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Markham Realty Development Ltd v Orognaron Land Group Inc [2023] PGNC 3; N10097 (12 January 2023)

N10097


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS NO. 63 OF 2018


BETWEEN:
MARKHAM REALTY DEVELOPMENT LIMITED
Plaintiff


AND:
OROGNARON LAND GROUP INC
First Defendant


AND:
MICHAEL MALIAKI; MALIAKI MICHAEL, JOHN MOARU; KEPI MICHAEL; AND YAZOM MICHAEL
Second Defendant


AND:
ANDI MALO in his capacity as Director Customary Land Registration
Third Defendant


AND:
HENRY WASA in his capacity as Registrar of Titles
Fourth Defendant


AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant


Lae: Dowa J
2021: 16th August
2023: 12th January


PRACTICE AND PROCEDURE– Appropriate mode of Originating Process-Application for declaratory orders – Order 4 Rules 2&3 – National Court Rules – Competency of the proceedings-Originating Summons not appropriate where there is substantial dispute of facts-Declaratory order not appropriate where prerogative order is required in a review application under Order 16 of the NCR


LAND LAW - application seeking validity of SABL-and lease agreement- SABL affected by NEC decision of 2011-Conversion of SABL into Certificate of title-Rights acquired by plaintiff under SABL scraped by conversion of SABL into Certificate of Title and lease agreement found to be uncertain and unfair-proceedings dismissed.


Cases Cited:
Ekepa v Nalepe (2020) N8564
Masive v Kenderop [1985] PNGLR 105
Samiak v Mosero (2011) N4916


Counsel:
J. Kais, for the Plaintiff
K. Kevere, for the first & second Defendants
B. Tomake, for the third and fourth Defendants


DECISION


12th January, 2023


1. DOWA J: The Plaintiff is seeking various declaratory and consequential orders for recognition and affirmation of its interest in a Special Business and Agricultural Lease (SABL) over land described as Portion 78C Milinch of Erap, Fourmil Markham, Morobe Province (hereinafter referred to as “Portion 78C”).


2. By Originating Summons, the Plaintiff seeks amongst other consequential and injunctive orders the following declarations:

  1. A declaration that the State Lease Volume 17, Folio 112, issued on 14/08/2009 to the First Defendant over Portion 78C, Milinch of Erap Fourmil of Markham in Morobe Province of Papua New Guinea containing an area of 862.44 hectares or thereabouts as delineated and registered on the registered survey plan Rural class 4 catalogued No. 31/1374 of the Surveyor Generals Register of Surveys (State Lease Vo. 17 Folio 112) is valid and effective for all intents and purposes.
  2. A declaration that the Lease Agreement executed on 28/11/2009 between the Plaintiff and the First Defendant with respect to all that piece of land comprised in the State Lease Volume 17, Folio 112 (The Land) and registered on the said State Lease Volume 17, Folio 112, per Journal entry No. N-15662, produced and entered on 11/01/2010 (Lease Agreement) is valid and effective for all intents and purposes.
  3. A declaration that any dealings in any manner whatsoever entered into between the First and Second Defendants and third parties over the land, including leasing or sub-leasing, selling or sub-dividing into allotments for the purpose of selling or leasing or sub-leasing, licensing or giving permission of any kind for the occupation or partial occupation of The Land are null and void.
  4. A declaration that the Certificate of Title Volume 1, Folio 23 registered on 20/12/2016 and issued to the First Defendant pursuant to Section 341 of the Land Registration Act 1981, over portion 78C, Milinch of Erap Fourmil of Markham in Morobe Province of Papua New Guinea containing an area of 862.44 hectares or thereabouts as delineated and registered on the registered survey plan Rural class 4 catalogued No. 31/1374 of the Surveyor Generals Register of Surveys (Certificate of Title Volume 1, Folio 23) is null and void and of no effect.
  5. A declaration that any other State Lease(s) or Certificate(s) of Title issued, or interests(s) created that are inconsistent with the said State Lease Volume 17, Folio 112 and Lease Agreement are null and void and of no effect.

Background Facts


3. The Plaintiff is a company incorporated under the Companies Act and has an interest in the land described as Portion 78C, Milinch of Erap, Fourmil Markham, Morobe Province. The First Defendant, Orognaron Land Group Inc (ILG), is a registered Customary Land Group from Nadzab, Markham District, Morobe Province. The Second Defendants are from Nadzab, Morobe Province and are members of the Orognaron Land Group Inc. They are customary landowners of the land, Portion 78C.


4. On 15th April 2009, a Special Agricultural and Business Lease (SABL) was granted to the First Defendant over Portion 78C, under State Lease, Volume 17 Folio 112 containing 862.44 hectares. On 28th November 2009, the Plaintiff entered a lease agreement with the First and Second Defendants to lease the entire land, Portion 78C, from the first and second defendants for 99 years.


