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Yaupa v Oliver [2010] PGNC 244; N4163 (8 October 2010)

N4163

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA NO: 90 OF 2009

LAWRENCE YAUPA
Appellant

V

SAM OLIVER
Respondent

Kimbe: Kawi J
2010: 8th October

APPEAL – District Court Practice and Procedure – authority, actual or ostensible authority of the son and wife to hold themselves out as representative of their father – father had no knowledge of the actions of the son and his wife.

– innocent third party relying on representations by the son and entering into a third party tenancy agreement with the son to rent father's property – representation made without father's knowledge and approval. Son forged father's signature to claim authority – son and his wife had no authority, actual or legal or ostensible to represent father-Son lacked capacity and therefore authority to enter into tenancy agreement with third parties over his father's property – Tenancy Agreement therefore null and void from the outset.

NHC LEASE AGREEMENT – condition required tenant to get written approval from National Housing Corporation before disposing off or selling house – father failed to get approval from the NHC in writing before purporting to sell property to his son – Getting written approval from NHC is a prerequisite to any sale of house – Purported Sale of house from father to son is null and void as father did not get written approval from NHC to sell house. Father has no – authority or capacity to act – Father has no legitimate title to pass onto son No authority and valid title passes from father to son and from son to third parties.

– son acted without authority of his father – Any third party transactions null and void. Appeal dismissed.

Cases cited:
Papua New Guinea Cases

Tony Yagon on behalf of Settlers of Dylup Plantation v Nowra No. 59 Ltd [2008] N3375
Primus Kikia v Kikia Solowet [2009] N3682

Overseas cases

Freeman and Lockyer (a firm) –v– Buckhurst Park Properties (Mangal) Ltd [1964] 2OB 480
Firbank's Executors –v- Humphreys (1886) 18QBD 54

Counsel:
Appellant, In Person
Mr. D. Kari, Respondent

8 October, 2010

1. KAWI J: INTRODUCTION: This is an appeal against the Decision of the Kimbe District Court given on the 4th June 2009. From my reading of the Court depositions the following appear to be the facts of this case:

FACTS

2. The Respondent in this appeal, Mr Sam Oliver was originally the legal tenant and Lease Holder of a property described as Section 49, Allotment 12, Gigo Settlement, Kimbe. Initially, the property was owned by the National Housing Corporation (NHC). The National Housing Corporation entered into a rental Agreement with Sam Oliver on the 23rd February 1994. The Rental Agreement stipulates that Mr Oliver shall pay a rental fee of K50.00 per annum.

3. Further it allowed Mr Oliver to apply for a lease over this land with a payment of a K10.00 fee to the Department of National Planning. The lease is for a term of fifty years. Some time in 2003, Mr Sam Oliver purportedly sold the house to his son Amos Oliver and his wife, Maria Atepo, for K30,000.00 of which K5,000.00 had already been paid as down payment and the balance of K25,000.00 has yet to be paid. Sometime in April 2008, Mr Amos Oliver and his wife Maria Atepo entered into a rental Agreement with Mr Lawrence Yaupa for the rental of this property. When this rental arrangement came to the knowledge of Mr Sam Oliver, he instituted legal proceedings against Mr Yaupa to have him evicted from his property. The District Court here in Kimbe entered judgment for the respondent, Mr Sam Oliver and ordered Mr Yaupa to give up vacant possession to Mr Oliver. Dissatisfied with this ruling, Mr Yaupa lodged this appeal to the National Court.

THE THIRD PARTY TENANCY AGREEMENT

4. Condition No. 15 of the Tenancy Agreement is very important in so far as this appeal is concerned as it goes to the root and heart of this appeal.

5. Clause 15 of the Tenancy Agreement states the following:

"15: The Tenant must seek written permission from the National Housing Corporation before:

(a) Making any business in or about his premises.

(b) Thinking of selling his house to a new tenant."

6. The appellant Mr Yaupa is currently the tenant of the property described as Section 49, Allotment 12, Kimbe. He says that he signed a Tenancy Agreement with Amos Oliver and his wife, Maria Atepo on the 1st of April 2008.

7. Under that Tenancy Agreement, the tenant, Mr Yaupa is required to pay a rental of K600.00 per month to Mr Amos Oliver and his wife, Ms Maria Atepo. Other conditions of that tenancy include:

(a) The Tenancy to run for a period of twelve (12) months with an option to renew,
(b) A bond fee of K300.00 to be paid upfront before moving in; and
(c) The lessee to be responsible for maintaining, cleaning and keeping the house and all its area clean and in good condition.
(d) Other normal Tenancy Agreement conditions are included.

