SC2465

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 16 OF 2022

BETWEEN:
CHRISTAIN LIFE CENTRE
First Appellant

AND:
PASTOR WILLIAM IKI
Second Appellant

AND:
JANET PEPAM KEPOLI
Respondent

Waigani: David J, Polume-Kiele J & Dingake J
2023: 26th April, 29th September

SUPREME COURT APPEALS – Civil Law - Government land – Mission Leases - State Leases –indefeasibility of title – meaning of “fraud” in Land Registration Act, Section 33(1)(a) – whether actual fraud must be proven – whether proof of constructive or equitable fraud is sufficient.

CONTRACTS – Sale of land – two contracts for sale of same land – approved applicant of NHC land, whether second contract entered with knowledge of first contract.

Cases Cited: 

Mapai Transport Limited v Romily Kila-Pat & Ors (2017) N6850 
Bean vs. Bean [1980] PNGLR 307
Curtain Brothers (PNG) Ltd vs. University of Papua New Guinea (2005) SC788
Lina Kewakali vs. The State (2011) SC1091
Tindiwi v Independent State of Papua New Guinea [2015] SC1416 
Pius Tikili v Home Base Real Estate Ltd (2017) SC1563
Paru Aihi v. Peter Isoaimo (2013) SC1276 
Rimbunan Hijau (PNG) Ltd v. Ina Enei (2017) SC1605

Counsel:

Mr D. Pilam, for the Appellant
Mr M. Tamutai, for the Respondent

JUDGMENT

29th September 2023

1.	BY THE COURT: The appellants appeal from the whole of the judgment of his honour Justice Colin Makail given on 4th February 2022 at Waigani whereby his Honour found and ordered that:

(i)	The title of the second defendant granted pursuant to a state lease over Allotment 13, section 10 Wapenamanda, Enga Province and contained in Volume 11, Folio 105 land described as (the property) and registered by an entry on 5th November 2001 is quashed forthwith.

(ii)	An Order for Specific performance that the fourth defendant cancel the entry on the state lease in favour of the first defendant dated 5th November 2001 forthwith.

(iii)	An Order for Specific performance that based on the second contract signed between the plaintiff and third defendant dated 3rd December 1998, the third defendant facilitate the transfer and registration of title of the property to the plaintiff, with the fourth defendant forthwith.

(iv)	The first, second and third defendants pay the plaintiffs costs of the proceeding, to be taxed if not agreed.

(v)	Time for entry of these orders shall be abridged to that date of settlement by the Registrar, which shall, take place forthwith.

2.	The trial of the matter in the court below took place at Wabag by way of affidavits. The parties filed written submissions for determination by the trial judge.

Relevant facts

3.	The appellants and the respondent both claim proprietary interest in the property. At the time of trial, the first appellant was registered title holder. Title to the property was entered on 5 November 2001.

4.	The respondent, Janet Pepam Kepoli has been the occupant of the said property since 1990. Sometime in 1994, she responded to a public tender notice calling for interested persons to put in their interest in the said piece of land owned the National Housing Corporation (NHC). The respondent expressed her interest in the said property by completing the requisite forms and lodged it with the Department of Lands & Physical Planning on 26 September 1990. She subsequently paid the required Land Application fee of K50.00.  

5.	To progress her interest further, sometime later in 1992, she paid the 10% Deposit Land Sales Fees of K500.39 at the National Housing Corporation, regional branch at Mt Hagen. She was subsequently advised that her application for the said property was successful. 

6.	In or about 1994, she entered a contract of sale for the said property.

7.	Since taking occupation of the said property, she has cultivated the land by planting fruit trees such as oranges, mandarin and guava and avocado trees and casuarina trees on the land. She also constructed permanent structures on the land for accommodation and used this to house the homeless and orphans under the auspice, Voice of Enga, a charity agency which she runs and manages.

8.	On 3 December 1998, she executed a second contract of sale of land with the National Housing Corporation and proceeded to make payments towards the purchase price of the subject land. On or about 6 September 2005, she completed payment of a sum of K2,887.00 as the purchase price for the subject property. The total payment made for the subject property is in the sum of K9,000.00.

9.	Since taking possession of the land, completing the necessary documentation relating to the property and executing a contract of sale of the land,  the respondent had been awaiting issue of the transfer of the title from the NHC until sometime on or about 20 June 2001 when the respondent was informed by the appellants that they have acquired the said property and requested the respondent to vacate the property. 
10.	The respondent being aggrieved by this acquisition sought relief from the National Court regarding the acquisition. The Court granted orders in her favour, now the subject of this appeal.

Appeal 

11.	The appellants raised six grounds of appeal which are contained under paragraph 3.1 to 3.6 of the Notice of Appeal filed 03rd March 2022. 

Issue

12.	The overarching consideration before this Court is whether the transfer of title from the National Housing Corporation to the appellants over the property is proper.

Appeal Grounds

Ground No. 1 - The learned trial judge erred in fact and in law in holding that the contracts of sale entered into between the National Housing Corporation and the respondent on 3rd December 1992 and on 3rd December 1998 in respect of land, allotment 13, section 10, State Lease Volume 11, Folio 105, Wapenamanda, Enga Province ("the Subject Land") were valid without considering that: 

(i)	National Housing Corporation did not have clear and good title to the subject land to pass on to the respondent during the time of signing of the two contracts of sale between National Housing Corporation and the respondent on 3rd December 1992 and 3rd December 1998 and therefore, the contracts of sale were null and void and unenforceable.

