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Lambea v Tambua [2024] PGNC 375; N11046 (18 October 2024)

N11046

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO.303 OF 2023

BETWEEN:
GLICK LAMBEA, GIBSON LAMBEA, REX YAPI, KENNETH UNDAH AND TIMOTHY TITIPU AS TRADITIONAL LANDOWNERS OF PORTION 11, IARO KARIMUI, SOUTHERN HIGHLANDS PROVINCE
Plaintiffs

AND:
DICK TAMBUA
Defendant

Waigani: David J
2024: 20^th June & 18^th October

PRACTICE & PROCEDURE – application for extension of injunction obtained ex parte

Cases Cited:
Mudge v Secretary for Lands [1985] PNGLR 387
Doriga Berasi v Konekaru Holding Limited (2010) N4189
Tarsie v Ramu Nico Management (MCC) Ltd (2014) N4097

Counsel:
Darryl Kamen, for the Plaintiffs
Marvin Joseph, for the Defendant

RULING

18^th October 2024

1. DAVID J: This is a ruling on whether an interim injunction obtained by the plaintiffs ex parte on 24 November 2023 (interim injunction) and extended several times prior to the hearing should be extended pending the determination of the substantive proceedings.
   
2. The plaintiffs rely on and read the following affidavits:
   
   1. Affidavit of Glick Lambea sworn on 27 September 2023 and filed on 23 October 2023;
   2. Affidavit of Rex Yapi sworn on 20 October 2023 and filed on 23 October 2023; and
   3. Affidavit of Kenneth Undah sworn on 13 June 2024 and filed on 14 June 2024.
      

3. The defendant opposes the application. He relies on and reads his own affidavit sworn and filed on 17 May 2024.

4. At the hearing, Mr. Joseph for the defendant proposed to move the defendant’s notice of motion filed on 17 May 2024 seeking orders for the dismissal of the proceedings under Order 12 Rule 40(1) and Order 5 Rule 9 and Order 10 Rules 9A(15)(2)(e) of the National Court Rules or in the alternative an order to set aside and or discharge the interim injunction under Order 12 Rule 8(3)(a) of the National Court Rules, but upon discussion between the bench and counsel, he only pursued the alternative relief.
   

ALLEGATIONS

5. The plaintiffs assert that:
   
   1. They are customary landowners of a piece or parcel of land described as Portion 11 Milinch Iaro and Fourmil Karimui, Southern Highlands Province, State Lease Volume 19 Folio 4577 (the land).
      
   2. The land was forfeited on 17 December 1999 by the issuance of a notice of Forfeiture of State Lease dated 17 December 1999 (Notice of Forfeiture) by the Minister for Lands & Physical Planning on the grounds that; the improvement covenant was not complied with; and that rent on the lease over the land remained due and unpaid for a period of more than six months.
      
   3. After the forfeiture, the Department of Lands & Physical Planning has failed to take steps to give notice by public advertisement that the land is available for leasing.
      
   4. Sometime in June or July 2023, the defendant moved into the land and started clearing it without approval from the traditional landowners.
      
   5. On 11 August 2023, a stop work notice was served on the defendant to cease clearing the land, but the defendant did not comply and this prompted the filing of these proceedings.
      

REBUTTAL

6. In rebuttal, the defendant states that:
   
   1. He is a director and a shareholder of a company called Tondono Limited.
   2. Tondono Limited was originally incorporated on 14 June 1990 as a Papua New Guinea company and was re-registered under the Companies Act 1977 on 4 October 2023.
   3. Tondono Limited is the current registered proprietor of the land which is a 99-year an Agricultural and Business Lease.
   4. Tondono Limited purchased the land from the then Agriculture Bank of Papua New Guinea for K65,000.00 through a Mortgagee Sale which was publicly advertised in the Post Courier on 26 February 1990.
   5. Tondono Limited has erected a livestock yard housing 15 cows and animals on the land without any dispute from any purported customary landowners.
   6. Tondono Limited has not been served the Notice of Forfeiture.
   7. Tondono Limited is unaware of where the Notice of Forfeiture originates from.
      

ISSUE

7. The only issue that requires my determination is whether the interim injunction should be extended pending determination of the substantive proceedings.

SUBMISSIONS

8. Mr. Kamen for the plaintiffs contends that the interim injunction should be extended pending the determination of the substantive proceedings as the affidavit evidence the plaintiffs rely on demonstrates that the plaintiffs are legitimate customary landowners of the land and the necessary principles on the grant of injunctions have been made out.

9. In addition, Mr. Kamen submits that if the defendant has any issues about the forfeiture of the land, he is at liberty to take up the issue with the Department of Lands & Physical Planning.

