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Finance Corporation Ltd (trading as Fincorp Ltd) v The Public Trustee of Papua New Guinea [2024] PGNC 418; N11094 (23 October 2024)

N11094

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 196 OF 2023

BETWEEN:
FINANCE CORPORATION LIMITED TRADING AS FINCORP LIMITED
Plaintiff

AND:
THE PUBLIC TRUSTEE OF PAPUA NEW GUINEA
First Defendant

AND:
JACOB POPUNA
Second Defendant

AND:
AUTOWRECKS LIMITED
Third Defendant

AND:
JOY MICHAEL
Fourth Defendant

AND:
JUNIOR BILL AMBONE
Fifth Defendant

Waigani: Coates, J
2024: 23^rd October

MORTGAGES - Securities – Mortgaged land – Mortgagee exercising right of possession – Notices given before death - Deceased estate under administration – Adjournment sought – No proper basis for adjournment - Claim case was not properly before the Court – Claim that the secured mortgaged land had to be administered under Wills Probate and Administration Act – Claim that securities are outside estate under administration – Orders made for plaintiff.

Cases Cited:

Papua New Guinean Cases

Ok Tedi Mining Ltd v Niugini Insurance Corporation (No.1) [1988-89] PNGLR
Brothers Rugby Football Club Inc v Port Moresby Rugby Football Union (2004) N2537
SCR No2 of 1981 [1981] PNGLR 150
Bank of the South Pacific Limited v The Public Curator as administrator of the Estate of the late Geno Iari and Others [2003] PGNC 152; N232

Overseas Cases

Aon Risk Services v Australian National University HC [2009] HCA 27

Counsel:
Mr Pokup Kepiniu, for the Plaintiff
Mr Jeffery Sailas Ambone, for the Fourth Defendant

DECISION

23^rd October 2024

1. COATES J: The financier Fincorp seeks to recover its unpaid mortgage loan and interest from a deceased’s estate, which is under administration by an executor.
   
2. To do so, Fincorp, the plaintiff, seeks a number of declarations relating to the enforcement of mortgage recovery proceedings it had launched before the registered owner of the land, Mr Clement Michael, died.
   
3. The land over which a registered mortgage is identified as Allotment 02, section 275, Hohola (Gerehu), National Capital District, subject to State Lease Volume 79 Folio 118.
   
4. I will refer to the land as the mortgaged land.
   
5. Mr Clement Michael died on 26 November 2021.
   
6. I will refer to Mr Michael as the deceased.
   
7. The deceased left a will, leaving the mortgaged land to his wife, Mrs Joy Michael, the fourth defendant.
   
8. She states she is the executor with the Public Trustee, but on examining the deceased’s will, it is the Public Trustee who is the executor, and of course, that is why the Public Trustee’s office and the Public Trustee, Mr Jacob Popuna, are named as first and second defendants.
   
9. It may be the case that the Public Trustee is overseeing the administration with Mrs Michael performing many duties, but in any case, I am satisfied that the deceased’s will left the mortgaged land to Mrs Michael and that administration, subject to this application, is being carried out.
   
10. Until his death, the deceased operated a car wrecking business, Autowrecks Limited, the third defendant, which benefitted from the loan subject to this proceeding.
    
11. The fourth Defendant, Mrs Michael and the fifth defendant, Mr Junior Bill Ambone, were officers of the firm Autowrecks Limited when it was controlled by the deceased.
    
12. Autowrecks is now in the hands of the fourth and fifth defendants.
    
13. I will refer to the third, fourth and fifth defendants as the defendants because they are opposing the orders sought by the plaintiff, while the first defendant, the Public Trustee’s office, and the second defendant, the Public Trustee Mr Jacob Popuna, take no position on the proceedings.
    

THE CONTROVERSY

14. At law, upon death, and under s.45 of the Wills, Probate and Administration Act 1996, which I will refer to as the Wills Act, and upon a grant of probate, it is generally accepted that all property of a deceased vests in the executors or administrators of an estate.
    