(ii)	The gazettal notice No. G140 dated 22 September 2005 did not in any way validate the two contracts of sale that were entered into in 1992 and 1998 because the gazettal notice was published in 2005 after when National Housing Corporation was granted the State lease and after when the State lease was transferred to the first appellant.

13.	Matters raised in Grounds 1 to 5 of the notice of appeal all relate to the issue of transfer of title over the subject property (Allotment 13 Section 10, Wapenamanda, Enga) held by the NHC. These grounds are all to be considered as one ground. 

14.	The reason we say this is because, at the time of the purported execution of the contract of sale of land sometime in 1994 and 3 December 1998 between the respondent and the NHC, title over the property was not in issue. This is because ownership of the subject property was vested in the National Housing Corporation pursuant to ss 111 to 118 of the Land Act. 1996

15.	Essentially, under ss 111 to 118 of the Land Act., the State grants portions of land to the NHC for purposes of enabling the NHC to fulfil its objectives and functions under s 28 of the NHC Act which is to provide adequate and suitable housing for letting to eligible persons; and to sell houses to eligible persons etc. So, in this case, land was already in the possession of NHC, and it was therefore able to deal with it accordingly. 

16.	Section 28 (1) subject to this Act provide amongst others - (a) to improve housing conditions; and (b) to provide adequate and suitable housing for letting to eligible persons; and (c) to sell houses to eligible persons; and (d) to make advances to eligible persons and approved applicants to enable them to become the owners of their own homes; and (e) to develop physically residential land by way of providing adequate services for human settlements; and; (f) to provide adequate and suitable housing by way of sale or lease to approved applicants; and (g) to provide associated buildings; and (h) generally to do such supplementary, incidental or consequential acts and things as are necessary or convenient for carrying out the functions referred to in this section. 

(2) …
(3) …
(4) …

17.	Here PART XI of the Land Act empowers the Minister to declare by notice in the National Gazette improved residential land to be land which this Part applies and allows for eligible persons, and approved applicants to apply for such land. We understand that the respondent in this case was such an approved applicant.

18.	 It is instructive to outline the provisions of the Land Act 1995 on this grant to the NHC. Under Part XI - GRANT OF STATE LEASES OF IMPROVED GOVERNMENT LAND TO THE NATIONAL HOUSING CORPORATION, it is the Minister that grants the land to the NHC to develop and build dwelling houses for sale to eligible persons or to lease to approved applicants so that they themselves can develop the land for purposes of constructing their own homes.

19.	Such grants do not come under ss 70, 71, 74, 75, 84 and 95 of the Land Act which are processes where land is dealt with by way of public tender and is managed by the Department of Lands and Physical Planning directly. The relevant provisions of the Land Act regarding this process were not addressed by counsel, but it is instructive to state them here as it goes to the merits of the appeal. 

“111. 	DECLARATION OF LAND BY MINISTER. 

The Minister may, by notice in the National Gazette, declare Government improved residential land to be land to which this Part applies. 

112. 	CERTAIN PROVISIONS NOT TO APPLY.

Sections 70, 71, 74, 75, 84 and 95 do not apply to land the subject of a declaration under Section 111. 

113. 	MINISTER MAY GRANT LEASE. 

The Minister may, in respect of land to which this Part applies, grant a lease to the National Housing Corporation on such conditions as he thinks proper.

114. 	NOTIFICATION OF GRANT. 

The Minister shall–

(a) by notice in the National Gazette notify the grant of a lease under this Act; and 

(b) as soon as practicable after the notification under Paragraph (a), by written notice, advise the National Housing Corporation of– (i) the grant of the lease and of the date of publication of the notice under that paragraph; and (ii) the terms, conditions, restrictions, and covenants on which the lease is granted including the amount payable under Section 117. 

115. 	EFFECTIVE DATE OF GRANT. 

A grant of a lease under this Act takes effect from the date of publication of the notice referred to in Section 113(a) and the National Housing Corporation shall be deemed to have accepted and executed the lease on that date. 

116. 	REMISSION AND POSTPONEMENT OF RENT.

During the period between the date of grant of the lease and the date a transferee executes a Contract for Sale, Transfer and Mortgage instruments in respect of the transfer of the lease by the National Housing Corporation to the transferee, the Minister–

 	(a) 	may, in respect of that lease, exercise his powers under Section 83(5) notwithstanding that an application has not been made to him by the National Housing Corporation; and Land 1996 s. 117. 
 	
(b) shall not, in the exercise of those powers, consider a report of the Land Board. 

117. 	IMPROVEMENTS.

 (1) 	The Minister may, in addition to any other conditions that he may impose under Section 114, require the National Housing Corporation to pay such amount in respect of the improvements on the land as he determines.

(2) Interest is not payable on the amount determined under Subsection (1). 

118. 	PERIOD OF LEASE. A lease under Section 113 shall be granted for a period of 99 years”. 

20.	More specifically, s 112 states that the provisions of ss.70, 71, 74, 75, 84 and 95 of the Act does not apply to a land granted to the NHC.  The relevant provisions are set out below:

“70 	HOW APPLICATIONS FOR STATE LEASES TO BE MADE. 

An application for a State lease shall–

 (a) be made in the approved form; and 

(b) be accompanied by the prescribed fee for the registration of the application. 

“71. 	AS A GENERAL RULE, THE LAND BOARD SHALL CONSIDER ALL APPLICATIONS FOR STATE LEASES. 

Subject to Section 72, the Land Board– s. 72. Land 1996 – 44 – (a) shall hear all applications for State leases; and (b) shall recommend to the Minister the persons (if any) to whom leases should be granted; and (c) may make such other recommendations to the Minister in connection with an application as the Board considers proper.”

