Mas v Oiza [2009] PGNC 232; N3835 (17 September 2009)

N3835

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 688 OF 2008

CATHY MAS
Plaintiff

V

STEVEN OIZA, ACTING PROJECT MANAGER
OIL PALM INDUSTRY CORPORATION
First Defendant

SAWI LAWILA
Second Defendant

JOSEPH MAS
Third Defendant

AGNES MAS
Fourth Defendant

Kimbe: Cannings J

2009: 21, 27 May,
24 June, 17 September

JUDGMENT

LAND – State Lease – agricultural lease – effect of transmission of estate under Land Registration Act – whether a registered proprietor who obtains estate via transmission has indefeasible title – whether governmental bodies must recognise a registered proprietor's title – allegation of fraud – meaning of "fraud" – Land Registration Act, Section 33(1)(a).

The title in a State Lease, an oil palm block, was transmitted to the plaintiff and she became the registered proprietor. The Oil Palm Industry Corporation, the governmental body that assists smallholders in the oil palm industry, refused to recognise the plaintiff's interest in the block. Instead they regarded her step-brother as the legitimate owner of the block and authorised him to harvest and sell oil palm grown on the block. The plaintiff commenced proceedings in the National Court seeking a declaration that she was the registered proprietor of the block and orders that the authority to harvest and sell the oil palm be transferred to her. The defendants alleged that transmission of title to the plaintiff had been effected fraudulently and submitted that the Court should refuse the relief sought by the plaintiff.

Held:

(1) When the plaintiff became the registered proprietor she was protected by Section 33(1)(a) (protection of registered proprietor) of the Land Registration Act, which relevantly states:

The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except ... in the case of fraud.

(2) "Fraud" in Section 33(1)(a) includes not only actual fraud but circumstances in which interests in land have been transferred in an obviously unlawful or irregular manner (Koitachi Ltd v Walter Schnaubelt (2007) SC870 considered; Emas Estate Development Pty Limited v John Mea and The State [1993] PNGLR 215 applied).

(3) A party alleging fraud has the onus of proving it on the balance of probabilities (The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603). Here, that onus was not discharged.

(4) The Oil Palm Industry Corporation and its officers and other governmental bodies involved in the oil palm industry have a duty to give effect to the ownership of oil palm blocks as determined by the National Court.

(5) The relief sought by the plaintiff was accordingly granted.

Cases cited

The following cases are cited in the judgment:

Elizabeth Kanari v Augustine Wiakar (2009) N3589
Emas Estate Development Pty Limited v John Mea and The State [1993] PNGLR 215
Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80
Koitachi Ltd v Walter Schnaubelt (2007) SC870
Mary Peter v Peter Mathew (1995) N1365
Mudge v Secretary for Lands [1985] PNGLR 387
Ramu Nickel Ltd v Temu (2007) N3252
Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959
The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603
William Maki v Michael Pundia [1993] PNGLR 337

Abbreviations

The following abbreviations appear in the judgment:

DCJ – Deputy Chief Justice
Inc – Incorporated
J – Justice
Ltd – Limited
N – National Court judgment
No – number
OPIC – Oil Palm Industry Corporation
PNGLR – Papua New Guinea Law Reports
Pty – proprietary
SC – Supreme Court judgment
V – versus
WS – Writ of Summons

ORIGINATING SUMMONS

This was an application for declarations and orders regarding a State Lease.

Counsel

G Linge, for the plaintiff
S Lawila, the second defendant, in person
R Beli, for the third defendant

17 September, 2009

1. CANNINGS J: The plaintiff, Cathy Mas, is the registered proprietor of a State Lease in the Sarakolok oil palm settlement near Kimbe. The 7.29-hectare block is formally described as Portion 928, Milinch Megigi, Fourmil Talasea.

She became the registered proprietor on 5 December 2006 when the whole of the estate of the previous registered proprietor was transmitted to her. She has come to court as she has had problems in getting other people and authorities, particularly her step-brother Joseph Mas the third defendant, and the Oil Palm Industry Corporation, to recognise her as the legitimate owner of the land. This has led to disputes and confusion about who has the right to occupy the land and harvest the oil palm on it.

2. Joseph says that the land should be his as he is the biological son of the original registered proprietor, Mas Olol, who died intestate (without leaving a will) in 1996. He says that Cathy is only his father's stepdaughter, so her interest in the land should give way to his. He also says that Cathy had the land transmitted to herself fraudulently.

