Kaumb v Sipison [2017] PGNC 90; N6714 (19 May 2017)

N6714

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 377 OF 2016

BETWEEN
GABRIEL KAUMB
Plaintiff

AND
LUTHER SIPISON, Departmental Head and Acting Secretary of the Department of Lands & Physical Planning
First Defendant

AND
HON. BENNY ALLAN, MP, Minister for Lands & Physical Planning
Second Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND

DANIEL RUING
Fourth Defendant

Waigani: Makail, J

2017: 17^th & 19^th May

JUDICIAL REVIEW – Review of grant of State lease – State leases over same portion of land – Lease granted for Agriculture purposes and residence purposes – Wrong State lease issued – Surrender of wrong State lease – Re-issuance of correct State lease – Allegation of fraud perpetrated on title of registered title holder – Whether fraud proven – Land Act – Sections 69, 87, 92 and 119 – Land Registration Act – Section 33 (1) (a)

Cases cited:

Mosoro v. Kingswell Limited & Ors (2011) N4450
Sulawei Limited v. Luther Sipison, Land Board & The State (2017) N6640

Counsel:

Mr. D. Mel, for Plaintiff
Mr. E. Manihambu, for First, Second and Third Defendants
Mr. P. Harry, for Fourth Defendant

JUDGMENT

19^th May, 2017

1. MAKAIL, J: The Plaintiff and Fourth Defendant have a dispute over a portion of land described as Portion 2795 (“Land”). It is located at the periphery of Malolo Estate at 9 Mile in the National Capital District. It is the subject of the judicial review proceedings after leave was granted to the Plaintiff to review two decisions concerning it on 22^nd September 2016. They are:

(a) the Second Defendant’s decision made under Section 87 of the Land Act to issue/sign off a State lease for agriculture purposes in favour of the Fourth Defendant on 17^th August 2015; and

(b) the First Defendant’s decision made under Section 92 of the Land Act to issue/sign off a State lease for residence purposes in favour of the Fourth Defendant on 10^th March 2016.

2. The Plaintiff alleged that the land is customarily owned and had purchased it from a customary owner, one Mr. Arua Miria of Dubara Idibana clan of Hanuabada village in the sum of K14,000.00 on or about 2010. On the other hand, the Fourth Defendant alleged that it is State land and that he had been lawfully granted a State lease for residence purposes for it.

3. It is the Plaintiff’s case that after the purchase, when he moved onto the land there was no visible sign of occupation of the land. It was covered with natural overgrowth and there were no structures, roads and food gardens on it. This assertion is refuted by the Fourth Defendant who alleged that he was also interested in the land. The land was part of Portion 13. He did not move onto it because he knew that it was State land. He was one of seven people who were interested in portions of land within Portion 13.

4. It is also the Plaintiff’s case that being mindful that it was customary land without formal title, he engaged a surveyor who surveyed the land and drew up a survey plan. The plan sets out the description and boundary of the land. He also built a semi-permanent house, drainage, water connection and other works. Following that, he applied to the Land Board for a State lease for residence purposes.

5. This assertion is also refuted by the Fourth Defendant who alleged that he and others raised K100,000.00 and paid a surveyor to survey the land. Portion 13 was sub-divided into seven portions, namely Portion 2800 and Portion 2794 to Portion 2799. He submitted his application for Portion 2795 for a high covenant residential lease to the Land Board on 15^th August 2012 which was after the Plaintiff had submitted his application on 11^th July 2011.

6. There is no dispute that the land is zoned for residential lease. A notice of exemption was granted in favour of the Plaintiff on 3^rd July 2012. The same notice of exemption was issued for the other mentioned portions. According to the Fourth Defendant, in 2013 the Land Board decided to recommend to the Minister to grant a State lease to him. While the application was pending decision, the Plaintiff moved onto the land and built a semi-permanent house in February 2014 and illegally had water connected to the house, resulting in Eda Ranu company wrongly issuing water bills to the Fourth Defendant.

7. It was not until 17^th August 2015 that a State lease for agriculture purposes was granted to the Fourth Defendant and according to him, it was for a wrong lease purpose and he made a request to the First Defendant to correct it by having a State lease for residence purposes reissued which was done on 10^th March 2016.

8. However, according to the Plaintiff this purported error was not detected until he brought it to the notice of the Fourth Defendant after the latter served on him an eviction notice and copy of the wrong State lease.

9. The Plaintiff alleged that fraud has been perpetrated on the title by the Fourth Defendant. He submitted that fraud can be inferred from the following circumstances which established irregularities and breaches in the statutory process under the Land Act. Such constituted fraud, sufficient to have the Fourth Defendant’s title, set aside under Section 33 (1) (a) of the Land Registration Act.

10. In relation to the first decision, these are:

• The land was zoned as residential, and
• The State lease granted to the Fourth Defendant was for agriculture purposes.
  