  1. While the SABL was still under sub lease to the Plaintiff, the First and Second Defendants requested the Third and Fourth Defendants to convert the SABL into a Certificate of Title under section 34L of the Land Registration (Amendment) Act 2009. On 20th December 2016, a Certificate of Title under Volume 1, Folio 23 was issued on Portion 78C, in favour of the First Defendant.
  2. Armed with the Certificate of Title, the First and Second Defendants entered into land deals with people other than the Plaintiff over Portion 78C.
  3. As a result of the defendants’ actions, the Plaintiff commences these proceedings alleging that the Defendants have unlawfully converted the SABL into a Certificate of Title which affected the lease agreement with the first and second defendants.
  4. The proceedings are rigorously opposed by the defendants on the basis that it was not the intention of the customary landowners to part with the whole of their land to a foreign company for 99 years without any return. This resulted in a contested hearing.

Hearing


9. The hearing was conducted by use of affidavits only. The parties agreed to rely on their respective affidavits and other documents filed in Court. The parties presented their submissions both in writing as well as oral presentations in Court.


Preliminary Competency Issues


10. During the hearing, counsel for the Third, Fourth and Fifth Defendants raised two preliminary issues: Firstly, the proceedings are incompetent as there is substantial dispute of facts not envisaged by Order 4 Rule 3(2)(b) of the National Court Rules. Secondly, the Plaintiff is asking the Court to review the administrative decision to issue the Certificate of Title Volume 1, Folio 23 on 20th December 2016, and this can only be done by invoking the Court’s judicial review jurisdiction under Order 16 of the National Court Rules.


Issues


11. The allegations and preliminary contentions raised by the parties pose the following issues for consideration:


  1. Whether the proceedings are incompetent for being filed in an inappropriate mode of civil proceeding.
  2. Whether the proceedings are incompetent for failing to invoke the Courts review jurisdiction under Order 16 of the National Court Rules.
  1. Whether the SABL issued on 14th August 2009 is still valid and in force.
  1. Whether the Certificate of Title issued on 20th December 2016 is valid and effective.
  2. Whether the First and Second Defendants are bound by the lease agreement between the Plaintiff and the First and second Defendants.
  3. Whether the land dealings entered by the second defendants with third parties are valid and effective.

The Plaintiff’s Evidence


12. The Plaintiff relies on the following affidavits:


  1. Affidavit of Reginaldo Melis Sworn 06/02/18, Filed 11/05/18 – doc. No. 3
  2. Affidavit of Reginaldo Melis Sworn 12/08/20, Filed 13/08/20 – Doc No.
  1. Affidavit of Joseph Kais of LTC hearing sworn and filed 07/10/2020 – doc. No. 26.
  1. Affidavit of Reginaldo Melis ins response to Michael Maliaki Sworn and Filed 15/07/18 – Doc No. 75
  2. Affidavit of Jenny Seth in response to Michael Maliaki Sworn and Filed 15/07/18 – Doc No. 75
  3. Affidavit of Reginaldo Melis in Response to Andie Malo Sworn 28/07/21, Filed 29/07/18 – doc. No. 96.
  4. Affidavit of Elsie Samarita Loth Sworn and Filed 10/10/21 – doc. No. 59.
  5. Affidavit of Jenny Seth Sworn 27/11/20, Filed 05/01/21 – doc. No. 28.
  6. Affidavit of Jenny Seth of continuing breach Sworn and Filed 28/07/21 – doc. No.97.
  7. Affidavit of Jenny Seth responding to Maliaki Michael and John Moaru Sworn and Filed 30/07/21 – doc. No. 98

13. The following is a summary of evidentiary facts deposed to by each of the witnesses relied on by the Plaintiff.


Reginaldo Melis


14. The evidence is led by Reginaldo Melis, Managing Director of the Plaintiff Company. He was introduced to the second Defendant, Michael Maliaki of Gebsogeg village in Nadzab, Wampar LLG, Morobe Province in 2006, by Ms Jenny Seth, the granddaughter of Michael Maliaki. Michael Maliaki is the principal landowner of Naier land, and a member of the Orognaron land Group. Mr Melis deposes that Michael Maliaki initially wanted to sell the land to him for K180,000.00 as he wanted to buy a PMV Bus. It was not his idea to purchase the customary land in the first place. It was the second defendants who wanted him to register their land for development purposes. He held discussions with the landowners and technical officers from the Lands Department to develop the land. After receiving advice from the Lands Department, he assisted the customary owners to convert and register the land. On 12th August 2009, the Department of Lands and Physical Planning, issued a SABL Title to Orognaron Land Group Inc., the First Defendant.


