Mikakata v Tobias [2021] PGNC 163; N9010 (18 June 2021)

N9010

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS(JR) NO. 407 OF 2019

BETWEEN:
JOHN MIKAKATA suing for himself and on behalf of David Manikam, Erick Joshua and Othy Apana their residents of Menyamya station, Morobe Province
Plaintiff

AND:
TITUS TOBIAS
First Defendant

AND:
JOHN ROSSO sued as the Minister for Lands & Physical Planning
Second Defendant

AND:
OSWALD TOLOPA sued as the Acting Secretary for Lands & Physical Planning
Third Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Lae: Dowa J
2020: 28^th October
2021: 18^th June

JUDICIAL REVIEW – review of decision made by Secretary for Lands as delegate of the Minister for Lands and Physical Planning exempting land from tender under section 69 (2) (d) of the Lands Act. Failure to follow due process under section 69 of the Land Act in granting state lease to the First Respondent- Land awaiting zoning and subdivision-Not an appropriate case for grant of exemption from tender-Plaintiffs had improvements on the subject land and were denied the right to tender and be considered for the grant of state leases over portions of the said land- Actions of the Respondents thus amounted to constructive fraud- – plaintiffs seek orders in the nature of certiorari to bring into court and quash decision of first respondent in granting the exemption and the granting of a state lease– whether plaintiff is entitled to judicial review and the reliefs sought in the notice of motion.

Held the plaintiffs are entitled to judicial review-there being no grounds for exemption from tender, the Respondents failed to follow due process under section 69 of the Land Act and the actions of the Respondents also amounted to constructive fraud-decisions of the second and third Respondents brought before the Court and quashed and title over land issued to the first Respondent declared null and void.
Cases Cited

Mali v State (2002) PNGLR 15

Malewo v Faukner (2009) SC960

Leda v Stettin Bay Lumber Company (2011) N4542
Kekedo v Burns Philip (PNG) Ltd [1988-1989] PNGLR 122

Vaki Vailala v NHC (2017) N6598

Pius Tikili v Home Base Real Estate (2017) SC1563

PNG Bible Church Inc v Carol Mandi (2018) SC1724

Rosemary John v James Nomenda (2010) N3851

Toki v Helai (2016) SC1558, Mota v Camilus (2017) N6810

Counsel:

S. Toggo, for the Plaintiff
N. David, for the First Defendant
S Maliaki, for the Second & Fourth Defendants

DECISION

18^th June, 2021

1. DOWA J: This is a ruling on an application for judicial review.
   
2. The Plaintiffs, by Notice of Motion, apply for the following orders:
   
   1. An order in the nature of certiorari pursuant to Order 16, r 1[1] and 5[1] of the National Court Rules that the following decisions be brought before this honourable Court and be quashed: -
      

[1] The decision of the secretary of the Department of Lands and Physical Planning acting in his capacity as the delegate of the Minister for Lands and Physical Planning dated 25^th January 2011 to exempt the land described as Section 5 Allotment 11, Menyamya station, Morobe Province.

[2] The decision of the Special Land Board meeting of the Papua New Guinea land Board that granted the title of the land described as Section 5 Allotment 11, Menyamya Station, Menyamya District, Morobe Province to the First Respondent, Titus Tobias and advertised in the National Gazette no. G250 dated 3^rd July 2012.

2. The Respondents to pay the cost of this proceeding.

Facts

3. The Plaintiffs are residents of Menyama Station, Morobe Province. They are occupants of a piece of land described as Allotment 11, Section 5, Menyama, Morobe Province. The Plaintiff, John Mitakata, is authorized by the Plaintiffs David Manikam, Erick Joshua and Othy Apana to be the lead Plaintiff in these proceedings.
   
4. The Plaintiffs came to settle and occupy the land, Section 5 Lot 11 on or, around 2009. They have made improvements to the property and have been operating since 2009, with the permission of the Menyama District Administration.
   
5. The Plaintiffs have also tendered applications for business lease on portions they occupy on the property on or between 2009 and 2010. They also paid for the survey and application fees for the property. The Plaintiffs did not receive a response from the Department of Lands and Physical Planning on their applications.
   
