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Petkol Trading Ltd v Pat [2021] PGNC 244; N8918 (20 July 2021)

N8918

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE


OS (JR) NO. 176 OF 2014


BETWEEN:
PETKOL TRADING LIMITED
Plaintiff


AND:

ROMILY KILA PAT – SECTRETARY, DEPARTMENT OF LANDS & PHYSICAL PLANNING
First Defendant


AND:
BENJAMIN SAMSON – ACTING REGISTRAR OF TITLES
Second Defendant


AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:
PALDIR COMMUNITY DEVELOPMENT SERVICES LIMITED
Fourth Defendant


AND:
ROBERT POSU
Fifth Defendant


Mendi and Ialibu: Kassman J

2017: 20th June

2021:20th July


JUDICIAL REVIEW – plaintiff applied for judicial review of the decision of the first, second and third defendants to issue title of land to the fourth defendant in circumstances where the fourth defendant was not a registered entity capable of holding and disposing off property – title to property was legally transferred to Plaintiff/applicant by Registrar of Companies who was vested with powers to deal with the property of an entity that was deregistered– Application for judicial review is granted


Cases Cited:
Papua New Guinea Cases


National Capital District Interim Commission v Bogibada Holdings Pty Ltd [1987] PNGLR 135
Tin Siew Tan v PNG Electricity Commission [2003] SC 683
Ok Tedi Mining Ltd v Niugini Insurance Corporation (No. 2) [1988-89] PNGLR 425


Overseas Cases


Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited [1921] 2 AC 438


Legislation Cited:


National Court Rules Order 22 rule 11.


Counsel:


Lasen Tangua, for the Plaintiff
Jason Rotep, for the First, Second and Third Defendants
Johannis Poya, for the Fourth and Fifth Defendants


DECISION


20th July, 2021


  1. By an originating summons filed in the National Court in Waigani on 3 April 2014, the Plaintiff, Petkol Trading Limited sought leave for judicial review of a decision of the Secretary, Department of Lands & Physical Planning and the Registrar of Titles of 23 November 2008 in registering title to the Fourth Defendant Paldir Community Development Services Limited in respect of Allotment 23 Section 22 Mendi, Southern Highlands Province which is more particularly described in State Lease Volume 9 Folio 215 (“the land”). Leave for judicial review was granted on 13 May 2014.
  2. For convenience, in this decision, I will refer to various parties, individuals and entities as follows:
  3. On 12 March 2015, the National Court in Waigani dismissed an application by Paldir and Posu which sought the dismissal of the proceedings and ordered the transfer of the court file to the National Court in Mendi for hearing and determination. The court file was received in the Registry of the National Court in Mendi and was first mentioned on 22 June 2016 when certain directions were issued. The substantive review was heard on 20 June 2017.
  4. Before the court were the Review Book filed 7 June 2017 (document numbers 62 and 63) and submissions for Petkol filed 13 June 2017 (document number 72) and submissions for Paldir and Posu filed 19 June 2017 (document number 80). The First, second and Third Defendants did not file written submissions but were represented by counsel from the Office of Solicitor General based in Mt. Hagen Mr Rotep who made oral submissions at the hearing and supported the submissions of Petkol.
  5. By a notice of motion filed 16 May 2014, found at pages 69, 70 and 71 of the Review Book, Petkol sought the following orders:

“1. An order in the nature of a declaration that the plaintiff is the sole registered owner and proprietor of the property described as Allotment 23, Section 22, Mendi Southern Highlands Province.

