Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

JPH Properties Ltd 1-63894 v Sipison [2021] PGNC 84; N8826 (21 May 2021)

N8826

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]
CIA NO. 25 OF 2017

BETWEEN:
JPH PROPERTIES LIMITED 1-63894
Appellant

AND:
LUTHER SIPISON, AS DELEGATE OF THE MINISTER FOR LANDS AND PHYSICAL PLANNING
First Respondent

AND:
HON. BENNY ALLAN, MINISTER FOR LANDS AND PHYSICAL PLANNING
Second Respondent

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

AND:
L&Z ENTERPRICE LIMITED
Fourth Respondent

Waigani: Miviri J
2021: 12^th May

PRACTICE & PROCEDURE – Judicial Review & Appeals – Appeal – Land Act 1996 Section 122 Forfeiture of State Lease – – Same Property –Appeal hearing 2 days away – Motion without merit – Abuse of process – dismissal – cost follow event.

Cases Cited:

Beecraft No 20 Ltd v Pok, Minister for Lands [2001] PGNC 85; N2125
Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110
Independent State of Papua New Guinea v Wingti [2021] PGSC 19; SC2100
Mount Hagen Local Level Government v Kimas [2012] PGNC 356; N6044
University of Papua New Guinea v Ofoi [2016] PGNC 85; N6303
Yakananda Business Group Inc v Minister for Lands & Physical Planning [2001] PGNC 50; N2159

Counsel:

S. Gor, for Appellant

B. Sinen, for Fourth Respondent

RULING

21^st May, 2021

1. MIVIRI, J: This is the ruling on the appeal filed of the 16^th March 2017 by the Appellant. He appeals against the decision of the Second Respondent of the 24^th June 2015 to forfeit his State Lease Volume 115 Folio 119 over land described as Section 20 Allotment 4 Boroko National Capital District. The Respondent’s decision was published twice in gazettal notice G406 dated the 24^th June 2015 and G463 dated the 23^rd July 2015.
   
2. He raises three grounds of appeal. The Minister erred in fact and in law when he forfeited the Appellant’s State Lease as the Appellant complied with and responded to the Ministers Notice to show Cause of the 23^rd May 2014 which was served on the registered office of the Appellant on the 1^st December 2014.
   
3. Secondly the Minister erred in fact and in law when the Minister forfeited the Appellant’s State Lease when there was no factual or legal basis for the Minister to make such a decision.
   
4. Thirdly the Minister erred in fact and in law when the Minister forfeited the Appellant’s State Lease, on the basis that the Minister did not serve the forfeiture notice on the Appellant.
   
5. He seeks that the decision of the Minister to forfeit the Appellant’s State Lease be quashed. Secondly the Appellant’s State Lease be restored and returned to the Appellant and the forfeiture be cancelled forthwith. Thirdly that the Respondents shall pay the Appellant’s costs of and incidental to the appeal.
   
6. Forfeiture of State Lease is covered by section 122 of the Land Act 1996:
   

(1) The Minister may, by notice in the National Gazette, forfeit a State lease–

(a) if rent on the lease remains due and unpaid for a period of six months; or
(b) if fees are not paid in accordance with this Act; or
(c) if the amount payable in respect of improvements is not paid in accordance with this Act; or
(d) if–

(i) a covenant or condition of the lease; or
(ii) a provision of this Act relating to the lease; or
(iii) a requirement of a notice under Section 91 relating to the lease,

is not complied with; or

(e) if the granting of the lease has been obtained, in the opinion of the Minister, wholly or partly as a result of statements that were, to the knowledge of the lessee, false or misleading.

(2) Before forfeiting a State lease under Subsection (1), the Minister–

(a) shall serve notice on the lessee calling on him to show cause, within a period specified in the notice, why the lease should not be forfeited on the ground or grounds specified in the notice; and
(b) may, whether or not cause has been shown in accordance with a notice under Paragraph (a), serve on the lessee a notice requiring him, within a period specified in the notice, to comply with the covenants or conditions of the lease or the provisions of this Act.

(3) The Minister shall not forfeit a lease under this Section unless–

(a) the lessee has failed to comply with a notice under Subsection (2) (a) or (b); or
(b) the lessee has failed to show good cause why the lease should not be forfeited.

(4) Copies of a notice of forfeiture and a notice under Subsection (2) (a) or (b) shall be served on all persons who, to the knowledge of the Departmental Head, have or claim to have a right, title, estate or interest in, to or in relation to the land, or such of them as can with reasonable diligence be ascertained and found.

(5) No acceptance of rent by the State waives a right to forfeit a lease under this Act.

(6) For the purposes of this Section the grant of an application for a State lease shall be deemed to be the grant of the lease.