6. Meanwhile, around 2011, the Plaintiffs learned that Tobias Titus, the First Defendant was given a state lease over the said land by the Department of Lands and Physical Planning, through the PNG Land Board.
   
7. On 25 January 2011, the Secretary for Lands and Physical Planning granted an exemption from tender under Section 69(2)(d) in favor of the First Defendant over the subject land. On 5^th April 2012, the First Defendant’s application was over the said land was gazetted on 5^th April 2012. On or around 3^rd July 2012, the Papua New Guinea Land Board met and granted a State Lease over the said land to the First Defendant.
   
8. The Plaintiffs allege, that the Defendants did not follow the proper process under s.69 of the Lands Act when granting the title to the First Defendant. The Plaintiff alleged the Secretary for Lands and Physical Planning was wrong in granting an exemption under Section 69 (2)(d) of the Land Act in favor of the First Respondent, on 25 January 2011, with the subsequent grant of title to the First Defendant on 5^th April 2012 by a Special Papua New Guinea Land Board.
   
9. The Plaintiffs rely on the following documents:
   
   1. Notice of Motion filed
   2. Statement of Facts under Order 16 Rule 4 NCR
   100. Affidavit of John Mikakata sworn 12/6/19 and filed 18/6/20
   4. Affidavit of Othy Apana sworn 12/6/19 and filed 18/6/19
   5. Affidavit of Erick Joshua sworn 12/6/19 and filed 18/6/19
   6. Affidavit of David Manikam sworn 12/6/19 and filed 12/6/19
      
10. The First Defendant relies on the affidavit of Titus Tobias sworn 17/6/20 and filed18/6/20.
    
11. The Second, Third and Fourth Defendants offered no evidence.
    

Issues

12. The issues for consideration are:
    
    1. As a preliminary matter, whether the proceedings are competent.
    2. Whether the decision of the Second and Third Defendants made on 29 January 2011 to exempt from public tender for the lease of the land described as Allotment 11 Section 5 Menyama, in favor of the First Defendant is unlawful.
    100. Whether the state lease granted over the land, Allotment 11 Section 5 Menyama Morobe Province to the First Respondent be declared null and void.
         

No 1. Preliminary Issue: Whether the proceedings are competent.

13. Counsel for the First Defendant submits that the proceedings are incompetent pursuant to Order 5 Rule 3 and 8 of the National Court Rules. Ms David submits that the lead Plaintiff does not have authority to act for the Co-Plaintiffs namely, David Manikam, Erick Joshua and Othy Apana without their written consent and authorization being filed in Court.
    
14. Order 5 Rule 3, 8 and 13 of the National Court Rules reads as follows:
    

“3. Joint right. (8/3)

(1) Where, in any proceedings, the plaintiff claims relief to which any other person is entitled jointly with him.

(a) all persons so entitled shall be parties to the action; and

(b) any of them who do not consent to being joined as a plaintiff shall be made

a defendant.

(2) Sub-rule (1) applies subject to any Act and applies unless the Court gives leave to the contrary.

8. Addition of parties. (8/8)

(1) Where a person who is not a party.

(a) ought to have been joined as a party; or

(b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on,

the Court, on application by him or by any party or of its own motion, may, on terms, order that he be added as a party and make orders for the further conduct of the proceedings.

(2) A person shall not be added as plaintiff without his consent.

(3) Without limiting the generality of Sub-rule (1), where a person not a party to proceedings for possession of land is in possession (by himself or by a tenant) of the whole or any part of the land, the Court, on application by him, may, on terms, order that he be added as a defendant and make orders for the further conduct of the proceedings.

13. Representation; Current interests. (8/13)

(1) Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them.

(2) At any stage of proceedings pursuant to this Rule the Court, on the application of the plaintiff, may, on terms, appoint any one or more of the defendants or other persons (as representing whom the defendants are sued) to represent all, or all except one or more, of those persons in the proceedings.

(3) Where, under Sub-rule (2), the Court appoints a person who is not a defendant, the Court shall make an order under Rule 8 adding him as a defendant.

(4) A judgement entered or order made in proceedings pursuant to this Rule shall be binding on all the persons as representing whom the plaintiffs sue or the defendants are sued, as the case may be, but shall not be enforced against any person not a party to the proceedings except with the leave of the Court.

