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Daba Hisiuna Pty Ltd v Turner & Davey Electrical Pty Ltd [1974] PGLawRp 337; [1974] PNGLR 164 (7 November 1974)

Papua New Guinea Law Reports - 1974

[1974] PNGLR 164 - Daba Hisiuna Pty. Ltd. v Turner & Davey Electrical Pty. Ltd.

[1974] PNGLR 164

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

DABA HISIUNA PTY. LTD.

V

TURNER & DAVEY ELECTRICAL PTY. LTD.

Lae & Port Moresby

Denton AJ

25 September 1974

7 November 1974

EVIDENCE - Presumptions - Regularity of delegation of power - Approval of Administrator to contract of sale of land - Approval given by Assistant Director of Lands under power delegated by Minister - Presumption of regularity of power delegated by Administrator - Administrative Arrangements (Vesting of Powers) Act 1971, ss. 9, 11[ccxxv]¹.

SPECIFIC PERFORMANCE - Order on proof of case - Outstanding matters of law notwithstanding.

SPECIFIC PERFORMANCE - Contract for sale of land - Approval of Administrator necessary - Construction of contract - Land Act 1962, s. 75 (3)[ccxxvi]².

In an action for specific performance of a contract for the sale of land to which the approval of the Administrator was required under the contract and under s. 75 of the Land Act 1962, and to which approval was given by the Assistant Director of Lands by delegation of the Minister of the House of Assembly for Lands and Environment:

Held

N1>(1)      In the absence of evidence for or against the proposition that the Minister of the House of Assembly for Lands and Environment was a person to whom a delegation had been made by the Administrator under ss. 9 and 11 of the Administrative Arrangements (Vesting of Power) Act 1971, the presumption of regularity of action in public office expressed in the maxim omnia praesumuntur rite esse acta should be applied, and accordingly it should be presumed that the Minister when delegating the power to give approval to the Assistant Director for Lands was acting within his authority as Minister to whom a delegation had been made by the Administrator.

N1>(2)      Notwithstanding there being outstanding requirements at law, the vendor was entitled to an order for specific performance on proof of its case. Dougan v. Ley [1946] HCA 3; (1946), 71 C.L.R. 142, Turner v. Bladin [1951] HCA 13; (1951), 82 C.L.R. 463, McCosker and King v. Kuster [1967-68] P. & N.G.L.R. 182, Butts v. O’Dwyer [1952] HCA 74; (1952), 87 C.L.R. 267 and McWilliam v. McWilliam’s Wines Pty. Limited [1964] HCA 6; (1964), 114 C.L.R. 656 referred to.

Semble

Had there not been approval of the Administrator to the contract, there would have been nothing upon which the plaintiff could bring proceedings. Roach v. Bickle [1915] HCA 80; (1915), 20 C.L.R. 663 referred to.

Action

This was an action for specific performance of an agreement dated 19th April, 1972, for the purchase by the defendant of property described as an allotment in the town of Lae. The defence raised on the pleadings was that it was a condition precedent to the agreement having any force and effect that it be approved by the Administrator of Papua and New Guinea, and that it was not so approved.

Counsel

W. J. McKeague, for the plaintiff (vendor).

G. R. Rissen, for the defendant (purchaser).

Cur. adv. vult.

7 November 1974

DENTON AJ: The plaintiff in this action sues for specific performance of an agreement dated 19th April, 1972 for purchase by the defendant of property described as an allotment in the town of Lae.

Clause 2 of the agreement provides for a purchase price of $18,000.00 payable on or before the 22nd April, 1973 by a bank cheque to the vendor or its solicitors, and in that respect time was made of the essence of the agreement.

The statement of claim alleges a notice of the 3rd April, 1973 to the plaintiff from a director of the defendant company purporting to act on behalf of the defendant, that the agreement would not be performed, and this document is in evidence.

