Garabe v Kora [2021] PGDC 106; DC6060 (26 July 2021)

DC6060

PAPUA NEW GUINEA

IN THE DISTRICT COURT OF JUSTICE

CIVIL JURISDICTION

GRFCV NO. 10 OF 2021

Between:

ALISON AJALI GARABE

Complainant

And:

PAUL ALUNGI KORA

Defendant

Tari: DCM, Mr. E. Komia

26th July 2021

CONTRACT LAW – agreement between two persons – verbal agreement requires balance of probabilities – general principal of sale of land must not be verbal – agreement void for uncertainty

CUSTOMARY LAW – customary land sale – land communally owned – clan members’ consensus must be obtained – principles of land transfer in accordance with Huli custom – where ownership is not in dispute – dispute on whether the land was sold –

Held:

1. A verbal agreement is binding on parties insofar as the terms of the agreement is very unambiguous and there is consensus ad idem on the parties making that verbal agreement, but where an agreement concerns the sale and transfer of interests associated with land, proper processes required under the Land Act 1996 must be followed whether the land to be sold is a State Land or Customary Land.
   
2. When determining an issue concerning the transfer and disposition of traditional customary land, the party selling the proper must act in conformity with S. 132 of the Land Act, and also in accordance with the customary practices and norm of the locality where the land is located, and in doing so, there must be evidence to prove that such sale, transfer and disposition of land has occurred with proper paper trails whose authenticity must be unambiguous.
   

Papua New Guinea cases cited

Ako v Wia [2013] PGNC 85; N5100 (1 March 2013)

Application of Ambra Nii [1991] PNGLR 357

Kiwai v Kiwa [2015] PGNC 83; N5877 (19 February 2015)

Leahy v Otri [2009] PGNC 314; N3860 (27 June 2009

Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159; N1094 (18 June 1992),

Reva Mase -v-The State (1980) N260

The Application of Rimbo Susu on behalf of Himself and Other Finschafen Landowners [1992] PNGLR 37

Overseas cases cited

Browning v Morris [1778] EngR 85; (1778) 2 Cowp 790, 98 ER 1364

Chappel Pty Ltd v DK Pett Pty Ltd [1971] 1 SASR 188

Kiriri Cotton Co Ltd v Dewani [1960] 1 All ER 177

Legislations

District Courts Act

Land Act 1996

Counsels:

Complainant: in person

Defendant: in person

INTRODUCTION

1. This is a claim by the complainant seeking this Court to order the defendant to receive a K 3, 000.00 which was agreed to be paid in 2014, and ultimately for free and vacant possession of a customary land located at Kikita adjacent to the Tari General Hospital. The complainant claims that the defendant is unlawfully occupying her customary land and seeks to restrain the defendant, his agents, associates, friends and family members from the land.
   
2. The defendant contends that the complainant had sold the land to her for a consideration of K 2, 500.00 and cross claims that, if the complainant is to move back onto the land, she has to adequately compensate him for the developments and also claims that he would have to remove his brother’s cemetery and as such, the complainant must adequately compensate him by paying him K 20, 000.00, two cows and two live pigs so he can give free and vacant possession of the land.
   

FACTS

3. The facts of this case is pretty much straight forward in that, the complainant is the defendant’s brother, and they both are from the Mayara sub clan of Tipa Clan, which form the bigger Kikita Tribe living within the corridors of Tari Town.
   
4. The complainant is the customary custodian of the land, which subject of this dispute. The defendant currently occupies the land.
   
5. It is a disputed fact that the complainant had bought the land for a consideration of K 2, 500.00, whilst the complainant states that the defendant had given him K 1, 500.00 which was for her second hand bail that was sold by the defendant’s sister, one Margaret Kora who had sold her second hand bail and had run away with the money. She claims that the defendant had given her that K 1, 500.00 after it was sent to her through the defendant’s account by his late brother one Alua Kora, pursuant to late Alua’s discussion with her concerning her monies squandered by Margaret Kora.
   
6. Another disputed fact is the contention that the complainant had never contested the defendants use of the land at the time of the burial of defendant’s elder brother one late John Kora.
   

