N6877

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 16 OF 2017

BETWEEN:
MAKOLKOL DEVELOPMENT RECOURCES LTD
First Plaintiff

AND:
AGATHA MORI
Second Plaintiff

AND:
GABRIEL GOGI
Defendant

Kokopo: Anis AJ
2017: 28th August & 20th September

BREACH OF CONTRACT – purported oral agreement assigning or undertaking to forgo or restrain interests over certain blocks of land that are part of a large land area that is subject of a Forest Clearing Authority licence - licence issued under the Forestry Act 1991 - licence issued over customary land - whether purported oral agreement exists - whether the oral agreement is permitted under sections 2 and 4 of the Frauds and Limitations Act 1988 - sections 2 and 132 of the Land Act 1996 discussed - whether such agreements are permitted under section 132 of the Land Act 

Cases cited:

Shell Papua New Guinea Ltd v. Speko Investment Ltd and Peandui Koyati (2004) SC767
PNGBC v. Jeff Tole (2002) SC695
Curtain Bros (Qld) Pty Ltd v. The State [1993] PNGLR 285
Application of Rimbo Susu [1992] PNGLR 37
Rumints Dei v. Moses Nomale and Pangia Constructions Pty Ltd (1995) N1286
Aro Ako v. Lessie Ben Wia (2013) N5100
Johannes Leahy v. Tom Otri (2009) N3860
In the matter of an application by Lamius Niligur and Ors (2001) N2165
Ronny Wabia v BP Exploration Co Ltd [1998] PNGLR 8
Louis Lucian v. Wasime Land Group Incorporated (2011) SC1107
Doriga Mahuru v. Hon. Lucas Dekena (2013) N5303
Makolkol Development Resources Limited and Agatha Mori v. Gabriel Gogi (2017) N6797

Counsel:

Mr T Tape, for the Plaintiffs
Mrs N Rainol, for the Defendant

JUDGMENT

20th September, 2017

1.	ANIS AJ:	This is a claim for breach of a purported oral agreement.  The plaintiffs say they have two (2) agreements in place with the defendant.  The first agreement they say is oral and they say that it was made on 28 June 2016.  The second agreement they say is written (the deed) and they say that it was signed a day after the oral agreement on 29 June 2016.  It is the oral agreement (purported oral agreement) that is in contention in this proceeding.  The plaintiffs say that the defendant breached the terms and conditions of the purported oral agreement when he interfered with their forest clearing operation.  The plaintiffs also say that based on the purported oral agreement, the defendant is estopped from interfering with their operation.

2.	The defendant admits to signing the deed but denies the existence of the purported oral agreement.

3.	The trial was conducted on 28 August 2017.  Parties presented their closing addresses and filed written submissions.  I reserved my decision thereafter to a date to be advised.

4.	I rule on it now.

Background

5.	The first plaintiff holds a licence issued by the Papua New Guinea Forest Authority.  It is called a Forest Clearance Authority, FCA 15-09 (FCA licence).  The FCA licence was issued to the first plaintiff on 11 January 2016 for a period of five (5) years.  The second plaintiff is the chairlady of the first plaintiff.  The FCA licence covers a land area of 23,656 hectares in Lassul, Baining LLG, within the Gazelle District of East New Britain Province.  The FCA licence area is divided into five (5) marked areas.  They are described as PY1 to PY5.  The area of land in question in this proceeding is Block PY1.  Block PY1 is further divided into five (5) sub-blocks, that is, sub-block 1 to sub-block 5.  The contractor that is engaged by the first plaintiff to clear forest under the licence is a company called KL Connections Limited (the contractor).  The contractor is presently clearing forest at Block PY1.  It has finished work on sub-blocks 1 and 3.  The contractor has, since the start of this year or so, commenced forest clearing at sub-blocks 2, 4 and 5 of Block PY1.  Since then, a dispute arose between the second plaintiff and the defendant.  It started when the defendant, through his lawyers, had written a letter dated 12 January 2017 to the plaintiffs and had threatened to take legal actions against the plaintiffs' forest clearing operation.

