N8797
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (HR) NO 247 OF 2016

MOREA KOTAMUFU
Plaintiff

V

MARY LANGUMA
First Defendant

NATIONAL HOUSING CORPORATION
Second Defendant

Waigani: Cannings J
2021: 19th February, 7th, 16th, 19th April

LAND – State Lease over government land – pleading of fraud against registered proprietor – principle of indefeasibility of title – exception in the case of fraud – whether plaintiff able to prove fraud warranting setting aside defendant’s title.  

The plaintiff claimed that he or his deceased elder brother has been in long-term occupation of one part of a large block of residential land in an urban area, as legal tenants of the National Housing Corporation (the second defendant) while the first defendant occupied the other part. The plaintiff claimed that in 2009, without his or his elder brother’s knowledge and without adhering to normal administrative protocols and mandatory procedures under the National Housing Corporation Act, the State Lease over the whole block of land was transferred from the National Housing Corporation to the first defendant for a small fraction of its real value. The plaintiff claimed that though the first defendant is now the registered proprietor of the State Lease her title in the whole block of land was acquired by fraud and ought to be cancelled. He sought declarations and orders to that effect and further orders that the whole block of land be subdivided by the National Housing Corporation and the subdivided parts allocated to him and to the first defendant. He also sought declarations that his right of protection against harsh and oppressive acts under s 41(1) of the Constitution and against compulsory acquisition of property under s 53(1) of the Constitution had been infringed, and damages. The first defendant responded that the proceedings ought to be summarily dismissed due to defective pleading of the allegation of fraud and an improper mode of commencement of the proceedings. As to the merits of the claim, both defendants argued that the proceedings ought to be dismissed as the plaintiff’s case rested on the assertion that he or his brother are long-term occupiers of part of the land as lawful tenants of the National Housing Corporation, which is a false assertion as neither defendant, especially the National Housing Corporation, has any knowledge of the plaintiff or his brother; and in any event the plaintiff failed to prove that the transfer to the first defendant was irregular or unlawful.     

Held:

(1)	The statement of claim adequately pleaded constructive fraud as a cause of action and the plaintiff was not obliged to commence the proceedings using another mode, so both of the first defendant’s preliminary points failed.

(2)	The plaintiff was unable to prove, in the face of what was a challenge to his standing, that he or his brother were long-term occupiers of the part of the land that was claimed to be the source of their interest in the proceedings. 

(3)	The plaintiff’s case failed due to lack of standing. If he had overcome that obstacle the proceedings would still have failed due to his inability to prove any constructive fraud in the transfer to the first defendant.

(4)	The proceedings were entirely dismissed with costs to the first defendant. 

Cases Cited

The following cases are cited in the judgment:

Maki v Pundia [1993] PNGLR 337
Wapua v Lopkopa (2009) SC1048

STATEMENT OF CLAIM

This was a trial on liability, the cause of action being constructive fraud.

Counsel

I David, for the Plaintiff
J Apo, for the First Defendant
A Luke, for the Second Defendant

19th April, 2021

1.      CANNINGS J: This case involves a challenge to the title of the registered proprietor of the State Lease over a block of residential land in Morata 2, National Capital District. The land is described as Section 366, Lot 127, Milinch Hohola, Town Port Moresby, an area of 0.1707 hectares.

2.     The plaintiff, Morea Kotamufu, claims that he or his deceased elder brother, Sarao Kotamufu (who died in 2016),  have been in occupation of one part of Section 366, Lot 127, since 1987, as legal tenants of the National Housing Corporation (the second defendant), while the first defendant, Mary Languma,  has occupied the other part since 1993. The plaintiff claims that in 2009, without his or his elder brother’s knowledge and without adhering to normal administrative protocols and mandatory procedures under the National Housing Corporation Act, the State Lease over the whole block of land was transferred from the National Housing Corporation to the first defendant for a small fraction of its real value. 

3.     The plaintiff claims that though the first defendant is now the registered proprietor of the State Lease her title in the whole block of land was acquired by fraud and ought to be cancelled. He seeks declarations and orders to that effect and further orders that the whole block of land be subdivided by the National Housing Corporation and the subdivided parts allocated to him and to the first defendant. He also seeks declarations that his right of protection against harsh and oppressive acts under s 41(1) of the Constitution and against compulsory acquisition of property under s 53(1) of the Constitution have been infringed, and damages. 

4.     The first defendant argues that the proceedings should be summarily dismissed due to defective pleading of the allegation of fraud and an improper mode of commencement of the proceedings. 

