Natera Jnr v Toea Homes Ltd [2021] PGNC 187; N8925 (22 July 2021)

N8925

PAPUA NEW GUINEA
[IN THE NATION COURT OF JUSTICE]

CIA NO. 1 OF 2020

BETWEEN
CECIL NATERA JNR in his capacity as the Chairman of Gorobe Kae Incorporated Land Group
First Appellant

AND
GOROBE KAE INCORPRATED LAND GROUP
Second Appellant

AND
TOEA HOMES LIMITED
Respondent

Waigani: Thompson J
2021: 14^th July, 22^nd July

APPEAL FROM DISTRICT COURT – SUMMARY EJECTMENT – Expiry of State Lease after commencement of proceedings but before application heard – whether there was bona fide dispute as to title – whether magistrate failed to take into account other legal proceedings – whether there was substantial miscarriage of justice – ss 21, 229 and 230 of District Courts Act – s 6 Summary Ejectment Act
Counsel:

Mr J. Posi, for the First and Second Appellants
Ms E. Goina, for the Respondents

22^nd July, 2021

1. THOMPSON J: This is an appeal from a District Court Order, granting Summary Ejectment to the respondent against the appellants.
   
2. On 17 May 2019, the respondent issued proceedings in the District Court, seeking Summary Ejectment against the appellants pursuant to 6 of the Summary Ejectment Act.
   
3. The land which is the subject of the dispute, was originally customary land. In 1964 it was acquired by the State and became Portion 675 Milinch Granville Fourmil Moresby on the Survey Plan Catalogue and the Department of Lands and Physical Planning file. It was then Set Aside and Reserved to the Department of Defence on 17 September 1964, and has been used as Defence and Reserved Land since then. In 2011, the PNG Defence Force made a decision to use part of the land for a Defence Staff Home Ownership Scheme, and on 24 November 2011 the Defence Council made an order for the transfer of the land. The respondent was set up to carry out the Housing Scheme for the PNGDF. The Minister for Lands and Physical Planning duly revoked the Setting Aside or Reservation of the land on 9 May 2012, and the Revocation was gazetted on that date. The land reverted back to the State, and the respondent made an application for an Urban Development Lease (UDL) over the land. This was granted, and duly gazetted on 4 June 2014. The respondent became the registered proprietor of the State Lease for Portion 675 Milinch Granville Fourmil Moresby Volume 61 Folio 66, for a period of five years from 4 June 2014.
   
4. The respondent was unable to proceed with the housing development, due to the appellants occupying and purporting to sell parts of the land.
   
5. On 18 August 2014, Govea Daure issued proceedings for the Gorobe Kae clan in the National Court on OS 517 of 2014 against three named individuals and the State, in which they claimed to be customary owners of the land, and obtained an ex parte injunction restraining those defendants from claiming or dealing with the land. At that time, the alleged customary landowners were individuals who had not incorporated as a Land Group, and the proceedings were brought by the clan elder for and on behalf of the clan. The respondent was not named as a party. The respondent applied to be and was joined as a party, and on 8 April 2016 the proceedings were dismissed, with costs.
   
6. On 5 September 2015, the appellants issued proceedings in the National Court on WS 1354 on 2015, against essentially the same defendants, being three individuals and the State. Again, the respondent was not named as a party. By this time, the clan members had incorporated, and the proceedings were issued in the name of the second appellant. In those proceedings, the appellant claimed to be the customary land owner, and alleged that after the land had been acquired by the State and Set Aside to the PNG Defence Force, then when part of the land was not used, it should have reverted to the appellant instead of being issued to the respondent. On 12 December 2016, those proceedings were discontinued.
   
7. On 13 January 2017 the appellants issued proceedings in the National Court in WS 5 of 2017, against two named defendants and the State. Again, the respondent is not named as a party. The appellants claim that they were the customary land owners when the land was acquired by the State and converted to a State lease, and that they have not been paid adequate compensation for the acquisition of the land. Those proceedings remain on foot.
   