ISSUES

8. The first issue which arises here for determination is whether or not Amos Oliver and his wife, Maria Atepo were authorized by the father Sam Oliver to ordain him with the capacity to enter into Third party Agreements and rent the property, Section 49, Lot 12 Kimbe out to third parties. This in turn begs the question of whether Amos Oliver and his wife Maria Atepo have the actual, ostensible authority to act and make representations on behalf of their father, Sam Oliver, or to hold themselves out as representative of their father Mr Sam Oliver.

9. I will discuss the issue of whether Amos Oliver and his wife Maria Atepo had the authority of Sam Oliver by making reference to the Law of Agency. The learned authors Chesire and Fifoot on the Law of Contract 4th edition at page 526 discuss ostensible authority in this way:

"As to the ostensible authority, the general rule under the law of "holding out" applies; a principal who acts as to make it appears that he has conferred upon his agent authority to make either a certain contract or certain disposition of goods, is estopped from disputing the validity of the transaction as against a person who dealt for value with the agent in the bona fide belief that the authority had actually been given. It is then irrelevant whether the agent had or did not have the actual authority.

Pearson L J discussed the Law on agent's ostensible authority in Freeman and Lockyer (a firm) –v– Buckhurst Park Properties (Mangal..) Ltd [1964] 2OB 480 ... 498 in this way:

"In my view the decision of the Judge was correct. On the facts as found the plaintiffs were entitled to rely on Kapoon's ostensible authority to give them instructions on behalf of the company because there was a holding out of Kapoon by the company as its agent to conduct its business within the ordinary scope of that business. The expressions "ostensible authority" and "holding out" are somewhat vague. The basis of them, when the situation is analysed is an estoppel by representation. The agent professes to act on behalf of the company, and he thereby impliedly represents and warrants that he has authority from the company to do so; Firbank's Executors –v- Humphreys (1886) 18QBD 54 at page 62. We are concerned in the case only with the representation, and not with the warranty which in some other case might give to the other contracting party a right of action for damages for breach of warranty. In this case the company has known of and acquired in the agent professing to act on its behalf, and thereby impliedly representing that he had the company's authority to do so. The company is considered to have made the representation, or caused it to be made or at any rate to be responsible for it. Accordingly, as against the other contracting party, who has altered his position in reliance on the representation, the company is estopped from denying the truth of the representation."

10. On the face of it, it would appear that the appellant Mr Yaupa was entitled to rely on any representations made by Mr Amos Oliver and his wife Maria Atepo. Both Amos and Maria held themselves out as owners of this property courtesy of a Statutory Declaration allegedly signed and filed by their father Mr Sam Oliver, the owner of this property. The appellant Mr Yaupa appears to be an innocent person who dealt for value with Amos Oliver and Maria Atepo in a bona fide belief that they (i.e. Amos Oliver and Maria Atepo) had the actual authority to lease out the property under dispute.

11. The appellant, Mr Yaupa points to a Statutory Declaration allegedly signed by Mr Sam Oliver dated 19th February 2003 in which the legal title holder, Mr Sam Oliver allegedly transferred and bequeathed his title over Section 49, Lot 12 Gigo One (1) Settlement to his son Amos Oliver and his wife, Maria Atepo. The Statutory Declaration dated 19th February 2003 contained three major conditions:

"(a) I now transfer my title of the piece of land located at Section 49 Lot 12, Gigo One (1) settlement, Kimbe Town, WNBP to my son Amos Oliver and family.

(b) The title now will be Amos Oliver, Section 49 Lot 12, Gigo One (1) Settlement, Kimbe Town, WNBP.

(c) I now sell the piece of land and the property fully to Amos Oliver (my son) and his wife Maria Atepo at the value of K10,000.00.

12. I would have had no doubt whatsoever in mind in holding that Mr Yaupa the appellant acted and relied upon the representations and holding out done by Amos Oliver and his wife Maria Atepo had it not been for the actions of their father, Sam Oliver who instituted legal proceedings against Lawrence Yaupa when he learnt that Lawrence Yaupa had taken possession of his house. The critical evidence here is the Statutory Declaration purportedly signed by Mr Sam Oliver wherein he allegedly bequeathed the title of the property to his son Amos Oliver and his wife Maria Atepo. Applying the strict law of agency principles, it would appear that they did have the authority based on the alleged transfer of property contained in the statutory declaration dated 19th February 2003.

13. But the respondent, Mr Sam Oliver contests this immediately after hearing of his son renting the property to a third party in the appellant. He filed for eviction of the appellant. This action of going to court negatives any arguments that Amos Oliver and Maria had the authority of their father to act. He states that he did not sign this Statutory Declaration. He says that he was in Rabaul at the relevant period and his signature was forged by his son Amos. In an affidavit dated 9th July 2008, Sam Oliver deposes that his son, Amos Oliver and his wife, Maria Atepo, forged his (Sam Oliver's) signature on the Statutory Declaration dated 19th February 2003 to have the title over the property Section 49, Lot 12, Kimbe allegedly transferred to themselves.