10. It was also submitted that the action was taken out against the defendant and not against Tondono Limited which the defendant is purportedly a shareholder, because the company was only re-registered under the Companies Act 1997 on 4 October 2023, about 25 years after the land was forfeited by virtue of the Notice of Forfeiture.

11. Mr. Joseph for the defendant submits that the interim injunction should be set aside or discharged as the defendant’s affidavit evidence demonstrates that; the plaintiffs do not have any legitimate interest over the land; the right parties are not before the Court; the purported forfeiture action taken out pursuant to the Notice of Forfeiture is questionable as evidence on steps taken under s.122 of the Land Act 1996 is lacking; and the Court was misled into granting the interim injunction.

REASONS FOR RULING

12. The question of whether to discharge an interim injunction is a matter of discretion: Tarsie v Ramu Nico Management (MCC) Ltd (2014) NC4097.

13. The considerations I will adopt and apply in exercising the Court’s discretion were suggested in Doriga Berasi v Konekaru Holding Limited (2010) N4189 and Tarsie v Ramu Nico Management (MCC) Ltd (supra) and these are:

1. Has there been a material change in circumstances since the previous orders were made which render their continuation unnecessary or inappropriate?
2. What has been the relative conduct of the parties since the earlier orders were made?
3. Are there previously undisclosed relevant facts which have been discovered since the interim orders were made?

4. Has it subsequently been discovered that the order was granted on an erroneous legal basis?

5. Were the grounds relied upon to support the setting aside or variation of the interim order, argued before the Court when it granted the earlier order?

6. Whether the Court was misled when it issued the interim injunction and if so, was that attributable to the conduct of the party which sought the injunction?

14. Material change of circumstances: None has been specifically pointed out to the Court by counsel.

15. However, upon perusal of the affidavits of Glick Lambea and Rex Yapi which were filed before the grant of the interim injunction, there is no mention in those affidavits about Tondono Limited being the registered proprietor of the land. The State Lease over the land is for a term of 99 years commencing from 22 May 1969. The term of the lease expires in May 2068. On the available evidence before the Court, Tondo Limited is the current registered proprietor of the land.

16. Forfeiture of State leases is regulated by Part XV (ss.122 and 123) of the Land Act 1996 and for a valid forfeiture to occur, the process stipulated there must be complied with. The grounds specified in the Notice of Forfeiture were that; the improvement covenant was not complied with; and that rent on the lease over the land remained due and unpaid for a period of more than six months. Apart from the Notice of Forfeiture, there is no cogent and convincing evidence before the Court to demonstrate that the purported forfeiture action was completed in accordance with the process specified under s.122 of the Land Act 1996 which includes service of a notice on the lessee calling on the lessee to show cause, within a period specified in the notice, why the lease should not be forfeited on the ground(s) specified in the notice (s.122(2)(a)). Under s.122(2)(b), before forfeiting a State Lease, the Minister may, whether or not cause has been shown by the lessee, 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 the Land Act 1996.

17. Section 122(3) states that the Minister for Lands & Physical Planning must not forfeit a lease unless the lessee has failed to comply with a notice to show cause issued within the period specified in a notice given under s.122(2)(a) and or s.122(2)(b) (s.122(3)(a)) or the lessee has failed to show good cause why the lease should not be forfeited (s.122(3)(b)). The defendant asserts that Tondono Limited neither has received the Notice of Forfeiture nor is aware where the Notice of Forfeiture originates from.

18. Moreover, there is no evidence of a notice appearing in the National Gazette that the State Lease over the land was forfeited and that the Registrar of Titles made an entry to that effect in the Register of State Leases in accordance with s.39 of the Land Registration Act, Chapter 191. The copy of the title that is in evidence does not show an entry having been made by the Registrar of Titles that the title was forfeited.

19. A State lease that has been forfeited under s.122 may be revoked pursuant to s.123 of the Land Act 1996.

20. The defendant is a director and shareholder of Tondono Limited. Tondono Limited purchased the land from the then Agriculture Bank of Papua New Guinea for K65, 000.00 through a Mortgagee Sale which was publicly advertised in the Post Courier on 26 February 1990. Tondono Limited has not been joined as a party to the proceedings. Tondono Limited is a company which was originally incorporated on 14 June 1990 as a Papua New Guinea company and was re-registered on 4 October 2023 prior to the commencement of these proceedings on 23 October 2023. Tondono Limited is a legal person with a separate existence, independent of its shareholders and continues in existence until it is removed from the register pursuant to s.16 of the Companies Act 1997. Tondono Limited is entitled to sue and be sued in its own name.

