Maki, acting for an on behalf of Moge Nambuka Milemp Clan v Minister for Lands and Physical Planning [1997] PGNC 55; N1568 (9 May 1997)

Unreported National Court Decisions

N1568

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

O.S. NO. 149 OF 1995
BETWEEN:
MICHAEL MAKI acting for and on behalf of Moge Nambuka Milemp Clan - Plaintiff
And:
THE MINISTER FOR LANDS & PHYSICAL PLANNING - First Defendant
And:
THE MANAGING DIRECTOR OF PAPUA NEW GUINEA WATER BOARD - Second Defendant
And:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA - Third Defendant

Mount Hagen

Injia J
11 November 1996
9 May 1997

LAND - Acquisition by Government - Compulsory acquisition of land for public purpose - Land required for town water supply - Whether land properly acquired by compulsory acquisition process - Whether adequate compensation paid - Land Act (Ch. No. 185), SS. 16, 17, 19, 21, 86, 87, 88, 89, 90, 91, 92, 94, 108 - 111.

LAND - Registration of land acquired by compulsory process under Land Act (Ch. No. 185) - Failure to register acquisition under Section 21 of Land Act - Whether acquisition inv-lid - Land Act (Ch. No. 185), SS. 17 (2); 21; Land Registration Act (Ch. No. 191), S. 26, 33

Cases Cited:

Minister for Lands v William Robrame [1980] PNGLR 433

Mudge & Mudge v The Secretecretary for Lands & The State [1985] PNGLR 387

NTN Pty Ltd v PTC [1987] PNGLR 70

PNG v Lohia Sisia [1987] PNGLR 102

Mamun Investment Pty Ltd & Ors v Paul Ponda Unreported Supreme Court Judgment SC 490 dated 31st August 1995

Counsel:

P Kunai for the Plaintiff

J Kawi for the First and Third Defendants

DL O’Connor for the Second Defendant

9 May 1997

INJIA J: The Plaintiffs claim to be the traditional landowners of the land in which the water reservoir for Mount Hagen city is situated. The Land is describ Portioortion 1282C Fourmil of Ramu, Milinch of Mount Hagen, Western Highlands Province. The la occupied and used bsed by the Second Defendant, the PNG Water Board, to supply water to the residents of Mount Hagen city.

18 December 1979, the land was compulsorily acquired by the First and Third Defendant for for public purpose, namely “water reservoir, aqueduct or water course” under S. 17 of Land Act Ch. No. 185 (S. 18 of the Land Act 1962). In these proces, the PlainPlaintiffs challenge the legality of the compulsory acquisition process and seek certain declaratory orders as follop>

(i) ټ A declaration that that the land known as Kugmul Hmul Hill and described as Portion 1282C Fourmil of Ramu & Milinch of Hagen, Western Highlands Province was leased to the Third Defendant by Plaintiff for the benefit of the Second Defendant for a period of ten years with option to renew and not otherwise.

(ii) ҈& A decladeclarationation that the said lease is deemed to have ended by affliction of time in December of 1989.

(iii) ҈ A Declon the the circumstances prevailing at the time regarding ding the sthe said land did not warrant the Third Defendant to use Section 18 of the Act er 185 to acquire the said land by compulsory proy process.

(iv) < larecion that the use of S of Section 18 of the Land Act by the Third Defendant to acquire the land by Compulsory process is null and void and of no effect becahe Thefendailedomply with the procedures to s to acquiacquire lare land bynd by Compulsory process as prescribed by Section 18 of the Land Act.

(v) &#If the Court finds that that the acquisition of the said land by Compulsory process was valid then to declare that no adequate Compensation was paid to the Plaintiff and his clansmen by the Third Defendant.

THE EVIDENCE

The Plaintiffs have filed ten (10) affidavits to support their claim. They are the affidavitsohn John Kauga sworn on 23rd February 1995, Reng Maip sworn on 8th March 1995, William Kakupa Kauga sworn on 8th March 1995, Luke Rupa sworn on 11th March 1995,ael Maki sworn on 21st April 1995, John Pamunda sworn on 22on 22nd June 1995, Awap Rumints sworn on 23rd May 1996, Dominic Yaga sworn on 29th April 1996, Michael Maki sworn on 27th May 1996, and Simon Noki sworn on 27th May 1996.

The Defendants have filed only one affidavit and that is of Silas Peril sworn on 31st January 1996. He is the Acticretary for for the Department of Lands with the National Government. In addition, both partie c by consent, produced the Lands Department file pertaininthe land for the Court’s perusal.

