Mogai Ltd v Tolopa [2021] PGNC 521; N9360 (22 December 2021)

N9360
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS. NO. 61 OF 2018

BETWEEN
MOGAI LIMITED
First Plaintiff

AND
ALIPU TRADING LIMITED
Second Plaintiff

AND
OSWLAD TOLOPA, in his capacity as the SECRETARY FOR THE DEPARTMENT OF LANDS AND PHYSICAL PLANNING
First Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

AND
HON. JOHN ROSSO, in his capacity as MINISTER FOR LANDS AND PHYSICAL PLANNING
Third Defendant

Waigani: Makail, J
2021: 20^th August & 22^nd December

LIABILITY – Acquisition of State Lease – State Lease for Business Light Industrial purposes –Land acquired by compulsory process – Land acquired for public purpose – Extension of runway of airport – Liability of State to pay compensation from date of acquisition pursuant to notice published in National Gazette – Land Act, 1996 – Sections 7(b), 12, 14, 23 & 26

LIABILITY – Common law tort of trespass to land – State Lease for Business Light Industrial purposes – Entry to land prior to acquisition by compulsory process – Land acquired for public purpose – Extension of runway of airport – Interference to right of occupation and quite enjoyment

COMPENSATION – Compensation for interest in land – Statutory compensation – Compensation prescribed by statute – Award of compensation restricted to value of land and value of improvement – Land Act, 1996 – Sections 12, 14 & 23

ASSESSMENT OF DAMAGES – Award of general damages for trespass to property – Award of damages for loss of business – General damages for loss of trade reputation and goodwill refused – Award of aggravated damages – Award of general damages for frustration and hardship – Award of exemplary damages – Award of special damages – Lack of invoices and receipt of payments – Reasonable sum awarded for expenses for motor vehicle hire, accommodation and airfares

INTEREST – Interest payable on sum awarded as compensation payable for compulsory acquisition of land – Rate of interest – 3% per annum – Land Act, 1996 – Section 47

Facts
The first plaintiff was the lease holder of a State Lease for Business Light Industrial purposes comprising of a piece of land described as Section 3 Allotment 8, Southern Highlands Province (now Hela Province). It is located at Tari. In 2010, the National Executive Council decided to acquire the land to extend the runway of Tari Airport. In 2011 and prior to the Minister for Lands and Physical Planning or his delegate giving a notice to treat to the first plaintiff and publishing a notice to acquire the land by compulsory process in the National Gazette, the defendants through Curtain Brothers (PNG) Limited pulled down improvements put up by the first and second plaintiffs on the land and had it fenced. The improvements were put up with the assistance of Curtain Brothers. After seven years and without giving notice to treat to the first plaintiff, on 25^th April 2017 the Secretary of the Department of Lands and Physical Planning as delegate of the Minister published a notice in the National Gazette of the State’s intention to acquire the land by compulsory process. Despite many requests, there was no agreement for an amount of compensation to be paid under section 26 of the Land Act, 1996. The plaintiffs sued the defendants for trespass to land and sought amongst other orders, general damages for trespass to land and compensation for interest in land under Section 14 of the Land Act, 1996.

Held

1. Where a lease holder’s State Lease is acquired by compulsory process by the Minister for Lands and Physical Planning or his delegate on behalf of the State the lease holder’s interest in land is converted to a right to compensation under Section 14 of the Land Act, 1996.
   
2. A cause of action for compensation pursuant to Section 14 of the Land Act, 1996 accrues from the date of publication of notice of acquisition by compulsory process in the National Gazette under Section 12 of the Land Act, 1996.
   
2. A cause of action for trespass to land accrues from the date of entry of land and prior to the date of publication of notice of acquisition by compulsory process in the National Gazette under Section 12 of the Land Act, 1996.
   
3. The defendants entered the first plaintiff’s land prior to the date of publication of notice of acquisition by compulsory process in the National Gazette. Liability is established against the defendants for trespass to land.
   
4. The defendants are liable to pay compensation for occupation and use of the land after the date of publication of notice of acquisition by compulsory process in the National Gazette. Liability is established against the defendants for compensation under Sections 7(b), 12 and 14 of the Land Act, 1996.
   
