N11664

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS NO.  155 OF 2022

BETWEEN:
DONNY WAMBUN ON BEHALF OF HIMSELF, AND HIS FAMILIES AND as a friend of TITUS WAMBUM
Plaintiff

AND
ANDREW AWGUI in his capacity as LAE REGIONAL MANAGER OF THE NATIONAL HOUSING COOPERATION
First Defendant

AND
NATIONAL HOUSING COOPERATION
Second Defendant

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:
KEN YAPI
Fourth Defendant

LAE: DOWA J
19 MARCH, 3 APRIL 2024; 8 JANUARY 2026 

REAL PROPERTY – plaintiff seeking enforcement of tenancy agreement and for purchase of NHC property-and alternatively for return of money paid for the property-Whether Plaintiff has standing to institute proceedings where transaction was initiated by plaintiff’s late father-whether orders sought are appropriate where subject property has been subsequently transferred to innocent third party-indefeasibility of title under Section 33 of the Land Registration Act-necessity to plead and prove actual fraud under the Torrens Title registration system-
Held: 
Plaintiff had no standing, and that third Party has acquired good title by registration and only remedy is for refund of money paid to the estate of the plaintiff’s late father in the interest of justice. Plaintiff’s claim substantially refused. 

Cases cited

Yooken Paklin v The State (2001) N2212  
Jonathan Mangope Paraia v The State (1995) N1343
Samot v Yame (2020) N8266
Mudge v The Secretary for Lands (1985) PNGLR 387
Mamun Investment v Koim (2015) SC1409
Nondepa Plantation v Balat (2020) SC1927
Timothy v Timothy (2022) SC2282 
 Helai v Samson (2024) SC2625

Counsel

P. Yama for the plaintiff
A Luke for the first and second defendants
S Maliaki for the third defendant
K. Aisi, for the fourth defendant

JUDGMENT

1.	DOWA J:	This is a decision on liability and damages.

Brief Facts

2.	The proceedings relate to a dispute of ownership of property, Allotment 13 Section 155, Lae, Morobe Province.  The Plaintiff alleges that National Housing Corporation, promised to sell the property to his father, late Titus Wambun.  They paid K15,000.00 as part payment and spent more than K 200,000.00 to renovate the property.  They have been residing on the property since 2013.  He alleges NHC failed to keep its promise and has since dealt with the property fraudulently with other parties including the fourth Defendant. The property was transferred to the fourth Defendant on 29th April 2022. The Plaintiff seeks an order that the National Housing Corporation be compelled to issue a tenancy agreement or in the alternative reimbursement of money paid to National Housing Corporation. 

3.	Ken Yapi, the fourth defendant, filed a Defence pleading that he is the current registered owner of the subject property.  He paid K80,850.00 for the property in November 2016.  The transfer of title to him was registered in April 2022 and he says, he has indefeasible title.

Evidence-Plaintiff

4.	By agreement the trial was conducted by way of tender of Affidavits. The Plaintiff relies on the following Affidavits:

a.	Affidavit of Donny Wambun filed 19th October 2022-Exh.P1
b.	Affidavit of Donny Wambun filed 29th August 2022 -Exh.P2
c.	Affidavit of Donny Wambun filed 13th April 2023-Exh.P3
d.	Affidavit of Donny Wambun filed 30th October 2023 -Exh.P4
e.	Affidavit of Gwen Taylor filed 30th October 2023-Exh. P5
f.	Affidavit of Philemon Yama filed 13th March 2024-Exh. P6

5.	This is the summary of the Plaintiff’s evidence. Between 2012 and 2013 the Plaintiff’s late father held discussions with the first Defendant for the outright purchase of the NHC property. On 19th April 2013, the Plaintiff’s late father made a deposit for the Allotment 13 Section 55, Taraka, Morobe Province, initially for tenancy and eventually for the outright purchase of the property. The first Defendant advised late Wambun that he would arrange for the documents to formalize the agreement.  First and second Defendants did not formalize the agreements for tenancy and or the purchase. Late Titus Wambun passed on early 2014. The Plaintiff says he has since occupied the property and made several attendances on NHC but were unsuccessful. Meanwhile, the Plaintiff says his family spent more than K200,000.00 to renovate the property.

