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PNG Toner & Ink Supplies Ltd v Tapako [2018] PGNC 306; N7426 (24 August 2018)

N7426

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) No. 75 of 2017

Between:
PNG TONER & INK SUPPLIES LTD
First Plaintiff

And:
GEORGE IPI
Second Plaintiff

And:
JIM TAPAKO
First Defendant

And:
SHIRLEY POHEI in her capacity as the Acting Registrar of Titles,
Department of Lands & Physical Planning
Second Defendant

And:
LUTHER SIPISON, Secretary, Department of Lands & Physical Planning
Third Defendant

And:
DEPARTMENT OF LANDS & PHYSICAL PLANNING
Fourth Defendant

And:
Hon. BENNY ALLAN, Minister for Lands & Physical Planning
Fifth Defendant

And:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Defendant

Waigani: Higgins, J
2018: 30^th July & 24^th August

JUDICIAL REVIEW – Land Registration Act 1981, s.89(1) – cancellation of State Lease – new State Lease to Plaintiff – purported cancellation of that Lease – Registration of 1^st Defendant – errors of law – second cancellation unlawful – register to be corrected – Land Act 1996, s.123 – res judicata

PNG cases cited

Aipa v Samson & ors [2012] N4777

Decision 2000 Ltd v Luther Sipison et ors [2017] N6778

Koitachi Ltd v Walter Schnaubelt & ors [2007] SCA 70

PingTan Enterprises & anor v Henry Wasa et ors [2012] N4777

Tapako v Ipi et alia (supra)
COUNSEL:

Mr. S. Japson, for the Plaintiffs
Mr. L. Aigilo, for the First Defendant
Ms. J. Topo, for the Second to Sixth Defendants

24^th August, 2018

1. HIGGINS, J: This is a claim, by way of Originating Summons, seeking to set aside and to reverse a decision of the second Defendant to cancel, purportedly pursuant to s.89(1) of the Land Registration Act 1981, the registration of State Lease Volume 14 Folio 55 in respect of Allotment 27 Section 02, Lae, Morobe Province.
   
2. The cited ground was that a previous State Lease over the same block of which the first Defendant had been the registered proprietor had been wrongly forfeited, contrary to ss.28 and 33(1)(g) of that Act.
   
3. State Lease Volume 14 Folio 55 was accordingly cancelled and State Lease Volume 3 Folio 20 reinstated.
   
4. These decisions were made and notified on 5 December 2016.
   
5. The first Plaintiff sought leave to review these decisions. That leave was granted on 16 May 2017.
   
6. There is no factual dispute concerning the history of the initial forfeiture, subsequent re-leasing and then the purported forfeiture of the new State Lease.
   
7. The original lease had been granted to the National Housing Corporation (NHC) in 1993 for a period of 99 years. It was for residential purposes. The dwelling on the land was later destroyed by fire, ie in 1999.
   
8. The land being thus vacant, the first Defendant made an expression of interest in purchasing the same from the NHC.
   
9. On 18 September 2001, a Contract for Sale had been entered into between the first Defendant and NHC. On 10 October 2001, the first Defendant paid K50,000.00 by way of agreed purchase price. On 12 October 2001, the third Defendant registered the title to the State Lease of the land in favour of the first Defendant and issued to him an Owner’s Copy of that State Lease.
   
10. Thereafter, the fourth Defendant, citing land rent unpaid for 6 years, gave notice of forfeiture of that State Lease. Forfeiture was duly effected though notice of the intended forfeiture had not been served on the first Defendant.
    
11. About February 2005, the first Plaintiff’s representatives made application for and were granted a fresh State Lease. Thereafter, the first Plaintiff commenced development works on the land. The first Defendant approached the Plaintiffs and alleged that the work (fencing and earthmoving) being done was “encroaching” on his land.
    
12. The Plaintiffs then engaged Steeles Lawyers to examine this claim. They undertook a search of State records which revealed that:
    

“• A State Lease over the land was, on 27 May 1993, registered, with NHC as the proprietor of a 99 year leasehold interest.

• Rental payments had not been paid since 1996.
  
• On 12 October 2001, a transfer was entered in favour of the 1^st Defendant who thereby became the registered proprietor.
  
• On 4 November 2002, the Department served a Notice To Show Cause on NHC threatening forfeiture of the State Lease.
  