14. Sam Oliver's evidence is corroborated by his other son Elias Oliver. Elias Oliver also says that in 2003, his father Sam Oliver was residing in Rabaul and was not in Kimbe at anytime to sign the Statutory Declaration.

15. On the basis of this evidence which was never challenged and contradicted in any material way, it is the finding and therefore the judgement of this Court that the signature of the complainant/respondent, Mr Sam Oliver in so far as it appears in the Statutory Declaration dated 19th February 2003 was forged by his son Amos Oliver and his wife, Maria Atepo. Both Amos Oliver and his wife, Maria Atepo had a financial motive to forge Sam Oliver's signature. The content of the statutory Declaration were also written by Amos Oliver. The Statutory Declaration is therefore self serving and cannot be evidence of a valid instrument transferring property and therefore title. It is the finding of this court that no valid title passed from the father Sam Oliver to his son Amos Oliver and his wife Maria Atepo on the basis on the contents of the Statutory Declaration Form.

LEGAL ISSUE NO. 2

16. It is true that Sam Oliver, the father and his son Amos Oliver did agree that the son (Amos Oliver) and his wife, Maria Atepo would buy the house for K30,000.00. Pursuant to that Agreement, Amos Oliver and his wife Maria Atepo paid K5,000.00 to his father Sam Oliver as deposit payment for the purchase of this house. The balance of K25,000.00 was to be paid after two weeks. There is no evidence before me that the K25,000.00 has now been fully paid.

17. Until that happens, the title cannot be transferred from Sam Oliver to his son Amos Oliver and his wife Maria Atepo. Amos Oliver therefore forged his father's signature, after as he had paid the K5,000.00. He then perceived himself as the new legal owner of the property in dispute. There is no evidence to show that the balance of K25,000.00 has been paid in full. Even if he had paid the balance of K25,000.00, would title pass on to him from his father? There is a lot of doubt on title of the property passing onto him. This is because the title cannot legally pass from Sam Oliver to his son Amos unless he, Sam Oliver gets the written approval to sell or dispose the house from the National Housing Corporation in accordance with the NHC Lease Agreement. Getting written approval from NHC under clause 15 of the Lease Agreement is a pre-condition for any sale between Sam Oliver and any third party including his son to be legitimate.

18. There is no evidence to show that Mr Sam Oliver did get written permission or approval from the National Housing Corporation to sell the house to his son Amos Oliver in accordance with clause 15 of the National Housing Corporation Agreement. Consequently, the purported sale by Sam Oliver to his son Amos Oliver is declared null and void and of no effect for want of compliance with clause 15 of the Tenancy Agreement.

LEGAL ISSUE NO. 3

19. It would follow that, any third party agreements brokered by Amos Oliver for the rental of this property is illegal because Amos Oliver himself does not have the legal capacity nor the authority from his father who himself is devoid of any authority because the NHC never given him that written approval to sell the house to third parties including his son and his wife. There is no evidence to show that the legal owner, Sam Oliver did get the written approval from the National Housing Corporation to sell the house to his son Amos. This is a prerequisite, or a major pre-condition for any sale of this property to be legal.

CONCLUSION

20. This is specifically provided for by clause 15 of the Lease Agreement between Sam Oliver and the National Housing Corporation. Without a written approval from the NHC, any sale is null and void. In other words no title passes. Getting written approval from the National Housing Corporation is therefore a pre condition to any sale. The court finds that Sam Oliver did not get written approval from NHC in accordance with clause 15 of the Lease Agreement to sell the house to his son. Consequently, any purported Sale Agreement between father and son is declared null and void and of no effect.

21. Furthermore, any purported lease or rental of the property section 49, lot 12, Kimbe by Amos Oliver to Lawrence Yaupa is null and void and of no effect as well. It would therefore follow that Amos Oliver too has no capacity or legitimate authority to enter into third party agreements with anyone, including the Tenancy Agreement with Lawrence Yaupa.

22. Any third party Agreement entered into between Amos Oliver and third parties for the rental of the property described as Section 49, Allotment 12, Gigo, Kimbe is hereby declared null and void and is no effect. This includes the Tenancy Agreement entered into between Amos Oliver and Lawrence Yaupa on the 1st of April 2008.

23. Furthermore, the Statutory Declaration dated 19th February 2003 purportedly signed by Sam Oliver is declared null and void as it is done in a blatant breach and total disregard of clause 15 of the Lease Agreement between the National Housing Corporation and Sam Oliver dated 23rd February 1994. The Lease Tenancy Agreement stipulated that the "Tenant ie Sam Oliver" is to seek written permission from the National Housing Corporation before "thinking of selling his house to a new tenant."