(5) An application for leave under Sub-rule (4) shall be made by motion, notice of which shall be served personally on the person against whom it is sought to enforce the judgement or order.

(6) Notwithstanding that a judgement or order to which an application under Sub-rule (5) relates is binding on the person against whom the application is made, that person may dispute liability to have the judgement or order enforced against him on the ground that by reason of facts and matters particular to his case he is entitled to be exempted from the liability.

(7) This Rule does not apply to proceedings concerning.

(a) the administration of the estate of a deceased person; or

(b) property subject to a trust.”

(Emphasis is mine)

15. The law on representative capacity is settled in this jurisdiction that where an action is instituted by a person in a representative capacity, written consent or authority be endorsed or filed in the originating process. Refer Mali v State (2002) PNGLR 15, Malewo v Faukner (2009) SC960 and Leda v Stettin Bay Lumber Company (2011) N4542. At paragraph 13 to 16 of the judgment Leda -v- Stettin Bay Lumber Company, His Honour Kawi J (as he then was) said this:
    

“13. In so far as bringing in an action in a representative capacity is concerned, the law was settled by the Supreme Court in Simon Mali & Ors –v– The State SC 690. The Supreme Court settled the law as follows:

"Contrary to what learned Counsel for the appellants asserts, the legal representatives of the unnamed plaintiffs in all the five (5) proceedings were required by law to "have their names included in a schedule to the writs or for their written consents to be filed". And these written consents would have to come by way of an Authority to Act Form."

14. Furthermore the Supreme Court stated: "We accept the State's Submission that in all actions or proceedings of a representative nature, all the interested plaintiffs must be named and duly identified in the originating process, be it a Writ of Summons, Originating Summons or statement of claim endorsed on a writ. In this respect, pursuant to the Rules (supra) each and every intending plaintiff must give specific instructions (evidenced in writing) to their lawyers to act for them. There are good reasons for this, one being where costs of the litigation are concerned, if awarded against the plaintiffs. Some of the problems or consequences in the representative action are anticipated in the various sub-rules under Order 5 rule 13 NCR".
15. In summary then the requirements of suing in a representative capacity are these:

(a) All interested persons intending to be plaintiffs must be duly identified and have their names included in a schedule attached to the Writ of Summons or the Originating Summons as the case may be.

(b) The written consent of the interested persons intending to be plaintiffs must be filed in Court by way of an Authority To Act Form.

(c) The parties to be represented must be numerous.

(d) They must all have the same interests in the proceedings.

(f) They all have a common grievance.

(g) The relief (s) sought is in its nature beneficial to them all.

16. In this case it is the finding of this court that the alleged representative plaintiff, Stanis Leda has not satisfied and fulfilled all the requirements of acting and suing in a representative capacity. Therefore, he cannot purport to represent members of the Uguge clan of Buluma and Mai villages whom he has not even identified. The Court finds and I so rule that Stanis Leda can only represent himself. He has no capacity to represent other unidentified members of his Uguge Clan of Buluma and Mai villages. The effect of this finding is that Stanis Leda will from now onwards represent himself in these entire proceedings, but the cause of action is not terminated as yet or the cause of action still survives and accrues.“
    
16. In the present case, John Mikakata is the lead Plaintiff. He is suing for himself and on behalf of David Manikam, Erick Joshua and Othy Apana who are also named as Plaintiffs. The Originating Summons and Notice of Motion do not have any endorsement of any consent or authority of the three plaintiffs. There is no separate consent or Authority form being filed.
    
17. However, Annexure ‘A’ to John Mikakata’s affidavit sworn 12 June 2019 and filed 18^th June 2019 is a letter of authority signed by the three Plaintiffs, consenting to and authorizing the lead Plaintiff, John Mikakata to lead them in these proceedings.
    
18. In my view, and as a matter of fact, the three Plaintiffs clearly authorized John Mikakata to lead them. They have met the requirements of Order 5 Rule 13(1). It is not in a form as required by the Rules. Under Order 1 Rule7 of the National Court Rules. The requirement under a form can be dispensed with in the interest of justice.
    