3. OPIC agrees with Joseph. The position taken by two of their officers, the first and second defendants, Steven Oiza, Acting Project Manager, and Sawi Lawila, Project Lands Officer, is that Joseph is the rightful owner of the land. This has led OPIC, the governmental body that assists smallholders in the oil palm industry, to authorise the issue of the Papa (primary) and Mama (secondary) cards over the block to Joseph and his wife, Agnes Mas, the fourth defendant. These cards are critical documents as the cardholders are the persons who are paid by the company, New Britain Palm Oil Ltd, which purchases the oil palm fruits from the smallholders. Without a card issued in their name a person receives nothing even if they are – as in the case of Cathy Mas – the registered proprietor of the land.

4. Cathy has filed an originating summons seeking a declaration that she is the registered proprietor and orders that the existing Papa and Mama cards be cancelled and that new cards be issued in her name.

5. The following issues need to be decided:

1. Should Cathy Mas remain the registered proprietor?
   
2. If yes, should the existing Papa and Mama cards be cancelled and re-issued in the name of Cathy Mas?
   
3. What other orders, if any, should the Court make?
   

1 SHOULD CATHY MAS REMAIN THE REGISTERED PROPRIETOR?

Principle of indefeasibility of title

6. Cathy has been the registered proprietor since 5 December 2006. Under Papua New Guinea's Torrens Title system of land registration for alienated government land, this means that Cathy is protected by the principle of indefeasibility of title. Registration of the lease in her name vested in her an indefeasible (unforfeitable) title subject only to the exceptions in Section 33(1) of the Land Registration Act (Mudge v Secretary for Lands [1985] PNGLR 387). The only exception that might apply in this case is Section 33(1)(a), which states:

The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except -

(a) in the case of fraud.

What does "fraud" mean?

7. As I pointed out in the recent Kimbe case of Elizabeth Kanari v Augustine Wiakar (2009) N3589 there are two schools of judicial thought on what fraud means.

8. On the one hand, in Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215 the Supreme Court (Amet J and Salika J, Brown J dissenting) held that if the circumstances of a forfeiture or transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title. This wide view was followed in the National Court decisions of Sheehan J in Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959, Sevua J in Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80 and Injia DCJ in Ramu Nickel Ltd v Temu (2007) N3252.

9. On the other hand, a narrower and more conventional view was recently favoured by the Supreme Court (Gavara-Nanu J, Mogish J and Hartshorn J) in Koitachi Ltd v Walter Schnaubelt (2007) SC870, where it was held that it means more than constructive or equitable fraud. It means "fraud committed by the registered proprietor or actual fraud".

10. As I did in Kanari's case I will apply the wide view expressed in Emas Estate so the question becomes: was the transmission of title to Cathy Mas so unsatisfactory, irregular or unlawful that it is tantamount to fraud? As Joseph Mas is the party arguing that this question should be answered yes he bears the onus of proof on the balance of probabilities (William Maki v Michael Pundia [1993] PNGLR 337, Woods J; Mary Peter v Peter Mathew (1995) N1365, Woods J; The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603).

Joseph's evidence

11. Joseph argues that the lease should have been transmitted to him following the death of his father, Mas Olol, in 1996 as he was his father's sole surviving biological son. Joseph's biological mother was a Bougainvillean woman who died in the 1960s. Mr Olol then married an East Sepik woman, Cathy's mother, Nigitakua Mas. Cathy's biological father is not Mr Olol. Cathy is Mr Olol's stepdaughter.

12. Joseph has given evidence that his father gave him the title document (the owner's copy of the State lease) and other personal documents including the oil palm block passbook a week before he died. Joseph's contention is that it was his father's intention that he should take over the block. In 1998 Joseph had the Papa card issued in his name and some time after that at his stepmother's request the Mama card was issued in the name of his then wife, Agnes Mas, the fourth defendant. Joseph says he tried over a number of years to get the title transmitted to himself. In 2001 he gave the necessary documents to Mr Lawila so that they could be delivered to the Department of Lands in Port Moresby. For some reason, however, the transmission never went through in his favour. There were a lot of disputes over the land and the oil palm harvest in this period. At one stage he had to go to the District Court to obtain an order preventing Cathy and her people from entering the block and harvesting the oil palm.

13. In 2004 Cathy's biological mother – Joseph's stepmother – died. Then on 26 April 2005 another of his stepsisters, Warina Mas – also known as Magdeline Tony – somehow managed to get the title transmitted in her name. Warina, however, died shortly afterwards and the next thing he knew the title was transmitted to Cathy. OPIC has consistently taken the position that he is the rightful owner of the block. He does not believe that Cathy has any right to the block as she left it in 1975 and only came back on the scene after his father died. Joseph says that he has been on the block since 1973.

