Nambawan Super Ltd v Wange [2019] PGNC 106; N7821 (24 April 2019)

N7821

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 633 OF 2018

BETWEEN
NAMBAWAN SUPER LIMITED
Plaintiff

AND
SAM WANGE as Chairman and Members of the PNG Land Board
First Defendant

AND
YAMBAKI SURVEYS LTD
Second Defendant

AND
NIPO INVESTMENT LIMITED
Third Defendant

&

OS NO. 673 OF 2018
(Consolidated)

BETWEEN

YAMBAKI SURVEYS LIMITED
First Plaintiff

AND
NIPO INVESTMENT LIMITED
Second Plaintiff

AND
NAMBAWAN SUPER LIMITED
First Defendant

AND
SAM WANGE as Chairman and Members of the PNG Land Board
Second Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani: Makail, J
2019: 10^th & 24^th April

STATE LEASES – Expiration of State Lease – Agricultural Lease – No application for further lease or renewal of lease made prior to expiration of State Lease – Effect of – Land reverts to the State – Land Act – Sections 65, 66, 68, 69, 87, 88, 119

STATE LEASES – Exemption of land from advertisement – Effect of – Land Act – Section 69(2)

Cases Cited:
Alu Wong v. Winifred Loi Hay Wong (2018) N7221
Mapai Transport Limited v. Romilly Kila-Pat & Ors (2017) N6850
Nambawan Super Limited v. Hon. Benny Allan & Ors (2014) N5707
Papua Club v. Nusaum Holdings Ltd (No. 2) (2004) N2603
Waigani Centre Pty Ltd v. The State and Minister for Lands (1997) SC517

Sulawei Limited v. Luther Sipison & Ors (2017) N6640

Counsel:
Mr. I. Shepherd & Mr. C. Joseph, for Plaintiff in OS No 633 of 2018
No appearance, for First Defendant in OS No 633 of 2018
Mr. A. Waira, for Second Defendant in OS No 633 of 2018
Mr. J. Poya, for Third Defendant in OS No 633 of 2018
Mr. A. Waira, for First Plaintiff in OS No 673 of 2018
Mr. J. Poya for Second Plaintiff in OS No 673 of 2018
Mr. I. Shepherd & Mr. C. Joseph, for First Defendant in OS No 633 of 2018
No appearance, for Second Defendant in OS No 673 of 2018
Mr. E. Bua, for Third Defendant in OS No 633 of 2018

JUDGMENT

24^th April, 2019

1. MAKAIL, J: These two proceedings were consolidated by an order of the Court on 10^th December 2018 for a joint trial because they concern a dispute over the same portion of land described as Portion 2158.

Undisputed Facts

2. From the affidavit of George Koi filed 13^th September 2018 (exhibit “A”), four affidavits of Simon Yambaki (exhibits “B”, “C”, “D” & “E”), three affidavits of Francis Lueme (exhibits “E”, “G” and “H”) and an affidavit of Liru Ipuna (“exhibit F”), the undisputed facts are these:

❖ Portion 2158 was originally part of Portion 1216.

❖ Portion 1216 was initially granted to Athol Green on 14^th February 1980. It is an Agricultural Lease for a term of fifteen (15) years.

❖ On 15^th October 1990 the title of the Lease was transferred to the Public Superannuation Board, now the Nambawan Super Limited.

❖ On 13^th February 1995 the State Lease for Nambawan Super expired.

❖ Nambawan Super did not renew the State Lease prior to its expiration.

❖ In 1992, survey was done by the Department of Lands and Physical Planning over Portion 1216.

❖ Following this, Portion 1216 was subdivided into three portions, namely Portion 2156, Portion 2157 and Portion 2158. (Parties have also in the originating summons, affidavits and submissions referred to Portion 2159 and because there are no copies of the State Leases for each portion to confirm the correct numbers, Portions 2156, 2157 and 2158 will be referred to in this judgment).

❖ The new sub-divisions were recorded in the Department of Lands and Physical Planning’s records as Cat Plan No. 49/1942.

❖ Unaware of this subdivision, Nambawan Super applied to renew the lease to the Land Board.

❖ The Land Board recommended that Nambawan Super be awarded a new lease over Portion 1216.

❖ Due to the subdivision the Department of Lands and Physical Planning did not give effect to the recommendation of the Land Board and no new lease was granted to Nambawan Super.

❖ Nambawan Super commenced proceedings OS (JR) No 519 of 2014: Nambawan Super Limited v. Romilly Kila-Pat, Secretary for Lands and Physical Planning and sought an order that the Secretary for Lands and Physical Planning exempt from being advertised for application or tender Portions 2156, 2157 and 2158 pursuant to Section 69(2) of the Land Act.