The notice alleged that land rentals had been unpaid for 6 years and lease covenants not complied with allegedly justifying forfeiture of the State Lease.

• That notice was not served on the 1st Defendant.
  
• On 28 May 2004, the Department of Lands & Physical Planning gazetted a notice forfeiting the State Lease in accordance with the Notice.
  
• In February 2005, the 1^st and 2^nd Plaintiffs applied to lease the forfeited land without tender or advertisement but unaware of the prior history.
  
• In August 2005, a State Lease of the land was awarded to the 1^st and 2^nd Plaintiffs with the 1^st Plaintiff as registered proprietor.
  
• The 1^st Defendant was informed of these facts by the Plaintiffs in May 2006 in response to his “Stop Work” notice.
  
• On 19 January 2007, a new State Lease issued with the 1^st Plaintiff as registered proprietor of the leasehold interest.
  
• On 4 July 2007, the 1^st Defendant issued judicial review proceedings against the Plaintiffs and the various State entities involved.
  
• On 12 August 2009, those proceedings were dismissed for want of prosecution.”
  

13. The first Defendant then pursued an application to set aside and reverse the dismissal of those proceedings.
    
14. That application was heard by Thompson AJ who delivered a decision on 7 September 2011. The first Defendant had chosen to proceed by way of Writ of Summons claiming that the Plaintiffs had obtained registration of the first Plaintiff as proprietor of the State Lease of the land by fraud and seeking reinstatement to the first Defendant of the proprietorship of the lease as well as damages.
    
15. Her Honour found the facts as outlined above and noted that by their allegations of fraud, the first Defendant was seeking to attract the provisions of s.33 of the Land Registration Act 1981. Referring to the Supreme Court case of Koitachi Ltd v Walter Schnaubelt & ors [2007] SCA 70, her Honour held that “fraud” in s.33 meant actual fraud.
    
16. Referring to the allegations of fraud, her Honour found that whilst there were irregularities in the government records, the first Defendant had failed to establish fraud on the part of the current registered proprietor, (ie) the first Plaintiff in these proceedings. It was not disputed that the grounds existed to forfeit the lease grounding the Notice To Show Cause. There was a failure to serve the notice on the defaulting registered proprietor. That was an error of the Registrar, not a result of any fraud on the part of the registered proprietor (first Plaintiff) but an administrative oversight. It did not render the forfeiture void but could have provided grounds for the first Defendant to apply to reverse that forfeiture.
    
17. The subsequent process did not leave open any inference of any such fraud.
    
18. Her Honour’s ultimate finding pointed to s.123 of the Land Act 1996:
    

“Section 123 of the Land Act says that where a State Lease has been mistakenly forfeited, it [the forfeiture] can be revoked provided that a notice under s.75 has not been published in the Gazette in respect to another applicant. In the present case, a notice under s.75 was published in the National Gazette in November 2005. The Plaintiffs [ie the present 1^st Defendant] did not make any application to revoke the forfeiture notice before the gazettal was published. That remedy is no longer available, and the forfeiture remains in effect. Accordingly, from the date of the gazettal of the forfeiture on 28 May 2004, the Plaintiffs [the 1^st Defendant] no longer had an instrument of title ...

... once the new lease was issued, the 2^nd Defendant [the 1^st Plaintiff] acquired indefeasible title subject to the exceptions in Section 33 of the Land Registration Act. The Plaintiffs [the 1^st Defendant] have not proved any actual fraud ...”

19. Thus what was, effectively, a challenge to the first Plaintiff’s title to the land was dismissed.
    
20. The first Defendant appealed against this decision to the Supreme Court. On 27 February 2015 that appeal was dismissed for want of prosecution.
    
21. It follows that the decision and orders of Thompson AJ remain in effect. The dismissal of the appeal was itself the result of a contested application for dismissal for want of prosecution. Lenalia, Davani & Sawong JJ handed down a reserved decision on 27 February 2015 following a hearing on 28 February 2013. The delay on the part of the first Defendant in seeking relief was described as “intentional and contumelious” (SCA No. 135 of 2011).
    
22. Despite these decisions, the Acting Registrar of Titles, on 5 December 2016, purported to cancel the first Plaintiff’s title to the land and transfer it to the first Defendant. This followed an advertisement of 21 July 2016 calling upon the first Plaintiff to produce the original certificate of title within 14 days. By this time the Plaintiffs had partially completed a building on the land.
    