74.	PUBLICATION OF NAMES OF SUCCESSFUL APPLICANTS, ETC., IN THE NATIONAL GAZETTE. 

The Departmental Head shall publish in the National Gazette– (a) the name of the successful applicant for each State Lease, together with particulars of the lands to be leased to him; and Land 1996 s. 75. – 45 – (b) in respect of that State Lease and those lands– (i) the name of the applicant considered the second-choice successful applicant; and (ii) the name of the applicant considered the third-choice successful applicant, to whom a Letter of Grant may be forwarded in accordance with Sections 75 and 79. 

75	 NOTICE TO SUCCESSFUL APPLICANTS. 

As soon as practicable after the publication of the notice under Section 74, the Departmental Head shall forward a Letter of Grant to each successful applicant (as specified in Section 74(a)) notifying him of– (a) the date of the publication of the notice in the National Gazette; and (b) the terms and conditions of the proposed lease; and (c) details of all fees due, outstanding tender moneys and any other amounts payable in respect of the proposed lease; and (d) the need to sign and return an accompanying Lease Acceptance Form to reach the Departmental Head within 28 days of the publication of the notice in the National Gazette, or such later date as is stated in the Letter of Grant, in order to accept the grant of the lease.

84. 	IMPROVEMENTS ON LAND TO BE LEASED. 

(1) Subject to Sections 120 and 100 and 102, if there are improvements on land to be leased under this Act, the lessee may be required to pay an amount in respect of the improvements fixed by the Minister, after considering a report of the Land Board. 

(2) Where a lessee is required to pay an amount in respect of improvements on the land the subject of his lease, the Minister may permit him to pay for them by annual instalments.

(3) The rate of payment in respect of improvements and the rate of interest payable are as prescribed.

95.	LAND IN PHYSICAL PLANNING AREAS. Subject to Sections 69 and 73, before a lease under this Division of land in a physical planning area is granted, the land shall, in the first instance, be offered for lease by tender”. 

21.	Under these provisions, the NHC takes ownership of the land granted to it by the State for purposes of building homes for eligible persons and to sell to eligible persons and approved applicants under s 113 to 118 of the Land Act. It does not necessarily mean that the National Housing Corporation does not have title per se. It is a grant from the State for which title to the land is vested in NHC and will be transferred once, settlement is completed. That is, the consideration (purchase price) agreed price of the improvement, or the undeveloped vacant land is fully paid by the eligible persons or approved applicant. 

22.	We understand that it is through this process that the said piece of land was put up for public tender and the respondent did express her interest in the subject (the property). We also note that her application was successful.

23.	By fulfilling the above processes, the respondent in this case became the approved applicant for the subject property under ss 111 to 118 of the Land Act. 

24.	 The respondent then entered a contract of sale of the said piece of land with the NHC. However, for some reasons, the respondent although had complied with the requirements specified under ss 111 to 118 of the Land Act, her interest in the land was bypassed. Although the respondent was the approved applicant/purchaser pursuant to s 2 of the National Housing Corporation Act 1990. 

25.	Section 2 states:

	“2.	Declaration of approved applicants.

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

26.	In this present case, the NHC for some reason facilitated another contract with the appellants and the title in the land was transferred to the first appellant sometime in or on 5 November 2001.

27.	These purported transactions did not take into consideration the fact that the respondent is the approved applicant under s 1 of the NHC Act and that she has fully complied with all the requirements contained in the contract of sale of land with the NHC. In that the respondent had expressed her interest in the land, made payment of the appropriate application and processing fees and finally payment of the purchase price for the subject land totalling a sum of K9,000.00.  All these were completely ignored by the NHC, who went ahead and transacted with the appellants for the sale of the subject land, whose actions were in breach of its previous obligations under a contract of sale of land dated 3 December 1998 with the respondent. Furthermore, the appellants cannot be said to be free of any obligation as they were fully aware of the respondent’s presence and properties which were constructed on the land. 

28.	We observe that all the transactions involving the NHC, and the appellant were not in compliance with s 111 to 118 of the Land Act. The NHC transacted with an entity contrary to the provisions of 111 to 118 of the Land Act. Even if the first appellant is an approved applicant for a State Lease, we are of the view and accept the findings of the learned trial judge that the correct procedure for the first appellant was to apply for land which would ordinarily be made pursuant to s 96 under the Land Act - Grant of Mission Lease. 

29.	For our purposes, s 96 states:

“96.	Grant of Mission Lease

(1) 	The Minister may grant a lease of Government land to– 

(a) 	a corporation having for its object the establishment or conduct, in the country, of a Christian mission; or 

(b) 	a person in trust for an institution or body having any such object. 

(2) 	A lease under Subsection (1) may be granted for such term, not exceeding 99 years, as to the Minister seems proper. 

“97. 	Purpose of mission lease.

 A mission lease may be granted for–

 (a) 	the purpose of–

(i)	a church; or 
(ii)	a dwelling-house or houses for members or persons employed by or working in connection with the mission; or 

(iii)	a school; or 

(iv)	a hospital; or

(v)	a building for any other charitable, educational or religious purpose; or

(vi)	gardens or pastures for purposes ancillary to any of the purposes specified in Subparagraphs (i) to (v) inclusive; and 

(b) 	the construction or operation, for the purposes of the establishment or conduct in the country of a Christian mission, of an aerodrome, and the erection or maintenance of hangars and other buildings required for the operation of an aerodrome. 