ISSUE

7. Whilst all the above agreed and disputed facts may have been seemingly tested out in the different stages of examination of the witnesses in the course of the trial, I have narrowed down the issue to, whether customary land can be disposed through selling transferring, by an individual or by a communal consensus of all the clan members, and whether sale, transfer and disposal of such customary land has a formal process under the customary laws of the Huli Society.
   

DISPOSAL AND TRANSFERRING OF CUSTOMARY LAND

8. Customary land is a commodity to Papua New Guinea society, whether it be in a matrilineal or patrilineal society. The traditional customary laws protect, regulate and administer the ownership, user and residual rights associated with customary land.
   
9. Whilst the Land Act 1996 is the legislation that deals with the regulation and administration of the process of ownership, transfer and disposition of state land (also known as alienated land), customary land is more dictated by the traditional norms and customary practice of a society that has transcended from generation to generation from time immemorial.
   
10. In this case, the proper thing to do would be to visit the traditional ‘modus operend’i associated with the transfer and disposition of one’s customary interest over land within the Huli community. This requires calling of evidence from the various parties as is provided for under the Underlying Law Act 2000, and the Customs Recognition Act.
    
11. Whilst the Underlying Law Act 2000 places more emphasis on the Supreme Court and the National Court to adopt underlying laws pursuant to Schedule 2.2 and 2.3 of the Constitution, it leaves no room for the District Court to develop and formulate underlying laws. Rather, the Customs Recognition Act provides more incentive for the District Courts to adjudicate on matters concerning application of customary law and in such cases where the court is faced with an issue concerning customary land.[1]
    
12. The way in which customary land is disposed or transferred is different. In the traditional setting, it is as discussed above, but if a customary land is to be sold it is in accordance with the procedures prescribed under the Land Act 1996, specifically, section 132. This provision was applied in a land matter that arose in Enga Province between Ako v Wia [2013] PGNC 85; N5100 (1 March 2013) in which His Honor Gauli AJ (as he then was) stated:
    
    14. The sale or disposal of customary land is governed by Section 132 of the Land Act 1996, which states:

"Subject to Sections 10 and 11, a customary landowner has no power to sell, lease or otherwise dispose of customary land or customary rights otherwise than to citizens in according with custom, and a contract of agreement made by him to do so is void."

15. Under the Section 10 of the Land Act, only the Minister, on behalf of the State, may approve the acquisition of the customary land on satisfaction upon reasonable inquiry that the customary landowner does not require the land for a certain period of time, then the State may lease the customary land. While under Section 11 of the Land Act, the Minister may grant the lease over the customary land for agricultural or business lease purposes only. In either case, such agreement shall be authenticated by an instrument of lease.

16. The Section 132 of the Land Act requires two things that need to be satisfied in disposing of a customary land. The customary land owner has power to dispose of the land only to citizens and such disposal is to be done in accordance with custom. The custom, that is more relevant, is the custom and or the practices of the people where the subject land is situated. And in the present case, it would be the custom of Wabag District or otherwise the custom of Enga Province if the custom is common throughout the province and none other.

17. And so the question to be asked is: What is the custom of Engans in disposing customary land? The appellant Mr. Komen Ere in his affidavit filed on 04/05/11 stated that he purchased the land from the customary owner, the late Mr. Aru Ako. He did not state his relationship with the late Aru Ako. He did not state if the sale and purchase of the land was done in accordance with their Engan custom. It is vital that the appellant must prove that such purchase was done in accordance to their relevant custom. In the absence of such vital evidence, it would appear that the requirement under Section 132 of the Land Act, had not been satisfied. That been the situation as it may, I could not be satisfied that the sale and purchase between the appellants Komen Ere and late Aru Ako was done in accordance with the custom of Engans. And I find that such sale and purchase to be null and void and therefore unenforceable.
    