There is no s no dispute that the land was customary land and it was acquired by the gment under the Land Act (&#t (“the Act”). Under the customary land mand may be acquired by the Minister for Lands by agreement or by compulsory acquisition under S. 17: S. 13.&#1here land is acqu acquired by agreement, it may be by way ose or outright purchase:&#1e: S. 15.; The declarations sons sought in para. (i) to (iv) inclusive raise the main issue of whethe land was acquired by the the government by agreement by way of a lease for a term of years or outright purchase “or” by compulsory process under the Land Act. These are the only twoods hods of acquisition of land under S. 13 of the Act. There c be a contemporaneoraneous acquisition of the same land by both methods - it has to be one method or the other. If I that and wquired ired ired by compulsory process or by agreement, and properly so, then the next next issue raised by the declaration soug para. (v) is to consider whether compensation or lease purchase payments was properly and and adequately paid to the customary landowners in accordance with the Land Act. If I find that the was nots not properly acquired by compulsory process or by agreement in accordance with the Act, then it will become necessary to consider the present and future ownership status of the land.

The defendants say the lthe land was acquired by compulsory process. Therefore, it is necesso s to set out the relevant provisions under the Land Act relating to compulsory acquisition.

The procedure for compulsory acquisition is prescribed by Sn 16-17. The pertinent parts ofe prse provisions are: are:

“S. & 16 (1)

(2) < Thee shall not acquire lane land by compulsory process under this Act unless the Head of State, acting on e, hast cato beed on of tners of the land, or sucr such of them as can, after diligent inqu inquiry, iry, be asbe ascertacertained,ined, a notice inviting the person on whom the notice is served to treat with the Minister for the sale to the State of the interest of that person in the land.

(3) sopererv s witd a notice tice to treat in respect of land may, not later than two months after the service of the notice, furnish to the Minister particulars of:

(a) &ـ the inte interest rest claimed by him in the land; and

(b) the amoont fic whe i hagre agreeable to sell to the State his interest in the land; and

(c);  & the;name and addressdress of any other person known to him to have an interest in the land and the nature of that interest;

4)҈& On receipt of the particulars referred to in Subsection (3on (3), th), the Mine Minister may:

(a) &#treat with the person furn furnishing the particulars for the acquisition of his interest by the State by agreement; and

160;&ـ&#1otwithstanding anything in this Act enter into an agreement went with tith that phat personerson for the acquisition.

(5) The Minister may, by written notice to a person served with a notice to treat, withdraw the notice to treat.

(6) &##160; Where tere the ownea of te interest in land, being a person who has furnished the particulars referred to in Stion (3), suffers loss by reason of the notice to treat having been given and withdrawn, thn, the State is liable to pay to him such compensation as is determined by agreement between the owner and the Minister or, in the absence of agreement, by action by the owner against the State in a court of competent jurisdiction.

(7) This section noes ppt ain y in a case where the Minister certifies that there are special reasons why the section should not apply.

17. &##1ompuin

1)/p>1)҈#1160; Where:here:

:

(a

(a) &#160eriop of two months hahs has expired afervica noto trer of es to treat, in reln relationation to any land; or

(b)  e; thister hter has givs given a cicater Sec16(7) in reln relationation to a to any land, the Minister may, by notice in the National Gazette, declare that the land, other than any ist inect och a notice tice to trto treat heat has been withdrawn, is acquired by compulsory process under this Act for a public purpose specified in the notice.

(2) ҈ On the the publication oo a notice under Subsection (1), the land to which the notice applies is:

(a) ـ&#1ested sted in then the State; and

(b) & freed ischafrom all interinteresterests, trs, trusts, restrictions, dedications, reservations, obligations, contracts, licences, charges and rates, to the inteat thal esin thd and all rights and powers iers incidencident tont to that that legal estate or conferred by this Act are vested in the State.

(3) &#1he land acquired under tder this section may be an easement, right, power, privilege or other interest that did not previously exist as such in, over or in connexion with the land.”

These provisions gives the State wide powers to acquire land by compulsory acquisition for public purposes. It is clear from S. 17 (2) that the publication of the notice in the National Gazette constitutes the “acquisition” and it operates to vest the legal title of the land in the govet by operation of law.

Upon the date of publication tion of the notice under S. 17, upon which the land is vested in the government, any interest or right of the owner over the land is “converted” into a right to compensation under the Act: S. 19(1). Upon land being lsorily acly acquired, the Departmental head must, as soon as practicable after the date of acquisition, cause a copy of the notice of acquisition to be served on the customary landowners: S. 20.

