N9609

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 103 OF 2020

BETWEEN
KAPSAK PIYEN
Plaintiff

AND
DIGICEL (PNG) LIMITED
First Defendant

AND
MISO AIKO
Second Defendant

Waigani:  Linge A J
2022:  27th April

LAND – Customary Land – interest in land - lease agreement relating to interest in customary land - whether the National Court has jurisdiction. 

The plaintiff, Kapsak Piyen and Digicel (PNG) Limited, the first defendant entered into a 10-year Lease Agreement in 2015 which enabled the latter to construct and own a Mobile Base Station located on Mt. Keladak in Maramuni, Enga Province which was terminated by the first defendant prompting the plaintiff to sue for breach of lease agreement he signed with Digicel (PNG) Limited and claims for rental, security earnings and loss of future earnings due to him under the Lease Agreement. The second defendant joined as a party after leave was granted by the Court and thereafter claims ownership over the same mountain on which the Digicel tower is located. Court directed parties to address the Court on the issue of whether it has jurisdiction to hear and determine the cause of action.

Held:

1.	This proceeding is struck out forthwith.
2.	Parties are at liberty to refer dispute of land ownership for mediation pursuant to the Land Dispute Settlement Act Ch 45.
3.	Digicel (PNG) Limited to pay rental into the Registrar of National Court Trust Account to be opened for that purpose.

Cases Cited:

Talibe Hegele v Tony Kila (2012) SC1180
Siu v Wasime Land Group Incorporated (2011) PGSC 4 
State v Lohia Sisia [1987] PNGLR 102
Sioti Bauf & Lavoi Nodai v Poliamba Pty.Ltd [1990] PNGLR 278
Ronny Wabia v BP Petroleum Development Ltd [2009] PGNC 258
Golpak-v-Alongrea Kali & Others [1993] PNGLR 491
Maina v Munom, [2021] PGNC 58

Counsel:

Mr H. Maliso, for the Plaintiff.
Mr J. Munnul, for the First Defendant.
Mr H. Token, for Second Defendant

RULING

10th May, 2022

1.	LINGE A J:  The cause of action is based on breach of lease agreement the plaintiff signed with Digicel (PNG) Limited (hereinafter “Digicel”) for the construction and use of a Mobile Base Station located on Mt. Keladak in Maramuni, Enga Province (hereinafter “the Digicel Tower”). The claim is for rental, security earnings and loss of future earnings due to the plaintiff under the Lease Agreement. The second defendant was granted leave to be joined in the proceeding and thereafter claims ownership over the mountain on which the Digicel tower is located. In the exercise of my discretion, I directed parties to address the Court on the issue whether it is within the Court jurisdiction to hear and determine the plaintiff’s claim. Parties have made submissions, and this is my ruling.
Facts
2.	The plaintiff filed this proceeding, pleading breach of lease agreement he signed with Digicel.  The claim is for rental, security earnings and loss of future earnings due to him under the Lease Agreement.  
3.	Miso Aikya, who claims to be the customary owner of Mt. Mapiak, the site on which the Digicel Tower stands had been joined as a party to the proceeding.
4.	Another claimant a Philip Ray who is not a party to this proceeding had filed his customary ownership claim over the same land in the Village Court and District Court at Wabag, Enga Province.
5.	So far, no proceeding has been filed by either Miso Aikya or Philip Ray at the Local Land Court or to have their customary ownership claim registered for land mediation pursuant to the provisions of the Land Disputes Settlement Act, chp.45, (the Act).
6.	The Lease Agreement which had a term of 10 years from 2015 had been repudiated by Digicel. Digicel currently makes Security payments but no lease rental payment to the plaintiff.

Submissions
7.	Mr. Maliso of counsel for the plaintiff submits that the cause of action pleads breaches of the Lease Agreement by Digicel, and he seeks as his relief the enforcement of the said Lease Agreement and claims damages for loss of rental, security earnings, CPI adjustments and interests.  He submits also that the Lease Agreement is a legal document that gives him legal right as a lessor to sue Digicel which falls within the jurisdiction of the National Court to deal with the breach and enforcement of the said lease agreement. He further submits that the issue of ownership of the land on which the Digicel Tower sits is not pleaded in the Statement of Claim. 
8.	The first defendant submits that the National Court is precluded from hearing the plaintiff’s claim as there exist a dispute of ownership of the land which has not yet been determined in accordance with the requirements of the Act.
9.	The second defendant claims to be a principal owner and thus has a claim of right over the mountain on which the Digicel Tower stands.  

