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

Kutupa Services Pty Ltd v Highlands Kakaruk Products Pty Ltd [1995] PGNC 22; N1334 (16 June 1995)

Unreported National Court Decisions

N1334

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

0S 326 OF 1994
KUTUPA SERVICES PTY LIMITED - Plaintiff
V
HIGHLANDS KAKARUK PRODUCTS PTY LIMITED - Defendant

Mount Hagen

Woods J
15 May 1995
16 June 1995

REAL PROPERTY - Contract for sale - possession given - whether surfficient preformance - purchaser defaults - Order for possession to vendor and registered proprietor.

Cases Cited:

McCosker & King v Kuster [1967-68] PNGLR 182

Ningiga v Koavea [1988-89] PNGLR 312

Counsel:

W Duma for the Plaintiff

P Dowa for the Defendant

16 June 1995

WOODS J: The Plaints seeking an Ordn Order for possession of the property known as Portion 523, Milinch of Hagen, Fourmil Ramu, Western Highlands Province and a writ of possession of the property. The Defe has claimed for afor a deca declaration that a valid contract was entered into between the plaintiff and defendant on 21 July 1989 aat the defendant has obtained an equitable interest in the property and the defendant furthfurther claims an order for specific performance.

The issues seem to be:

1. ـ҈ W60; Whetherether a valid contract for the sale of the property between the plaintiff and the defendant was executed.

2. Iw so erethatrtht eec comp completed andd and spec specific performance can be ordered.

3. & Whether the Piaintiff titl titlevacansessi the rty.

The evie evidencedence befo before thre the coue court shrt showed that:

1. ټ T60; The Plaintifthe rereo ietor of the prop property erty as peas per the State Lease Volume 106 Folio 36 the owners copy of which was produced to the Court.

2.&##160;;ټ 89 there were negotiationstions bens betweentween the the parties for the sale and purchase of the property and both parties exd a Contract for the Sale of the property on the 20th November 1991 which required a deposieposit of 20,000 to be paid on exchange and the balance of the purchase price to be paid within 14 days after the Minister’s approval was obtained.

3. & T60; The deposit as required in the contract for sale was not paid by the defendant at the time the con was executed and exchanged.

4. &ـ N6 acti action wasn was taas taken by either party to the contract to have the contract properly stamped in accordance with the provisions of the Stamp Duties Act, it being the responsibility of the purchaser to pay the Stamp Duty.

5. ټ&#N60; ep steps were were taken by either party to the contract to have the contract lodged with the Department of Lands for the requisite approval under the Lands Act. The steps for approval require action by both parties although it is the Vendor’s responsibility to lodge the application.

6. ; There wms sontement wherebhereby the defendant entered into occupation of the the property to operate his business and there was some agreement for theent ooccup fee.; Thes no written documeocumentatintation toon to supp support tort this agreement. There is no signd stamped mped lease.

7. There is no evidence of any variation to the original contract for the purchase price to be on terms or by instalments nor for the operation of the occe occupation fee to be counted as terms payments off the purchase price. Whilst there was a suggesoion of payment over 10 years in the 1989 negotiation this was not contained in the 1991 contract.

8. &##160;; The Defendant has has been in occupation of the property since before 1991 and has has paid certain amounts by way of occupafees uch pts ceased some time ago. There evidence as to how how these occe occupatiupation paon payments were treated in the accounts of the defendant,whether capital payments off the purchase or whether as lease payments and therefore costs of running the business for taxation and balance sheet purposes.

9. ټ&##160; I60; In Apri April 1994 the Defendant requested the Plaintiff to execute a fresh contract for sale of the property at a much reduced price to the original price in the 1991 contract

W there appears tors to have have been negotiations and firm intentions to enter into a contract for the sale of land the purchaser never completed the exchange of contracts provided for in clause 5 of the contract by payingposit, nor payingaying the stamp duty, nor taking the appropriate steps to assist with the seeking of the approval of the Minister for Lands. The contractale hver been been stamped so in accordance with the provisrovisions of the Stamp Duties Act it cannot be pleaded or presented in cou160; Further as the contract has not been approved by the Minister for Lands it can hcan have nce and eand effect. Of course jecause there hare has been no compliance with the requisite legislation does not mean that it is in equity devoid of all ef&#160 McCosker & King v Kuster [1967-68] PNGLR 182R 182 and Ningiga v Kuavea [1988-89] PNGLRPNGLR 312. However the evidence showt that the defendant has deliberately failed to comply with critical prerequisites of the agreement namely the paying of the depin accordance with the terms of the contract, nor made any offers or attempts to join the vthe vendor with the seeking of the approval, nor made any attempt to have the stamp duty paid. Then 94 the Defendant acte acted as if the contract of 1991 was abrogated by seeking a fresh contract for the same land. So it is noif the plaintifintiff/vendor has refused to complete or to rm its obligations, it is t is the defendant who has refused to comply with the requirements and terms of the contract. So thist is e to give any any effy effect to the intent of the agreement and the contract as it stands is unenforceable as the defendant haled to comply with the terms and has acted as if the original contract has been rescinded oded or abrogated.

Whilst there was a valid agreement for the sale of land entered into in 1991 the defendant by its failures to comply with the terms cannot seek enforcement of the agreement and instead has acted to rescind that contract and cannot now seek its enforcement.

Whilst the defendant may have had some agreement for some kind of leasehold possession and occupation of the property there has been no document presented to this court evidencing the terms of that occupation so such occupation can only be at will or by consideration of the occupation fees, however as the occupation fee is no longer being paid the occupation can only be at will. Whils Defendant talks of h of having effected improvements to the property to support its argument that there was more than a lease tis no evidence of any fixed or permanent landlord’s improvements. There is only only refe toce to livestock on the property and other suchlike tenants improvements such as if running a business on the property. The creferred to can clearclearlclassified as running costs for business or taxation purposurposes not as payments of capital as if for a purchase. The plaintis for requestedested vacant possession of the property for for the failure to pay the occupation fee and as the registered proprieto plaintiff is entitled to such possession.

I order that there is no enforceable cont contract of sale between the parties. I order that the defendant give up vacant possession of the property to the Plaintiff forthwith.

Lawyer for Plaintiff: Blake Dawson Waldron

Lawyer for Plaintiff: P Dowa