Cathy's evidence

14. Cathy's evidence was somewhat different. She says that she came with her mother to the block from East Sepik in 1969. Joseph arrived in 1973, then aged 18, but he was "a loafer, had bad habits and did not help at all at the block". After their father died in 1996 Joseph stole the title document from the house and then entered into corrupt deals with OPIC and the Department of Lands (though she does not name any officers of those bodies as being involved). This resulted in the Papa card being issued to Joseph and the Mama card being issued to Agnes, even though she (Cathy) and her mother and other family members were still living on the block. Cathy says her mother commenced proceedings in the National Court in 2004 aimed at restraining Joseph from harvesting the oil palm and from transmitting the lease to himself. Those proceedings were not completed before her mother died.

15. She says that she did "cause a transmission of title" to her own name in 2006 following the death of Warina. Cathy does not say what exactly she did to cause the transmission to be effected.

No other evidence

16. None of the internal working documents of the office of the Registrar of Titles or the Department of Lands and Physical Planning have been admitted into evidence. These should have shed light on how the decision was made to transmit the title to Cathy. Joseph's counsel, Mr Beli, applied by motion to admit evidence of this nature but the application was made very late – after the close of evidence and submissions – and I refused it.

Has fraud been established?

17. Mr Beli submits that this is a clear case of fraud as the evidence shows that Cathy completely by-passed OPIC. She improperly had the title transmitted to herself in 2006. Title should have been transmitted by custom to Joseph soon after his father's death in 1996. The relevant governmental bodies, especially OPIC, have consistently taken the view that Joseph is the rightful owner of the block and the legitimate beneficiary of the oil palm harvest.

Conclusion as to fraud

18. It is not the role of the National Court to decide who is morally entitled to this block or who should own the block according to custom. It is not customary land. It is alienated government land covered by a State Lease. The law is clear that the registered proprietor must be regarded as the owner unless someone proves that the title has been obtained by fraud.

19. Joseph has fallen short of proving that the circumstances in which the lease was transmitted to Cathy are so unsatisfactory, irregular or unlawful as to be tantamount to fraud. No illegality has been proven. It is not even clear that what happened was irregular. In view of the competing evidence I am unable to make a finding of fact that – as alleged by Joseph – Cathy left the block in 1975 and only came back after their father died. It appears that Cathy's mother – Joseph's stepmother – stayed on the block after the death of Mr Olol and that she did not want the block transmitted to Joseph. It appears that it was her wish to have the lease transmitted to Cathy.

20. Cathy Mas is and must remain the registered proprietor until she is divested of title under the Land Registration Act or by an order of the National Court or the Supreme Court; and no good case has been made out for such an order being made.

2 SHOULD THE EXISTING PAPA AND MAMA CARDS BE CANCELLED AND RE-ISSUED IN THE NAME OF CATHY MAS?

21. Yes. I regard the sorts of orders sought by the plaintiff as a natural consequence of her being the registered proprietor of the State Lease. The Oil Palm Industry Corporation and its officers and other governmental bodies involved in the oil palm industry have a duty to give effect to the ownership of oil palm blocks as determined by the National Court.

3 WHAT OTHER ORDERS SHOULD THE COURT MAKE?

22. I will make a number of other orders aimed at clarifying who has control of the land and putting in place a timetable for a peaceful and orderly transition of control.

23. As to costs, Cathy has engaged private counsel and in these circumstances the rule of thumb as to costs should apply: the losing side should pay costs. The costs order should be confined to the party who actively opposed the relief sought by the plaintiff, ie the third defendant, Joseph Mas.

DECLARATIONS AND ORDERS

(1) The registered proprietor of Portion 928, Milinch Megigi, Fourmil Talasea is Cathy Mas and in that capacity she has the right to decide who lives on and occupies that land and, subject to order (2), she controls all social, economic and agricultural activities on the land including the growing and harvesting of oil palm.

(2) If Cathy Mas requires any of the parties to these proceedings to vacate the land or wants to prohibit any of the parties to these proceedings entering the land, she must apply to the National Court by notice of motion for an order that such persons vacate the land or be prohibited from entering it.

(3) The first and second defendants and the Oil Palm Industry Corporation must within one month after service of this order take all steps necessary to (a) cancel or cause to be cancelled any existing Papa and Mama cards over the subject land and (b) issue or cause to be issued new Papa and Mama cards in the name of the plaintiff or any other person nominated by her.

(4) The third defendant shall pay the plaintiff's costs of these proceedings on a party-party basis, to be taxed if not agreed.

Orders and declarations accordingly.

_________________________________________
Linge & Associates: Lawyers for the Plaintiff
Public Solicitor: Lawyer for the third Defendant