6.	The plaintiffs responded by filing this proceeding to assert their rights based on the two (2) agreements.  As stated, the deed's validity is not in issue.  My primary role therefore is to determine whether the plaintiffs have established the purported oral agreement.  The terms of the purported oral agreement are pleaded in the statement of claim, which I will later address in my judgment.  But essentially, the plaintiffs' argument is that in consideration of them allowing the defendant to receive fifty (50) percent of the royalty benefits over sub-blocks 1 and 3 of Block PY1, the defendant has verbally agreed, pursuant to the purported oral agreement, not to claim beneficiary rights over sub-blocks 2, 4 and 5 of Block PY1.  In other words, the plaintiffs are saying that the defendant has assigned to them or has restrained himself from claiming beneficiary rights over sub-blocks 2, 4 and 5 of Block PY1. 

Evidence

7.	The parties have agreed to tender all their evidence without the benefit of cross-examination.  I must say that I find the approach odd.  I say this taking into account the serious challenge put to the facts particularly those concerning the existence of the purported oral agreement.  For the plaintiffs, they obviously have the burden of proof to establish the purported oral agreement.  One would have thought that witnesses should be called so that their evidence are tested; to give the Court the opportunity to see who may be telling the truth and who may not.  That said, I note that that was the wishes of the parties, that is, to let the Court decide who to believe based on what is filed.

8.	I have accepted and marked each affidavit tendered.  I have used the abbreviation "P" to connote the plaintiffs' evidence, and the abbreviation "D" to connote the defendant's evidence.  Let me set them out here.

Exhibit No.
	Description	Date
	
“P1”	Affidavit of Agatha Mori	13/01/17	
“P2”	Affidavit of William Labu	25/05/17	
“P3”	Affidavit of John Sako	25/05/17	
“P4”	Affidavit of Oscar B. Manalang	10/07/17	
“D1”	Affidavit of Gabriel Gogi	28/02/17	
“D2”	Affidavit of Gabriel Gogi	17/03/17	
“D3”	Affidavit of Gabriel Gogi	13/06/17	
“D4”	Affidavit of Anton Katol	14/08/17	
“D5”	Affidavit of Neserawa Motuwe	14/08/17	

Issues

9.	I note the issues as identified by the parties in their written submissions.  In my opinion, the main issues are as follows:
(i)	Whether there was an oral agreement;
(ii)	If so, whether the oral agreement, that effectively assigns or restricts claim for beneficiary interests over customary land is permitted under sections 2 and 4 of the Frauds and Limitations Act 1988 (Frauds and Limitations Act);
(iii)	If so, whether the defendant has breached the oral agreement;
(iv)	Whether the defendant should be estopped;
(v)	Whether the defendant's cross-claim has been established and should be upheld, and whether this Court should order the plaintiffs to pay the defendant a sum of K135,851.43.

Purported oral agreement and the deed

10.	Let me begin my judgment by setting out the material terms of the purported oral agreement and the deed.  I refer to paragraph 8 of the statement of claim.  It firstly says that the parties have entered into two (2) agreements, that is, firstly, the oral agreement on 28 June 2016, and then the deed a day after on 29 June 2016.  Let me quote here in part the purported oral agreement as pleaded under paragraph 8 of the statement of claim.

(a)	On or about the 28th of June 2016, at around 10.00 am the Second Plaintiff’s group consisting of Peter Maidu, Cleopas Siwa, Maria Mao and the Second Plaintiff, and the Defendant’s group consisting of the Defendant, Anton Katol and John Sako met with the Managing Director of the Contractor, KL Connections Limited, Mr Kevin Ling including one of his officers Oscar Manalang at their office situated at Allotment 53, Section 64, Seaview Village, Kokopo Town, East New Britain Province and arrived at the following agreement:

(i)	The Second Plaintiff and her group demanded that the Defendant had to expressly agree that if he will not dispute on the timber royalty and other such payments relating to Block 2, Block 4, and Block 5, they shall allow the Defendant to share royalty benefits from Block 1 and Block 3.
(ii)	The Defendant verbally agreed that he shall not take any issue on Block 2, Block 4 and Block 5 in the presence of Kevin Ling, the Managing Director of KK Connections Limited and his officer, Oscar Manalang and in the presence of all the others.

(b)	The Defendant verbally expressed he agreed not to take any issue on Block 2, Block 4 and Block 5 and therefore he requested the Second Plaintiff and her group to allow him 50% share only on Block 1 and Block 3 which the Second Plaintiff agreed together with her group.