The proceedings have been conducted on the basis that this notice, which was contained in a letter from a firm of chartered accountants, was written with the defendant’s authority and was intended to indicate that the contract would not be completed on the due date, and the fact is that the defendant did not pay the purchase money on that date, as indicated in the letter was its intention, and has not been willing to do so since. The defendant had been in possession under the agreement and it remained in possession for about two months after the date fixed for completion. I accept evidence from the plaintiff that it was, at the due date, and now is, willing to complete the agreement. This evidence was given on the basis that the plaintiff may be required in the future to obtain approval from administrative authorities to the transfer, and I take it as meaning willingness to take all steps in that regard which can be taken, but not in any sense proof that such steps will necessarily succeed.

On the 25th September, 1973, according to the defence filed, the defendant “cancelled and rescinded the agreement insofar as it then had any force and effect”. This was denied by the plaintiff and there is no evidence as to what was done on that date.

The defence raised on the pleadings is that it was a condition precedent to the agreement having any force and effect that it be approved by the Administrator of Papua New Guinea, and that it was not so approved. The defendant added a paragraph in its defence that approval by a delegate of the Minister of the House of Assembly for Lands and Environment was not due compliance. The plaintiff replied to this latter that approval had been obtained and amounted to compliance with the condition.

The clause referred to in this defence and reply is as follows:

N2>“11.    This Agreement is subject to the approval of the Administrator of Papua New Guinea and unless and until such approval is obtained shall have no force or effect except so far as the remaining provisions of this clause are concerned. The vendor shall apply for the Administrator’s approval and pursue such application. The purchaser shall promptly join in the application and do such acts and sign such documents or papers as and when it may be necessary or desirable for the purpose of ensuring the success of the application at the earliest point of time. If such approval is refused this Agreement shall be deemed to be rescinded.”

This clause needs to be considered in the light of the provisions of s. 75 of the Land Act 1962, which reads as follows:

N2>“75(1) Notwithstanding anything in any law in force in the Territory or a part of the Territory contained, the subject to the provisions of this section, a person shall not, without the approval of the Administrator:

(a)      transfer land;

(b)      give a mortgage or encumbrance of or over land; or

(c)      grant a lease, easement, right, power or privilege of, over in or in connexion with land.

N2>(2)      Unless and until the approval referred to in the last preceding subsection has been given, a transfer, mortgage, encumbrance, lease, easement, right, power or privilege in or in connexion with land made, entered into, given or granted is void and of no effect.

N2>(3)      Nothing in the last preceding subsection contained shall be deemed to render void and of no effect a contract or agreement for the purpose of entering into a transaction referred to in subsection (1) of this section if that contract or agreement:

(a)      is expressed to be subject to the approval of the Administrator; or

(b)      provides that, unless and until that approval is given, the contract or agreement has no force or effect.

N2>(4)      Where the approval of the Administrator is required to be given under this section, the transferee, mortgagor, encumbrancer, grantee or donee, as the case may be, who seeks that approval shall, within twenty-eight days of the execution of an instrument to which that approval relates, cause:

(a)      that instrument to be presented to the Department of Lands, Surveys and Mines for endorsement with a certificate in the prescribed form to the effect that that approval has been given; and

(b)      a duplicate or certified copy of that instrument to be filed in that Department.

N2>(5)      A person referred to in the last preceding subsection shall not refuse or fail to comply with a provision of that subsection.

Penalty: Twenty pounds.

Default penalty: Five pounds.

N2>(6)      A duplicate or certified copy prepared solely for the purposes of paragraph (b) of subsection (4) of this section is not liable to stamp duty under a law in force in the Territory or a part of the Territory.”

The portion of the section involved in the present case is principally sub-s. (3).

At the relevant time the powers of the Administrator could be exercised in accordance with the Administrative Arrangements (Vesting of Powers) Act 1971. That the Administrator is now known as the High Commissioner and the exercise of powers is now pursuant to the Constitutional Change (Consequential Provisions) Act, No. 93 of 1973 is not suggested to alter this position so far as the present case is concerned. Nor has it been argued that any such changes as have occurred prevent the clause in the agreement having effect if a person entitled to exercise the Administrator’s powers should do so.