19. Even if I am wrong in my view the current proceedings are not incompetent for a second reason. That is, even if the claims by the three Plaintiffs are struck out, the Plaintiff John Mitakata can stand alone and is competent for all purposes. He has substantial interest in the case and the reliefs sought is available to him.
    
20. For the foregoing reasons, I find the proceedings are competent and shall proceed to the consideration of the substantive issues.
    

Issue No. 2: Whether the Second and Third Defendants followed due process under sections 65 to 75 of the Land Act in granting a state lease to the first Defendant to the exclusion of the Plaintiffs who had competing interest over the same land.

Evidence

21. I now turn to the evidence to deal with this issue.
    

John Mitakata

22. The Plaintiff, John Mitakata deposes in his affidavit that he is the current occupant of the subject land, Allotment 11 Section 5, Menyamya, along with the Plaintiffs, David Manikam, Erick Joshua and Othy Apana. He is authorized by the Co-Plaintiffs to lead and represent them in these proceedings.
    
23. He says, the four Plaintiffs were permitted by Mr Solomon Bomo, the District officer in charge of Lands in Menyama, to move onto the subject land. The land was vacant at the material time.
    
24. He says, although the land was vacant and available, it was not zoned and subdivided. With the assistance of Mr Bomo, the Plaintiffs travelled to Lae and obtained applications for tender.
    
25. Mr Mitakata deposes further that after paying K454.00 being for necessary fees for the application and for the survey, he lodged his application for tender with Solomon Bomo, and the Lands office in Lae for onforwarding.
    
26. Mr Mitakata deposes that when in Lae, Mr Bomo and Mr Brian Irafa of Lands office in Lae, advised him and the other Plaintiffs to wait for the land to be surveyed and advertised for consideration of their applications by the Papua New Guinea Land Board.
    
27. While waiting and due to the assurances given by the Lands officers, the Plaintiffs proceeded to make improvements on the allotments they were occupying.
    
28. And for John Mitakata, he built a building which is used for a store in the front and a shed for the coffee storage at the back. He has also constructed a perimeter fencing.
    
29. Mr Mitakata deposes that when he and the Plaintiffs became aware of the title being issued to the First Defendant over the land they were occupying, the Plaintiffs lodged a complaint to the District Administration in Menyamya, the Lands office in Lae and the National Lands Department.
    
30. As a result of the complaints, the district officials in Menyamya wrote to the Secretary for Lands. The Secretary for Lands has responded by putting a stop work to the First Defendant.
    
31. The Provincial Program Advisor for Lands in Morobe, has also written to the First Defendant Titus Tobias to surrender the title to the Registrar for Lands, as the land has not been surveyed, rezoned and no proper descriptions of land have been given.
    

David Manikam

32. David Manikam is a co-Plaintiff. He deposes similar evidence to that of John Mikakata. He is a resident and occupant on the subject land. He also applied for a state lease of a portion of the land. He paid K454 for the application and survey fee.
    
33. He runs a business under the name “Anima Trading” on the land. His improvements consist of a warehouse, for wholesale business and coffee storage shed. He also has a retail store and a dwelling residence with perimeter fencing.
    

Erick Joshua

34. The Plaintiff Erick Joshua deposes similar evidence to that of John Mikakata. He is an occupant on the subject land. He lodged his application for a state lease over a portion of the land in December 2010. He also paid his application and survey fees totalling K454.00. He has made improvements to the land and trades under a business “Anaji Trading”. His improvement on the land consists of a trading store and a dwelling house. He deposes that he has the support of the Menyamya District Administration to be granted a state lease over a piece of land, the subject of these proceedings.
    

Othy Apana

35. The Plaintiff, Othy Apana deposes similar evidence to that of John Mikakata. He is an occupant of a part of the subject land. He trades under the business name “Yanapai Trading”. The improvements made on the property include a timber yard and joinery and residential quarters for the family, with perimeter fencing. He also applied to the Lands Department of a grant of the state lease over a portion of the subject land. He paid the necessary application and survey fees of K454.00. He says he also has the support of the Menyamya District Administration for the grant of lease over, a portion from the subject land.
    

First Defendants Evidence. Titus Tobias

36. Titus Tobias, the First Defendant gave evidence by affidavit. He deposes he is the current proprietor of the land described as Allotment 11 Section 5 Menyamya Morobe Province. He says the land contains 0.0356 hectare of unimproved land. He applied for the state lease on 17^th October 2010.
    
