N11630

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS 146 OF 2023

JOY ELIAS
Plaintiff

V

ELIAS HANK
First Defendant

EZEKIEL YAPARA
Second Defendant

WABAG: ELLIS J
8 DECEMBER 2025

REAL PROPERTY – Transfer by National Housing Corporation to first defendant then transfer to second defendant – constructive fraud not proved

REAL PROPERTY – Land Registration Act – system explained – title by registration, not registration of title

Cases cited
Blatch v Archer [1774] Eng R 2; 1 Cowper 63
Breskvar v Wall [1971] HCA 70; 126 CLR 376
Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336
Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215
Ising v Ande [2014] PGSC 59; SC1359
John v Nomenda [2009] PGNC 294; N3851
Kunjil No. 19 Ltd v Samson [2024] PGSC 143; SC2677
Mota v Camillus [2017] PGNC 149; N6810
Paga No 36 Ltd v Eleadona [2018] PGSC 17; SC1671
PNG Bible Church Inc v Mandi [2018] PGSC 82; SC1724
Tikili v Home Base Real Estate Ltd [2017] PGSC 1; SC1563
Toki v Helai [2016] PGSC 74; SC1558
Vailala v National Housing Corporation [2017] PGNC 7; N6598

Counsel
Joy Elias, the plaintiff, in person
No appearance by the first defendant 
C Talipan for the second defendant

JUDGMENT

1.	ELLIS J:  On 19 April 2023 the plaintiff filed a Writ of Summons which alleged that the acquisition of a residential property in Wabag from the National Housing Corporation (NHC) by her husband, the first defendant, and its sale by him to the second defendant were fraudulent.  

2.	The orders sought were as set out below:

(a)	A Declaration that the registration of the title in the Second Defendant’s name on 27th November 2017 exists in the case of fraud.
(b)	An Order pursuant to Section 33(1)(a) of the Land Registration Act that the Second Defendant’s title is nullified and [cancelled] forthwith.
(c)	An order that the First Defendant reimburses the money paid by the Second Defendant to NHC for the simultaneous transfer of title from NHC to the First Defendant and then to the Second Defendant on 27th November 2017.
(d)	An order that the First Defendant then transfers the title to the Plaintiff in the next fourteen days of this Court order.
(e)	General damages.
(f)	Interest at 8% pursuant to statute.
(g)	Costs of [these] proceedings; and
(h)	Any other order(s) as the Court deems appropriate.
	
3.	The first defendant did not file a defence, but the second defendant did. 

Hearing

4.	The plaintiff appeared in person.  

5.	There was no appearance by or for the first defendant.  

6.	It was surprising that a lawyer appeared for the second defendant because, on 28 November 2025, the second defendant refused to accept service of the plaintiff’s court book.  As a result, it was necessary to provide the second defendant’s lawyer with a copy of the court book and allow time for him to read its contents.

Evidence

7.	The first defendant filed an affidavit on 8 January 2024.  The second defendant filed affidavits on 4 June 2024, 6 June 2025 and 28 August 2025.  However, those affidavits did not become part of the evidence since the first defendant did not attend the hearing and the second defendant did not refer to them.

8.	Four affidavits were filed by the plaintiff: on 18 March 2024, 9 May 2024, 24 April 2025 and 2 October 2025.  Those affidavits were admitted as Exhibits A to D respectively.

9.	In her first affidavit, filed on 18 March 2024 (Exhibit A). the plaintiff said she moved into the subject property in 1992 with her husband (the first defendant) and they were tenants of the NHC.  She said that in 1996 the first defendant moved out of that property when he married another woman.  It was asserted by the plaintiff that she was entitled to acquire the subject property, said to be based on s 37(c) and s 38(1)(b) of the National Housing Corporation Act 1990 (the NHC Act).  

10.	The first defendant was said to have, without her knowledge, obtained title to the subject premises from the NHC on 27 November 2017 and then transferred ownership to the second defendant the same day.  While an affidavit should contain only evidence, this affidavit made allegations that the defendants conspired to defraud her in that:

a.	They signed a contract of sale on 29th August 2017 when the title was still with the National Housing Corporation.
b.	They signed the Transfer Instrument on 29th August 2017 when the title was still with the National Housing Corporation.
c.	They allowed the simultaneous transfer of the title on the 27th November 2017.

11.	Omitting subsequent allegations, submissions and requests for orders, the only remaining evidence was that the plaintiff filed a caveat on 5th February 2019.