❖ On 2^nd November 2015 the Court ordered by consent of the parties that the Secretary for Land and Physical Planning recommend to the Minister to exempt Portions 2156, 2157 and 2158 from being advertised and also that the Secretary for Lands and Physical Planning facilitate and take necessary steps to refer the applications for State Lease to the next sitting of the Land Board.

❖ At the Land Board Meeting 02/2016 on 14^th March 2016 Nambawan Super’s applications for State Leases over Portion 2156 and 2157 were successful and its representatives were advised that a State Lease had been issued over Portion 2158 to Nipo Investment Limited (“Nipo”) in 2013.

❖ The Department of Lands and Physical Planning had advertised Portion 2158 and Nipo was granted a State Lease over it on 30^th June 2014. It had engaged Yambaki Surveys Limited (“Yambaki Surveys”) to survey the land and draw up a development plan. It subdivided the land into eight (8) Sections and 304 Allotments.

❖ On 30^th May 2017 the National Court in proceedings OS (JR) No 358 of 2016: Nambawan Super Limited v. Luther Sipison, Secretary for Land and Physical Planning & 4 Ors quashed the decision of the Minister by his delegate the Secretary for Lands and Physical Planning to grant the State Lease to Nipo and ordered the Secretary to comply with the orders made in proceedings OS (JR) No 519 of 2014 with respect to Portion 2158.

❖ In the National Gazette G569 published on 4^th September 2018 the agenda for Land Meeting 04/2018 due for 14^th September 2018 meeting revealed that, listed in Item 23 for Applications for State Leases over Portion 2158 were three applicants besides Nambawan Super, that is, Yambaki Surveys and Nipo.

Proceedings OS No 633 of 2018

3. In the proceedings OS No 633 of 2018 the plaintiff Nambawan Super contends that the major point of contention is that, the notice of exemption granted to it an entitlement to being the sole applicant for the State Lease over Portion 2158 to the exclusion of others including Yambaki Surveys and Nipo. It was, therefore, wrong and contrary to Section 69(2) of the Land Act for the Land Board to include Yambaki Surveys and Nipo as applicants for the State Lease.

4. It seeks a declaration that it is the sole applicant for the State Lease over Portion 2158 and that the Land Board proceed to consider its application to the exclusion of Yambaki Surveys and Nipo.

Proceedings OS No 673 of 2018

5. In proceedings OS No 673 of 2018 the plaintiffs Yambaki Surveys and Nipo contend that Nambawan Super’s State Lease over Portion 1216 had expired and it did not apply to renew it prior to its expiration. When the lease expired, it reverted to the State and is available for re-leasing. It is on this basis that the State advertised it as being available for leasing and Nipo applied and was granted the State Lease.

6. Secondly, Portion 1216 was subdivided into three portions and ceased to exist. A claim by Nambawan Super to Portion 1216 is erroneous and misconceived and should be dismissed. Thirdly, that they have been unfairly deprived access and use of Portion 2158. Finally, they raise a jurisdictional issue in relation to Nambawan Super failing to appeal the decision of the Land Board to include them as applicants for land to the Minister under Section 62 of the Land Act. They contend that this Court lacks jurisdiction to determine the issue of exemption because it is a matter for the Minister to determine had Nambawan Super appealed to him. The proceedings commenced by Nambawan Super should be dismissed for this further reason.

7. The State who was represented by counsel from the Office of the Solicitor-General defended the position of the Land Board by contending that notwithstanding Portion 2158 was exempted from advertisement, Section 69(2) of the Land Act does not expressly prohibit the Land Board from considering other applicants for the State Lease and it is on this basis that it can be inferred that the Land Board has a wide discretion to include other applicants for consideration and that is what it did when it included Yambaki Surveys and Nipo in its meeting agenda of 14^th September 2018.

Expiration of State Lease

8. I start with the basic premise that Government land may be leased by the State. This is apparent from Section 65 of the Land Act where it states that, “the Minister may grant State leases of Government land as provided by this Act.” Except that the lease must not be inconsistent with customary land leased by customary landowners to the State or zoning and physical planning requirements or exempted from advertisement under Sections 66, 67 and 69(2) of the Land Act, all Government land must be advertised as available for leasing under Section 68 of the Land Act.

9. A typical lease has a fixed term. In the case of a State Lease, the term may vary depending on the type of lease. For an Agricultural Lease, according to Section 87 of the Land Act, the term shall not exceed 99 years. And according to Section 88 of the same Act, the Agricultural Lease shall contain conditions prescribing the minimum for improvements to be carried out by the lessee. In this case, Portion 1216 was an Agricultural Lease for a term of fifteen (15) years commencing on 14^th February 1980. It expired on 13^th February 1995.