8. On 27 July 2018 the second appellant issued proceedings in the District Court on DC 664 of 2018, against five named individuals. The respondent again was not named as a party. The appellant claimed that it was the customary landowner and that the five named defendants were interfering with their customary rights. On 15 August 2018 the District Court made an Order that the defendants were restrained from “ ... encroaching the Taurama customary land”. The respondent applied to be joined, but their application was refused. In a written decision on or about 26 November 2018, the District Court found that “The law does not recognize the defendants in the shoes of the Toea Homes Limited. The Defendants have no standing to represent Toea Homes Limited and the defendants are strangers to Toea Homes Limited...”. The court went on to make orders against the individually named defendants.
   
9. After the respondent filed the ejectment proceedings in the District Court in May 2019, but before the Magistrate made a decision on the application, the UDL expired on 3 June 2019. The respondent produced affidavit evidence to the District Court showing that on that date, it had applied for a re-issue of the UDL. On 18 June 2019 the appellants filed an application to dismiss the proceedings, which was heard on 18 July 2019. In December 2019, the court directed the parties to attend and provide further evidence on the issue of the appellants’ standing to bring the proceedings. On 11 February 2020 the parties returned to court and made those submissions. A decision was then reserved. On 11 March 2020 the court refused the appellants’ application, and granted summary ejectment. On a date in March or April 2020 which was unclear, the appellants filed this Appeal. At the hearing, the respondent was given leave to rely on a further affidavit, which showed that on 4 January 2021, the PNG Land Board notified the respondent that its application for another UDL had been successful, although a new title document has not yet been issued.
   
10. I will deal with each of the Grounds of Appeal as they are set out in the Notice of Appeal.
    
11. Ground 1.1 – The Magistrate failed to deliberate on the appellants’ Notice of Motion to dismiss the ejectment proceedings for want of jurisdiction under s 21 of District Court Act, when the title was bona fide in dispute between the parties.
    
12. In a number of cases (eg. Ruth Don and ors v Comfort Tours and Travel Ltd (2014) PGNC 272), it has been said that in order to show that there is a bona fide dispute, the claimant must show that he has taken some distinct, formal and legal step to challenge the title. The State acquired the title and allocated it to the PNG Defence Force, in 1964. The respondent became the registered proprietor in 2014. The appellants have not issued legal proceedings challenging the respondents’ title. Pursuant to s33 of the Land Registration Act, the registered proprietor holds it absolutely free from all encumbrances except, relevantly, in the case of fraud or a proprietor claiming under a prior instrument of title. It is not affected by any estate or interest which might otherwise be paramount. The appellants have not asserted that they are proprietors under a prior instrument of title, and nor have they alleged any fraud against the respondent. The appellants have issued various sets of legal proceedings, but none of them challenged the respondents’ title. They did not demonstrate that they had a bona fide dispute over the title. In any event, the Ground is only that the Magistrate “failed to deliberate on the appellants’ Notice of Motion”, when the documentary record of the proceedings clearly show that the appellants motion was moved, heard, the arguments raised by the appellants were considered, the appellants and respondent were required to make further submissions, and a decision was delivered. The Magistrate plainly deliberated on the appellant’s application, and this Ground is not made out.
    
13. Ground 1.2 – The Magistrate erred in failing to properly consider that the application for summary ejectment was in conflict with the orders made in the District Court on 29 August 2018 in DC 664 of 2018, whereby “... members of the PNGDF including Toea Home Limited were each and severally restrained from encroaching ... the Taurama Customary Land Portion 675 ...”. This is incorrect. Neither the PNGDF nor Toea Homes Ltd were parties to those proceedings, they were not named in the Order and the order did not refer to Portion 675. It did not in fact identify the “Taurama Customary Land” at all. Further, the court specifically found that the persons named as defendants in those proceedings had “no standing to represent Toea Homes Limited” and “the law does not recognize the Defendants in the shoes of Toea Homes Limited”. Furthermore, the wording of the restraining order was so vague, that it is difficult to see how anyone could be said to have breached it.
    