15. The administrator takes and deals with property as the property is found and has the duty to properly and thoroughly administer the estate according to law, that is, identify property, call in debts, pay them out and distribute to beneficiaries what is left of the estate according to the priorities as stated in the Wills Act and the will’s instructions.
    
16. The controversy in this matter appears to be a dispute over the plaintiff’s ability to take its security, the mortgaged land, outside of the estate’s administration, although the case the defendants presented was confusing as they did not object to the selling of the land.
    
17. I will have more to say on this later and return to a leading decision and s.45 of the Wills Act.
    

CONTEXT OF CLAIM

18. The context of the plaintiff’s claim is understood from the history of the mortgaged land.
    
19. The deceased was the registered proprietor on the Certificate of Title of the mortgaged land and upon death, such title usually vests in the executor and administrator.
    
20. On 28 February 2019, the plaintiff lent the third defendant, Autowrecks, a sum of K750,000 as working capital for the business, at the time being operated by the deceased.
    
21. The loan was repayable over 10 years at K12,458.69 per month.
    
22. On the same day security documents were executed between the plaintiff and the deceased using the mortgaged land as security for the loan, to protect the plaintiff’s money.
    
23. These documents were:
    
    1. A mortgage deed under which the deceased pledged the mortgaged land as security for the loan;
    2. A Deed of Guarantee and Indemnity wherein the deceased guaranteed to repay the money;
    100. A general Security Agreement by the deceased.
         
24. The plaintiff holds the security deeds and documents.
    
25. On 13 March 2019, the agreed loan was advanced from the plaintiff to the deceased.
    
26. On 14 March 2019, the plaintiff registered its security interest in the Papua New Guinea Personal Securities Register in wide terms over the rights and undertakings of the deceased for the purpose of securing payment of the monies owing.
    
27. By August 2019, the deceased had defaulted in his payments.
    
28. On 11 September 2019, the mortgage instrument was registered with the Registrar of Titles as Registered Mortgage number S85395.
    
29. On 30 December 2019, the plaintiff issued a default notice under s.68 of the Land Registration Act 1981 (Chapter 191), claiming a default in the sum of K810,582.84 to be paid within 30 days, and failing payment the plaintiff would sell the land according to a Notice of Requirements under the Notice of Default provision s.67 of the Land Registration Act 1981 (Chapter 191).
    
30. On 29 January 2020, the 30 days required after notice given pursuant to s.68(1)(a) of the Land Registration Act lapsed, with no compliance by deceased or third defendant Autowrecks.
    
31. As at that date, the plaintiff, under the Land registration Act, was entitled to sell the property.
    
32. The mortgage remained unpaid, with the default continuing and as at 4 July 2023 the amount of K547,929.09, which included interest, remained unpaid. It has grown again since then to date of trial, being 4 October 2024, and although the Court does not have the exact figure, any order made for either party will include an order for an accounting to be given.
    
33. Even though there are claims that the plaintiff did not act to sell the land once entitled to under the default notice pursuant to s.68 of the Land Registration Act, there is evidence that the parties were negotiating over a period of time.
    
34. There are two important and relevant factual matters which stand out in this matter, which are:
    
    1. At no time during this hearing did the defendants challenge the effectiveness of the security documents signed, and
    2. At no time during this hearing did the defendants submit that in circumstances outside of the administration of the deceased’s estate, the plaintiff had not taken all steps necessary to recover its monies for taking possession of the mortgaged land by issuing the default notice.
       
35. In other words, the steps taken under the Land Registration Act by the plaintiff have not been challenged, other than the defendants’ position that the notices are ineffective only because the estate is under administration.
    

ORDERS SOUGHT BY THE PLAINTIFF

36. The plaintiff seeks a series of declarations and subsequent orders.
    
37. As a matter of law, the plaintiff indicated in its Originating Summons filed 28 July 2023 that it would rely on the inherent jurisdiction of the National Court and s.155(4) of the Constitution, Order 4 of the National Court Rules and various sections of the Land Registration Act to achieve the declarations and orders sought.
    