Also upon acquisition of the land by compulsory process, the Departmental head is required to lodge with the Registrar of Titles a certified copy of the notice of acquisition. The trar of Titles then &#en “register(s) the acquisition in the manner, as nearly as may be, in which dealings with land are registered; and deal with and give effect to the copy of the notice as of acquisition as if it were a duly executed grant, conveyance, memorandum or instrument of transfer of land to the State”: S. 21. Such registrati title by t by the Registrar would be done under the Land Registration Act (Ch. No. 191). In acnce with well establitablisrinciples, upon registration of title, the State would acquire an indefeasible title to theo the land: Mudge & Mudge v The Secretor Lands & the State [1985] PNGLR 387; Mamun Investmenttment Pty Ltd & Ors v Paul Ponda & Elias Kuabo representing Mount Hagen YMCA, Unreported Supreme Court Judgment SC 490 dated 31st August 1995. However, failo register ther the acquisition under S. 21 should not, in my view vitiate the acquisition. Thibecause upon publicatiocation of the notice under S. 17 (2) legal title of the land is vested in the State by operatioration of law, and registration under S. 21 would only be a formality for record purposes. The; The situ under the Lahe Land Registration Act is different. Upon registn, the transfernsferee acquires an indefeasible title to the land: Land Registration Act, SS. 26 & 33.

The undisputed facts in the present case are tn as early as 1968, the colonial government identified this this land as being suitable for use to develop water supply for Mt. Hagen. Negotiations between theonational and Provincial Governments on one hand and the customary landowners on the other took place between 1968 - 1978 as to how the land should be acquired by the government for that purpose. Various options were considered. Among them was a recommennation by a Lands Officer, one L.W. Rupa on 16 June 1978 that the land be acquired by agreefor a lease of thirty (30) years. Thernment considered all tall the options includinguding acquisition by agreement by lease for a term of years or outright purchase, and compulsory acquisition. se of the ongoing dispute pute and opposition by the landowners as to the method of acquisition and the amount of compensation or lease payments, the negotiations lasted some ten (10) years wi any final resolution.&#160 At ame time, the need for for a permanent water supply for the Mt. Hagen increased with the increase in development of the town coupled with growth in population. Then there was the additional pressure from overseas finance lending sources. Loan finance fre Asian Devn Development Bank in 1978 had been secured by the government for the project.&#The Bank gave the government an ultimatum to resolve the lahe land dispute by acquiring the land or face the risk of loosing the loan fund. So the government decideacto acquire the land by compulsory acquisition process. That approach had the backing of the Western Highlands Provincial Government: See Minute of Meeting ofy May 1979 (Annexure “A” of Mr Peril’s affidavit).

On 18 December, 1979 the then Minister for Lands, Mr Boyamo Sali, issued two notices of compulsory acquisition in rt of the two pieces of land land under S. 17 (1) (b). He also i two certificatescates under S. 16 (7) which certified that S. 16 provisions did not apply in respect of these lands. The two ns of compulsory aory acquisition were published in Nationaltte No. G8 dated 27 Decembecember 1979. From copies of correspondences on the Departmental file, some of which are annexed to Mil’s affidavit, it isit is clear that the customary landowners were made aware of the publication of the compulsory acquisitionce. Upon my perusal of the the Lands Department file, it seems that the Department Head did not however, cause the registration of the compulsory acquisition with the Registrar of Titles as required by S. 21. After the pubion of the nohe notice, discussions took place between government officials and the landowners for compensation and compensation was paid by the State. Thpulsoquisition process hess however, was not challenged in d in Court up until these proceedings have been filed, which is more than ars later.

In those fourteen (14) years, negotiations took place as to appropriate cate compensation and certain payments were made by the government and accepted by certain groups of landowners. Since then, in theseeedingedings, certain landowner groups with the support of those who received the earlier payments such as the group headed by Dominic Yaga, are challenging theents. They say the payments wer for lease of the lane land for a term of 30 years or alternatively, that if it was compensation for compulsory acquisition, the amounts paid is inadequate.

It is submitted for the Defendants that the land was clearly and properly acquired by compulsory process under the Act. Thbmit the government comp complied with all the necessary procedural requirements in SS. 16 & 17 and that upon publication of the two notices in the National Gazette, all legal interest in wo lands vested in the Stat State. They submit, by operation of S. 17 (2), the State acquired an indefeasible title to the two lands. Further, it is submitted athe affected landowners did not challenge the acquisition in Court soon after the acquisiand it is too late now beca because the State has fully developed the site at substantial cost. The tiffs’ counsel msel makes submissions in direct contradiction to these submissions.