  1. An order in the nature of a declaration that the registration of Title to the property described as Allotment 23, Section 22, Mendi, Southern Highlands Province, in the name of the fourth defendant by the first and second defendants is null and void and of no effect.
  2. An order in the nature of certiorari be issued to bring into this Court and to quash the Fourth Defendant’s title to the property described as Allotment 23, Section 22, Mendi, Southern Highlands Province, as being obtained illegally and by fraud or deceipt.
  3. An order in the nature of mandamus against the first and second defendants to correct and rectify the land register to show or reflect the plaintiff’s name as being the sole legal proprietor and owner of the property described as Allotment 23, Section 22, Mendi, Southern Highlands Province.
  4. An Order in the nature of an injunction against the Fourth and Fifth Defendants from claiming to be the owners of the property described as Allotment 23, Section 22, Mendi, Southern Highlands Province and from interfering with the Plaintiff’s efforts to develop the said property and its rights to the full enjoyment of the said property.
  5. Pending the hearing of the substantive issues, the fourth and fifth defendants and their agents and employees be restrained from interfering with the plaintiff’s right to the full enjoyment of the property described as Allotment 23, Section 22, Mendi, Southern Highlands Province, including an order that they be restrained from harassing, threatening intimidating and assaulting the plaintiff and or its agents over the said property”.
  6. At the hearing, Petkol informed the court it would be pursuing paragraphs 1 and 4 and will abandon paragraphs 2, 3, 5 and 6 of the Notice of Motion.
  7. In the Statement of Agreed and Disputed Facts and Legal Issues, found at pages 175 and 176 of the Review Book, the parties agreed there are five issues at stake.
    1. Who is the current registered title holder of the property? Is it Petkol or Paldir?
    2. Should the Secretary and ROT be ordered to rectify or update the lagis land register system to reflect Petkol as the registered title holder of the property?
    1. Whether or not Paldir and Posu and their servants and agents should be restrained from interfering with the subject property?
    1. Whether the proceeding herein is an abuse of Court process?
    2. What is the administrative decision subject of the review before the Court?
  8. Petkol relied on seven affidavits sworn by Peter Kola and filed 3 April 2014 (document number 4), 13 October 2014 (document number 10), 4 July 2016 (document number 52), 14 July 2016 (document number 55), 4 November 2016 (document number 56), 13 December 2016 (document number 61), 13 June 2017 (document number 74).
  9. From those affidavits of Peter Kola, I have made a chronology of pertinent events.
  10. Paldir and Posu relied on nine affidavits. Six affidavits were sworn by Robert Posu filed on 16 October 2014 (document number 13), 25 October 2014 (document number 25), 3 November 2015 (document number 49), 12 July 2016 (document number 53), 28 November 2016 (document number 58) and 16 June 2017 (document number 78). One affidavit each was sworn by Johannis Poya filed 16 October 2014 (document number 14), John Mombulu filed 12 July 2016 (document number 54) and Clarence Kapali filed 9 March 2017 (document number 64). At the hearing, Paldir and Posu withdrew their reliance on an Affidavit which was sworn by Henry Wasa on 14 June 2017 and filed 16 June 2017 (document number 76).
  11. Robert Posu says the following:
  12. In Robert Posu’s affidavit filed 16 June 2017 (document number 78), he says:
  13. Clarence Kapali essentially gives evidence in support of Paldir and Posu. He produces copies of the contract for sale and transfer instrument between Menduli and Paldir of 7 September 2007.
  14. I set out in full the sworn evidence of Mombulu in his affidavit filed 12 July 2016 (document number 54) which is word for word a repeat of his evidence in an affidavit he swore which was filed earlier in National Court proceedings WS No. 806 of 2012 Peter Kola, Chairman and Managing Director, Petkol Trading Limited -v- Robert Posu filed 12 July 2016 (document number 54), Managing Director, Paldir Community Development Limited sworn 27 September 2013 and filed 28 September 2012:

“1. Except where it is stated to be on information or belief, I have personal knowledge of the facts deposed herein and where it is stated to be on information or belief, I believe same to be true.


  1. I am from Mendi in the Southern Highlands Province and was the Managing Director of the now deregistered company known as Vagabond Security Services Limited who once owned the property known as Section 22 Allotment 23, Mendi, Southern Highlands Province (“the property”) and as such, I am authorized to depose to the contents of this my affidavit.
  2. I know both Peter Kola and Robert Posu as both of them come from Mendi in the Southern Highlands Province. I also dealt with both of them in dealing with the property now in dispute in these proceedings.
  3. I owned and controlled a company known as Vagabond Security Services Ltd and upon incorporation of the company, the company owned the property.
  4. I sold the land to Menduli Pty Ltd, a company owned by the United Church in the Southern Highlands Province at a value of about K45,000.00 by way of a contract of sale executed on the 13th February 2000, which was prepared by Warner Shand Lawyers based at Mount Hagen, Western Highlands Province.
  5. The company after purchasing the land also helped me built my house in my village in Mendi. There on the company fully purchase the land and I had no interest and control of the land anymore.