38. In summary declarations sought are that:
    
    1. Clement Michael, deceased, owns the land subject of this application;
    2. The plaintiff holds a registered mortgage over the mortgaged land;
    100. The plaintiff has complied with all necessary legislation to recover its security interest, and
    4. The plaintiff is entitled to enforce its rights as mortgagee under the Land registration Act.
       
39. Consequential orders sought are:
    
    1. Vacant possession of the land;
    2. Powers to eject occupiers of the land by police if necessary;
    100. That the plaintiff be entitled to sell the land;
    4. Costs, and
    5. Any other appropriate order.
       

ORDERS SOUGHT BY THE DEFENDANTS

40. The defendants presented a confused case as to what they sought.
    
41. They sought:
    
    1. An immediate adjournment for negotiations, or
    2. The loan be restructured, or
    100. The plaintiff’s case be dismissed, with costs, to allow the executor and administrator to administer the deceased’s estate in the usual course of administration, or
    4. The matter be brought back into Court pursuant to the Wills Act and those rules of Court dealing with trusts and succession matters, being Order 15 and Order 19 of the National Court Rules.
       

ADJOURNMENT APPLICATION

42. The Court and the Plaintiff were taken by surprise by the adjournment application.
    
43. The defendant’s Counsel, Mr J Ambone, said a Notice of Motion had been filed on the morning of the hearing.
    
44. As to that, there had been no time for the Registry to place it on file or time for the plaintiff to respond.
    
45. The plaintiff indicated strong opposition to an adjournment, having no time to consider the application and having prepared for trial on what the defendant had indicated was its case, as confused as it was.
    
46. In order to extend natural justice, I invited an oral application for an adjournment.
    
47. The basis of the adjournment was said to be that the proceeding before the Court was wrongly brought, and it should be proceeding under the Wills Act and rules applying to succession matters and trust matters.
    
48. It was also submitted that the plaintiff should consider its position, discontinue this matter and bring it back pursuant to the Wills Act.
    
49. I take it that the defendants would also want me to dismiss the case if the plaintiff would not voluntarily withdraw it.
    
50. As to an adjournment for negotiations, I accept such had occurred over the past few years, the sticking point being that the defendants could not produce the money claimed under the security held by the plaintiff.
    
51. The fifth defendant, Mr Junior Bill Ambone said in his affidavit that the loan could not be paid until Autowrecks operations were profitable which is a statement against interests in the circumstances of this case.
    
52. Tied in with that statement was that no substantive evidence was put that there was any viable plan the defendants could put forward which the plaintiff would accept for the payment of the loan moneys.
    
53. There is a term sometimes used in court cases called a novel submission, a submission which takes an unusual stance to issues within a case and how they should be managed. Such a submission was made here when Mr Ambone suggested that the matter be adjourned for six months to allow the defendants to sell the land, and the interest accrued between February 2022 when the defendants wanted the land sold now be deducted from the total owed to the plaintiff, as the plaintiff delayed in selling the land.
    
54. Why I call it novel is because no mechanism and no powers were referred to as to how such an order could be made and it is not up to the Court to simply construct an order, which becomes an enforceable obligation, without very particularised submissions as to the powers available to make such an order.
    
55. As a private arrangement an adjournment would be possible if the plaintiff agreed, and no agreement was forthcoming.
    
56. Just as novel was the suggestion by the fourth and fifth defendants, Mrs Joy Michael and Mr Junior Bill Ambone to restructure the loan to reduce loan repayments.
    
57. No power of the Court was pointed to in order to achieve that type of order which would be an interference with the contract bringing the loan into being.
    
58. Keeping in mind that the oral adjournment application was sought so a range of possible resolutions could be ventilated, without any concrete proposals other than the need to consider whether this case was properly before the Court, the application required an assessment of its basis.
    
59. Also, I am only referring here to the third, fourth and fifth defendants, not the first and second defendants, the Public Trustee’s office and the Public Trustee, who are not taking a position.
    