11.	I turn to the deed.  A copy was tendered through Annexure D to Exhibit P1.  It is also located at Annexure F to Exhibit D1.  I set it our here.

GABRIEL GOGI

AND

AGATHA MORI

AGREEMENT – SETTLEMENT OF LEGAL PROCEEDINGS LLC: 08 OF 2016 RABAUL DISTRICT LAND COURT
________________________________________________________

THIS AGREEMENT is made this        29    day of June 2016

BETWEEN GABRIEL GOGI the principal complainant

AND AGATHA MORI, the principal defendant,

Each as parties to legal proceedings under LLC number 08/2016 in the Rabaul District Land Court.

WHEREAS
(a)	By ex-parte order dated 1 April 2016 under LLC 08/2016 Gabriel Gogi and his co-complainant John Sako obtained certain orders of restraint against Agatha Mori and KK Connections Limited.

(b)	Those proceedings and other related proceedings which have been issued as a result of alleged breaches of the 1 April 2016 orders are again returnable to the Rabaul Land Court at 1:30pm Friday 8 July 2016.

(c)		The parties have met to negotiate a settlement to their differences and disputes.

NOW THEREFORE IT IS AGREED

1.	Gabriel Gogi and Agatha Mori shall each be entitled to receive a 50% share of all monetary benefits arising out of the logging of blocks 1 and 3 of the PY01 area as depicted on the attached plans as part of the logging operation under Forestry Cleaning Authority No. FCA-15-09 in favour of Makolkol Resource Development Limited with KL Connections Limited as contractor.

2.	The parties shall receive such 50% funds each in their representative capacity of their respective clans and the two parties shall be solely responsible for any further division and distribution thereof within their respective clans.

3.	In reaching this agreement they do so strictly on the basis that they are only dealing with the division of the monetary benefits from the land described and that each does so reserving to them and strictly “without prejudice” as to the legal ownership of the land described which as between the parties currently remains unresolved and open for further negotiation, mediation or legal proceedings, in due course.

4.	Nevertheless with this agreement in place, executed and consented to by the relevant persons, the complainants in legal proceedings in LLC 08/2016 and any other related proceedings shall formally sign off and file a Notice of Withdrawal of Proceedings to be heard in the Rabaul District Land Court on Friday 8 July 2016.

12.	I recall that during the presentation of submissions hearing, I asked the plaintiffs' counsel why the terms of the purported oral agreement was not inserted into the deed.  Counsel said he was also at lost and I gathered then that that was perhaps his clients' position. 

13.	Before I move on in my judgment, I note that the plaintiffs have, as I can see from their written submission, tried to also argue that the agreement was partly in writing and party oral.  This, in my view, requires clarification.  I reject that claim for two (2) reasons.  Firstly, this argument is made contrary to the plaintiffs' own pleading which states that there were two (2) agreements, one oral and one written that were entered into on two (2) different dates.  I again refer to paragraph 8 of the statement of claim as I have covered above in my judgment.  The second reason is this.  The deed is express and complete.  I will explain this further below in my judgment.  

