Lutheran Church of Papua New Guinea is established by Evangelical Lutheran Church of Papua New Guinea Act, an Act of Parliament.  By operation of section 10 (saving of contracts) of the Evangelical Lutheran Church of Papua New Guinea Act 1992, (ELCPNG Act), the State Lease is vested in the Plaintiff Church on the commencement of the ELCPNG Act. Section 10 reads:

“10.	SAVING OF CONTRACTS.
All Contracts, Agreements, Conveyances, Deeds, Leases, Licences and other instruments or undertakings entered into by, made with or addressed to the Property Trust (whether alone or with any other person) before the date of commencement of the Act and in effect immediately before that date shall, on and after that day, to the extent that they were previously binding on and enforceable against or in favour of the Property Trust, be binding on and of full force and effect in every respect or in favour of the Church fully and effectually as if instead of the Property Trust the Church had been a party to them or bound to them or entitled to the benefit of them.“
13.	Despite the contention that the Plaintiff is not the registered proprietor, I am convinced that by operation of section 10 of the Evangelical Lutheran Church of Papua New Guinea Act, that the Plaintiff is the proprietor of the land and is to benefit from the title registered in the New Guinea Property Trust and the lease agreement.   I also note that the sub lease agreement entered on 1st January 2013, was between the Plaintiff in its own name Evangelical Lutheran Church of Papua New Guinea (ELCPNG) the Second Defendant.  The defendants have recognized and accepted Evangelical Lutheran Church of Papua New Guinea as owner of the property, and they are now estopped from denying the Plaintiff’s ownership of the property.

 14. The Plaintiff has produced in evidence a Certificate of Title under State Lease Volume 3 Folio 230 over the subject land section 70 Allotment 18 Lae, Morobe Province.  Section 32 of the Land Registration Act provides that where an instrument of title describes a person as the proprietor of an estate or interest, that person is the registered proprietor of the estate or interest.  Section 33 of the Land Registration Act provides that the registered proprietor of an estate holds it absolutely free from all encumbrances except for fraud and exceptions set out in (1) (a) to (f), Re:  Mudge -v- Secretary for Lands (1985) PNGLR 387.

15. 	For the foregoing reasons, I find that the Plaintiff is the registered proprietor of the land described as Allotment 18 Section 70, Lae State Lease Volume 3, Folio 230.

Vacant Possession

16.	The Plaintiff seeks an order for vacant possession in these proceedings.  This has become necessary because the defendants have refused to move out of the property despite requests.  The Plaintiff as owner is entitled to possession.  In the case of Godowan Investment Ltd v Wambea (2018) N7263, Cannings J in dealing with a similar case said this at paragraphs 19-20 of his judgment:
         
 “19.	 I have no hesitation in granting orders generally in terms of paragraphs 3 and 4. Such orders follow naturally from the declaration that the plaintiff is the registered proprietor of the State Leases over Section 173, Allotments 6, 7 and 8. The person who will be directly affected by such orders is the second defendant. He has erected buildings and other structures on the subject properties and conducts his businesses there. He invested in and improved the properties without the consent of the registered proprietor. That is a risk he voluntarily took, and he has to bear the consequences of taking such a risk.

20.	There is no evidence or suggestion that the plaintiff by its conduct acquiesced in the second defendant’s conduct. In fact. the evidence shows the contrary. The plaintiff warned him on several occasions that he was acting unlawfully. He took no notice and continued to develop the properties. There is no good reason for refusing the relief sought in the originating summons.”

17.	I am therefore inclined to grant orders for vacant possession and for the defendants to deliver up vacant possession within the time frame the Court considers reasonable. 

Writ of Possession

18.  The second relief is an order for Leave to issue Writ of Possession.  The Court has upheld the application for vacant possession. For the same reasons and as a matter of course, leave to issue a Writ of Possession shall be granted.

19.	The law is settled. If a person moves in and settles on someone else’s land and builds homes and structures, he does it at its own peril.  Such persons are entitled to an equitable interest of being granted a reasonable time to remove their structures and vacate the property.  Refer: Jure Investment v Conlife (2018) N7286, Paga Hill Development Company v Daure Kisu (2014) N5683 and Laka v Nui (2013) SC1223. In my view, a period of two (2) months is reasonable for the defendants, and servants or agents to remove their personal items and deliver up vacant possession.

         Permanent Injunction

20.	The fourth relief is for an order in permanent injunction restraining all the Defendants, their servants, and agents from remaining or trespassing on the subject land, and from threatening, intimidating or otherwise harassing the Plaintiff, its associates, agents, and employees.  
  
21.  Generally, a grant of an interlocutory injunction is discretionary.  Its purpose is   to maintain status quo until final determination.  See Robinson v Airlines Corp (1983) PNGLR 476. A permanent injunction on the other hand is more serious and is sparingly granted. The Supreme Court in Medaing v Ramu Nico Management (MCC) Ltd (2011) SC144 discussed the law on permanent injunction.  At paragraphs 58-63 of the judgment, the court said, and I quote:
“58. 	The law in relation to the grant of permanent injunctions is summarised in the text Spry, Equitable Remedies, Injunctions and Specific Performance, Seventh Edition (1980). At pg.392, Spry (supra) states.
"In all cases, it is a matter of discretion whether an injunction will or will not be granted; but the manner of exercise of that discretion depends on the precise nature of the particular rights that it is sought to protect and on all other material circumstances."
59. 	Spry (supra) quotes further at pg.393 from the case Pride of Derby and Derbyshire Angling Association Ltd v. British Celanese Ltd [1953] ch.149 at 189, which states.
"An injunction may, nonetheless, be refused, as a matter of discretion, should it appear to be unjust or 'highly unreasonable' to grant it, by reference to established equitable considerations such as laches, hardship, acquiescence, the absence of clean hands or such other matters. Further, statutory rights must be taken into account by the Court."
22. 	The Plaintiff, as the registered owner, is entitled to peaceful use of the property.  It is not highly unreasonable or unjust to grant the orders sought. I will therefore grant an order for permanent injunction against the defendants. 

