Tulapi v Steamships Trading Company Ltd [2012] PGSC 43; SC1210 (4 December 2012)

SC1210

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 118 OF 2011

BETWEEN

DANIEL TULAPI
First Appellant

AND

MARICAR TULAPI
Second Appellant

AND

RESURRECTION HILL LIMITED
Third Appellant

AND

STEAMSHIPS TRADING COMPANY LIMITED
Respondent

Waigani: David, Yagi & Makail, JJ
2011: 19th December
2012: 04th December

REAL PROPERTY – State Lease – Rental arrears – Summary ejectment proceedings – No issue as to title – District Court proceedings –Discontinuance of – Effect of – Commencement of National Court proceedings – Claim for possession – Order for possession granted – Whether abuse of process.

COMPANY LAW – De-registration of company – Effect of – Company in the custody of Registrar of Companies – Court process served on Registrar of Companies – Companies Act, 1997 – ss. 372 & 373.
Facts

The appellants and the respondent entered into a lease for a period of two years at a rent of K9,450.00 per month. The respondent alleged that the appellants defaulted and were in arrears of K220,000.00 and sought to evict them from the property. It commenced summary ejectment proceedings in the District Court under the Summary Ejectment Act and subsequently discontinued it. It then commenced National Court proceedings for possession of the property. The National Court upheld the respondent's claim and ordered the appellants to vacate the property.

On appeal, the first appellant contended that the trial judge erred in upholding the respondent's claim when the summary ejectment proceedings in the District Court was pending, that they were denied natural justice when the Court heard the respondent's claim for possession in their absence, that the respondent's claim for possession was incompetent because the third appellant was de-registered and that the respondent had defective title to the property and fraudulently induced them to enter into the lease.

Held:

1. As the complainant in the summary ejectment proceedings in the District Court, the respondent has a right to discontinue it. When it discontinued it, the proceedings came to an end and it was not open to challenge in any manner or form, save as to the issue of costs. Thus, the decision by the District Court to set aside the notice of discontinuance and re-instate the proceedings and subsequent appeal by the respondent to the National Court are of consequence to the issue of discontinuance.

2. The appellants' request for adjournment was belated and not supported by a notice of motion and affidavit. Delay was a prominent feature of the case and the delay denied the respondent the opportunity to have its claim for possession determined quickly. Therefore, the appellants failed to establish that they were denied natural justice.

3. As the third appellant was de-registered and the Registrar of Companies did not take steps to defend the claim by the respondent in OS No 689 of 2011, the respondent was entitled to judgment and the judgment was wide enough to apply to the third appellant, its servants, agents, persons or entity connected with it. This included New World Fashion Limited.

4. The ground on defective title was misconceived as the dispute between the parties was outstanding rentals and right to possession to property.

5. The appeal was dismissed and the appellants were ordered to pay the costs of the appeal on a party/party basis to be taxed if not agreed.

Cases cited:

Papua New Guinea Banking Corporation -v- Jeff Tole (2002) SC694

Counsel:

First Appellant in person
No appearance for Second & Third Appellants
Mr J Brooks, for Respondent

04th December, 2012

JUDGMENT

1. BY THE COURT: This appeal arises from the decision of the National Court given on 30th September 2011 which ordered the appellants to vacate a property described as allotment 33, section 38, Hohola, National Capital District. The property is located at what is commonly known as the "Steamships compound" at Waigani. At the hearing of the appeal, the first appellant appeared and informed the Court that he is the only appellant prosecuting the appeal. The second and third appellants did not appear nor have they shown any interest in pursuing the appeal. We take it that they have abandoned the appeal.

Background Facts

2. The case has a long and convoluted history beginning with a grant of a commercial lease over the property to the respondent on 26th June 2003 and ending with a dispute over the right of occupation between the parties. In between, there were three separate court proceedings by either party including numerous interlocutory applications seeking inter-alia, orders to assert their right to possess the property. To cut the long story short, on 01st September 2008, the first and second appellants as directors of the third appellant entered into a commercial lease on behalf of the third appellant with the respondent to lease part of the property (unit 5) for the purpose of establishing a merchandise (clothing) shop. The lease was for a period of three years with an option to renew at a rent of K9,450.00 per month.

3. The dispute began when the respondent alleged that the appellants were in default of rent and sought to evict them from the property. It alleged that the appellants were in arrears of a total sum of K220,000.00. The first and second appellants requested the respondent to transfer the lease to them. The respondent agreed in principle on condition that the appellants settle in full the arrears. On 29th April 2010, the appellants commenced proceedings WS No 453 of 2010 and sought interim orders to restrain the respondent from evicting them. In the substantive proceedings, the appellants (first and third appellants) claimed damages and loss of business income for alleged breach of contract when the respondent failed to give possession of the property to them and construct a building to house the shop. On 07th May 2010, Justice Davani heard the application for interim restraining orders and refused it.