6.	Plaintiff testified that despite the undertaking, NHC sent notices in the name of the previous tenants, Wendy and Wini Painango to vacate the property. The Painangos left the premises many years back and the Plaintiff and his family were occupying the property.  The first and second Defendants removed the Plaintiff from the property in or around October 2021.  Plaintiff eventually learnt that the property was transferred to Ken Yapi, the fourth Defendant, in April 2022.  Plaintiff deposes he approved by the Office of Public Trustee of Papua New Guinea to pursue this matter. Notice under Section 5 of the Claims By and Against the Sate Act was duly served prior to commencing these proceedings.

Evidence of First and Second Defendants 

7.	The first and second Defendants rely on the following two affidavits:

a.	Affidavit of Andrew Augwi filed 1st September 2022-Exhibit 1D1
b.	Affidavit of Andrew Augwi filed 30th October 2023-Exhibit 1D2

8.	Augwi deposes that NHC was the registered proprietor of the subject property until it was transferred to the fourth Defendant in April 2022. The Plaintiff was not a tenant of NHC. The initial authorized tenants of the subject property were Wendy and Wini Painango who occupied the property under the tenancy agreement as of 2007. They defaulted on the rentals and by 2020, the rental arrears reached K 97,152.00. NHC issued eviction proceedings and obtained eviction orders in October 2021. The Painagos have since vacated the property.  

9.	Meanwhile, NHC has sold the property to Ken Yapi, the fourth Defendant under NHC’s Cash Sale Scheme. Yapi expressed his interest in November 2016. The property was then sold to him for K 80,000.00. The Transfer of Tile was registered on 29th April 2022.

10.	In respect of the Plaintiff’s assertion of a deposit of K 15,000.00, Augwi deposes that Late Titus Wambun paid the money without following proper procedure under the NHC Cash Sales Scheme.   Late Titus Wambun did not express an interest in writing to buy the property, nor did he not receive any offer from NHC to purchase the property. There was no formal written agreement between late Wambun and NHC for the sale of the property to him. There was also no tenancy agreement with late Wambun. There were existing tenants on the property and the late Wambun was not an approved tenant. He does not recall any dealings with the Plaintiff. The Plaintiff is a total stranger who claimed to be a tenant only after the evictions were completed on 25th August 2022.

Evidence of Ken Yapi, the fourth Defendant. 
11.	The fourth Defendant relies on the following Affidavits:

a.	Affidavit of Ken Yapi filed 30th September 2022- Exhibit 2D1
b.	Affidavit of KenYapi filed 9th October 2023- Exhibit 2D2

12.	Yapi deposes he is the registered owner of Allotment 13 Section 155, East Taraka, Lae, Morobe Province. He expressed interest with NHC to buy the subject property in November 2016. The property was sold to him for K 80,000.00. He paid for the property. He waited for a long while for NHC to complete the sale. The title was not transferred to him until April 2022 when it was eventually registered in his name. Yapi deposed that the Plaintiff is not a tenant nor the one who paid the K15,000.00 to NHC.

Issues

13.	The issues based on pleadings, evidence and submissions are: 

a.	Whether the Plaintiff complied with mandatory notice under section 5 of the Claims By and Against the State Act.
b.	Whether the Plaintiff has standing to institute the proceedings.
c.	Whether the Plaintiff is entitled to the refund of the funds paid for the subject property.

Burden of Proof

14	The burden of proving the claim rests on the Plaintiff and he must discharge the burden on the balance of probabilities. Refer: Yooken Paklin v The State (2001) N2212,  Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

a.	Whether the Plaintiff complied with mandatory notice under section 5 of the Claims By and Against the State Act.

15.     Counsel for fourth Defendant submitted that the Plaintiff did not give notice of claim within six months prior to filing the proceedings. Counsel submitted that the cause of action took place in 2013 and the notice of claim was given in May 2022, which was out of time.

16.     It is trite law that the mandatory six months’ notice runs from the date of cause of action. An action for a simple contract or tort shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued. The cause of action can accrue on a specific date or recur on subsequent dates or a series of occurrences: see Wialu v Andreas [2020] PGSC 60; SC1970, Habolo Building & Maintenance Ltd v Hela Provincial Government [2016] PGSC 67; SC 1549; and Public Curator of Papua New Guinea v. Kara [2014]. PGSC 58; SC1420.
17.     In the present case, although the K15,000.00 was paid on 19th April 2013, the first and second Defendants did not do anything towards formalizing any sale of the property with the Plaintiff’s late father. Plaintiff was still waiting for NHC’s action until the property was eventually sold and transferred to the fourth Defendant on 29th April 2022. In my view, the cause of action commenced on 29th April 2022 and not before that date. Notice under Section 5 needed to be sent by 29th October 2022.  Thus, notice of claim being served on 13th May 2022 was within the mandatory period of six months.

b.	Whether the Plaintiff has standing to institute the proceedings.