60. I was referred to the decision of Kapi DCJ on Ok Tedi Mining Ltd v Niugini Insurance Corporation (No.1) [1988-89] PNGLR by counsel for the Plaintiff, Mr Kepiniu, where the requirements for an adjournment were set out.
    
61. These are that:
    
    1. The Court has a discretion, meaning all possible relevant submissions need to be put;
    2. The applicant bears the onus in the application, showing why an adjournment would not become an injustice for the opposing party;
    100. Actual prejudice not mere speculative prejudice must be shown in not granting an adjournment, and
    4. Such application ought to be made promptly.
       
62. As to the simple act of seeking an adjournment, it came on the day of the hearing, 4 October 2024.
    
63. It came after a first trial date was abandoned in March 2024 when the defendants had not even filed their Notice of Intention to Defend.
    
64. Their Notice of Intention to Defend was filed on 28 June 2024 after proper comments from the bench were made to file material.
    
65. The defendants’ affidavits were only filed on 7 August and 27 September 2024, while the plaintiff has filed numerous and detailed affidavits from the very beginning of this case from 28 July 2023 when the originating process was filed.
    
66. Counsel’s submissions for time to enter further negotiations to clearing the debt and the suggestion the defendants be given six (6) months to sell the property lacked any particulars and the Court is aware many negotiations had already taken place.
    
67. And there was simply no explanation as to why the application was made on the day of trial when the trial date had been set two months prior on 9 August 2024.
    
68. The decision in Ok Tedi Mining Ltd v Niugini Insurance Corporation does not stand alone and there are many decisions from the National and Supreme Courts of Papua New Guinea expressing the same tests, sometimes using different words, for an adjournment, and especially those which come late in proceedings.
    
69. In more recent times, again following the same requirements for an adjournment, the High Court of Australia expressed, notably, a public interest element to the consideration of adjournments.
    
70. In the case of Aon Risk Services v Australian National University HC [2009] HCA 27, the Chief Justice, at paragraph 5, stated:
    

“In the proper exercise of the primary judge’s discretion, the application for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the Court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU’s statement of claim should not have been allowed. The discretion of the primary judge miscarried”.

71. The defendants here were not offering to pay the plaintiff costs thrown away if the trial was abandoned that day, and it is something further to consider.
    
72. In my view, the application was so late, and so ill prepared, that the plaintiff would obviously be prejudiced when it was ready to continue the case it prepared in answer to the case the defendants had prepared to that point.
    
73. The public interest in having a timely decision cannot be ignored.
    
74. On that basis, I concluded that no real consideration had been given to the issues to be determined and dismissed the oral application for an adjournment.
    
75. That left the plaintiff’s right as mortgagee to take possession of its security in circumstances of an estate under administration, and consideration of the case being wrongly before the Court, to be heard on the trial date set.
    
76. I did allow the defendants to file further written submissions, as they had not prepared them for the hearing day, such extending procedural fairness to them, and as no evidence was tested in the matter, this was a case to determine legal issues only.
    

BASIS ON WHICH MATTER WAS BEFORE THE COURT

77. Before examining the defendants’ case, it would be proper to examine how the plaintiff bought this matter to Court when it filed its Originating Summons.
    
78. The plaintiff brought this matter to Court following Order 4 Rule 3(2) of the National Court Rules and s.155(4) of the Constitution and the Court’s general jurisdiction to make declarations.
    
79. Order 4 of the rules is a simple provision providing the machinery to get matters before the Court.
    
80. Order 4 Rule 3(2) allow matters to come into Court where the principal question is likely to be a question of law or an issue of construction of an act or document or where there is unlikely to be a substantial factual dispute.
    
81. That was the case here.
    
82. Section 155(4) of the Constitution recognises the National Court’s inherent jurisdiction in circumstances as seems proper for orders which do justice in the circumstances of a case.
    
83. In its Originating Summons, which Order 4 allows for, the plaintiff stated the declaratory relief sought as the primary relief, which is a requirement, then the consequential relief, as required by the cases – see Brothers Rugby Football Club Inc v Port Moresby Rugby Football Union (2004) N2537.
    