15. After the grant of the SABL, the First and Second Defendants signed a lease agreement with the Plaintiff on 28th November 2009. The first and second defendants understood the terms and willingly entered the lease agreement. The second defendants were not coerced in any form or manner when they signed the agreement. The lease was for the entire land comprising 862.44 hectares for a period of 99 years. Mr Melis deposes that the first and second Defendants acknowledged in the lease agreement that the K250,000 he spent for the registration of the land and the K170,000.00 spent for the Coaster bus were valid consideration for the lease. Armed with the lease agreement, the Plaintiff took steps in developing a Wampar Township Strategic plan, which included photographing, drawings, survey plans and attending the Stakeholder meetings and drawing up cost estimates for securing finance. Mr Melis deposes that, in pursuit of the town development plan and in accordance with the lease agreement, the Plaintiff has expended more than K8 million.


16. Mr Melis deposes that, some years later after the signing of the lease, he noticed that the principal landowner, Michael Maliaki’s attitude has changed so much. Beginning 2015, the second Defendants led by Michael Maliaki, breached the terms of the lease agreement by dealing with the demised land. They built a public marketplace and began selling and leasing of parts the demised premises to other companies and individuals.


17. Mr. Melis deposes that, in further defiance of the existing lease agreement, the first and Second Defendants proceeded to obtain a new Certificate of Title for the same land, Portion 78C, in place of the SABL Lease issued in 2009.


Jenny Seth
18. Jenny Seth gives evidence for the Plaintiff. She is the granddaughter of the second defendant, Michael Maliaki. Her mother was the adopted daughter of Michael Maliaki. Her evidence is in most parts identical to Reginaldo Melis. She says she introduced Renaldo Melis to her family. At that time Michael Maliaki asked her to talk to Reginaldo for the sale of his land in exchange for a PMV Bus. It was Michael’s idea to sell the land. After some discussion, Reginaldo agreed, and assisted the landowners to register the customary land group. The first defendant was successfully incorporated and registered and eventually a SABL was granted to the first defendant in August 2009. She deposes that after the grant of the SABL, Michael Maliaki and other landowners willingly signed a lease agreement in favour of the Plaintiff in November 2009. In response to Michael Maliaki’s denial in his affidavit of 15th April 2021 filed in these proceedings, Ms Seth deposes that her grandfather was impatient and did not abide by the terms of the lease agreement. In breach of the terms of the lease, he went ahead to build a market and leased portions of the demised land to the other people and companies.


Elsie Samarita Loth


19. Elsie Samarita Loth is the chairlady of Gabsongkeg Development Foundation Inc. representing the community of Gabsongkeg. She deposes she represents the nine (9) clans of Gabsongkeg, the owners of the Nair land. She is aware of the lease agreement by Orognaron Land Group with the Plaintiff. She deposes, the community is concerned with Michael Maliaki’s land deals resulting in illegal settlements and the creation of social problems.


The Defendants’ Evidence


20. The Defendants rely on the following affidavits:


  1. Affidavit of Michael Maliaki sworn 14/04/21, filed 15/04/21, Doc. 52
  2. Affidavit of Kepi Michael sworn 14/04/21, filed 15/04/21, Doc. 53.
  1. Affidavit of Andie Malo sworn 16/07/21, filed 19/07/21, Doc. 83
  1. Affidavit of John Moaru sworn and filed 22/07/21, Doc. 99
  2. Affidavit of Maliaki Michael sworn and filed 22/07/21, Doc.90

Michael Maliaki


21. Michael Maliaki is the chairman of Orognaron Land Group Inc. He is a member of the Orognaron clan of Gabsongkek village, the customary owners of Nair land. He deposes, in 2006, his relative, Jenny Seth, approached him and told him that she was acquainted with an expatriate, namely Reginaldo Melis, who was interested in acquiring a portion of land for farming. Mr. Melis was then introduced to him by Jenny Seth. Mr. Melis confirmed his interest in acquiring portions of land at Nair. At that time, Mr Melis did not indicate the portion of the land he wanted. In consideration for the land Mr Melis promised to buy a Coaster bus for Mr Maliaki. Mr Melis did not mention the price for the land he was prepared to pay except for the bus he eventually bought for him (Michael). He deposes that in 2006, a lands officer from the Lands Department visited them and got details of the land. However, there was no proper land investigation done, and no development plans for agriculture was produced. In 2007, Mr Melis gave them a 25-seater coaster bus, but the landowners were still not told which portion of land Mr Melis wanted. Sometime later, they went to the home of Billy Lawrence in the evening to sign some documents for the alienation and registration of the customary land for Lease – Lease back purposes.


22. In August 2008, the application for incorporation of the first Defendant Orognaron Land Group Incorporated (ILG) was gazetted, and thereafter certified. The landowners were then told that the State has issued a Special Agricultural and Business Lease (SABL) to Orognaron Land Group Inc. In September 2009, the second Defendants were advised by Mr Melis to sign a lease agreement. In November 2009, the first and second Defendants signed a lease agreement with Mr Melis company, Markham Realty Development Ltd.


