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Soroda v Atkinson [2019] PGNC 307; N8020 (8 August 2019)

N8020

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 1 OF 2019

BETWEEN:
AI’ULU SORODA
Plaintiff

AND:
JOHN ATKINSON
Defendant

Waigani: Thompson J
2019: 30^th July, 8^th August

DECLARATORY RELIEF - principles - declaration of ownership

Cases Cited:

Nil

Counsel:
Kipes Law, for the Plaintiff
O’Briens, for the Defendant

8^th August, 2019

1. THOMPSON J: BACKGROUND: On 2 January 2019 the Plaintiff filed the Originating Summons seeking various types of declaratory relief to resolve issues which had arisen with the Defendant, following the death of Jefferson Soroda (“JS”) on 3 April 2012 and Miriam Soroda (“MS”) on 8 August 2018.

2. The business affairs and properties of JS were not well documented prior to his death, and both he and his wife died intestate. The Plaintiff says that she is the daughter of the deceased persons, and therefore entitled to share in their estates pursuant to the intestacy provisions of the Wills Probate and Administration Act.

3. The basic facts relating to the estate property are set out in the affidavits, but the material is not sufficiently comprehensive to mean that the facts are all uncontested.

4. Essentially, JS and Naisoro Meseko (“NM”) entered into a partnership agreement, whereby each owned an equal share in four business, including the Oro Guest House (“OGH”). The Defendant owned a separate management consultancy business and other businesses.

5. In 1991 the partners entered into a Contract with the Defendant whereby he was employed as manager of three of the partners’ businesses, including the OGH. JS and NM also joined the Defendant in the purchase of four parcels of land in Popondetta, and they were registered as tenants in common in equal shares on the four Certificates of Title, between 1990 and 1995. This meant that they each held a 1/3 share in the four properties, on which there were some existing buildings.

6. On 31 December 1999 the partnership ended, and NM sold his share of the businesses and the four properties to JS, and retired. The Defendant submitted that NM had only sold his share of the business, not the land, but the Agreement dated 10 November 1999 and the other documents specifically refer to both the land and businesses. There was evidence that JS had paid the full purchase price by 2002, and was also making transitional payments to NM from the businesses, although it was unclear if those payments had concluded when JS requested that NM’s interest as tenant in common on the four properties be transferred and registered in JS’ name. The transfers were not registered on the Titles before JS died.

7. The evidence is sufficient to establish that NM sold his 1/3 shares in the land to JS, and that JS was entitled to have the 1/3 interests transferred to him and registered on the titles. After the sale, the Defendant and JS entered into transactions on the basis that JS had acquired NM’s interest, and neither the Defendant nor NM had ever suggested, or taken any steps to assert, that JS had not acquired NM’s interest. The Defendant had never held a majority of the interests in the land, and he has only ever held a 1/3 interest.

8. In 2001 JS terminated the Defendant’s employment as manager. The Defendant issued proceedings claiming damages for breach of Contract, and in 2004, those proceedings were settled by payment of an agreed amount by JS to the Defendant. The termination, legal proceedings and settlement agreement all proceeded on the basis that JS was the sole owner of the OGH and the other businesses, specifically referred to JS and “his guest house business”, and specifically acknowledged that both JS and the Defendant could continue to operate their respective businesses and maintain their respective residences, on the joint properties.

9. Contrary to the Defendant’s assertion, the settlement agreement did not contain any agreement for the payment of rent to the Defendant. The Agreement was only that a total amount would be paid to the Defendant in settlement of his claim for breach of his employment contract, and after setting off various entitlements and payments.

10. At that time, the position therefore was that JS had two-thirds (or 1/3 and NM held 1/3 on constructive trust for JS) and the Defendant had 1/3, ownership of the joint properties, the Defendant was conducting his business from and living on one property, while JS was conducting his OGH business and living on another property, while also paying some rent to the Defendant for the use of part of a building on the property occupied by the Defendant.