84. The purpose of the application was to confirm the plaintiff’s right to recover its security interest in an estate under administration, the statutory process of acquiring the security interest being completed before death and redemption of it being outside estate administration.
    
85. This is what is challenged.
    
86. Having said that, and part way through the hearing, as I indicated above, a submission was made that the defendants agreed to the land being sold, which seems to mean that their opposition to rules and manner this matter came to Court is an alternative position.
    
87. The essence of the defendants’ argument was that it was the executor and administrator who had all of the deceased’s property vested under their control, including the mortgaged land, and it would be dealt with in the normal course of administration with the security interests of the plaintiff taken into account but in no order of priority given the wording of the Wills Act.
    
88. That is outside the normal law applied to securities, which take priority over non-secured interests.
    
89. A simple reading of s.45 of the Wills Act says property vests in the estate’s administrator, with the defendants submitting that as an estate matter, the plaintiff’s case must come back pursuant to the succession and trust rules.
    
90. As I stated, this would mean that there is no priority given to the plaintiff’ security because of the wording of the Wills Act.
    
91. All Order 15 does is to address requirements as to administration and trusts and all Order 19 does is to set out the probate rules – neither of which require close assessment here, as the Wills Act and a particular case apply to explain the law.
    
92. It was difficult to understand the particulars of the defence case, as the written submissions merely reproduced pages of legislation and the rules, which is not helpful when what is required are detailed submissions on interpretation of the wording.
    
93. The reproduced legislation and rules refer to parties, beneficiaries, general administration, probate jurisdiction, rules, hearing, definitions, creditors and a headnote from a case, which does not place before the court legal submissions and how the law is to be applied to the facts.
    
94. The Court is in a difficult position of interpreting each of those sections and rules reproduced, and applying them to the facts, when little and shallow legal argument is given to support the orders being sought.
    
95. In any case, that is what has occurred when each party should be presenting its case and assisting the Court by stating fully and clearly how the law is to be applied to the facts.
    
96. Submissions pay a key role.
    
97. After reproduction of parts of the Act and rules, defence counsel made brief written submissions, which were an extension of oral submissions made on 4 October 2024, the day of the hearing.
    
98. These were that the administration of an estate must be in strict compliance with the Wills Act and the rules stated on Orders 15 and 19.
    
99. It was said such is the case so the administrator can properly account for all property, debts and liabilities.
    
100. He said this was fundamental as “natural justice, fairness and justice must be served in the administration of the deceased person’s estate so all parties can and must be properly attended to and catered for”.
     
101. The submissions went on to say lawful and legal rights by an Act of Parliament cannot be dispensed with by the Court.
     
102. Counsel said that a creditor can file a proceeding in Court to protect its interests.
     
103. He placed some importance on the fact that the loan was not for the subject property, a submission unexplained as to why that would be an issue when the deceased used the land as guarantee of the loan’s repayment.
     
104. Another confusing submission was that the property was not being managed so as to give the Plaintiff concern, but how this was related to the plaintiff’s claimed right to call in the security was not explained.
     
105. He also stated that the fourth defendant, Mrs Michael, had given the Plaintiff permission to sell the property in 2022, but the plaintiff had not done so and that was not the defendants’ fault, as though this should be a bar to the plaintiff bringing these proceedings, keeping in mind that earlier the Court was told the defendants wanted the land sold.
     
106. There was the repeated claim in the written submissions that the matter was not properly before the Court pursuant to Order 4 of the rules and an Originating Summons was not the correct way to proceed, and that s.155 of the Constitution did not provide a power to the Court to exercise a discretion in this matter and such reliance was an abuse of the Court’s process. The defendant relied on SCR No2 of 1981 [1981] PNGLR 150 saying that the section was facilitative, not one where rights can be created.
     
107. I repeat these were statements not explained in terms of their legal meaning and there was brief reference to administration under the Wills Act and even briefer reference to s.45 of that Act which I will return to shortly.
     