98. 	RENT. 

Rent is not payable for a mission lease. Division 7.” 

30.	Whilst we note that Counsels did not address the Court on these provisions, it is apparent that the trial judge did in his deliberations considered the relevant processes under ss 92, 96 and 97 of the Land Act 1996 that were available to the category of developments for a State Lease such as a residential, business and mission lease and made a finding accordingly.  

31.	The findings of the trial judge were that the process and or procedure adopted by the appellants to procure the title to the said piece of land was irregular. This is because the subject land is in a residential area and to build a church, there are avenues available under the Land Act for the appellants to apply for land to build a church etc. 

32.	The appellants are eligible to apply for a Mission Lease and a Mission Lease will certainly not be in a Residential area, which the learned trial judge found this to be suspicious.

33.	Further, the learned trial judge found that the speed within which this transaction was concluded was quite extraordinary and remarkable. In that the appellants were able to commence and complete the transaction for the sale and purchase of the subject property and have title registered within a space of 4 months (from 20 June 2001 and 31 October 2001) suspicious. His Honour cited the case of Mapai Transport Limited v Romily Kila-Pat & Ors (2017) N6850 as being relevant to this case. In that case the plaintiff (Mapai Transport Limited) had applied directly to the Minister to exercise his discretion under s 65 of the Land Act to exempt the land from advertisement and lodged his expression of interest for the land. When the Land Board met to consider the application, it is expected that the exemption conferred on the First Plaintiff an exclusive right to be the sole applicant for subject land. However, when the Land Board included and considered and furthermore, recommended the grant of a State lease to the Fourth Defendant, it not only acted beyond its powers but contrary to the Ministerial exemption.

34.	Applying this to this present case, we find that his Honour did not err when he found that since the first appellant is a Church entity and indeed, the Land Act does have separate provisions relating to such entity or organisation and thus it should have utilised this procedure to secure interest in an area of land for its activities under the Division 6. Mission Leases, it is not hard to infer that the conduct of the appellants is suspicious. 

35.	Furthermore, even if as contended by the appellants that the NHC did not have title to pass to the respondent initially, nothing prevented the NHC from advising the respondent of the status of her transaction with the NHC if it really did not have title to transfer to her upon settlement of the agreed purchase price of the sum totalling up to an amount of K9,000.00 for the subject land. 

36.	We also observe that although the NHC was named as a party in the Court below, it took no interest in the proceedings and failed to take any appropriate steps to defending the proceedings and all other documents including the notice of hearing of the matter. The respondent is the only party who seriously defended the proceeding in the court below and in this appeal. This silence is taken to infer that perhaps, there is something amiss in this whole transaction with the appellants.

37.	Consequently, we find no error on the findings of the learned trial judge. This ground of appeal is dismissed.

Ground 2 - The learned trial judge erred in quashing the title of the subject land which was transferred to the first appellant on 5 November 2001 and ordered for specific performance of the contract entered on 3 December 1998 because the appellants did not breach any provisions of the Land Act 1996 to warrant such orders to be granted. 

38.	In this case, the ground of appeal is really a challenge to the exercise of discretion by the learned trial judge. 

39.	Thus, the question to ask is whether the trial judge duly exercised his discretion according to law or whether he failed to consider relevant facts and law where and if applicable, and considered, these factors would have swayed or enabled him to exercise his discretion in favour of the appellants and held that the transfer of title to them was proper? 

40.	For this Court to review such an exercise of discretion, it must be based on proper grounds and the appellant in this case must show an identifiable error warranting a review of the exercise of discretion of a trial judge. 

41.	Overall, it is now settled law that, an appellate court will be slow to overturn a decision of a lower court that was a result of that court’s exercise of its discretionary power unless an identifiable error, such as:

(i) 	acting on wrong principles or
(ii) 	giving weight to extraneous or irrelevant matter or
(iii) 	failed to give or take into account relevant considerations or
(iv) 	making mistakes with facts.

has occurred, or furthermore, where there is no identifiable error, the decision must be unreasonable or plainly unjust.

42.	If an appellant can show that all of the above  circumstances exist, than this would require the appellate court to interfere and overturn a decision resulting from the exercise of a discretion: Bean vs. Bean [1980] PNGLR 307; Curtain Brothers (PNG) Ltd vs. University of Papua New Guinea (2005) SC 788; Lina Kewakali vs. The State (2011) SC1091. Tindiwi v Independent State of Papua New Guinea [2015] PGSC 93; SC1416 (28 October 2015)

43.	We now turn to consider ground 2 of the appeal. The appellants here say that the learned trial judge fell into error, when he found that the transfer from the NHC to the appellants were irregular, unlawful, and unsatisfactory inferring fraud. 

44.	In the proceedings before the trial judge, several matters were apparent, firstly, the NHC and the Registrar of Titles were not active participants although named as parties. They both elected not to participate. If there were breaches of the NHC Act and the Land Act, these were not disclosed and their interest in defending their actions were concluded by their silence. Their silence is something which his Honour, the trial judge noted and took into consideration. 

45.	Furthermore, if the NHC did not have title to pass to the respondent, it elected not to appear before the Court to state its position to the Court as to the purported assumption made by the appellants that the NHC did not have title to pass to the respondent in the first place nor as to why the respondent was not informed by the NHC itself of its intention to revoke its earlier contract of sale of land and to enter into a new contract of sale of land to the appellants. This behaviour then calls into question, the intention and action of the NHC and eventually, the appellants. In this case, the NHC chose to remain silent on its earlier legal obligation to the respondent and furthermore, failed also to inform the new purchasers, the appellants. Or even if the NHC and the appellants were both aware of the transactions already concluded with the NHC but then elected to proceed with the new transactions, then it can only be said that they both are guilty of deceitful conduct, as his Honour, the trial judge concluded.

