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National Court of Papua New Guinea |
N311(L)
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
W.S. 920 OF 1978
BETWEEN:
FIRST ASSISTANT SECRETARY
DEPARTMENT OF PRIME MINISTER
PLAINTIFF
AND:
MICHAEL JAMES LEAHY
FIRST DEFENDANT
AND:
HIGHLANDS PRODUCTS PTY. LIMITED
SECOND DEFENDANT
Waigani: Miles J
19 June 1981; 13 August 1981
REASONS FOR JUDGMENT
MILES J: This is an application by way of notice of motion on behalf of the two defendants to set aside a judgment obtained for want of delivery of defence. The claim of the plaintiff is for possession of land which is "native" land within the meaning of the Land Act 1963. Judgment was obtained on 22nd May 1981.
It is a well established rule of practice that a default judgment will not be set aside unless firstly there is filed an affidavit which sets out matters of fact which, if accepted, establish a defence to the plaintiff’s claim and secondly there is some explanation of the delay which enabled the plaintiff to sign judgment in default: The Government of Papua New Guinea and Davis v. Barker[1]. The rule however being one of practice and not law enables the court to exercise its discretion to set aside its own judgment (if obtained ex parte) in particular situations where justice requires, for instance in a claim against a deceased estate where the personal representatives have no knowledge of the matters alleged by the plaintiff, or where there has been some irregularity in the obtaining of judgment or where, as Kearney J. (as he then was) dissenting, suggested (supra (1) at p.401) the statement of claim does not disclose a cause of action.
It has not been suggested by the applicant defendant that the judgment was obtained irregularly. I note that the form of the judgment is not in accordance with Form 4 appearing on p.928 of the National Court Rules, which form is in accordance with Order XXXI Rule 7, in that it does not provide a description of the land. However I think that nothing turns on this for the purpose of the present application. The land is sufficiently described in the statement of claim.
Nor does the applicant suggest that an affidavit disclosing matters going to defence cannot be obtained because the action relates to events of which no living person, who can be conveniently located, has knowledge. I shall return to this aspect later.
The only affidavit filed in support of the application which conceivably goes to matters of defence is that of the applicant’s solicitor sworn 12th June 1981 which annexes a copy of the proposed statement of defence. There is a prior affidavit sworn by the same deponent on 9th June 1981 in which he states that he has been advised by counsel "that the Defendants have a good Defence to the within action and a Cross-Claim against the Plaintiff". This is insufficient to found an application to set aside a default judgment. I note that the affidavit of 9th June is expressed to be filed on behalf of both defendants. The affidavit of 12th June refers to the "Defendant’s Defence" and the "Defendants’ application": the proposed statement of defence and counterclaim annexed purports to be on behalf of the second defendant only. The affidavit of 12th June does not depose to any facts and for that reason cannot be said to establish circumstances which furnish a defence on the merits. That in itself might be sufficient to dispose of the present application by dismissing it. However the proposed statement of defence does raise several distinct issues and it is desirable to deal with them one by one.
The first issue raised on behalf of the second defendant is whether the plaintiff has locus standi to bring the proceedings. One may well understand the difficulty faced by the defendants in understanding how it is that the plaintiff claims the right to bring a claim for possession of land on behalf of the KATUMANI and GWANGIAI clans. Although the plaintiff’s entitlement to do so is probably a matter of law and not a matter of fact (although it may be partly a matter of law and partly a matter of fact) it would have been preferable to plead the matters of law which gave rise to that entitlement: see Iambakey Okuk and The Independent State of Papua New Guinea v. Gerald Sidney Fallscheer[2] and Parker v. The Commonwealth[3]. I wonder how long it would have taken me to enlighten myself on this aspect without the submission of Mr Neill, which establishes the following:
Hence the present plaintiff is the person charged with the duty of taking action to establish further or protect the interests of "natives" in "native land". The only issue of fact that could possibly arise is that notification in the Government Gazette was not made and that is not pleaded. The first ground of defence cannot be established.
The second ground of defence appears to be contained in paragraphs 4, 5 and 9 of the proposed statement of defence. As I understand it, the second defendant relies upon its own possession and occupation of the land claimed and says that it has an interest in the land sufficient to entitle it to be registered as owner. This contention is, I presume, to be taken in conjunction with the denials of the allegations in paragraphs 2, 3 and 6 of the statement of claim. Without some evidence placed upon affidavit of the facts positively alleged by the second defendant, the bare assertion of its own possession cannot in my view amount to a defence on the merits. The proposed statement of defence merely denies unlawful possession, there is nothing upon which a court could conclude that the second defendant entered into possession lawfully or retains possession lawfully. Possibly the second defendant does not intend to argue that its entry into possession was lawful but seeks to rely upon its continuing possession in the light of the other matters alleged in paragraphs 6 and 7 of the proposed statement of defence, and to these I now turn.