12.	The documents annexed to this affidavit were not marked and their sequence did not match what was said in the affidavit.  Those documents were:

(1)	The first page of a lease (CB5, ie page 5 in the Court Book), from the State to the NHC which did not identify either the plaintiff or the first defendant. 
(2)	A page, seemingly a record of transactions (CB6) which records a transfer to the first defendant on 27 November 2017, a transfer to the second defendant two minutes later, and the plaintiff lodging a caveat on 18 March 2019. 
(3)	A copy of an undated contract for sale (CB8) between the first defendant as vendor and the second defendant as purchaser, signed by them, showing a purchase price of K100,000.
(4)	A signed transfer document dated 29 August 2017 (CB16), showing the first defendant as seller/transferor and the second defendant as buyer/transferee.
(5)	A copy of the plaintiff’s caveat which recorded a prohibition term of six months to one year.  

13.	Much of the plaintiff’s second affidavit, filed on 9 May 2024 (Exhibit B), duplicated what was set out in her first affidavit.  It added a claim the second defendant was not eligible under the NHC Act to acquire the subject property.

14.	The plaintiff’s third affidavit, filed on 24 April 2025 (Exhibit C), indicated that she applied for legal aid in 2018 in relation to prior proceedings between the same parties, which were allocated the reference WS 417 of 2019.  She claimed that the Public Solicitor’s Office in Wabag withdrew those proceedings in 2023 for unknown reasons, after which she unsuccessfully applied to the Office of the Public Solicitor in Port Moresby for legal aid, and then unsuccessfully pursued an appeal from that decision.  It appears the withdrawal of the earlier proceedings was the reason why these proceedings were commenced, and it was indicated that the plaintiff’s application for legal aid in relation to these proceedings was rejected.

15.	In her fourth affidavit, filed on 2 October 2025 (Exhibit D), the plaintiff referred to proceedings with the reference OS 960 of 2018 which were said to have become the proceedings with the reference WS 417 of 2019, presumably because an allegation of fraud in relation to land transactions should be pursued by a writ of summons, not an originating summons (Ising v Ande [2014] PGSC 59; SC1359).  It was indicated that the plaintiff approached a private law firm to draft the writ of summons for these proceedings.  This affidavit explained that the plaintiff was unable to obtain assistance from the Office of the Public Solicitor and was unable to afford retaining a private lawyer.

16.	The lawyer for the second defendant indicated that he wished to cross-examine the plaintiff, but the questions that were asked lacked any utility.

17.	Instead of relying on the affidavits filed by the second defendant on 4 June 2024, 6 June 2025 and 28 August 2025, the second defendant’s lawyer sought to rely on an affidavit sworn earlier today, which had been neither filed nor served.  The tender of that evidence was rejected because it would plainly be unfair to expect a litigant-in-person to consider and be able to respond to what might be termed an ambush affidavit, noting that there was a directions hearing held more than two months ago, on 3 October 2025, at which any desire to rely on additional evidence could and should have been indicated.  That intended evidence was marked for identification as MFI 1.

Submissions

18.	The only written submissions filed were those of the plaintiff, filed on 16 April 2024.  They were marked for identification as MFI 2.  The plaintiff did not seek to add oral submissions.

19.	It was contended that the subject property was “matrimonial property”, but there was no explanation of what was suggested to be the legal effect of those words.  As to the history of litigation in relation to that property, it was noted that the proceedings OS 960 of 2018 were discontinued then replaced by proceedings WS 417 of 2019.  It was noted that, after the plaintiff lodged a caveat in February 2019, the parties were ordered to resolve their differences through mediation late in 2020.  After that failed to result in agreement, the plaintiff withdrew those proceedings and then, in 2023, commenced these proceedings.

20.	In these submissions, it was said that the first defendant had not provided any reason why he chose to sell the property to the second defendant.  It was also asserted that the second defendant failed to check whether the property was vacant and that, had he done so, he would have learned that the plaintiff was still occupying the property.  After repeating the events set out in the first affidavit of the plaintiff, it was alleged that (1) the plaintiff was entitled to acquire the property under s 37(c) and s 38 of the NHC Act, and (2) that the first defendant’s transfer to the second defendant was contrary to those two sections.  The allegations of fraud, quoted above, were repeated.