Assessment of evidence

14.	I refer to the second plaintiff's evidence, which is marked as Exhibit P1.  She said that on 28 June 2016, Peter Maidu, Cleopas Siwi, Maria Mao, Gabriel Gogi, Anton Katol, John Sako, Kevin Ling, Oscar Manalang and herself, had all met at the office of the contractor in Kokopo, East New Britain Province.  She said that at the meeting, the defendant had expressly agreed that he would not take issue with sub-blocks 2, 4 and 5.  She said that it was based on that undertaking made by the defendant that she agreed to allow the defendant to benefit from sub-blocks 1 and 3, and as she herself puts it at paragraph 8 of Exhibit P1, On this understanding I signed a benefit sharing agreement on the 29th of June 2016.  The first obvious problem I see with this assertion is.  If that was the understanding or consideration, why was it not inserted as the consideration in the deed?  Why was something completely different put down as the consideration in the deed for her to allow the defendant to benefit from sub-blocks 1 and 3?  It seems that the second plaintiff is not being truthful here.  I say this because she does not explain this contradiction in her evidence.  I also note that there was no explanation provided when I had put similar questions to the plaintiffs' lawyers at the presentation of submissions hearing.  The second obvious problem I see with the assertion is this.  If one looks at the deed, it speaks completely different to the assertion.  The deed talks of settlement in relation to a different set of facts.  Its heading reads AGREEMENT – SETTLEMENT OF LEGAL PROCEEDINGS LLC: 08 OF 2016 RABAUL DISTRICT LAND COURT.  The facts that have led to its execution are expressly stated therein.  They are also stated in the defendant's evidence, which I will address later below.  The second plaintiff as I gather attempts to link the deed with the purported oral agreement, to support her assertion.  My difficulty is that I cannot see the link or connection.  The deed is express and complete (see cases: Shell Papua New Guinea Ltd v. Speko Investment Ltd and Peandui Koyati (2004) SC767; PNGBC v. Jeff Tole (2002) SC695 and Curtain Bros (Qld) Pty Ltd v. The State [1993] PNGLR 285).  I also note that I have already ruled out the argument that the 'agreement' as a whole (referring to the purported oral agreement and the deed) was party written and partly oral.  What I find as interesting and perhaps revealing that the second plaintiff is concealing the truth of what may have happened is this.  She makes no mention whatsoever in her evidence of the facts that are revealed in the deed.  The facts are as follows:  The defendant and John Sako had sued the plaintiffs in proceeding LLC No. 8 of 2016.  The plaintiffs were facing imminent contempt charges before the Local Land Court.  That appeared to be the reason why the parties had opted to sign the deed.  So as a consideration by the second plaintiff in allowing the defendant to receive half of the benefits that were due to the landowners for forest clearance over sub-blocks 1 and 3 of Block PY1, the defendant agreed to withdraw the contempt and other related proceedings that were pending before the Local Land Court.  The parties signed the deed on those terms.

15.	Let me refer to Exhibit P3.  Mr Sako seemed to have jump ship or made a U-turn so to speak.  He was a co-complainant with the defendant in the Local Court proceeding against the plaintiffs.  He now turns around and questions the defendant's eligibility as a landowner to the land in question, and he supports the plaintiffs' claim.  I therefore do not trust this person as a credible witness.  But my decision is not primarily based on this reason.  Mr Sako's evidence is not relevant to the questions that are before this Court.  He gives evidence concerning ownership of customary land, and on who is part of which clan and so forth.  I say the same for Exhibit P2, that is, the affidavit of Mr Labu.  This is not a local or provincial land court hearing to determine who owns what traditional land (see case: Ronny Wabia v BP Exploration Co Ltd [1998] PNGLR 8).  Both evidence are unhelpful and I reject them.

16.	Let me deal with Oscar Manalang's evidence, which is marked as Exhibit P4.  He is an employee of the contractor.  He claims to be a neutral person.   He said he was present in the first meeting on 28 June 2016.  He recollection supports the second plaintiff's evidence of what had purportedly transpired at that time.  He gave his evidence on behalf of the contractor to support the plaintiffs' claim.  In my view, the contractor has vested interest in the matter.  It is currently engaged by the plaintiffs to clear the forest, which includes harvesting of logs.  For the contractor to be involved and support a party in this proceeding that is sensitive in nature, to me, it does not demonstrate the contractor's neutrality.  I therefore reject this evidence because I have doubts on its credibility.

17.	I note that the plaintiffs have not provided any evidence to explain why their then lawyers did not reflect the terms of the purported oral agreement either in writing separately or as a clause in the deed.  I see no explanation given from Exhibit P1 to Exhibit P4.  Again and as stated above, I had raised the point at the hearing and I note that I only received verbal submission from the plaintiffs' counsel, which suggested or implied that perhaps their former lawyers may not have followed the plaintiffs' instructions.  Well, the plaintiffs have the burden of proof so it is not, in my view, sufficient for them to simply make the assertion and not provide evidence to support it.  I note that lawyers only act on instructions and without anything supporting the plaintiffs' claim or implied claim that perhaps it was their lawyers' fault, I find, as well as it is sufficient for me to assume, that the deed was drafted by the plaintiffs' then lawyers as per the plaintiffs' instructions based on what was agreed upon.  I also note and find that if there was an error or oversight as claimed by the plaintiffs, they did not file evidence to show that they had taken steps soon after 29 June 2016 to address it.  It would have been a crucial oversight, would it not, which would have required immediate attention by the plaintiffs?  However, I see no evidence including documentary evidence tendered to support this claim.  In my view, want of such evidence and the lapse of time after the signing of the deed, would weigh against the plaintiffs' claim.  The other obvious reason of course is that the second plaintiff has signed the deed on the terms as agreed.  Had she had issues with the deed because a vital clause was not inserted, she should have raised that and had that sorted out by her then lawyers who drafted the deed.  That did not seem to be a problem until this proceeding was filed.

