Aipa v Samson [2012] PGNC 185; N4777 (31 August 2012)

N4777

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 269 OF 2010

TIMOTHY ALEX AIPA, TRADING AS
WALTECE SERVICE STATION (WAIGANI) LIMITED
First Plaintiff

WALTECE SERVICE STATION (WAIGANI) LIMITED
Second Plaintiff

V

BENJAMIN SAMSON, DEPUTY REGISTRAR OF TITLES
First Defendant

RAGA KAVANA, REGISTRAR OF TITLES
Second Defendant

PEPI S KIMAS, SECRETARY,
DEPARTMENT OF LANDS & PHYSICAL PLANNING
Third Defendant

HON DR PUKA TEMU MP,
MINISTER FOR LANDS & PHYSICAL PLANNING
Fourth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Waigani: Cannings J
2012: 18 June, 31 August

JUDICIAL REVIEW – decision of Deputy Registrar of Titles to cancel title of grantee of State Lease – whether procedure for cancellation in Land Registration Act, Sections 160 and 161, followed – natural justice

The Deputy Registrar of Titles wrote to the lawyers for the registered proprietor of a State Lease to advise that he had established a number of anomalies in the issuance of title to the lawyers' client (the plaintiffs) and decided to cancel the title. The plaintiffs applied for judicial review of the decision to cancel the title on various grounds including error of law constituted by failure to follow statutory procedures for cancellation of an instrument and denial of natural justice.

Held:

(1) The Land Registration Act Chapter No 191, Sections 160 and 161, prescribes a procedure for cancellation of title: the Registrar of Titles, upon being satisfied that an instrument has been issued to a person in error, must first "summon that person to deliver that instrument"; and only after a summons has been issued can the instrument be cancelled. Here, no summons was issued prior to the decision to cancel title. This was an error of law.

(2) An administrative decision that interferes with or removes a person's interests in property is subject to the principles of natural justice: the decision-maker must before interfering or removing the person's interests give that person notice of the proposed decision and a right to be heard and act in an impartial and unbiased manner. Here, no prior notice and no right to be heard was given to the plaintiffs. There was a denial of natural justice.

(3) The plaintiffs thus established an excess of jurisdiction and the court exercised its discretion to quash the decision to cancel title. Other relief sought by the plaintiffs, including an order in the nature of mandamus that would require the defendants to correct the title in favour of the plaintiff and damages, was refused.

Cases cited

The following cases are cited in the judgment:

Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110
Dale Christopher Smith v Minister for Lands (2009) SC973
Kavana v Hunter (2007) N3208
Mision Asiki v Manasupe Zurenuoc (2005) SC797
NCDIC v Crusoe Pty Ltd [1993] PNGLR 139

Counsel

I Molloy & D Mel, for the plaintiff
E Geita, for the defendants

31 August, 2012

1. CANNINGS J: This is a ruling on an application for judicial review of a decision of the Deputy Registrar of Titles to cancel title to a small but valuable piece of land next to the Kone Tigers Rugby League Ground on Waigani Drive in the National Capital District, formally described as Section 468, Lot 1, Hohola.

2. The first plaintiff, Timothy Alex Aipa, has for the last 14 years been attempting to develop the site as a service station, using the second plaintiff, Waltece Service Station (Waigani) Ltd, a company that he owns and controls, as the vehicle for doing so. For many years Mr Aipa could not find out whether he or his company had actually been granted title to the land. It was only in 2009 that it was discovered that, in fact, on 2 March 2000 a 99-year State Lease over the land had been granted to "Waltece Service Station" by the then Minister for Lands and Physical Planning, Hon Viviso Seravo MP. This was good news for Mr Aipa and he reinvigorated his attempts to develop the land. In May 2010, however, he received bad news when his lawyers, Steeles, who had been liaising on his behalf with the Department of Lands and Physical Planning, received a letter dated 10 May 2010 from the Deputy Registrar of Titles, the first defendant, Benjamin Samson, notifying his decision to "cancel the title" of Waltece Service Station.

3. The Deputy Registrar stated that he had discovered various anomalies in the issuance of title: there were two titles over the same parcel of land and the volume and folio reference on the State Lease granted to Waltece Service Station was incorrect. He stated that "two titles cannot exist over the same parcel of land and former (first) title always takes precedence over the latest (second) title". Therefore his office would recognise the title held by another company, as it was granted prior to 2 March 2000.

