Roman Catholic Archdiocese of Rabaul v Gaung [2017] PGNC 21; N6642 (13 February 2017)

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ALLAN GAUNG, MANAGING DIRECTOR OF MALAKIT INVESTMENT LIMINTED
First Defendant

LAND DISPUTE – State Lease - originally freehold land - land converted to state lease - portion of land subject to agreement for development purposes - dispute arose or started on the said portion - whether land part of traditional land - whether land state land - indefeasibility of title discussed

PRACTICE & PROCEDURE - Challenge on title to a state lease - correct processes discussed
Facts:

The plaintiff said it owned a state lease described as Portion 302 Milinch Kokopo, Rabaul East New Britain Province. The plaintiff said the defendants have interfered with one of its business dealings on a portion of land, which it said was within the said state lease. The defendants argued that the said portion of land was within their customary land called Lelerai. They also challenged the plaintiff's title over Portion 302. They said they failed to understand how it was possible for the plaintiff to have obtained the said title.

Case cited:
Alex Timothy v. Hon Francis Marus (2014) SC1403
Gari Raka v. Peter Taule (2011) N4196
Housing Commission v. Yama Security Services Pty Ltd [2000] PNGLR 69
Mudge v. The Secretary for Land [1985] PNGLR 387
Richard Wapua v. Poss Lopkopa (2009) SC1048

1. ANIS AJ: The plaintiff commenced this proceeding on 11 July 2016. It alleges that the defendants have interfered with one of its business dealings over a piece of land in Kokopo, East New Britain Province. The block of land concerned is part of a state lease described as Portion 302 Milinch Kokopo, Rabaul East New Britain Province (Portion 302). Portion 302 has various sub-leases and proposed sub-leases to it. The plaintiff says it is currently in the process of sub-leasing a block of land (Proposed Block) within Portion 302 to a company called JT Tyres Limited, that is, opposite the Kalabond Sports field in Kokopo, East New Britain Province. The plaintiff says the defendants were unhappy about this arrangement. The plaintiff says the defendants have warned it to stay clear from the Proposed Bock until the matter is resolved. The plaintiff says the defendants' actions have affected or interfered with its said business dealings with JT Tyres Ltd who, according to the plaintiff, were supposed to occupy, develop and operate its business on the Proposed Block.

2. The trial was conducted on 1 December 2016. I reserved my ruling to a date to be advised.

(iii) If so, whether the defendants' alleged actions, if proven, warrant a permanent injunction.

5. The plaintiff called one (1) witness to testify. He is Doug Grant Tennent. The defendants called two (2) witnesses to testify. They are Allan Gaung and Ephraim Daula. All these witnesses were cross-examined in Court.

6. Through these witnesses, counsel for the parties formally tendered various affidavits. I set them out herein:

Exhibit No.	Description	Dated & Date filed
“P1”	Affidavit of Doug Grant Tennent	7/07/16 11/0716
“P2”	Affidavit of Doug Grant Tennent	27/09/16 28/09/16
“P3”	Affidavit of Doug Grant Tennent	12/12/16 12/12/16
“D1”	Affidavit of Allan Gaung	26/09/16 26/0916
“D2”	Affidavit of Ephraim Daula	12/12/16 13/12/16

7. The first question before anything else is for this Court to ascertain the type of the lease we are dealing with. Secondly, who legally owns it, or to be precise, whether the plaintiff is the registered proprietor of Portion 302.

8. The plaintiff attaches a copy of the title to Portion 302 at Annexure 1 to Exhibit P1. The plaintiff's evidence reveal that prior to 2009, it held the land as a freehold lease. On 9 April 2009, after the plaintiff had applied for a conversion, the freehold lease was converted to a state lease and it was issued with the said Portion 302. The plaintiff explains these in Exhibit P1.

9. During the trial when the plaintiff's witness Mr Grant was put on the witness stand, he produced to the Court, the original owner's copy of the title to Portion 302. The Court and the defendants' counsel were given the benefit to peruse and examine the said title. From my perusal and examination of the original title, I find it to be in order. I did not see anything that would suggest otherwise and the original corresponded with the attached copy contained in Exhibit P1. I particularly noted the last entry in the title, which showed the plaintiff as the current registered proprietor. I also noted the earlier register record, which showed that the lease had been converted from freehold to state lease in 2009. The register also recorded the plaintiff's name as the former registered owner to the land when it was held as a freehold lease.

10. The plaintiff's title seems to be in order. But before I rule on that, let me go on to consider the defendants' arguments.