46.	This is not a case where the respondent is a competing applicant, this is a case where the respondent is an approved applicant. She has fulfilled all the requirements required of her as an approved applicant under s 111 of the Land Act, all that is pending is the transfer of the title over the subject property. She was blindsided by the NHC, dare we say with biding from the appellants. 

47.	As alluded to earlier in this judgment, ss 96 to 98 of the Land Act provides for grant of mission lease by the Minister for Lands and Physical Planning.  This is the process under which a church can utilize to apply for a State Lease. Such processes under ss 96 and 97 of the Land Act was not invoked by the appellants and therefore the first appellant is not an eligible person for grant of the title over a residential lease over the subject piece of land.

48.	Furthermore, the appellants have not demonstrated any error by the trial Judge in dealing with this issue. We find no error in the findings made by the trial judge that the first and second appellant were not eligible or approved persons under s 37 of the National Housing Corporation Act 1990. 

49.	Consequently, we find no error in his Honour’s findings and go further to say that the first appellant does not fall within the category of persons provided for under s 37 and 38 of the National Housing Corporation Act 1990 as contained in the Gazettal Notice No. G140.

50.	 We understand that the respondent was the approved applicant/purchaser pursuant to s 2 of the National Housing Corporation Act 1990. 

51.	Section 2 states:

	“2.	Declaration of approved applicants.

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

52.	Ground 2 of the Notice of Appeal is dismissed. 

Ground 3 – The learned trial judge erred in fact and in law in inferring fraud in the process of transferring title of the subject land to the first appellant without considering that:

(a)	None of the evidence adduced by the respondent directly proved actual fraud being committed by the appellants. Even if the evidence were circumstantial, there was credible evidence provided by the second appellant explaining how he obtained title to the subject land for and on behalf of the first appellant.

(b)	The appellants were not aware of the respondent’s interest in the land as no one from the National Housing Corporation informed them about the respondent’s interest in the subject land and the two contracts of sale signed so far and hence the appellants were innocent of committing any fraud. Further, none of the evidence provided by the respondent proved that the appellants knew about the respondent’s interest in the subject land and the contract of sales that were signed between her and the National Housing Corporation.

53.	Again, this ground is interrelated to grounds 1 and 2 above. We have addressed those grounds already and dismissed both grounds. We also dismiss Ground 3 of this appeal.

54.	But for completeness’ sake, we say that this ground is a challenge to the exercise of discretion of the trial judge. 

55.	In the case before us, the relevant transcript does not contain any material as to relevant provisions of the NHC Acts being drawn to the attention of the learned trial Judge. There is record of the learned trial judge giving consideration and thought to the fact that the land was initially a NHC property and there had to be an inquiry or consideration of the relevant provisions of the NHC Act as well as those of the Lands Act before treating the case before him as a fight over an ordinary State Lease on State land. 

52.	This was a special case because of the subject property was by the relevant legislative provisions and the undisputed facts, a grant to the National Housing Corporation pursuant to ss 111 to 118 of the Land Act. Thus, the subject land was under the ownership and control of the NHC. The title was vested with the NHC, and title would have initially been available for transfer to the respondent pursuant to s 117 of the Land Act, which provides that a grant of a lease under this Act takes effect from the date of publication of the notice referred to in Section 113(a) and the National Housing Corporation shall be deemed to have accepted and executed the lease on that date. 

53.	However, for reasons only known to the NHC, title was transferred to the appellants without due consideration given to the payment made by the respondent pursuant to a contract of sale of land under s 83 of the NHC Act. executed on 3 December 1998. 

54.	Although the counsel who appeared before his honour did not draw to the Court’s attention to all relevant and applicable law. That includes any applicable statutory or case law or both. The learned trial Judge had considered the law relating to Mission Leases and applied this law against the correct status of the NHC property, and he had in conclusion arrived with due respect at and applied the correct law to this case.

55.	Relevantly, his honour found at [26] of his judgment and page 34 of the Appeal Book where he states:
 
“26.	A pivotal factor in the whole controversy is the first and second defendants’ admission of being aware and cognizant of the plaintiff’s use of the land on which the property is located by her planting of fruits trees, garden with building of dwelling houses over a long period of time since 1990. If there is any truth in the first and second defendants’ claim that the sale and purchase of the property between them and the third defendant was clean, they should have informed the plaintiff of their interest in the property and expression of interest to purchase it. It would dispel any further doubts in relation to their conduct.” 

56.	In addition, at paragraph [27-29] his Honour, the trial judge went on to state:

“27.	… this was a case where the plaintiff, first and second defendants had competing interests in the property and each expressed interest in purchasing it from the third defendant. As the plaintiff’s interest in terms of use of the property and her expression of interest to purchase the property was first in time, it was prudent for the first and second defendants to inform her of their intention to purchase the property prior to proceeding with it. Not to do so that supports the plaintiff’s case that it was deliberately done to by-pass her and get the property before her”. 

28.	Under s 33 (1) (a) of the Land Registration Act, a registered proprietor of an estate or interest holds it absolutely free from all encumbrances except in the case of fraud.

29.	Having regard to all the circumstances as described above, I am satisfied that fraud may be inferred and I so find” 

57.	We find no error in the findings of inferring fraud in the process of transferring title to the subject land and dismiss this ground of appeal.

Ground 3 of the appeal is dismissed.

