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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 159 OF 2009
BETWEEN
ARNOLD TOMBE for himself and 10 Others
Plaintiff
AND
MATTHEW MASKET
First Defendant
AND
MICAH PITPIT,
COMMISSIONER, LAND TITLES COMMISSION
Second Defendant
AND
LAND TITLES COMMISSION
Third Defendant
AND
RAGA KAVANA, REGISTRAR OF TITLES
Fourth Defendant
AND
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant
AND
NELSON KIPUNGI
Sixth Defendant
AND
PAKIPU INVESTMENT LIMITED
Seventh Defendant
Wabag: Yalo, AJ
2009: 10 and 22 June
Cases cited
Bauf and Nodai v Poliamba Pty Ltd [1990] PNGLR 278
Mark Ekapa & Ors v William Gaupa & Ors (2004) N2694
Cases referred to
Gobe Hongu Ltd v National Executive Council & Ors (1999) N1920 National Housing Corporation v Yama Security Services Pty Ltd (2000) N1985
Golobadana No 35 Ltd v Bank South Pacific Ltd (2002) N2309 Mainland Holdings Ltd & Ors v Stobbs and Ors [2003] N2522
Counsel
Mr. I. Thomas, for the Plaintiff
Mr. B. Harry, for the 1st and 7th Defendants
Mr. R. Lains, for Iraps Investment Ltd
DECISION
YALO, AJ: There were two separate applications before me. The first of these was filed by Tamutai Lawyers acting for Irap Investments Limited. It is not a party to the proceedings and it sought to be joined as a party. This party also sought in its application orders that the interim orders of 22 April 2009 be set aside and alternatively that the proceedings be dismissed for being abuse of the court process. The second application was filed by Stevens Lawyers acting for the First and Seventh Defendants. Among others this application sought to dismiss the proceedings generally for abuse of the court process on the basis that the Plaintiff lacks locus standi. There were no appearances for the rest of the Defendants. The Plaintiff, through his Counsel primarily opposed both applications.
By agreement by all parties present the Court heard the application by Irap Investment Ltd first. This was followed by the application filed by the First and Seventh Defendants. I will address both applications together since both seek similar orders.
ISSUES
IIL’S SUBMISSIONS
3 Mr. Lains, Counsel for IIL submitted that the substantive proceedings are an abuse of the court process because the wrong mode has been used to bring the proceedings. The Plaintiff is claiming fraud in his statement of claim and in his pleadings. Under Order 4 rule 2(b) National Court Rules (NCR) claim relating to fraud should come by way of the Writ of Summons and not by Originating summons. Counsel argued that this is because the Plaintiff has to plead the specifics of the fraud.
4 Mr. Lains further submitted that the proceedings are statute barred under the Frauds and Statutory Limitations Act. The subject land was a customary land registered in 1999. The proceedings is commenced in 2009, ten years after the issue arose. The Plaintiff’s own affidavit shows that since 1984 he had knowledge of the subject land being registered and they did nothing. Mr. Lains referred the Court to two case authorities, namely Pacific Native Timbers v Donaldson, N2933 and Mark Ekapa (2004) N2694.
FIRST AND SEVENTH DEFENDANTS’ SUBMISSIONS
5 Counsel representing the First and Seventh Defendants, Mr. Harry submitted that his clients sought to have the entire proceedings dismissed. First, his clients support the two grounds raised by IIL. That is, the proceedings should be by way of Writ of Summons and not by Originating Summons for the same reasons offered by IIL. Secondly, that the proceedings are statute barred and for the same reasons offered by IIL the proceedings should be dismissed.