4. Following this, on 31st May 2010, the respondent gave notice to the appellants to vacate the property. On 02nd July 2010, the respondent commenced summary ejectment proceedings in the District Court against the appellants seeking orders to evict them. On 05th August 2010, the appellants filed an application to dismiss the ejectment proceedings and the application was heard and reserved by the Magistrate. On 16th June 2010, the appellants filed an amended writ of summons and statement of claim in proceedings WS No 453 of 2010. On 14th December 2010, Justice Kandakasi struck out the amended writ of summons and statement of claim.

5. On 05th May 2011, the respondent requested the police to assist evict the appellants from the property. The police refused because there was no court order to evict the appellants. On 08th August 2011, the respondent conducted a company search of the third appellant and it discovered that the third appellant was de-registered on 29th January 2009. This fact was not disclosed to the respondent prior to the company search. Because of the delay in the delivery of the Magistrate's decision, on 09th August 2011, the respondent discontinued the ejection proceedings.

6. Subsequently, on 18th August 2011, it commenced proceedings OS No 689 of 2011 and sought an order for possession of the property. On 19th August 2011, both proceedings WS No 453 of 2010 and OS No 689 of 2011 came before the Deputy Chief Justice and his Honour made various orders, one of which was for the documents in OS No 689 of 2011 proceedings to be served on the Registrar of Companies because the third appellant was de-registered. The respondent diligently obliged.

7. On 12th September 2011, both proceedings were fixed for hearing before his Honour. The appellants did not appear. Instead, he sent a letter requesting an adjournment because he was sick. His Honour declined the request and proceeded with the hearing. His Honour reserved his decision until 15th September 2011. Before his Honour could hand down his decision, the first appellant filed an application to stay the handing down of the decision. On 15th September 2011, the application was heard and his Honour refused it and went on to deliver his decision dismissing the proceedings WS No 453 of 2010 and further reserved his decision in OS No 689 of 2011 proceedings. On 30th September 2011, his Honour handed down his decision in OS No 689 of 2011 granting possession of the property to the respondent. This is the decision that is the subject of this appeal.

Grounds of Appeal

8. There are 16 grounds of appeal. They are set out in full below:

"1. His Honour erred in law and in fact in that National Court was ceased (sic) of original jurisdiction, the respondent first filed and prosecuted the appellant(s) under the Summary Ejectment Act at the Port Moresby District Court to evict the appellants.

2. His Honour erred in fact and in Law (sic) in that there was no originating process filed before the National Court to remove the matter of eviction that was already filed and heard by the Port Moresby District Court and was pending ruling, judgment and orders of the district court (sic) and the National Court was ceased (sic) with the jurisdiction to heard (sic) the same respondents matter of eviction.

3. His Honour erred in law and in fact in that on the 02nd of July, 2010, the respondent commenced proceedings by way of complaint at the Port Moresby District Court seeking eviction against the appellants. The district court (sic) heard the compliant for eviction and ruling was reserved by the Magistrate of the district court (sic). While the ruling was pending the respondent filed a separate and similar proceeding in the national court (sic) seeking eviction the subject of this appeal. His honour was wrong in law in making orders for eviction against the appellants in that the district court (sic)was entitled to make or not make the orders for eviction.

4. His Honour erred in law or in fact in that on the 22nd September 2011, the respondent filed a Notice of Appeal to the National Court from the decision of the district court (sic) that on the 17th august, (sic) 2011 an interlocutory order was made against the respondent and the district court (sic) did not make orders for eviction against the appellants. His Honour was wrong in the exercise of his discretion in that the respondents proceedings OS NO 689 OF 2011 THAT WAS FILED ON 18TH August 2011 was not an appeal proceeding and that his honour was clearly ceased (sic) with jurisdiction.

5. His Honour erred in law and in fact in that his honour wrongfully exercised his discretion whereby his honour refused and dismissed the appellants (sic) Notice of motion filed on 14th September, 2011 that sought to allow the appellants to be heard and the proceedings to be fixed for trial inter-parties hearing.

6. His honour erred in Law (sic) and in fact in that his Honours (sic) findings were wrong and leading to a wrong conclusion and orders in that the contract to lease between the parties (appellants & respondents) were nullity and void on the grounds that the third appellant (resurrection (sic) Hill Limited) was de-registered and had no capacity to sue and be sued. The facts are that on the 17th July 2008 when the third appellant gave considerations (sic) for the lease contract it was duly registered under the companies Act (sic) and it was fraudulently de-registered by the respondent's servants and agents in January 2009.