Ground 4 - 	Finding fraud against the appellants in circumstances where:

a)	The allegations of fraud were mainly made against the National Housing Corporation who was a party to the National Court Proceeding but not actively participating in the court proceedings and not attending at trial because court documents were not served on them by the respondent; and
b)	No evidence being filed by the National Housing Corporation explaining or responding to the allegations of fraud; and,
c)	The appellants filing evidence explaining their interest in the subject land and how they got title; and,
d)	the first appellant having indefeasible title over the subject Zand for over 20 years since 5th November 2001.
e)	when the respondent clearly and in the interest of justice and fairness had a recourse to sue National Housing Corporation for negligence and misrepresentation as her interest lies in damages.

was unfair and unjust and was in breach of the principles of Natural Justice enshrined under section 58 of the Constitution as the first appellant was a bona fide purchaser with good title.

58.	Again, this ground is related to grounds 1, 2, and 3 above and we have addressed those grounds already and dismissed these grounds. 

59.	Essentially, we are of the view that ground 4 of the appeal is really a challenge to the exercise of discretion of the trial judge. 

60.	In the case before us, the relevant transcript does not contain any material as to relevant provisions of the NHC Acts being drawn to the attention of the learned trial Judge. There is a record of the learned trial judge giving consideration and thought to the fact that the land was initially a NHC property and there had to be an inquiry or consideration of the relevant provisions of the NHC Act as well as those of the Lands Act before treating the case before him as a fight over an ordinary State Lease on State land. 

61.	It is obvious that the appellants had applied for the State Lease under a wrong process. The Land Act does provide for applications to be made by Churches for a Mission Lease (Part VI) of the Land Act. This application or transaction was purportedly one that is based on a residential lease, and it did affect and extinguished the respondent’s interest in the property.

62.	 In his deliberation, His Honour, the learned trial judge was of a respectful view that the fact that the appellants actions to transact in a land matter outside of the processes allowed under the Land Act which specifically provides for such entities and or organisations, did infer deceitful conduct, a conduct that the learned trial Judge found the appellants guilty of. Furthermore, his Honour also noted that at no point did the NHC or the appellants notify the respondent of the termination of NHC’s contract of sale of land with her. The NHC and appellants also did not notify the respondent that the appellants have expressed an interest in the subject land and had in fact entered into an agreement to purchase the subject land from the NHC. The transactions which the appellants sought and obtained which concluded in the grant of the title to the first appellant.

63.	Further and in addition, s 83 of the NHC Act provides for contracts. Section 83 states: 

“83.	All contracts and agreements entered into, made with or addressed to the State under or through the Department of Housing or the Housing Commission, in so far as they relate to the functions of the Corporation under this Act, are, to the extent that they were immediately before the commencement of this Act, binding on and of full force and effect against or in favour of the Department of Housing or the Housing Commission are, on that commencement binding on and of full force and effect against or in favour of the Corporation as fully and effectually as if, instead of the State or the Housing Commission, the Corporation had been a party to them or bound by them or entitled to the benefit of them”.

64.	In the present case, the respondent had executed a contract under s 83 of the NHC Act. This contract is binding on and of full force and effect against the NHC. 

65.	It is trite that failure to follow the process provided under the Land Act when dealing with State land amounts to fraud capable of undoing any title secured outside the prescribed statutory processes as established in the case of Pius Tikili v Home Base Real Estate Ltd  (2017) SC1563. In that case, Supreme Court said:

“23.	His Honour, we consider, should have addressed the meaning of “fraud” in Section 33(1)(a) of the Land Registration Act more rigorously. There is now a strong line of Supreme Court decisions that have substantially qualified the concept of indefeasibility of registered title set out Mudge v Secretary for Lands [1985] PNGLR 387. Cases such as Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215, PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126 and Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120 support the proposition that in many situations it will not be appropriate to insist on proof of actual fraud before the National Court considers cancelling the registered proprietor’s title. It will be sufficient if constructive or equitable fraud is proven. Constructive fraud exists where the circumstances of a transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title.”

66.	Adopting and applying the principle established above to this present case, we are of the view that his Honour the trial judge did not err in his finding of guilt of deceitful conduct when dealing with the NHC that due process under the relevant provisions of the NHC Act and the Land Act were not followed to have the respondent’s interest in the property extinguished. 

67.	The NHC was obliged to complete its process under its Act and the Land Act and have the title in the subject land transferred to the respondent. It however, hijacked its own processes resulting in the property being granted to the appellants and had the title registered in the first appellant’s name. 

68.	We find that His Honour, the learned trial judge did not err in the exercise of his discretion in inferring fraud in his judgment in favour of the respondent.

69.	Consequentially, we affirm the decision of the trial judge in finding that the title secured and registered in the name of the first appellant, Christian Life Centre, the property the subject of these proceeding is invalid and is of no force and effect.

70.	We dismiss ground 4 of the notice of appeal.

Ground 5 - The learned trial judge erred in law and in fact in holding that the grant of a residential tease to the first appellant instead of a mission lease also proved the inference of fraud without considering that:

a)	The state lease that was initially granted to the National Housing Corporation on 11 October 2001 by the National Department of Lands was a residential lease which was subsequently transferred to the second appellant who then has/had the option to convert it into a mission tease.
b)	That point was never raised at trial and parties were never accorded the opportunity to be heard on that point contrary to the principles of natural justice enshrined under section 59 of the Constitution.