A question now arises as to how these powers to grant approval are exercised. The relevant provisions of the Administrative Arrangements (Vesting of Powers) Act 1971 are ss. 9 and 11, which read (as amended in June, 1972) as follows:

N2>“9.      Delegation

(1)      The Administrator may, by instrument in writing under his hand, delegate to a minister or any other person all or any of his powers or functions (but not including any power or function specified in s. 10 of this Act).

(2)      A delegation under sub-s. (1) of this section may be given to two or more persons jointly or severally.

(3)      A power or function may be delegated under this section notwithstanding that the law which confers the power or function makes different provision for delegation.”

N2>“11.    Delegation of certain powers of delegation.

Where the Administrator delegates any power or function under s. 9 of this Act to any minister or other person, he may, in the same or another instrument of delegation, also delegate to that person the power to further delegate, by instrument in writing under his hand, the power or function to any person, or to a person or a member of a class of persons specified in the instrument.”

The power in question here is conceded not to be an excepted power within s. 10.

The plaintiff called evidence from Mr. L. B. G. Holland who, as an officer of the Department of Lands, signed an approval of the terms of the contract under s. 75 of the Land Act on the 3rd October, 1972, he then holding the office of Assistant Director of Lands. This approval is endorsed on the contract. Mr. Holland gave evidence that he signed the approval by delegation of the Minister of the House of Assembly for Lands and Environment, the delegation under which he signed it being to the person holding, for the time being, the office which he held at that time. There was no evidence that the Minister of the House of Assembly for Lands and Environment was a person to whom a delegation had been made under ss. 9 or 11 of the Administrative Arrangements (Vesting of Powers) Act 1971 and the defendant relies upon this gap in proof as indicating that the contract has not had the necessary approval.

In argument before me this point was not pursued by the plaintiff, which did not in argument through its counsel claim that Mr. Holland’s approval was sufficient, but I did not understand the plaintiff to concede that the defendant was correct in its contention that approval was not sufficiently established, or to withdraw its reply to that effect.

The facts proved in evidence are delegation to a public official by another public official and exercise of the delegated power by the first of these two public officials. The gap in proof is whether the power could be delegated to him because there is no evidence whether or not, in the present case, the Administrator’s power was delegated to the Minister.

This appears to me to be a clear case for the application of the presumption of regularity of action in public office expressed in the maxim omnia praesumuntur rite esse acta. I propose to act on the basis of this presumption, that is, that in the absence of evidence for or against the proposition it should be presumed that the Minister when delegating the power to give approval to the Assistant Director of Lands was acting within his authority as a Minister to whom a delegation had been made by the Administrator.

This finding makes it unnecessary to decide the difficult question raised by the principal argument for the defendant, that in the absence of approval there was nothing upon which the plaintiff could proceed at all. Since the application of the presumption upon which I have based my finding was not debated before me, it is, I think, desirable that I should indicate my views as to the point which was argued, i.e., as to the effect of clause 11.

The defendant, through its counsel, points out that clause 11 has obviously been drawn having regard to s. 75 (3) of the Land Act, and its terms seem to me quite specific. Naturally it must be construed in the light of the surrounding circumstances, particularly of the existence of s. 75 (3) of the Land Act, and of clauses in the agreement, such as clauses 14 and 22, which create an apparent conflict within the agreement with the terms of clause 11. The defendant argues, and in my view correctly, that this is not of any consequence since rights arising from occupation of the property with which those clauses deal can, in the absence of express agreement, be dealt with on various bases of implied agreement, payment for use of occupation and the like. Similarly, the final sentence of clause 11 could possibly be regarded as meaning that the agreement is to be inoperative only in the case of refusal, which is not the case here. However, it does not seem to me to have that effect on the earlier provisions of the clause.

The provisions of this clause contrast with those dealt with in cases such as Dougan v. Ley[ccxxvii]³, where there was an oral agreement for sale of a property subject to a requirement for statutory approval but without reference to it in specific terms, this relating to Transport Act requirements on the sale of a taxi cab. A similar case was Egan v. Ross[ccxxviii]⁴, where a written agreement made no reference to the requirement of consent of the Minister under the Crown Lands Acts of New South Wales. Harvey C.J. in Equity said, referring to a previous decision of his own, that if a contract for the sale of such an interest is made and nothing is said about the subject of Minister’s consent, it must be implied that if the consent of the Minister is refused the contract would go off, but that this does not prevent a decree for specific performance being made. This is in contrast with the situation in cases such as Roach v. Bickle[ccxxix]⁵, where a lease of an irrigation farm was made subject to the approval of the Commissioner of Water Conservation in somewhat similar terms to the contract in the present case, and Rich J. at p. 672 pointed out that in the absence of such consent being given the contract never became operative.