7. His Honour erred in fact and in Law (sic) in that his Honours (sic) findings that the third appellant was de-registered company and the contract of lease was null and void but failed and did not make any findings against the first appellant, second appellant and New World fashion (sic) Limited trading as new world (sic) department store.

8. His Honour erred in Law (sic) and in fact in that his Honours 9sic) finding against the first, and second appellants and New World Fashion Limited trading as New World Department store was wrongful in that the said persons were not parties to the contract of lease with the respondent and resurrection (sic) Hill Limited and the third appellant.

9. His Honour erred in Law (sic) and fact in the finding that the nullity of contract of lease between the respondent and resurrection (sic) Hill Limited was the same finding and application of nullity and void of contract with the first and second appellants and New World Fashion Limited the residents and owners of the land. His Honour was wrong in that the parties to the lease contract of 17th July 2008, or August 2008 or 01st September, 2008 are the respondent and Resurrection Hill Limited.

10. His Honour erred in Law (sic) in that in that (sic) his honour failed to observe and uphold the appellants (sic) rights to fair trial in the proceedings and wherein the proceedings were serious and deliberate by the respondent to deny the appellants right to property namely land and his honours (sic) exercise of discretion to conduct the trial of the proceedings ex parte (sic) and refusing to hear the appellants (sic) defence is and was clearly contrary to section 59(2) of the Papua New Guinea Constitution.

11. His Honour erred in Law (sic) and fact in the exercise of his discretion when he allowed and permitted the respondent to conduct a trial of the proceedings OS NO 689 OF 2011 EX PARTE (sic) when he failed to consider the following matters;

A. The originating summons OS NO 689 OF 2011 was defective and irregular AND HE FAILED TO STRUCK (sic) OUT OR DISMISS the summons in that the summons failed to state the time and date of hearing or trial of the proceedings.

B. The summons was filed and sealed on the 18th August, 2011 and the respondent and his Honour caused the trial and hearing of the summons ex parte (sic) on the 12th September 2011, that is to say hearing and trial took place within twenty four (24) days. The appellants' rights to file Notice of intention to defend and defence was violated, denied and taken away when the thirty days allowed by the law to the appellants to file their defence had not yet expired.

C. The Respondent could not lawfully cause a trial and his Honour wrongfully exercised his discretion to permit the respondent an ex parte (sic) hearing and trial of the proceedings to the advantage of the appellants' rights to be heard on (sic) their defence to be filed.

D. His Honour failed to consider the Notice of intention to defend filed by the appellants on 14th September, 2011, and proceeded to ex parte (sic) trial of the matter.

E. The Originating summons was defective that his honour fell into serious error in not considering the fact that the summons did not specify and did not state the time period in which the appellants were required to file their Notice of intention to defend and defence as mandatorily required by Law (sic) and the National Court Rules.

F. His Honour failed to consider the serious defectives (sic) in the summons that did not prescribe and stated (sic) the date and time of hearing and trial of the proceedings.

G. His Honour failed to exercise his discretion according to law and the court rules in that he exercised his discretion in a way that is not recognized and permitted by the Law (sic) and the National Court Rules in that the summons was so defective and hearing could not lawfully be conducted ex parte (sic) and without notice of hearing to the appellants.

I. (sic) His Honour failed to consider the fact that no notice of hearing was ever served on the appellants or at all and his honour fell into error when he caused the trial and hearing of the matter ex parte (sic) and in the non attendance of the appellants in the circumstances.

J. (sic) The summons was seriously defective and could properly had been dismissed or struck out had his honour considered the fact that named parties who are not contracting parties to the contract or purported lease were wrongfully named as defendants to the proceedings.

12. His Honour erred in Law (sic) and fact in that he failed to consider the defect in the state lease held out by the respondent. Had his Honour inquired with the respondent as to any grounds of defect in the title to the state lease his honour could have found that;

i. The respondent has/had a defective title to the land and property in dispute.

ii. The state lease was by operation of Law (sic) deemed forfeited by the Minister for Lands in that the respondent did not satisfy the fundamental covenants and conditions of the state lease. The respondent was guilty of violations of sections 122 and section 128 of the land act, (sic) 1996. The violation of the land act (sic) cannot be waived and the state lease was by operation of the Act deemed forfeited and the appellants acquired bona fide lease rights.

iii. The appellants acquired good title from the respondents bona fide in that the appellants were not aware and did not know the defect in the title of the respondent.