71.	We now turn to ground 5 of the appeal. In this case, the issue raised relates to the finding of the learned trial judge. This point was not raised at trial and is therefore raised for the first time at the appellate court. On this point, we iterate that the law on this is well settled. The Supreme Court in  Paru Aihi v. Peter Isoaimo (2013) SC1276 stated the law in these terms:

“21.	This Court has been consistently maintaining this position in its subsequent decisions. This includes the decisions in Alfred Alan Daniel v Pak Domoi Ltd, ... per Injia CJ, Yagi & Makail JJ., and Stettin Bay Lumber Company Ltd v S. K. Goh & Ors...per Kirriwom, Mogish & Hartshorn JJ. More importantly it includes the five (5) member bench decision in the Isaac Lupari case. There in the separate decisions of Gabi and Hartshorn JJ., with whom two other members of the Court Salika DCJ. and Batari J., agreed and myself not giving an opinion, endorsed the James Pupune line of cases. This position has been also maintained even in criminal cases. Cases representing this line of authorities include the decisions in Jimmy Ono v. The State…per Hinchliffe, Sevua, and Kandakasi, JJ.; the Kepa Wanege and Masolyau Piakali cases and the recent decision in Denden Tom & Anor v. The State...per Salika, DCJ., Kandakasi and Gabi, JJ. The last case reiterated the position in these terms:

‘The law is very clear that, an appellant cannot raise an issue on appeal for the first time without first raising the issue in the Court below. The Supreme Court in its most recent decision in Chief Collector of Taxes v. Bougainville Copper Limited and Bougainville Copper Limited v. Chief Collector of Taxes ... affirmed that principle.’ 

72.	This ground of appeal really relates to the exercise of discretion. The issue of the procedures under the NHC Act and the Land Act combined have been raised by the trial Court at the hearing of the appeal. The issue was inherent in the cause of action itself. All the parties to the proceeding and the Court had a duty to raise and consider the relevant and applicable statutory provisions before arriving at a final decision on the matter. Counsel did not assist the trial court on the relevant provisions of the NHC Act, an obvious omission and serious oversight by all the parties. The trial Court was at liberty to exercise on its own volition to appraise itself of the relevant law and exercise discretion accordingly to administer substantive justice on merits of the case. 

73.	The NHC failed for reasons only known to it to appear in Court on the hearing of the substantive matter and on appeal to address the Court on the issue. After entering a contract of sale of land with the respondent, the NHC failed to take any meaningful step to transfer the title to the subject land to the respondent. It sat on this transaction for more than 8 years. On the other hand, it took the NHC only four months to conclude the subsequent contract of sale to the appellants. These actions were tantamount to deceitful conduct on the part of NHC and the appellants. The appellants cannot in this situation cannot plead innocence of deceitful conduct. They are equally to blame. They collaborated with the NHC staff to conclude a transaction which ultimately resulted in the respondent’s loss of the payment of the purchase price for the subject land and issuance of title to the subject land. When such a deceitful conduct leads to serious consequences in the loss of a legitimate expectation of a transfer in property interest in subject land, comes before or to the attention of the Court, the Court cannot ignore it. It is incumbent on the Court to deal with the issue and address the issue with a decision which is sound in law. It must also be supported with any relevant evidence or lack thereof on point.

74.	 It is trite law that no person can be allowed to gain from his or her own crime or illegal conduct. The Supreme Court in  Rimbunan Hijau (PNG) Ltd v. Ina Enei (2017) SC1605, restated the law in these terms:

“39.	Secondly, we note that, none of the English cases as followed and applied in PNG and elsewhere appear to discuss and take into account the principle that a person cannot be allowed to gain from his or her illegal or criminal conduct. A number of Supreme and National Court decisions in PNG have spoken of and or applied this principle in the context of other settings. One of the cases on point is this Court’s decision in PNG Deep Sea Fishing Ltd v. Luke Critten.... That was in the context of two different views on upsetting a title to land on the basis of fraud as represented by the decisions in Emas Estate Development Pty Ltd v. John Mea & Ors... and Koitachi Ltd v. Walter Schnaubelt... on the one side and Mudge v. Secretary for Lands... and cases that follow it on the other side.”

The Supreme Court noted that its earlier decision in PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC1126, tried to make sense of these deferent positions in the following way:

“The decision in Mudge and Koitachi could work well with one complimenting the other. Where title in certain property has passed a number of hands and or a considerable period of time has passed and is hard to trace back what has happened, the need to bring fraud home to the eventual title holder is sensible and could apply. However, where title in a property has not passed hands or the circumstances leading to either grant or transfer of title can easily be traced and established, the requirement to bring fraud as determined by Mudge and Koitachi home to the eventual title holder may be inappropriate. The title holder knowing this position of the law may well have deliberately or by his conduct facilitated a breach or otherwise a failure to follow all relevant processes and requirements for a proper, fair, and transparent grant or transfer of title over State Leases, which may fall short of fraud as held by Mudge and Koitachi to gain from his own illegal, improper, unfair, and questionable conduct. This would no doubt run into conflict with well-established principles of law which say that no one can be permitted to gain from his or her own illegal conduct. Against such possibilities, Emas does make sense.