5. General damages for loss of trade reputation and goodwill is a remedy in an action for defamation and will be refused in an action for trespass to land.
6. There is no evidence that the first plaintiff received income from the lease of land to the second plaintiff and no damages for loss of business income are awarded. As the second plaintiff received an income from the lease of its lodge to Curtain Brothers, damages for loss of business income are assessed and awarded for a period of seven years from date of entry of land to date of publication of notice of acquisition by compulsory process in the National Gazette in the sum of K1,645,000.00.
7. The injury inflicted on the plaintiffs by the abrupt entry and demolition of the buildings on the land was exacerbated by the long delay of seven years for the defendants to comply with the procedure for compulsory acquisition under the Land Act and not paying reasonable compensation. Aggravated damages are assessed and awarded to the plaintiffs in the sum of K50,000.00 and K25,000.00 respectively.
   
8. With the second defendant increasingly requiring land under a State Lease to be returned to boost public infrastructure projects throughout the country and its failure to comply with the process of acquisition under the Land Act, 1996 it is appropriate that it be ordered to pay exemplary damages. Exemplary damages are assessed and awarded in the total sum of K10,000.00.
   
8. For special damages, as they must be strictly proven and due to lack of particulars and corroboration which may explain the total sum claimed as being quite extravagant, a nominal sum of K30,000.00 is assessed and awarded to reimburse the plaintiffs for motor vehicle hire, accommodation and airfares expenses.
   
9. General damages for frustration and hardship is assessed and awarded in the total sum of K20,000.00.
   
10. The defendants’conduct is not only harsh and oppressive but has also resulted in the plaintiffs being unjustly deprived of their property under Sections 41 and 53 of the Constitution respectively. General damages for breach of Sections 41 and 53 of the Constitution is assessed and awarded in the total sum of K12,000.00.
11. As there is lack of particulars to support the plaintiff’s claim for K6 million for value of land and value of improvement, compensation is assessed for value of land and value of improvements in the total sum of K4.5 million.
12. Interest at rate of 3% per annum is awarded on the compensation sum of K4.5 million payable from date of acquisition of 25^th April 2017 to date of payment under Section 47 of the Land Act, 1996.
    

Cases Cited:
Pacific Trade International Limited v. Waisime (2020) SC1935
PNG Aviation Services Pty Limited v. Somare (2000) SC658
Johnnie Wabata & Anor v. Justus Ohue (2018) N7157
Grace Lome v. Allan Kundi & Ors (2009) N3791
George Kala v. Joseph Kupo (2009) N3677
Enei v. Rimbunan Hijau Ltd (2011) N4402
Rimbunan Hijau Ltd v. Enei (2017) SC1605
Madang Cocoa Growers Export Co Ltd v. Lange (2016) N6161
Likui Trading Ltd v. Joseph Selna (2011) N4530
Michael Jacob & 106 Ors v. Chief Inspector Jim Namora & The State (2020) N8385
Nick Bentanjo & Ors v. Fred Yakasa & The State (2020) N8419
Ballen No 28 Limited v. Hon. Benny Allen & Ors (2019) SC1868

Counsel:

Mr. A. Waira, for Plaintiffs
Mr. R. Uware, for Defendants

JUDGMENT

22^nd December, 2021

1. MAKAIL J: By an originating summons filed 8^th February 2018 and subsequently converted to pleadings by way of an amended statement of claim on 20^th November 2019, the plaintiffs sued the defendants for the common law tort of trespass to land and statutory compensation for interest in land following compulsory acquisition pursuant to Sections 7(b), 12 and 14 of the Land Act, 1996. The land is a State Lease for Business Light Industrial purposes and described as Section 3 Allotment 8, Southern Highlands Province (now Hela Province). It is located at Tari.
   

Trespass

2. The plaintiffs alleged that the land was acquired by compulsory process by the defendants under the Land Act, 1996. Prior to the land being acquired, the defendants had entered the land without their authority, pulled down improvements and put up a fence.
   
3. Consequently, they were denied the right to quite enjoyment of the land and suffered loss and damages in the following way: damages for trespass, missing rentals or mesne profits, frustration and inconvenience, loss of reputation and good will, loss of business, loss of compensation under Section 14 of Land Act, damages for breach of Section 53 (2) of Constitution and general damages for negligence. Before proceeding any further, it is the decision of the Court that general damages sought for negligence will be disregarded and dismissed because the pleadings are expressed as an action in trespass to land.
   

Damages sought

4. A summary of the damages sought is set out below:
   
   • (a) K6,000,000.00 to first plaintiff and K10,000.00 to second defendant as interest converted to a right of compensation under Section 14(1) of Land Act.
     
   • (b) K100,000.00 to first plaintiff and K50,000.00 to second plaintiff by the second defendant loss of trade reputation and good will.
     