iv. The appellants became aware of the defect in title of the respondent when the respondent committed fraud and illegalities and violation of the Land Act, 1996 and the land registration (sic) Act when the respondent committed acts of fraud, forgery and unlawfully withheld the title from the appellants to cover up the defect in the respondent's title.

v. The appellants had taken steps and brought to light and to the Minister for lands (sic) the fraud and illegality committed by the respondent and the Minister shall forfeit the state lease to the respondents pursuant to Law and the Land Act 1996.

vi. His Honour only considered the de-registration of Resurrection Hill LTd (sic) but refused and failed to without reasons at Law (sic) omitted to consider and deliberate on the defect and fraudulent activities and registration of the lease by the respondent. Had his honour allowed inter-parties trial, he would have found that the registrar of companies on the 24th August, 2010 approved and sealed the re-instatement of resurrection (sic) Hill Limited to the register of companies under section 373(3) of the companies act, (sic) 1997.

vii. The respondent had and has obtained the titled (sic) state lease by fraud and has clearly violated the forfeiture provions (sic) of section 122 and section 128 of the Land Act, 1996. The respondent clearly does not have and had never had a cause of action for eviction against the appellants.

viii. The respondent had on the 01st September, 2008 transferred its lease title and rights to the appellants and the appellants cannot be evicted.

13. His Honour erred in law and fact in that the orders he made against the appellants were contradictory and conflicted with his findings in that;

A. His Honour found on the facts and the Law (sic) that the entire contract was null and void as between the resurrection (sic) Hill Ltd and the respondent on the basis of the de-registration. However his honour erred and made wrongful orders for eviction in that orders cannot be made against persons who are not parties to the contract of lease and court orders cannot lawfully be made against a dead company, the third appellant or against the appellants under a null and void contract.

B. His Honour was wrong and erred in that the respondent and its lawyers were found to be negligent and the contract was nullity (sic) and void and as such the court orders do not reflect the findings. There cannot be any enforcement rights and relief granted to parties in a contract that was declared nullity and void and the orders from eviction and costs and other orders are wrongful and ought not to have being (sic) made.

C. Consistent with the findings of fact and Law (sic) the respondent committed negligence and illegality and therefore were not entitled to the orders made in the respondents (sic) favour.

D. His Honour made an error and omission in that in the declared nullity of contract both parties to meet their own costs and both parties to remain where they are and the appellants have the right to remain resident on the land until such time the Minister for lands (sic) re-tender and determines the state lease whereby the appellants shall tender for the land the subject of dispute.

14. His Honour erred in Law (sic) and fact in his ruling that the contract of lease was null and void because Resurrection Hill was de-registered company and did not have the capacity to contract. His Honour was wrong in that finding in that on the 01st day of September, 2008, resurrection (sic) Hill Limited was a registered company and had capacity to enter into contract of lease with the respondent and the appellants as such entered and took occupation and possession of the sad land lawfully and cannot give up possession of the land and the order for eviction is wrong and a nullity and void and must be set aside.

15. His Honour erred in Law (sic) and fact in dismissing the appellants Notice of Motion filed on 14th September, 2011, seeking to be heard in the ex parte (sic) hearing and trial, when he in the proper administration of justice, failed in his duty to provide written reasons (a written judgment, published decision or reasons for decision) for his decision or judgement resulting in denial of natural justice and giving rise to the conclusions that there were no good reasons for the decision rendering the decision of the court bad, null and void.

16. His Honour erred in Law (sic) and fact in making the orders for eviction against the appellants and persons not being party to the contract of lease and the proceedings, and made orders including Orders for costs, when he in proper administration of Justice, failed in his duty to provide written Judgment and reasons for Judgment for his decision, and thus denied Natural Justice under section 59(2) Papua New Guinea Constitution and giving rise to conclusions and orders that there were no good reasons for the decision rendering the decision or ruling of the court bad, null and void."

9. These grounds can be summarized into 4 main grounds. We set them out below:

9.1. Grounds 1 - 4 relate to the summary ejection proceedings in the District Court and proceedings OS No 689 of 2011;

9.2. Grounds 5, 10, 11, 15 and part of 16 relate to the hearing of 12th September 2011 and raise the issue of breach of natural justice;

9.3. Grounds 6 - 9, 13, 14 and part of 16 relate to the de-registration of the third appellant in proceedings OS No 689 of 2011; and

9.4. Ground 12 relates to the defective title of the respondent in proceedings OS No 689 of 2011.

District Court proceedings on eviction

10. The first appellant submitted that the trial judge erred in granting the order for possession and issuing an eviction order against the appellants when the District Court was seized of the matter. This is because the respondent commenced ejectment proceedings in the District Court and while the decision on the application to dismiss was pending, it commenced further proceedings in the National Court seeking the same order against the appellants. He referred to a notice of discontinuance filed by the respondent and submitted that it was set aside and the District Court re-instated the summary ejectment proceedings.

