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Lamana Development Ltd v Kavana [2007] PGNC 273; N3180 (27 June 2007)

N3180

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 738 OF 2005

BETWEEN:

LAMANA DEVELOPMENT LIMITED
Plaintiff

AND:

RAGA KAVANA, THE REGISTRAR OF TITLES
First Defendant

AND:

PEPI KIMAS, THE SECRETARY OF THE DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Second Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:

TALASEA INVESTIMENT LIMITED
Fourth Defendant

AND:

HG PROPERTIES LIMITED
Fifth Defendant

Waigani: Gavara-Nanu, J
2006: 3 & 8 August
2007: 27 June

PRACTICE AND PROCEDURE – National Capital District Physical Planning Board – Power to rezone – Physical Planning Act, 1989; ss. 3, 42, 67, 71, 72, 94, 95 and 115 – Title holder not notified – Pre-requisites to rezoning of land – Duty to observe principles of natural justice – Title holder an overriding factor.

PRACTICE AND PROCEDURE – National Court - Declaratory orders – Jurisdiction to make – Constitution, s. 155 (4) – Primary right – Whether a party having no primary right can invoke s. 155 (4) of the Constitution to obtain declaratory orders.

Cases cited
Avia Aihi v. The Sate (No.1) [1981] PNGLR 81
Douglas Charles Dent v. Thomas Kavali [1981] PNGLR 488
National Capital District Interim Commission -v- Bogibada Holdings Pty Ltd [1987] PNGLR 135
OK Tedi Mining Ltd -v- Niugini Insurance Corporation [1989-90] PNGLR 4 Mount Hagen YMCA v. Mamun Investments & Ors [1991] PNGLR 337
25.
Patterson Lowa & Ors v. Wapula Akipe [1991] PNGLR 265
B. Fortunaso Pty Ltd v. Bank of South Pacific & Ors [1992] PNGLR 275

Counsel
J. Shepherd & F. Griffin, for the plaintiff
K. Iduhu for the fourth defendant.

1. Gavara-nanu J: Plaintiff is seeking declaratory orders that the land described as Section 405, Lot 5, Hohola, National Capital District (State Lease Volume 5, Folio 218), ( subject land ) which the plaintiff claims is by virtue of s. 72 of the Physical Planning Act, 1989, a zoned public utilities as published in a notice in the National Gazette No. G81 dated 26 June, 2003; should not be developed otherwise than in accordance with such zoning. Also, as a consequential order, the plaintiff seeks a permanent injunctive order to prohibit the fourth and fifth defendants forthwith from any form of dealing, including development and or transfer on or of the subject land which would be contrary to law and its zoning as public utilities for public car park purposes.

2. In seeking these orders, the plaintiff relies on; National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135 and Ok Tedi Mining Ltd v. Niugini Insurance Corporation [1988-89] PNGLR 425. In these cases, it was held that the power of this Court to make declaratory orders is derived from s. 155(4) of the Constitution. See also, Douglas Charles Dent v. Thomas Kavali [1981] PNGLR 488; Patterson Lowa & Ors v. Wapula Akipe [1991] PNGLR 265; Mount Hagen YMCA v. Mamun Investments & Ors [1991] PNGLR 337 and B. Fortunaso Pty Ltd v. Bank of South Pacific & Ors [1992] PNGLR 275.

3. In National Capital District Interim Commission v. Bogibada Holdings Pty Ltd (supra), Kapi DCJ (as he then was), inter alia, made two observations, which are relevant to this case. First, where granting of declaratory orders sought would not settle the dispute between the parties, declaratory orders should be refused. Secondly, declaratory orders are made according to the principles of equity adopted under Schedule 2.2 of the Constitution.

4. In this instance, the plaintiff is the registered owner of the land described as Section 405, Lot 1, Hohola, (State Lease Volume 29, Folio 9); and the fourth defendant is the registered owner of the subject land.

5. The subject land sits adjacent to the land owned by the plaintiff, and both pieces of land share a common boundary.

6. The subject land was formerly registered under Hetura Paz Development Limited (Hetura), for which a Business (Commercial) Lease was issued to Hetura on 14 November, 1992. The subject land was subsequently transferred to the fourth defendant on 08 March, 1997, and the transfer was entered in State Lease Volume 5, Folio 218. On 19 June, 2000, the then Secretary for Lands and Physical Planning by a letter dated the same day granted five year extension for the fourth defendant to comply with the improvement covenants contained in State Lease Volume 5, Folio 218. The plaintiff contends that the extension is contrary to s 119 of the Lands Act, 1996, and is therefore illegal.