24. There is no evidence at all from Sam Oliver seeking written approval from the National Housing Corporation of selling or disposing of the property Section 49, Allotment 12, Gigo, Kimbe to any one, let alone, his son, Amos Oliver. This Court finds that Sam Oliver was never authorized by the National Housing Corporation in writing to dispose off or sell the subject house to anyone including his son.

25. Any Agreement between Sam Oliver and his son Amos Oliver (father and son) to sell the property, is also declared null and void for breaching the main Lease/Rental Agreement between the National Housing Corporation and Sam Oliver.

26. As it is the title to the property described as Section 49, Allotment 12, Gigo Settlement, Kimbe is legally vested in Mr Sam Oliver, who alone has legal title to this property to the exclusion of everyone in the whole world, including his son Amos Oliver, and his wife Maria Atepo, as well as the appellant Lawrence Yaupa.

27. Sam Oliver being the legal owner over this property has every right to evict any person found illegally occupying his property, including Lawrence Yaupa.

28. There shall be a judgement for the respondent, Mr Sam Oliver.

29. The power of the National Court on appeal is provided for by Section 230 of the District Court Act which is stated in these terms:

s230 – POWER OF THE NATIONAL COURT ON APPEAL

(1) On the hearing of an appeal, the National Court shall inquire into the matters, and may –

(a) adjourn the hearing from time to time; and

(b) mitigate or increase a penalty or fine; and

(c) affirm, quash or vary the convictions, order or adjudication appealed from, or substitute or make a conviction, order or adjudications, which ought, on the evidence before the National Court, to have been made by a District Court; and

(d) remit the case for hearing before the court which made the conviction, order or adjudication or any other competent court; and

(e) exercise a power that the court that made the convictions, order or adjudication might have exercised; and

(f) make such further or other order as to costs or otherwise as the case requires.

(2) An appeal shall only be allowed if it appears to the National Court that there has been substantial miscarriage of justice.

30. His Honour, Cannings J in the case of Tony Yagon on behalf of Settlers of Dylup Plantation –v– Nowra No. 59 Ltd [2008] N3375 held that Section 6 of the Summary Ejectment Act can only be used where the persons whom the owner wants to evict are "illegal occupier of the land; people who have no right, title or license" to be on the land.

31. His Honour applied the same principle in the case of Primus Kikia –v– Kikia Solowet [2009] N3682.

32. In the present case, I agree with His Honour's ruling in those two cases and so applying those principles here, I find that the appellant Lawrence Yaupa is illegally occupying the house at Section 49, Lot 12, Gigo, Kimbe. Any Tenancy Agreement that he entered into with Amos Oliver is devoid of authority, as Amos Oliver had no authority or lacked capacity from his father to do that.

33. I do not find that the learned magistrate erred in his judgment to order his eviction from that property.

ORDERS

34. Pursuant to Section 230 of the District Court Act, I make the following orders:

(1) The appeal is hereby dismissed with costs awarded to Mr Sam Oliver;

(2) The orders of the learned magistrate dated 4th June 2009 is hereby varied and the following orders are made in lieu.

(i) The appellant Lawrence Yaupa shall immediately deliver up free and vacant possession of property known as Section 49, Allotment 12 (Gigo) Kimbe, West New Britain to the rightful legal owner, Mr Sam Oliver within two weeks commencing at anytime and ending on Wednesday 20th October 2010.

(ii) Lawrence Yaupa shall move out of Section 49, Lot 12 by Wednesday 20th October 2010 and give free and vacant possession to Sam Oliver the legal owner of the property.

(iii) If Lawrence Yaupa or his agent or family members put up resistance or tries to prevent Sam Oliver from taking up vacant possession and quite possession of this property, then a warrant shall be issued under Section 6 of the Summary Ejectment Act to have the appellant evicted.

(iv) Lawrence Yaupa, his family members, and servants and associates or agents are hereby restrained and injuncted from interfering and putting up resistance from moving out or harassing or intimidating Sam Oliver from moving in and taking vacant possession of his property.

(v) Similarly Amos Oliver and his wife Maria Atepo or their servants and agents are restrained from interfering in any way with, Sam Oliver from taking up free and vacant possession of property Section 49, Lot 12, (Gigo) Kimbe.

(3) The Tenancy Agreement between Amos Oliver and Lawrence Yaupa dated 1st April 2008 is hereby declared null and void and of no effect.

(4) The Agreement to sell the property from Sam Oliver to his son Amos Oliver is hereby declared null and void and of no effect.

Orders accordingly.

________________________

Public Solicitor: Lawyers for the Respondent
Appellant In Person