Oliver Taste Ltd v Public Curator of Papua New Guinea [2020] PGNC 523; N8231 (6 March 2020)

N8231

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 832 OF 2019

BETWEEN
OLIVER TASTE LIMITED
Plaintiff

AND
PUBLIC CURATOR OF PAPUA NEW GUINEA
Defendant

Waigani: Thompson J
2020: 28^th February, 6^th March

Challenge to validity of conveyance pursuant to Letters of Administration subsequently revoked – S73 of Wills Probate and Administration Act – indefeasibility of title of registered proprietor – necessity to prove fraud under S33 (1) of the Land Registration Act – fraud must be of registered proprietor

Counsel:

Mr. H. Leahy, for the Plaintiff
Mr. F Aki, for the Defendants

6^th March 2020

1. THOMPSON J: The Plaintiff filed an Originating Summons, seeking an order that the Defendant remove a sign which it had erected on the Plaintiff’s land.

2. This application was made by way of Originating Summons, because the Plaintiff was the registered proprietor of the land. Pursuant to S33 of the Land Registration Act, (“the LRA)” the registered proprietor has indefeasible title, subject to the exceptions set out in S33 (1).

3. The Defendant opposed the relief sought, on the basis that the Plaintiff had acquired the title by fraud, because it was not a bona fide purchaser of the land.

4. The basis of the Defendant’s allegation of fraud against the Plaintiff, was that the Plaintiff had purchased the land from a vendor who sold it pursuant to Letters of Administration of the estate of the deceased owner, but the grant of Letters of Administration to him were subsequently revoked by the National Court.

5. The Letters of Administration had been granted to a person named Yapi Giwi in January 2011, and he sold the property to the Plaintiff by way of a contract of sale signed on 28 March 2014. After payment of stamp duty and obtaining Lands Department approval, title was registered in the Plaintiff’s name on 5 March 2015. The vendor’s Letters of Administration were revoked by Court Order in WS 984 of 2016, made on 9 July 2019.

6. Pursuant to S73 of the Wills Probate and Administration Act Chapter 291, a conveyance of an interest in property made to a purchaser by a person to whom representation has been granted, is valid notwithstanding a subsequent revocation of the representation.

7. Pursuant to S73, the 2015 conveyance to the Plaintiff therefore remained valid notwithstanding the revocation of representation in July 2019.

8. The Defendant submitted that S73 should be read together with S61 of the Act. This section provides that a person making a payment or disposition in good faith under a representation is indemnified and protected in so doing, notwithstanding any defect in or circumstances affecting the validity of, the representation. Where a representation is revoked, a payment or disposition made in good faith to a personal representative before the revocation, is a valid discharge to the person making it.

9. S61 is a separate provision to S73, and the wording of the two sections is different. S73 does not contain the same wording relating to good faith, and there is no room for implying that wording into the section. If Parliament had intended to put those words in, it would have done so, but it did not. It is reasonable to assume that this is because the effect of a conveyance of an interest in property is fully covered by the provisions of the LRA. If a disposition of an interest in property is challenged, the absence of good faith would be a relevant part of establishing fraud under S33 (1) of the LRA.

10. The Defendant has not established that the Plaintiff made a payment which was not made in good faith.

11. The Defendant has shown that the personal representative, Yapi Giwi, made a conveyance pursuant to Letters of Administration which were subsequently revoked.

12. There was no evidence before this Court to show if the revocation was based on a finding that some other person had a better entitlement to the grant of representation, or if it was revoked because the grant had been fraudulently obtained.

13. Even if it is assumed that the revocation was based on fraud by Yapi Giwi in obtaining the Letters of Administration in 2011, that did not establish any fraud against the Plaintiff. Indeed, the Plaintiff did not exist in 2011, having only been incorporated in 2014.

14. If fraud had been found against Yapi Giwi, the Defendant is entitled to take whatever action it considers necessary against him, seeking damages or other appropriate relief.

15. The Defendant has not yet established any fraud against the Plaintiff.

16. The Defendant has relied on a number of assertions of fraud:

(a) “The Plaintiff must have known all along that the Title is vested in the Public Curator by virtue of the Court Order of 5 July 2019”. However, the land had already been sold and transferred to the Plaintiff in 2015, and the proceedings on WS 984 were not issued until 2016. Further, the Court Order did not vest title in this land to the Public Curator. It merely vested the estate of two deceased persons in the Public Curator.

(b) “That the Plaintiff’s affidavit says it paid K10m but declared to the IRC that it only paid K500,000.00”. This is a complete mis-reading of the Plaintiff’s affidavit, which declares that the purchase price was K10m, and that it paid K500,000.00 to the IRC for stamp duty. There is nothing fraudulent in that.

(c) “The payment of the balance of the purchase price by the Plaintiff was made 9 months after knowing that the Letters of Administration was in dispute, because the Plaintiff received a letter from the Registrar of the National Court dated 6 August 2014, saying that WPA 112 of 2010 was an application to revoke the Letters of Administration, which had not yet been heard”. The contract had already been signed in March 2014, before the letter was received. That application on WPA 112 of 2010 for revocation was dismissed by the court on 14 November 2014. There was therefore no issue as to the validity of the Letters of Administration, for the Plaintiff to be aware of.