11. Based on the evidence and submissions by the parties, the defendants initially challenged the Proposed Block. They claimed that the Proposed blocked was not situated on state land but that it was situated on customary land. They claimed that it was part of their traditional land called "Lelerai". However, I note that during the trial, the defendants did not bother with this argument. They adduced no evidence to challenge that claim. Instead, the defendants ran a different or should I say a much broader argument. The defendants focussed their attention on the plaintiff's title over the entire Portion 302. They challenged the validity of the plaintiff's title over Portion 302. The defendants argued that the current title held by the plaintiff was void and they did not recognise it. The defendants ventured into the historical aspect of the land as they saw it or based on their own researches and findings. They adduced maps and drawings and claimed that based on their evidence, the land where Portion 302 is situated, was never formally acquired from the traditional landowners. That argument then opened the 'flood-gates' so to speak, where both parties proceeded to and presented evidence concerning the historical background of Portion 302. Unfortunately, I must say that all these arguments, evidence and submissions by the parties are not relevant to the central issues.

12. I think it is obvious why the defendants have abandoned their argument that the Proposed Land is situated over customary land and not over Portion 302. When I look at the official map for the title of Portion 302 (see Annexure 1 to Exhibit P1), it clearly reveals the location and boundaries of the Lelerai land. The first thing I notice is that the Lelerai land and the Proposed Block are located several kilometres away from each other. Secondly, the two (2) land areas do not meet, conjoin or share any common boundaries. The Lelerai land, which is traditional land, is located further inward far opposite Vunabosco.

13. In regard to the defendants' initial claim that the Proposed Block is within or on their traditional land called Lelerai land, I find that to be not true and is baseless. I find sufficient evidence adduced by the plaintiff, which proves that the Proposed Land is within state land that is Portion 302 and it is not on customary land namely the Lelerai land area.
14. In regard to the defendants' challenge over the plaintiff's title to Portion 302, I find the argument, regardless of its merit, misconceived. I find the challenge misconceived because:

15. In my opinion, a challenge on the plaintiff's title, which is a state lease, may be appropriately raised before a judicial review Court. That is, the defendants could file a separate judicial review proceeding in the National Court. This present proceeding was commenced under Order 4 Division 2 of the National Court Rules. It is not a proper mode of proceeding, for the defendants to appear in and raise such an argument challenging or questioning the validity or legality of a state lease. Secondly, the defendants could also raise a challenge over the title, by filing a writ of summons with proper pleadings. [See cases: Alex Timothy v. Hon Francis Marus (2014) SC1403; Richard Wapua v. Poss Lopkopa (2009) SC1048].

16. Whichever mode of proceedings the defendants decide to use, should suffice, of course provided that they must have good evidence or valid grounds that they would propose to argue before the National Court if they wish the National Court to overturn the plaintiff's title. I will elaborate on these below.

17. Because I have now dismissed all of the defendants' arguments to the claim, let me firstly return to my findings and considerations under the sub-heading "TITLE" above in my judgment. I will rule on it now. I am satisfied on the balance of probability that the plaintiff is the registered proprietor and holds a valid title over Portion 302.

18. Therefore, I find that the plaintiff, under law, holds an indefeasible title over Portion 302. There are ample case authorities on this and I need not cite them all here. But I should point out the leading case authority concerning indefeasibility of title, which is the Supreme Court case of Mudge v. The Secretary for Land [1985] PNGLR 387. The case has been applied and followed ever since. I will cite two (2) other cases herein, which I think better summarises the Mudge decision and the principle of indefeasibility of title.

19. Firstly, I refer to the decision of the late Justice Mark Sevua, in the case National Housing Commission v. Yama Security Services Pty Ltd [2000] PNGLR 69. His Honour said:

The law in relation to indefeasibility of title is contained in Mudge and Mudge v. Secretary for Lands and The State [1985] PNGLR 387. The Supreme Court held in that case that, “registration of lease under the provisions of the Land Registration Act (Chapter 191) is effective to vest an indefeasible title in the registered proprietor subject only to the exceptions enumerated in s.33.” The Supreme Court followed the Privy Council in Fraser v. Walker [1967] 1 AC 569 and said, “it is now settled law that apart from exceptions mentioned in the relevant legislations once land is under the Torrens System, the owner acquires indefeasibility of title.”

20. Secondly, I refer to the decision of Justice Cannings in the case of Gari Raka v. Peter Taule (2011) N4196. His Honour said:

Papua New Guinea has adopted a Torrens Title system of land registration for alienated government land. We apply the principle of indefeasibility of title. Registration of leases vests an indefeasible (unforfeitable) title in the registered proprietor subject only to the exceptions in Section 33(1) of the Land Registration Act (Mudge v Secretary for Lands [1985] PNGLR 387). The only exception that might apply in this case is Section 33(1)(a): in the case of fraud.

