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Papua New Guinea Bible Church Inc v Wagun [2013] PGNC 335; N5297 (23 May 2013)

N5297

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 213 OF 2009

BETWEEN:

PAPUA NEW GUINEA BIBLE CHURCH INC
Plaintiff

AND:

PAUL WAGUN
EBM FIELD DIRECTOR (PNG)
First Defendant

AND:

BENJAMIN SAMSON
Deputy Registrar of Title
Second Defendant

AND:

REGISTRAR OF TITLES
Third Defendant

Mount Hagen: Poole, J
2013: 23 May

EQUITY – Property held on bare trust – Creation of absolute interest – beneficiary entitled to terminate trust and require transfer of trust property.

COMPANY LAW – Section 378 of Companies Act – time for Registrar to restore a company to register - Capacity of de registered Company to transfer trust property – Section 372 of Companies Act – Power of Registrar as representative of defunct company to act for company.

Cases cited:

Saunders v Vautier (1841) 3 My & Cr, 711
Loke Yew v Sweetenham Rubler Co Ltd [1913] UKLawRpAC 11; [1913] AC 491
Lord Shathcona Steamship Co. Ltd v Dominion Coal Co Ltd [1926] AC 108 Howie v New South Wales Lawn Tennis Ground Ltd ([1956] HCA 11; 1956) 95 CLR 132 National Provincial Bank Ltd v Airsworth [1965] UKHL 1; [1965] AC 1175

Counsel

Mr Kunai, for Plaintiff
Miss P Tamutai, for the Defendants

23rd May, 2013

1. POOLE, J: This action is the culmination of a long standing dispute between various groups who are engaged in a bitter contest about ownership of real estate which was acquired for mission purposes, to spread the Gospel.

2. The conduct of the parties is notable for its lack of charity to their neighbours and the court file contains a great number of documents of varying degrees of relevance which deal more with questions of what, in the deponent's view, may be regarded as true holiness rather than objective facts of property ownership.

3. The background of this unholy row may be summarized as follows:

• In about 1948 the Evangelical Bible Mission of Summerfield, Florida, U.S.A, dispatched a Mr Green Talbod Bustin to Papua New Guinea as a missionary. Over the years he was joined by a number of other similar minded people and several members of his own family joined him in his missionary endeavors.
  
• In the process of the mission work, Mr Bustin and his fellow missionaries set up a numbers of mission stations and centers in a number of places and, in so doing, applied for and were granted mission leases over land. These were registered in the name of the Evangelical Bible Mission. Eight of these properties are the subject of this action.
  
• The Evangelical Bible Mission of Florida, U.S.A. was a corporation under the laws of that State and, in January 1970, it became registered under the Companies Ordinance of 1968 as a Foreign Company. It was removed from the register of registered companies on 26 November 1965 and is recorded as re-instated on 11th August 2009.
  
• With the passage of time the mission became less dependent for its day to day conduct on the parent body in the U.S.A. and, in 1974, the Evangelical Bible Mission, both in its America head office and in Papua New Guinea, decided to set up a separate National, Papua New Guinea Church and named it Papua New Guinea Bible Church. It became incorporated under the Companies Act. By this time the Evangelical Bible Mission had been de-registered as a Foreign Company in Papua New Guinea, but remained recorded on the title to the real estate it had acquired.
  
• The American parent body, of course, continued to exist and, in March 1980, resolved that the Evangelical Bible Mission would, in the words of one of the former long serving Missionaries, Mr Robert Brock, who was present at the meeting, "now indeed turn all governing authority over to the Papua New Guinea Bible Church. This was stated to include placement of Missionaries, existing housing and real estate." Another similar Missionary, Esther Hershy, deposed that she attended and voted at that meeting and stated that "all properties of Evangelical Bible Mission transferred to Papua New Guinea Bible Church which included all missionary housing and all real estate." The same facts are deposed to by Mr. Jacob Miller, who was the Secretary of the Evangelical Bible Mission. Although the affidavits of these witnesses were taken by Notaries Public, unfortunately none of them annexed a Minute of the meeting formally recording this resolution. In any event, despite this decision being taken, nothing was done in Papua New Guinea to implement it.
  