18.     The issue of standing was previously raised by the fourth Defendant in an interlocutory application. I made a ruling then (19th April 2023) which did not exhaustively determine the matter. It is open to the Court to deal with the issue in the light of evidence presented.

19.    The fourth Defendant submits that the Plaintiff does not have standing to bring this action in that the arrangement with NHC was made by the Plaintiff’s late father, Titus Wambun and not the Plaintiff.  Plaintiffs’ response is that he was present when his late father, Titus Wambun paid K15,000 for the purchase of the property.  The property was purchased for the family, and they have since moved in and have been residing on the property.  His late father, Titus Wambun, died shortly after paying the deposit.  After his death, the Plaintiff has been chasing up with NHC for the formalization of the transfer of the property to no avail.
  
20.   Apart from the receipt dated 19th April 2013, the Plaintiff has not produced any other documentary evidence that he is the tenant of NHC. Neither he nor his late father had a tenancy agreement with NHC. The existing tenants were Wendy and Wini Painango who were eventually evicted from the property by an eviction Order from the Lae District Court issued in October 2021.It is possible that the Plaintiff may have been occupying the property, but that would be unauthorized.

21.     The person that had an equitable right was his late father, Titus Wambun, by virtue of his payment of K 15,000.00. The deceased died intestate. On his death, the late Titus Wambun’s estate reverted to the Office of Public Trustee of Papua New Ginea for management. Section 44 of the Wills, Probate and Administration Act, provides that unless probate or administration is granted, the property of a deceased person vests in the Public Curator. Although the Plaintiff is permitted by his family and the Office of Public Trustee to bring this action, he is not the legal representative of the estate. He is not the official administrator of the estate of late Titus Wambun either by grant of Probate or Administration. In my earlier ruling this was adverted to the Plaintiff, but the Plaintiff took no further action in getting the Public Trustee involved. In the end, I find the Plaintiff does not have standing to institute these proceedings. 

22.    The result the relief sought for compelling the first and second Defendants to enter into a tenancy agreement with the Plaintiff is refused.

Indefeasibility of Title.

23.    There is another reason why the Plaintiff shall not be granted the relief sought.
The Fourth Defendant is the registered proprietor after   purchasing the property from NHC and has an indefeasible title.  

24.    The fourth Defendant produced, a copy of the State Lease title registered in his name, issued under State Lease, Volume 6 Folio 71 over the subject land, Allotment 13, Section 155, Lae. Section 32 of the Land Registration Act provides that where an instrument of title describes a person as the proprietor of an estate or interest, that person is the registered proprietor of the estate or interest.  Section 33 of the Land Registration Act provides that a registered proprietor of an estate or interest holds it absolutely free from all encumbrances except for fraud and other exceptions set out in (1)(a) to (f). 

25.    Although the Plaintiff submitted that the property was transferred to the fourth Defendant by fraud, the Plaintiff was and is not the sitting tenant to base a claim under Sections 37 and 38 of the National Housing Corporation Act. He has no first right of refusal.  The legitimate people having a right to complain would be Wendy and Wini Painango. NHC has a discretion to dispose of its properties to anyone under the Cash Sale Scheme subject to the provisions of the National Housing Corporation Act and in accordance with law. Finally, the transfer and registration of title involve the Registrar of Titles and the Lands Department. To disturb the transfer and registration of title (indefeasibility of title) under the Torrens Title registration system, Plaintiff has the onus to plead and prove fraud. The preponderance of judicial pronouncements by the Supreme Court these days is that actual fraud be proved against the registered title holder to disturb indefeasibility of title accorded by Section 33 of the Land Registration Act. See Mudge v The Secretary for Lands (1985) PNGLR 387, Mamun Investment (2015) SC1409, Nondepa Plantation v Balat (2020) SC 1927, Timothy v Timothy (2022) SC 2282 and Helai v Samson (2024) SC2625.