18.	I refer to the defendant's evidence.  His own written evidence are marked as Exhibit D1, Exhibit D2 and Exhibit D3.  The defendant's evidence seems to make practical sense.  Let me illustrate.  The defendant said that what was agreed to between himself and the second plaintiff on 28 June 2016 was what was put down in writing on 29 June 2016.  He said the second plaintiff did not want to be held liable for contempt of court at that time in relation to proceeding LLC No. 8 of 2016.  He said that that was why the second plaintiff had agreed with him that if he withdrew the local land court proceeding, she would in return allow him to receive fifty (50) percent of the beneficiary entitlements that were received from forest clearing that was taking place at sub-blocks 1 and 3 of Block PY1 within the FCA licence area.  He said he agreed with the terms of the deed, which was why he said the deed was prepared and signed.  He said there was no agreement for him to forgo his and his clan's customary beneficiary rights over sub-blocks 2, 4 and 5 of Block PY1.  He challenged the plaintiffs' claim by stating this.  He said the plaintiffs' lawyers drafted the agreement so he questioned why the plaintiffs' assertion was excluded from the deed.  And he concludes by saying that the reason is that there was no such oral agreement, undertaking or basis as now alleged by the plaintiffs.

19.	The defendant's next witness who gave written evidence is Anton Katol.  His evidence is marked as Exhibit D4.  It is not disputed that this witness was present at the meeting on 28 June 2016.  The second plaintiff confirms that in her evidence.  Mr Katol states that he witnessed the signing of the deed on 29 June 2016.  So he was present at both meetings.  Mr Katol corroborates the defendant's evidence where the defendant has stated that the deed was signed only in regard to benefit sharing over sub-blocks 1 and 3 of Block PY1.  Mr Katol disputes Mr Manalang's evidence saying amongst other things that he gave false evidence.  I find this witness's evidence relevant in part to the extent as I have stated above.  Other than that, Mr Katol also attempts, in his evidence, to address ownership of traditional land.  I find that part of his evidence irrelevant and I reject it.

20.	I refer to Exhibit D5.  Mr Motuwe is the defendant's former lawyer.  He said he was involved in the matter at the material time.  He said the signed deed only relates to benefit interests or sharing over sub-blocks 1 and 3 of Block PY1.  I note that Mr Motuwe was a signatory and a witness to the deed.  He said he was not aware of a meeting held on 28 June 2016.  I note that the defendant has admitted to attending the first meeting on 28 June 2016.  As such, I reject Mr Motuwe's said claim.  But I find that Mr Motuwe was present at the second meeting on 29 June 2016 and I also find that he participated in the signing of the deed.  Mr Motuwe makes an interesting remark when he said that the defendant had the authority from his clan to act in negotiating and signing of the deed only in relation to sub-blocks 1 and 3 and nothing else.  He said the defendant did not have the authority from his clan to deal with sub-blocks 2, 4 and 5.  He said to do so, the defendant would require his clan's authority so it was not possible for him to make such an undertaking or agree on something, which he had no authority over at that time.  Now, I note that no man or woman in Papua New Guinea can claim that he or she as an individual owns an entire traditional land mass or forest, or more particularly thousands of hectares of land like in the present case.  If there is such a case or situation then I have yet to come across it.  Customary land in Papua New Guinea is generally communally owned [see cases:  Johannes Leahy v. Tom Otri (2009) N3860; In the matter of an application by Lamius Niligur and Ors (2001) N2165].  The parties herein and I particularly refer to the second plaintiff and the defendant, claim to act for themselves as well as leaders or representatives of their clans.  I, however, find as a fact, that the representative status of the second plaintiff and the defendant have not been clearly pleaded.  The statement of claim tends to refer to the second plaintiff and the defendant as entering into an oral agreement as individuals rather than as leaders or representatives.  Given that the parties did not identify this point as an issue, I will refrain from addressing it.  But what I can say is this.  The uncertainty in relation to the representative capacities of the parties, together with Mr Motuwe's evidence claiming want of authority, makes the argument on the existence or validity of the purported oral agreement weak.  And I note that unlike the defendant, the plaintiffs have chosen not to call their former lawyers to testify on these contested facts.  Of course, that does not help their case.

