Moge Nambuga Milimb Investment Pty Ltd v Kauga [2011] PGNC 20; N4227 (22 February 2011)

N4227

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS NO 744 OF 2002

BETWEEN

MOGE NAMBUGA MILIMB INVESTMENT PTY LTD
Plaintiff

AND

BULDA KAUGA, DAVID POTTI, POLLY RENG & PAUL MAKI
Defendants

Mount Hagen: Makail, J
2011: 15th & 22nd February

REAL PROPERTY - Property dispute - Land ownership - Declaration of ownership - State land - State lease - Claim of traditional ownership - Interference with right to quiet enjoyment - Clear title - Indefeasible title - Superiority of title over any equitable right or interest - Declaration and permanent injunction granted - Land Registration Act, Ch 191 - Section 33.

Cases cited:

Mudge & Mudge -v- Secretary for Lands & Physical Planning & Ors [1985] PNGLR 387
Mamun Investment Limited -v- Paul Ponda & Ors [1995] PNGLR 1
Albert Purane -v- Ase Tipurupeke Land Group Inc (2005) N2806

Counsel:

Ms P Tamutai, for Plaintiff
No appearance, for Defendants

JUDGMENT

22nd February, 2011

1. MAKAIL, J: This is an ex-parte trial matter as the defendants had not shown any interest or made any effort to defend the action since its commencement on 16th December 2002. In the originating summons, the plaintiff sought declaratory and injunctive orders against the defendants in relation to a property located in the town of Mt Hagen. The property is described as allotment 2, section 17. It is a business lease registered in the registrar of title's records as State lease Volume 119, Folio 99.

2. The Plaintiff is a duly incorporated company under the Companies Act, 1997. It is alleged the shareholders of the plaintiff are various clans of which the directors of plaintiff, the defendants and others are members. It claimed it is the registered proprietor of the State lease and is entitled to quiet enjoyment of the property. The defendants, on the other hand, claimed they were original traditional owners of the land on which the property is located and are also entitled to own part or whole of it.

3. The plaintiff relied on four affidavits to prove its ownership of the property. The first one was from its director and secretary Akai Kup sworn on 13th December 2002 and filed on 16th December 2002 which was tendered as exhibit "P1". The other three affidavits were from its Chairman Jacob Kop sworn on 13th December 2002 and filed on 16th December 2002 (exhibit "P2"), other directors Raphael Raim sworn on 13th December 2002 and filed on 16th December 2002 (exhibit "P3") and Leo Laka sworn on 13th December 2002 and filed on 16th December 2002 (exhibit "P4").

4. The uncontested facts deduced from these affidavits are, the plaintiff is the registered proprietor of the property, having granted title on 20th July 1989. It operated a fuel service station on the property. It is commonly known as the Shell service station. On 09th December 2002, one of the defendants Builda Kauga approached Akai Kup and delivered a letter. In that letter, the defendants advised the directors of the plaintiff to meet with them to discuss the ownership of the property. They proposed the land on which the property is located be divided between the plaintiff and them. According to them, the proposal was supported by a decision of the Mt Hagen National Court of 09th May 1997 in proceeding OS No 149 of 1995.

5. On the morning of 11th December 2002, the defendants, their agents and servants brought in timbers and erected a fence with barb wires adjacent to the service station. The directors of the plaintiff said that they had not authorised or given their consent to the defendants to divide the land because they had not convened a board meeting and resolved that matter. In fact, they said they had yet to meet with the defendants to discuss the proposal of the defendants and were shocked to find out that the defendants had gone ahead to erect a fence on the property. As a result, the plaintiff commenced this action and on 18th December 2002 obtained an interim injunction restraining the defendants, their agents and servants from further dealing with the property until further orders.

6. I have had the benefit of reading the helpful written submissions of Ms Priscilla Tamutai of counsel for the plaintiff. First, I accept her submission the plaintiff has clear title to the property as it is the registered proprietor. The plaintiff's title is contained in the title deed marked as annexure "A" to the affidavit of Jacob Kop sworn on 13th December 2002 and filed on 16th December 2002 (exhibit "P2"). Based on the title deed, and in accordance with established principles, the plaintiff has indefeasible title to the property and is entitled by law under section 33 of the Land Registration Act, Ch 191 to occupy and conduct its business: see Mudge & Mudge -v- Secretary for Lands & Physical Planning & Ors [1985] PNGLR 387 and Mamun Investment Limited -v- Paul Ponda & Ors [1995] PNGLR 1.

7. Secondly, I accept Ms Tamutai's submission that the defendants have no title to the property. As such, they have no legal right or interest over the property. If the defendants claim some kind of equitable right or interest over the property on the basis that they were the original traditional owners of the land on which the property is located, their claim must fail because the land belongs to the State. They have neither produced evidence to establish that the land on which the property is located had not been acquired by the State nor have they established to the Court's satisfaction that the National Court decision of 09th May 1997 in proceeding OS No 149 of 1995 declared that the land had been improperly acquired by the State.