   • (c) K1,080,000.00 to the first plaintiff and K100,000.00 to the second plaintiff as damages for loss of business.
     
   • (d) K100,000.00 to first plaintiff and K50,000.00 to second defendant as aggravated damages.
     
   • (e) K50,00.00 each to first and second plaintiffs as exemplary damages.
     
   • (f) K100,000.00 each to first and second plaintiffs as special damages.
     
   • (g) K50,000.00 each to first and second plaintiffs as general damages.
     
   • (h) K6,000.00 each to first and second plaintiffs for breaches of Sections 41 and 53 of the Constitution.
     
   • (i) 3% interest pursuant to Section 47 (1) (a) of LandAct.
     
   • (j) Legal costs.
     
   • (k) Alternatively amount claimed under mesne profits or damages for trespass, loss of trade reputation and good will, loss of business and general damages be added and awarded for interest converted to a right of compensation under Section 14 (1) and the Land Actto each of the plaintiffs.
     

Defence

5. The defendants filed a defence on 27^th November 2019, subsequently amended it on 22^nd October and denied liability.
   

Evidence

6. At trial, the plaintiffs tendered the following affidavits which were marked as exhibits:
   
   1. Affidavit of Mokai Andane filed 27^thOctober 2020 (Exhibit “P1”).
      
   2. Further affidavit of Mokai Andane filed 10^th February 2020 (Exhibit “P2”).
      
   3. Affidavit of Mokai Andane filed 6^th November 2020 (Exhibit “P3”).
      
   4. Affidavit of Paul Laija filed 10^th February 2020 (Exhibit “P4”).
      
   5. Affidavit of Joe Paraka filed 27^th October 2020 (Exhibit “P5”).
      
   6. Affidavit of Anthony Waira filed 10^th February 2020 (Exhibit “P6”).
      
7. The defendants rely on the affidavits of:
   
   1. Benjamin Samson filed 11^th November 2020 (Exhibit “D1”).
      
   2. Gabriel Michael filed 19^th November 2020 (Exhibit “D2”).
      

Uncontested Facts

8. The following facts can be extracted from these affidavits as the uncontested facts for the present purposes. The plaintiffs are incorporated companies owned by Mogai Andane. Mr. Mogai Andane through the first plaintiff acquired title to the land by way of State Leaseon 2^nd May 2007.
   
9. The second plaintiff was set up as a lodge on the subject land. Prior to that in 2005 a valuation was done on the subject land. In 2008 the second plaintiff leased one of the buildings within the subject land to Curtain Brothers Company. The buildings were put up and upgraded with the assistance of Curtain Brothers.
   
10. In 2010, the National Executive Council (“NEC”) decided to acquire the land by compulsory process to extend the runway of the Tari airport. On 20^th December 2010 Curtain Brothers through its General Manager David Daly terminated the lease agreement with the second plaintiff. Mr Daly informed the plaintiffs about the compulsory acquisition of the subject land. The second plaintiffs’ lodge and other improvements made on the subject land were pulled down and the subject land fenced. Improvements on the land included four separate buildings to operate a lodge and one building for wholesale and retail shop including water tanks.
    
11. On 24^th March 2010 Undiri Management and Property Consultants (UMPC) conducted a valuation of the land and improvement and produced a report which K6,000,000.00 comprising of value of land and value of improvements. A valuation report was also prepared by Saleng J. Hosa of the Valuer General’s Office dated 2^nd September 2005 gave a value of K53,000.00 for the land and K947,000.00 for value of improvements and a total of K1,000,000.00.
    
12. The plaintiffs then commenced legal proceedings styled OS No 622 of 2008 in the National Court to seek orders to stop the defendants from interfering with their right to quite enjoyment of the land. These proceedings were discontinued on 22^nd July 2011. On 14^th March 2011 the plaintiffs commenced another set of legal proceedings styled OS No 112 of 2011. These proceedings were also discontinued on 26^th April 2011. However, on 23^rd October 2014 the plaintiffs’ lawyers wrote to the Minister for Lands and Physical Planning and requested the Department of Lands and Physical Planning to comply with the process for acquisition of land and pay reasonable compensation to the plaintiffs.
    
13. After seven years, the subject land was eventually acquired by the Defendants on or about 25^th April 2017 when the first defendant as the delegate of the third defendant published a notice in the National Gazette of the State’s intention to acquire the land by compulsory process to extend the runway of the Tari airport.
    