108. The plaintiff’s position, among other submissions, was that the plaintiff had done all that was necessary to redeem its security, and as I said that position was not challenged by the defendants in circumstances outside of the administration of the estate.
     
109. Counsel for the Plaintiff, Mr Kepiniu, relied on the case of Bank of the South Pacific Limited v The Public Curator as administrator of the Estate of the late Geno Iari and Others [2003] PGNC 152; N232, which I will refer to as the Iari case, stating that it was very similar to this matter under challenge.
     
110. In that matter, Kandakasi J, as he then was, explained in great detail and legal history the standing of mortgages and mortgagees, the plaintiff here being the mortgagee.
     
111. As to a mortgagee’s rights and powers under a mortgage he refers to mortgages and priorities being recognised under the Land Registration Act 1981 (Ch. 191) and addressed risks, noting that the Act was silent as to the kind of risk factors mortgages are intended to protect against. That keeps in mind that a mortgage is a legal pledge, or in other words, a transfer of a legal interest (my highlighting) for the purpose of securing payment.
     
112. He examined the meaning of s.67 of the Wills Act, entitled Priorities of Debts, where the Public Curator in that case had submitted that all creditors were to be treated equally, and concluded that the section and other laws did not unequivocally remove the rights of a legal mortgage secured over property.
     
113. He pointed to the section concluding that ss. (1) refers to creditors standing on an equal footing in an estate and ss. (2) did not prejudice any lien, charge or security that a creditor holds.
     
114. His Honour also concluded that the provisions of the Wills Act and the Insolvency Act 1951 did not cover the situation where a registered mortgage exists.
     
115. After examining various sections of legislation, His Honour stated:
     

“These provisions make it clear that, where a deceased dies intestate, his properties both real and personal become entrusted in the hands of the administrator of his estate. The ultimate aim here is to convert by sale all non-money properties into money for purposes of distribution under the WPAA [the Wills Act]. However, where any of the property includes “an interest in reversionary interest” that cannot “be sold until it falls into possession” or “unless the personal representative C special reason for sale”.

As we already noted, one of the principal features of mortgages is that they are only a security. The mortgagor has the right to redeem his property on the repayment of all that was lent together with the agreed interest component. In other words, the property reverts to the mortgage or upon a full repayment of monies lent with the agreed interest component. It follows therefore that, where a deceased dies intestate with a mortgagor over all or any of its assets, the property the subject of the mortgage each cannot be sold unless reversion has properly taken place, or the administrator sees special reason to sell (s. 69(1) and (2)) the properties covered in the mortgage. But if the property in question is land which is the subject of an equitable mortgage, and the deceased’s estate is insolvent as in this case, the administrator can sell if he has first gone to the Court and obtain leave to do so (s. 105(2) of the Insolvency Act).

The total effect of all the provisions mentioned above is very clear. Legal or registered securities including mortgages are left to take their normal consequences at law. When a debtor becomes insolvent or dies or is otherwise unable to meet his creditors demands, it means he or she is not in a position to meet their repayment schedules under a loan and or pay the balance of whatever is owed. The mortgagee will then be at liberty to enforce its security under the mortgage, without the need for a court order for it to do so.”

116. Further, His Honour refers to the words reversionary interests stated in s. 69 of the Wills Act, a section addressing trust requirements for the sale of property where a reversionary interest exists, and such shall not be sold until it is possessed.
     
117. Although s. 67 is headed ‘Trust For Sale On Intestacy’, that heading is misleading. An estate with no will is in intestacy, but once an administrator is appointed it is managed as an estate under a will would be managed but pursuant to the rules of intestacy. The wording simply protects any person’s reversionary interest when no will is left. A reversionary interest of course is any right in property the enjoyment of which is deferred, such as where ownership in land is granted by the owner for an interest, such as a loan, possession of which will revert to the owner on the loan being paid out. A lease is a reversion giving the owner the right to possession in the future, when the lease ends. It is an equitable right.
     