11. The respondent appealed the decision to set aside the notice of discontinuance and reinstatement of the proceedings to the National Court on 17th August 2011 and should have pursued it to its conclusion. Instead, it commenced separate National Court proceedings OS No 689 of 2011 on 18th August 2011. If the respondent seeks to enforce its right of possession, it must seek eviction orders in the District Court proceedings. He submitted that the course taken by the respondent was an abuse of process and when his Honour proceeded to hear the application by the respondent and granted possession of the property without allowing the District Court to make a decision on the ejectment proceedings, his Honour acted in excess of his jurisdiction. This was where his Honour fell into error and his decision ought to be set aside.

12. The respondent countered these submissions by referring the Court to the notice of discontinuance filed on 09th August 2011 and submitted that his Honour did not act in excess of his jurisdiction when he heard and granted possession of the property to it. It submitted that it was open to his Honour to hear the matter because the District Court proceedings were discontinued. The reason for discontinuing it was because the District Court had delayed its decision for a long time. Furthermore, it is irrelevant if it failed to set aside the order re-instating the proceedings because the proceedings had been discontinued.

13. The grounds relating to the summary ejectment proceedings in the District Court raise the issue of competency of the National Court proceedings. We accept the submissions of the respondent. The respondent was the complainant in the summary ejectment proceedings in the District Court and made a decision to discontinue it. We are of the opinion that when it filed the notice of discontinuance, the proceedings came to an end: see s. 147 of the District Courts Act as an example. The only matter remaining would be the question of costs. We are also of the opinion that its decision to discontinue the proceedings is not open to challenge in any manner or form.

14. In other words, the respondent has a right to discontinue the proceedings. Generally, the right to discontinue proceedings is not interfered with but on the issue as to costs. In that regard, the District Court should have considered the costs between the parties. As the District Court proceedings were discontinued, the District Court was no longer seized of the matter. When the respondent subsequently commenced proceedings OS No 689 of 2011 in the National Court, the National Court became seized of the matter and it was open to his Honour to hear and rule on the matter.

15. Any events that occurred after the discontinuance of the summary ejectment proceedings in the District Court such as the setting aside of the notice of discontinuance, reinstatement of the proceedings, and the subsequent appeal to the National Court by the respondent against the District Court's decision are of no consequence to the issue of discontinuance. For these reasons, we are not satisfied that his Honour acted in excess of his jurisdiction and committed an error of law. We dismiss grounds 1- 4.

Breach of natural justice

16. It was submitted that the trial judge erred in law and fact when he heard the matters ex parte, thus denying the appellants an opportunity to be heard. This is because when the proceedings WS No 543 of 2010 and OS No 689 of 2011 were heard on 12th September 2011, the first appellant requested an adjournment by way of a letter to the Court. Given that request, his Honour should have adjourned the hearing to another date. It was further submitted that the issues raised in these proceedings were serious because they directly impinged on the appellants' right of occupation and quiet enjoyment, thus his Honour should have granted their application for adjournment.

17. Furthermore, it was submitted that the trial for proceedings OS No 689 of 2011 was rushed. This is evident by the fact that it was filed on 18th August 2011 and fixed for hearing on 19th August 2011. Then, it was further adjourned to 19th September 2011 for hearing. This was within a space of one month. As a result, the appellants were not given the opportunity to file a notice of intention to defend and defence. Furthermore, the originating summons did not state the date and time for hearing. It was submitted the omission in the date and time were serious defects in the originating summons and as a result, the appellants were unaware of the date for the hearing of the respondent's claim and were ill prepared to respond to it.

18. To conclude his submissions, the first appellant submitted that the manner in which the respondent proceeded with proceedings OS No 689 of 2011 was not recognized by law and the National Court Rules such that the respondent could not have lawfully caused a trial. For these reasons, his Honour improperly exercised his discretion when he heard the matters ex parte.

19. In defending the trial judge's decision, the respondent submitted that his Honour properly exercised his discretion because first the date of hearing of 12th September 2011 was fixed at the request of the appellants. Secondly, the appellants' notice of motion seeking dismissal of the proceedings OS No 689 of 2011 was fixed for hearing at their request. The respondent obliged in each instance. It was further submitted that in any case, the hearing was not ex parte because the appellant handed up a written submission and his Honour took it into account before he made his decision. Either way, it was submitted his Honour properly exercised his discretion and these grounds should be dismissed.