7. Appellant was the registered proprietor of the State Lease Volume 115 Folio 191 over Land described as Allotment 4 Section 20, Boroko National Capital District. And the State Lease was for a period of 99 years starting from 22^nd January 1987 and was due to expire on the 21^st January 2086.
   
8. By the affidavit of Luther Sipison 18^th June 2018 Secretary of the Department of Lands & Physical Planning the subject State Lease held by the appellant was forfeited under section 122 (1) (d) (ii) of the Land Act 1996. That publication was done in the National Gazette No. G406 on the 24^th June 2015 after a show cause notice was served on the appellant. This notice is self-explained that if reasonable cause were not provided, the Lease would be forfeited. Here that was not the case of the appellant despite that notice which is annexure “B” to his affidavit. It was issued by the Benny Allan Minister for Lands because, the improvement conditions by the Act had not been fulfilled in respect of the subject land. Secondly the lease rentals remained due and were unpaid for a period of more than six months. And thirdly the Leasee appellant had failed to comply with the Notice to show Cause under section 122 (2) (a) of the Land Act. It was dated 21^st June 2015.
   
9. Further under annexure “C” Notice to show cause had been issued to the appellant by one Romilly Kila Pat delegate of the Minister for Lands and Physical Planning in fulfilling the requirements of section 122 (2) (a) of the Land Act 1996 to call upon the appellant as to why the subject lease should not be forfeited from him because, firstly he had neglected or failed to comply with the improvement covenants and conditions as set out in the lease agreement, and secondly, the subject land had accrued rental which remained due and unpaid for more than six months and had accrued to a total of K250 as of the 1^st January 2013, the annual rental being K 350. That if no sufficient cause were shown 28 days from the issue of the subject notice forfeiture would be instituted against. And he was directed to reply to the Secretary the Department of Lands and Physical Planning P. O. Box 5665 Boroko NCD or facsimile 301 3299. That notice was dated the 23^rd May 2014.
   
10. Then there was annexure “D” where the Secretary set out by Statutory Declaration of Edward Reipi compliance officer NCD from the Alienated Land Division of the Department of Lands and Physical Planning, P. O. Box 5665 Boroko NCD that he had posted the show cause notice subject as annexure “C” here in a registered mail addressed as JPH Properties Ltd on the 04^th July 2014 bearing receipt number DC00000011361 for section 4 Allotment 20 Boroko NCD. And he declared this on the 03^rd November 2015 at Waigani in that Statutory Declaration. Attached to it was the independent verification receipt from Post PNG lodged 04^th July 2014 bearing the receipt number DC00000011361 that 1x doc was sent to JPH Properties Ltd P. O. Box 2110 Port Moresby telephone 301 3140. And it was sent by the Dept of Lands & Physical P. O. Box 5665 Boroko phone number 301 3140 1 item weighing 1.000kg. And there was payment receipt also issued dated the 04^th July 2014 in the sum of K 50.60 paid alongside.
    
11. In my view this was independent evidence setting apart where the truth lay in the matter as to whether or not there was show cause notice in compliance or breach of section 122 (2) (a) of the Land Act 1996 by the Minister as to whether or not a show cause had been discharged or not. It independently established what was asserted by the Minister that indeed through his delegate the Secretary of Lands that indeed a notice to show cause was indeed sent to the appellant on the 04^th July 2014. It was paid for through Post PNG who because of the duties that they carried out verified independently what was asserted by the respondents that notice to forfeit published was following that notice.
    
12. And the notice was specific asking for the appellant to discharge two requirements seen as lacking which warranted should there be failure to forfeit the subject State Lease particulars are set out above. And that is clear by annexure “E” of the Secretary that shows that out of the yearly rental on the subject property K250 remained yet to be paid from the initial of K350. It remained outstanding since the 20^th February 2013. And the subject State Lease was held by JPH Properties Limited.
    
13. And annexure “F” to the Secretary’s affidavit was the Lease compliance unit Alienated Lands Division, Department of Lands & Physical Planning inspection report of the 13^th Day of August 2013 which purpose was to ascertain the status of the unimproved vacant land described above for forfeiture against the leasee for not complying with the lease conditions. The details of the lease were, residential lease volume 115 Folio 191 registered to JPH Properties Limited for a period of 99 years as per Lagis Printout. It commenced on the 22^nd January 1987 at an annual land rental of K350. It was a total land area of 0.159ha. And importantly as at the date of inspection it was identified that the subject land was undeveloped and vacant. It was fenced with cyclone fence. It was sloppy and registered with survey plan number catalogue No. 49/462. And Electricity, water supply and sewerage and garbage collection are available on site for easy connection. Furthermore, the subject land is located within the proximity of necessary amenities such as Police Station, Sporting facilities, recreational areas, Local market, shops, etc which are located at East Boroko. It is located within the vicinity of a residential zoned area (East Boroko). The subject land can be accessed through Budoa Avenue via Boroko Drive. At the date of the Inspection the subject land was still vacant and undeveloped with vegetation of short grasses covering the area. There are still no improvements done on the land to date except fencing.
    