118. Earlier His Honour had also referred to the fact that the mortgagee had made demands before the deceased died and that there was no legal bar preventing the bank from redeeming pursuant to s. 74 of the Land Registration Act (Chp 191) upon default in payment.
     
119. What was missing in this case was reference by Mr Ambone for the defendants to the legal principles identified and explained by Kandakasi J, and he needed to do this because the plaintiff relied on this judgement on the basis the legal principles were similar to the case before the Court.
     
120. Mr Ambone maintained that the secured interest of the plaintiff will not be higher than any other creditor who comes forward, ignoring completely the Iari decision and not addressing the points Kandakasi J made.
     
121. He merely stated that the Iari case was different from this case because the deceased had died intestate.
     
122. He did not explain why such would make a difference, especially when the Public Curator in that case had obtained letters of administration. Those letters of administration, as I have indicated, give no more and no less power than the executor appointed by a will, where property has to be identified, debts paid followed by distribution.
     
123. As a final attempt to talk of an unfairness, a position at law which is difficult to sustain other than how a case is conducted or as particulars of some type of unconscionable conduct, none of which were submitted here, counsel said the plaintiff knew the deceased had health problems, delayed in selling the property in February 2022 despite having consent of the fourth defendant and that the property was worth K10,000,000.00 and the plaintiff may under sell it.
     
124. I will return to the Iari case – His Honour pointed to the law as it developed and currently stands, a mortgagee may exercise its rights at a time it chooses.
     
125. Given that I was satisfied that the parties had negotiated, it may well be a fact that the plaintiff did not sell the property so that the defendants had time to meet the debt for which the plaintiff held security.
     
126. That the deceased may have been ill, and the plaintiff may have known about this, is irrelevant to his acts in executing the deeds which gave the plaintiff security over his land.
     
127. Whether the land is worth K10,000,000.00 or not, and there is no valuation evidence it is mere opinion, counsel for the plaintiff said the plaintiff would obtain a valuation and sell as close to that price as possible.
     
128. I now also return to s. 45 of the Wills Act, which has not been addressed.
     
129. The words deal with what property is vested upon a grant of probate for the administrator.
     
130. It is all of the estate gifted under the will pursuant to s. 45(1)(a), and pursuant to s. 45 (1)(b), “every estate for the life of another that that person could...have disposed of by will”.
131. Applying the words of s. 45 (1)(b), the subsection makes the judgment in the Iari case very clear – the secured property cannot be disposed of because it does not vest in the administrator, for the reasons outlined by Kandakasi J, and the section prevents that secured property being vested and disposed of by will.
     
132. The legal interest passed with the security, to be redeemed upon repayment of the loan.
     
133. In the defendants’ case, there appears to have been no consideration given to the wording, merely an acceptance in general that property passes on death when a grant of probate is made, when s. 45 outlines what property vests, which is only that property which can be disposed of by will. This serves as a professional reminder to the legal profession that legislation, and cases, should be reread when dealing with specific facts and practitioners should not rely on what they think they know. Time and again this same mistake is made, but not by the best practitioners. Submissions may be then crafted around the actual words.
     

FINDINGS

134. Weighing the cases put forward, I firstly need to make a finding.
     
135. Supported by the decision in the Iari case, I find that the Wills, Probate and Administration Act 1966 does not empower the defendants here to block in any way the plaintiff from recovering the security interest the deceased pledged for the loan received, and that land is secured property which does not vest in the administrator, and which cannot be disposed of by will.
     
136. Consequently, I will make findings that:
     
     1. The deceased, Mr Clement Michael, is the registered proprietor of the land described as Allotment 02, Section 275, Hohola, (Gerehu), National Capital District) but subject to State Lease Volume 79 Folio 118;

The plaintiff is holder of a registered mortgage, No. S85395, over the mortgaged land;

Before the death of the deceased, the plaintiff had duly complied with the statutory notice provisions (under s. 67(1) and (2)) of the Land Registration Act 1981 (Chapter 191) in issuing default notices for non-payment of the money lent;

Because of non-compliance by Clement Michael with the default notice and continuing default in relation to payments the plaintiff is entitled to enforce its mortgagee rights (under s. 68 and s. 74) of the Land Registration Act 1981 (Chapter 191);

5. Clement Michael, deceased, owns the land subject of this application;
6. The plaintiff holds a registered mortgage over the mortgaged land;
7. The plaintiff has complied with all necessary legislation to recover its security interest, and
8. The plaintiff is entitled to enforce its rights as mortgagee under the Land registration Act.
   