6 In addition the First and Seventh Defendants submitted that the Plaintiff has a conflict of interest. That is to say that his interests are not the same as the others he purports to represent. There was an agreement sometime in December 2005 that he leased the property from the First Defendant. The First Defendant was the proprietor then. The Plaintiff was a lessee and he has no higher rights than the First Defendant. Dr Amean’s affidavit filed in support of the First and Seventh Defendants’ application deposes to the fact that land was originally customarily owned by the Endakikin Clan prior to its registration. The Plaintiff is not a member of that clan and he is not entitled to act as a Plaintiff in this instance. The Plaintiff has somehow obtained consent and authority from the Endakikin Clan. Dr Amean deposes to the fact that those who have consented to the Plaintiff to act as their representative are not quite genuine and they do not have legitimate interests in the land. The Plaintiff is using others’ names to obtain title for himself. The pleadings in the originating process clearly show that the Plaintiff wants the title to the property. He is a lessee and he is not entitled to come to this Court. The Plaintiff cannot act as a representative of customary landowners. The First and Seventh Defendants do not object to genuine customary landowners commencing these proceedings. With respect some pertinent aspects of Dr Amean’s affidavit are hearsay evidence which I refuse to accept.
7 Counsel for the First and Seventh Defendants further argued that his client, Pakipu Investment Ltd is a bona fide purchaser of the subject land. He had no knowledge of the vendor’s fraud. The proceedings should be dismissed and that the Plaintiff be restrained from dealing with the land or taking any interests in the land.
PLAINTIFF’S SUBMISSIONS
8 Mr. Thomas Imau, Counsel for the Plaintiff submitted that the Plaintiff has standing to bring the proceedings. The Plaintiff has no conflict of interest as asserted by the First and Seventh Defendants. The Plaintiff has stated clearly in the originating process that he is the Plaintiff for himself and ten others. Under paragraph No 2 of the Statement pursuant to Order 16 rule (3) (2) (a) of the NCR the plaintiff refers to himself as a duly authorized representative of the traditional owners of the subject land. Under paragraph 22 of the Plaintiff’s affidavit filed on 26 March 2009 he annexes an authority to act signed by ten customary owners of the subject land. This authority to act is supported by two Village Court officials, namely James Sipiain and Philip Yakaio. Counsel submitted that the Plaintiff has sufficient authority to act for himself and on behalf of others.
9 Mr. Imau submitted that in relation to the nature of the proceedings it is about breach of statutory provisions and it is not about fraud as asserted by IIL and the First and Seventh Defendants. The remedies sought in the proceedings are in the nature of declaration, mandamus and certiorari. It questions the validity of the land registered in the first place and therefore the validity of the title issued. In the present proceedings it is not necessary to plead fraud and the necessary specifics and present evidence of fraud or transfer of titles. It is not an action for fraud so as to warrant the Plaintiff to plead fraud. The nature of the proceeding claims illegality and non compliance with the mandatory statutory provisions to register the subject land initially and issue title. This is a case where once a customary land has been converted to freehold land. The law provides for the process to convert customary land to freehold land and the Plaintiff asserts that the relevant statutes were not followed and without consent or knowledge of the genuine customary landowners.
10 Since the First Defendant was not and is not a customary owner of the subject land he has always intended to surrender the land to the Plaintiff and the genuine customary landowners. The Plaintiff deposes to this fact at paragraph 18 of his affidavit filed on 26 March 2009, document No 5 on court file. The First Defendant had asked for K50, 000.00 as compensation paid to him before he quitted the property so the Plaintiff and others paid him K10, 000.00. On 3 January 2009 the Plaintiff and others traveled to Lae to see the First Defendant to settle the balance of K40, 000.00. However they learnt that the First Defendant had retracted from their agreement and had taken steps to transfer the property without their knowledge. This was when the Plaintiff and those genuine customary land owners had knowledge that the First Defendant had taken steps to transfer the land to other parties.
11 Finally, the Plaintiff argued that this is not a claim in tort or contract or fraud so statutory time limitations do not apply. The statutory breach cannot be rectified by passage of time. This fact does not offer any protection to the Seventh Defendant’s claim of being a bona fide purchaser. The two applications are misconceived.