(d) “The Plaintiff would have known the property had been owned by two people as tenants in common”. However, on the face of the documents, the property was not owned by two people as tenants in common, it was owned by two people as joint tenants. Accordingly, at the date of death of one tenant in 2004, the property passed to the other surviving tenant. When he died in 2007, the property only formed part of his estate, and not part of the estate of the previous joint tenant.

(e) “The Order of 5 July 2019 establishes that Title belongs to the Defendant”. That is not correct. After revoking the Letters of Administration granted to Yapi Giwi, the Order merely establishes that the estate of the two deceased persons separately vested in the Public Curator. It makes no mention of the title to this land.

17. The Defendant has not appreciated that although the Letters of Administration were revoked, the conveyance of the property to the Plaintiff remained valid, and remains valid unless the title is set aside under one of the exceptions in S33 of the LRA.

18. The Supreme Court has held that in order to set aside title under S33 (1) (a) of the LRA, fraud must be actual fraud, and it must be fraud by the registered proprietor. (Koitachi Ltd v Walter Schnaubelt and ors (2007) PGSC 11, John Soto and anor v Our Real Estate Ltd (2018) PGSC 55).

19. Fraud in S33 (1) (a) of the LRA does not refer to fraud by the person from whom the registered proprietor acquired the title. It is fraud by the registered proprietor himself. Fraud by persons from whom he claims, does not affect him, unless knowledge of it is brought home to him. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. (Koitachi Ltd v Schnaubelt, supra).

20. Even if fraud included constructive fraud, the Defendant has not shown any such fraud by the registered proprietor. There may have been fraud by Yapi Giwi (although that evidence was not before this Court), but there has not been evidence of fraud by the Plaintiff. There has been no allegation that any of the prescribed procedures or processes were not followed. The only allegation is that the purchase of the property was fraudulent because the Plaintiff should have known that the Letters of Administration had been fraudulently granted to Yapi Giwi.

21. Leaving aside the fact that a finding of fraud against Yapi Giwi was not in evidence before this Court, the revocation of his Letters of Administration occurred in 2019, 4-5 years after the Contract of Sale and Registration of Title. There was no other evidence of fraud by Yapi Giwi, or that this was known by the Plaintiff in 2014-2015. There was no evidence from which an inference of constructive fraud on the part of the Plaintiff could be drawn. (Paga No. 36 Ltd v Joseph Eleadona and ors (2018) SC 1671).

22. There was no caveat on the title, and there was nothing which should have put the Plaintiff on notice of any alleged fraud

23. The Defendant has not, in these proceedings, established fraud by the Plaintiff.

24. The Plaintiff has shown that it is the registered proprietor of the land, with prima facie indefeasible title.

25. The only other relevant evidence was that a few days before this trial, the Defendant filed an Originating Summons against the Plaintiff, in which he seeks a Declaration of ownership and rectification of the register.

26. That Originating Summons is not before this court. Its only significance in relation to these proceedings, is that the Defendant is making some form of challenge to the Plaintiff’s title.

27. Unless and until such time as those proceedings are heard, and a finding of fraud is made against the Plaintiff, (even though fraud is not referred to in the OS), then pursuant to S33 of the LRA, the Plaintiff remains the registered proprietor of the land.

28. Reference also needs to be made to an oral submission made at the end of the hearing by the Defendant’s counsel, that the Plaintiff had failed to give S5 notice to the State of its intention to make a claim.

29. This had not been raised in any of the affidavit evidence or the written submissions. The Defendant produced no evidence that the State had not received Notice of Intention to make a claim.

30. The Defendant referred to the case of the Public Curator of PNG and anor v Konze Kara (2014) PGSC 58. This case found that the Public Curator is the State, within the meaning of S5 of the Claims By and Against the State Act. However, the case also found that for any claim to fall within the meaning of S2 of the CBAS Act, it must be an action that is founded on contract or tort or breach of Constitutional rights under S57 or S58 of the Constitution.

31. The Plaintiff’s claim here is not founded on contract or tort or a breach of constitutional rights. It is therefore not a claim within the meaning of S2 of the CBAS Act, and notice was not required to be given.

Conclusion

32. It was not really made clear to this Court why the Plaintiff has gone to the effort and expense of issuing proceedings for the removal of a sign, and it was not really made clear to this Court why the Defendant went to the effort and expense of opposing the application. The proceedings seemed to be a storm in a teacup.

33. The Defendant appeared to be under the misapprehension that putting a sign on the land somehow conferred, or proved, ownership of the land. In fact, of course, the presence or otherwise of a sign is completely irrelevant to a determination or proof of ownership. Ownership of land is determined by reference to the Land Registration Act. Unless and until such time as the Defendant successfully challenges the registered title, the Plaintiff remains the registered proprietor with indefeasible title.

34. The Plaintiff is therefore entitled to control any signage on the property. It requested the Defendant to remove the sign, but the Defendant refused. This small dispute has then ended up in the National Court.

35. For these reasons, I make the following orders:

1. The Defendant is to remove the sign which it placed on the Plaintiff’s property, at its own cost, within 14 days.

2. Each party is to pay its own costs of the proceedings.
   

_____________________________________________________________
Pacific Legal Group Lawyers: Lawyers for the Plaintiff
Office of the Public Curator: Lawyers for the Defendant