13. In other cases such as Reva Mase -v-The State (1980) N260; Application of Ambra Nii [1991] PNGLR 357. The Application of Rimbo Susu on behalf of Himself and Other Finschafen Landowners [1992] PNGLR 37, Leahy v Otri [2009] PGNC 314; N3860 (27 June 2009) all tend to synchronize well with the principles surrounding disposal and transfer of customary land interest to another person, other than a citizen.
    

HULI CUSTOM

14. Now referring to the Huli custom that references to the disposition and transfer of customary ownership and user rights over a customary clan’s land is based on three main reasons. The three reasons are through tribal fight compensation, gratitude to a warrior, friendly gesture.
    
15. Tribal fighting compensation is a manner in which customary ownership and user right over a piece of land belonging to a clan is transferred or disposed to another person who can either be from the same tribe, clan and sub clan or another tribe, clan or sub clan who has helped as an ally in a tribal warfare with an enemy tribe. The owner of the fight often referred to as the ‘Wai Tene’ will substitute the customary land for pig and award the land as a form of compensation for the death or injuries sustained the the deceased family or the injured person whilst going into battle with the enemy tribe, clan or sub clan. This type of transfer of ownership and user rights is seldom done, as it is only in rare circumstance when the Wai Tene does not have the required pigs to adequately compensate the injury or deaths that his allies and himself had sustained whilst in battle.
    
16. The other reason why land is transferred or disposed is in appreciation or gratification of an act of valor shown by a warrior who has fought exceptionally well and protected a clan’s land, pig and women, and has more or less been the outstanding warrior. The Wai Tene and the entire clan can agree and demarcate a portion of their clan’s land and transfer it to the warrior as sign of appreciation and acknowledgement of his bravery.
    
17. The final reason is a gesture as a good friend who has been with that person in good and bad times.
    
18. In all these process, the clan has to witness and agree, to give meaning to the truce and agreement to dispose the land. So essentially land was never sold or transferred for commercial purposes. Land served as a commodity to raise pigs, make gardens and harbor clansmen and their tribal allies to build the tribe and clans network so that they gain recognition as an existing clan amongst other competing clans.
    
19. It is a norm and customary practice in Huli Society that the clan must communally agree in unison to transfer and dispose a portion of their customary land for one of the three reasons above. It has nevertheless, been a trend recently that individuals have been disposing and transferring customary ownership of land without the clan member’s consensus which has lately seen an increase in the number of cases concerning litigants coming into court to file complaints and summons seeking to restrain certain individuals both the seller and the buyer from further dealing with the land.
    
20. It is therefore an established law both customarily, and statutorily that customary land is not easily disposed or transferred just like that like a flip of a finger. There are processes that one has to fully satisfy and adhere to before transferring and disposing interests associated with customary land. These strict requirements are such as agreement by clansmen allowing the disposal or transfer of a land to another citizen or the State for that matter under compulsory acquisition, followed by properly documented transfer which is then registered by the local land office in the Province or District.
    
21. In this instance, the evidence given by both the complainant and the defendant highlights some discrepancies resulting in both parties ending up committing grave error. What yearns in the evidence of the complainant is that, there was no one present at the time of the purported understanding between the defendant’s late brother Alua Kora and herself of the monies that would be given to her to refund the monies misused by the defendant’s sister, Margaret Kora.
    
22. But what creates doubt in my mind over the complainants evidence that the monies were for refund of her second hand bail being misused by Margaret Kora is that, at the time the initial argument over the land sprouted up in 2014, the complainant and her husband and son agreed to reimburse the K 2, 500.00 claimed by the defendant and to include an additional K 500.00 to reimburse a total of K 3000.00 to the defendant when the complainants husband is paid his share of the compensation by the State in acquiring the land upon which the National Development Bank is now built. The court further received evidence that the monies were paid around the same time but the complainant and her husband and son never honored their commitment.
    
23. From the defendant’s evidence, the complainant has made arrangements to dispose the customary land by selling it to another citizen for a considerable amount, which he claims exceeds K 100, 000.00. whilst I find it hard to believe given the lack of evidence, the question I pose is, why wait until 2021 to repay the K 2, 500.00 or K 3, 000.00 for that matter after seven years had lapsed and the complainant and her husband and son had been paid the land compensation they claimed would be paid, which they would then use to set off the K 3, 000?
    
