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Koroguen v Wagen [2008] PGNC 108; N3422 (24 July 2008)

N3422

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 144 OF 2001

PIUS KOROGUEN
Plaintiff

V

CHRISTINE WAGEN
Defendant

Kimbe: Cannings J
2008: 18 April, 24 July

JUDGMENT

LAND – unjust enrichment claim by caretaker of agricultural lease against registered proprietor of lease – claim for damages to compensate caretaker for costs and effort involved in developing the land.

The defendant was the registered proprietor of an agricultural lease but the plaintiff was in occupation of it for 21 years before the defendant obtained an eviction order against him. The defendant sold the land and the plaintiff then brought an unjust enrichment claim against the defendant, claiming damages to compensate him (the plaintiff) for the costs and effort involved in developing the land.

Held:

(1) To succeed in an action for unjust enrichment, a plaintiff must prove three things:

• that the defendant has been enriched by the receipt of a benefit; and
• that the defendant has been enriched at the plaintiff’s expense; and
• that it would be unjust to allow the defendant to retain that benefit.
  

(2) The plaintiff failed to establish any of the elements of the cause of action.

(3) The plaintiff was a tenant at will who assumed the risks of any person who comes on to land without legal title and takes it upon themselves to spend money and effort improving the land.

(4) There was no unjust enrichment on the part of the defendant as she had not received any money which as a matter of law or conscience she was not entitled to.

Cases cited

The following cases are cited in the judgment:
Ansett Transport Industries Pty Ltd v Reginald Walter Eginton (1971) No 645
Aquip Pty Ltd v Gastrouevo [1987] PNGLR 491
Breckwoldt & Co (New Guinea) Pty Limited v Harold Gnoyke (No 2) [1975] PNGLR 195
Maip Pty Ltd v Ambra Coffee Estates Pty Ltd [1995] PNGLR 25
Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159

Abbreviations

The following abbreviations appear in the judgment:
CJ – Chief Justice
Co – Company
Edn – edition
J – Justice
K – Kina
Ltd – Limited
No – number
OPIC – Oil Palm Industry Corporation
PNGLR – Papua New Guinea Law Reports
Pty – Proprietary
v – versus
WS – writ of summons

STATEMENT OF CLAIM
This was a claim for damages for unjust enrichment.

Counsel
G Linge, for the plaintiff
P Kaluwin, for the defendant

24 July, 2008

1. CANNINGS J: This is a case about land and families. The plaintiff, Pius Koroguen, and the defendant, Christine Wagen, are cousins. Their fathers, both deceased, were brothers. Pius and Christine and their families come from East Sepik Province but settled in West New Britain a long time ago.

2. Christine was the registered proprietor of an agricultural lease at Sarakolok, near Kimbe, but Pius was in occupation of it for 21 years before Christine obtained an eviction order against him. Christine sold the land and now Pius is suing Christine, claiming damages to compensate him for the costs and effort involved in developing the land.

3. Pius is making what his lawyer, Mr Linge, has labelled an ‘unjust enrichment’ claim against Christine. He is saying that Christine allowed him to occupy the land for a long time, causing him to believe that it was safe for him to stay and spend his own money improving the land, then she changed her mind, had him evicted and enriched herself unjustly by selling the land at a price that was boosted by all the work he had put into developing the land.

4. The case raises the issue of whether someone who occupies land without any legal right of occupation can sustain a claim against the owner of the land who allowed them to stay there for some time before forcing them to leave.

BLOCK 789, SECTION 1, SARAKOLOK

5. The land in question is block No 789, Section 1, Sarakolok, an oil palm settlement near Kimbe. Christine’s father, Wagen Yanauli, was granted an agricultural lease over the block in 1969 and moved his family from East Sepik to West New Britain to live on and develop it. Christine was six years old at the time.

6. Wagen planted oil palm on part of the block but not long after, in 1971, he died. One of his brothers, Saun, came on to the block and looked after Christine and her mother but in 1973 Christine and her mother moved out and the block was left idle.

7. In 1975, title to the block was transmitted to Christine under the Land Registration Act (even though she was still a young girl and not in occupation of it). She was formally named as registered proprietor of the agricultural lease. In effect, she owned the block from then on. Pius has never disputed Christine’s ownership of the block or her right to sell it.

8. In 1979, Saun arranged for another of the deceased’s brothers to come from East Sepik and move on to the block. That other brother is Pius’s father (name not provided), who moved in with his family, including Pius, then aged 19, and another son, Raphael Koroguen.

9. Fast-forward to August 2000 when Christine obtained an eviction order against Pius in the Kimbe District Court. Pius complied with the order, left the block, then Christine sold it. There are two versions of what happened in the intervening 21 years.