For my part, I agree with the submission of the Defendants&#821unsels. It is clear from the eve tnce that the landowandowners, including the Plaintiffs, were aware of the compulsory acquisition, that the legal title to the land had been vested in the State upon publication of the notices in the National Gazette by operation of law and that their interest in the lands had been converted to a right to compensation. Knowing these facts, they proceeded to negotiate for compensation and received certain payments. The fact that they did not challenge the acquisition urt until more than fourteen (14) years later further goes to show that they accepted the cthe compulsory acquisition. The needromptply for judicjudicial review of an executive action ison is well recognized: NTN Pty Ltd v PTC [1987] PNGLR 70; PNG v Lohia Sisi87] PNGLR 102. This Court cannoperly and and fairly review an executive decision madn made more than 14 years ago in different socio-political and economic circumstances unless there are very compelling reasons to do so. e present case, there are are no such compelling reasons. The that the State may havy have failed to register the acquisition with the Registrar of Titles not vitiate the acquisition because registration is only only a matter of formality: see my discus at p. 7, ant, ante.

For these reasons, I find that the two lands were properly acquired by the government by compulsory process under the Act.

Tht issue is whether proper compensation was paid for the acqe acquisition. Right to compensationcustocustomary land compulsorily acquired is given by S. 19. &#1art XI sets out the prin principles and procedure for dealing with compensation claims.&#16e underlying principle is that reasonable compensation must must be paid: Minister for Lands v William Robert Frame [1980] PNGLR 433. The important features of Part XI are:

1. ;ټ The pere person loon lodges a claim for compeon with the Department of Lands under the procedure provideovided in S. 86 (1) & (2).

2. ټ&#T60; eristeriderscdersclaim.&aim. #16 m He may either accept cept or reject the claim: S. 86 (3) - Taimant is nots notified of the decision withree (nths e Min’s decision: S. 86 (4). (4).

3.

3. &##160;; 160; If0; If the Mthe Minister accepts the claim, thunt of compensation is asse assessed under Division 8 (SS. 108 - 111). If the ter rejects the clae claim, the claimant may brinactiothe Nal Cour Court clat claimingiming a declaration as to his entitlement to compensation: S. 87. The Nat Court procedures fres for ng with such action is prov provided by S. 87.

4. ;ټ If the the claim laim is accepted by the Minister amount of compensation may be reached by agreement betweentween the Minister, on behalf of the State, and the Claimant or “own the #8221her befr before oore or aftr after the acquisition of the land by compulsory process: S. 90 - 91.

5. &##160; If the Minister andr and the parties disagree on the amount of compensation, they may, by consent, refer the matter to arbion: .&#16e cla may also bring an action in the National Court to determine mine the athe amountmount of c of compensation: S. 94. The Court pures for dealinealing with this claim is set out in S. 94.

The guiding principles to be used by the Government and the clt in agreements or by the Court, in determining a reasonable amount of compensation are sete set out in SS. 88 - 89. These Sectprovide:

>

“88. General principles

(1) In the determinati the amount of compensation payable in respect of land acquired by compulsory process underunder this Act, regard shall be had to:

(b) ـ the dame damage (if any) caused by the ance e land from other land in which the claimant had an interest at the date of acquiacquisitiosition; and

(c) &##160;enhant or deor depreciation in value of the interest oest of thef the claimant, at the date of acquisition, in other land adjoining or sevfrom cquirnd by reason of the carrying out of, or the proposal to carry out, the the publipublic purc purpose for which the land was acquired.

(2) ҈ te deninmining the the value of land acquired under this Act, regard shall not be had to any increase in the value of the land arising from the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

(3) ;ټ Where tere the vale value of the interest of the claimant in other land adjoining the land acquired is enhanced or depreciated by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, the enhancement or depreciation shall be set off against, or added to, as the case requires, the amount of the compensation otherwise payable to the claimant.

89. Value of land in certain cases

Where, for a purpose:

(a) &#connected with the defencefence of Papua New Guinea; or

(b) ټ&##16urhe public safc safety of Papua Newa New Guin Guinea; oea; or

r

(c) ـ connecttd with navi navigation by air, the State, a formministration, any other government or a person or authorityority acting for or on behalf of the State, a former administration or anyr govnt haether bher beforeefore or a or after the commencement date, done or caused to be done work on, or in relation to, land or has placed anything on, under or over land, and the land is subsequently acquired by compulsory process under this Act, the value of the land shall, for the purpose of determining the compensation payable in respect of the acquisition, be assessed without reference to the enhancement or depreciation (if any) in value arising from the work so done on, or in relation to, the land or the thing so placed on, under or over the land.”