11. It is not clear how the Defendant has asserted that the estate is additionally liable to him “for a share of the net profits” from “its usage of my 1/3 of the properties”, in the absence of any reciprocal liability on him to account to the estate for a share of the net profits from his usage of the estate’s 2/3s of the properties.

12. On 3 April 2012 JS died, and on 8 August 2018 MS died. As both persons died intestate, then under Section 35 E of the Wills Probate and Administration Act, the estate may be distributed in accordance with custom or under S84(1),and under S44 until the distribution, the property vests in the Public Curator. Under either process, the estate will prima facie go to the children of the intestates.

13. The Plaintiff conducted the OGH business, and the Defendant continued to conduct his businesses, from the joint properties.

14. No one applied to the Public Curator for Letters of Administration of the estate, until the Plaintiff applied in October 2018. This application appears to have been prompted by the Defendant having issued summary ejectment proceedings against her in September 2018 in the District Court. In those proceedings, the Defendant stated in a Complaint that he was “the owner” of the business operations and assets of the Oro Guest House and property, including a motor vehicle. On 15 November 2018 he obtained an eviction order against the Plaintiff from the OGH and from all four properties. On 7 December 2018 he obtained a Warrant to evict the Plaintiff on the stated basis that he was “the owner” of the OGH property.

15. There is no doubt that the Defendant is “a” but not “the” owner of the four properties, on the basis of his 1/3 interest. Since those proceedings were issued, the Defendant no longer alleges that he owns the OGH business, which was clearly owned by JS, and was lawfully being operated as a business from the premises. It is impossible to see the basis on which the Defendant could have informed the court that he was the owner of the 4 properties, the OGH, its business and its assets, including its motor vehicle. He repeated the statements in his letter to the Plaintiff and others, in particular his letter of 13 October 2018 in which he describes himself as “the owner” of the land and buildings, says that no one has his permission to run the Guest House business on his property, and demands that the Guest House business immediately cease. However, the Defendant was only ever a manager of the OGH business until his termination, and was not ever its owner.

16. Following the Plaintiff’s request for the Public Curator to administer the estate, the Public Curator has put up a sign on the Oro Guest House saying that it is under trust management by the Public Curator, and it is still being occupied and managed by the Plaintiff.

17. These, then, are the circumstances which have led to the issue of these proceedings seeking declaratory relief.

Issues

18. In order to obtain a Declaration, the factors which are required to be established are well-settled, and summarized in numerous cases including Amos Ere v NHC and another (2016) N 6515. The Plaintiff must show:

(a) there must exist a controversy between the parties

(b) the proceedings must involve a right

(c) the proceedings must be brought by a person who has a proper or tangible interest in obtaining the order

(d) the controversy must be subject to the court’s jurisdiction

(e) the Defendant must be a person having a proper or tangible interest in opposing the Plaintiffs claim

(f) the issue must be a real one, not merely of academic interest, hypothetical or one whose resolution would be of no practical utility.

19. The conduct of the parties prior to these proceedings shows that there was a controversy between them as to ownership of the OGH business and properties. This dispute is subject to the court’s jurisdiction. As a potential beneficiary of JS’s estate, which includes the OGH business, the Plaintiff has a tangible interest in obtaining the relief. By virtue of his previously asserted claim to ownership, the Defendant has a tangible interest in opposing the Plaintiff’s claim. The issue is real, based on facts which have already occurred, and is not merely hypothetical or of academic interest. However, do the proceedings involve a right?

20. Based on the uncontested material, the Plaintiff has a claim to be accepted by the Public Curator as a beneficiary of the estate, and if accepted, she will acquire the right of ownership of some or all of the estate property, including the OGH business and the two-thirds interests in the properties. She therefore has a contingent right to a legal interest in the property, conditional on a future event taking place, namely, her acceptance by the Public Curator as a beneficiary of the estate.

21. Under S53 and 54 of the Adoption Act, when a child has been in the custody of and has been brought up and maintained by persons as their child, in accordance with custom, then the child is deemed to have been adopted by those persons. A certificate of adoption issued by Local Court is conclusive evidence of an adoption, but it is not necessary in order for the adoption to be effective.