14. The District Court orders of August 2018 were not in conflict with the application for summary ejectment. This Ground is not made out.
    
15. Ground 1.3 – the Magistrate erred by failing to consider or deliberate on evidence of the proceedings in WS 5 of 2017 which showed that title to the land was bona fide in dispute.
    
16. The proceedings on WS 5 of 2017 do not make any challenge to the respondents’ title at all. Once again, the appellants deliberately did not name them as a party to the proceedings, and so it is difficult to see how the appellants could allege that they were challenging the respondents’ title. More significantly, the statement of claim itself makes no such challenge. On the contrary, the statement of claim acknowledges that the land was acquired by the State in 1964, whether regularly or irregularly, and only seeks compensation to be paid for that acquisition.
    
17. In Ground 1.3 (ii), the appellants refer to an amendment to that statement of claim by which they sought specific performance of a Deed of Release entered into between them and the State on 20 July 2017 for payment of compensation. No evidence was produced of that Deed of Release, but in any event, the amendment confirms that the appellants’ claim is not a challenge to the ownership of the land. It is simply a claim for payment of compensation for the land, pursuant to an alleged agreement. The District Court files shows that the Magistrate made a written note of the submissions on this point from the appellants and respondents’ lawyers, and subsequently made a decision. No error has been shown, and this Ground is not made out.
    
18. Ground 1.4 – the Magistrate erred by placing weight on trivial or irrelevant issues in relation to the appellants’ standing. The evidence shows that the Magistrate was right to consider the standing of the appellants, as they were claiming to be customary landowners of land which had been alienated in 1964. The appellants produced no evidence to show that they were the persons identified in the 1964 Land Titles Commission decision, or the descendants of those beneficiaries. The proceedings which had been issued in 2014 were issued in the name of another person (Govea Daure) on behalf of the Gorobe Kae Clan. The later proceedings were issued in the name of an Incorporated Land Group, which was only created in 2015. The chairman of the group is not the person named in the 2014 proceedings, and is not named in the Land Titles Commission decision in 1964. That decision identified the persons having usufructuary rights to the land as being “living descendants of Kobuga Garia”.
    
19. The identity of the persons claiming to be customary owners of the land, was not a trivial or irrelevant issue. It was a fundamental issue. No error has been shown, and this Ground is not made out.
    
20. Ground 1.5 – The Magistrate erred by failing to give weight to the fact that the respondents’ UDL had expired on 3 June 2019, so that it lacked standing to bring ejectment proceedings. S 6 of the Act says that “where a person without right, title or licence is in possession of premises, the owner may make a complaint ... to recover possession...”. The respondents’ evidence was sufficient to satisfy the court that the appellants were persons without right, title or licence to the land of which they were in possession. Their only claim of right was based on having been the customary landowners, but they produced no Local Land Court or Provincial Land Court decision determining that they were the customary landowners. They produced no evidence that they had acquired an entitlement to the land by virtue of the 1964 Land Title Commission decision. The appellants produced no evidence to refute the respondents’ evidence that the land ceased being customary land in 1964, had been acquired by the State, Set Aside for the PNG Defence Force, and then a UDL had been issued. The Magistrate was entitled to find that the appellants were in possession of the premises without right, title or licence.
    
21. The respondent was the owner at the commencement of the application for ejectment, but was no longer the owner by the time of the hearing and decision. The respondent produced evidence showing that on expiry of the UDL, it had applied for renewal. Although prima facie the respondent was no longer the owner, it submitted that the District Court should follow the National Court decision of Otto Phillip v Sixth Estate Ltd (2018) N 7125, with an identical factual situation in which the National Court found that the Magistrate nevertheless had discretion to order summary ejectment, as long as the District Court had jurisdiction under s 21, whereby title to the land was not in bona fide dispute.
    