23. Mr Maliaki deposes that, Mr Melis did not inform him and the other landowners that the lease agreement was for the whole of the Nair land. The terms of the lease were not explained to them. The landowners were led to believe that the Plaintiff was going to lease only a portion of the land for agricultural purposes. The Plaintiff did not inform them that the lease was for the construction of a township. Mr Maliaki deposes, that the landowners were cheated and defrauded by Mr Melis and the Plaintiff company, and their customary land comprising more than 860 hectares was fraudulently taken from them to use for a township development without any tangible benefit for them.


John Moaru


24. John Moaru is one of the Second Defendant’s named in the proceedings. He is the nephew of Michael Maliaki and comes from Gabsongkek village. He deposes that Jenny Seth brought Reginaldo Melis to their village and told them of Mr Melis intention to purchase the “Nair” land. Jenny Seth is not from their clan, and she lives on her maternal grandfather’s land and is interfering with the second Defendants customary land. In response to an allegation by Jenny Seth that Michael Maliaki did not sign his own affidavit, but was forged, Mr Moaru says that Michael Maliaki did willingly sign his affidavit in the presence of all family members at their house.


Kep Michael


25. Kepi Michael comes from Gabsongkek village. He is one of the Second Defendants. He deposes that on 7th April 2021, he conducted a search at the office of Investment Promotion Authority and found that Nadzab Development Ltd is not registered and does not exist. He also conducted a search on LR Soils and Concrete Testing Services at IPA and found, it was registered on 6th December 2015 and the business name is owned by one Harry Raku. Clearly, the evidence is of little relevance to the issues for determination.


Maliaki Michael


26. Maliaki Michael is the son of Michael Maliaki, and one of the Second Defendants. He deposes that Jenny Seth was Reginaldo Melis’ girlfriend. She pressured her father Michael Maliaki to sell a portion of Nair Land to him in exchange for a new bus. He deposes further that Jenny Seth is not directly related to them and is not a member of their Orognaron clan. She is related to them only through her grandmother, Gurum who was adopted by his grandfather. He said, the Plaintiff through Mr. Melis was trying to steal their land.


Andie Malo-third Defendant


27. Andie Malo is the Third Defendant. He is the Director-Customary Land Registration, Department of Lands and Physical Planning. He deposes that on 15th April 2009, a Special Agriculture and Business Lease (SABL) was granted in favour of the First Defendant for Portion 78C, and the title was registered on 14th August 2009. That on 10 January 2010, a sub-lease was registered in favour of the Plaintiff. While the SABL was still under sub-lease, the Plaintiff and the First Defendant after some mutual understanding applied for the same land to be issued a Certificate of Title in place of the SABL under the Voluntary Customary Land Registration process pursuant to section 34L of the Land Registration (Amendment) Act 2009. On 20th December 2016 a Certificate of Title was issued over Portion 78C in Certificate of Title Volume 01, Folio, 23.


28. Mr Malo gives additional evidence on voluntary customary land registration and the status of SABLs in the country. He deposes that in 2011, a Commission of Inquiry into SABLs was established by the National Government. The Commission of Inquiry made several recommendations to the National Government. After the Inquiry, the National Executive Council, met on 20th December 2016 and made several decisions on SABLs. One of the decisions was for the current SABLs to be converted into a Certificates of Title (CT) through the Voluntary Customary Land Registration process and for the SABLs to be surrendered for cancellation. After learning of the Governments position on SABLs, the First Defendant sought his assistance for the issue of Certificate of Title in place of the SABL.


29. Mr Malo also explains the differences between a SABL lease and a Certificate of Title. That a SABL is a State Lease issued under the Lands Department Lease-Lease back arrangements under section 11 the Land Act whereas a Certificate of Title is on the other hand a freehold title issued under the Voluntary Customary Land Registration under the Land Registration (Amendment) Act 2009. In the latter case, the land remains customary land with perpetual customary succession and cannot be transferred, although it can be sub-leased to other developers on terms. Mr Malo concludes that the SABL issued to the First Defendant be surrendered as it is no longer valid and has no effect given that the Certificate of Title issued to the First Defendant is now valid and effective for all intent and purpose.


30. I will now turn to the consideration of the issues


Consideration of the Issues


Issue No.1 Whether the proceedings are incompetent for being filed in an inappropriate mode of civil proceeding.


31. Mr Tomake, counsel for the State, submits that the proceedings are incompetent, as the Originating Summons is not an appropriate mode of proceedings because there is substantial dispute of facts between the parties contrary to the procedural requirements of Order 4 Rule 3 (2) (b) of the National Court Rules.


32. Order 4 Rule 3(1) of the National Court Rules provides that proceedings may be commenced either by a Writ of summons or by Originating Summons as the Plaintiff considers appropriate. Sub-rule(2)(b) provides that proceedings in which there is unlikely to be substantial dispute of fact, are amongst those which are appropriate to be commenced by Originating Summons. It has been held that applications for declarations to the National Court by way of Originating Summons under Order 4 of the NCR be used where facts are not in dispute. Re Masive v Kenderop (1985) PNGLR 105 and Ekepa v Nalepe (2020) N8564.