14. And the recommendations made were notice to show cause must be served on the current leasee to show as to why the Lease should not be forfeited. Secondly the Lease must be forfeited being the reasons stated above after 28 days from the date of the issue of the notice to show cause breach of the improvement covenant. And that the subject land must be granted through the formal allocation and public tender processes and recommendations duly made by the PNG Land Board. This is to purposely make land available for any potential developers to apply and fully develop the land to its highest and best use. And the report is compiled by Edward Reipi the Compliance Officer NCD.
    
15. Again, without actual inspection of the land it would not be described in the way that the Compliance Officer Edward Reipi has described. Where for example the access would be to the land by what drive and avenue would the land be. What were the public amenities that were available immediately where it was. What was the condition of the grounds there was vegetation of short grasses covering the area. These are details that can be described with physical inspection. With details such as where the Police Station was, the Sporting facilities, recreational areas, Local market, shops, etc which are located. It leaves no other reasonable conclusion other than there were physical inspections of the lease. It makes the evidence of Edward Reipi as evidence that goes to strengthen that there was indeed evidence to comply with the requirements of section 122 (2) (a) of the Land Act 1996 by the Minister, that he and his department did not just forfeit and take without administrative checks and balances before resorted to by this evidence. It made sense why cut the source of rentals to the Public Purse without verifying and checking out before the Land Act was used as here. Why expend money again on a property that was occupied to simply give notice and have the occupant do what was required of them on the land. Why have a Department in charge of all land matters with a Ministry provided with Staff and logistics with a law specifically discharged under its wing to have breaches of it. It would make no common sense nor would it be logical. Keeping of records and maintenance for example with the lagis system managed by that department.
    
16. And this is followed with the application under section 92 of the Land Act annexure “G” of the affidavit of the Secretary. It was approved and recommended in favour of Lennie Kiap for a 99-year lease at the value of K 250,000.00 That is verified by the PNG Land Board Meeting No 02/2016 advertised in the government gazette No. G421 1^st July 2016 and Lennie Kiap is advertised and being approved and allocated the subject land, annexure “H” to the affidavit of the Secretary.
    
17. This evidence in my view sets out a procedure that was administratively followed in compliance and giving effect to the law the Land Act in the way that the Department of Lands Physical Planning went about in dealing with the subject land. If indeed there was cohesion and fraud to defeat and to deprive the appellant of the land these are different parts to that Department, there is no demonstration by evidence as to this fact, so that it was purposely done with this ulterior mode to deprive. And this is viewed out by annexure “I” notice of Acceptance of a Lease by a Successful applicant under section 76 of the Land Act issued to Lennie Kiap accepting the conditions provisions restrictions and covenants of the proposed lease. Which is confirmed by part payment of the annual rental of K 3700 per annum K 1561.10 is paid upfront 04^th July 2016.
    
18. There is no evidence of the appellants assertion that he paid the rental registered in the details opted off the Lagis system of land subject set out above. If as asserted by the appellant K600 was paid on the 17^th December 2014 it would definitely show out in the lagis annexure “E” of the Secretary. There is no entry except the amount owing. This is a computer system tracking Land files kept and obviously for conspiracy and fraud it would also engulf the persons employed there to tamper the records. There is clearly no evidence of this fact against, and it does not bear out for the appellant if glossed at this level. Because annexure ‘J” of the Secretary’s affidavit is the Lennie Kiap’s Owners Copy of the State Lease residence high covenant that is accorded Lennie Kiap on the 04^th July 2016 on that piece of land Portion 004 Section/Milinch 020 Fourmil Boroko NCD.
    
19. Here the observation that can be made is that money time and logistics is made out by the Department of Lands and Physical Planning, it would not go to that extent to waste because preparation of these documents take time and man hours, and that is expenditure for the department. It must make sense that it is within the departments records because it is by compliance of the land law and not otherwise. These are independent corroboration each confined to what it does from where it is in the Department in this subject land. It is hard to pin that there was a conspiracy to get the property off the appellant from the subject land given. Even if it were a conspiracy the appellant come to appeal by leave application after being out of time to appeal. It begs how genuine he is to the appeal when he is over the time limit to lodge and comes because of leave by the court. If there was injustice it would have been promptly attended to. That is not to his credit.
    
