Carter Holdings Ltd v Sipison [2019] PGNC 25; N7725 (22 February 2019)

N7725

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 683 OF 2016

BETWEEN:
CARTER HOLDINGS LIMITED formally VITROPLANT LIMITED
Plaintiff

AND:
MR LUTHER SIPISON in his capacity as the Acting Secretary for the Department of Lands and Physical Planning & Delegate of the Minister for Lands & Physical Planning
First Defendant

AND:
THE MINISTER FOR LANDS AND PHYSICAL PLANNING
Second Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani: Nablu, J
2018: 13^th December
2019: 22^nd February

JUDICIAL REVIEW – Decision of the Minister – forfeiture of State Leases – Section 122, Land Act – declaration of Government land – declaration of customary land – breach of the mandatory statutory process – judicial review granted.

LAND LAW – forfeiture of State Lease – no evidence of service of notice to show cause – declaration of Government land – declaration of customary land – declarations simultaneously made in the same gazettal notice – unilateral exercise of the Minister’s power – contrary to mandatory statutory process – ss.5, 133, Land Act.

Cases Cited:

University of Papua New Guinea v. John Ofoi (2016) N6303

Counsel:

A. Mana, for the Plaintiff
S. Tiankin, for the Defendants

22^nd February, 2019

1. NABLU, J: Carter Holdings Ltd, the applicant was granted leave to review the decision of the acting Secretary for the Department of Lands & Physical Planning in his capacity as the delegate to the Minister for Lands & Physical Planning on the 14^th of April 2016, to forfeit three (3) of their State Leases. The notice of the purported forfeiture was published in the National Gazette G209 of 2016.

2. The plaintiff became aware of the purported forfeiture on 10^th August 2016, when a story was published in the Post Courier that land on Woodlark Island had been returned to the traditional landowners. After numerous follow-ups with the relevant authorities they discovered the gazettal notices pertaining to the forfeiture on 12^th September 2016 at the Government Printing Office. The plaintiff also found National Gazette No. G532 of 2016 which indicated that the entire land on Woodlark Island was classified as “Government Land” before it was purportedly returned to the traditional landowners and declared customary land by the Minister in accordance with Section 133(1) of the Land Act.

3. The plaintiff seeks various declaratory orders that the following:

1. State Lease Volume 31 Folio 117, in respect of Portion 138, Milinch, Wooklark, Fourmil Murua, Milne Bay Province (Portion 138);
2. State Lease Volume 31 Folio 118 in respect of Portion 139 Milinch Woodlark, Fourmil Murua, Milne Bay Province (Portion 139); and
3. State Lease Volume 31 Folio 119 in respect of Portion 140 Milinch Woodlark, Fourmil Murua, Milne Bay Province (Portion 140).
   

4. The plaintiff seeks orders in the nature of certiorari to quash the decision to forfeit the State Lease. Further to that they seek orders to quash the decision that the land was classified “Government land” and then later declared “Customary land”. They also seek subsequent orders to compel the Registrar of Titles to cancel the entry of the forfeiture on the relevant title deeds and reinstate the plaintiff as the registered proprietor. Alternatively, the plaintiff also seeks damages to be assessed by the Court.

5. The State took no position in the matter and submitted that if costs were to be awarded then such an award of costs be paid personally by the first and second defendants or alternatively the Department of Lands is to pay the costs of the proceedings from the Department’s funds.

6. The law on forfeiture of State Leases is provided in Section 122 of the Land Act.

7. In the case of University of Papua New Guinea v. John Ofoi (2016) N6303, I set out my views of the law and the underlying law in regard to the forfeiture of State Leases under the Land Act.

8. I stated at paragraphs 16 and 18 of that decision that:

“16. The question of the validity of forfeiture of State Leases pursuant to the Land Act has been the subject of a number of decisions of the Supreme Court and this Court. The main legal principle applicable is that, the State can lawfully forfeit a State Lease if the mandatory process under Section 122 of the Land Act is complied with. It is trite law that the State has the ultimate power to forfeit a State Lease where the registered proprietor has either failed to comply with the mandatory requirement to pay land rental fees or failed to comply with the land covenants specified in the State Lease. The exercise of this ultimate power of forfeiture can only be validly exercised upon strict observance of the mandatory requirements that are specified under s.122 (2) of the Land Act. The State must give proper notice to the registered proprietor by duly serving a Notice to Show Cause under s.122 (2) of the Land Act.

18. The State’s failure to comply with the mandatory prescribed provisions under Section 122 of the Land Act, are grounds to invalidate the entire forfeiture process. Accordingly, this Court and the Supreme Court has invalidated and set aside a number of forfeitures for failing to comply with the mandatory requirement to show cause (See Emas Estate Development Pty Ltd v. Mea & The State [1993] PNGLR 215).

9. In the present case, there is uncontested evidence before me that the plaintiff was not provided a Notice to Show Cause. It is clear that there is a serious breach of the statutory mandatory procedure. In failing to serve a Notice to Show Cause, the subsequent forfeiture undertaken by the defendants is deemed null and void.

10. The defendants filed the affidavit of Oswald Tolopa on the 16^th November 2017. However, I note that the State did not take a position in this case. Therefore, this affidavit was not submitted into evidence. For that reason, I did not take the contents of that affidavit into consideration. Whilst I note that the Court has a wide and unfettered discretion to accept evidence by way of affidavits. In this case, the State has decided not to take up a position. They neither relied on or put any affidavit before the Court.