10. Where a lessee has put up improvements on the land and on the expiration of the lease, the lessee is not granted a further lease, according to Section 119(3) of the Land Act, the State is obliged to pay compensation for the improvements to the outgoing lessee within six months of the expiration of the lease. As to the land, it reverts to the State.

Effect of Expired State Lease

11. It is then a case where the contention by Yambaki Surveys and Nipo that on expiration of the Agricultural Lease, the land reverts to the State is critical to the question whether Portion 1216 was available for leasing. There is one Supreme Court decision which favours Yambaki Surveys and Nipo’s contention. This is the one given by the Supreme Court in Waigani Centre Pty Ltd v. The State and Minister for Lands (1997) SC517 which has been adopted in a number of National Court cases such as Papua Club v. Nusaum Holdings Ltd (No. 2) (2004) N2603; Nambawan Super Limited v. Hon. Benny Allan & Ors (2014) N5707 and Alu Wong v. Winifred Loi Hay Wong (2018) N7221.

12. If the effect of an expired State Lease is that the land reverts to the State, then it is open to the Minister to invoke Section 65 (supra) and grant a new State Lease over the land. In this case, the Minister will be entitled to grant a new State Lease over Portion 1216 after it expired on 13^th February 1995. Unless the land is exempted from being advertised under Section 69 of the Land Act, the process under Section 68 of the Land Act on advertisement of lands available for leasing comes into play and it will be up to the Secretary for the Department of Lands and Physical Planning to advertise the land as being available for leasing.

13. By the time the Agricultural Lease expired on 13^th February 1995 no exemption was granted by the Minister under Section 69(2) (supra) and the Secretary for Department of Lands and Physical Planning was under no obligation to exempt it from being advertised. On the other hand, he was obliged by Section 68 (supra) to have it advertised as available for leasing. If Portion 1216 was advertised as being available for leasing, it was incumbent on Nambawan Super to apply for it.

Renewal of State Lease over Portion 1216

14. However, before this was going to happen, two significant events may have happened which may have changed the course of events leading up to the question whether Portion 1216 was available for leasing. First, Nambawan Super asserts that on 24^th August 1995 in a Government Gazette G78 the predecessor of the Secretary for Lands and Physical Planning published notification pursuant to Section 74 of the Land Act (previously Section 34 of the Land Act, Ch 185) that it had successfully applied for renewal of the Agricultural Lease over Portion 1216 at the Land Board Meeting No. 1940.

15. I have searched the affidavit of Mr. Koi (exhibit “A”) and have not been able to find a copy of the Gazettal Notice G78. Be that as it may, there is no mentioned of the land been advertised as available for leasing. What is apparent and not disputed is that Nambawan Super applied and was granted a renewal of its Agricultural Lease over Portion 1216 after it had expired.

Subdivision of Portion 1216

16. The second significant event which is not disputed is that, the Portion 1216 was subdivided into three portions, one of them being Portion 2158. By the time Nambawan Super said it applied to renew the Agricultural Lease, Portion 1216 was already subdivided. However, it is not clear from the evidence how the land came to be subdivided. This is because a subdivision is regulated by Section 130 of the Land Act and there is a set procedure to follow to obtain approval to subdivide a land. For instance, according to Section 130(1) (supra) it is the “lessee [who] may apply to the Minister for approval to subdivide the land included in his lease.”

17. If Nambawan Super was the lessee of Portion 1216 prior to its expiration, it should have been the party to apply to the Minister to subdivide Portion 1216. It appears that it did not and this may explain why it was not aware of the subdivision by the time it applied for renewal of the Agricultural Lease to the Land Board. Further, it may be that the Land Board was also not aware of the subdivision because by its decision it recommended that a new lease over Portion 1216 be granted to Nambawan Super.

18. The subdivision only became a contentious issue when the Department of Lands and Physical Planning did not comply with the recommendation of the Land Board and did not issue a State Lease to Nambawan Super. It was the Department’s view that Portion 1216 was subdivided and it was not possible to issue a new State Lease over it to Nambawan Super.

19. It was then that Nambawan Super commenced the first Court proceedings and on 2^nd November 2015 obtained a consent order directing the Secretary of the Department to recommend to the Minister to exempt Portions 2156, 2157 and 2158 from advertisement and take all steps to refer its applications for State Leases over the land to the Land Board.

20. It should be mentioned at this juncture that it would appear that despite it being unaware of the subdivision and further, may have had no say in the subdivision of Portion 1216 despite being the lessee of Portion 1216 prior to its expiration, when it commenced Court proceedings to secure the three portions of land, it appeared to have accepted that Portion 1216 had been subdivided.

21. Furthermore, it appears that it did not take issue with the manner in which the subdivision was done when the procedure set out in Section 130 (supra) is taken into account, especially when it was the lessee at the material time and should have been the applicant for subdivision. Other than this, there is no evidence to establish the identity of the party who applied for subdivision of Portion 1216 and it will remain a mystery.