10. Pius gave evidence that he took out a loan, built a house on the block, did a lot of work on the block (which was in a bad state when he moved in, with no one looking after it) and spent a lot of time and money developing it. Christine showed no interest in the block, did not invest any money in it and did not offer any help. She lived in Kimbe and never visited him even though he asked her to come. When he moved on to the block the oil palm price was low, only about K80.00 per tonne, and now it is more than K400.00 per tonne. Christine waited until the price increased and he had paid off the loan before she took him to court; and she was incited by the neighbours with whom he had had a long-running dispute. This version of events was supported by Raphael, who is comfortable with Pius taking their cousin, Christine, to court as she is the one who got them evicted from the block and what she did was not in accordance with their East Sepik custom. They had helped her out with school fees but she showed no gratitude or thanks, said Raphael.

11. Christine’s side of the story is different. She says that her father died, her mother remarried and she and her mother tried to negotiate with Pius’s father (who died in 1994) to sort out something about the block. Everyone knew that she, Christine, was the owner but Pius and his family were unwilling to allow her to occupy the block or share the proceeds of the oil palm harvest. She and her mother asked for financial assistance many times but Pius only gave them excuses. Pius’s father at one stage opened a bank account in her name but he was the signatory and he only put K100.00 into it. She sought the assistance of OPIC and they attended a mediation at Nahavio but Pius ended up assaulting Saun and her relationship with Pius did not improve after that. After she had Pius and the others evicted, she did not move on to the block as they had made her lose interest in it. She sold it for K15,000.00. The way she sees it, whatever money Pius spent on the block was of his own free will and he knew all along that he did not own it. He benefited from it for 21 years, did not share the proceeds with her, she and her children have been left to suffer; and now he has the gall to sue her for damages.

WHAT ARE THE ELEMENTS OF AN UNJUST ENRICHMENT CLAIM?

12. The plaintiff must prove:

1. that the defendant has been enriched by the receipt of a benefit; and
   
2. that the defendant has been enriched at the plaintiff’s expense; and
   
3. that it would be unjust to allow the defendant to retain that benefit.
   

13. If the plaintiff proves those three things the court can award a remedy by way of restitution to the plaintiff. A common example of unjust enrichment is where a person has paid money under a mistake of fact to another person who has no right in law or conscience to receive it (Ansett Transport Industries Pty Ltd v Reginald Walter Eginton (1971) No 645; Breckwoldt & Co (New Guinea) Pty Limited v Harold Gnoyke (No 2) [1975] PNGLR 195; Aquip Pty Ltd v Gastrouevo [1987] PNGLR 491; Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159 and see generally Goff & Jones, The Law of Restitution, 2nd ed, 1978, pp 13-14).

14. The plaintiff has not proven any of the three elements of an unjust enrichment claim.

15. First, there is no evidence that the defendant, Christine, received any particular benefit when she sold the block. The only evidence before the court of what she got for the block is her oral evidence that she sold it for K15,000.00. There is no evidence that that price was a good price and that the value of the land was boosted by the investments made by Pius. I can see that that might be a reasonable inference to draw from the facts but I think the court has to insist on a plaintiff proving the elements of his cause of action on the balance of probabilities and, here, Pius’s evidence falls well short of the mark.

16. Secondly, even if Pius had proven the first element, he has failed to prove that Christine gained at his expense. Sure, he may have invested some money in the block and worked hard to clear the land and develop the block, but it seems to have provided him and his family with a livelihood for 21 years so has he really lost anything? I cannot conclude that any of Christine’s gain was at Pius’s expense.

20. Finally, Pius has not proven that justice requires that he be compensated by Christine or that she make restitution to him. There is perhaps an argument that under East Sepik custom he had a greater right to the land than Christine so Christine should have to compensate him by paying him some of the proceeds of the sale. However, that sort of argument was not developed during the course of the trial and, in any event, the land at the centre of this dispute is State land, not customary land, so custom has a limited role to play in resolving this case. The most important consideration is that Pius was a tenant at will who assumed the risks of any person who comes on to land without legal title and takes it upon themselves to spend money and effort improving the land (Maip Pty Ltd v Ambra Coffee Estates Pty Ltd [1995] PNGLR 25). Christine made a neat point in her evidence when she said that Pius had spent money on the land of his own free will, knowing that he did not own it. A reasonable person in that position knows the risks. They cannot expect the law to bend over backwards to help them if the legal owner of the land exercises her rights. There was no unjust enrichment on the part of Christine as she had not received any money which as a matter of law or conscience she was not entitled to.

21. The plaintiff, Pius Koroguen, has failed to prove his case and therefore his claim for compensation must be dismissed.

ORDER

(1) The plaintiff’s claim for relief is dismissed in its entirety.

(2) The plaintiff shall pay the costs of these proceedings to the defendant on a party-party basis, to be taxed, if not agreed.

Orders accordingly.

Linge & Associates: Lawyers for the plaintiff
Public Solicitor: Lawyer for the defendant