Annexed hereto and marked with letter “A” is a true copy of the Contract for Sale.


Annexed hereto and marked with letter “B” is a true copy of the Transfer Instrument.


Annexed hereto and marked with letter “C” is a true copy of the Receipt of the payment of outstanding land lease rentals dated 13th June 2002.


  1. I know on or about November 2006, (date I cannot recall), after I had disposed of the land to Menduli Pty Ltd, Mr Peter Kola approached me and proposed that he will pay K600,000.00 to me on security the title of the same property and offered to pay deposit of K30,000.00 if I sell the property to him.
  2. That at all relevant times, I did not disclose the fact that I had already sold the land to Menduli Pty Ltd as I wanted to prove that Peter Kola can honour his promise to pay me K600,000.00.
  3. I am advised that the land was sold to Petkol Trading Ltd, a company owned by Peter Kola for about K50,000.00 by the Registrar of Companies without my knowledge and consent, as an owner of a deregistered company. I do not know as to what happed to the K50,000.00 as the Registrar of Companies never advised me or gave my share of the money.
  4. To this date, I have not received K600,000.00 as promised by Peter Kola or any payment from him after sale by Registrar of Companies was concluded.
  5. I know that the property in dispute had been sold to Menduli Pty Ltd prior to deregistration of my company, Vagabond Security Services Ltd and subsequent sale of the property by Registrar of Companies to Petkol Trading Ltd is void.”
  6. Johannis Poya was the lawyer for Paldir and Posu and his evidence is essentially a submission in law attacking the mode of proceedings commenced by Petkol in this proceeding as an application for judicial review. These arguments go to jurisdiction and would be appropriate if raised as an objection to the competency of Petkol’s application for judicial review. I have considered and addressed these arguments below.