In the present case, there is no dispute that the sum of K65,000.00 was paid for both pieces of land as compensation. This amount was ad at by a by agreement between the State and the claimants or customary landowners after the compulsory acquisition. This amoun comprised as foas follows:

idth="93" valign="top">

K35,000.00

Loss of property and business for Intake Site
Land on intake site	K15,000.00
Land on Reservoir	K15,000.00
Total	K65,000.00

The amount was agreed upon between the parties after lengthy negotiations which also involved valuation of the lands by the Valuer General. The State made the pay by s by instalments. The last ese payments was was made in October 1980. There is however, ndence once of any comprehensive formal written agreement. It ap that most of the nege negotiations and agreements were orand in a few instainstances, reduced to writing. Some assistance as t termsterms of thof the agreement may be derived from a copa written agreement betweentween the State and the Claimants dated 10 October 1980 in respect of the sum of K15,000.00 for the reservite. The agreement isnt is reproduced below:

“CONDITIONS OF ACCEPTING K15,000.00 FOR THE LAND AT THE RESEVOIR SITE - BY MOGEI NAMBUGA CLAN

1. First preferebces ve gio t to the Mogies for Land Leases in time:

(a) ټ&#Town ofwn of HagenHagen any commercial and Residential purposes.

(b) ;&#16ricases outside the tohe town of Moun Mount Hagen.

2. ټ&#L60; ofss of waterwater ater supplsupply to be collected by the Mt. Hagen Co.

.ټ ـ Thesh resh resh wath waterwater be f be freely supplied to surroundings villages at the water Resevoir site.

4. &ـ҈ If a new siew site is located in the future we would want our land be r be returneturned to us.

Spokesman: (Signed) Nambuga Clan

Spokesman: (Signed) “......”

Spokesman: (Signed) &#d) “......”

National Government Ref: (Signed by Secretary)

Provincial Government Ref: (Signed by Premier)

Date: 10/10/80 Place: Premiers Office Mount Hagen”

The uncontested evidence from the State is that the State has fully satisfied the additional conditions set out in para. 1 and 3 of this agreement, in particular:

(i) ;ټ A primeprime agricagricultural land consisting of Portions 1-1194, 2-1195 and 3-1196 in the Waghi Valley totalling some 84.069 hectares was bought by tate aven t landowners via their landowner companympany, Mog, Moge Deve Development Corporation. This landow fully developeeloped with a Coffee Plantation.

(ii) &##160; A big pbig prime coimercitl site described as Allotment 2, Section 17, Mten Town was also bought by the State and given to the LandoLandowners via their landowner company, the Moge Nambuga Millimp Corporation.&#This has been divided ided into into various Allotments, some of which are yet to be developed. On o this Allotments standstands a modern fuel service station directly opposite Mt. Hagen’s Highlander Hotel.

After the payments in the form of cash a kind, various groups of landowners laid claim to further cher compensation between 1980 and early 1995 which culminated in these proceedings. These proceedinge initiatetiated by a group led by the present principal Plaintiff, Mr Michael Maki. It appears the present Plat Plaintiff’s group is one of five (5) groups of landowners who laid cliam to further compensation. ther s are led by Messrs Jsrs John Pamunda, Phillip Num Maip, Wai Pok and Dominic Yaga.&#16. The grod by Dominic Yaga waga was ncipal beneficiary in the 1980 payment. He has now aligned himself with Mr Maki to suto support him in these proceedings. erent grouve claimed differifferent amounts.

Upon caon carefully considering the whole of the evidence, I am satisfied that thunt opensation arrivedrived at by agreement and paid to the claimants in 1980 was fair and reasoreasonable. I do not find any breachhef the provision of the Act designed to ensure payment of reasonable compensation to the customary landowners. The State ully ied with itth its side of the bargain and there is nothing more to be done by the Stat State. I parties want to re-nete nete the agreement to allow for further compensation, it is up to the State to open its doorsdoors to further or fresh negotiations.&#1urther it is up to the State to return the land to its trad traditional landowners if the State no longer requires the land for the purpose for which it was acquired.

For these reasons, I dismiss the Plaintiffs claim with costs to the Defendants.

Lawyer for the Plaintiff: Kunai & Co Lawyers

Lawyer for the First and Third Defendants: Solicitor General

Lawyer for the Second Defendant: DL O’Connor Lawyers