N7927
 
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 499 of2018 and
WS NO 1828 OF 2015
(Consolidated)
BETWEEN:
WEN'S HOLDING LIMITED 
Plaintiff/Third Cross Defendant
AND:
LUCY AGEN 
Defendant/Cross Claimant/Plaintiff
AND:
JOHN DEGE in his Capacity as 
Managing Director for National Housing Corporation 
First Defendant/First Cross Defendant
AND:
NATIONAL HOUSING CORPORATION 
Second Cross Defendant
AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA 
Third Defendant
Waigani: Thompson, J 
2019: 16th, 17th & 31st July
LAND LAW - Land title - registered proprietor - verbal agreement for sale of property - indefeasibility of title -fraud has to be pleaded and proved 
Cases Cited:

Shell PNG Ltd) v Speko Investment Ltd (2004) PGSC 16 
Steven Naki v AGC (Pacific Ltd) (2005) PGNC 163
Papua Club Inc v Nusuam Holdings Ltd (No.2) (2004) N 2603
Koitachi Ltd v Walter Schnaubelt and (2007 PGSC 11

Counsel:

Mr. Mukwesipu, for the Plaintiff/Third Cross Defendant
Mr. Donald, for the Defendant/Cross Claimant
31st July, 2019

1. THOMPSON J: BACKGROUND: On 29 December 2015 Lucy Agen (LA) issued proceedings on WS 1828 of  2015 against the National Housing Corporation and the State. In those proceedings she claims that on 10 May 2008 she entered into a verbal agreement with the NRC whereby in consideration for payment of arrears and continuing rental, she could become a tenant of Flat 1 in an NRC duplex property at Section 95 Lot 6 Gordons (of which Flat 2 was occupied by another tenant) and would have the right of first refusal to purchase the property. It is implicit in her pleadings that by "property" she is referring to Flat 1. 
2.    LA and the NRC signed a Tenancy Agreement on 15 November 2010 which 
provided, inter alia, that it was a weekly tenancy which was able to be terminated 
by the NRC at any time on giving a week's notice. It also provided that the NRC 
would have no responsibility for refunding the costs of any improvements done to 
the property by the tenant. The tenancy was renewable if rentals were up to date, 
but it remained a weekly tenancy. 
3. 	LA says that on the same date as she signed the Agreement, the NRC 
confirmed that she would have a right of first refusal on the property. 
4. The Tenancy Agreement did not contain any term relating to a right of first 
refusal, or any term at all relating to the possible sale of the property to the tenant, 
and did not refer at all to Flat 2. 
5. On 30 March 2014 LA wrote to the NRC, offering to buy the property, with 
no mention of any agreement for a right of first refusal. No response was received. 
6. On 14 October 2015 the NRC gave written notice to LA and the tenant of 
Flat 2 that the property was unfit for habitation, the tenancies were terminated, and 
allowing them a month to move out. LA did not move out. On 2 December 2015 
she wrote to the NRC offering to buy the property. Her letter of offer did not refer 
to any agreement for a right of first refusal. 
7. On 9 December 2015 the NRC gave written notice to vacate the property 
within 24 hours. On 29 December 2015 LA issued those proceedings, seeking 
Declarations that she and the NRC had a valid contract giving her a right of first 
refusal to purchase the property. On 31 December 2015 she obtained interim 
injunctions restraining her from being evicted from Flat 1, and restraining the NRC 
from selling the property until she had been given the right of first refusal. These 
Orders were subsequently extended until the determination of the substantive 
hearing. Since then, LA did not progress the matter, and there has not been a 
substantive hearing. 
8. Unknown to LA, on 7 December 2015 the NRC had already entered into a 
contract for sale of the duplex at Lot 6 Section 95 to Wen Holdings Ltd, a transfer 
was signed on 7 December, and the purchase price was paid by bank cheque on 17 
December 2015. The transfer was entered on the State Lease for Lot 6 Section 95 
Hohola on 21 December 2015. 
9. On 22 February 2016 Wen's Holding Ltd applied to the Lands Department 
to correct the certificate of title by changing the name from Wen Holdings Ltd to 
Wen's Holding Ltd. The application was supported by a Statutory Declaration 
stating that the name had been inadvertently shown on the documents in error; a 
copy of the Certificate of Incorporation showing the name as Wen's Holding Ltd, 
incorporated on 24 October 2014; a Miscellaneous Application Form, and a receipt 
showing that Miscellaneous Application fee ofK200 had been paid on 23 February 
2016. The certificate of title was surrendered, and subsequently returned showing 