37. He says, on the 25^th of January 2011, one Romily Kilapat who was the delegate of the Minister for Lands and Physical Planning at that time exempted the land from being put on public tender under Section 62(2)(d) of the Land Act.
    
38. In March 2012, the PNG Land Board considered and granted the exemption of the property being put on public tender, as a result he was the only applicant gazetted on the National Gazette dated 5^th April 2012.
    
39. In July 2012, in a Special Meeting No. 01/2012 the PNG Land Board considered and granted him the State lease which was gazetted on 3^rd July 2012. After acceptance of the lease acceptance form (LAF) he was given the owners State copy of the Lease on the property, Volume 26 Folio 48, on or about August 2012.
    

Reasons For Decision.

40. The land described as Allotment 11 Section 5 Menyamya was exempted from public tender in favour of the First Defendant by the then Secretary, for Lands and Physical Planning, Romilly Kila Pat, exercising its powers under Section 62 (2)(d) of the Land Act. The reasons for the exemption are contained in the Notice under Section 69 (2)(d) which I reproduce below:

“NOTICE UNDER SECTION 69(2)(d)

I, Romilly Kilapat, a delegate of the Minister for Lands and Physical Planning by virtue of the power conferred in me by Section 69(2)(d) of the Land Act 1996 and all other powers powers me enabling under this Division notwithstanding that the Land has not been offered for by lease tender.

The special reason being that, the parcel of land is located in a remote area of Menyamya where you hardly find development, the applicant/developer Titus Tobias who is a local small scale businessmen intend to develop and therefore the Department should promote and encourage such for development in remote areas.

SCHEDULE

All the Land known as; ALLOTMENT 11 SECTION 5 MENYAMYA, MOROBE PROVINCE”

41. This is the decision that paved way for the consideration of the First defendant’s application for lease without public tender by the PNG Land Board. This is also one of the main decisions the Plaintiffs seek judicial review.

LAW (Judicial Review)

42. The relevant rule is Order 16 Rule 1(1) of the National Court Rules, which provides:

“(1) An application for an order in the nature of mandamus, prohibition, certiorari or quo warranto shall be made by way of an application for judicial review in accordance with this Order.”

43. The law on application for Judicial Review is settled. In Kekedo v Burns Philip (PNG) Ltd [1988-1989] PNGLR 122, the Supreme Court stated that:

“The circumstances under which judicial review may be available are where the decision-making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision which no reasonable tribunal could have reached or abuses its powers”.

44. The Supreme Court in that case further stated that:

“The purpose of judicial review is not to examine the reasoning of the subordinate authority with the view to substituting its own opinion. Judicial review is concerned not with the decision but with the decision-making process.

LAND ACT 1996

45. Sections 65 to 75 of the Land Act 1996 is applicable in this case. The most relevant sections are 67, 68 and 69 and they read as follows:
    

“67. STATE LEASES NOT TO BE INCONSISTENT WITH ZONING, PHYSICAL PLANNING, ETC.

A State lease shall not be granted for a purpose that would be in contravention of zoning requirements under the Physical Planning Act 1989, any other law relating to physical planning, or any law relating to the use, construction or occupation of buildings or land.

68. ADVERTISEMENT OF LANDS AVAILABLE FOR LEASING.

(1) Except where land has been exempted from advertisement under Section 69, the Departmental Head shall give notice, by advertisement in the National Gazette, of all lands available for leasing under this Act.

(2) An advertisement under Subsection (1) shall contain the following information:–

(a) the type of lease available to be granted;

(b) the purpose of the lease;

(c) the length of the lease;

(d) a description of the land to be leased;

(e) the amount of rent (if any) payable for the first period of the lease;

(f) in the case of a special purposes lease–any royalties that are payable;

(g) the terms and conditions of the lease;

(h) the reserve price;

(i) such other information as the Departmental Head thinks fit or the Minister directs.

(3) A statement contained in an advertisement under this Section does not in any way bind the State in the granting of a lease over land the subject of the advertisement or constitute an offer to lease land.