THE LAW
12 Order 12 rule 8 NCR states:
8. Setting aside or varying judgment or order. (40/9)
(1) The Court may, on terms, set aside or vary a direction for entry of judgment where notice of motion for the setting aside or variation is filed before entry of the judgment.
(2) The Court may, on terms, set aside or vary a judgment—
(a) wher judgment has been entn entered pursuant to Order 12 Division 3 (default judgment); or
(b) where the judgment has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for the direction; or
(c) whe judgment has been ente entered in proceedings for possession of land pursuant to a direction given in the absence of a person and the Court decides to make anr that the person be added as a defendant.
>
(3) The Court may, on terms, set aside or vary an order—
(a) where rder has been made iade in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or
(b) where notice of motion for the setting aside or variation is filed before entry of the order.
(4) In addition to its powers under Sub-rules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgment) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.
(5) This Rule does not affect any other power of the Court to set aside or vary a judgment or order.
13 Order 12 rule 40 NCR states:
40. Frivolity, etc. (13/5)
(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings—
(a) no reasonable cause of action is disclosed; or
(b) the proceedings are frivolous or vexatious; or
(c) the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.
(2) The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).
14 In the case of Mark Ekapa & Ors v William Gaupa & Ors (2004) N2694 the National Court addressed the issue of setting aside its own interim orders. The judgment refers to numerous judgment of this court which has established principles of law that this Court has jurisdiction to set aside its own judgments: Bauf and Nodai v Poliamba Pty Ltd [1990] PNGLR 278; Gobe Hongu Ltd v National Executive Council & Ors (1999) N1920; National Housing Corporation v Yama Security Services Pty Ltd (2000) N1985; Golobadana No 35 Ltd v Bank South Pacific Ltd (2002) N2309 and Mainland Holdings Ltd & Ors v Stobbs and Ors [2003] N2522.
15 In the case of Bauf (supra) the head note to the judgment reads:
“(1) A party seeking to obtain an interim injunction, ex parte, is under an obligation to demonstrate utmost good faith and to bring to the attention of the court:
(a) all facts material to the applicant’s right to the injunction; and
(b) any material which could be put in favour of the defendant’s position.
(2) Failure to make full and proper disclosure of relevant material is sufficient to justify the court dissolving an interim injunction made ex parte.
(3) A statement of claim seeking an injunction must disclose a reasonable cause of action.
(4) The interim injunction should be dissolved for non-disclosure of relevant material.
(5) The originating summons should be dismissed for failure to disclose a cause of action.
16 Section 16 of the Statutory Limitations Act states:
16. LIMITATION OF ACTIONS IN CONTRACT, TORT, ETC.
(1) Subject to Sections 17 and 18, an action–
(a) that is founded on simple contract or on tort; or
(b) to enforce a recognisance; or
(c) to enforce an award, where the submission is not by an instrument under seal; or
(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,
shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.
(2) An action for an account shall not be brought in respect of any matter which arose more than six years before the commencement of the action.
(3) Subject to Subsection (4), an action upon a specialty shall not be brought after the expiration of 12 years commencing on the date when the cause of action accrued.
(4)[1] [2] Nothing contained in Subsection (3) shall be construed as affecting any action for which a period of limitation is specified by any other Act, and that subsection shall be read and construed accordingly.
(5) An action shall not be brought upon any judgment after the expiration of 12 years commencing on the date when the judgment became enforceable.
(6) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years commencing on the date when the interest became due.
(7) Subject to Subsection (8), an action to recover any penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of any enactment shall not be brought after the expiration of two years commencing on the date when the cause of action accrued.
(8) For the purpose of Subsection (7) the word "penalty" does not include a fine to which any person is liable on conviction of a criminal offence.