14. On 28^th June 2017 the plaintiffs lodged a claim for compensation with the Department of Lands and Physical Planning. They claimed a total sum of K11,460,840.00 which comprised of loss of land and guest house and loss of rent. As for the defendants, a valuation was carried out by Mr Michael of the Valuer General’s Office on 14^th August 2019 and a report was finalised on 26^th August 2019.
    
15. The Valuation Report placed the value of the land at K2,500,000.00 and the value of improvement atK947,000.00 giving a total value of K3,447,000.00.However, the plaintiffs were not informed of the sum of K3,447,000.00 until they were served a copy annexed to the affidavit of Mr Samson (Exhibit “D1”) and affidavit of Mr. Michael (Exhibit “D2”).
    

Tort of Trespass

16. To be successful in an action for trespass, the onus is on the plaintiffs to prove an unlawful intrusion or invasion of their land, that the intrusion or invasion was intentional and with force and they were injured.
    
17. A cause of action for trespass to property accrues from the date of entry on land and prior to the date of publication of notice of acquisition by compulsory process in the National Gazette under Section 12 of the Land Act.
    

Compulsory Acquisition of Land

18. Where a lease holder’s State Lease is acquired by compulsory process by the Minister for Lands and Physical Planning or his delegate on behalf of the State the lease holder’s interest in land is converted to a right to compensation under Section 14 of the Land Act.

19. A cause of action for compensation pursuant to Section 14 of the Land Act, accrues from the date of publication of notice of acquisition by compulsory process in the National Gazette under Section 12 of the Land Act.
20. The process of compulsory acquisition is provided for under Part III, Division 5 from Sections 12 to 16 of the Land Act. In summary the following procedure is:

1. The Minister must give invitation to treat to the landowners of the land. Section 13(1).
   
2. Within two months the person served the notice to treat must provide particulars of the interest claimed by him in the land, the amount the person agrees to sell his interest in the land, and the nature of that interest. Section 13(2).
   

100. The Minister then may treat with the person providing the particulars by agreement and enter an agreement with that person for the acquisition. Section 13 (3) or he may by writing withdraw the notice to treat. Section 13 (4).
     

4. After two months, the Minister must declare by publication in the National Gazette that the land is acquired by compulsory acquisition: Section 12(1).
   
5. The notice of compulsory is to be served personally or by registered post: Section 15.
   
6. The Secretary for Department of Lands & Physical Planning must register the land with the Registrar of Titles. Section 16.
   

21. In the present case, the defendants entered the first plaintiff’s land prior to the date of publication of notice of acquisition by compulsory process in the National Gazette. No notice to treat was given to the first plaintiff as the registered proprietor of the State Lease. They pulled down improvements put up on the land and the subject land was fenced. By their conduct, they interfered with the plaintiffs’ right to quiet enjoyment of the land. Liability is established against the defendants for trespass to land.

22. Secondly, despite many request there was no agreement for an amount of compensation to be paid under Section 26 of the Land Act. In the circumstances, the defendants are liable for compensation under Section 14 of the Land Act for occupation and use of the land after the date of publication of notice of acquisition by compulsory process in the National Gazette. Liability is established against the defendants for compensation under Section 14 of the Land Act.

Assessment of Damages

23. Damages will be assessed in two parts: damages for trespass to land and compensation for interest in land after acquisition by compulsory process.

Damages for trespass to land

(a) Damages for mense profit or trespass to land

24. Counsel for the plaintiffs was correct in his submissions to point out that that if the Court is not satisfied that the plaintiffs have proved mense profit, then the plaintiffs should be awarded damages for trespass. As was held in Pacific Trade International Limited v. Waisime (2020) SC1935, mense profit is distinct and separate from damages for trespass because the former is awarded where the injured party has permitted the trespasser to occupy the land for a fixed period but continues to occupy it after the period has expired. This is common in a landlord and tenant relationship whereas in the latter case, trespass occurs without the invitation of the injured party.
25. In the former case, damages are assessed based on the loss of rent for the period of occupation by the trespasser after the period fixed for lawful occupation has expired: Seafreight Pty Ltd v. Bishop Shipping Services Pty Ltd [1976] PNGLR 22 and PNG Ports Corporation Ltd v. Charles Inini trading as Inini Trading (2012) N4717. In the latter case, damages was assessed based on the value of the land: Enei v. Rimbunan Hijau Ltd (2011) N4402 and Rimbunan Hijau Ltd v. Enei (2017) SC1605.

26. In the present case, damages will be assessed based on the value of the land and value of the improvements because the defendants entered and occupied the land without the permission or authority of the plaintiffs. As the parties rely solely on the various valuation reports for the purpose of ascertaining the value of the land and value of the improvements, it will be appropriate that this issue be considered under compensation for acquisition of land under Section 14 of the Land Act.