20. Further the affidavit of Paul Frame details that he pays K600 for outstanding rental and produces a receipt annexure “F” dated the 09^th December 2014 of a cheque of K600. It does not make sense because what is owing is K 250 why pay K600 cheque when the cheque could have been simply K250 for what was due and owing. Which was outstanding since the 20^th February 2013. It could not be resorted to in the way the respondents did if it were outstanding that long accepting that JPH Properties Limited then leasee was a company. Payment could be made readily.
    
21. What is also against the evidence of Paul Frame is that there are no improvements to the subject land as covenanted. It is as if he is trying desperately to save the land with the evidence that he produces on that day alone 17^th December 2014 in the various annexures of payment to his affidavit. Even the quotation of K31, 674.50 for the fence is only that, nor could it be development to meet the covenant within agreed. These are the same for the architectural drawings they are not substance on the land meeting the covenants agreed and with the rental annual due and lacking since 20^th February 2013, it left no option other than what was administratively done by the Minister with his administrative staff from the department of Lands and Physical Planning, helmed by Secretary Luther Sipison.
    
22. If a simple land rental of K250 accruing since 20^th February 2013 was not paid, and when it was paid was in excess with a cheque of K600 coupled with a backdrop of apartmental design and project, that was going to draw out millions in rentals to the State, it would not be right for the State to show cause and forfeit as it did. It did not make sense because the State would be losing out millions of Kina in the development intended by JPH Properties Limited, especially to an individual for rental of K3700 per annum K1561.10 is paid upfront 04^th July 2016 in Lennie Kiap.
    
23. In my view what can be deduced here is that money and earnings was not what the Minister and his Department were concerned with, but compliance of the law the Land Act. There is also no reason not to comply with the time limitations imposed to appeal as demonstrated by Paul Frame, in the way he has expended and made payments in one day on the 17^th December 2014 to various persons, authorities owing in the city and sleeping over his rights, so much so that leave extended to appeal within 28 days was necessitated in court on the 08^th March 2017 entered 16^th March 2017. He had the means available he could readily discharge; he could not be breaching his annual rental of K250 for a year 2013. But if that was the case it did not make sense for the Minister and the department to forfeit his State Lease. What is evident by this conduct is that the Minister and his Department were intent on complying with the Land Act 1996 and did that in the discharge of the mandatory requirements of section 122 of the Land Act here. It makes perfect sense in the light of Mount Hagen Local Level Government v Kimas [2012] PGNC 356; N6044 (14 August 2012) and would not give the facts set out above lead to University of Papua New Guinea v Ofoi [2016] PGNC 85; N6303 (26 April 2016). Because there is compliance in the notice to show cause that is served on the appellant. The independent verification from the receipt by Post PNG as the recipient and persons discharged with the delivery makes sense that indeed it was paid for and sent as contended. Service of the Notice to show cause was made to comply with the requirements before forfeiture set by section 122 of the Act. Forfeiture flowed where there was failure as evidenced there is no error of law or breach of law to derail what was done by the Minister through his department.
    
24. Given its facts and circumstances this is not a case that falls within what was seen by this court in Yakananda Business Group Inc v Minister for Lands & Physical Planning [2001] PGNC 50; N2159 (7 December 2001) hence warranting as in Beecraft No 20 Ltd v Pok, Minister for Lands [2001] PGNC 85; N2125 (5 April 2001). It would be not right to move in that direction given the observations set out above.
    
25. A notice to show cause on the leasee JPH Properties Limited was affected with non-compliance returned, so prompting the forfeiture undisputed in the facts here. Given these the allegations raised against non-compliance of section 122 is not made out against the respondents. They complied within the bounds of section 122 of the Land Act 1996: Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110 is within the facts here; opportunity was accorded in law to the leasee before forfeiture. Because public officials discharging functions that they administer under the law always must accorded, Audi alteram partem” listen to the other side", or "let the other side be heard as well". It is the principle that no person should be judged without a fair hearing in which each party is given the opportunity to respond to the evidence against them. That is what was here, and what was forfeited has passed on within law to Lennie Kiap, and now subsequently to the fourth respondent no fault of his is his State Lease indefeasible by section 33 of the Land Registration Act. Given these facts and position in law the appeal is therefore pursuant to Order 18 Rule 12 (4) (a) (ii) of the National Court Rules dismissed as being without merit in law and fact with Costs forthwith.
    
26. The formal orders are:
    
    • (i) Appeal is without merit in law and fact.
    • (ii) Appeal is also dismissed forthwith pursuant to Order 18 Rule 12 (4) (a) (ii) NCR.
    • (iii) Costs will follow the event forthwith.

Orders Accordingly.

__________________________________________________________________

Fiocco & Nutley Lawyers: Lawyer for the Appellants

Pacific Legal Group Lawyers: Lawyer for the Fourth Respondents

Office of Solicitor General: Lawyer for the First, Second & Third State Respondents