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Kua v Papua New Guinea Harbours Board Ltd [2005] PGDC 121; DC473 (26 October 2005)

DC473

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 2856 OF 2005

BETWEEN

Tom Kua
Complainant

V

Papua New Guinea
Harbours Board Limited
Defendant

Port Moresby: Bidar, PM
2005: 26th October

District Court –
Practice and Procedure
Application by Notice of Motion to set aside
Ex parte orders- General principles
District Court Act, S. 25

Cases Cited
Steven Naki –V- AGC (Pacific) Ltd (2005) N2782
Sea Freight Pty Ltd –V- Bishop Shipping Services Pty Ltd [1976] PNGLR 22.

Counsel
T. Kirio For Complainant
H.T. Kila For Defendant

DECISION

26th October, 2005

BIDAR, PM: On the 11th October 2005 the defendant through its lawyers filed a notice of motion which seeks these orders.

"1. That the ex parte restraining order of 16th August 2005, obtained by the complainant be set aside entirely.

2. That the entire proceedings be dismissed as the matter discloses no reasonable cause of action.

3. The complainant pays the costs incidental to this application and these proceedings

4. Such further orders as the court deems fit."

To appreciate the orders sought by the defendant, it is necessary to state brief back ground to these proceedings, which complainant earlier sought and obtained interim injunctive orders.

On the 16th August 2005, complainant filed summons upon complaint against the Defendant claiming existence of Home Ownership Scheme Agreement between complainant and the defendant. Complainant claims an agreement exists between the parties whereby the complainant agreed to pay 60% of the purchase price of any property and defendants to pay 40%.

Complainant was the former employee of the defendant. He had been occupying a property at section 311 allotment 25, Gerehu since 4th April 1994. The property is owned by the defendant.

Defendant had a Home Ownership Scheme which the complainant wanted to participate in. On 5th March 2001, Complainant wrote to the defendant to register his interest. His interest was registered and given a registration No.0002.

By a letter dated 30th November 2001 Complainant wrote to the defendant requesting defendant to sell the property he occupied to him. The defendant by a letter dated 24th January 2002, advised complainant that it was unable to sell the said property to him because all sale of defendant’s properties or institutional houses were put on hold and that complainant should find another house to buy. Complainant in a letter dated 28th February 2002 informed defendant that he identified another property at section 310 allotment 189 Gerehu, which he wanted to buy. He claims that the defendant failed to fulfil its part of the obligation under the Home Ownership Scheme. Complainant claims damages and other reliefs.

The relevant issue to be decided is whether or not there is a legally binding agreement between the parties to these proceedings, and if so what are terms of this agreement from which breach can be found so that the party in breach is obliged to pay damages to the other party.

The law on contract is clear. The essential elements are that there should be an agreement between the parties, intention to create legal relations which is supported by a consideration.

In the circumstances of this case, first of all was there an offer. The facts of this case show that the conduct of parties do not show one party making an offer, which was accepted by the other party.

Representation or preliminary communications entered into between the parties do not amount to offer but a mere invitation to treat. When the complainant wrote to the defendant expressing his interest to participate in the Home Ownership Scheme and his interest having been registered, in my view was only an invitation to treat. No offer was made and accepted by the defendant.

Counsel for Defendant, Miss Kila referred to a recent case of Steven Naki –v- AGC (Pacific) Ltd (2005) N2782, where His Honour Cannings J. set out the test to apply in determining whether or not an agreement between the parties exists.

"To work out whether there is an agreement between the parties the conventional test is:

Has one party made an offer clear and precise in its terms which has been accepted by the other party? The test is an objective one.

Would a reasonable person, having been fully informed as to the actions of the parties, conclude that the plaintiff and the defendant had reached agreement on their arrangements?

Putting it as FROST CJ did in Sea freight Pty Ltd –v- Bishop Shipping Services Pty Ltd [1976] PNGLR 22. Have the parties to the negotiations given their final consent to terms by which they were content to be bound as a complete exhaustive statement of their rights and liabilities?

If the answer to all the above questions is Yes, then the court should "give" effect to the outward appearance of agreement and not to be concerned with whether one of the parties might have some unexpected qualifications or reservation about what has been agreed on."

It was submitted by Ms Kila that if complainant went back to Home Ownership Scheme Office of the defendant with a letter of offer from a proposed vendor and the HOS Officer had arranged valuation of the property and negotiated a sale price with the vendor and filed a submission to BLAC of the defendant, then the offer would have been said to have occurred, and the acceptance or approval be binding on both parties. In this case it was submitted the matter never got to that stage, therefore, no offer and acceptance and no contract.

For complainant Mr. Kirio has filed written submissions which I have had benefit of reading, with respect to counsel, these submissions do not assist the complainant’s case at all. Counsel submitted that a serious questions of law and fact to be tried with respect the law is clear and is there all the time and only the facts need to be entertained and application of law to those facts.

The facts in this case are clear. The complainant had been a long time resident of the property at Gerehu. He expressed his interest to participate in the Defendants Home Ownership Scheme. His interest was registered. He asked to buy the house he lives in but he was told that sale of institutional houses were put on hold. He was told to find another house, which complainant said he did. Complainant should have gone to defendant with a letter of offer from the vendor so that HOS Officer could arrange valuation of property and negotiated a sale price with a vendor. After that HOS Officer compiles a submission to BLAC of the defendant. As I alluded to, complaint is efforts never reached that stage and his expression of interest was only a mere invitation to treat. There was no offer made which was accepted by the defendant.

In all the circumstances the court is not satisfied on the balance of probabilities that the complainant has a cause of action against the defendant. There was no offer and acceptance and therefore are no contract between the parties. I grant the motion filed by defendant on 14th October 2005 and I make the following orders:

1. The ex parte restraining orders of 16th August 2005 obtained by complainant be set aside.

2. The entire proceedings filed herein by complainant on 16th August 2005 be dismissed for disclosing no reasonable cause of action.

3. Complainant pays defendant’s costs of and incidental to these proceedings

In relation defendant’s submission that complainant be ordered to vacate the property he currently occupies, the court refuses to make such an order.

Court is of the view that it is subject of separate proceedings, which the defendant might wish to pursue:

Gubon Lawyers: Complainant
PNG Harbours Ltd: Defendant