Consideration
10.	The Lease Agreement between the plaintiff and Digicel the subject of this proceeding is now subject to scrutiny due to the second defendant having been joined as a party. The subject land is customary land and thus it is incumbent upon the Court to ensure that there is no jurisdictional impediment to its deliberating on the cause of action. 
11.	The fundamental issue in this case is to ascertain the definition of “land” under the Land Dispute Settlement Act Ch 45, (the Act).  Section 2, Interpretation section of the Act defines “land” as customary land and includes… interest in land. 
12.	The Act also defines “Interest” to include “any interest in land of whatsoever nature that is recognized by the custom of the people of the area in which the land is located.”
13.	Section 3 (1) of the Act stipulates, “Subject to Subsection (2) and to Section 4, this Act applies to disputes as to interests to customary land, or as to the position of boundaries of any customary land.
Nothing in this Act applies to a dispute:
(a)	as to whether land is or is not customary land; or
(b)	to which Part IV. Of the Land Groups Incorporation Act applies.
14.	Under Section 26 of the Act, only the Local Land Court (and Provincial Land Court) has jurisdiction over and in relation to dispute as to an interest in land.
15.	To summarise, the Act thus categorises and defines land to include interest in customary land and where there is a dispute or issues over land, such a dispute is deemed to relate to interest in customary land and must be dealt with in accordance with the provisions of the Act which include hearing at the Local Land Court apart from mediation. The Act is promulgated for settlement of disputes in relation to interests in customary land.
16.	The critical consideration in this case is whether the Lease Agreement is caught by Section 2, interpretation section of the Act which defines “land” as customary land and includes… interest in land. In other words, whether the lease agreement relied on by the plaintiff as the basis to receive lease rental payments for the use of the customary land by Digicel pursuant to the Lease Agreement is an “interest in land” in the context alluded to above. 
17.	In Golpak-v-Alongrea Kali & Others [1993] PNGLR491, the Court held that a contract for use of land is “an interest in land” and the National Court has no jurisdiction to deal with ownership or interest in customary land. 
18.	In Maina v Munom, [2021] PGNC 58, the National Court determined that a dispute concerning interest in customary land can only be determined by the Local Land Court. Her Honour Thompson J considered interest in customary land to also include interest over the use of that land, and financial benefit derived from the use of the land.
19.	The Supreme Court in Louis Lucian Siu v Wasime Land Group Incorporated (2011) PGSC 4 expressed a view that the National Court should have dismissed the entire proceeding for want of prosecution. It went on to say that: “there were sufficient evidentiary materials before the National Court which showed that this was really a dispute over monetary and other financial benefits and interest arising from the control, use and ownership of customary land.
The person or persons declared as customary owners of this land will have the ultimate control over how financial and other monetary benefits are distributed. Hence ultimately the dispute was not only about ownership of customary land per se but also a dispute over interests in customary land.” 
20.	The Supreme Court in Talibe Hegele v Tony Kila (2012) SC 1180 held: “if the cause of action requires the Court to determine ownership of customary land, the Court will lack jurisdiction as it is well settled principle that the National Court (and Supreme Court) has no jurisdiction to hear or determine disputes about ownership of customary land.” 
21.	The Supreme Court ruling in Talibe Hegele’s case (supra) is generally followed, see State v Lohia Sisia [1987] PNGLR 102; Sioti Bauf & Lavoi Nodai v Poliamba Pty.Ltd; Ronny Wabia v BP Petroleum Development Ltd [2009] PGNC 258. 
22.	The case filed by the plaintiff pleads breach of the lease agreement. The issue of jurisdiction came to the fore as the case proceeded and after the second defendant was granted leave to join as a party in the proceeding with his claim of ownership. The first defendant who had terminated the lease agreement on the basis it seems upon discovery of the ownership dispute by the second defendant and breach of Warranty and Lessor’s Covenant.
23.	I accept that the proceeding is being instituted outside of the framework of the Act. The plaintiff pleads breaches of the Lease Agreement and seeks orders resulting from the alleged breaches.  
24.	 The termination of the Lease Agreement by Digicel is allegedly due to breach of Lessor’s covenant, Clause 5 and breach of warranties Clause 7 of the Lease Agreement and the customary ownership claim by the second defendant. Digicel has tendered affidavit evidence deposing to these.
25.	Clause 5 of the Lease Agreement provides: “ The Lessor hereby covenants with the Lessee as follows: 5.1  That the registered owner of the land or is entitled to be registered owner of the land, and in the event that the land is customary land, that pending the completion of the relevant processes of land investigation, registration of the land and incorporation of registered land group, this agreement will have effect so as to allow the Lessee to use the Leased Premises as stipulated herein”
26.	Clearly Digicel requires the Lessor to be a registered owner/proprietor or a registered owner by custom upon fulfilling the relevant processes culminating in registration of the land and incorporation of registered land group. The provision envisages the plaintiff to have a clear registerable title under law and not a mere customary claim of right. However, that was not the case.
27. 	Clause 7.1 of Lease Agreement provides for Warranty by the plaintiff/ Lessor it states, “The Lessor hereby warrants as follows: 
(a)	It is the registered proprietor of the Land and the only person legally and beneficially entitled thereto.
(b)	No person has any right whatsoever to restrict or obstruct the Lessee’s use and occupation of the Leased Premises and its access to and from the Leased Premises.
(c)
(d)	That in the event that the land is not registered, the Lessor will complete all processes required by the National Lands Department to have the land registered and a title issued to the Lessor, this includes land investigation processes, surveying of the land and registration of the sublease.
(e)”
28.	This Warranty clause is succinct and explicit as to require the plaintiff to absolutely promise that he is the registered proprietor, and no other person has any right to restrict or to obstruct Digicel’s use and occupation of the leased premises. 
29.	It seems to me that while Digicel signed the lease agreement with these strict requirements of legal ownership or a registered title by the plaintiff, it did not complete due diligence to verify proper legal ownership. It took the chance to establish its Mobile Base Station and to pay whomsoever without full verification of legal ownership. It is in evidence that even though Digicel signed a lease agreement with the plaintiff and established its operation, it decided to pay a third party of its choice.  