4. The plaintiffs are applying for judicial review of the Deputy Registrar's decision to cancel title on two main grounds (numerous other grounds set out in the originating statement have not been pursued): (1) error of law constituted by failure to follow procedures for cancellation of title in the Land Registration Act; and (2) denial of natural justice.

(1) ERROR OF LAW: LAND REGISTRATION ACT

5. Mr Molloy for the plaintiffs submitted that the Deputy Registrar (presuming that he was delegated the powers of the Registrar) was obliged to "summon" the plaintiffs to deliver up the "instrument" (in this case the plaintiffs' copy of the State Lease) under Section 160 (production of instruments wrongly issued, etc) of the Land Registration Act before exercising the power under Section 161 (cancellation and correction of instruments and entries) of that Act to cancel title. Those provisions are set out below, with emphasis added to the parts of each provision said to support the plaintiffs' argument:

160. Production of instruments wrongly issued, etc

(1) Where it appears to the satisfaction of the Registrar that—

(a) an instrument has been—

(i) issued to a person in error; or

(ii) fraudulently or wrongly obtained by a person; or

(b) an instrument is fraudulently or wrongly retained by a person; or

(c) an instrument held by a person contains a misdescription of the boundaries, area or position of land; or

(d) an instrument held by a person contains an entry or endorsement—

(i) made in error; or

(ii) fraudulently or wrongly obtained; or

(e) an instrument of title is held by a party to an ejectment action whose right to the land has been determined,

he may summon that person to deliver up the instrument.

(2) Where a person refuses or neglects to comply with a summons under Subsection (1), or cannot be found, the Registrar may apply to the Court to issue a summons for that person to appear before the Court and show cause why the instrument should not be delivered up.

(3) Where a person served with a summons issued under Subsection (2) refuses or neglects to attend before the Court at the time appointed by the summons, the Court may issue a warrant directing the person so summoned to be apprehended and brought before the Court for examination.

(4) On the appearance before the Court of a person summoned under Subsection (2), or apprehended by the warrant under Subsection (3), the Court may examine him on oath and order him to deliver up the instrument.

(5) Where a person refuses or neglects to comply with an order under Subsection (4), the Court may commit him to a corrective institution for a period not exceeding six months unless the instrument is sooner delivered up.

(6) Where a person—

(a) has absconded or keeps out of the way so that a summons under Subsection (2) cannot be served on him; or

(b) has refused or neglected to comply with an order under Subsection (4),

the Registrar shall, if the circumstances of the case so require—

(c) issue to the proprietor of the land an instrument as provided in this Act in the case of a certificate of title lost or destroyed; and

(d) enter in the Register—

(i) notice of the issue of an instrument and the circumstances under which it was issued; and

(ii) such other particulars as he thinks necessary.

161. Cancellation and correction of instruments and entries

(1) Subject to Subsection (2), the Registrar may—

(a) cancel or correct an instrument delivered up under Section 160; and

(b) in any other case, on such evidence as appears to him sufficient, correct errors or omissions in—

(i) the Register or an entry in the Register; or

(ii) the other duplicate certificate of title or an entry on that duplicate.

(2) Where a correction is made under Subsection (1)—

(a) the Registrar—

(i) shall not erase or render illegible any words; and

(ii) shall affix the date on which the correction was made together with his initials; and

(b) the Register or other duplicate certificate of title so corrected has the same validity and effect as if the error had not been made except as regards an entry made in the Register before the time of correcting the error.

(3) Where the Registrar is satisfied that a matter in a certificate of title does not affect the land to which the certificate relates he may record on the title the cancellation of that matter in such manner as he considers proper (emphasis added).

6. Mr Geita for the defendants submitted that the issuance of a summons (by either the Registrar of Titles or the National Court) under Section 160 is not a precondition to exercise of the power of cancellation under Section 161(1)(a) as the exercise of the power to issue a summons is conditioned by the word "may" that appears in Sections 160(1) ("the Registrar may summon that person to deliver up that instrument") and 160(2) ("the Registrar may apply to the Court to issue a summons").