22. The subdivision is a critical point because from that time onwards, the Land Board in its meeting of 14^th March 2016 treated Portion 1216 as being subdivided into three portions and recommended that State Leases to be granted over Portions 2156 and 2157 to Nambawan Super and not Portion 2158 because it had been granted to Nipo.

23. However, it appears that Nambawan Super formed a firm view that regardless of whether Portion 1216 was subdivided, it was entitled to all of the portions constituting Portions 2156, 2157 and 2158 because of its prior interest in Portion 1216 as lessee.

Exemption of Land from Advertisement

24. Having missed out on Portion 2158, Nambawan Super commenced the second Court proceedings and on 30^th May 2017 the National Court quashed the grant of State Lease over Portion 2158 to Nipo and directed the Secretary of the Department to comply with the order of the Court made in the first legal proceedings. The order in the first proceedings was for the Secretary of the Department of Lands and Physical Planning to recommend to the Minister to exempt Portions 2156, 2157 and 2158 from advertisement. Since the other two portions had already been granted to Nambawan Super, only Portion 2158 was left and to be exempted from advertisement.

25. According to Nambawan Super, pursuant to Section 69(2) (supra) the exemption granted to it the right to be the sole applicant to the exclusion of others for Portion 2158. Instead the Land Board had placed before it two additional applications, one by Yambaki Surveys and the other by Nipo. It contends that this is where the Land Board erred and on the authority of the exemption notice, it is entitled to a declaration that it be considered as the sole applicant at the Land Board.
26. The cases of Mapai Transport Limited v. Romilly Kila-Pat & Ors (2017) N6850 and Sulawei Limited v. Luther Sipison & Ors (2017) N6640 which counsel for Nambawan Super cites in support of Nambawan Super’s submission are directly on point and reinforces Nambawan Super’s entitlement to the relief it seeks. It should be added that the power to grant an exemption is conferred on the Minister. The purpose of an exemption is obvious. It is to exclude the land from the usual advertisement process for the general public to apply for the land and conversely, restrict the application for land to the applicant who has been granted an exemption. There are a range of reasons for that and these are set out in Section 69(2(a) to (j) of the Land Act. To accept the proposition put forth by the State would not only defeat the purpose of an exemption but undermine the Minister’s decision and place the applications of other applicants in the hands of a body that should have them in the first place.

27. While Yambaki Surveys and Nipo are troubled by the lack of reasons for the grant of exemption in favour of Nambawan Super especially those stipulated in Section 69(2)(a) to (j), and failure to meet those requirements, it would be wrong to overlook Nambawan Super’s long history and association with the land in its former state as Portion 1216. Furthermore, it would be wrong to suggest that once Portion 1216 was subdivided, it ceased to exist. Of course by description it ceased to exist, but physically, it exists. This appears to be the troubling issue as a result of the subdivision. But it is not a sufficient reason to deny Nambawan Super’s claim as the sole applicant for Portion 2158 based on the exemption notice.

28. Finally, the decision referred to in Section 62(1) of the Land Act refers to a decision made by the Land Board on the merits of the application for land. The decision may constitute a refusal, upholding or variation of the application for land. Thus, the inclusion of Yambaki Surveys and Nipo by the Land Board cannot be described as one of those decisions falling within the ambit of Section 62(1) of the Land Act. Nambawan Super has sufficiently shown that it has correctly engaged the jurisdiction of this Court and will be, accordingly, declared as a sole applicant at the Land Board. Whether it will be successful in its application at the Land Board is another issue. That is a matter for the Land Board to determine.

29. The relief it seeks will be granted in terms of paragraphs 1, 2 and 3 of the originating summons filed 13^th September 2018 and the relief Yambaki and Nipo seek in terms of paragraphs 1 to 8 of the originating summons filed 1^st October 2018 is refused. The Land Board, Yambaki Surveys, Nipo and the State will pay Nambawan Super’s costs of both proceedings on a party/party basis, to be taxed, if not agreed.
Judgment and orders accordingly.
________________________________________________________________
Ashurst Lawyers: Lawyers for Plaintiff in OS No 633 of 2018
Cappollo Lawyers: Lawyers for First Defendant in OS No 633 of 2018

Poya Legal Services Lawyers: Lawyers for Second Defendant in OS No 633 of 2018
Cappollo Lawyers: Lawyers for First Plaintiff in OS No 673 of 2018

Poya Legal Services Lawyers: Lawyers for Second Plaintiff in OS No 673 of 2018
Ashurst Lawyers: Lawyers for First Defendant in OS No 673 of 2018
Solicitor-General: Lawyers for Third Defendant in OS No 673 of 2018