21.	Under a heading “Law”, it was claimed that the transfer from the first defendant to the second defendant breached s 37(c) and s 38(b) of the NHC Act.  A submission was made that there was no evidence showing that the second defendant was an eligible person under s 37 of the NHC Act and that the effect of s 2 of the NHC Act was that only the Minister could have declared the second defendant to be an approved applicant for the subject property.  A further submission was made that the first defendant was not the registered owner of the property when it was transferred to the second defendant on 29 August 2017 and it was noted that the first defendant did not become the registered owner until 27 November 2017 with the second defendant becoming the registered owner later the same day.  

22.	That was said to have involved a breach of s 10 and s 11 of the Land Act, with the contended consequence that there was constructive fraud.  However, since s 10 of the Land Act 1996 is headed “Acquisition of customary land by agreement” and s 11 is titled “Acquisition of customary land for the grant of special agricultural and business lease”, and the subject land is not customary land, that submission carries no force.  It may be that those submissions were intending to refer to s 10 and s 11 of the Land Registration Act 1981.

23.	  Reference was made to cases on constructive fraud: Vailala v National Housing Corporation [2017] PGNC7; N6598 (Vailala); Tikili v Home Base Real Estate Ltd [2017] PGSC 1; SC1563 (Tikili); PNG Bible Church Inc v Mandi [2018] PGSC 82; SC 1724 (Mandi); John v Nomenda [2009] PGNC 294; N3851 (John); Toki v Helai [2016] PGSC 74; SC1558 (Toki) and Mota v Camilus (2017) N6810 (Mota).  Based on those cases, it was submitted that there was no valid transfer from the first defendant to the second defendant.

24.	The only oral submission made by the plaintiff was that she had been living in the house which is the subject of these proceedings for so long.  She asserted that house was hers.

25.	On behalf of the second defendant, it was submitted that the plaintiff had no interest in this land.  It was contended that she is not a joint tenant, but that submission overlooks the fact that there is no evidence beyond an assertion of the plaintiff in her affidavit evidence, that she was a tenant.  A submission was made that the plaintiff should be evicted from the subject property but (1) there was no cross claim lodged in these proceedings, and (2) it appears the second defendant has not taken any proceedings to evict the plaintiff since he became the owner of the subject property, more than eight years ago, on 1 December 2017.  A request for made for the second defendant’s lawyer to be given time to go through his client’s documents and to check the file, but this matter was listed for hearing more than two months ago and there has been ample time for that to be done prior to the hearing.

26.	When provided with an opportunity to make submissions in reply, the plaintiff said she moved into the house in 1992, said the documents upon which she relied were in the court book, and that the first defendant was not responding to her.

Relevant law

27.	There was reference to s 2 of the NHC Act, the wording of which is set out below:

“The Minister may declare an organization or person to be an approved applicant for the purposes of this Act”.

28.	In the NHC Act s 37, headed “Sale of dwellings”, provides as follows:

“Subject to this Division, the Corporation may sell a dwelling vested in it to– 

(a)	an eligible person; or 
(b)	an approved applicant; or
(c)	a person who exercises the option offered to him under Section 38(1).”

29.	Another provision in that statute that was referred to was s 38, titled “Options to purchase”, which is in the following terms:

“(1)	After a tenancy agreement has been in force for two years between the Corporation and a tenant, the Corporation may, in its discretion, offer to– 
(a)	the tenant; or 
(b)	the spouse, widow or widower of the tenant; or 
(c)	the tenant and his spouse as joint tenants; or 
(d)	the tenant and his next of kin, an option to purchase the dwelling the subject of the agreement at a purchase price specified in the option, subject to the conditions imposed by this Division.

(2)	Where a tenant, under Division 1, of a dwelling becomes a purchaser under this section, either along or jointly with his spouse, he is entitled– 

(a)	as from the date on which his tenancy of the dwelling commenced; or
(b)	if he has been a tenant of the Corporation in more than one dwelling without interruption and the Corporation so approves–from the date of first occupation of an earlier dwelling, and subject to any terms specified in the option, to be credited in reduction of the sale price of the dwelling with an amount equal to that part of the economic rent that represents the repayment of the amount of the capital cost included in the amortization allowance in accordance with Section Sch.2.4.

(3)	Where a tenant has not been credited with an amount in accordance with Subsection (2) and his spouse, widow or widower becomes a purchaser under this section, the spouse, widow or widower is entitled to be credited with the same allowance under Subsection (2) as the tenant would have been entitled to if he had purchased the dwelling.