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 1984; 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 131.“

46. The Plaintiffs were occupants of state land over allotment 11 section 5 Menyamya. They have lodged applications for the grant of state lease over the said land. They were awaiting survey and rezoning and subdivisions allowing for individual allotments. Pending their applications, the First Defendant was granted a state lease over the entire land.
    
47. The subject land, allotment 11 section 5, Menyamya, was not yet advertised for open tender for the grant of state lease. Section 69 (1) makes it clear, a state lease over a state land shall not be granted without first being advertised, unless it has been exempted from advertisement under Subsection (2). Subsection (2) sets out the reasons or considerations where exemptions can be granted. In the present case, the First Defendant lodged its application on 17^th October 2010. The proposed improvement was for a wholesale building and mini service station, to the value of K180,000.00.
    
48. By 25^th January 2011, the Lands Department would have had in its possession the tender applications of the Plaintiffs in their office, which were lodged between 2009 and 2010.
    
49. The Second and Third Defendants have not filed any evidence in the proceedings despite extended time been given to them to file responding affidavits. It is not clear how the Secretary for Lands and Physical Planning arrived at the conclusion that the First Defendant’s application was qualified for exemption.
    
50. The evidence from the First Defendant, show he was applying for a land with an area of 0.0356 hectares. The valuation report annexed to his Affidavit (Annexure A) for the area shows the area he was applying is 0.0635 hectares. The state lease issued over the property to the First Defendant shows an area of 1.188 hectares. There is a disparity in the land area. There is no explanation why the First Defendant who applied for a small portion of land ended up with a huge piece of prime land. If you subdivide the land area equally at an average area of .0635 hectares, that is 635square meters each, you will end up with more than 18 allotments. That is sufficient for allocation to meet the Plaintiffs’ needs as well as the First Defendant’s requirements and there shall be even more for other interested parties.
    
51. The evidence from the Plaintiffs shows, the subject land contains a big area sufficient to accommodate all the Plaintiffs with their various business activities. The evidence shows the land is not vacant. It is occupied by the Plaintiffs and has substantial improvements. What was the basis of the First and Second Defendants opinion that this piece of land was vacant or unoccupied and qualified for exemption? Did they have any investigation report? If the Defendants investigated, it would have established that the land was not vacant. The Department would have also learned that the land was still awaiting survey, rezoning and subdivision. The officer in charge of Lands in Menyamya and the Lands office in Lae have clearly communicated their position to the Lands Department regarding the state and status of the subject land that it was not yet surveyed, rezoned, and subdivided in readiness for application for the state leases by the Plaintiffs and other interested persons.
    
52. The decision made by the then Secretary as a delegate to the Minister was made in isolation from any input by the district officer in charge of Lands in Menyamya District and the Lands office in Lae. The decision was made adverse to the interests of the Plaintiffs. The Plaintiffs were not given an opportunity to have their applications considered.
    
53. As a result, the Plaintiffs applications were not brought before the PNG Land Board. The Land Board did not investigate or enquire with the relevant lands officers especially the officers based in Lae and Menyamya to satisfy itself of the appropriateness of the exemption. They failed to consider that the subject land was yet to be surveyed, zoned, and subdivided ready for leasing. They did not satisfy themselves that the zoning requirements under the Physical Planning Act 1989 were met. The evidence shows, the Second Defendant realising the Lands Department’s mistake issued a stop work notice by a letter on 12^th October 2012 to the First Defendant to stop work on the land.
    
54. In my view, the grant of a state lease of this land was subject to following of the process and the meeting of the requirement under sections 67, 68 and 69(1) of the Land Act and the Physical Planning Act. It did not qualify for an exemption under section 69(2)(d). The decision to grant a lease of the said land to the First Defendant to the exclusion of the Plaintiffs as interested persons was therefore improper and in breach of sections 67,68 and 69 (1) of the Land Act.
    
55. It has been held that where a decision to grant a lease over state land in contravention of law, especially the Land Act, can amount to constructive fraud.

Fraud is defined in the head notes of the judgments in the case Vaki Vailala v NHC (2017) N6598 and Pius Tikili v Home Base Real Estate (2017) SC1563 to mean “actual fraud or constructive fraud. Constructive fraud exists where the circumstances of a transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title.”