137. It follows that I will make the declarations and order sought.
     
138. I will also make a costs order against all defendants, including the first and second defendants, as matters of the same or similar nature have been before the Court previously. As defendants, they should have taken part.
     

DECLARATIONS AND ORDERS

DECLARATIONS

139. I make the following declarations:
     
     1. Pursuant to Order 4 Rule, 3(2) of the National Court Rules, Section 155 (4) of the Constitution, and the Court’s inherent jurisdiction, a declaration that Mr Clement Michael (deceased) is the registered proprietor of the land described as Allotment 02, s. 275, Hohola (Gerehu), National Capital District subject to State Lease Volume 79 Folio 118 (the Mortgaged Land).
        
     2. Pursuant to Order 4 Rule, 3(2) of the National Court Rules, Section 155 (4) of the Constitution, and the Court’s inherent jurisdiction, a declaration that the plaintiff is the holder of Registered Mortgage No. S85395 over and in respect of the Mortgage Land.
        
     3. Pursuant to Order 4 Rule, 3(2) of the National Court Rules, Section 155 (4) of the Constitution, and the Court’s inherent jurisdiction, a declaration that as the holder of Registered Mortgage No. S85395 over and in respect of the Mortgage Land, the plaintiff has duly complied with the notice provisions under section 67 (1), and (2) of the Land Registration Act 1981 (Chapter 191) by issuing a statutory default notice on Mr Clement Michael on 30 December 2019, notifying them of their default, in payment of secured money lent to them by the plaintiff (default notice).
        
     4. Pursuant to Order 4 Rule, 3(2) of the National Court Rules, Section 155 (4) of the Constitution, and the Court’s inherent jurisdiction, a declaration that on account of Mr Clement Michael’s non-compliance with the default notice, and continuing default in payment of secured money lent to him by the plaintiff, the plaintiff is entitled to enforce its mortgagee rights under section 68 and 74 of the Land Registration Act 1981 (Chapter 191) and relevant loan and security documents to have vacant possession of the Mortgage Land and sell it to recover to secured funds it lent to Clement, Michael.
        

ORDERS

140. I make the following Orders:
     
     1. Pursuant to section 74 (1) (c) of the Land Registration Act 1981 (Chapter 191) that the Defendants and their servants, agents, associates, family members and any other person give vacant possession of the Mortgage Land to the plaintiff within 14 days of the date of this judgement.
     2. Pursuant to section 155 (4) of the Constitution and the Court’s inherent jurisdiction, any member of the Royal Papua New Guinea Constabulary be at liberty to enter onto the mortgage land and evict the defendants, their servants, agents, associates, family, members, and any other person occupying the Mortgage Land if they fail to give vacant possession of the Mortgage Land to the plaintiff within 14 days of the date of this judgement.
        
     3. Pursuant to section 68 (1) of the Land Registration Act 1981 (Chapter 191), section 155 (4) of the Constitution and the Court’s inherent jurisdiction, that as the holder of Registered Mortgage No. S85395 the Plaintiff be at liberty to exercise its right to sell the Mortgage Land and apply the proceeds of sale in accordance with section 68 (6) of the Land Registration Act 1981 (Chapter 191).
        
     4. Pursuant to section 155(4) of the Constitution, upon sale of the Mortgaged Land, the plaintiff give to the defendants a full accounting of the dispersal of sale monies.
        
     5. The defendants pay the plaintiff’s costs of an incidental to this proceeding as agreed or as taxed.
        

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Posman Kua Aisi Lawyers: Lawyers for the Plaintiff
Parkil lawyers: Lawyers for the Fourth Defendant