21. As also pointed out in the two (2) cases, there are exceptions to the principle of indefeasibility of title. For example, proof of fraud, whether it be actual fraud under section 33(1)(a) of the Land Registration Act (LRA) or constructive fraud in equity, is an exception to the principle of indefeasibility of title. But like I had ruled above in my judgment, that may be a separate matter if it is ever raised by the defendants following due process.

23. I am satisfied that there have been interferences by the defendants and their agents on the plaintiff's land namely Portion 302. Firstly, I refer to the defendants' letter dated 24 September 2015, that is, Annexure "6" to Exhibit P1. The letter may be viewed as a threat. It also constitutes or implies the defendants' intention to continue to interfere with Portion 302. The letter reads in part as follows:

RE: STOP WORK NOTICE ON SITE, REMAINDER OF LELERAI SUB-DIVISION, PORTION 302 KINIGUNAM, M/l KOKOPO, F/M RABAUIL

Regarding to the above matter, which is situated within Painakau Ward, Kokopo/Vunamami L.L.G, Kokopo District that the Land is under DISPUTE therefore NO DEVELOPMENT WILL TAKE PLACE and if any Development is taking place now than Cease Operation or Stop Work immediately.

The issue here, we are addressing is the Ownership and not the Partnership where your Office, Palnakaur Ward and the Palnakaur Sub-Parisk are pursuing. The said Land is a Remainder of of Lelerai Sub-division according to our understanding; therefore it should be given back to its Original Owner.

Also the manner in which you, Substitute, Portion 302, Freehold Land to State Lease (99 year lease) in 2008 is questionable and irrelevant, set procedures were not fully followed accordingly. Therefore you took advantage of the majority of illiterate original Land Owner, you Extinguished or God given Rights (Land), you destroyed or Birth Rights and Abuse our inheritance and if it was intentional then, its Land grabbing and Land grabbing is a Criminal offence in Nature.

This matter is being taken up with the National Lands Department for further deliberation and also to confirm a Clause in the Land Act which states that all Freehold Land is being replaced with State Lease.

We kindly, ask your Office or Associate not to further carry out Development or Sell Land within the Disputed Area until Dispute is settled by both Parties.

24. I note that the letter was written sometime back in September of 2015. But I also note and take into account the fact that it has constituted the start of the dispute between the parties. Obviously, the plaintiff wanted the issue resolved so that it does not affect its business dealings or rights over Portion 302, which was why it filed this proceeding. One of the plaintiff's claims in its evidence, which I uphold, is that the defendants were stubborn and they have refused to co-operate with the plaintiff to try to resolve the matter amicably. That, as well as the continued existence of threats or uncertainty since the matter had not be resolved since 2015, has led the plaintiff to filing this Court proceeding.

25. I note that the first defendant himself also gave evidence in Court stating that he has built a house or a structure over the Proposed Block. He said as far as he was concerned, they did not recognise the title held by the plaintiff.

26. I note that the defendants represent groups of persons or landowners who appear unhappy about the activities of the plaintiff over Portion 302. Well, as I have stated above in my judgment, there are due processes available if the defendants still intend to pursue their claims. But until such time, this Court has a constitutional role to protect and enforce the private legal rights of persons like the plaintiff in this proceeding.

27. I am satisfied and I will grant the relief sought by the plaintiff in its originating summons.

28. During the course of trial, evidence shows that the defendants have or may have erected a house, fixtures or structures on the block of land within Portion 302.

29. In all fairness to both parties, I intend to and I will make consequential orders allowing time for the defendants, their agents and servants to remove any house, fixtures or structures from the Proposed Block within Portion 302.

30. In regard to the first issue, Whether the plaintiff is the registered proprietor of Portion 302 my answer is "yes". In regard to the second issue, If so, whether the Proposed Block is within Portion 302 my answer is "yes". And in regard to the final issue, "If so, whether the defendants' alleged actions, if proven, warrant a permanent injunction" my answer is "yes".

32. I have found that the defendants had no legal basis to interfere with the plaintiff and its business dealings on Portion 302 with third parties in the first place. The plaintiff would not have come to Court to seek the relief as sought in its originating summons had it not been for the actions of the defendants. The plaintiff has a clear title and it seems that the defendants were defiant or stubborn which has led to the trial of this matter.

33. I will award costs of the proceeding in favour of the plaintiff on a party/party basis.

Warner Shand Lawyers: Lawyers for the Plaintiff
Promised Inheritances Consultancy Legal Services: Lawyers for the Defendants

National Court of Papua New Guinea

Roman Catholic Archdiocese of Rabaul v Gaung [2017] PGNC 21; N6642 (13 February 2017)