that the name had been changed to Wen's Holding Ltd, ("WH") without any 
change to the other particulars or any separate entry recording the correction and 
change of name. 
10. As LA remained in occupation, in 2017 WH issued eviction proceedings in 
the District Court, which in June 2018 were ultimately unsuccessful. The District 
court took the view that there was a bona fide dispute over title, and so it did not 
have jurisdiction in the matter. (As it did not have jurisdiction, its purported order 
for WH to apply to be joined in the National Court proceedings, was of no effect). 
11. On 26 July 2018 WH issued proceedings on OS 499 of2018 against LA. On 
7 November 2018 these proceedings were ordered to be consolidated with WS 
1828 of 2015 and heard together, and the combined trial was heard on 16 and 17 
July 2019. 
WS 1828 OF 2015 
12. I deal first with WS 1828 of 2015. WH is not a party to these proceedings. 
Although the Defendants had filed Defences and Affidavits denying the claim, 
they did not appear at the hearing. 
13. LA has pleaded that the agreement she relied on to make her claim, was 
made on 10 May 2008. As her proceedings were not issued until 29 December 
2015, they were prima facie time-barred pursuant to Section 16 of the Frauds and Limitations Act ("the Act"). However, a statutory time-bar has to be pleaded, and 
as it was not pleaded in the Defences, it cannot be relied on. 
14. The agreement relied on by LA, was pleaded as a verbal agreement by 
which she was entitled to purchase the property. Section 2 of the Act provides that 
no interest in land can be created or disposed of except by writing signed by the 
person creating or disposing of the interest. There was nothing in writing signed 
by the NRC agreeing to dispose of its interest in the property to LA. Neither the 
weekly Tenancy Agreement nor LA's letters offering to buy the property, created 
an interest. 
15. The evidence showed that LA was a weekly tenant, whose tenancy was 
terminated on 14 October 2015. She has continued to occupy the property since 
then, and to date. The last evidence of any rent paid by LA was in June 2015, 
when she says she was in credit. There is no evidence of any rent paid to the NRC 
up to December 2015, or to WH after December 2015. 
16. LA asked why she would have paid the arrears and continuing rental 
payments, if she was not intending to buy the property. The answer is simply that 
the payments were a condition to her becoming a lawful tenant. The evidence was 
that the NRC would not enter into a Tenancy Agreement with her, unless those 
payments were made. 
17. The alleged verbal agreement to be entitled to purchase the property is not 
reflected in .the Tenancy Agreement or in any of the letters written by LA to the 
NRC. There was no evidence that the person with whom she allegedly made the 
agreement, the Manager of Evictions, was authorized or had the legal capacity to 
bind the NRC to a sale agreement. This manager was not called by LA to give 
evidence of the alleged agreement. There was no evidence supporting an 
agreement to sell Flat 1, or to sell Flat 2 which did not form part of the Tenancy 
Agreement. There was no evidence of any conduct by the NRC consistent with an 
agreement to sell. 
18. To establish the existence of a contract, LA had to establish 3 elements - 
that there was a agreement between the parties, a mutual intention to create legal 
relations which includes the element that each party must have the capacity to enter 
into the contract, and support of the agreement with consideration (Chitty on 
Contracts, 2ih edition, 1994). To establish if these elements exist, LA has to show 
that one party made an offer which was clear and precise in its terms, which was unconditionally accepted by the other party, and valuable consideration was given. 
(Shell PNG Ltd) v Speko Investment Ltd (2004 PGSC 16) and Steven Naki v AGC 
(Pacific Ltd) (2005 PGNC 163). 
19. LA has not shown that the NHC made an offer which was clear and precise 
in its terms. She has not shown that valuable consideration was given for such an 
offer. She has not shown that NBC had an intention to create legal relations, and 
has not shown the element that the person allegedly making the offer had the 
capacity to enter into the contract. 
20. LA therefore failed to produce sufficient evidence to prove on the balance of 
probabilities that she had either a verbal or written agreement with the NHC 
entitling her to purchase the property, or to remain in occupation of the property 
after the termination of the tenancy. 
21. Having failed to establish her claim, LA is not entitled to any of the relief 