11. For that reason, I am of the view that the evidence of Dr Marek Lobromski is uncontested and the only evidence before this Court.

12. In the present case, I am satisfied that the mandatory process under Section 122 of the Land Act was not compiled with. The plaintiff was never served a Notice to Show Cause nor were they served a Notice of Forfeiture for the respective State Leases of which they were the registered proprietor at the material time.

13. The next ground of review which the plaintiff relied on is that the subsequent declarations made by the Minister in relation to the subject portions of land were made contrary to the provisions in the Land Act. The declarations were that the land was Government land and then it was declared customary land. The primary reason advanced by the plaintiff is that the portions of land were not properly forfeited pursuant to the mandatory statutory process under the Land Act. Therefore any consequent declarations were unlawful and null and void.

14. It is not disputed that the Minister has the discretion to declare any land which does not appear to be customary land to be State Land. Land is declared “State land” unless good cause is shown that it should not be declared so. Following the expiration of three months after the publication of a notice in the National Gazette, the Minister may exercise his discretion to make a declaration under Section 5 of the Land Act. The land is then conclusively deemed State Land.

15. A notice under Section 5(1) of the Land Act is required to set out the name or names the land is known by, a description or plan of the land, the position of the land and the estimate area of the land.

16. If after the publication of the gazettal notice, there are no objections, the land is declared as State Land. However, if during the three months period a claim is made to the Minister that the land is customary land, then the Minister is required to refer the matter to the Land Titles Commission. Where a claim is referred to the Land Titles Commission, the Land is deemed State Land until the Land Titles Commission has decided the claim. The process is provided for under Section 5 of the Land Act.

17. Once land is declared government land, the Minister pursuant to Section 133(1) has the discretion to declare the land as customary land. The Minister is required to publish a notice in the National Gazette to effect the declaration.

18. The pertinent question for determination by this Court is whether the declaration of Portion 138, 139 and 140 as Government land was done in accordance with the procedure under Section 5(1) of the Land Act.

19. I am not convinced that the procedure under Section 5(1) of the Land Act was compiled with.

20. According to the evidence before me, there is no evidence that the three (3) months notice period which is required by Section 5(1) of the Land Act was published in the National Gazette. There is also no evidence by way of a National Gazette that declares the Government land. It appears that the Land is declared Government land and simultaneously declared Customary Land in the same notice which is published in National Gazettes 32 of 2016. This decision offends Sections 5 and 133 of the Land Act.

21. For the forgoing reasons, I am satisfied that the plaintiff has established their grounds of judicial review.

22. The decisions are unlawful and therefore should be quashed forthwith. It is also appropriate that consequential orders to reinstate the plaintiff’s title should be ordered. However, in regard to the State’s counsel submission in regard to costs, it is clear that the first and second defendants’ decisions were unlawful, irregular and made contrary to the mandatory statutory procedure under the Land Act. However, the awarding of costs is discretionary. The question posed, is whether the Court has the discretion based on this submission alone, without any direct evidence to establish that the first and second defendants actions and or conduct was so malicious as to penalise the defendants with costs on a personal capacity. I am of the view that it is not appropriate to do so in the circumstances. I would however exercise my discretion to order that costs is paid for by the State and direct that it be paid by the Department of Lands and Physical Planning.

23. For the foregoing reasons, the plaintiff’s application for judicial review is granted. The relief sought in the plaintiff’s notice of motion is granted. The defendants to pay the plaintiff’s costs of the proceedings to be taxed if not agreed.

Court Orders:

1. The plaintiff’s application for judicial review is granted.
   
2. The first and second defendants’ decision of 21^st March 2016 as gazetted by gazettal notice G209 dated 14^th April 2016 to forfeit the following Agricultural Leases held by the plaintiff;
   
   1. State Lease Volume 31 Folio 117 in respect of Portion 138, Milinch Woodlark, Fourmil Murua, Milne Bay Province (Portion 138);
   2. State Lease Volume 31 Folio 118 in respect of Portion 139, Milinch Woodlark, Fourmil Murua, Milne Bay Province (Portion139); and
   3. State Lease Volume 31 Folio 119 in respect of Portion 140, Milinch Woodlark, Fourmil Murua, Milne Bay Province (Portion 140);

is declared null and void and quashed forthwith.

3. The first and/or second defendants’ subsequent decisions made on 1^st July 2016, as gazetted by gazettal notice G532 dated 1^st August 2016, which purportedly categorized the land the subject of the forfeited leases as “Government Land”, which land were then purportedly declared customary land pursuant to Section 133(1) of the Land Act are unlawful and quashed forthwith.
   
4. Direct the Minister for Lands or his delegate, Secretary for Lands or his delegate and the Registrar of Titles or his delegate to;
   
   1. cancel the entry of forfeiture on the relevant title deeds;
   2. enter in the relevant Title Deeds, the name of the applicant; and
   100. restore the plaintiff’s state leases within 21 days of the service of this order.
        
5. Direct the Secretary for the Department of Lands to pay the plaintiff’s costs of and incidental to the proceedings to be taxed if not agreed.
   
6. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

_____________________________________________________________
Corrs Chambers Westgarth: Lawyers for the Plaintiff
Solicitor – General: Lawyers for the Defendants