23. The first Plaintiff, on 22 July 2016, had written to the second Defendant detailing the history of the matter and in support of their opposition to the notice of intention to transfer the title to the first Defendant. Despite that, the second Defendant purported to cancel the first Plaintiff’s title.
    
24. Following this letter, the Plaintiffs instituted these proceedings.
    
25. The decision of 5 December 2016 cited as the reason for it.
    

“... State Lease Volume 14 Folio 55 was improperly granted and subsequently registered contrary to Section 33(1)(g) and provisions provided (sic) by Section 28 of the land (sic) Registration Act 1981 Chapter 191.”

26. Annexed was a copy of State Lease Volume 14 Folio 55 marked as “cancelled”.
    
27. That decision has been promptly and properly challenged. Leave to review was granted on 16 May 2017.
    
28. In these proceedings (OS 75 of 2017 (JR), Mr Tapako, by way of affidavit, deposed to various matters which he alleged constituted fraud, inter alia, by the second Plaintiff.
    
29. That affidavit raises the same issues as those disposed of unfavourably to the first Defendant in proceedings WS No. 1075 of 2009 between the same parties (confirmed in SCA 135 of 2011).
    
30. In those circumstances, the first Plaintiff submits that the Registrar (second Defendant) acted improperly and unlawfully in purporting to cancel the Certificate of Title issued to the first Plaintiff over the land and reinstating the forfeited title of the first Defendant.
    
31. It is pointed out that, in any event, the then Acting Registrar of Titles invoked s.89(1) of the Land Registration Act 1981 as the source of power to cancel the State Lease issued to the first Plaintiff.
    
32. That section authorises the cancellation of a caveat where the caveator’s asserted interest “has ceased or been abandoned or withdrawn” (89(1)(a)) or is “satisfied or arranged” (89(1)(b)) or, that asserted interest does not entitle the caveator to forbid the registration of the interest sought to be restrained (89(1)(c)). It has nothing to do with the cancellation of a State Lease.
    
33. Further the reliance on ss.160 and 161 of the Land Registration Act was misconceived.
    
34. Section 160 provides for the production to the Registrar of instruments wrongly issued. In this case, the allegation was that the State Lease had been issued fraudulently to the first Plaintiff. That allegation was contested and rejected by Thompson AJ (supra).
    
35. Even if some other ground had been relied upon, Section 161 allows cancellation of an instrument delivered up under Section 160. The process for requiring such a delivery had not been followed. Hence the purported cancellation of the first Plaintiff’s State Lease was unlawful in any event. (see Aipa v Samson & ors [2012] N4777).
    
36. The first Defendant’s submissions in this matter commenced by alleging:
    

“The Plaintiffs had, under dubious circumstances, obtained a duplicate Title over the subject property on the 19^th January 2007 which was done erroneously, hence the processes of proper or lawful registration at the Titles Registry were incomplete. He was thus in possession of a void title.”

37. This assertion is contrary to the findings and decision of Thompson AJ in Tapako v Ipi et alia (supra). It is quite improper to allege what amounts to fraud (dubious circumstances) without a proper foundation, the more so when that contention has been judicially examined and dismissed.
    
38. A decision to cancel a certificate of title made otherwise than in compliance with ss.160 and 161 of the Land Registration Act is voidable at the suit of an aggrieved party (see PingTan Enterprises & anor v Henry Wasa et ors [2012] N4777, Decision 2000 Ltd v Luther Sipison et ors [2017] N6778).
    
39. In this case, the Acting Registrar’s decision is clearly based on erroneous grounds. It was completely unreasonable and unjustifiable even apart from being contrary to a judicial decision in point decided between the parties bound by that decision upon the principles of res judicata.
    
40. The second to fifth Defendants have now conceded that the decision of the second Defendant was not lawfully made and has no force or effect. I so declare.
    
41. Those Defendants also concede that the errors made by the second Defendant are such that the State (sixth Defendant) should be ordered to pay the costs of the Plaintiffs and of the first Defendant on a solicitor/client basis. It is so ordered.
    

Japson & Associates Lawyers: Lawyers for the Plaintiffs
Lakakit & Associates Lawyers: Lawyers for the First Defendant
Office of the Solicitor General: Lawyers for the Second to Sixth Defendants