Unpaid Rent

23.	The Plaintiff seeks judgment for unpaid rent for the period between 1st January 2013 to 31st December 2021, in the sum of K396,000.00.  The details of the Plaintiffs claim are contained in paragraphs 8-19 of the amended Statement of Claim and paragraphs 29-32 of the Plaintiffs submission filed herein.  The initial rent was fixed at K2,000.00 per year commencing on 1st January 2013.  It was a term of the lease agreement that monthly rent would be increased by K500.00 on the anniversary of each year.  For the period between from January 2013 to 31st December 2020, the Defendants paid only K36,000.00 and the outstanding unpaid rent was K324,000.00. The Plaintiff is making a further claim of rent of K72,000.00 for the period commencing 1st January 2021 to 31st December 2021. 

24.	The Defendants have filed a general denial in their defence to the Plaintiffs claim for the unpaid rentals.  They have not produced any evidence rebutting the clear evidence of the Plaintiff. The calculation of the outstanding unpaid rent is computed in paragraphs 14 and 15 of the Amended Statement of Claim. It is supported by evidence of a lease agreement executed by the parties on 1st January 2013. The terms of the expired lease provide that rent would increase at the rate of K 500.00 per month on the anniversary of each year. The calculations are based on the terms of the expired lease agreement.   I have examined the calculations and accept them based on annual increment of K500.00 per month. I therefore accept the final figure of K 396, 000.00 as claimed. I will allow judgment for K396,000.00 for unpaid rent for period 1st January 2013 to 31st December 2021.  

 Interest

25.  The Plaintiff claims interest. It is discretionary. I will allow interest at 8 % to commence on 1st January 2021. This is to allow for the amendment of the rental figures since the commencement of proceedings in 2018. Interest for the last two years at the rate of 8% on the judgment sum of K 396,000.00 is K 63,360.00. The total judgment sum is K 459,360.00 inclusive of interest.

Damages

26.	The Plaintiff sought damages for trespass and for unlawful occupation. This type of claim is allowed and recognized by law as damages for mesne profits. Mesne profits are income to which ELCPNG is entitled but from which it has been deprived of.  Mr Gor, counsel for the Plaintiff, has cited the case of Waisime -v- Auskoa Enterprises Ltd (2019) N7727 in support of his submission.  At paragraph 34 of the judgment, his Honour, Kandakasi J (as he then was) said this:
	
“34. Having regard to the foregoing discussions and the case authorities cited, I consider a claim in trespass is different from a claim for mesne profits. Trespass goes into the question of how a defendant to such a claim first entered the plaintiff’s land or property. If the defendant first entered the land without any permission authority or consent of its owner, that amounts to an act of trespass. It is both a criminal and civil wrong. The former would attract criminal responsibilities and penalties, while the civil wrong would attract damages. Depending on what the owner wants and the actions or inactions of the police both types of consequences could follow against a trespasser. Hence, action under either of the process, criminal or civil, would not excuse actions under the other. On the other hand, mesne profits cover the period a defendant occupies another’s land and gains from it, whether any actual income or benefit is derived or not by reason only of the defendant’s adverse possession of the land. The measure of damages is based on the extent of the defendant’s use of the land and gaining from it. Hence, trespass and mesne profits are two separate causes of action which could attract separate assessments and award of damages if made out. One could argue as does the defendants here that, they arise out of the one transaction and only one award of damages should cover both. But such an argument ignores the fact that trespass without any use and gain from the property is compensable without the need to prove use and gain. Similarly, mesne profits could come about without trespass. This could be possible where the defendant lawful enters the property say under a lease or rental agreement but fails to vacate after the expiry of its relevant term and the defendant continues to make use and gain from the property. “

27.	In the present case, I note this claim is sought in the alternative to the claim for unpaid rentals.  Since the Court has granted the main relief for the unpaid rental, I am reluctant to grant the alternative relief for the damages for mesne profits.

Cost

28.	The Plaintiff has succeeded in its claim and therefore is entitled to cost as a matter of course to be taxed, if not agreed.

ORDERS

29.    The Court orders that: 

i)	Judgment for possession is granted to the Plaintiff of land contained in Certificate of Title Volume 3 Folio 230, Section 70 Lot 18, Lae, Morobe Province. 

ii)	The defendants and their, agents, employees, and servants whosoever immediately deliver up vacant possession of the part of Allotment 18 Section 70, Lae they are currently occupying within two (2) months from date of this order.

iii)	The Plaintiff is granted Leave to issue Writ of Possession pursuant to the judgment for possession which shall be executed after two (2) months from the date of this order.

iv)	The defendants and their agents, employees and servants are permanently injuncted from remaining in possession or trespassing onto Allotment 18 Section 70, Lae.

v)	Judgment is entered for the Plaintiff against the defendants in the sum of K 459,360.00 being outstanding unpaid rent inclusive of interest.

vi)	The Defendants shall pay the Plaintiff’s cost to be taxed if not agreed.

vii)	Time be abridged.

Fiocco Nutley & Associates:      Lawyers for the Plaintiff
Daniels & Associates:  		Lawyers for the Defendants