Damages for Trade Reputation and Goodwill

26. The first plaintiff seeks K100,000.00 and the second plaintiff seeks K50,000.00. The plaintiffs assert that they provided a facility for lease, that it was abruptly taken away from them, the buildings and other improvements were destroyed and gave the wrong impression to the public that they were operating illegally on the land.
27. However, damages for trade reputation and goodwill is a remedy in an action for defamation and will be refused in an action for trespass: PNG Aviation Services Pty Limited v. Somare (2000) SC658.

Damages for Loss of Business

28. The first plaintiff seeks K1,080,000.00 and second plaintiff seeks K100,000.00. According to Mr Andane, the plaintiffs built a lodge and entered into a lease agreement with Curtain Brothers to lent it out to the latter’s staff as accommodation. They were generating an income of K240,000.00 net per month between years 2009 and 2010. They projected a similar net income per month would have been generated after they were removed from the land between 2011 and 2017. They rely on the financial statement for the year ended 31^st December 2010 by their accountant Mr Paraka to corroborate the claim for loss of business income.

29. An award under this head of damages to the first plaintiff is refused because there is no evidence that the first plaintiff as the lease holder of the State Lease at the material time was generating an income. For example, that it was receiving rent for the lease of the land from the second plaintiff as the lodge operator. A consideration of loss of business will only be given to the second plaintiff as the operator of the lodge on the land. For these reasons, damages sought by the first plaintiff under this head is refused.

30. As to the claim by the second plaintiff, Mr Andane’s assertion that the second plaintiff was earning K240,000.00 net per month in 2009 and 2010 is supported by the BSP Bank Statement of the second plaintiff. The second plaintiff’s BSP Bank Statement shows the following payments were received from Curtain Brothers. A break-up of the rentals extracted from the Bank Statement and may be found in the Spread Sheet marked as Annexure “T” to exhibit “P1”. It will be observed that between 12^th September 2008 and 19^th October 2009 the second plaintiff received K18,000.00 each month. This equates to a total of K235,000.00.

31. Applying K235,000.00 as loss of business income per annum for seven years from 2011 to 2017 is a total sum of K1,645,000.00. This sum is awarded as loss of business income to the second plaintiff.

Aggravated Damages

32. The first plaintiff seeks K100,000.00 and second plaintiff seeks K50,000.00. Aggravated damages are awarded to compensate an injured party where the circumstances surrounding the act of trespass made the injury of the injured party worse.

33. In the present case the defendants should have given sufficient time to the plaintiffs to move out of the land which would include the plaintiffs dismantling and removing the building structures and water tanks. Instead, they were pulled down and the land fenced. The injury inflicted by the second defendant on the plaintiffs was bad enough to deprive them from their right to quiet enjoyment of the land.

34. As if it was not bad enough, the plaintiffs were given a run around by the defendants resulting in the plaintiffs commencing legal proceedings styled OS No 112 of 2011 on 14^th March 2011 to seek redress only to then discontinue them on 29^th April 2011. All it required was for the defendants to give a notice to treat to the first plaintiff before the Minister or his delegate could acquire the land by compulsory process after publication in the National Gazette. Instead, it took the defendants seven years to get to that point.

35. While some consideration may be given to the fact that the land was urgently needed to extend the Tari Airport runway, adding to the injury already suffered by the plaintiffs when they were removed from the land and improvements demolished, the failure by the defendants to comply with the procedure for compulsory acquisition under the Land Act over a period of seven years must surely be described as inhumane, unlawful and unjustified making the plaintiffs’ injury worse.

36. As to how much to award, the case of PNG Aviation Services Pty Limited v. Somare (supra) relied upon by the plaintiffs to claim K100,000.00 and K50,000.00 respectively is distinguishable on its facts because that was an action for defamation while this case is based on trespass. On the other hand, a consideration will be given to comparable awards in police assault cases such as Johnnie Wabata & Anor v. Justus Ohue (2018) N7157 where the defendant assaulted and verbally abused the plaintiffs and the plaintiffs were awarded a global sum of K33,005.00 inclusive of aggravated damages, Grace Lome v. Allan Kundi & Ors (2009) N3791, a case of police negligence for not prosecuting a rape suspect where the plaintiff was awarded K5,000.00 as aggravated damages and George Kala v. Joseph Kupo (2009) N3677, a police assault and abuse case where the plaintiff was awarded K5,000.00 as aggravated damages.