33. In the present case, the Plaintiff seeks five (5) declaratory orders, Six (6) consequential reliefs and three (3) mandatory injunctions. Basically, the Plaintiff seeks declarations that a) the SABL issued on 14th August 2009 is valid, b) the lease agreement between the parties executed on 28th November 2009 is valid and effective, c) the subsequent issuance of Certificate of Title, Vol: 1 Folio 23 over the same land to the First Respondent is null and void, and d) all subsequent dealings on the subject land by the second defendants with others is null and void.


34. The evidence filed by the respective parties show there is substantial dispute of facts, in respect of the SABL, the Lease Agreement, and the subsequent issuance of the Certificate of Title. In my view, the mode of proceedings chosen by the Plaintiff is not suitable. It is more appropriate to commence the proceedings by pleadings in a Writ of Summons.


35. Although the mode of proceedings chosen by the Plaintiff is inappropriate, it is not incompetent perse. The Court has jurisdiction to deal with the application. The issue is raised belatedly, and the Court has assumed jurisdiction in hearing the matter and will proceed to determine this matter on its merits including the suitability of the originating process chosen.


Issue No. 2. Whether the proceedings are incompetent for failing to invoke the Courts review jurisdiction under Order 16 of the National Court Rules.


36. The second preliminary matter raised by the counsel for the State relates to relief No.4, the issuance of Certificate of Tittle Volume 1 Folio 23 issued on 20th December 2016. The State argues that the relief sought by the Plaintiff, seeking a nullification of the Certificate of Title involves the review of an administrative decision, and the Plaintiff failed to invoke the Court’s jurisdiction under order 16 of the National Court Rules.


37. I agree with the submissions of the State. Relief No.4 is a declaratory order that can be issued only after a review of the administrative decision of third and fourth Defendants. The appropriate mode of proceedings to invoke the jurisdiction of the Court is by judicial review application under Order 16 of the National Court Rules.


38. Although the issue raised challenges the competency of the proceedings, relief No.4 is just one of the reliefs. There are two other principal reliefs sought by the Plaintiff which the Court has jurisdiction to hear. It has been held in Samiak v Mosero (2011) N4916 that if the principal relief being sought is for orders in declarations and injunctive orders and not orders in prerogative orders, it is optional for the plaintiff to either use the review procedure under Order 16 or Order 4 rule 3 of NCR. For this reason, the Court will proceed to consider the merits of the case, in so far as it applies to the other reliefs sought in the proceedings.


Substantive Issues


Issue No. 3. Whether the Special Agriculture and Business Lease (SABL) over land Portion 78C Vol.17 Folio 112 issued on 14th August 2009 is still valid and in force.


39. Between 2007 and 2009, Reginaldo Melis, the Managing Director of the Plaintiff company assisted the First and Second Defendants to apply for a Special Agricultural and Business Lease (SABL) over “Naier” land, Portion 78C, Markham. The Plaintiff and First and Second defendants were ably assisted by the Lands Department officials namely Billy Lawrence and Andie Malo. The SABL was finally issued on 14th August 2009. On 28th November 2009, the Plaintiff and the First and Second defendants signed a Lease Agreement.


40. According to the evidence of the Second Defendants, the original purpose of the lease was for agriculture, and that the Plaintiff would use portions of land although it was not clear which parts of the land were to be acquired by the Plaintiff. It was not their intention to lease out the entire land to the Plaintiff and the Defendants felt cheated when they came to learn that the Plaintiff intended to use the entire land for a town development purpose. The Plaintiff refutes the second defendants’ assertions and maintains that the first and Second Defendants were advised and knew all along that the land would be used for a township development, where everyone including the First and Second Defendants would benefit. The first and second defendants have willingly signed a 99-year sub-lease in favour of the Plaintiff. The Plaintiff was surprised to learn of the subsequent issuance of the Certificate of Title which the second defendants use in nullifying the SABL and the lease agreement.


41. The evidence of Andie Malo, the Director of Customary Land Registration, Department of Lands and Physical Planning, is relevant and helpful in resolving the controversy between the Plaintiff and the first and second defendants. Mr Malo is familiar with the history of the subject land, Portion 78C. He assisted the first and second Defendants and the Plaintiff in the issuance and registration of the SABL in 2009. Mr. Malo is also involved in the subsequent issuance of the Certificate of Title over Portion 78C on 20th December 2016. The action taken by Mr. Malo is at the request of the first and second defendants with the understanding of the Plaintiff and is consistent with the NEC Decision on the status of SABLs. There is incontrovertible evidence that in 2011, there was a Commission of Inquiry into SABLs established by the National Government. After the Commission of Inquiry, the National Government through the National Executive Council (NEC) on made various decisions SABLs on 20th December 2016 in its Decision No 344/2016.