Conclusion
30.	Finally, I pose two (2) issues that I must deal with, and these are: 
1.	Whether the Lease Agreement is “an interest in land”? 
2.	Is there a dispute or an issue with ownership of the land on which the Digicel Tower is located.
31.	In respect of the first issue I am of the view that the Lease Agreement is “an interest in land”. As such, it is caught by Section 2 definition of land under the Land Dispute Settlement Act and therefore, I will not assume the jurisdiction to proceed to determine claims by the plaintiff that emanate from an interest in land. 
32.	As for the second issue, clearly there is a dispute with ownership of the land on which the Digicel Tower is located and that although the cause of action does not require the Court to determine ownership of customary land, but on breach of Lease Agreement, based on my previous determination, this Court lacks jurisdiction. 
33.	I have considered whether I should isolate the cause of action as being based on the claim of breach of the Lease Agreement as pleaded in the Statement of claim and to proceed, mindful of the Court’s unlimited jurisdiction under Section 166 (1) and Section 155 (4 of the Constitution, however based on all the factors above I will not proceed on that option.    
34.	The land claim issue will not disappear but continue to surface in this proceeding so in the exercise of my duty to control proceedings, I must deal with the fundamental land issue now and make appropriate ruling as a way forward.

Orders
35.	Accordingly, I order as follows: 
	1.	This proceeding is struck out forthwith.
	2.	Parties are at liberty to refer dispute of land ownership for 	mediation pursuant to the Land Dispute Settlement Act Ch 45.
	3.	Digicel (PNG) Limited to pay rental into the Registrar of the National Court Trust Account to be opened for that purpose.
	4.	Cost be in the cause.
	5.	Time is abridged. 
_______________________________________________________________
Niuage Lawyers:	Lawyers for the Plaintiff	
John Peter Munnul Lawyers: Lawyers for the First Defendant
Public Solicitors:	Lawyers for the Second Defendant