37. Having considered the awards in those cases and the presence of aggravating factors in this case, a fair and reasonable sum to award to the plaintiffs is K50,000.00 and K25,000.00 respectively.

Exemplary damages

38. For this head of damages, the plaintiffs seek K100,000.00 and K50,000.00 respectively. Exemplary damages are awarded as a form of punishment and carry a personal and general deterrence effect on the wrong-doer and would be wrong-doer. The plaintiffs submit that given the conduct of the defendants they should be ordered to pay exemplary damages, such an order would act as deterrence against reoffending in future. They rely on the case of Enei v. Rimbunan Hijau Ltd (2011) N4402 and Rimbunan Hijau Ltd v. Enei (2017) SC1605 where the Court awarded K150,000.00 as exemplary damages as a result of logging activity by the defendant on customary land for eight years without fulfilling its contractual obligations to the plaintiff.

39. That case may be distinguished from this case because it involved a logging operation on a large portion of customary land while in this case it is confined to a land area of 2.7420 hectares under a State Lease. However, with the second defendant increasingly requiring land under a State Lease to be returned to boost public infrastructure projects throughout the country and its failure to comply with the process of acquisition under the Land Act, it is appropriate that it be ordered to pay exemplary damages. Hopefully, it will be a lesson to the State and its officers in the Department of Lands and Physical Planning not to engage in such conduct in future. Using comparable awards in police raid cases such as Michael Jacob & 106 Ors v. Chief Inspector Jim Namora & The State (2020) N8385 and Nick Bentanjo & Ors v. Fred Yakasa & The State (2020) N8419 as a guide, exemplary damages are assessed and awarded against the second defendant in the sum of K5,000.00 to each plaintiff, giving a total sum of K10,000.00.

Special damages

40. For this head of damages, the first plaintiff seeks K100,000.00 on the ground that it is the lease holder of the State Lease when the trespass occurred. The second plaintiff seeks K50,000.00. Special damages are expenses and losses incurred because of the trespass. They must strictly be proved and connected to the trespass.

41. Mr Andane deposes at paras. 18 to 22 of exhibit “P2” that he travelled between Tari and Port Moresby to pursue compensation and legal proceedings against the defendants since 2011 and incurred expenses which comprised the following:

(a) Legal costs of K100,000.00.
(b) Motor Vehicle Hire of K150,000.00.
(c) Accommodation of K150,000.00.
(d) Airfares from Tari to Port Moresby and return of K24,000.00.

42. It will be accepted that the plaintiffs incurred expenses associated with the action as a result of the trespass. These are those outlined by Mr Andane in exhibit “P2”. However, as they must be strictly proved, there are no invoices, receipts of payments with airline tickets and boarding passes to corroborate Mr Andane’s assertion for each head of expenses. In addition, Mr Andane does not state the number of times, dates and names of service providers to ascertain the total loss. The lack of particulars and corroboration may explain why the total sum claim for each head of expenses is quite extravagance.

43. However, on his word, a nominal sum will be awarded. Except for legal fees which can be claimed separately by way of a Bill of Costs, a reasonable sum will be awarded for each head of expenses as follows:

(a) Motor Vehicle Hire of K10,000.00.
(b) Accommodation of K10,000.00.
(c) Airfares from Tari to Port Moresby and return of K10,000.00.
Total – K30,000.00.

44. A total sum of K30,000.00 is awarded as special damages.

General damages for frustration and hardship

45. The plaintiffs rely on the case of Madang Cocoa Growers Export Co Ltd v. Lange (2016) N6161 where the Court awarded K50,000.00 as general damages for frustration and hardship and each seek K50,000.00. Mr Andane asserts that as a result of the trespass, the plaintiffs could not carry on business on the land since 1^st February 2011 and could not pay their employees. Their lifestyle had changed.

46. The plaintiffs are companies and it may be argued that it is not possible for companies to express their emotions about the whole saga. That is true. But there are people who manage and work for them. Mr Andane is the proprietor of both companies and the second plaintiff employed staff to work at the lodge. They are now without jobs as a result of the actions of the defendants.

47. Damages in the sum of K15,000.00 was awarded to a plaintiff company as general damages for frustration and hardship in Likui Trading Ltd v. Joseph Selna (2011) N4530. Except for stating that damages under this head are claimable in this jurisdiction, the Court did not say why it was awarding general damages to a company. In Madang Cocoa Growers Export Co Ltd (supra), the plaintiff company was awarded K50,000.00 as general damages for frustration and hardship. Based on these decided cases, there will be an award of general damages for frustration and hardship in the sum of K10,000.00 to each plaintiff giving a total sum of K20,000.00.