20. We consider that before we rule on whether the trial judge erred in hearing the matters ex parte, it must first be made understood that the grounds on the denial of natural justice arise from two separate instances; one on 19th August 2011 hearing and the other on 12th September 2011 hearing in relation to proceedings OS No 689 of 2011 only. No issue on denial of natural justice can arise in proceedings WS No 453 of 2010 because no appeal lies from the National Court's decision to dismiss it. Secondly, it must be established if the hearing on 12th September 2011 was ex parte.

21. In relation to the hearing of 19th August 2011, we accept the first appellant's submission that the respondent rushed the proceedings OS No 689 of 2011. This is evident from the date it was filed and fixed for hearing. It was filed on 18th August 2011 and fixed for hearing on 19th August 2011 at 9:30 am. It is unclear if the originating summons was served on the appellants before the hearing on 19th August 2011. O 4, r 26 of the National Court Rules provides for a summons to state an appointment for hearing and is in the following terms:

"26. Summons stating appointment for hearing. (5/4A)

(1) This Rule applies to proceedings commenced by originating summons in Form 6 stating an appointment for hearing.

(2) The appointment for hearing to be stated in a summons under this Rule may be fixed by the Court, or, if not fixed by the Court, shall be obtained from the Registry.

(3) Where there is a defendant, the summons shall, unless the Court otherwise orders, be served not less than five days before the date of the appointment for hearing.

(4) Where the appointment for hearing is obtained from the Registry and the summons is to be served outside Papua New Guinea, the date of the appointment shall be not less than one month after the date of filing of the summons.

(5) Where the Court makes an order under Sub-rule (3), the summons shall bear a note of the order made."

22. It is clear from Sub-rule (2) that the appointment for hearing of a summons may be fixed by the Court, or by the Registry. Sub-rule (3) states that where there is a defendant, the summons shall be served unless the Court otherwise orders, not less than five days before the date of the appointment for hearing. In this case, there were defendants. They are now appellants in this appeal. Thus, the appointment for hearing should have been fixed not less than five days from the date of the filing of the summons. This did not happen. It was fixed for hearing on the next date. That was on 19th August 2011 at 9:30 am. This gave the appellants no time to prepare for the hearing.

23. However, that is not the end of the matter. It appears that proceedings OS No 689 of 2011 was fixed for hearing on 19th August 2011 because as the transcripts have revealed, the respondent had also filed a notice of motion on 10th August 2011 and it was fixed for hearing on 11th August 2011 at 9:30 am. It was then adjourned to 19th August 2011 at 9:30 am for hearing. This notice of motion was filed in the proceedings WS No 453 of 2010 and sought orders to dismiss the proceedings WS No 453 of 2010. Upon further discussions between his Honour and counsel for the respondent, his Honour adjourned the hearing of the notice of motion in proceedings WS No 453 of 2010 and proceedings OS No 689 of 2011 to 12th September 2011 at 9:30 am for hearing. For these reasons, we are not satisfied that a miscarriage of justice has occurred.

24. From the transcripts of the proceedings of 12th September 2011, we note that both proceedings were fixed for hearing on 12th September 2011. On the same date, the appellants' application to dismiss the proceedings OS No 689 of 2011 was fixed for hearing. We also note that the appellants did not attend the hearing. Instead, they sent a letter to the Court requesting an adjournment. At the same time, they sent a written submission. What was the written submission for?

25. The appellants gave no reasons. The respondent said it was to support the application to dismiss proceedings OS No 689 of 2011. If we accept the respondent's reason, it would mean that the appellants were heard on the application based on the written submission. Based on this, his Honour made his decision refusing their application to dismiss. For this reason, we are of the view that the hearing was not ex parte. Accordingly, we are not satisfied that the appellants were denied the opportunity to be heard. We dismiss grounds 5, 10, 11 & 15.

26. Alternatively, if the written submission was intended to be used by the appellants on the date to be fixed for the hearing, assuming that their application for adjournment was granted, the power to grant an adjournment is an exercise of judicial discretion and must be exercised based on proper grounds and principles of law. They include whether the reasons for adjournment are satisfactory, the application was made promptly and whether the other party will not be prejudiced by the adjournment.

27. The first appellant said that he was sick. There is no explanation given by the second and third appellants for their absence. His Honour held that he would hear the matters because the letter of request for adjournment was handed up to him at the last minute. It appears his Honour did not turn his mind to the reason given by the appellants for their request for adjournment but his Honour was concerned about the belatedness of the application. In our view, his Honour's concern was genuine. The matters were fixed for hearing on that date with knowledge and consent of the parties and he expected them to be ready to proceed with the hearing.

