N6067
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 194 OF 2013

BETWEEN

MARK AGI JOHN LAKANI for and on behalf of himself and for the living Descendants of IGO TAU LAKANI of Kwaradubuna Laurina Clan of Hanuabada
Plaintiff
 
AND

GABE OVIA IKUPU
First Defendant
 
AND

JOHN DEGE in his capacity as the Managing Director of NATIONAL HOUSING CORPORATION
Second Defendant

AND

NATIONAL HOUSING CORPORATION
Third Defendant

AND

HENRY WASA, in his capacity as the Registrar of Titles
Fourth Defendant

AND

ROMILY KILA PAT, in his capacity as the Secretary for Department of Lands and Physical Planning
Fifth Defendant

AND

HON. BENNY ALLAN sued in his capacity as the Minister for Lands and Physical Planning
Sixth Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Seventh Defendant

AND

RICHARD SINAMOI
Eighth Defendant

AND

TUMNIR INVESTMENT LIMITED
Ninth Defendant

Waigani: Makail, J
2013: 03rd December
2015: 28th August

PRACTICE & PROCEDURE – Application to dismiss proceeding – Failure to give notice of claim to State – Failure to plead reasonable cause of action – Failure to plead particulars of fraud – Action time-barred – Claims By and Against the State Act 1996 – Section 5 – Frauds and Limitations Act 1988 – Section 16(1) – National Court Rules – Order 8, rule 30.
 
Cases cited:

Julius Pololi v. Brian Wyborn (2013) N5253
Stanis Leda v. Stettin Lumber Company Limited (2011) N4542 
Tau Gumu v. PNGBC (2001) N2288
William Maki v. Michael Pundia and PNG Motors [1993] PNGLR 337

Counsel:

Mr D Wayne, for Plaintiff
Mr J Sirigoi, for First Defendant
No Appearance, for Second – Sixth Defendants
No appearance, for Seventh Defendant
Mr D Mel, for Eighth Defendant
Mr E Waifaf, for Ninth Defendant 
 
RULING ON APPLICATION TO DISMISS PROCEEDING

28th August, 2015
 
1.	 MAKAIL, J: On 16th March 2013 the plaintiff representing himself and other members of the Kwaradubuna Laurina Clan of Hanuabada commenced this proceeding to set aside a title granted to the eight defendant in relation to a piece of land described as State Lease Volume 38 Folio 9643 being Allotment 15 Section 46, Granville in the National Capital District. 

Background Facts

2. The land is located at Hanuabada village in Port Moresby. The State Lease over Allotment 15 Section 46 was first granted to the third defendant on 05th August 1981. The third defendant then transferred it to the first defendant on 26th October 2006. On 08th September 2011 the eighth defendant executed a contract for sale of land with the first defendant for the purchase of the property. The purchase price was K500,000.00 and the eighth defendant has to date paid a sum of K460,000.00 and paid a further K17,000.00 in development costs and has possession and control of the property. The ninth defendant has proceeded to carry out work on the land by erecting a fence which has closed down access to the feeder road used by the plaintiff and other members of his clan.

3. The plaintiff was not aware of the grant of the State Lease by the third defendant to the first defendant and then the transfer from the first defendant to the eighth defendant. As far as he and other members of Kwaradubuna Laurina Clan were concerned, the land is traditional land and at no time did the State acquire it. There was a time the land was leased to the State but that was many years ago during the Australian Colonial Administration. It was leased by the plaintiff's grandfather to the State for a certain period subject to renewal and when the lease expired, it was not renewed. 

4. The plaintiff challenges the following decisions:

4.1. the decision to grant State Lease over Allotment 15 Section 46 to the third defendant on 05th August 1981; and

4.2. the decision to transfer State Lease to the first defendant on 23rd October 2006. 

5. The plaintiff alleges fraud in both transactions. It seeks to have the decisions declared null and void.

6. Initially, the eighth and ninth defendants were not parties to the proceeding. On 25th November 2013, the Court allowed them to join the proceeding and issued an interim injunction restraining the ninth defendant from carrying out work on the land until further order. This order is still in force. 

Motions

7. In the meantime, the first and eighth defendants have each filed a motion seeking an order to dismiss the proceeding. The first defendant's motion was filed on 03rd October 2013 and the eighth defendant's was filed on 28th November 2013. The grounds for the dismissal of the proceeding are:

7.1. Failure to give notice of claim to State pursuant to Section 5 of the Claims By and Against the State Act 1996; 
 
7.2. Failure to plead reasonable cause of action pursuant to Order 12, rule 40 of the National Court Rules;

7.3. Failure to plead particulars of fraud pursuant to Order 8, rule 30 of the National Court Rules; and

7.4. Action being time-barred pursuant to Section 16(1) of the Frauds and Limitations Act 1988.

Reasonable cause of action and Particulars of Fraud

8. I deal with grounds on failure to disclose a reasonable cause of action and failure to plead particulars of fraud together because they raise the issue of sufficiency of pleadings. The first and eighth defendants supported by the ninth defendant submit that the allegations of fact pleaded in the statement of claim fail to disclose a reasonable cause of action. This is because it is unclear whether the cause of action is one of fraud. If it is fraud, the allegations of fact do not support it and that there are no particulars pleaded as required by Order 8, rule 30 of the National Court Rules and as was held in the case of William Maki v. Michael Pundia and PNG Motors [1993] PNGLR 337. The plaintiff submits that these grounds are misconceived and should be dismissed because the pleadings do disclose that the cause of action is one of fraud.