• In time Mr Green Tallbod Bustin died and the First Defendant, who says he is a director of and shareholder in the now re-instated Evangelical Bible Mission (P.N.G.) Ltd, instituted action in his capacity as Public Curator against the Registrar of Companies and the Investment Promotion Authority (OS 19 of 2009) and was party to OS 22 of 2009 between Papua New Guinea Bible Church Inc and the Acting Public Curator, Julius Pololi. These proceedings concerned the estate of the deceased. Act on OS 9 of 2009 sought Orders to reinstate the Evangelical Bible Mission and resulted in an Order re-instating it to the register.
  

OS 242 of 2010 was brought to set aside that Order which was made, by consent, and endorsed by the Court on 5 August 2009. This was Ordered on 2 April 2012. On that day the Court also declared that Evangelical Bible Mission Incorporate changed its name on 9th October 1981 to Papua New Guinea Bible Church Incorporated pursuant to section 9(3)(b) of the Associations Incorporation Act. An Association Search dated 11 February 2012 shows that Papua New Guinea Bible Church was recorded as being incorporated on that day, not that the Evangelical Bible Mission changed its name.

4. Be that as it may, the position has now evolved whereby the Defendants are asserting that the Evangelical Bible Mission Incorporated is a valid legal entity as from 11th August 2009, and the properties are vested in it absolutely.

5. It is common ground, both in the evidence of the Plaintiff and from the First Defendant, that the express intention of the Evangelical Bible Mission was that its real property was to be transferred to the Plaintiff- although no time was expressed for doing this and, apparently though neglect, this was not acted on.

6. The Plaintiff, for many years, has been occupying the properties, but now, on the purported re instatement of the Evangelical Bible Mission in 2009, the First Defendant and others are asserting that the Plaintiff has no right to occupy the land nor claim to any entitlement in it.

7. The issues to be determined are:

1. What is the status of the party recorded on the title to the properties, and

2. What party is the beneficial owner of the properties;

8. The titles still record the Evangelical Mission (PNG) Ltd as the owner of the properties. This company, as previously noted, was deregistered on 26th November 1965.

9. The First Defendant, Mr Wagun, states that this company was re- instated and that he is a director and a shareholder of it. He asserts that this re-instatement took place on 11th August 2009.

10. When a company is removed from the Register the Companies Act states, explicitly, the consequences.

11. The first in importance, in relation to this case, is contained in section 378 of the Companies Act, which sets out the conditions upon which the Registrar may restore a company to the register. The relevant parts of that section are sub section (1), (2) and (3) and are in these terms.

378. Registrar may restore Company to Register

(1) Subject to this section, the Registrar shall, on the application of a person referred to in Subsection (2), and may, on his own motion, restore to the register a company that has been removed from it during the previous six years where the Registrar is satisfied that, at the time the company was removed from the register-

(a) the company was still carrying on business or other reason existed for the company to continue in existence; or

(b) the company was a party to legal proceedings; or

(c) the company was in receivership, or liquidation, or both; or

(d) the company should not have been removed from the register.

(2) Any person who, at the time the company was removed from the register, was-

(a) a shareholder or director of the company; or

(b) a creditor of the company; or

(c) a liquidator, or a receiver of the property, of the company; or

(d) any aggrieved person,

May make an application under Subsection (1).

(3) Before the Registrar restores a company to the register, the applicant in Subsection (2), or where there is no applicant, the Registrar, shall give public notice, in a format approved by the Registrar setting out-

(a) the name of the company; and

(b) the name and address of the applicant; and

(c) the section under, and the grounds on which, the application is made or the Registrar proposes to act, as the case may be; and

(d) the date by which an objection to restoring the company to the register shall be submitted to the Registrar, not being less than one month after the date of the notice; and

(e) any other matter or statement required by the Registrar.

(4) The Registrar shall not restore a company to the register where the Registrar receives an objection to the restoration within the period stated in the notice.

(5) Before the Registrar restores a company to the register under this section, the Registrar may require any of the provisions of this Act, being provisions with which the company had failed to comply before it was removed from the register, to be complied with.