Analysis of the evidence


  1. The evidence of Mombulu is abundantly clear that he first sold the land on 13 February 2000 to Menduli but after receiving the purchase money from Menduli, he and his lawyer failed to register the transfer from Vagabond to Menduli on the original title document. Neither did Menduli’s lawyer pursue registration of the transfer. This was fatal to Menduli’s claim to ownership of the land which is the flawed basis of Paldir’s claims.
  2. The second title document was then issued, under suspicious circumstances on 30 December 2015 to Vagabond and Allistree on which the transfer to Paldir was registered. Paldir and Posu failed to produce a contract for sale and transfer instrument as to the transfer of title from the purported proprietors Vagabond and Allistree to Paldir.
  3. What stands out from these pertinent facts are the following:
  4. Having considered all the evidence adduced at trial by the parties and discussed above, I make the following findings.
    1. Vagabond was a duly incorporated company at the relevant time.
    2. Mombulu was principal behind Vagabond, possibly as the sole shareholder and director of Vagabond.
    1. The land in issue between the parties (Petkol and Paldir) is Allotment 23 Section 22 Mendi, Southern Highlands Province which is more particularly described in State Lease Volume 9 Folio 215 which was duly issued on 18 August 1999 to Vagabond. I will now refer to this as “the original title document.”
      1. On 13 February 2000, a Contract for Sale of Land and Transfer Instrument between Vagabond and Menduli in respect of the land were prepared by Warner Shand Lawyers and apparently executed and then stamped and approved but the transfer was never registered on title.
      2. On 30 December 2005, by the Journal entry No. H-8027 entered on title, a new Official Copy of State Lease Volume 9 Folio 215 was issued to Vagabond and Allistree (as joint tenants) for the same period of 99 years from 24 June 1999 to 23 June 2098 in respect of the land. I will now refer to this as “the second title document.” There was no evidence adduced as to who requested the second title document and the background and reasons for issue of the second title document.
      3. On 21 April 2006, the company Vagabond was deregistered by the ROC. In accordance with provisions of the Companies Act, on deregistration, all assets and property of Vagabond vested in the ROC and those assets included the land.
      4. On 27 November 2007, a transfer to Paldir was registered on the second title document. However, Paldir was not incorporated until 8 October 2013 so it was not a legal entity with legal capacity to acquire and own property as at 27 November 2007. That transfer was legally flawed and correctly deemed by Raga Kavana ROT as null and void and was duly cancelled.
      5. On a date in 2008, by publication in a newspaper of a Notice dated 3 April 2008, the ROC gave notice of intention to consider an offer to purchase the land, the property of Vagabond, which was then a defunct company.
      6. On 9 April 2008, by publication in a newspaper of a Notice dated 7 April 2008, the ROT gave notice of intention to issue replacement Official Copy of Certificate of Title in respect of the land to Vagabond on being satisfied the registered proprietor’s copy of the original title document had been lost or destroyed.
      7. On 7 May 2008, Petkol was registered as a company.
      8. On 18 June 2008, a Contract for Sale of Land and Transfer instrument between ROC and Petkol in respect of the land was duly executed, stamped and approved and registered on the original title document.
      1. On 17 February 2009; (a) the ROT formally cancelled Entry No. H-8027 on issue of an Official Copy of State Lease Volume 9 Folio 215 registered on 30 December 2005 to Vagabond and Allistree (as joint tenants) being the second title document; and (b) on 17 February 2009, the ROT formally cancelled Entry No. H8848 as to registration of the transfer of title to Paldir in respect of the land effected on the second title document.
      1. On 18 February 2009, by a letter issued by Raga Kavana, ROT to Posu, c/- Paldir advising of the cancellation of Entry No. H8027 on Official Copy of State Lease Volume 9 Folio 215 and cancellation of Entry No. H8848 as to the transfer of title to Paldir in respect of the land. The ROT correctly recognised Petkol as the legitimate proprietor of the land.
      2. The letter issued by Henry Wasa, ROT to Paldir dated 4 October 2012 advising the Transfer between ROC (as successor of Vagabond) and Petkol was invalid and that Paldir is the rightful registered proprietor was factually flawed and legally incorrect as Paldir was not at that time a registered entity.
      3. On 8 October 2013, Paldir was incorporated and registered as a company.
  5. On the basis of my analysis of all the evidence adduced at trial by the parties, I make the following findings and orders:
    1. State Lease Volume 9 Folio 215 issued in respect of Allotment 23 Section 22 Mendi, Southern Highlands Province to Vagabond Security Services Limited on 18 August 1999 is a lawfully correct instrument.
    2. On 18 June 2008, Petkol Trading Limited was the registered proprietor of State Lease Volume 9 Folio 215 issued in respect of Allotment 23 Section 22 Mendi, Southern Highlands Province and that remains to today.
    3. The Secretary for Lands and Physical Planning and Registrar of Titles shall immediately correct and rectify their respective records to reflect findings and order number 2 above.
  6. Counsel for Paldir and Posu raise a number of issues attacking the mode of proceedings commenced by Petkol and they argue I should refuse to grant the declaratory orders sought and order Petkol commence fresh proceedings by originating summons. My first response is that would be appropriate to raise before participating in steps towards setting the matter for hearing and not after all the evidence has been filed and the review book settled. I note Petkol’s submission that this issue was heard and dismissed by Justice Nablu on 12 March 2015 and their appeal from that decision to the Supreme Court was subsequently withdrawn. I agree with counsel for Petkol that the issue is res judicata and I will not waste my time on the arguments. Petkol has sought a declaratory order that it is the legitimate registered proprietor of the land and also an order in the nature of mandamus directed at the Secretary and Registrar of Titles to rectify their records. The courts have repeatedly said an application for declaratory orders will be refused if the grant of declaratory orders will not settle the dispute between two parties. See National Capital District Interim Commission v Bogibada Holdings Pty Ltd [1987] PNGLR 135 and Tin Siew Tan v PNG Electricity Commission [2003] SC 683.
  7. In Ok Tedi Mining Ltd v Niugini Insurance Corporation (No. 2) [1988-89] PNGLR 425, Kapi DCJ (as he then was) referred to the factors that are required to be established before a declaratory order can be made. These are set out in the case of Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited [1921] 2 AC 438 at 448. They are:
    1. There must exist a controversy between the parties.
    2. The proceedings must involve a right.
    3. The proceedings must be brought by a person who has a proper or tangible interest in obtaining the order.
    4. The controversy must be subject to the court’s jurisdiction.
    5. The defendant must be a person having a proper or tangible interest in opposing the plaintiff’s claim.
    6. The issue must be a real one. It must not be merely of academic interest, hypothetical or one whose resolution would be of no practical utility.
  8. I agree with Petkol that this case satisfies all the considerations. There is a real dispute between Petkol and Paldir over title or their right to the land and Petkol is the holder of title which is recognized by the Registrar of Titles but which Paldir continues to dispute. The dispute is properly before the National Court.
  9. Petkol has succeeded in this proceeding against Paldir and Posu. As provided by Order 22 rule 11 of the National Court Rules, Paldir and Posu shall pay Petkol’s costs of the proceedings, such costs shall be assessed on a party and party basis, to be taxed, if not agreed. In this regard, I note counsel for the First, Second and Third Defendants supported the Plaintiff’s submissions. I will not make an order for their costs as officers of the Registry of Titles played a part in the issue of the “second title” and unlawful registration of the transfer to Paldir.