RULING
Jurisdiction
17 This Court clearly has a jurisdiction to determine the applications. The Court has a wide discretion to set aside its own interim orders. Order 8 rule 8(3) (a) of the NCR states that the Court may, on terms, set aside or vary an order where the order has been made in the absence of a party, whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order. An order may be set aside or varied under rule (4) too but so long as the order does not include an order which determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief, see Order 8 rule (4). Order 8 rule (5) is expressed in terms as if to avoid doubt and to bolster other broad and inherent powers of the Court to set aside or vary a judgment or order. In that respect there is the inherent power conferred on both the Supreme Court and the National Court to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case under Section 155(4) of the Constitution. This law has been restated in many authorities in this jurisdiction.
Does the Plaintiff have locus standi to bring these proceedings?
18 I am satisfied that the Plaintiff has standing to commence and pursue these proceedings. If he is not a genuine customary owner of the subject land he has sufficient authority to represent those who have authorized him to do so. Counsel for the First and Seventh Defendants made submission that some who have signed and authorized the principal plaintiff have subsequently retracted their support, but unfortunately this evidence was from the bar table and I do not accept it. I am mindful that Dr Amean deposes to certain facts in his affidavit that there are persons who initially supported the principal plaintiff and later withdrew their support and authority. There were assertions made during submissions by Counsel that there are factions even within the customary owners of the subject land. There was also assertion that the principal plaintiff himself is not a genuine customary owner of the subject land. There was further argument that the First Defendant who claims to be the proprietor of the land is not a genuine customary owner of the land. Unfortunately it is not for me to work out the genuine former customary owners of the subject land. That is for a different forum.
Should Iraps Investment Ltd be joined as a party to these proceedings?
19 Order 5 rule 8 provides for addition of parties to proceedings. It reads:
8. Addition of parties. (8/8)
(1) Where a person who is not a party—
(a ought to have been joined as a party; or
(b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on,
the Court, on application by him or by any party or of its own motion, may, on terms, order that he be added as a party and make orders for the further conduct of the proceedings.
(2) A person shall not be added as plaintiff without his consent.
(3) Without limiting the generality of Sub-rule (1), where a person not a party to proceedings for possession of land is in possession (by himself or by a tenant) of the whole or any part of the land, the Court, on application by him, may, on terms, order that he be added as a defendant and make orders for the further conduct of the proceedings.
20 IIL sought to be joined as a party to these proceedings pursuant to Order 5 rule 8(1) (b) and rule (3). I grant an order that Iraps Investment Limited be joined as the Eight Defendant in these proceedings. There is evidence in Mr. Frank Apupuni’s affidavit filed in support of IIL’s application that IIL has sufficient interests in the property subject of these proceedings. On 14 January 2009 the parties executed a contract of sale for the First Defendant to sell the property to IIL. Part of the term of the contract was that the purchaser was to pay a 10 percent deposit on the signing of the contract. On 12 January 2009 IIL paid K10, 000.00 to the First Defendant as a deposit and the First Defendant accepted this. The completion of the sale was to take place when the due process including statutory approval had been granted. On 17 February 2009 title to the property was transferred to IIL. Whilst the Plaintiff opposed IIL’s application to join as a party it is more in the Plaintiff’s interest that this new party be added to the proceedings.
Should the interim orders be set aside?
21 The principles of law applicable in setting aside orders are those settled by the authorities I referred to earlier. I am indebted to Counsel for IIL referred the Court to Mark Ekepa v William Gaupe (supra) which enumerates considerations the Court may take into account in determining the issue. The Court considered and applied those established by previous authorities and added two of its own. They considerations are as follows.
1 Has there been any change in circumstances since the previous orders were made, which render their continuation unnecessary or inappropriate?
22 If there has been material change in the circumstances which initially warranted the grant of interim orders the Court may set aside its orders as was the case in Mainland Holdings. In that case it was put to the Court that Mr. Stobbs’ continued presence in the company as group general manager was necessary to help save a grain crisis affecting the operations of Niugini Tablebirds Ltd. The Court granted 90 days extending Mr. Stobbs’ contract of employment. The grain crisis was solved and Mr. Stobbs took a two weeks holiday overseas. The Court dissolved the interim order when the Plaintiffs went back to the Court and argued that the circumstances had changed. For the present purpose Counsel’s did not raise this issue. It was not argued that there had been a change in the circumstances that warranted the interim orders to be set aside. So this consideration is not applicable here.