26.    The Plaintiff did not sufficiently plead and prove actual fraud against the registered proprietor, the fourth Defendant. 

c.	Whether the Plaintiff is entitled to the return of the money paid for the subject property 

27.    The Plaintiff claims in the alternative that the first and second Defendants refund money paid for the purchase of the property and for the renovation done to the property. The Plaintiff’s father paid K 15,000.00 on 19th April 2013. A receipt was issued for the payment. The receipt expressly stated that the purpose for the payment was for the purchase of the property described as Allotment 13 Section 155, Lae. Mr. Augwi who dealt with the Plaintiff’s father, has not disputed the payment but stated that the receipt was erroneously recorded for a purchase. I reject the explanation given by Augwi. The record speaks for itself. The payment was a deposit paid for the purchase of the property. The First and second Defendants provided no explanation why they received the K 15,000.00 and did not account for it. The estate of late Titus Wambun is entitled to a refund. Otherwise, it will amount to an unjust enrichment by NHC. I will invoke the powers under Section 155(4) of the Constitution and Order 12 Rule 1 of the National Court Rules to order that the K 15,000.00 be refunded with 8% interest to the estate of late Titus Wambun.

28.    The second claim is for the refund of K 200,000.00 spent on the renovation of the property. The Defendants disputed the Plaintiff’s claim. The Defendants gave evidence that no renovation was done on the property. The onus is on the Plaintiff to prove the claim. The Plaintiff gave evidence that the renovation was funded by Capital Land Limited, a subsidiary of Papindo Group of Companies. The money was part of the purchase price for a property the late Titus Wambun sold to Capital Land Ltd. The Plaintiff sought to rely on receipts and correspondence from Papindo Trading Ltd. I note there are clear discrepancies. The two cheques totaling two hundred thousand kina (K200,000.00) relied on by the Plaintiff were dated 27th February 2013 and 19th April 2013. At that time the Plaintiff had not yet occupied the NHC property.  Secondly the receipt issued for payment by Papindo was dated 7th September 2015 and in the name of the Plaintiff. There are no invoices and receipts issued for the renovation work. There are no bank statements for the transactions. I have doubts that the renovations were ever done. The claim for renovations is refused.  

What orders should the Court make?

29.    Based on my ruling, the following orders shall be made:

1). The reliefs sought by the Plaintiff are substantially refused.

2)	The first and second Defendants shall refund K15,000.00 paid by late Titus Wambun with 8% penalty interest as of 19th April 2013. I have calculated Interest calculated from 19th April 2013 to 8th January 2026 at 8% amounts to K15,267.71. The total amount shall be K30,267.71.

3)	The first and Second Defendants shall pay the K30,267.71 inclusive of penalty interest to the Public Trustee of Papua New Guinea for management and distribution to the beneficiaries. 

Costs

30.    The first and second Defendants shall pay the cost of the proceedings. The first and second Defendants received K15,000.00 from late Titus Wambun. The reason for the payment was for part payment of the outright purchase. The first and second Defendants did not keep their part of the bargain. On learning that the deceased passed away the first and second Defendants should have refunded the money. They gave a false impression to the Plaintiff. They eventually sold the property to the fourth Defendant in 2016, although they were aware that there were sitting tenants and the Plaintiff who had vested interest in the property. They did not give them the right of first refusal. In the circumstances, it is just that the first and second Defendants meet the costs of the Plaintiff and the fourth Defendant.

Orders

31.     The Court orders that:

1.	 The reliefs sought by the Plaintiff’ is substantially refused. 

2.	The first and second Defendant shall pay the estate of late Titus Wambun the K 15,000.00 with penalty interest of K 15,267.71 totaling K 30,267.71. 

3.	The first and Second Defendants shall pay the K 30,267.71 inclusive of penalty interest to the Public Trustee of Papua New Guinea for management and distribution to the beneficiaries. 

4.	The first and second Defendants shall the Plaintiff and Fourth Defendants’ costs be taxed if not agreed. 
5.	Time is abridged. 

Lawyers for the plaintiff: Miles Lawyers	
Lawyer for first and second defendants: NHC Inhouse Counsel          
Lawyer for the third defendant: S Maliaki          
Lawyers for the fourth defendant: Kelly Naru Lawyers