(6) The Court may, on the application of the Registrar or the applicant, give such directions or make such orders as may be necessary or desirable for the purpose of placing a company that is restored to the register under this section and any other persons as nearly as possible in the same position as if the company had not been removed from the register.

(7) Nothing in this section limits or affects Section 379. (my underlining.)

12. Section 279 of the Act also provides for the Court to restore a company to the register, on application by a person referred to in section 278(2), for the reasons referred to in section 378(1).

13. The company was removed from the register in 1965 and the six years during which it may be restored to the register expired on 26th November 1971. The explicit provisions of section 378 are, alone, sufficient to render void any purported re-instatement of the company by the Registrar in 2009 – some 38 years after the expiration of the term permitted by statute for this to take place.

14. Accordingly I find that the status of the party recorded on the titles to the property in question is that of a de-registered, defunct company.

15. What, then, is the consequence of this?

16. The Evangelical Bible Mission has no legal existence and is unable to act in any way. Until it became extinct (6 years after its de-registration) it held the property on trust for the Plaintiff, as bare trustee.

17. At any time, until it became extinct, it had capacity to transfer the property to the Plaintiff who, as cestui qui trust, was entitled to require the trustee to carry out its duties absolutely.

18. In the case of a bare trust, or constructive trust, an absolute interest in the property is created. When this happens, the interest of the beneficiary may be directly asserted against the person creating the right in question and also against successors in legal title, provided those successors are not bona fide purchasers for value without notice (see Lord Shathcona Steamship Co. Ltd v Dominion Coal Co Ltd [1926] AC 108 and Howie v New South Wales Lawn Tennis Ground Ltd [1956] HCA 11; (1956) 95 CLR 132 and National Provincial Bank Ltd v Ainsworth [1965] UKHL 1; [1965] AC 1175.)

19. This, in equity, is referred to as the rule in Saunders v Vautier and may be stated as empowering a beneficiary who is not under any legal incapacity and entitled to the undivided beneficial interest in property to require the trustee to transfer the property to him and terminate the trust. (See Loke Yew v Sweetenham Rubler Co Ltd [1913] UKLawRpAC 11; [1913] AC 491 – especially at 505-506.) The extinction of the trustee does not extinguish the rights of the beneficiary, but to whom can it turn to enforce its beneficial entitlement?

20. The Court has power, both inherently and under the Land Registration Act (especially sections 108(1)(c) and section 111) to make a Vesting Order, but such a relief is not sought in the pleadings.

21. Section 372 of the Companies Act makes the Registrar the representative of a defunct company and section 373 vests property of a defunct company in the Registrar but with the exception (see s373(2)) that, while the property may include leasehold property, it "does not include property held by the Company on trust for any other person."

22. In the light of the evidence, I find that, since at least the Evangelical Bible Mission held the property on trust for the Plaintiff, and it does not vest in the Registrar because of section 373(2).

23. Nonetheless, the Registrar still may act in this matter. Section 372 of the Companies Act provides:

372. Registrar as Representative of Defunct Company

(1) Where, after a company has been removed from the register, it is proved to the satisfaction of the Registrar-

(a) that the company, if it still existed, would be legally or equitably bound to carry out, complete, or give effect to some dealing, transaction or matter; and

(b) that, in order to carry out, complete or give effect to the dealing, transaction, or matter, some purely administrative act, not being of a discretionary kind, should have been done by or on behalf of the company, or if the company still existed should be done by or on behalf of the company,

the Registrar may, as representing the company or its liquidator under the provisions of this section, do or cause to be done any such act.

(2) The Registrar may execute or sign any relevant instrument or document adding a memorandum stating that he has done so under this section, and the execution or signature has the same force, validity and effect as if the company, if it still existe4d, had duty executed the instrument or document.

24. In the circumstances of this case I find:

1. The Evangelical Bible Mission, if it still existed, would be bound in equity to complete the transaction or matter as trustee of transferring the titles to the property to the Plaintiff, as the beneficiary absolutely entitled.

2. The Registrar has power to carry out the transfer (which was not a discretionary matter, for the defunct company was obliged to make the transfers when called on to do so) which the company should have done by executing any relevant instruments to give effect to the transfer.