42. The relevant part of the NEC Decision No 344/2016 is reproduced below:


“DECISION NO. 344/2016


Subject: SURRENDER OF SABL FOR LAND TITLES UNDER THE REVISED INCOPORATED LAND GROUP SYSTEM AND THE NEW VOLUNTARY CUSTOMARY LAND REGISTRATION SYSTEM

On 20th December 2016, Council:

  1. noted the content of policy Submission No. 248/2016.
  2. took note of the enormity of interests by landowners to seek Land Titles over their customary lands through the new Voluntary Customary Land Registration system and acknowledge the involvement of the Courts in the mediation over disputes.
  3. took note that since the recommendations of the COI and NEC Decision No. 187/2014 no new SABL are issued to date, however customary Leases are administered through ILGs and VCLR under the Incorporated Land Groups Act and Customary Land Registration Act 2009.
  4. took note of the surrender of SABLs over, Portion 248C, Aitape West Speik and Kandrian Closter, West New Britain which have been successful conversed and reverted back to the traditional landowners.
  5. approved that under the Legislative Review exercise carried out by Lands Department Special Agriculture and Business Lease are completely repealed and existing SABLs are administered according to their status of implementation.
  6. approved the Ministerial Statement to be presented in Parliament and that the NEC approved the following as National Government position on SABL.
    1. surrender the Special Agriculture and Business Lease to the Department of Lands and Physical Planning.
    2. recognized the perpetual rights and interest of the customary landowners and for the developer to protect these rights and interests.
    3. process the ILGs through the ILG Office and process and issue land titles under the new Voluntary Customary Land Registration System; and
    4. allow the ILGs to develop leases out of their land titles, negotiate with the developer on the terms of the leases, and once agreement is reached, lease their land to the developer. The ILGs also invite the government to assess the leases to ascertain the application of the required fees and charges.
  7. approved the establishment of a Customary land Advisory Committee to advise landowners covered under the existing Special Agriculture and Business Leases and those who have interests in registering their lands under the new Voluntary Customary Land Registration System to obtain Titles.

...............”
43. It is clear one of the NEC decisions was for the current SABLs to be converted into Certificate of Title (CT) through the Voluntary Customary Land Registration (VCLR) process and for SABLs to be surrendered. The National Executive Council Decision No.344/2016 has also permanently halted all SABL transactions by placing a moratorium which included the First Defendant’s SABL issued in 2009.


44. In response to the change in the Government Policy and the NEC decision, the First Defendant applied for a Certificate of Title over Portion 78C which is the subject of an existing SABL. The application was made under the Land Registration (Amendment) Act 2009.


45. Sections 34L and 34M of the Land Registration (Amendment) Act 2009 are relevant which read:

"34L. ISSUE OF CERTIFICATE OF TITLE.

"(1) Where the customary group has been registered as the owner of land, the Registrar of Titles shall, upon payment of a prescribed fee, prepare and issue a Certificate of Title in the prescribed form in the name of the group.


"(2) In preparing a Certificate of Title under Subsection (1), the Registrar of Titles shall prepare a copy of the title for the purposes of registration in the Register.".


17. NEW SECTION 34M.

The Principal Act is amended by adding the following new section after Section 34.


"34M. EFFECT OF REGISTRATION.


"(1) An entry in the Register –


(a) is conclusive evidence of the facts; and


(b) unless endorsed otherwise; shall be deemed to guarantee the area and the boundary of the land to which the entry relates; and


(c) shall be subject to such rights and interests as are recorded in the register.


"(2) Registration of ownership which is inconsistent with –

(a) a title previously registered under the provision of this Act; or

(b) a reservation, easement or other such interest made by the State for public purposes under any law; or


(c) an estate, right, title or interest granted by the State under any law,

shall be ineffective to the extent of the inconsistency."


46. The first defendant’s Certificate of Title Volume 01 Folio 23 was issued on 20th December 2016. It was registered under section 34L of the Land Registration (Amendment) Act 2009. The Certificate of Title is conclusive ownership of Portion 78C by the first defendant under section 34M of the Land Registration (Amendment) Act 2009. The actions taken by the defendants in issuing a Certificate of Title to replace the SABL was consistent with the NEC decision in protecting and securing perpetual succession of customary land usage. It is also consistent with the second defendants’ complaint that no proper land investigation was done before the State issued the SABL. There is nothing to suggest that the issuance of the Certificate of Title issued to the first defendant is inconsistent with the interests created in the SABL as the later was deemed surrendered and cancelled at the instance of the voluntary registration and issuance of the Certificate of Title.


47. I find upon issuance of the Certificate of Title Volume 1 Folio 23 under section 34L of the Land Registration (Amendment) Act 2009 to the First Defendant, the SABL Lease Volume 17 Folio 112 previously granted under sections 11 and 102 of the Land Act 1996 became obsolete and ineffective by operation of law and the National Government policy via NEC Decision No 344/2016.