22. This interpretation was accepted by the Magistrate, and receives some support from s 14 of the Summary Ejectment Act, which provides that where a person who had been granted a warrant for recovery of possession of land, had at the time of the grant, a lawful right to the possession of the land, an irregularity or informality in the mode of proceeding for possession, does not give the aggrieved party the right to set it aside. In the present case, after the UDL expired, the respondent was still entitled to continue in possession of the land, pursuant to its acquisition by the State and subsequent allocation to the PNG Defence Force. I am not satisfied that the Magistrate erred in finding that the respondent had standing to bring the ejectment proceedings. However, if this was an error, their ejectment did not result in any substantial miscarriage of justice to them, because the appellants had not shown that they had a right, title or licence to possess the land.
    
23. Ground 1.6 – The Magistrate erred in failing to give weight to evidence that the UDL had been issued to the respondent due to fraud. The appellants do not identify that evidence. There was no allegation of fraud in any of the legal proceedings issued by the appellants, and in any event, the respondent was not a party to any of those proceedings, so no allegation of fraud could have been made against it. Any allegation of fraud, including so-called constructive fraud, must be specifically pleaded and particularized (National Council of Young Men’s Christian Association of PNG (Inc) v Firms Services Ltd (2017) SC1596, John Soto v Our Real Estate Ltd (2018) PGSC 55).
    
24. The Magistrate did not err in not finding that the UDL had been fraudulently issued to the respondent. This Ground is not made out.
    
25. Ground 1.7 – the Magistrate erred in failing to accept cited cases to the effect that to establish a bona fide dispute over title, the party must show that it has taken distinct, formal and legal steps to challenge the title.
    
26. As found earlier, none of the legal proceedings issued by the appellants challenged the respondents’ title. They did not even name the respondent. They did not show the court that they had taken any legal step to challenge the respondents’ title, and as the respondent had been the registered proprietor until after the issue of the District Court proceedings, any such step would have to have been an application under s 33 of the Land Registration Act, to set aside the title on the grounds of fraud. In the complete absence of such evidence, there was no error by the magistrate. This Ground is not made out.
    
27. Grounds 1.8 and 1.9 are the same, and are already included in Grounds 1.2, 1.3 and 1.7. None of the legal proceedings issued by the appellants contained a challenge to the respondents’ title. The appellants therefore failed to show that there was a bona fide dispute as to title. There was no error by the Magistrate, and these Grounds are not made out.
    
28. None of the Grounds of the appeal have been made out, with the possible exception of Ground 1.5, relating to the expiry of the UDL. At the time when the Magistrate made the decision, there was evidence that the respondent’s UDL had expired, and that it had applied for a renewal. There is now further evidence that the respondents’ application for renewal has been accepted. Another UDL is therefore likely to be issued. The appellants have not taken any distinct, formal and legal step to challenge the 1964 acquisition of the land, or to challenge the 1964 Setting Aside Reservation of the land to the Defence department, or to challenge the 2014 issue of the UDL to the respondent. The appellants have produced no evidence to show that they have any right, title or licence to be in possession of the land. In those circumstances, I find that there has not been a substantial miscarriage of justice in the decision to grant summary ejectment against them.
    
29. The appellants are proceeding with their claim against the State for compensation for the acquisition of the land. In those proceedings, the appellants will have to satisfy the court that they are the persons entitled to receive that compensation, noting of course that the National Court has no power to determine customary ownership
    
30. Pursuant to s 230 (2) of the District Courts Act, an appeal shall be allowed only if it appears to the National Court that there has been a substantial miscarriage of justice. I therefore do not allow the Appeal, and I make the following orders:
    
    • (1) The Appeal is refused.

(2) The Order of the District Court given on 11 March 2020 in proceedings DC 271 of 2019, is affirmed.

(3) The appellants are to pay the respondent’s costs on a party/party basis, to be agreed or taxed.

__________________________________________________________________

Rageau Manua & Kikira Lawyers: Lawyers for the First / Second Appellants

Dentons PNG: Lawyers for the Respondent