2 What has been the relative conduct of the parties since the earlier orders were made?
23 In my view this consideration is relevant for the Court to take into account the past and present conduct of the parties. Did the plaintiff behave himself properly before and at the time of obtaining the interim orders? Has he behaved unfairly or unreasonably after the interim orders were granted? For instance a beneficiary of the interim orders should not use the Court processes unfairly for his own good quite to the disadvantage of the other party and the Court
In Mainland Holdings the Court concluded that the beneficiary of the interim order, Mr. Stobbs, having got the order he wanted, went on a holiday to New Zealand. He deserted the company at a time of deepening crisis. His conduct was found to be irresponsible and unreasonable. The interim order was dissolved. In the present case this issue was not raised and I find that this consideration does not apply.
3 Are there previously undisclosed relevant facts, which have been discovered since the interim orders were made?
24 In the Mainland Holdings case the Court stated that this consideration does not deserve the same weight as the first consideration. The Court explained the policy reason why it is so. Injia DCJ stated:
"In the exercise of its regulatory jurisdiction, the Court also has wide discretion to protect itself or its process from abuse by parties aggrieved by its earlier order, to have a second opportunity to re-argue the case in order to reverse its earlier decision. In cases where the earlier interlocutory order is subject of an appeal, the court should be reluctant to engage in any deliberations on the facts and law, which would or is likely to interfere or usurp the review powers of the appellate court to review the findings of fact or law. This is particularly so when a second judge is invited to vary or discharge an interlocutory order of the first judge".
25 In the present case the Applicants argued that the Plaintiff failed to disclose the material fact that title to the subject property had been transferred to IIL on 17 February 2009 and the interim orders were sought and granted in April 2009. In summary the interim orders prevent parties other than IIL and the Plaintiff from registering, transferring, granting any interests or title to the land to any person. The parties other than the Plaintiff who purport to possess the title or any interests in the land were prevented from interfering with the Plaintiff’s use of the land until the substantive proceedings were determined. It appears to me that unbeknown to the Plaintiff, IIL had the title to the land. This reflects the First Defendant’s attitude from the beginning when he allegedly registered the customary land without the consent and knowledge of the customary landowners. He has been on a "land transfer mission" involving the same land. If the Plaintiff had been aware that the land was transferred to IIL in February 2009 what makes IIL think that the Plaintiff would exempt it from the interim orders. The Plaintiff had at the time of seeking the interim orders attempted to include all those who may deal with the land at one time or another and prevent them from dealing with the land in any manner whatsoever until the determination of the substantive proceedings. The Plaintiff has interests in the land and wishes to one day have title to it so it would be in his interest to prevent IIL from dealing with the land if he had knowledge that IIL had the title. I am not convinced that the Plaintiff had knowledge of the First Defendant’s secret dealing with IIL. There is a serious allegation about breach of the relevant statutes in relation to conversion of customary land to a registered land which may affect the subsequent transfers of title to the land. How did IIL and the Seventh Defendant end up with the title in light of this serious allegation? What has been the First Defendant’s conduct all along? There may be bona fide title holders but there appears to be serious doubt about the propriety of the First Defendant’s conduct. Are the applicant’s coming to this Court with clean hands? He who seeks equity must do equity. Whether their hands are clean or not is yet to be determined but for the present purposes there exist serious substantive issues for proper determination and I am unable to accept the applicant’s submissions and casually brush aside the serious allegation of breach of relevant statutes. The aphorism: "Land belongs to a vast family of whom many are dead, a few are living and countless are still unborn[1]" is relevant to land issues in traditional Papua New Guinea societies.