48. For the foregoing reasons, it is clear the SABL issued over Portion 78C State Lease Volume 17 Folio 122 is no longer valid and effective and therefore the relief No. 1 sought in the Originating Summons is refused.


Issue No.4 Whether the First and Second Defendants are bound by the Lease Agreement executed on 28th November 2009.


49. On 28th November 2009, immediately after the issuance of the SABL, the Plaintiff entered a lease agreement with the First and Second Defendants. The major terms of the agreement are that the Plaintiff would lease the entire land containing 862.44 hectares for a period of 99 years at a lease rental fixed at 5% on the unimproved value of the whole land or parcels of the land leased out. That is the land would be subdivided into smaller parcels and used for business and commercial purposes and for every portion leased out to third parties the first and second defendants would receive an annual rent of 5% on the unimproved value. It seems the Plaintiff being the developer has exclusive rights to keep the usual business or commercial rentals usually or likely to be charged monthly to the exclusion of the Landowners. Apart from the 5% annual land lease rental, the First and Second Defendants are entitled to earn 5% of the net profit of the Plaintiff company, apart from other community development assistance. The lease agreement expressly excludes the landowners from equity participation.


50. The Plaintiff submits that the lease agreement was fair and freely entered by the parties and is binding. The First and Second Defendants submit that the agreement is not binding on them for various reasons that: i) the terms were uncertain, and they were not told that they were parting with their entire land to the Plaintiff for 99 years. ii) that the original purposes of leasing portion of land to the Plaintiff was for agriculture, and not for a township development; iii) uncertainty as to the consideration or earnings from the use of the land; and iv) that the original SABL is cancelled and that the land is reverted to the landowners by virtue of the Certificate of Title issued on 20th December 2016. Counsel for the State submitted that the sub-lease registered in favour of the Plaintiff on 11th of January 2010 is scraped off together with the SABL. The effect of the above transaction is that the Certificate of Title Volume 01 Folio 23 supersedes the State Lease Volume 17 Folio 112 pursuant to decision of the NEC.


51. I have considered the arguments of the parties and find that the lease agreement became a nullity, the moment the Certificate of Title was issued. It displaced the interest created under the SABL on 20th December 2016.The lease agreement is no longer valid and in force.


52. Secondly, I note that terms of the lease agreement are rigorously disputed by the First and Second Defendants. As the deponents to the affidavits were not cross-examined on the contents, the facts and evidence deposed to in each of their affidavits remain disputed. Where the facts are substantially disputed, it is not safe to grant the declaratory orders sought by the Plaintiff. I have grave doubt as to the validity of the agreement. As alluded to earlier, the originating process commenced by the Plaintiff is not appropriate to grant the relief sought on the face of substantial dispute of facts.


53. I make a further observation on the lease agreement. It appears to be oppressive. The First and Second Defendants were leasing or giving up their land, containing 862.44 hectares for a period of 99 years. What is the consideration. How are the landowners going to be compensated. Firstly, under the lease agreement, the consideration alleged to have been paid was: K250,000.00 being cost for registration of the State Lease (SABL), and K170,000.00 for a Toyota Coaster Bus given to Michael Maliaki. Apart from that no actual cash was paid to the landowners either upfront or periodically under the lease. Under the agreement, the landowners are to receive an annual rental of 5% on the unimproved value on parcels of land subleased, and a 5% of the net profits earned by the Plaintiff company. These benefits or consideration are too remote and unpredictable and are questionable. For example, who will pay them the annual rent of 5%. Is it for the entire land or for portions of improved and leased out to third parties. What about the 5 % from the net profit of the Plaintiff’s operations. What is the guarantee that the Plaintiff will make yearly profits let alone net profits. How will it be monitored. In the light of no equity participation expressly stated in the lease agreement, the first and second defendants are likely to be kept away from their own land for a considerable period. The lease agreement was signed in November 2009. There is no evidence of any tangible developments on the land by the Plaintiff nor the landowners receiving any benefits under the sub-lease.


54. I am inclined to accept the evidence of the second defendants that it was not their intention to part with the entire Nair land containing 862.44 hectares for 99 years, neither did they understand nor were properly explained the terms of the lease agreement. In my view, this is not a fair lease agreement, worthy of endorsement by the Court. This is the kind of lease agreement and land dealings that the National Government has endeavoured to discourage and placed a moratorium in its NEC decision of 20th December 2016.


55. For the foregoing reasons, I am reluctant to declare that the sub-lease (agreement) entered on 28th November 2009 is valid and enforceable.


Issue No, 5 Whether the Certificate of Title issued on 20th December 2016 be declared null and void.


56. The Plaintiff submits that Second Defendants led by Michael Maliaki maliciously obtained a second Title, a Certificate of Title over the same property, under section 34L of the Land Registration (Amendment) Act 2009 which erased the Plaintiffs registered interest in the first Title (SABL).