9. I accept the plaintiff's submission. It is clear from the pleading that the cause of action is one of fraud. From my reading of paragraphs 10 to 24 of the statement of claim, the plaintiff is alleging that the title was obtained by fraud. The essence of the claim is that the plaintiff and members of his clan are and were traditional owners of the land the subject of the dispute. At no time did the State acquire the land. Unbeknown to them, a State Lease was granted by the third defendant to the first defendant over the subject land and subsequently transferred by the first defendant to the eighth defendant. They seek to have the defendants return the land to them. Based on this summary of facts, I am not satisfied that the defendants do not know the case they will meet at trial. These grounds are dismissed.

Time-Bar
 
10. The first and eighth defendants supported by the ninth defendant submit that the action is time-barred. They refer to the pleading in the statement of claim and point out that according to the pleading, the plaintiff seeks to set aside two decisions: They are:

10.1. the decision to grant State Lease over Allotment 15 Section 46 to the third defendant on 05th August 1981; and

10.2. the decision to transfer State Lease to the first defendant on 23rd October 2006.

11. Relying on Section 16(1) of the Frauds and Limitations Act 1988 and Julius Pololi v. Brian Wyborn (2013) N5253 (Hartshorn J) they submit that common law claims of fraud in relation to alleged erroneous granting of State Lease have been held to be claims founded on tort. Fraud or deceit is a tort and therefore covered by Section 16(1). Consequently, the declaratory relief sought by the plaintiff cannot be considered as equitable relief under Section 18 of the Frauds and Limitations Act 1988. The cause of action is statute-barred as of:

11.1. 05th August 1987 in respect of the grant of initial State Lease; and

11.2. 23rd October 2012 in respect of the transfer of State Lease to first defendant. 

12. The plaintiff relies on Tau Gumu v. PNGBC (2001) N2288 (Kandakasi J) and also Stanis Leda v. Stettin Lumber Company Limited (2011) N4542 (Kawi J) and submit that the action is not time-barred because as a tort, fraud was concealed until it was discovered in November 2011 when the lawyers for the first defendant gave notice to the plaintiff to vacate the property. Subsequent search of the title at the Department of Lands and Physical Planning confirmed the grant of State Lease to the first defendant and then to the eighth defendant. 

13. I accept the defence submission that a fraud is a tort and based on Section 16(1) (supra), where the cause of action based on fraud, it shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued. One of the exceptions to the time limitation is under Section 18 (supra), where the claim is for specific performance of a contract or an injunction or for other equitable relief. A declaratory relief based on a claim of fraud is categorised as not an equitable relief and is not covered by Section 18 as "other equitable relief" which would make an action seeking a declaratory relief falling within the exception and the time limitation of six years would not apply. The case of Julius Pololi v. Brian Wyborn (supra) is directly on point. 

14. I accept the defence submission that six years from the date cause of action accrued in relation to the decision to grant State Lease over Allotment 15 Section 46 to the third defendant on 05th August 1981 expired on 05th August 1987 and in relation to the decision to transfer State Lease to the first defendant on 23rd October 2006, six years expired on 23rd October 2012. The proceeding was commenced on 16th March 2013. It was clearly outside six years. It follows as the plaintiff is claiming declaratory relief based on fraud, the action is caught out by Section 16(1) (supra) and is time-barred in both respects. It matters not if fraud was concealed and the cases cited by the plaintiff are of no assistance. 

15. I am satisfied that the action is time-barred and must be dismissed. It follows it is not necessary to consider the remaining ground on failure to give Section 5 notice to the State.

Order

16. The orders are:

1. The first and eighth defendants' motions to dismiss the proceeding are upheld.

2. The proceeding is dismissed.

3. The plaintiff shall pay the first, eighth and ninth defendants' costs of and incidental to the motions including the proceeding, to be taxed, if not agreed.

Time shall be abridged.
_______________________________________________________________
Warner Shand Lawyers: Lawyers for the Plaintiff
Sirigoi Lawyers: Lawyers for the First Defendant
Acting Solicitor-General: Lawyers for the Seventh Defendant 
Steeles Lawyers: Lawyers for the Eighth Defendant 
Edward M. Waifaf Lawyers: Lawyers for the Ninth Defendant