25. In the shower of litigation concerning this dispute about the property in question, there has been a strange intervention by the Public Curator's Office which, in acting concerning the estate of the late Green Talbod Bustin, made some moves, apparently, to deal with property registered in the name not of the deceased, but of the Evangelical Bible Mission. In view of the relationship of the First Defendant with that office, it is appropriate to quote the dictum of Moulton L.J. in the Privy Council case to which I have referred, Loke Yew v Sweetenham Rubler Co Ltd, that it is "a principle of general application that where the rights of third parties do not intervene no person can better his position by doing that which is not honest to do." The attempted resuscitation of the Evangelical Bible Mission 38 years out of time for the apparent purpose of frustrating the bare trust upon which the property was held appears to be an attempt, at least in equity, to do "that which is not honest to do."

26. I find that;

1. The party beneficially entitled to the registered title of the pieces of property the subject of this action is the Plaintiff;

2. The Registrar of Titles has power under section 372 of the Act as the representative of the defendant company presently recorded on the title to sign any relevant instrument to give effect to the transfer of those titles to the Plaintiff.

3. The purported re-instatement of the defunct company, Evangelical Bible Mission, is void as being in contravention of section 378(1) of the Companies Act.

27. The Formal Orders of the Court are;

1. All the title and interest formally held by the Evangelical Bible Mission (PNG) Ltd in;

(i) State Lease Volume 53 Folio 25

Portion 8 Milinch Kaugel Fourmil Karimul – S.H.P. Area: 9.17 Hectares

(ii) State Lease Volume 56 Folio 226

Portion 21 Milinch Kaugel Formil Karimul – W.H.P. Area: 2.6260 Hectares

(iii) State Land Volume 45 Folio 206

Portion 28 Milinch Yowadi Fourmil Wabag – W.H.P.

Area: 1.8150

(iv) State Lease Volume 45 Folio 205

Portion 30 Milinch Yowadi Fourmil Wabag – W.H.P.

Area: 70.200 Hectares

(v) State Lease Volume 44 Folio 238

Portion 18 Milinch Kaugel Fourmil Karimul – W.H.P.

Area: 2.54 Hectares

(vi) State Leave Volume 35 Folio 8688

Portion 79 Milinch Kaugel Formil Karimul – S.H.P.

Area: 1.00 Hectares

(vii) State Lease Volume 33 Folio 8091

Portion 179 Milinch Mendi Fourmil Kutubu – S.H.P.

Area: 40.206 Hectares

(viii) State Lease Volume 42 Folio 222

Portion 1 Milinch Kagel Fourmil Karimul – W.H.P.

was held on bare trust for the Plaintiff, Papua New Guinea Bible Church Inc, absolutely.

2. The Registrar of Companies shall, pursuant to section 372 of the Companies Act, execute any documents and do or cause to be done any act necessary to be done to transfer the title, and deliver the owners copy of such title to;

1. State Leave volume 53 Folio 25

(Portion 8, Milinch Kaugel, Fourmil Karimul)

2. State Lease volume 56 Folio 226

(portion 21, Milinch Kaugel, Fourmil Karimul)

3. State Lease volume 45 Folio 206

(portion Yowadi Fourmil Wabag)

4. State Lease Volume 45 Folio 205

(portion 30, Milinch Yowadi, Fourmil Wabag)

5. State Lease Volume 44 Folio 238

(portion 18, Milinch Kaugel, fourmil Karimul)

6. State Lease. Volume 35, folio 8688

(portion 79 milinch Kaugel, Fourmil Karimu

7. State Lease Volume 33 folio 8091

(portion 179, Milinch Mendi, Fourmil Kutubu

8. State Lease volume 42, 0222

(portion 1, Milinch Kaugle, Fourmil Karimul)

to the Plaintiff within 21 days of delivery to him of such documents of transfer as are necessary to effect such transfer.

3. The Plaintiff's costs of and incidental to this action are to be paid by the First Defendant, such costs to be taxed if not agreed.

4. The time for giving effect to these Orders is abridged to the time of sealing by the Registrar, which shall take place forthwith.

__________________________________________
Kunai & Co. Lawyers: Lawyers for the Plaintiff
Tamutai Lawyers: Lawyers for the Defendant