Whom should I believe? Findings

21.	So in the end, the only relevant evidence that addresses the claim of a purported oral agreement, based on my findings, is the evidence of the second plaintiff on the one hand, and on the other hand, I have the defendant's evidence and the evidence of Mr Katol and Mr Motuwe.  Because I have ruled out the other evidence of the plaintiffs, the second plaintiff's evidence stands alone.  It is not corroborated and I find that to be weak against the defendant's three (3) witnesses' written testimonies (including his own).

22.	I therefore find that the plaintiffs, who are obliged with the burden proof to establish on the balance of probability, have not, in my view, discharged that burden, that is, to prove the existence of the purported oral agreement of 28 June 2016.  I accept the defendant's evidence addressing the matter.  I find that there was a discussion held by the parties on 28 June 2016.  But I find that the said discussion was in relation to sub-blocks 1 and 3 of Block PY1.  I find that following on from the said discussion concerning sub-blocks 1 and 3, the parties prepared and signed the deed on the following day on 29 June 2016.  I also find insufficient evidence disclosed by the plaintiffs to establish the oral agreement in the terms as alleged.

23.	I reject any evidence filed by the parties that concerns customary ownership over the land where the FCA licence is situated.  I firstly find such evidence irrelevant to the issues at hand.  This is a claim that is based on contract law.  It is not a claim or a dispute over customary landownership.  I note that I had also ruled on this in an earlier interlocutory application for this matter, that is, Makolkol Development Resources Limited and Agatha Mori v. Gabriel Gogi (2017) N6797.  Secondly, this is not the correct forum for the parties to raise such an argument.  This Court has no jurisdiction to hear customary land disputes [see cases: Ronny Wabia v BP Exploration Co Ltd (supra); Louis Lucian v. Wasime Land Group Incorporated (2011) SC1107; Doriga Mahuru v. Hon. Lucas Dekena (2013) N5303].  The parties are of course at liberty to raise that before the local or the provincial land Courts if they wish.

Sections 2 and 4 - Frauds and Limitations Act

24.	I raised with counsel during the trial whether the oral agreement, if it exist, would breach sections 2 and 4 of the Frauds and Limitations Act.  Since the parties did not identify that as an issue, I allowed time for parties to address that and file supplementary submissions.  I have them now before me so I will consider it.

25.	Let me begin by reading sections 2 and 4.

2.	Creation, etc., of interest in land.
(1)	Subject to Subsection (2) and Section 5—
(a)	no interest in land can be created or disposed of except—
(i)	by writing signed—
(a)	by the person creating or disposing of the interest; or
(b)	by that person's agent lawfully authorized in writing for the purpose; or
(ii)	by operation of law; or
(iii)	by will; and
.....
4.	Contracts for the sale of land, etc.

No action shall be brought upon a contract for the sale or other disposition of land or an interest in land unless the contract, or some note or memorandum of the contract, upon which the action is brought is in writing signed—
(a)	by the person against whom the action is brought; or
(b)	by an agent of that person lawfully authorized in writing for the purpose.

(Underlining is mine)

26.	The main query I had was whether sections 2 and 4 apply to interests or dealings with customary land.  I note the supplementary submissions filed by the parties.  However, I find them, with respect, unhelpful.  I think that the phrase "interest in land" should be the starting point for me to begin.  I find that had the purported oral agreement exist together with the deed, they both refer to benefit sharing interests over customary land.  I note that the FCA licence concerned was issued over customary land to the first plaintiff under the Forestry Act 1991.  This fact of course is not in dispute.  So the assignment, forgoing or restraint of interests, as alleged by the plaintiffs against the defendant in the purported oral agreement, had it existed over sub-blocks 2, 4 and 5, would relate to or concern customary interests over customary land.