28. Further, delay has been the prominent feature of this case. In our view, this was a straight forward case. It was a dispute over rental arrears and not on defective title and should have been resolved right away had parties focused on that issue. Instead, this case dragged on for 2 years since the dispute started in 2009. The delay was occasioned by the numerous court proceedings and interlocutory applications which we have briefly alluded to earlier. The delay denied the respondent the opportunity to have its claim for possession determined quickly.

29. In any case, in our view his Honour was not obliged to consider the first appellant's request for an adjournment because there was no application by way of a notice of motion supported by an affidavit before the Court: rr. 38 & 40 of the National Court Rules. In our view, the letter by the first appellant was not proper. For these reasons, we are not satisfied that the trial judge wrongly refused the application for adjournment, thus denying the appellants an opportunity to be heard. We dismiss grounds 5, 10, 11, 15 and part of 16.

De-registration of Third Appellant

30. Grounds 6 - 9 & 14 alleged that proceedings OS No 689 of 2011 is incompetent and should have been dismissed because the third appellant was de-registered. As the third appellant has been de-registered, it had no legal capacity to sue or be sued. It was the respondent who de-registered it. As it was de-registered it, it had no control over the property and the respondent de-registered it purposely to deprive the appellants of the property.

31. In support of these grounds, it was submitted that his Honour erred when he found that the lease was null and void. The first appellant submitted that the third appellant was de-registered and did not have the capacity to enter into the lease with the respondent. This is because when parties entered into the lease on 01st September 2008, the third appellant was registered. Therefore, it had the capacity to enter into the lease and took possession of the property. When his Honour found otherwise and ordered them to vacate the property, this was where his Honour fell into error.

32. It was further submitted that even if the third appellant was de-registered after the proceedings WS No 453 of 2010 was commenced, the occupant of the property was New World Fashion Limited and the Court order did not apply to it. His Honour was wrong to hold that the Court order also applied to New World Fashion Limited and ordered it to vacate the property.

33. The respondent countered these submissions by submitting that the appellants had deliberately misled the Court to believing that it fraudulently de-registered the third appellant in order to stop the appellants from pursuing the proceedings WS No 453 of 2010. It submitted that the appellants were obliged to disclose the correct status of the third appellant at the time they commenced proceedings WS No 453 of 2010 and they failed to do that. It was not until 08th August 2011 that it discovered that the third appellant was de-registered on 29th January 2009.

34. It further submitted that his Honour was correct in directing that the Court documents in proceedings OS No 689 of 2011 be served on the Registrar of Companies as he was the custodian of a de-registered company, in this case, the third appellant pursuant to ss. 372 and 373 of the Companies Act, 1997.

35. First, it is not disputed that the third appellant was not de-registered when it entered into the lease with the respondent. That was on 01st September 2008. Therefore, it had the capacity to enter into the lease with the respondent. It was on 29th January 2009 that it was de-registered. Section16 of the Companies Act, 1997 makes it explicitly clear that a company upon incorporation has a separate legal personality, distinct from its shareholders and continues its existence until removed from the register of companies.

36. When the third appellant was de-registered, by operation of law, its property was vested in the Registrar of Companies. From that time onwards, the Registrar of Companies was responsible for the conduct of matters specified in s. 372(1) as representative of the company. In our view, we consider s. 372(1) is wide enough to include any legal proceedings commenced by or against it. In other words, the shareholders and directors lose power to deal with the property of the third appellant.

37. When it commenced proceedings WS No 453 of 2010 on 29th April 2010, it is apparent it was without the knowledge and consent of the Registrar of Companies. The appellants did not disclose its' de-registration in the pleadings to the respondent and as a result, the respondent was not aware of it, although we should say that if the respondent's lawyers were prudent and diligent enough, they should have conducted a company search when they were preparing the respondent's defence to verify its status. If they had done that, they would have discovered this fact. They did not until 08th August 2011.

38. By then, the pleadings in proceedings WS No 453 of 2010 had closed and the matter was pending trial. As a result, when it came for hearing on 19th August 2011, the Court's attention was drawn to the third appellant's de-registration and his Honour correctly and properly directed the respondent to serve the Court documents in proceedings OS No 689 of 2011 on the Registrar of Companies. The respondent obliged. Despite that, the Registrar of Companies failed to defend the claim in proceedings OS No 689 of 2011.