7. On 6 March, 2002, the National Capital District Physical Planning Board (NCD Physical Planning Board) purportedly in the exercise of its powers under s. 71 of the Physical Planning Act, 1989, proposed the rezoning of the subject land to public utilities for public car park purposes in the Waigani City Centre Zoning Plan. That rezoning amended the previous Waigani City Centre Master Plan of 1982, which was made under the old Town Planning Act, Chapter No. 204, which has since been superseded by the Physical Planning Act, 1989. The rezoning of the subject land was advertised in the Post Courier on the same day for public comment.

8. On 27 February, 2003, the NCD Physical Planning Board in its meeting No.2 of 2003, discussed and considered the Waigani City Centre Zoning Plan including the public response for the subject land to be made a public utility. The Board then approved that subject land be rezoned from Commercial land to public utilities for a public car park. On 26 June, 2003, the rezoning of the subject land as a public car park was published in a notice in the National Gazette No.G81 as required under s.71 of the Physical Planning Act, 1989. The three months period for any aggrieved person or entity including the fourth defendant to appeal against rezoning of the subject land expired on 26 September, 2003.

9. The plaintiff says in late 2004, the fourth defendant took steps to sell the subject land to HG Properties Ltd (HGPL), but the sale was not completed as there was no Ministerial Approval given for such transfer. This is of no consequence in so far as the claims by the plaintiff are concerned.

10. The plaintiff claims that the fourth defendant has since becoming the owner of the subject land in 1997, failed to comply with improvement covenants over the subject land namely, "improvements by way of buildings for Business (Commercial) purposes to a minimum value of one hundred thousand kina (K100, 000.00)"; and the plaintiff further claims that under the improvement covenants, such buildings were to have been erected on the subject land within two years from the date of registration of the transfer of the lease from Hetura to the purchaser (the fourth defendant).

11. The fourth defendant has argued that it made attempts to comply with the improvement covenants during the extension given to it by the then Secretary for Lands and Physical Planning on 19 June, 2000. The fourth defendant further contended that it applied for a building permit on 27 July, 2005, to build on the land to comply with the improvement covenants but that application is yet to be considered by the NCD Building Board. The fourth defendant also says that pursuant to its application for a building permit, it engaged House Guard Ltd to erect a building and a perimeter fence at a total cost of K5, 527,000.00, but because the NCD Building Board has not made a decision on its application for a building permit, these improvements cannot be made.

12. The fourth defendant also says that it, on 14 July, 2003, in a letter to the then Minister for Lands, appealed against the NCD Physical Planning Board's decision to rezone the subject land from commercial purposes lease to public utility for a car park. The fourth defendant however has conceded that no appeal was made to the Appeals Tribunal by 26 September, 2003, (which was the expiry date for the three months appeal period).

13. The plaintiff has argued that the letter by the fourth defendant to the then Minister for Lands on 14 July, 2003, did not constitute an appeal against the decision of the NCD Physical Planning Board to rezone the subject land for public utilities purposes. It therefore says that the fourth defendant has not appealed against the decision of the NCD Physical Planning Board.

14. The rezoning of the subject land by the NCD Physical Planning Board was an administrative act purportedly done in the exercise of its powers under s. 71 of the Physical Planning Act, 1989. This begs the question of whether the purported exercise of power by the NCD Physical Planning Board to rezone the subject land over which the fourth defendant holds a valid title was proper.

15. If the rezoning of the subject land by the NCD Physical Planning Board was proper then the next question that would arise is – whether the letter by the fourth defendant to the then Minister for Lands dated 14 July, 2003, constituted a valid appeal against the decision by NCD Physical Planning Board to rezone the subject land.

16. There is no dispute that the subject land is owned by the fourth defendant and therefore holds a valid title over it.