Paragraph 6 of the proposed statement of defence alleges "prolonged inordinate and inexcusable delay in bringing this action" and other conduct on the part of the Plaintiff "and those he claims to represent" which is sufficient to disentitle the plaintiff to relief. This appears to raise the equitable defence of laches or equitable negligence. This defence has been described by the authors Meagher, Gummow & Lehane of "Equity, Doctrines and Remedies", Sydney, 1975, p.655, as:
"... a defence which requires that a defendant can successfully resist an equitable (although not legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either (a) acquiesced in the defendant’s conduct or (b) caused the defendant to alter his position in reasonable reliance on the plaintiff’s acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb: Lindsay Petroleum Co. v. Hurd [1874] UKLawRpPC 1; (1874) LR 5 PC 221."
The doctrine of laches is said to have developed in the courts of equity because originally in England the Statute of Limitations applied only to courts of common law and could not operate to defeat a claim in equity. Yet delay on the part of a plaintiff was always something to be taken into consideration when considering whether or not equitable relief should be granted. It therefore follows that in an action at law, where a Statute of Limitations may be applicable, there is no room for the operation of the equitable defence of laches. See Snell’s "Principles of Equity", 27th edn., p.33. See also Lakunda Plantation Pty. Limited v. Ian Maluvil[4].
In my view the defence of laches cannot apply to the present proceedings. In any event there is no affidavit of merits setting out the particular facts relating to the alleged conduct which induced the "Defendants to behave as in fact they did" and the facts relating to the way in which "the Defendants and each of them acted to their detriment". The application to set aside the judgment fails on this ground.
The next ground of defence alleged appears in paragraph 7 of the proposed statement of defence. It is in the following terms:
"7. The Plaintiff and Claimants are estopped and precluded from saying that they are entitled to the vacant possession of the lands or that they are the owners of the lands claimed because the said lands have been with the knowledge and consent of them occupied, farmed, worked, fenced, developed and enjoyed without dispute since 1951 in the presence of the Claimants who never made any claim to the ownership of the said lands for 20 years thereafter, but by their silence permitted and induced the Defendants to believe that the said lands were the rightful property of the First Defendant and thereupon to develop, work, fence, improve and otherwise expend monies on the said lands to the detriment of the Defendants."
Apart from the initial objection that this proposed ground of defence is not supported by any affidavit of facts, I do not think that estoppel can defeat the claim as pleaded. Estoppel is a subject that has received the detailed attention of many textwriters and judicial authorities. There is estoppel in law and estoppel in equity. My own limited research into this esoteric subject in recent times indicates that estoppel, once regarded as a rule of evidence, has probably become a doctrine of substantive law. Estoppel in law involves a representation by word or conduct, of existing fact upon which the other person has been induced to act, as the representor intended that he should act, with the result that the person acting on the representation will suffer harm if the person who made the representation should be allowed to deny or repudiate it: Craine v. Colonial Mutual Fire Insurance Co. Ltd.[5]. Equitable estoppel, a more recently developed doctrine, seems to extend beyond representations of fact to representations of intention and may not require proof that the person acting on the representation will suffer harm if the other person is permitted to deny or repudiate the representation: Combe v. Combe[6].
It is not clear whether the estoppel pleaded in paragraph 7 of the proposed statement of defence is of the legal or the equitable variety. In any event an allegation of representation either of fact or intention is essential. The only allegation of that type as pleaded is that the claimants "by their silence permitted and induced the Defendants to believe that the said lands were the rightful property of the First Defendant". Although the matter is not free from doubt, on balance I think that an allegation that the claimants by silence induced the second defendant to believe that the land belonged to the first defendant may amount to an allegation of a representation sufficient to found an estoppel, either legal or equitable, depending on whether the representation was as to fact or as to intention. The further question arises as to whether estoppel would defeat the claim of the plaintiff.
Some assistance for the purpose of the present case may be obtained from the decision of the Privy Council in Chalmers v. Pardoe[7], a case involving customary held land in Fiji. Their Lordships said:
"There can be no doubt on the authorities that where an owner of land has invited or expressly encouraged another to expend money on part of his land on the faith of an assurance or promise that that part of the land will be made over to the person so expending his money a court of equity will prima facie require the owner by appropriate conveyance to fulfil his obligation; and when, for example for reasons of title, no such conveyance can effectively be made, a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended."
The trial judge in that case had declined to make any order in favour of the plaintiff because the plaintiff had failed to prove the necessary premise of fact in order to found an application of the equitable doctrine. (It is notable that in the present application there is no evidence of any "necessary premise of fact".) In the Fiji Court of Appeal and in the Privy Council the trial judge’s decision was upheld for a different reason, namely that the arrangement between the parties amounted to a dealing with land such as to require under the relevant legislation the consent of the Native Land Trust Board. As such consent had not been obtained the dealing was unlawful and equity could not lend its aid to the plaintiff.