8. Further, they had not shown to the Court's satisfaction that the National Court decision in the above mentioned proceeding had authorised them to take possession of part or whole of the land. That National Court decision relates to another portion of land described as Portion 1282C in Mt Hagen which was compulsory acquired by the State to establish a water supply reservoir for the Mt Hagen town. They claimed compensation and the Court rejected their claim.

9. For these reasons, it must be accepted the State had acquired the land from the traditional land owners at some point in time under the provisions of the Land Act, 1996. Their right or interest as traditional land owners ceased when the State acquired the land and leased it to the plaintiff by a grant on 20th July 1989 under the provisions of the Land Registration Act, Ch 191.

10. Thirdly, if they rely on custom to assert their ownership of the land on the basis that, they were the original traditional land owners, their claim must also fail because the Land Registration Act Ch 191, being a statute is superior than custom as adopted and applied under schedule 2.1 of the Constitution. The Court cannot go past the plaintiff's grant of title under the Land Registration Act, 191. The plaintiff's title gives the plaintiff superior rights and interests to that of the defendants and must prevail over the defendants' customary rights or interests.

11. The fourth reason is that, the defendants claim they have an equitable interest in the land on which the property is located because they were the original traditional land owners of the land. Therefore, they are entitled to part or whole of the land. However, this claim must fail because if the Court were to accept that the defendants were traditional land owners of the land and had an equitable right or interest that must be recognised and enforced by the Court, that claim would run counter to the well established principle of supremacy of laws under section 9 of the Constitution.

12. Here, the Land Registration Act Ch 191, being a statute is superior to the English common law and equity as adopted under schedule 2.2 of the Constitution. The plaintiff's grant of title under the Land Registration Act, 191, gives it superior rights and interests to that of the defendants and must prevail over the defendants' equitable interest.

13. Fifthly, I accept Ms Tamutai's submission that if the defendants are members of the clans who own shares in the plaintiff, this does not bestow on them any equitable right to deal with the plaintiff's property. The certificate of incorporation of the plaintiff annexed as annexure "C" to the affidavit of Jacob Kop sworn on 13th December 2002 and filed on 16th December 2002 (exhibit "P2") proves that the plaintiff is a legal entity and can own property in its own name. In Albert Purane -v- Ase Tipurupeke Land Group Inc (2005) N2806, Davani, J made a distinction between a company and its shareholders and made this valuable point:

"A company is a distinct legal entity which owns its property in its own right in such a way that shareholders are not regarded as having any legal or equitable interest in the company's property."

14. For these reasons, I find the plaintiff is the registered proprietor of the property and is entitled to quiet enjoyment of it.

15. Regrettably, the evidence before the Court suggests the defendants had disrupted the plaintiff's business operations. There is evidence in the affidavit of the Chairman Jacob Kop sworn on 13th December 2002 and filed on 16th December 2002 (exhibit "P2") that the plaintiff had obtained a loan from Bank of South Pacific Limited to finance its business operations in 1992. The money was used to construct the fuel service station. It mortgaged the land with its assets to Bank of South Pacific Limited. There is an outstanding of K200,000.00 to be repaid to Bank of South Pacific Limited.

16. Constant disputes amongst the land owners including the defendants over the management of the plaintiff and the running of the fuel service station led to the handing over of the management and running of the fuel service station to Wamp Nga Holdings Limited. The plaintiff had tried to conduct its business affairs to generate revenue amidst the constant disputes and the actions of the defendants had seriously hampered its efforts. I find the actions of the defendants were unlawful and caused serious hardship to the plaintiff's business operations. They have interfered with the plaintiff's right of quiet enjoyment of the property and the Court must immediately intervene to stop them.

17. Realistically speaking, the plaintiff has been denied its right to quiet enjoyment of the property because of the actions of the defendants. This calls for the Court to issue orders to permanently restrain the defendants from interfering with the plaintiff's right of enjoyment. I am therefore, satisfied the plaintiff has established its claim on the balance of probabilities and grant the following orders:

1. A declaration that the defendants or their agents or servants do not have any legal or equitable right to annex or deal with portion of the land described as allotment 2, section 17, Mt Hagen, Western Highlands Province.

2. A permanent injunction restraining the defendants or their agents or servants from dealing in any manner with the land described as allotment 2, section 17, Mt Hagen, Western Highlands Province.

3. The defendants shall pay the plaintiff's costs of the action to be taxed if not agreed.

4. Time for entry of these orders shall be abridged to the date of settlement by the Registrar which shall take place forthwith.

Ruling and orders accordingly.
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Tamutai Lawyers: Lawyers for Plaintiff