24. That to my mind tends to somewhat go against the complainants claim. Essentially, it can be concluded that the complainant is using the Statute to negate an agreement which she had reached with the defendant. That in itself act against the complainant. I have labored to find a relevant principle in common law that would whilst acknowledging the statutory defects in upholding the complainant’s argument and claim, also tend to make the complainant also be responsible for her inactions and fault.
    
25. The defendant further adduced into evidence a copy of a statutory declaration form signed by the complainant confirming the sale of the land. A close scrutiny at the statutory declaration showed that the statutory declaration was a photocopied one whilst part of it is riddled with correction fluid, part of it is written by pen. That to my mind is not admissible. The rule of best evidence does not warrant such evidence to be adduced as evidence in court; see Kiwai v Kiwa [2015] PGNC 83; N5877 (19 February 2015).
    
26. In this case the complainant seeks to enforce the agreement reached in 2014, and seeks the Courts power to order the defendant to accept the K 3, 000.00 which she had offered to settle pursuant to the agreement of 2014, and consequently giving her free and vacant possession of the land. In the case of Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159; N1094 (18 June 1992), Sheehan J in this case that concerned the plaintiff seeking to declare an agreement contrary to statute held in his judgement that the plaintiff cannot use the Statute as a cloak for fraud. In the analysis and discussions leading to his judgement that found a balance between the two parties and in declaring that both parties were at fault, inquired into the conduct of the parties and then states, that;
    

“When statutes expressly declare a particular class of contract to be unlawful, the Court must obviously obey such a legislative direction. It is nothing to the point that neither party knew the state of the law and that neither intended any infraction of it. The consequence of a void contract is simply that no rights arise out of it and, thus, no rights are enforceable.

A succinct summary of the effect of illegal contracts is set out by Sangster J in Chappel Pty Ltd v DK Pett Pty Ltd [1971] 1 SASR 188, where he said that from decided cases two principles emerge:

"The first is that a contract which is entered into with the object of committing an illegal act is unenforceable, the second is that the Court will not enforce a contract which is expressly or impliedly prohibited by statutes ... (but in) considering implied prohibitions a Court ought to be very slow to hold that a statute intends to interfere with the rights and remedies given by the ordinary law of contract".

In this case it is plain that neither the complainant respondent or the appellant could enforce the agreement to lease or any provisions of it since it is void by statute. No rights or obligations, therefore, arise under that agreement. But this matter does not necessarily end there.

The law as to the consequences of illegal contracts has long been clear. Void contracts or unenforceable contracts are governed by the maxim ex turpi causa non oritur actio. That simply means, no rights can arise out of an illegal contract. But the courts have long recognised two situations. The first is that very often one or other party may be less at fault than another; the second is that situations arise where it would be unjust for the courts to allow a party to take advantage of illegality by hiding behind the unenforceability of a contract and, thereby, unjustly enrich himself.

Turning first to inequality of responsibility for the illegality; this may arise in many contractual situations, but it often occurs through statutes where it is clear that the prohibitions against making certain contracts are for the protection of a particular class of people, e.g. persons suffering an incapacity such as minors, or as here - customary landowners.

Thus, as Lord Mansfield said in Browning v Morris [1778] EngR 85; (1778) 2 Cowp 790, 98 ER 1364:

"where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men; the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there the parties are not in pari delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract."

This principle still holds. Lord Denning, in Kiriri Cotton Co Ltd v Dewani [1960] 1 All ER 177, gives a clear exposition of those situations where monies or property had in pursuant of an illegal contract may be recovered. He says at p 180 G:

"so long as the illegal transaction has not been fully executed and carried out, the courts have in many cases shown themselves ready to entertain a suit for recovery of the money paid or property transferred. These were cases in which it appeared to the court that, even though the transaction was illegal, nevertheless it was better to allow the plaintiff to resile from it before it was completed, and to award restitution to him rather than to allow the defendant to remain in possession of his illegal gains.... But so soon as the illegal transaction has been fully executed and carried out, the courts will not entertain a suit for recovery unless it appears that the parties were not in pari delicto."

