Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

Papua New Guinea Harbours Board v Hargy Oil Palms Pty Ltd [1995] PGNC 51; N1384 (12 December 1995)

Unreported National Court Decisions

N1384

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 86 OF 1995
PAPUA NEW GUINEA HARBOURS BOARD
v
HARGY OIL PALMS PTY LTD

Waigani

Sawong J
5 May 1995
12 December 1995

PRACTICE & PROCEDURE - Entry of summary Judgment - Recovery of rent due under a lease

LANDLORD AND TENANT - Agreement for lease.

APPROVAL OF MINISTER REQUIRED - Effect of lack of approval - Possession given and taken - whether rent recoverable - Land Act (Ch 185).

LANDLORD AND TENANT - Agreement for lease - Lease not registered - Effect of lack of registration - possession given and taken.

LANDLORD AND TENANT - Application for Summary Judgment for unpaid rent - whether non approval by Minister and or non registration of lease amount to serious questions law for consideration.

Cases Cited:

The following cases are cited in the judgment:

Luabar Logging Pty Ltd [1988] PNGLR 124

Ningiga v Koavea [1988-89] PNGLR 312

Wal Wine v Bill Giglma [1990] PNGLR 462

Danny Jabos v Kasper Kwaidu, Unreported Judgment N1051 of 1991

12 December 1995

SAWONG J: The decision on this matter was to have been handed down on 19th May 1995, but on 18th May 1995 both counsel advised the Court to delay handing down a decision, as both parties were entering into negotiations to settle the matter.

It appears from recent correspondence to my associate that the matter has not been amicably resolved, and the parties hae requested that the Court hand down its decision.

By a Notice of Motion, the Plaintiff claimed the following orders:

“A. An Order directing the entry of Judgment for the Plaintiff in these proceedings pursuant to Order 12 Rule 38;

B. Costs;

C. And such further Orders as the Court thinks fit.”

In support of its relief, an affidavit deposed to by one Steven Tupa was filed. Mr Tupa is the Acting Director, Finance and Administration of the Plaintiff.

Mr Tupa deposed that there was in existence between the parties, a Lease Agreement. The lease was dated 21 March, 1990 and it was for a term of 15 years commencing on 1 July 1990.

He further deposed that, under the terms of the lease, the Defendant as lessee, agreed to pay to the Plaintiff an annual rent of K520,772.00 payable by equal quarterly payments. He further deposed that the Defendant had not paid any of rentals for the period 1991 to 1994 inclusive and there was therefore due to the Plaintiff an amount of K1,683,088.00.

He further deposed that, under the term of the lease agreement it was agreed between the parties that the Defendant would pay interest at the rate of 15% per annum on overdue monies. The amount of interest due, for the same period referred to above, amounted to a sum of K252,463.00.

Before I deal with the application for entry of summary judgment, I wish to deal with a preliminary point of law raised by the defendant. Mr Anderson for the Defendant has raised the point that as the Lease Agreement was neither approved by the Minister under s. 69 of the Land Act, (Ch 185) nor was it registered under s. 49 (1)...of the Land Registration Act, it was not enforceable against the Defendant.

Firstly, in relation to the argument that the lease is unenforceable because it has not been approved under s. 69 of the Land Act, I say this. There is no doubt that a lease agreement exists between the parties. This was not challenged by the Defendant. The only challenge by the Defendants to a summary judgment being entered against it, is that, that the Lease Agreement was not approved by the Minister for Lands under s. 69 of the Land Act (Ch 185) and or that the agreement was not registered pursuant to s. 49 (1) of the Land Registration Act. If I understood Mr Anderson’s argument correctly, it is as follows. He submitted that the lease is void and of no effect and thus a debt created under it (i.e. under the Lease Agreement) cannot be recovered because of non compliance with s. 69 of the Land Act (Ch 185). In the alternative he says, that the lease is also void because the agreement has not been registered under s. 49 (1) of the Land Registration Act, and accordingly any debt created under the agreement cannot be recovered.

Section 69 of the Land Act (Ch 185) has been judicially considered in this jurisdiction. See Luaba Logging Pty Ltd [1988] PNGLR 124; Ningiga v Koavea [1988-89] PNGLR 312; Wal Wine v Bill Giglma [1990] PNGLR 462; Danny Jabos v Kasper Kwaindu (Unreported Judgment) N1051 of 1991. In Re Luabar Logging Pty Ltd [1988] PNGLR 124, Bredmeyer J consider the application of s. 69 of the Land Act. The facts of that case were fairly short. In that case a creditor presented a petition to wind up the company on the ground that the company was enable to pay its debts pursuant to s. 240 (1) (e) of the Companies Act (ch 145). The notice under that section did not recite a written Lease Agreement between the parties. However, the creditor alleged that the company owed it rent due on a certain premises for a certain period. At the hearing of the petition, the company argued that the rent claimed was under the Lease Agreement which was stamped but not approved under s. 69 of the Land Act (Ch 185). The company argued that the lease was void and thus a debt created under it cannot be recovered because of s. 69 of the Land Act (Ch 105) and because the parties by their express wards in Cl 9 declared that the lease should have no force or effect until it was approved. It was held in that case, that, despite the provisions of s. 69 of the Land Act, where the parties had acted on an unapproved lease and the tenant had gone into possession with the knowledge and approval of the land lord, the tenant was estopped from claiming that the lease was of no force and effect and the land lord could sue for and recover the rent owing.