57. The Defendants’ combined submission on this issue is that; after the 2011 Commission of Inquiry into SABLs, the National Government (NEC) made several decisions, one of which to convert all current SABLs into Certificates of Title, through voluntary Customary Land Registration process, and secondly, the Government placed a moratorium on all SABLs. The First Defendant applied for and was granted a Certificate of Title through voluntary customary land registration on 20th December 2016. This effectively and permanently altered the SABL previously issued.


58. My findings and reasons for decision on this issue are the same as discussed in Issue No.3 in paragraphs 39 to 48 of my judgement and will adopt same. The Certificate of Title issued on 20th December 2016 was at the prompting of the NEC decision to protect customary land interests. The first defendant became the absolute owner of Portion 78C. The effect of the transaction is that the Certificate of Title Volume 01 Folio 23 supersedes the title in SABL Volume 17 Folio 112 pursuant to decision of the NEC and in accordance with the law under sections 34L and 34M of the Land Registration (Amendment) Act 2009


59. For the aforesaid reasons, the relief sought by the Plaintiff is refused.


60. There is another reason why this relief should be refused. Counsel for the Plaintiff submitted that the defendants failed to comply with due process under the Land Registration (Amendment) Act 2009 to obtain the Certificate of Title. There is nothing before this Court to find that the decision of the State/governmental bodies which granted the Certificate of Title under section 34L of the Land Registration (Amendment) Act improper or illegal. Mr. Malo, the Director for Customary Land Registration, has clearly explained his involvement in assisting the first defendant to obtain the Certificate of Title replacing the SABL in the light of the NEC Decision on SABLs. The presumption of compliance with the requirements of the Land Registration (Amendment) Act is therefore with the defendants and the onus is on the Plaintiff to prove otherwise. Again, as alluded earlier, this will require a review of the administrative decision of the Lands Department officials, and that must be initiated through a judicial review application under Order 16 of the National Court Rules for prerogative orders. The Plaintiff has not done that and is therefore not entitled to the relief claimed.


61. For the foregoing reasons, I am not satisfied that the issuance of Certificate of Title, Volume 1 Folio 23 issued over Portion 78C, on 20th December 2016 was a nullity. Rather, the Certificate of Title issued over Portion 78C on 20th December 2016 is valid and effective for all intent and purpose.


Issue No. 6 Whether the land dealings entered by the second defendants with third parties are valid and effective.


62. Counsel for the Plaintiff submits that all land dealings by the first and second defendants with third parties after the signing of the lease agreement be declared null and void and of no effect.


63. The sub lease agreement between the plaintiff and the first defendant was based on the SABL issued to first defendant. Having found that the SABL issued on 14th August 2009 and the lease agreement signed on 28th November 2009 are no longer effective and binding on the first and second defendants, it is of no consequence in determining this issue. Under the Certificate of Title, the first and second defendants are at liberty to lease and deal with the land as they determine while the land remains customary land. In addition, the evidentiary facts relating to the land deals and the date of each deal remains disputed.


64. For these reasons I refuse the relief sought.


Conclusion


65. In the end, all declarations along with the consequential and injunctive reliefs sought in the Originating Summons are refused because: a) the first defendant’s Special Agricultural and Business Lease (SABL) Volume 17 Folio 112 granted on 14th August 2009 is replaced or became nullified and ineffective when it (First Defendant) was issued a Certificate of Title Volume 1 Folio 23 on 20th December 2016. b) the evidentiary facts relied on by the plaintiff in seeking the declarations, are substantially disputed by the defendants and not conclusive. c) the relief sought to nullify the Certificate of Title would have been more appropriately pursued by way of judicial review under Order 16 of the NCR for a prerogative order rather than a declaration as sought in this application.


Costs


66. Ordinarily, cost would follow the event. A successful party is entitled to cost. In the present case, the plaintiff’s application is refused. It must pay the costs. However, in my view, the plaintiff can pay the cost of the third and fourth defendants only. No costs should be awarded in favour of the first and second defendants. The reason is this. On 14th August 2020, the Court granted interlocutory injunctive orders against the first and second defendants from dealing with the subject land pending final determination of the proceedings. The second defendants disobeyed. The second defendants were charged with contempt of court in separate proceedings- OS No 94 of 2022- Markham Realty Development Ltd -v- Michael Maliaki and others. On 31st August 2022, the defendants pleaded guilty and were convicted and are pending sentence. The defendant’s conduct is contemptuous and are not entitled to costs.


Orders


The Court orders that:


  1. The Plaintiffs entire proceedings is dismissed.
  2. The Plaintiff shall pay the third and fourth defendants’ cost of the proceedings to be taxed, if not agreed.
  3. Time be abridged.

_____________________________________________________________________
Huon Lawyers: Lawyer for the Plaintiff
Public Solicitor: Lawyer for the First & Second Defendants
Solicitor General: Lawyer for the Third and Fourth Defendants

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