56. The law on constructive fraud is now settled in this jurisdiction. Refer to Pius Tikili v Home Base Real Estate Ltd (2017) SC1563, PNG Bible Church Inc v Carol Mandi (2018) SC1724 and Rosemary John v James Nomenda (2010) N3851, Toki v Helai (2016) SC1558, and Vaki Vailala v NHC (2017) N6598 and Mota v Camilus (2017) N6810.

57. The Supreme Court in the most recent case of PNG Bible Church v Carol Mandi (supra) emphasised that a failure to follow the process under the Land Act and the National Housing Corporation Act can render all dealings invalid based on constructive fraud. At paragraph 18 of the judgment, the Court said this:

“It is now well-established law in PNG that a failure to follow the process provided under the Land Act when dealing with State land amounts to fraud capable of undoing any title secured outside the statutorily prescribed process. The decision of the Supreme Court, drawn to our attention by learned counsel for the Church in Pius Tikili v Home Base Real Estate Ltd (2017) SC1563 is a case on point. There the Court comprising of Cannings, Yagi and Neill JJ., said:

“His Honour, we consider, should have addressed the meaning of “fraud” in Section 33(1)(a) of the Land Registration Act more rigorously. There is now a strong line of Supreme Court decisions that have substantially qualified the concept of indefeasibility of registered title set out Mudge v Secretary for Lands [1985] PNGLR 387. Cases such as Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215, PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126 and Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120 support the proposition that in many situations it will not be appropriate to insist on proof of actual fraud before the National Court considers cancelling the registered proprietor’s title. It will be sufficient if constructive or equitable fraud is proven. Constructive fraud exists where the circumstances of a transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title.”
58. The Supreme Court then proceeded to nullify the grant of a state Lease over a land which was issued for failure to follow process provided under section 77 and for misapplication of sections 70,71,74,75 and 84 of the Land Act.

59. Applying the above principles, I find the defendants did not follow proper process under sections 67, 68 and 69 of the Land Act 1996 and section 71 of the Physical Planning Act 1989, The role of this Court is, however, not to examine the reasoning or soundness of the decision of the Defendants with a view to substituting its own opinion. The Court is, however, concerned with the decision-making process. In my view the Plaintiffs have clearly established with credible evidence that the Defendants have failed to follow due process, and have committed an error of law, committed a breach of natural justice, and made a decision that is unreasonable under the circumstances.

60. I will therefore uphold the application for judicial review and grant the orders sought.
    

Orders

61. The Court orders that:

1. The decision of the Secretary of the Department of Lands and Physical Planning acting in his capacity as the delegate of the Minister for Lands and Physical Planning dated 25^th January 2011 to exempt the land described as Section 5 Allotment 11, Menyamya station, Morobe Province, as State Lease Volume 20 Folio 48, is declared unlawful and is quashed.
   
2. The decision of the Special Land Board meeting of the Papua New Guinea land Board that granted the title of the land described as Section 5 Allotment 11, Menyamya Station, Menyamya District, Morobe Province, as State Lease Volume 20 Folio 48, to the First Defendant, Titus Tobias and advertised in the National Gazette no. G250 dated 3^rd July 2012 is declared unlawful and be quashed.
   
3. The First Defendant shall within 30 days from date of this orders surrender and deliver up the Title or State Lease of the land described as Section 5 Allotment 11, Menyamya Station, Menyamya District, Morobe Province, as State Lease Volume 20 Folio 48, to the Registrar of Titles for cancellation.
   
4. The Second and Third Defendants in consultation with the Morobe Provincial Lands Office, shall take all administrative steps under the Lands Act 1996 and the Physical Planning Act 1989 to zone and subdivide the said land for the purposes of granting individual leases.
   
5. When ready for leasing, the Second and Third Defendant shall advise the Plaintiffs and the First Defendant to apply and be considered for the grant of state leases from the said land.
   
6. The Defendants shall pay the cost of the proceedings to be taxed, if not agreed.
   
7. Time be abridged.
   

Daniel & Associate Lawyers: Lawyers for the Plaintiff

David & David: Lawyers for the First Defendant

Solicitor General: Lawyers for the Second & Fourth Defendants