5.    As to the merits of the claim, both defendants argue that the proceedings should be dismissed as the plaintiff’s case rests on the assertion that he or his brother are long-term occupiers of part of the land as lawful tenants of the National Housing Corporation, which is a false assertion as neither defendant, especially the National Housing Corporation, has any knowledge of the plaintiff or his brother; and in any event the plaintiff has not proven that the transfer to the first defendant was irregular or unlawful.     

PRELIMINARY POINTS 

6.    I will deal first with the two preliminary points. First, the allegedly defective pleading argument is based on Order 8, Rule 30 of the National Court Rules, which states:

A party pleading shall give particulars of any fraud, misrepresentation, breach of trust, wilful default or undue influence on which he relies.

7.     In view of the seriousness of the allegation of fraud, it is necessary for a statement of claim to particularise the alleged acts or omissions of the defendant pleaded to amount to fraud (Maki v Pundia [1993] PNGLR 337, Wapua v Lopkopa (2009) SC1048). I consider that sufficient particulars are pleaded in the present statement of claim. I dismiss the first preliminary point.

8.    As to the mode of commencement, it is true that the plaintiff is seeking some relief, such as a detailed prescription of the procedures that would apply to require the first defendant to yield up her title so that it can be quashed by the Registrar of Titles, which would appear more commonly in an application for judicial review. However, I do not agree that the inclusion of such relief in the prayer for relief in the statement of claim, means that the plaintiff was obliged to commence proceedings by judicial review under Order 16 of the National Court Rules. The proceedings have been properly commenced by writ of summons under Order 4 of the National Court Rules.

9.     Both preliminary points are therefore refused and I will now deal with the merits of the plaintiff’s case.

PLAINTIFF’S STANDING 

10.     This is an issue that neither the first defendant’s counsel, Mr Apo, nor the second defendant’s counsel, Mr Luke, described as a preliminary issue, but I think it ought to be described in those terms as it is fundamental to the plaintiff’s case or more particularly the defendants’ defence. Both defendants argue that the proceedings should be dismissed as the plaintiff’s case rests on the assertion that he or his brother are long-term occupiers of Section 366, Lot 127 as lawful tenants of the National Housing Corporation, which is a false assertion as neither defendant, especially the National Housing Corporation, has any knowledge of the plaintiff or his brother. 

11.     Mr David, for the plaintiff, conceded that there was little direct evidence to support the plaintiff’s assertion that he and his brother had been lawful tenants but argued that this was no longer contentious as a result of meetings with National Housing Corporation personnel in 2016, which had ascertained that the plaintiff’s brother had occupied the property in 1987 and improved it substantially in the period since then. 

12.    I find no merit in Mr David’s submissions. The only evidence that goes any way towards advancing the plaintiff’s case is what looks like a standard-form National Housing Corporation tenancy agreement in the name of Sarao Kotamufu dated 26 February 1987 but it is unsigned by any person on the part of the National Housing Corporation, unsealed, and it is for Section 366, Lot 126, a neighbouring allotment.

13.     The evidence for the plaintiff is vastly inadequate. He has been unable to prove, in the face of what has been a challenge to his standing, that he or his brother were long-term occupiers of Section 366, Lot 127, the land that is claimed to be the source of his interest in the proceedings. The plaintiff has no record of any tenancy agreement in regard to the subject land, no record of payment of any rent to the National Housing Corporation and no other direct evidence that he or his brother actually occupied Section 366, Lot 127, let alone did so lawfully.

14.     In these circumstances, the plaintiff’s case fails. There is no point going any further except to say that if the case were to proceed on its merits, the plaintiff’s case would still fail due to his inability to prove any constructive fraud in the transfer from the National Housing Corporation to the first defendant.

CONCLUSION 

15.     The plaintiff’s case has failed due to lack of standing and is entirely dismissed. The plaintiff will be ordered to pay the first defendant’s costs. The National Housing Corporation has not been consistent in its cooperation with the Court, which could have been resolved a long time ago if the Corporation had provided the necessary assistance in a timely manner. 

ORDER

(1)	The proceedings are wholly dismissed.

(2)	The plaintiff shall, subject to any other costs orders made in the proceedings, pay the first defendant’s costs of the proceedings on a party-party basis which shall, if not agreed, be taxed.  

Judgment accordingly.
_____________________________________________________________
Kalit Legal Consulting: Lawyers for the Plaintiff			
Apo & Co Lawyers: Lawyers for the First Defendant	
NHC Legal Services: Lawyers for the Second Defendant