21. The defendant is not the registered proprietor of the land. Tondono Limited is.

22. This consideration favours the exercise of the Court’s discretion in favour of the defendant.

23. Conduct of the parties: Nothing adverse can be taken against the parties. This is a neutral consideration.

24. Previously undisclosed relevant facts: I adopt my remarks in relation to the question of whether there was any material change of circumstances and apply them here. This consideration favours the exercise of the Court’s discretion in favour of the defendant.

25. Order was granted on an erroneous legal basis: Neither the transcript of the proceedings when the interim injunction was granted is before the Court nor have parties specifically addressed this consideration. I do not know the reasons given by the Court for the grant of the interim injunction. This is a neutral consideration.

26. Grounds for setting aside the interim injunction: I adopt my remarks in relation to the question of whether there was any material change of circumstances and apply them here. Neither the transcript of the proceedings when the interim injunction was granted is before the Court nor have parties specifically addressed this consideration. Again, I do not know the reasons given by the Court for the grant of the interim injunction. However, I am of the view that this consideration favours the exercise of the Court’s discretion in favour of the defendant.

27. Was the Court misled?: I find the conduct of the plaintiffs in seeking the interim injunction wanting.

28. Section 4(1) of the Land Act 1996 states that all land in the country other than customary land is the property of the State, subject to any estates, titles or interests in force under any law which in the context of the provision includes private freeholds and leaseholds, Section 4(2) of the Land Act 1996 states that all estate, right, title and interest other than customary rights in land at any time held by a person are held under the State.

29. A forfeiture is the premature termination of a lease before the expiry of the term. The forfeiture action enables the landlord to recover possession. In this context, the status of the State Lease as Government land is unaffected. As I have mentioned above, forfeiture of State leases is regulated by Part XV (ss.122 and 123) of the Land Act 1996 and for a valid forfeiture to occur, the process stipulated there must be complied with.

30. Section 133(1) of the Land Act 1996 states that the Minister may, by notice in the National Gazette, declare any Government land or trust land to be customary land and thereupon the land shall for all purposes be deemed to be customary land.

31. The phrase “Government land” is defined in s.2 of the Land Act 1996 and, amongst others, means “land that is the subject of a State lease or a lease from the State under any other Act”.

32. The land is a State Lease. It is neither customary land nor is there evidence demonstrating that it was declared customary land pursuant to s.133(1) of the Land Act 1996. Tondono Limited is the registered proprietor of the land and is protected by law under s.33(1) of the Land Registration Act, Chapter 191. The registration of the title in Tondono Limited’s name vests in the company an indefeasible (unforfeitable) title subject only to the exceptions in Section 33(1) of the Land Registration Act, Chapter 191. The Supreme Court decision in Mudge v Secretary for Lands (1985) PNGLR 387 is authority for the principle that registration of leases under the provisions of the Land Registration Act, Chapter 191 vests an indefeasible title in the registered proprietor subject only to the limited exceptions enumerated in s.33(1). The latest entry made on the State Lease is the discharge of mortgage produced on 19 February 2024 and entered on 27 February 2024 showing there are no other encumbrances held against Tondono Limited.

33. Clearly, the plaintiffs do not have any legal interest over the land. They have taken out an action against the defendant who is not the registered proprietor of the land; the right parties are not before the Court. The purported forfeiture action taken out as per the Notice of Forfeiture is questionable. Therefore, in my view, there are no serious questions to be tried and the balance of convenience does not favour the grant of an extension of the interim injunction. While damages would not be an appropriate remedy as submitted by the plaintiffs, their remedy at best, if indeed the land was forfeited (which is denied by the defendant and which I have found to be questionable) and if they are truly customary landowners as they assert, would be to seek the Minister’s intervention for a declaration of customary land to be made under s.133(1) of the Land Act 1996 or apply for a grant of a lease over the land under the relevant provisions of the Land Act 1996. No issue has been raised about the requirement to give an undertaking as to damages.

34. This consideration favours the exercise of the Court’s discretion in favour of the defendant.

35. Four out of the six considerations favour the exercise of the Court’s discretion in favour of the defendant. The other two considerations have been considered as neutral considerations. Hence, the interim injunction which was extended several times before the hearing will not be extended and will be discharged and set aside.

36. Given the above, it is not necessary to consider the other submissions of counsel.

ORDERS

37. The formal orders of the Court are:

1. The interim injunction granted by the Court on 24 November 2023 and extended several times prior to the hearing is discharged and set aside.
2. The plaintiffs shall bear the defendant’s costs, which shall be taxed, if not agreed.
   

Ruling and orders accordingly.
_______________________________________________________________
Kamen Lawyers: Lawyers for the Plaintiffs
Mawa Lawyers: Lawyers for the Defendant