General damages for breach of Sections 41 and 53 of the Constitution

48. Each plaintiff seeks K6,000.00. General damages for breach of Sections 41 and 53 of the Constitution may be awarded as a separate head of damages to compensate the injury party where the wrongful conduct is so harsh and oppressive resulting in irreparable damage to the injured party: Nick Bentanjo & Ors v. Fred Yakasa & The State (2020) N8419.

49. In the present case the second defendant entered the land without the consent of the plaintiffs and not only demolished the buildings but also destroyed their businesses without conducting a valuation of the land and improvements prior to acquiring it. Its conduct is not only harsh and oppressive but has resulted in the plaintiffs being unjustly deprived of their property under Sections 41 and 53 of the Constitution respectively. Since the plaintiffs seek K6,000.00 each, this sum is awarded . Total sum awarded is K12,000.00.

Compensation for acquisition of land

50. Section 14 of the Land Act states:

“14. Conversion of interests into claims for compensation.

(1) Subject to Subsection (2), the interest of every person in land or a chattel to which a notice of acquisition applies is, on the date of acquisition, converted into a right to compensation under this Act.

(2) Where an easement, right, power, privilege or other interest in, over or in connection with land that did not previously exist as such is acquired, the interest of every person in the land is, on the date of acquisition, and to the extent to which the interest is affected by the acquisition, converted into a right to compensation under this Act”.

51. According to Section 14, the interest of the first plaintiff as the lease holder of the land is converted to compensation. In assessing the amount to award as compensation regard must be had to the general principles of assessment under Section 23 of the Land Act.
52. First, regard must be had to the value of land at the date of acquisition: Section 23(1)(a). In Ballen No 28 Limited v. Hon. Benny Allen & Ors (2019) SC1868 the Supreme Court held that (see head notes):

“2. The requirement of S23 (1) (a) of the Land Act, 1996 is for regard to be had to “the value of the land” at the acquisition date, and not to a valuation of the land at the acquisition date. This is plainly because it would be almost impossible for a notice of compulsory acquisition to be published in a Government Gazette on a certain date, and for a valuation to then be carried out on that same date.

3. .......

4. When valuing the land at the date of acquisition, some of the matters that may be taken into account are:
   
   • The unimproved value of the land at the date of issue of the State Lease,
   • The value shown by the purchase price which would have been paid by the current title holder of the State Lease
   • The values shown by the sale prices of other comparable properties from around the period of sale and purchase of property, in particular comparable land area.
   • The compliance or non-compliance of improvement covenant of the State Lease by the title holder.”
     

53. Secondly, regard must be had to the value improvements: Section 23(1)(b).

54. Thirdly, if the work has been done on the land that has been acquired for public purpose or work is about to start, no consideration will be given to any increase in the value of the land: Section 23(2).

56. In the present case there was no valuation done for the purpose of issuing the State Lease in 2007. There is also no value of the purchase price shown with other comparable properties within the area. This means that there is not enough information to assess the value of the land.

57. There are three competing figures for the value of the land; K6,000,000.00 inclusive of value of improvement assessed as of 24^th March 2010; second, K53,000.00 based on the valuation report prepared by Saleng J. Hosa of the Valuer General’s Office dated 2^nd September 2005 and finally, K2,500,000.00 by Mr Michael of the Valuer Generals Office of 14^th August 2019.

58. There is a reference in the valuation report by UMPC to the method adopted to assess the value of the land. One of them is “direct comparison”. However, there is no mention of a comparable land and value of that land to conclude that the assessed value represents a fair and accurate value of the land. Secondly, the report refers to a “fair market value” but the author does not explain what it is and how the value is arrived at using the fair market value method.

59. In terms of proximity to the date of entry of 2010, the value of K6,000,000.00 would be preferred because the valuation was done around the date of entry on the land. However, the valuation does not identify specifically the value of the land whereas the valuation of 24^th August 2019 does. But that valuation was done almost eight years after the entry onto the land by the second defendant. The valuation of 2^nd September 2005 is specific on the value of land. It gave a value of K53,000.00 but that was five years prior to the second defendant’s entry onto the land. Arguably the value of the land has appreciated over the years.

60. Striking a balance between the competing valuations, it is preferrable to make an award between K2,000,000.00 and K6,000,000.00. K3 million is awarded for the value of land.