17. Section 71 of the Physical Planning Act, 1989, pursuant to which the subject land was rezoned by the NCD Physical Planning Board provides:

71. Zoning of Physical Planning Areas.

(1) Where it is authorized to do so under this Act, a Board may, by notice in the National Gazette –

(a) divide a physical planning area or part of a physical planning area into one or more zones; or

(b) declare that a physical planning area or part physical planning area is a single zone; or

(c) do any combination of Paragraphs (a), (b) and (c),

and all of the above procedures shall be known as zoning.

18. The plaintiff says it has the overall power under s. 42 of the Physical Planning Act, to consider and determine all physical planning matters in respect of the National Capital District.

19. Section 42 provides:

42. Functions of the National Capital District Physical Planning Board

The National Capital District Physical Planning Board is empowered to consider and determine all physical planning matters which are wholly within the National Capital District.

20. The plaintiff also says that pursuant to s. 72 of the Physical Planning Act, the subject land may not be developed for any other purpose than the purpose for which it has been rezoned, viz. for a public car park.

21. Section 72 provides:

72. Use and development of land and building within a zone for authorized purposes.

(1) Subject to this section, the purposes for which a building or land may be used in a zone (other than a redevelopment zone) are –

• (a) the purposes specified in respect of that zone; and
  
• (b) any other purpose for which planning permission has been granted in a particular case.
  

(2) Subject to this section, the purposes for which development may take place in a zone (other than a redevelopment zone) are –

• (a) the purposes specified in respect of that zone; and
  
• (b) any other purpose for which planning permission has been granted in a particular case.
  

(3) Subject to Section 73, the purposes for which a building or land may be used in a redevelopment zone are –

• (a) where the land is also in another zone – a purpose for which a building or land may be used in the other zone; and
  
• (b) a purpose for which planning permission has been obtained in a particular case.
  

22. The plaintiff says it has done everything in accordance with the law viz. the Physical Planning Act, 1989, thus the rezoning of the subject land from a Commercial Lease to public utilities for a public car park is proper and legal and the fourth defendant having failed to appeal against the rezoning, it should be granted the relief it is seeking.

23. The threshold question is whether the NCD Physical Planning Board had the power to rezone the subject land over which the fourth defendant has a valid title. This question in my view turns on the interpretation and application of s. 67 and s.71 of the Physical Planning Act. The former deals with declaration by notice in the national gazette of physical planning areas by the Minister and the latter, as seen above, deals with zoning of physical planning areas.

24. Section 3 of the Physical Planning Act, provides that "physical planning area" includes:-

(a) .................

(a) any town; and
(b) any area which is declared as such under s. 67 or 68; and
(c) the National Capital District.

25. The subject land being in the National Capital District, had to be first declared a physical planning area by the Minister in accordance with s. 67 of the Physical Planning Act before the NCD Physical Planning Board could rezone it under s. 71.

26. Section 67 provides:

67. Declaration of Physical Planning area in the national interest.

The Minister may, after:-

(a) consideration of the advice of –

• (i) the National Physical Planning Board; and
  
• (ii) the Chief Physical Planner, and
  

(b) consultation with –

• (i) where a province is affected – the provincial Minister of that province; and
  
• (ii) where the National Capital District is affected – the National Capital District Commission;
  

by notice in the national Gazette declare an area to be a physical planning area in the national interest.

27. Section 42, upon which the plaintiff has placed reliance is a general provision which empowers the NCD Physical Planning Board to consider and determine all physical planning matters including land to which a declaration is made under s. 67.

28. Sections 67 and 71 come under PART VII of the Physical Planning Act, 1989, which is under the heading – "CONTROL OF THE DEVELOPMENT AND USE OF LAND".

29. Section 71 is made subject to the other provisions of the Physical Planning Act, including s. 67. This is born out clearly by the opening words of Subsection (1), which provides:

"(1) Where it is authorized to do so under this Act, a Board may, by notice in the National Gazette ..."

30. Two things can be said about s. 71 (1), first, it applies to any Board, including the NCD Physical Planning Board and secondly and more importantly, in the case of the NCD Physical Planning Board, it can only do what it is empowered or authorized to do under the Act.

31. There is a clear distinction between s. 67 and s. 71. The former relates to the Minister's power to declare by notice in the National Gazette an area to be a physical planning area. But that power can only be validly exercised by the Minister after consideration of advice given by the National Physical Planning Board and the Chief Physical Planner, and in a case where the National Capital District is affected, which is the case here, a Ministerial declaration can only be made after consultation with the National Capital District Commission. Moreover, any such Ministerial declarations must be in the national interest.