26 I asked IIL’s Counsel whether the interim orders were useful to his client and that they not be set aside. Counsel argued that the orders be set aside. I differ from their submissions. In some respects and given the conduct of the Office of the Registrar of Titles and the Land Board in relation to how the land was converted and registered, the interim orders may be valuable to IIL.
4 Has it subsequently been discovered that the order was granted on an erroneous legal basis?
27 Whilst the Court in Mainland Holdings stated that this is something that might be taken into account it is not a very weighty consideration. I agree with Cannings J in
Mark Ekepa (supra) that this may relate to where the Court "made a clear error of law in the course of making its earlier interim order that the exercise of discretion entailed in the granting
of the earlier order should be interfered with". This consideration was not argued as an issue in the present proceedings.
28 Having discussed the above considerations Cannings J in Mark Ekepa added two more. These are res judicata and issue estoppel, and breach of good faith. I quote from pages 31 – 32 of the judgment:
"5 Were the grounds relied on to support the setting aside or variation of the interim order, argued before the Court when it granted the earlier order? Or did the party wanting to set aside or vary the earlier order have the opportunity to raise those grounds?
If yes is the answer to either of these queries, the Court should be reluctant to set aside or vary the earlier order. In this way the Court will give effect to the principles underlying the doctrines of res judicata and issue estoppel.
6 Was the court misled when it issued the interim injunction? If yes, was that attributable to the conduct of the party which sought the injunction?
This is a very important consideration, which focuses on the conduct of the party which obtained the original interim injunction. If it deliberately misled the Court, this will be a factor weighing heavily in favour of setting aside the interim injunction".
29 Consideration No 5 in Cannings J’s judgment (res judicata and issue estoppel) is not applicable in this instance. The interim orders were obtained ex parte and the applicants did not have an opportunity to argue earlier the grounds they raise now in support of these applications. In relation to consideration No 6 in Cannings J’s judgment I am not convinced that the plaintiff misled this Court to obtain the interim orders. The First Defendant, allegedly a guest on the land, registered the customary land without the Plaintiff’s knowledge and allegedly without following proper legal procedures. He subsequently transferred the title or attempted to have transferred it on more than one occasion to third parties despite initially promising to return the land to the customary owners and despite receiving K10, 000.00 being a part payment of a total sum agreed to transfer the registered land back to them.
Should the entire proceedings be dismissed for being abuse of the Court process?
30 The cause of action in the substantive proceedings is a claim that illegality was involved in the initial registration of the land. I am satisfied that the originating process is in clear terms. It is not about fraud and I accept the mode of proceedings as they are. I do appreciate that there is reference to the term "fraud" under paragraph 4.11 of the Plaintiff’s Order 16 rule 3(2) (a) NCR Statement. However one has to read the entirety of that paragraph in particular subparagraphs (a) – (e) and the entirety of the whole of the Originating process to appreciate that the nature of the proceedings is not about fraud.
31 As regards statutory limitation illegality and statutory breaches are not time barred. The argument that Section 16 of the Frauds and Statutory Limitations Act bars the present proceedings has no relevance here. Those who ill-gain value or interests in property through alleged illegality and breach of statute should not hide behind statutory time limitations and or the principles of equity. In other words if they breached the law, statute or common law or the principles of equity we have adopted under our Constitution offers them no protection. The proceedings are not an abuse of the Court process. I dismiss the applications to set aside the interim orders and to dismiss the proceedings.
ORDERS
_________________________________________________
Kassman Lawyers: Lawyers for the Plaintiff
Tamutai Lawyers: Lawyers for the IIL
Stevens Lawyers: Lawyers for the 1st & 7th Defendants
Sino & Co Lawyers: Lawyers for the 6th Defendants
[1] TO Elias, Nigerian Land Law (Sweet & Maxwell 1971) 148 quoted in R.W. James Challenges of Equity in Developing the Underlying Law (Faculty of Law, University of Papua New Guinea 1996) 90.
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