sought in WS 1828 of 20 15. 
OS 499 OF 2018 
22. I refer next to OS 499 of 20 18. WH has produced evidence that it is the duly 
registered proprietor of Section 95 Lot 6 Hohola. Pursuant to Section 33 of the 
Land Registration Act, the registered proprietor holds the title free from all 
encumbrances except, relevantly, fraud. Cases such as Papua Club Inc v Nusuam 
Holdings Ltd (No.2) (2004) N 2603 and Koitachi Ltd v Walter Schnaubelt and 
(2007 PGSC 11) have held that in order to amount to fraud under Section 33, it 
must be actual fraud or of the registered proprietor. 
23. LA alleges actual fraud against WH, on the grounds that WH was not an 
incorporated company at the date of the transfer, the transferee's signature was in 
Chinese writing, and that the change of name from Wen Holdings Ltd to Wen's 
Holding Ltd was fraudulent. 
24. LA also alleges actual fraud against NHC by way of a cross-claim. She 
alleges that the NHC falsely represented to her that the property was unfit for 
habitation, that the NBC knowingly sold it to an unregistered company with no 
company seal, that NRC did not carry out the due diligence checks on WH, that the purchase price was not paid, and the correction to the name and the title was fraudulent.
25. LA was not a party to the contract of sale for the property, did not at any 
time have an interest in the property, and has no standing to challenge the validity 
of the contract for sale of the property. 
26. Order 8 Rule 14 of the National Court rules provides that in a defence, the 
party pleading shall plead specifically any matter or fact showing illegality which 
is alleged to make the Plaintiffs' case not maintainable. LA has not pleaded any 
fact or matter showing that the contract of sale was illegal under the National 
Housing Corporation Act. She has not pleaded any fact or matter showing that the 
contract was illegal under the Land Registration Act, and has not pleaded any 
specific breaches of the Land Registration Act showing illegality in the registration 
process. 
27. LA produced no evidence to refute the Condemnation Certificate issued by 
Chief Health Surveyor or any other evidence that the property was not unfit for 
habitation. She produced no evidence that the NRC was obliged to and had failed 
to do due diligence checks. She did not identify any law preventing a signature 
being signed in the language of the signer. She produced no evidence to contradict 
WH's evidence of copies of the bank cheque and NRC receipt for payment of the 
purchase price. She produced a copy of an online search dated 4 February 2016 
showing no results for a search of Wen Holdings Ltd. This showed only that there 
was no result for a search on that day. It was not sufficient to rebut the copy of the 
Certificate of Incorporation produced by WH showing that WH was incorporated 
with Company no. 1-104182 on 24 October 2014. There was evidence that WH 
had a company seal, which was on the Miscellaneous Application. 
28. LA produced no evidence from the Lands Department or anyone else that 
incorrect procedures had been followed in the correction of the name of the 
transferee. Even if the procedure had not been correctly followed, it did not have 
any consequence for LA. Any error would have only affected Wen Holdings Ltd. 
There was no suggestion by LA or anyone else that there was another company 
called Wen Holdings Ltd, or of any adverse effect on anyone caused by the error in the name. 
29. None of these matters were in any event sufficient to establish fraud against 
WH. Fraud cannot be mere suspicion or innuendo. There must be evidence of 
gross breaches of the procedures and processes for registration of the title 
tantamount to fraud, or actual fraud. 
30. Having failed to properly plead or produce sufficient evidence to prove on 
the balance of probabilities that there was fraud by either WH or the NRC, LA has 
not rebutted the presumption of the indefeasibility of title conferred on WH by 
section 33 of the Land Registration Act. 
Conclusion 
31. For these reasons, I make the following orders: 
1. The proceedings on WS 1828 of 2015 are dismissed. 
2.	A Declaration is granted that Wen's Holding Ltd is the registered 
proprietor of the property identified as Volume 68 Folio 141 Section 95 
Lot 6 Hohola. 
3.	Lucy Agen is to give vacant possession of the said property, within 10 
days. 
4. Each party is to pay its own costs. 
___________________________________________________________________

Mukwesipu Lawyers: Lawyer for the Plaintiff/Third Cross Defendant
Donald & Company Lawyers: Lawyer for the Defendant/Cross Claimant