61. The second aspect of the claim is the value of improvements on the land. Again, the UMPC report does not specify the value of the improvements although it does identify the different structures built on the land as a lodge and wholesale and retail shop and the materials used to build them. This kind of report will not assist in ascertaining a fair and accurate value of the improvements. It also does not state the comparable properties with similar set up or improvements in Tari and their value. The report is inadequate.

62. The Valuer General’s report by Mr Hosa dated 2^nd September 2005 gave a value of K947,000.00 for improvements. This value was given five years prior to the entry and demolition of the improvements. The second Valuer General’s report by Mr Michael dated 24^th August 2019 was almost nine years after the event and adopted the valuation of K947,000.00 by Mr Hosa. This is understandable because by that time, the improvements were gone and there was nothing left for the valuer to make an assessment.

63. Given the lack of particulars in the valuation by UMPC report and the less proximity to the event by the valuations done by the valuers of the Valuer General’s office, a value between K1,000,000.00 and K2,000,000.00 would represent a fair and accurate value of improvements. K1.5 million is awarded for the value of improvements.

64. The total sum awarded for the value of land and vale of improvement is K4.5 million.

3% interest pursuant to Section 47(1)(a) of Land Act

65. The plaintiffs seek interest pursuant to Section 47 of the Land Act which states:

“47. Interest on compensation.

(1) Subject to this Division, an amount of compensation payable in respect of an acquisition by compulsory process under this Act (other than an amount payable to a mortgagee on which interest is payable under Section 39) bears interest at the rate of 3% per annum from the date of acquisition of the land to—

(a) the date on which payment is made to the claimant; or

(b) where the amount is deposited in the National Court in accordance with Section 45, to the date on which the amount is so deposited.

(2) Where the amount of compensation determined by the National Court does not exceed an amount offered by the Minister, interest is payable only to the date on which the offer of the Minister was received by the claimant.

(3) Where compensation is determined, or ordered to be paid, by the National Court, interest continues to be payable under this Section and not otherwise”.

66. The claim will be allowed and interest at the rate of 3% will be payable on the amount of compensation in respect of an acquisition by compulsory process. 3% will be calculated and payable on the total sum of K4,500,000.00 per annum from the date of acquisition of land of 25^th April 2017 to the date of payment to the plaintiffs. Secondly interest at the rate of 3% per annum will continue to be payable until the amount of compensation is paid: Section 47(3).

Legal Costs

67. Finally, as to costs, the defendants will pay the plaintiffs’ costs of the proceedings, to be taxed, if not agreed.

Order

68. The order is as follows:

1. Judgment on liability is entered against the defendants for trespass to land.
   
2. Judgment on liability is entered against the defendants for acquisition of land by compulsory process under Sections 7(b), 12 and 14 of the Land Act, 1996.
   
3. Judgment sought for general damages for loss of trade reputation and goodwill is refused.
   
4. Judgment sought for loss of business income for the first plaintiff is dismissed.
   
5. Judgment is entered in favour of the second plaintiff for loss of business income in the sum of K1,645,000.00.
   
6. Judgment is entered in favour of the plaintiffs for aggravated damages in the sum of K50,000.00 and K25,000.00 respectively.
   
7. Judgment is entered in favour of the plaintiffs for exemplary damages in the total sum of K10,000.00.
   
8. Judgment is entered in favour of the plaintiffs for nominal damages for motor vehicle hire, accommodation and airfares expenses in the total sum of K30,000.00.
   
9. Judgment is entered in favour of the plaintiffs for general damages for frustration and hardship in the total sum of K20,000.00.
   
10. Judgment is entered in favour of the plaintiffs for general damages for breach of Sections 41 and 53 of the Constitution in the total sum of K12,000.00.
    
11. Judgment is entered in favour of the plaintiffs as compensation for value of land and value of improvements in the total sum of K4,500,000.00.
    
12. Judgment sought for general damages in negligence is dismissed.
    
13. Interest at rate of 3% be payable on the amount of compensation in respect of an acquisition by compulsory process. 3% interest shall be calculated and payable on the total sum of K4,500,000.00 per annum from the date of acquisition of land of 25^th April 2017 to the date of payment to the plaintiffs and secondly interest at the rate of 3% per annum will continue to be payable until the amount of compensation is paid in pursuant to Section 47 of the Land Act, 1996.
    
14. The defendants shall pay the plaintiffs’ costs of the proceedings, to be taxed, if not agreed.

________________________________________________________________
Waira Lawyers: Lawyers for Plaintiffs
Solicitor General: Lawyers for Defendants