Natural and man-made disasters – Southern Highlands Province, 2017 and 2018


  1. The following circumstances have contributed to the delay in the delivery of this decision. At the time of the hearing of the substantive review, the country was engaged in the National General Elections with nominations, voting and counting conducted from about May to December 2017 and for some seats, in the Southern Highlands Province, declarations were made in 2018. In that period, there were no sittings of this court in the Southern Highlands Province on account of constant disruptions to law and order and the safety of people and their free and orderly movement within the province was constantly under threat. Then on 26 February 2018, this province experienced major loss of life, personal injuries to many people and loss and damage to property and infrastructure including roads and bridges following a major earthquake reported to have been 7.5 on the Richter scale with the epicenter located within this province. The building housing my chamber, courtroom and other critical functions of the National Court was severely affected and was declared structurally unsafe and unfit for human occupation. A further three months of disruption was then experienced during which renovations were effected to the adjoining building from which the library was converted and used as my chamber and office for staff of the court reporting service. The court server was relocated to the registry and courtroom 2 was renovated and made fit for use. This court then resumed sittings in courtroom 2 in May and June until it was completely destroyed by fire and looting following delivery of the decision of the National Court in Waigani on 14 June 2018 in the election petition between Joseph Kobol, a candidate who contested the Southern Highlands Regional seat retained by Governor Honourable William Powi, MP. In that event, other major State and provincial offices were destroyed by rioters who invaded the Mendi airport terminal and tarmac in broad daylight and set fire to a dash 8 aircraft operated by the national airline Air Niugini. Fortunately, there was no reported loss of life to passengers and crew although they would have been severely traumatized in this event which was the first of its kind in this country. In the same rampage in Mendi town, rioters looted and burnt completely a private residence and buildings occupied by the District Court and the provincial department of primary industries. These buildings remain to be reconstructed. The National Court and District Court have held sittings on an ad-hoc basis in the District Court in Ialibu in November and December 2018 and in February, May and June 2019. On the directions of the Chief Justice, I left the Southern Highlands Province and took up duties as Senior Resident Judge in Kokopo, East New Britain Province in 2019. In the year 2020, my term expired in early February 2020. This was the period when the covid19 pandemic was at its height throughout the world and had set foot in PNG. I remained in Australia until September when I returned and was sworn in to serve my current term as Judge of the National Court. I have continued to be resident in Kokopo. With the approval of the Chief Justice, I returned to Ialibu to deliver my decision in this matter among others civil matters.
  2. The formal orders of this court are:
    1. The application for judicial review is granted.
    2. State Lease Volume 9 Folio 215 issued in respect of Allotment 23 Section 22 Mendi, Southern Highlands Province to Vagabond Security Services Limited on 18 August 1999 is a lawfully correct instrument.
    3. On 18 June 2008, Petkol Trading Limited was the registered proprietor of State Lease Volume 9 Folio 215 issued in respect of Allotment 23 Section 22 Mendi, Southern Highlands Province and that remains to today.
    4. The Secretary for Lands and Physical Planning and Registrar of Titles shall immediately correct and rectify their respective records to reflect findings and order number 3 above.
    5. The Fourth and Fifth Defendants shall pay the Plaintiff’s costs of the proceedings, such costs shall be assessed on a party and party basis, to be taxed, if not agreed.
    6. The time for entry of this order is abridged to the time of settlement by the Registrar which shall take place forthwith.

Judgment accordingly:
__________________________________________________________________
Baniyamai Lawyers: Lawyers for the Plaintiff
Office of Solicitor-General: Lawyer for the First, Second and Third Defendants
Poya Legal Service: Lawyers for the Fourth and Fifth Defendants

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