The Waigani National Court has quashed the title to a property at Boroko that the National Housing Corporation sold to Defence Minister Dr Fabian Pok ruling “constructive fraud” was committed in its sale.
The court declared the title dated Feb 28, 2014 to Dr Pok null and void, ordering NHC to offer the property for sale to long-term occupant and former Public Servant Vaki Vailala for a sum of no more than K230,000.
Justice David Cannings issued the orders after he found that the transfer of the property located at Hanu place Boroko, Section 6, Lot 25 was unlawful and unsatisfactory irregular, as to be tantamount to fraud.
Justice Cannings described the transfer of title to Dr Pok by the National Housing Corporation as constructive fraud adding that it was a “case of fraud” for the purposed of section 33(1)(a) of the Land Registration Act.
The ruling came despite Dr Pok purchasing the property on Jan 28, 2014 at K525, 525, an amount K4,065.60 less than what the NHC had earlier offered to Vailala.
Vailala was a surveyor at the Department of Lands and Physical Planning whose family had been occupying the property since 1994 on rental basis from the National Housing Corporation.
In 2005 he had intensions to purchase the property and organised a valuation of the property to be done by the office of the Valuer-General in Dec 2005.
Two offers were made by NHC to Vailala to purchase the property at a disclosed amount in July 2006 and again in 2008, however in July 2009, they entered into a written tendency agreement for him to pay rental at K220 per fortnight.
On April 18, 2012, Vailala wrote to NHC’s Managing Director John Dege pointing out the two previous offers which he accepted, further expressing his interest to purchase the property.
However, on May 10, 2013, Dr Pok under the letterhead of the “Office of the Minister for Defence” wrote to NHC’s Managing Director expressing his interest to purchase “any property that is available for sale by your organisation,” stating he has housing allowance and finance prepared to pay the market value. There was no mention of any particular property.
On Oct 30, 2013, NHC wrote to Vailala offering section 6, Lot 25 at Boroko, for sale under the NHC Outright cash scheme for the price of K529, 590.60 subject to conditions he accepts the offer in 14 days and pay 10 percent deposit.
That offer to Vailala was cancelled on Nov 18, 2013 by Dege due to his failure to comply with the condition despite a request for an extension of time.
The same property was later sold to Dr Pok at K525, 525 (K4,065.60 less). A deposit of K195,617 was paid by the Defence Secretary on Nov 28, 2013 and by Jan 28, 2014, the contract of sale was executed between NHC and Dr Pok.
Transfer of the state lease was done from NHC to Dr Pok on Feb 28, 2014.
Vailala filed a National Court proceeding on July 16, 2014 listing NHC, Dr Pok, Dept of Land Secretary Romilly Kila-Pat and the state as defendants. An interim injunction against his eviction was granted by the court the next day.
He claimed that the property was sold by NHC to Dr Pok in “Irregular circumstances” contrary to the National Housing Corporation Act, alleging Fraud and sought orders that Dr Pok’s title over the property be declared null and void and also be forfeited back to NHC. He also asked the court to order NHC to offer the property for sale to him at a reasonable price.