11. This is contrary to Section 67 of the Land Act which states that State leases must not be inconsistent with zoning and physical planning requirements and other related purposes.

12. In addition, the decision was also ultra vires Section 67 of the Land Act.

13. It is also unreasonable under the Wednesbury principles of unreasonableness because no reasonable decision-maker would have granted a State lease for agriculture purposes where:

(a) land was zoned as Urban/Residential,
(b) applications to the Land Board were for State lease for residence purposes, and
(c) Land Board made a grant of State lease for residence purposes.

14. Finally, the decision is harsh, and oppressive and disproportionate in the circumstances under Section 41 of the Constitution.

15. As to the second decision, there is no provision in the Land Act or any other legislation that permits a conversion of a State lease from agriculture purposes to residence purposes. Section 119 of the Land Act allows for variation of a purpose of a State lease but only within the same Division of the Act. For example, a business and residence lease granted under Division 5. In this case, the lease for agriculture purposes was granted under Division 3 while lease for residence purposes was granted under Division 5.

16. The recourse for the Fourth Defendant was to have the State lease for agriculture purposes cancelled and have the land re-advertised as vacant and available for leasing under Section 68 of the Land Act.

17. Alternatively, the Fourth Defendant must show that:

(a) he had applied to the Land Board for a variation of the purpose of the State lease from agriculture to residence,

(b) the Board gazetted the Fourth Defendant’s application,

(c) the Board considered the Fourth Defendant’s application and recommended to the Minister, and

(d) the Minister made a decision to grant the variation.

18. Given this process, the Plaintiff submitted that it is unlikely that a variation could have been granted within a space of 1 month and 5 days following service of the eviction notice with a copy of the wrong State lease.

19. Further, the First to Third Defendants and their officers had no authority to unilaterally vary the purpose of the State lease and any suggestion that it was an oversight or mistake or error and was corrected by the reissuance of a correct State lease must be rejected as being misconceived.

20. Secondly, the decision was unreasonable because there is no evidence from the First Defendant as to how the first State lease was cancelled and a second State lease for Residence purpose was granted.

21. Finally, it was harsh and oppressive and disproportionate in the circumstances under Section 41 of the Constitution.

22. The Defendants refuted the Plaintiff’s allegations. First they submitted that the issue of exemption was decided in an earlier proceeding OS (JR) No 365 of 2015 involving the same parties where the National Court had dismissed the proceedings on the grounds that the Plaintiff lacked standing and there was no arguable case for the Court to grant leave to review the exemption hence res judicata.

23. The Court relied on the case of Mosoro v. Kingswell Limited & Ors (2011) N4450 where it was held that an exemption was void because one of the preconditions for grant of an exemption there was no evidence of an agreement in writing between the applicant and the State.

24. The Fourth Defendant added that all the issues raised by the Plaintiff were considered by the Land Board and it decided to recommend to the Minister to grant the State lease to him. The Plaintiff appealed to Head of State and the appeal was decision. The decision of the Head of State is final and not open to review. Thus, the proceedings are an abuse of process.

25. In any case, the claim of fraud must fail because it has not been pleaded and particularised and further there is no evidence to prove it. On the other hand, he submitted that there is undisputed evidence that he submitted an application to the Land Board for grant of a State lease for residence purposes and the Land Board had recommended in his favour. Apparently, a wrong State lease was issued to him but it should not be held against him but regarded as an error in the documentation and that it was corrected by the Registrar of Titles when it was returned to him and a correct copy of the State lease was issued.

26. It was a voluntary act of surrender of the State lease consistent with Sections 160 and 161 of the Land Registration Act. Thus, the Plaintiff’s submission that he must reapply for a new State lease must be rejected as being misconceived.

27. The other grounds relied upon by the Plaintiff must equally fail because this was a case where a wrong State lease was issued and was subsequently replaced with a correct one, consistent with the decision of the Land Board.

28. The first issue to settle is whether the land is customary or State land. Its determination will further determine whether it was necessary for the Plaintiff to apply to the Land Board for grant of a State lease for the purpose of security of tenure.

29. Based on the survey plan - plan of Portion 13 and sub-division of Portions 2800, 2794 to 2799 and the admission in the Statutory Declaration by Mr. Miria dated 20^th August 2012 that “Before the State owned the land my fathers and forefathers from Koiari were the real landowners which I still maintain this position even now” which was made in reference to Portion 2796 but nonetheless is consistent with and corroborates the evidence of the First and Fourth Defendants that Portion 2795 is State land, I am satisfied that Portion 2795 is State land.

30. There is a further reason and that is, if it is customary land, it does not make sense and illogical for the Plaintiff to seek to have its converted into a “State lease”, a process only applicable to State land under “Part X – State Leases” of the Land Act, where “The Minister may grant State leases of Government land as provided by this Act.” Indeed, it would be contrary to the Land Act. In my view, it was unnecessary. If it is customary land, the agreement he entered into with Mr. Miria to purchase the land would suffice.