In my opinion the case is comparable to Roach v. Bickle[ccxxx]⁶ and had there not been approval there would have been nothing upon which the plaintiff could bring proceedings.

The plaintiff relied upon Dougan v. Ley[ccxxxi]⁷, Turner v. Bladin[ccxxxii]⁸ and McCosker & King v. Kuster[ccxxxiii]⁹ as authorities for the proposition that it was entitled to an order for specific performance notwithstanding there being outstanding requirements of the law. These cases and the later authorities Butts v. O’Dwyer[ccxxxiv]¹⁰ and McWilliam v. McWilliam’s Wines Pty. Limited[ccxxxv]¹¹ do, I find, enable me to make an order for specific performance notwithstanding that some action may be required by both parties. Turner v. Bladin[ccxxxvi]¹² makes it clear also that, on the principle of mutuality, although the order which the plaintiff is seeking here is really no more than one resulting in the payment of money, it is nevertheless entitled to an order for specific performance should its case be established. Indeed the contrary has not been argued, although the plaintiff has claimed damages as an alternative in the statement of claim, and there was some evidence as to damages. As neither party submitted that I should treat the case as one of damages rather than for specific performance, and obviously there may be reasons for this in the case of each, I have considered only whether I should order specific performance.

The agreement requires that the plaintiff shall apply for approval under the Land Act and pursue such application and that the purchaser is to join in and do such acts or things as are necessary, but I am not aware of the conveyancing practice as to whether approval can be obtained before completion. I indicate that should there be any practical problems arising from this I would make appropriate orders on further consideration to safeguard the position of the purchaser with regard to its purchase money should such approval not be obtainable, as a matter of practice, before completion.

My proposed order likewise does not deal with the situations, which may arise, that approval of the transfer is in fact refused, or that the plaintiff is unable for some other reason to make title, or for default of either party in relation to the application for consent, or completion, as the case may be.

Different considerations may arise in some of these situations as against others, and appropriate orders are a matter to be dealt with if necessary. The form of orders of this nature is dealt with in Seton, Judgments and Orders, Vol. 3.

I will give the parties an opportunity to speak to the form of declarations and orders but as at present advised, propose to make declarations:

N2>(1)      That the agreement between the plaintiff and the defendant referred to in paragraph 1 of the statement of claim ought to be specifically performed and carried into execution.

N2>(2)      That the defendant is bound by an obligation to do all acts and execute all such documents as may be reasonable and proper on its part to enable the plaintiff to apply for approval under s. 75 of the Land Act.

And to make orders:

N2>(i)       That the defendant do specifically perform the contract referred to in par. 1 of the statement of claim.

N2>(ii)      That within fourteen (14) days after service upon him of an office copy of this order the defendant do all such acts and execute all such documents as may be reasonable and proper on its part to enable the plaintiff to apply for approval of a transfer of the land to the defendant under s. 75 of the Land Act.

N2>(iii)     That upon approval being granted to the said transfer under s. 75 of the Land Act and in case a good title within the meaning of the said agreement can be made to the land referred to in par. 1 of the statement of claim the defendant complete the said agreement by payment of the purchase money due thereunder.

N2>(iv)     That further consideration and further costs be reserved in the events of approval under s. 75 of the Land Act being refused, or in case good title is not otherwise made to the land referred to in the said agreement.

N2>(v)      That the defendant pay the plaintiff’s costs of the action.

N2>(vi)     That liberty be granted to either party to apply upon seven (7) days’ notice to the other generally as to any matter arising in the carrying out of this judgment.

Orders accordingly.

Solicitors for the plaintiff: Gaden, Bowen & Stewart.

Solicitor for the defendant: G. R. Rissen.