In my view the provisions of the Land Act 1963 and the policy behind it, insofar as they relate to native land, are persuasive that the reasoning in Chalmers v. Pardoe (supra) should be followed in Papua New Guinea. The defence under consideration is in effect an assertion that the plaintiff should not be permitted to deny that the defendants (one or the other, or both, it is not clear which) have acquired sufficient interest in the land to oust the claimants’ right to possession. Under s.81 of the Act a native has no power to sell, lease or dispose of native land or any interest in native land otherwise than to natives in accordance with native custom (except where the disposal is in favour of the Administration under s.16) and a contract or agreement to do so is void. Accordingly once it is accepted that land is native land, a native person holding an interest in that land cannot be estopped from denying his interest, except perhaps at the suit of another native person claiming a conflicting interest according to custom. The judgment obtained by the plaintiff in the present case should not be set aside in order to enable the defendants or either of them to set up a defence of estoppel.
The next matter relied upon in the proposed statement of defence was that the plaintiff’s action is statute-barred in that the right of action alleged accrued more than six years prior to the commencement of the action and is barred by the Statutes of Frauds and of Limitations Act 1951. No particular section of the Act was referred to, and an examination of the Act reveals that no provision is made for limiting the time for bringing a claim for possession of land, or as it would have been known at common law, an action in ejectment.
The final matter raised by way of defence is a claim in paragraph 9 that the defendants have been in occupation of the land jointly and severally for a continuous period for more than twenty years and thereby have become "entitled to and do possess title ownership and right of possession". This is a claim based on the doctrine of adverse possession. The Full Court of the pre-Independence Supreme Court said, as to this doctrine and as to limitations of time on the right to bring an action for the recovery of land, in The Administration v. Tirupia Re Vunapaladig and Japalik Land[8]:
"However, we have come to the clear view that no title by adverse possession could be established in the Territory of New Guinea. The doctrine of adverse possession was not known to the common law but derives from statute. See Megarry and Wade The Law of Real Property, 3rd ed., pp. 996 et seq. There is no Statute of Limitations such as was, for example, the Distress Replevin and Ejectment Act of 1867 of Queensland, adopted or imported into New Guinea and without some such statute there can be no limitation of a right to bring action for the recovery of land."
Whilst I think that there is room for the view that the doctrine of adverse possession was not wholly a creature of statute law (see Paradise Beach & Transportation Co. Ltd. v. Price-Robinson[9]), it had certainly ceased to be part of the English common law as at Independence and the decision of the pre-Independence Full Court should be adhered to. Moreover in the case of native land, s.84 of the Land Act 1963 provides further ground for denying the existence in Papua New Guinea of the doctrine of adverse possession: an executive declaration is sufficient and conclusive proof of ownership by custom.
For all the above reasons I would decline to set aside the judgment of 22nd May 1981 both on the basis that no affidavit of merits has been filed and on the basis that the proposed grounds of defence would not in any event succeed. The delay on the part of the defendants which gave the plaintiff the opportunity to sign judgment has on the whole been sufficiently explained.
The dismissal of the motion does not in any way affect the second defendant’s right to continue with the cross-claim if it is so advised but that will have to be by way of separate action.
One further matter needs to be mentioned. The notice of motion was taken out on behalf of both defendants. The proposed statement of defence purports to be drawn on behalf of the second defendant only. In addition to the proposed statement of defence there is a proposed counterclaim by the second defendant. In that statement of counterclaim there is a reference to the first defendant being "now deceased". When this matter first came before me as a summons for directions on 20th February 1981, there was an application on behalf of the plaintiff that the record be amended to accommodate the death of the first defendant. Counsel for the plaintiff on that occasion was obliged to abandon the application to amend because he was in no position to prove the death of the first defendant and I was told that, according to searches made, the death of the first defendant was not registered. Counsel for the defendants said that he had no instructions as to the death or otherwise of the first defendant. This I accept as being true, although it was strange that he was able to conduct the case on behalf of the first defendant if in fact that party was dead. Now however it is positively asserted in the counterclaim, apparently to the plaintiff’s surprise and certainly to mine, that the first defendant is dead. On the face of it this matter of the death of the first defendant has not been approached by the solicitor for the defendants with that degree of frankness which is in the best traditions of the profession.
I will hear the parties on the question of what further steps are to be taken as to the amendment of the record and as to the assessment of mesne profits or occupation fee.
Order: Application refused. Applicant to pay respondent’s costs.
Solicitor for the Applicants: Russell Hay
Counsel: G. Smith
Solicitor for the Respondent: A. Amet, Public Solicitor
Counsel: W. Neill
[1] [1977] PNGLR 386
[2] Unreported Supreme Court Judgment SC180 dated 3rd October 1980
[3] (1965) 112 C.L.R. 295
[4] Unreported National Court Judgment N308(L) dated 30th July 1981
[5] (1920) 28 C.L.R. 305
[6] (1951) 2 K.B. 215
[7] (1963) 3 All E.R. 552 at 555
[8] [1971-1972] PNGLR 229 at 242
[9] (1968) A.C. 1072 at 1082
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