In pari delicto may be translated as describing a situation where the parties are equally at fault. If that is the case, the parties are stuck with their agreement and no rights or obligations can be enforced. But where they are not equally at fault (where there may have been duress, a mistake of fact, or where the duty of observing the law in the field where the contract arose is placed on one rather than the other; that is, where the law is plainly intended for the protection of a class of persons) parties are not in pari delicto and monies can be recovered.”

27. Whilst the contract falls within the category of the maxim ex turpi causa non oritur actio , can this Court simply say that there is an unenforceable agreement and order for the land to be reverted to the complainant for want of statutory compliance thereby rendering the agreement to sell the land a voidable contract? To my mind, it would not be fair, and the complainant would be unjustly enriching herself if she was intending to sell the land as purported by the defendant to which she openly admitted by that she was in talks with certain buyers to sell the land. In this instance, I should not consider her entire argument, but rather decide that the defendant being put in a position where he was made to believe that he had properly bought and acquired the land when it was not so, and whilst both parties may have been at fault, it is improper for the complainant to be allowed to walk away with the benefits of the land alone. After all the defendant is also from the same clan and is by default a landowner too except for the fact that he has no custody over the land.
    
28. In this case, the evidence establish that the complainant has had the advantage of being the benefactor of the money, and did allow the defendant to live on the said land for almost ten years, although she had promised in September, 2014 to repay the K 3, 000.00 which she did not do until this year May, and when the defendant declined, she then took this matter into Court. The defendant had undertaken payment for the occupation and ownership of the land. Nevertheless, it would be improper if the complainant would plead irregularity in the contract or agreement to sell and use Statute as a cloak to use it to her advantage and leaving the defendant disadvantaged, as the evidence of her agreeing to pay the K 3, 000.00 establishes that she did sell the land.
    
29. Nevertheless, even if the issue of ownership is contested, I am fortified that neither of the parties have ownership over the disputed land, because customary ladn in Papua New Guinea is owned by the entire clan or tribe, and as such, the land is owned by the Tipa Mayara clan. What the parties are arguing in court is essentially the authority to have custody over the land based on the lineal descendant and history of being custodians from time immemorial up until now, which I find both of them having equal right to claim custodial and user rights over. The only reason why the complainant has the upper hand is based on the fact that her parents had settled there and she grew up on that portion of land. That makes the custodial right lean towards the complainant.
    
30. So having identified the above, what is the better decision this court should arrive at? I am of the view that whilst the complainant can regain possession, custody and user right over that land, she cannot lean to Statute to cover her own inactions, but rather also compensate the defendant for living on that land for the last ten years without her seriously contesting his occupation. As I put it earlier, perhaps the value of the land appreciated overtime and caused her to rescind her initial agreement to sell, despite her knowing that she did not obtain consensus of the clan to sell the land. The end result would be that the defendant must benefit from the proceeds of the land too, although he has to give vacant possession, and I therefore would make orders in that;
    

COURT ORDER:

1. The defendant shall give free and vacant possession to the complainant as of the date of this Order.
   
2. The complainant shall compensate the defendant thirty percent of the current value of the land, and or if the land is transferred, sold or disposed, the defendant shall be compensated the value equivalent to the purchase price.
   
3. The Cemetery of Late John Kora shall not be removed as prayed for by the defendant, but shall be left untouched as he is also the brother of the defendant, and a landowner by default, and has the right to be buried there.
   
4. In the event that the complainant wishes to transfer, dispose or sell the land to another citizen of Papua New Guinea, the formal process required under S.132 of the Land Act 1996 must be strictly adhered to, and proper consensus shall also be obtained from the Tipa Mayara clansmen before entering into such transaction.
   
5. Cost is to be borne by parties.
   
6. Time is abridged from the date of this Order upon the signing

By the Court.

Magistrate E. Komia

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^[1] Ss. 1, 2, 3, 5, and 7 of the Customs Recognition Act