31. As I have found the land is State land. I further find that it formed part of Portion 13 as described by the Fourth Defendant and shown in the survey plan, but vacant prior to the Plaintiff, Fourth Defendant and others expressing interest in different portions within Portion 13. Again, based on the survey plan, I find that part of Portion 13 was sub-divided into Portions 2800, 2794 to 2799.

32. I further find that the Plaintiff and Fourth Defendant expressed interest in Portion 2795 and were required by the Land Act to apply for grant of State lease before they can occupy it. Both of them submitted separate applications to the Land Board for grant of a State lease for residence purposes. The Plaintiff was a beneficiary of an exemption notice exempting the land from being advertised and that his application was to be the sole application before the Land Board.

33. He did not say why the land was exempted from advertisement but it appears it may be that he may have already put up improvements on it. But the purpose to which the application for a State lease was to be granted does not fall into anyone of the criteria set out in Section 69 of the Land Act. Section 69 states:

“69. Duty to advertise State Leases.

(1) A State lease shall not be granted without first being advertised in accordance with Section 68 unless the land has been exempted from advertisement under Subsection (2).

(2) The Minister may exempt land from advertisement for application or tender—

(a) where the lease is granted to a governmental body for a public purpose; or

(b) where it is necessary to relocate persons displaced as a result of a disaster as defined in the Disaster Management Act (Chapter 403); or

(c) where a lessee applies for a further lease; or

(d) where the State has agreed to provide land for the establishment or expansion of a business, project, or other undertaking; or

(e) where the land applied for adjoins land owned by the applicant and is required to bring the holding up to a more workable unit, providing that the claims of other neighbouring landowners are considered and their views taken into account in deciding whether to exempt the land from advertisement in favour of the applicant; or

(f) where the Department responsible for foreign affairs recommends that land be made available to the applicant for consular premises; or

(g) where the land is required for the resettlement of refugees; or

(h) where the applicant has funded the acquisition of the land from customary landowners in order to acquire a State lease over it; or

(i) where a lease is to be granted under Section 99 or 102; or

(j) where a new lease is granted under Section 110, 130 or Section 131.”

34. I find that the stated purpose is contrary to the conditions of the exemption and raises doubts as to the genuineness of the Plaintiff’s application. On the other hand, given the competing interests between the Plaintiff and the Fourth Defendant, there was no reason for the land to be exempted from advertisement and that it should have been advertised for interested applicants to submit their bids to the Land Board for consideration.

35. For these reasons, I further find that it was open to the Land Board to consider the Fourth Defendant’s application along with the Plaintiff’s application to arrive at a decision. The position taken by the Land Board has been affirmed by the National Court in the case of Sulawei Limited v. Luther Sipison, Land Board & The State (2017) N6640.

36. Given this finding, I consider that it is not necessary to consider whether the issue of exemption is res judicata. Based on the tender documentation namely application for tender form and receipt of payment of prescribed fee of K50.00 submitted to the Land Board and further, notice of gazettal No. G323 dated 24^th August 2012, Office of Valuer General’s Report dated 13^th February 2012, Alienated Land Division of the Department of Lands & Physical Planning Report undated and the exemption notice, I further find that for all intent and purposes, the application by the Fourth Defendant for a State lease was for residence (high covenant) lease.

37. Consistent with this finding I accept the Fourth Defendant’s explanation for the error in the issuance of the State lease. A wrong State lease for agriculture purposes was issued and given to him. The error was not detected until the Plaintiff brought it to his notice after he served on the Plaintiff an eviction notice and copy of the wrong State lease.

38. For this reason, I further find that the surrender of the wrong State lease and issuance of a correct one was consistent with the Registrar of Title’s powers under Sections 160 and 161 of the Land Registration Act. And I reject the Plaintiff’s submission that the First to Third Defendants and in this case, the Registrar of Titles, the officer in charge of registration of titles, have no authority to unilaterally vary the purpose of the State lease.

39. For the reasons given, I further find that Section 119 of the Land Act does not apply in this case and furthermore, there is no requirement in the Land Act for the Fourth Defendant to reapply to the Land Board for variation of the purpose of the State lease and for the Land Board to consider and advise the Minister to grant a variation.

40. Finally, based on the above findings, I am not satisfied that fraud have been proven against the title of the Fourth Defendant such that it should be set aside, nor are the decisions ultra vires the powers of the First and Second Defendants. Equally, no errors of law can be attributed to the decision-making process in order to quash the decisions. Further, the decisions are not unreasonable or harsh and oppressive and disproportionate in the circumstances.

41. The application for judicial review is dismissed with costs to the Defendants, to be taxed, if not agreed.

Judgment and orders accordingly.
________________________________________________________________

Mel & Hennry Lawyers : Lawyers for Plaintiff
Solicitor-General : Lawyers for First, Second and Third Defendants
Stevens Lawyers : Lawyers for Fourth Defendant