27.	Given that finding and based on the assumption that the purported oral agreement exists, let me now refer to section 2 of the Interpretations Act Chapter No. 2.  It defines "interest in land" as follows and I read:

"interest in land" means a proprietary right, title or estate, whether corporeal or incorporeal, and whether legal or equitable, in or in respect of land (other than customary land), and includes a right appurtenant or appendant to any such right, title or estate;  (Underlining is mine)

28.	So customary land (or interest over customary land) is excluded under the phrase "interest in land" which is used in sections 2 and 4 of the Frauds and Limitations Act.  I find that to be the law.  That is, I find that sections 2 and 4 of the Frauds and Limitations Act do not apply to customary land dealings or agreements and that includes oral agreements.  Therefore, had the purported oral agreement exist, it would not be subject to sections 2 and 4 of the Frauds and Limitations Act.  Having made this finding, let me go one step further and ask myself this.  Does that mean therefore that it is permissible for customary land dealings or interests to be made orally?

29.	Let me refer to another provision in another Act, which I believe is relevant to the question, that is, Section 132 of the Land Act 1996 [see cases: Application of Rimbo Susu [1992] PNGLR 37; Rumints Dei v. Moses Nomale and Pangia Constructions Pty Ltd (1995) N1286 and Aro Ako v. Lessie Ben Wia (2013) N5100].  It states and I quote:

132.	Disposal of Customary Land.

Subject to Sections 10 and 11, a customary landowner has no power to sell, lease or otherwise dispose of customary land or customary rights otherwise than to citizens in accordance with custom, and a contract or agreement made by him to do so is void.  (Underlining is mine)

30.	Now the term "customary rights" is defined under section 2(1) of the Land Act.  It means rights of a proprietary or possessory kind in relation to land that arise from and are regulated by custom.  In my view, the tests, which I have identified and underlined under the wordings of section 132 of the Land Act above, have to be met in full before an agreement whether oral or written that deals with customary land rights may be regarded as valid.  But I note that for the present case, the parties themselves are customary landowners who appear to have boundary issues or concerns that has drawn them to signing the deed so that they could have usage or beneficiary rights over their customary land that they occupy until the boundaries or their land issues are resolved.  As such, section 132 may not be relevant to the present case except to confirm or answer the question Does that mean therefore that it is permissible for customary land dealings or interests to be made orally? to which I would answer in the affirmative.

31.	I note that my remarks and findings under this sub-heading are presumptuous or hypothetical compared to my findings on the main issue.  I note that I have already found that there was no oral agreement as claimed by the plaintiffs or that there was insufficient evidence disclosed by the plaintiffs for me to be satisfied on the balance of probability that there was in fact such an oral agreement that was entered into between the parties on 28 June 2016.

Cross-claim

32.	I note that the defendant has withdrawn his cross-claim.  I note this at page 6 of the defendant's written submission filed on 28 August 2017.  The defendant's counsel also revealed this in her closing address.  The defendant has indicated that he may resolve that through further negotiations with the second plaintiff.  I also note that the cross-claim itself was not stated as an agreed or disputed fact nor was it pleaded as an issue for trial, in the Statement of Agreed and Disputed Facts and Legal Issues that was filed by the parties on 14 August 2017.

Summary

33.	In regard to the first issue, whether there was an oral agreement, my answer is "no".  In regard to the second issue, if so, whether the oral agreement, that effectively assigns or restricts claim for beneficiary interests over customary land is permitted under sections 2 and 4 of the Frauds and Limitations Act 1988, my answer is this.  "The issue is unattainable given my findings in relation to the first issue but I have discussed its application based on law."  In regard to the third issue, If so, whether the defendant has breached the oral agreement, I find the issue unattainable given my findings in relation to the first issue.  In regard to the fourth issue, whether the defendant should be estopped, I find the issue unattainable given my findings in relation to the first issue.  In regard to the fifth issue, whether the defendant's cross-claim has been established and should be upheld, and whether this Court should order the plaintiffs to pay the defendant a sum of K135,851.43, my answer is, "no because the claim has been withdrawn as well as the fact that it was not duly identified as a trial matter."  

Cost

34.	Cost is discretionary.  I will order cost to follow the event.  It will be assessed on a party/party basis to be taxed if not agreed.

THE ORDERS OF THE COURT

35.	I make the following orders:

1.	The proceeding is dismissed.

2.	The plaintiffs shall pay the defendant's cost of the proceeding on a party/party basis which shall be taxed if not agreed.

3.	Time for entry of the orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.

The Court orders accordingly.

______________________________________________________________
Kandawalyn Lawyers:			Lawyers for the Plaintiffs
NatPhil & Associates Lawyers:		Lawyers for the Defendant