(4)	A contract of sale under this section may provide– 

(a)	for the outright purchase; or
(b)	for the payment of the purchase price by instalments; or 
(c)	for the payment of the purchase price to be secured– 
(i)	by mortgage, in the prescribed form, over the property in respect of which the advance is made; or 
(ii)	by any other security approved by the Corporation.”

30.	It is noted that, in the Land Registration Act 1981, s 10 deals with the registration of certificates of title while s 11 provides for certificates of title to be evidence.

31.	Further, it is necessary to refer to each of the six decisions that were referred to in the written submissions for the plaintiff.

32.	Vailala confirmed that it is sufficient for a plaintiff to prove constructive fraud.  In that case, it was found that the plaintiff had proved the sale by the NHC (which was the first defendant) to the second defendant was unlawful in that it was contrary to the provisions of the NHC Act.

33.	Tikili was a Supreme Court case that confirmed it is only necessary to establish constructive fraud, not actual fraud.  In that case, it was decided that fresh evidence, admitted on appeal, justified “a finding of irregularity and illegality, and thus constructive fraud”.  That case, which depended on its own facts, did not involve the NHC.

34.	Mandi was a Supreme Court case which revealed that a church authorised a pastor to have title to a property transferred to the church, but the pastor had the property transferred and registered in his name.  The decision in Tikili was cited with approval and it was determined that there had been a failure to comply with the requirements of the NHC Act.

35.	John was a case in which it was found there was constructive fraud because the NHC guidelines for acquisition of property under the Government's Home Give Away Scheme and statutory procedures and requirements under the NHC Act were breached.

36.	Toki was an unsuccessful appeal from a decision that constructive fraud was established in relation to transactions regarding land that occurred after a National Court order in separate proceedings that were in breach of that order.

37.	Mota involved customary land.  Constructive fraud was proved due to a failure to comply with the procedures set out in ss 10, 11 and 102 of the Land Act.

38.	Those six decisions that were cited in the submissions for the plaintiff establish two points.  First, that it is only necessary for a plaintiff to prove constructive fraud, not actual fraud.  Secondly, that whether constructive fraud has been proved depends on the evidence in each case.

Consideration

39.	It is necessary to note that, in civil proceedings, the plaintiff bears the onus of proof and is required to satisfy the Court on the balance of probabilities, ie more like than not.  

40.	As a result, it is not for first defendant to provide reason why he sold the subject land to the second defendant, nor is it for the second defendant to disclose details of the transfer to him.  It should also be observed that allegations are not evidence.  Further, that these proceedings are not about the plaintiff’s expectations: they require a consideration of any legal rights she had and the evidence she has provided.  

41.	The absence of evidence in relation to the alleged tenancy is telling.  As was noted long ago, by Lord Mansfield in Blatch v Archer [1774] Eng R 2; 1 Cowper 63 at 65:

“It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other side to have contradicted.”

42.	Also, there is a well-established principle that the evidence required to prove an allegation depends on how serious is that allegation.  In Kunjil No. 19 Ltd v Samson [2024] PGSC 143; SC2677 the Supreme Court recently confirmed the adoption in Paga No 36 Ltd v Eleadona [2018] PGSC 17; SC1671 of what was said by the High Court of Australia in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 at 343-44 per Latham CJ:

“The standard of proof required by a cautious and responsible tribunal will naturally vary in accordance with the seriousness or importance of the issue …”

43.	It is necessary to understand the system that applies to land covered by the Land Registration Act 1981.  That Act operates to apply what is commonly referred to as Torrens title, name after Sir Richard Torrens who first developed a system of title by registration in the Australian State of South Australia in 1858.  Prior to that, it was necessary for a vendor to provide to the purchaser every document, from the first grant or transfer from the State to a person or company to establish title to a parcel of land.  Now called old system title, over time that system resulted in the need for many documents and any gap in that chain of documents amounted to a defect in the title.  What became known as Torrens title replaced the need for those documents by creating a register which recorded the owner of every property covered by that system.  As Barwick CJ said in Breskvar v Wall [1971] HCA 70; 126 CLR 376 at 15: “it is not a system of registration of title but a system of title by registration”.

44.	With that system came the question of what would be required to set aside the title acquired by registration.  In common with other jurisdictions which have adopted the Torrens title system, the Land Registration Act 1981 provides protection to the registered owner, but not “in the case of fraud”:  s 33(1)(a).  In Australia, actual fraud is required and that is difficult to prove.  