39. Nonetheless, we are of the view that the fundamental issue in WS No 453 of 2010 and OS No 689 of 2011 was outstanding rentals and right to possession to property. The rentals were owed by the third appellant. The first and second appellants may have equitable interests in the property but they did not plead and claim them in the proceedings. The pleadings conferred are of the rights and interests of the third appellant. As such, they are not entitled to the reliefs if they have not pleaded them: see Papua New Guinea Banking Corporation -v- Jeff Tole (2002) SC694.

40. It follows the proper party having the legal rights and interests in the dispute is the Registrar of Companies: see ss. 372 & 373 of the Companies Act, 1997. The Registrar of Companies did not take steps to defend the claim by the respondent in proceedings OS No 689 of 2011. In our view, the respondent was entitled to judgment and the judgment is wide enough to apply to the third appellant, its servants, agents, persons or entity connected with it. This included New World Fashion Limited.

Defective Title

41. The last ground raises the issue of title. The appellants devoted a considerable amount of time trying to show that his Honour erred when he failed to find that the grant of title of the State lease was transferred to the first appellant. The first appellant tried to show that the respondent did not have good title when it entered into the lease with the appellants. He submitted that the Minister for Lands forfeited the State lease. The respondent then fraudulently obtained title and then entered into the lease with the appellants. He even suggested that he put up improvements on the property worth K5 million. This included the construction of the building which housed the New World Fashion store.

42. The respondent strenuously objected to the suggestion that the first appellant constructed the building worth K5 million, however, it did not produce evidence in rebuttal because it was unaware that the appellants were going to raise it at trial on 19th September 2011. This was because the appellants' affidavits raising those issues were served on its' lawyers at 5:00 pm the day before the hearing. As a result, it filed an application to adduce fresh evidence in the Supreme Court but at the hearing, it abandoned it. In any case, it submitted that the appellants did not plead the issue of defective title in proceedings WS No 453 of 2010 and allege fraud. Further, they did not claim any reliefs to set aside the title. Thus, it was not open to them to assert any right of ownership and claim damages.

43. This ground of appeal can be disposed off easily. First, as earlier noted, on 14th December 2010, Justice Kandakasi struck out the amended writ of summons and statement of claim in the proceedings WS No 453 of 2010. In this appeal, the respondent did not contend that the proceedings should have ended at that time. The transcript of proceedings on 12th September 2011 shows that his Honour did raise this point with counsel for the respondent. Counsel's reply was that the striking out of the amended writ of summons and statement of claim reverted parties to the original writ of summons and statement of claim. It would appear his Honour accepted this position and proceeded with the hearing on the original writ of summons and statement of claim.

44. Based on the original writ of summons and statement of claim, we accept the respondent's alternative submissions. We have closely examined the pleadings and we are unable to find any allegations of fraud against the respondent to suggest that its' title was defective, and no good title to enter into the lease with the appellants. Simply put, there is nothing in the pleadings on defective title, yet the appellants had gone to great length trying to show to the Court below that the respondent had no good title when it entered into the lease with them.

45. As the transcripts of the proceedings of 15th September 2011 have revealed, this sudden change of position occurred on 15th September 2011. It was raised during submissions by the first appellant to stay the handing down of the ruling by his Honour on the respondent's application to dismiss the proceedings WS No 453 of 2010. Prior to that, the issue between the parties had always been one of outstanding rentals. The change in the position caused them to vigorously defend the respondent's application to dismiss the proceedings WS No 453 of 2010.

46. They took that position because in proceedings OS No 689 of 2011, the respondent sought an order for possession of the property. The issue of defective title was their defence against the respondent's claim for possession. The position is appreciated but the appellants have not appealed the decision of 15th September 2012 where his Honour refused their application to stay the handing down of the ruling on the respondent's application to dismiss proceedings WS No 453 of 2010 and also the decision to dismiss proceedings WS No 453 of 2010. Thus, these two decisions stand and this Court will not review them.

47. Finally, the issue of defective title derailed the whole process. We reiterate, it was never an issue but because of the appellants' persistence, it became the centre of the dispute. It diverted the Court's attention from the issue of outstanding rentals to the propriety of the respondent's title. As a result, what was supposed to be an uncomplicated matter, ended up with the Court trying to resolve multiplicity of legal proceedings and numerous interlocutory applications. All these must stop now. This ground is misconceived and is, therefore, dismissed.

Conclusion

48. In the end result, we are not satisfied that the first appellant has shown that the trial judge improperly exercised his discretion to grant possession of the property to the respondent. It follows the appeal must therefore, fail.

Order

49. The orders are:

1. The appeal is dismissed.

2. The appellants shall pay the costs of the appeal on party-party basis to be taxed if not agreed.
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First Appellant in person
Gadens Lawyers:Lawyers for the Respondent