In my view, the principle of law that has been established by these authorities is that, a party who has consciously and freely entered into an agreement to lease land or buildings cannot subsequently change its mind and rely on s. 69 of the Land Act (Ch 185) as a defence.

It may be of interest to note here, that under Cl 9 of the lease in the present case, does not say that the lease will of no effect or force if it is not approved by the Minister. In fact it says differently. It says, “so far as this document constitutes an agreement to do any of the acts specified in s. 69 (1) of the Land Act (ch 185)...such agreement is subject to the approval of the minister under the Land Act but in all other respects the obligations of the parties here under...are and remain enforceable from the date hereof notwithstanding that the approval has not been given or refused”.

And so by their own expressed agreement in Cl 9, the parties agreed that even if the Minister does not approve the lease or refuses to approve it, their respective rights and obligations remain intact and are enforceable.

In the present case, it is not disputed that there exist a Lease Agreement between the parties. The lease was for a term of 15 years commencing on 1 January 1990. It is also not disputed that the parties have, for all intents and purposes, acted on and relied on the provisions of the agreement.

It follows from what I have said that, I reject this argument. In my veiw this submission is without any foundation and has no merit at all.

Mr Anderson also says that the lease is unenforcible because it has not been registered in accordance with s. 49 (1) of the Land Registration Act (Ch 191).

The requirement for the registration of a lease is prescribed by s. 49 (1) of the Land Registration Act, (Ch 191). It reads as follows:

“49. Creation of Lease.

(1) Where a proprietor intends to lease land for a life or lives or for a term of years exceeding three years, he shall execute a lease in the prescribe form, and the lease shall be registered.”

The prescribed form of the lease, referred to in s. 49 (1) of the Land Registration Act (Ch 191) is in form 5 of Schedule 1 of the Land Registration Regulations (Ch 191). If one looks at the form, and compares it with the document that was signed between the parties in this case, one will quickly see the difference. The difference are many, but just to highlight some of them, are these, the form, the length, the details, etc. I am of the view that the lease, the subject of this action is, certainly different from the form prescribed in the Regulations.

Furthermore, the parties have not declared in their agreement that the agreement was to be registered in accordance with s. 49 (1) of the Land Registration Act (Ch 191) and that non registration of it would, render the terms of the agreement unenforciable. Moreover, the parties have acted on it. The tenant Defendant had possession of it and has had the use of the land pursuant to the provisions of the Agreement that the parties have executed.

Accordingly, and for these reasons, I reject the arguments raised by the Defendant. I find that there are no serious issues of law to be determined.

Insofar as the application for summary judgment is concerned I say this. The Plaintiff is seeking summary judgment under O 12 r 38 of the National Court Rules in respect of rent monies owing under a Lease Agreement for the lease of the premises described in Item 2 and 5 of the Lease Agreement (hereinafter refused to on the wharf and other facilities at Bialla). The statement of claim refers to rents due from the Defendants for the period 1991-1994 inclusive, which the Defendants says, the Plaintiff has not paid.

The Defendant has filed a Notice of Intention to Defendant, but has not file a Defence but that is not the basis of this application. As I have said earlier, the Defendants does not denies the existence of a Lease Agreement between it and the Plaintiff, all it attempted to do, was to unsuccessfully argue that the agreement was unenforceable because it had not been approved and/or that it was not registered. The Defendant does not deny the amount claimed by the Defendant.

Order 12 r 38 permits the Court to direct entry of judgment where there is evidence of facts on which the claim or part of the claim is based and there is evidence by the Plaintiff that in the belief of the person giving evidence the defendant has no defence.

The principles here are quite simple, in my view. If a defendant makes admissions sufficient to support the claim against him, the plaintiff may apply for judgment based on the admissions. These admissions may be based either on formal admissions in the pleadings or on informal admissions. For the judgment to be entered under this rule the defendant’s admissions must be strong and unambiguous. However the judgment is not entered on admissions where serious questions of fact or law required consideration. See Dep. International Private Limited v Ambogo Sawmill Pty Ltd (Unreported Judgment N594).

In the present case, the defendant has not denied the amount claimed by the Plaintiff. It has not even filed a defence. It’s only challenged to the application is based on the two submission which I have already rejected. I find that there are no serious issue of law which require consideration. I also find that there are no serious questions of facts for any further consideration.

I am satisfied that the Plaintiff is entitled to have judgment on the clear evidence on the basis of the affidavit of Mr Tupa. As I said the Defendant has not denied the amount claimed, nor disputed the evidence of Mr Tupa. The defendant has gone into possession of the land, although no consent was obtained nor was the lease agreement registered. I am of the view that a party cannot be allowed to blow hot and cold, to have the benefit of a contract and then escape the obligation which is the consideration for the benefit. It is like eating one’s cake and having it too. See Re Luabar Logging Pty Ltd.

In this case, I have read the affidavit of Mr Tupa carefully. I accept the applicant’s affidavit evidence that Hargy Oil Palms had the lease, did not terminate it or quit it in any way, had possession of it and otherwise had the benefit and use of the land without paying for it.

I find that the Plaintiff is entitled to Summary Judgment under O 12 r 38 (1). I therefore order that judgment be entered for the Plaintiff in the total sum of K1,935,551.20. I also order that the Defendant pay the Plaintiff’s costs, such costs to be agreed, if not, to be taxed.

Lawyer for the Plaintiff: Henaos

Counsel: Mr Sirigoi

Lawyer for the Defendant: Gadens Ridgeway

Counsel: Mr E Anderson