22. It has not been disputed that the Plaintiff was in the custody of and had been brought up and maintained by JS and MS, as their child.

23. There was no evidence of JS and MS having many foster children, as submitted by the Defendant. On the contrary, only Ricky Nadu has claimed to be a foster child of JS and MS, but he has parents who are not JS and MS, and merely says that he was “introduced” to JS and MS when he was 21, and after that began living and working there. That does not make him a foster child. No other person has claimed to be a child of the deceased.

24. As a child of JS and MS, and where there are no surviving spouses or parents of the deceased, the Plaintiff has a reasonable likelihood of being certified as entitled to all or part of the estate. The Public Curator has legal rights over the estate property, and could have issued these proceedings. He did not do so, but has been content to permit the Plaintiff to continue to remain in the property and operate the OGH business. No other person is asserting a right greater than the Plaintiff to live in and operate the OGH business on the property.

Conclusion

25. The Plaintiff’s position as a child of JS and MS, is sufficient to give her an equitable interest in the property which forms part of the estate.

26. The Defendant, on the other hand, has no claim to a right, entitlement or interest in any of the property which forms part of the estate. He is the owner of 1/3 of the 4 properties, but this does not form part of the estate. He is not the owner of the OGH business or its assets, including its motor vehicle, which does form part of the estate. His claim to be owed some rental monies makes him a creditor of the estate, but does not give him an interest in the estate.

27. In the absence of any written agreement as to how the 4 properties are to be occupied by the owners, a 1/3 owner has no legal basis to eject the two-thirds owner/s. Both JS and the Defendant were entitled under S16 of the Land Registration Act to have a Certificate of Title. Under S146 of the Act, a Certificate of Title is an absolute bar to an action for ejectment. The Plaintiff has a contingent right to become the person named in the Certificate of Title in place of JS, and this gives her an equitable interest in the land.

28. The Defendant is plainly not “the registered proprietor” of the land. He is “a registered proprietor”, with a minority share, and has no better interest than the other registered proprietor/s.

29. The Defendant’s assertion is not correct that he is entitled to “exclusive and absolute possession and use of the land”. That right belongs to the registered title holder, which is both JS and the Defendant. The controversy which has arisen between the parties, has arisen because of the Defendant’s conduct in attempting to take exclusive possession of the land, despite being only a 1/3 owner of the land, and not an owner at all of the OGH business.

30. It is finely balanced, but I find that the Plaintiff has sufficient standing to seek declaratory relief relating to her equitable interest in the property to the extent necessary to preserve it. However, she is not entitled to most of the declaratory relief which she has sought. For instance, in para 3, she seeks a declaration that “the Defendant is not the owner of the Oro Guest House because his interest was paid off by JS”. In fact, the Defendant never had an interest in the OGH, and the payment made to him by JS was simply for breach of the Management Contract. The Court also cannot make the declarations sought in paras 4 and 5, which are matters for other or criminal proceedings.

31. I therefore make the following orders:

(a) A Declaration is granted that the estate of Jefferson Soroda is an owner as tenant in common of the land and buildings on Vol 6 Fol 1298 Lot 11 Sec 5, Vol 4 Fol 133 Lot 16 Sec 5, Vol 116, Fol 49 Lot 33 Sec 5, and Vol 38 Fol 9346 Lot 34 Sec 5, Popondetta.

(b) A Declaration is granted that the Defendant is entitled to deal with his 1/3 interest as tenant in common of the said land and buildings.

(c) A Declaration is granted that the estate of Jefferson Soroda is the owner of the business known as the Oro Guest House

(d) A Declaration is granted that pursuant to S44 of the Wills Probate and Administration Act, the property of Jefferson Soroda and Miriam Soroda, including the business known as the Oro Guest House, is vested in the Public Curator until administration of the estates has been finalized.

(e) Each party is to pay its own costs.
__________________________________________________________________Kipes Law: Lawyers for the Plaintiff
O’Briens: Lawyers for the Defendant