Eventually the Court decided to endorse the decision in Emas Estate Development Pty Ltd v. John Mea & Ors [1993] PNGLR 215. In so doing it reasoned as follows:

“In our view, the principle enunciated in Emas is a necessary safeguard against the abuse of the process prescribed for the proper, fair, transparent and legal allocation of State Leases. In a jurisdiction like PNG where there is ready abused of legislatively prescribed process particularly over a much sought after resource like land, and other regulatory requirements for safety and well fare of the nation, the decision in Emas becomes very important. The situation in PNG is not the same as in England, Australia or elsewhere, where the state owns most of the land and there is a large supply of land. Also, unlike Australia and England, there is in PNG, a ready resort to abusing legislatively prescribed process particularly in relation to land as much as other important resources. Under Mudge, people who either deliberately or by their own conduct chose not to follow the proper process laid for applying for and being granted State Leases and eventual registration to gain from their own illegal and improper conduct or failures.... Hence it makes sense to qualify the application of the decision in Mudge and those following.”

We accordingly dismiss ground 5 of this appeal.

Ground 6-	The teamed trial judge erred in law and in fact in placing too much weight and reliance on the evidence of the respondent when in fact:

a)	The evidence of the second appellant, his affidavit sworn 23rd June 2010 and filed 28th June 2010 clearly explained how the first appellant got title of the subject land from the National Housing Corporation.

b)	The evidence of the respondent and the second appellant clearly showed that the purported developments that the respondent did on the subject land, after 25th September 2009, were done in breach of the restraining orders of the National Court in 2009. Christian Life Centre v. Janet Kepoli, which proceeding was amalgamated with proceedings WS 1053 of 2009, Janet Pepam Kepoli v. Christian Li e Centre Pastor William Iki National Housing Corporation and The Registrar of titles, which is the subject of the appeal.

c)	The respondent's evidence were contradicting in terms of the improvements, on the subject land and in terms of compliance of the restraining orders of 25th September 2009 in that the respondents affidavit sworn 29th September 2010 and filed 30th September 2010, at paragraph 10 onwards states, she built a permanent residential building to accommodate widows and orphans of Kompiam and Wapenamanda on another property described as allotment 22, section 10 and not on allotment 13 of section 10 but in her supplementary affidavit sworn 23rd January 2020 and filed 24th January 2020, she says she made tangible improvements on section allotment 13, section 10 accommodate the widows and orphans.

d)	The learned trial judge erred in law and in fact in holding that the land was not vacant in the legal sense as the respondent made a garden and planted orange tree, avocado trees, Mandarin trees, guava trees and casuarina trees as improvements whereas in the legal sense these are not improvements required by the improvement covenant contained in the certificate of title of the subject land.

75.	In addressing this ground of appeal, as we already noted, the NHC has shown no interest in defending the substantive National Court proceedings or this appeal. There is a complete lack of interest and evidence from the NHC as to the processes it took to terminate the respondent’s interest or the transfer of the title to the first appellant under the NHC Act and the Land Act.  

76.	We accept the learned trial judge’s findings that the NHC’s lack of interest and non-appearance and entering no contest on the National Court proceedings to infer a deliberate decision to accept there is no basis for the appeal and the reliefs sought can be granted.

77.	In the circumstances, we are of the view that and repeat the sentiments express in ground 5 above. In that the NHC failed for reasons only known to it to appear in Court on the hearing of the substantive matter and on appeal to address the Court on the issue. After entering a contract of sale of land with the respondent, the NHC failed to take any meaningful step to transfer the title to the subject land to the respondent. It sat on this transaction for more than 8 years. 

78.	On the other hand, it took the NHC only four months to conclude the subsequent contract of sale to the appellants. These actions were tantamount to deceitful conduct on the part of NHC and the appellants. The appellants cannot in this situation cannot plead innocence of deceitful conduct. They are equally to blame. They collaborated with the NHC staff to conclude a transaction which ultimately resulted in the respondent’s loss of the payment of the purchase price for the subject land and issuance of title to the subject land. When such a deceitful conduct leads to serious consequences in the loss of a legitimate expectation of a transfer in property interest in subject land, comes before or to the attention of the Court, the Court cannot ignore it. It is incumbent on the Court to deal with the issue and address the issue with a decision which is sound in law. 

79.	Consequently, any injustice that the actions and omissions of the NHC and the appellants has brought about upon the respondent must be corrected by reversal of what had happened against them and to restore to the respondent to where she should have been prior to the fraudulent actions of the NHC and the appellants. 

80.	We consequently make the following orders:

(1)	The Appeal is dismissed.

(2)	The decision and orders of the National Court in WS 1053 of 2009 delivered on 4 February 2022 is affirmed.

(3)	The transfer and registration of title entered in the name Christian Life Centre as the transferee/owner of the land described as Section 10 Allotment 13, Wapenamanda, Enga Province, contained in State Lease Volume 11, Folio 105, (“the property”) be struck off.

(4)	The Registrar of Title shall forthwith by order of this Court cancel the entry of transfer and registration of the title in the name of Christian Life Centre entered 5 November 2001 over the land described as Section 10 Allotment 13, Wapenamanda, Enga Province, contained in State Lease Volume 11, Folio 105, (the property)

(5)	The Registrar of Title shall by order of this Court have the title, 
over the land described as Section 10 Allotment 13, Wapenamanda, Enga Province, contained in State Lease Volume 11, Folio 105, (the property) restored to the National Housing Corporation forthwith.

(6)	The National Housing Corporation and the respondent, Janet Pepam Kepoli, shall continue and complete their agreement for the sale and transfer title over the land described as Section 10 Allotment 13, Wapenamanda, Enga Province, contained in, State Lease Volume 11, Folio 105 (the property) to Janet Pepam Kepoli forthwith.

(7)	Costs of the Appeal are awarded in favour of the respondent to be taxed if not agreed.
____________________________________________________________
Dowa & Piam Lawyers: Lawyers for the Appellants
Tamutai Lawyers: Lawyers for the Respondent