32. Section 71 relates to a Board, which in this case is the NCD Physical Planning Board, having the power to, by notice in the National Gazette, zone areas in the National Capital District which have already been declared by the Minister as physical planning areas under s. 67.

33. Therefore in this instance, the NCD Physical Planning Board could only rezone the subject land if it was or had already been declared by the Minister as a physical planning area under s. 67 (1). In this case, there was no such declaration. It follows therefore that the purported exercise of power by the NCD Physical Planning Board to rezone the subject land had no legal basis and the rezoning was improper. The NCD Physical Planning Board had therefore acted beyond its powers when it rezoned the subject land. Thus, the purported exercise of power by the NCD Physical Planning Board under s. 71 to rezone the subject land was wrong and improper.

34. It is important to note that under s. 67 of the Physical Planning Act, even the Minister's powers to declare land a physical planning area is subject to and dependent upon the advice being given to it by the National Physical Planning Board and the Chief Physical Planner and in consultation with National Capital District Commission. Moreover, the exercise of power by the Minister to declare land as a physical planning area must be proper and according to law. So, in this case, had the requirements of s. 67 been complied with, the Minister would have been advised by the National Physical Planning Board or the Chief Physical Planner of the valid title the fourth defendant has over the subject land which is the overriding factor. This is a matter which the NCD Physical Planning Board completely ignored.

34. The fourth defendant having a valid title over the subject land should have been personally notified by the NCD Physical Planning Board of its decision or intention to rezone the subject land. By failing to notify the fourth defendant accordingly, the NCD Physical Planning Board was in breach of the principles of natural justice. The fourth defendant having a valid title over the subject land is as I said, the overriding factor which could not be ignored or disregarded by the NCD Physical Planning Board. The obligation on the NCD Physical Planning Board to notify the fourth defendant personally of its decision or intention to rezone the subject land is clear from the plain reading of s. 94 (1) of the Physical Planning Act.

35. Section 94(1) provides:

94. Appeals against a Board's decision.

(1) An applicant, or an owner or an occupier of land who is aggrieved by a decision of a Board, may appeal to the Tribunal within the prescribed time from the date of the decision or, in the case of a zoning, the date of the gazettal of the decision, whichever is the latter.

36. Section 94 (2) (h) provides that an appeal under Sub-section (1) may be against the declaration of a zone under s. 71. Then s. 95 (1) and (2) provide that the Appeals Tribunal "shall" afford the appellant a hearing either in writing or at a hearing. These mandatory procedural requirements were ignored and breached by the NCD Physical Planning Board when it failed to inform the fourth defendant personally of its decision to rezone the subject land.

37. The net effect of the NCD Physical Planning Board rezoning the subject land is that the fourth defendant would be unjustly deprived of the ownership of the subject land, thus deny it from the use and enjoyment of the land.

38. The fourth defendant's ownership of the subject land is existing and has not in any way been affected by its purported rezoning. The fourth defendant still owns the subject land and it has every right to develop it in the way it would see fit. As long as the fourth defendant has a valid title over the subject land; and no Ministerial declaration had been made for the subject land to be a physical planning area under s. 67, the NCD Physical Planning Board had no power to rezone it.

39. The plaintiff sought to invoke s. 155 (4) of the Constitution to obtain declaratory orders. But s. 155 (4) can only come into the aid of a party who has a primary right to be protected and enforced. See, Avia Aihi v. The State (No.1) [1981] 81. The plaintiff in this case has no primary right, that right is vested in the fourth defendant as the registered owner of the subject land.

40. Thus the title in the subject land still being vested in the fourth defendant, the granting of declaratory orders sought by the plaintiff would not settle the dispute between the parties.

41. Such being the decision of the Court, it is not necessary for me to decide the question of whether the fourth defendant appealed against the decision of the NCD Physical Planning Board to rezone the subject land as it no longer arises.

42. In the result, I refuse to grant the declaratory orders sought by the plaintiff.

43. The plaintiff will pay the fourth defendant's costs.

___________________________________________
Lawyers for the Plaintiff: Young & Williams Lawyers
Lawyers for the Defendant: Warner Shand Lawyers