45.	The question of what was required to prove fraud in Papua New Guinea was considered by the Supreme Court in Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215.  In that case, Brown J not surprisingly took the Australian approach of requiring actual fraud to be proved.  In contrast, Amet J (as he then was) considered that approach should not be adopted in Papua New Guinea.  His view was that the “errors, irregularities and illegalities” were sufficient to justify setting aside the title that was challenged in that case.  While Salika J (as he then was) did not expressly agree with Amet J, he also took the less stringent view of what is required to establish fraud that will warrant setting aside a title to land acquired by registration under the Land Registration Act 1981.

46.	From that seemingly slender foundation has developed a line of authority that has now established that, in Papua New Guinea, it is not necessary to prove actual fraud as what is termed constructive fraud is sufficient.  Just as a criminal charge can be proved by circumstantial evidence, instead of direct evidence such as evidence from eyewitnesses, so constructive fraud can be proved by sufficient evidence of errors, irregularities or illegalities.  It is the legal equivalent of saying: if it looks like a duck, waddles like a duck and quacks like a duck: it’s a duck.

47.	However, in this case there is insufficient evidence to establish constructive fraud.  The following matters need to be recorded to explain that conclusion:
(1)	There is no evidence beyond the plaintiff’s assertion that she was a tenant, such as a tenancy agreement or a rental receipt, and her assertion alone is insufficient when a serious allegation of fraud is being made.
(2)	As a result, there is insufficient evidence to show the plaintiff was entitled to acquire the subject property from the NHC.
(3)	There is no evidence to suggest the first defendant was not a tenant.
(4)	There is no evidence to suggest the first defendant was not entitled to acquire the subject property from the NHC.
(5)	There is no evidence of what the terms and conditions are for the acquisition of a property from the NHC.
(6)	As a result, there is no evidence that any such requirements were breached in relation to the transfer from the NHC to the first defendant.
(7)	The evidence suggests the transfer from the first defendant to the second defendant followed the usual sequence of a contract for sale being signed and a transfer request form was completed, after which the transfer from the first defendant to the second defendant was registered.
(8)	The first defendant acquired title by registration at 9.10am on 27 November 2017 and the second defendant acquired title by registration at 9.12am on that day.  Accordingly, the first defendant was the owner of the property at the time it was transferred from the first defendant to the second defendant.
(9)	There is nothing to suggest the transfer from the first defendant to the second defendant had anything to do with the NHC.

48.	In view of those matters, which are clear from the documents upon which the plaintiff relied, it is not surprising that (1) the plaintiff’s request for legal representation was refused by the Office of the Public Solicitor, and (2) the Deputy Chief Justice, on 19 April 2024 and 17 January 2025, urged the plaintiff to obtain legal advice.

49.	While the orders that will be made in this case finalise the plaintiff’s claims in relation to the subject property, there may be other proceedings by the second defendant against the plaintiff if she is still occupying the property which he owns.  No such orders can be made in these proceedings as the second defendant has not sought any orders in these proceedings and has apparently not commenced any other proceedings during the period of just over eight years that he has owned the property.

Costs

50.	The usual position in relation to costs is summarised by the phrase costs follow the event, meaning the outcome of the proceedings, in that the unsuccessful party is required to pay the costs of the successful party.  There does not appear to be any reason why that approach to costs should not be taken in this case.

51.	However, if the question of the costs of the first defendant proceeds to taxation, it is noted that (1) the only involvement of the first defendant in these proceedings appears to have been the filing of an affidavit on 8 January 2024, and (2) that affidavit presented as having been prepared by him. 

52.	 If the question of the costs of the second defendant proceeds to taxation, it is noted that (1) no amount should be allowed in relation to the affidavit of the second defendant that was dated today, (2) the second defendant’s lawyer had not looked at the Court file prior to today’s hearing, as he made a request today for time to do so, and (3) that the hearing lasted for less than one hour.

Orders

53.	For the reasons set out above, the orders of the Court will be as follows:
1.	Verdict for the defendants.
2.	The Writ of Summons is dismissed.
3.	The plaintiff is to pay the costs of the defendants, as taxed if not agreed.
4.	Time is abridged so that these orders may be entered forthwith.

Orders Accordingly.
_______________________________________________________________
Lawyers for the second defendant: Kortal Lawyers