7. I agree with Mr Geita that the Registrar of Titles has a discretion as to whether he issues a summons or applies to the Court to issue a summons (the procedure employed in Kavana v Hunter (2007) N3208). However, that is no answer to the plaintiffs' proposition that that exercise of the power under Section 160 is a precondition to exercise of the power of cancellation under Section 161. I uphold the plaintiffs' proposition as I am satisfied that Section 161(1) draws a distinction between on the one hand cancelling or correcting an instrument and on the other hand correcting an error or omission in the Register or an entry in the Register. The power to "cancel" an instrument under Section 161(1)(a) can only be exercised in relation to an instrument delivered up under Section 160. Cancellation of an instrument must be preceded by the issuance of a summons and a delivering up of the instrument.

8. In the present case the Deputy Registrar failed to issue a summons or apply to the Court for issuance of a summons before deciding to cancel the instrument (the State Lease granted to Waltece Service Station in 2000). He erred in law in the manner contended for by the plaintiffs. This ground of review is upheld.

(2) DENIAL OF NATURAL JUSTICE

9. The plaintiffs' argument is that they were denied natural justice when the Deputy Registrar conveyed his decision to cancel the title as they were given no prior notice and no opportunity to have a say on whether title should be cancelled. The defendants only response was to argue that the Act did not expressly provide for a right to be heard and none should be implied.

10. I reject the defendants' argument as it is not necessary for an Act to expressly make provision for a right to be heard. Such a right will readily be implied. It is an integral part of the common law principles of natural justice that have been adopted as part of Papua New Guinea's underlying law that if a public official exercising statutory powers proposes to make an administrative decision that will interfere with or remove a person's interests in property that decision is subject to the principles of natural justice (Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110, NCDIC v Crusoe Pty Ltd [1993] PNGLR 139). The decision-maker must before interfering or removing the person's interests give that person notice of the proposed decision and a right to be heard and act in an impartial and unbiased manner.

11. Here, no notice was given of the proposed decision to cancel the title and no right to be heard was given on the alleged anomalies in title or on the question of which of the two apparently conflicting titles should be given priority. There was a denial of natural justice.

WHAT DECLARATIONS OR ORDERS SHOULD THE COURT MAKE?

12. An application for judicial review proceeds in two stages. First the plaintiff must establish good grounds for judicial review. Secondly, if one or more grounds are established, the plaintiff must make a case for a remedy, which is a matter of discretion (Mision Asiki v Manasupe Zurenuoc (2005) SC797, Dale Christopher Smith v Minister for Lands (2009) SC973).

13. Here two grounds of review have been established: error of law and denial of natural justice. Each amounts to a serious excess of jurisdiction on the part of the Deputy Registrar, which has had a serious effect on the plaintiffs' interests in property. Each is sufficiently serious to warrant the exercise of the court's discretion in favour of the plaintiffs by the making of an order in the nature of certiorari, quashing the decision to cancel the plaintiffs' title. The fact that this will, it appears, leave two certificates of title remaining in relation to the same piece of land is irrelevant for present purposes. That problem can be resolved by the Registrar of Titles following the procedures set out in the Land Registration Act and complying with the principles of natural justice. For present purposes it must be recognised that the Deputy Registrar's decision to cancel the plaintiffs' title was bad in law and deserves to be quashed and declared null and void. Other relief sought by the plaintiffs, including an order in the nature of mandamus that would require the defendants to correct the title in favour of the plaintiffs and damages, has been inadequately articulated and will be refused. Costs will follow the event.

ORDER

(1) The application for judicial review is granted.

(2) The decision of the first defendant dated 10 May 2010 to cancel the title over Section 468, Lot 1, Hohola is quashed and is declared null and void.

(3) Other relief sought in the plaintiffs' amended statement under Order 16, Rule 3(2)(a) of the National Court Rules is refused.

(4) Costs of these proceedings shall be paid by the defendants to the plaintiffs on a party-party basis, to be taxed if not agreed.

(5) Time for entry of the order is abridged to the date of settlement by the Registrar which shall take place forthwith.

Judgment accordingly.
__________________________________________________________

Steeles Lawyers: Lawyers for the Plaintiff
Solicitor-General: Lawyer for the Defendants