Waril Incorporated Land Group Inc v Morobe Provincial Government [2023] PGNC 21; N10108 (3 February 2023)

N10108

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 244 OF 2022

BETWEEN:
WARIL INCORPORATED LAND GROUP INC
Plaintiff

AND
MOROBE PROVINCIAL GOVERNMENT
First Defendant

AND
NAMALU PTY LTD
Second Defendant

AND
BEWAPI COFFEE MILL LIMITED
Third Defendant

AND
PACIFIC CORPORATE SECURITY LIMITED
Fourth Defendant

AND
NKW HOLDINGS LIMITED
Fifth Defendant

AND
ARTANE LIMITED
Sixth Defendant

AND
JACK PAKUS as the SURVEYOR GENERAL of DEPARTMENT OF LANDS & PHYSICAL PLANNINGS
Seventh Defendant

AND
ALA ANE as the REGISTRAR OF TITLES of DEPARTMENT OF LANDS & PHYSICAL PLANNING
Eight Defendant

AND
BENJAMIN SAMSON as the SECRETARY for DEPARTMENT OF LANDS & PHYSICAL PLANNING
Ninth Defendant

AND
INDEPENDENT STATE OF PAPUA NEW GUINEA
Tenth Defendant

Lae: Dowa J
2022: 15^th December
2023: 03^rd February

PRACTICE AND PROCEDURE- application for dismissal of proceedings for disclosing no reasonable cause of action- Order 12 Rule 40 of the National Court Rules-claim statute barred under section 16 of Frauds and Limitations Act-failure to give prior notice under section 5 of the Claims by and Against the State Act-National Court lacks jurisdiction to determine customary land interest on alienated land section 15 of the Land Titles Commission Act-case untenable -proceedings summarily dismissed

Cases Cited:
PNG Forest Products v State [1992] PNGLR 84-85
Ronny Wabia v BP Exploration Co. Ltd [1998] PNGLR 8
National Provident Fund Board v Maladina & Others (2003) N2486
Mamun Investment Ltd-v-Nixon Koi (2015) SC1409
John Hiwi-v-Rebdle Rimua (2015) SC1460
Nodepa Plantation Ltd-v-Balat (2020) SC1927
Kimas v Oala (2015) SC1475
Wabia v BP Petroleum (2009) N4337

Counsel
M. Alu, for the Plaintiffs
C. Joseph, for the Sixth Defendant (Ashurst Lawyers)
C. Niniwale, for the Fifth Defendant
S. Maliaki, for the Seventh to the Tenth Defendants

RULING

03^rd February, 2023

1. DOWA J: The Sixth Defendant applies for summary dismissal of the proceedings under Order 8 Rule 27 and Order 12 Rule 40 of the National Court Rules.
   
2. The grounds for the application are:
   
   1. The claim is statute barred.
   2. Want of section 5 Notice under the Claims by And Against the State Act
   3. Lack of jurisdiction in dealing with customary land interests.

Background Facts

3. The Plaintiff is an incorporated land group (ILG) representing the original customary landowners of land originally known as Ikolo land at Bewapi 9 Mile Lae Morobe Province. The Plaintiff claims ownership of land stretching from 9 mile to 16 mile, Lae.
   
4. Portions of the Bewapi Land were alienated by the colonial administration and State leases were issued. Portion 27, Milinch of Lae, Morobe Province under State Lease Volume 66 Folio 93 is one of them.
   
5. The Plaintiff alleges that Portion 27 was not lawfully acquired. The original Agriculture Lease was granted to Ena Mary Patterson in June 1979. The title was transferred to Yabim/Kottie Development Corporation Pty Ltd in December 1979 and mortgaged to Morobe Provincial Government. The property was then transferred to Namalu Pty Ltd in September 1996. On 11^th March 2011 the title was transferred to Bewapi-Coffee Mill Ltd. On 27^th October 2011, the title was conditionally surrendered.
   
6. After the surrender of the original lease the land was subdivided, and individual titles were issued to Bewapi Coffee Mill Limited in February 2013. They became Portions 834, 835 and 869-884. The sixth Defendant and Rathcormack Ltd occupy Portions 869-884.
   
7. The Plaintiff alleges that the transfer of the original title from Morobe Provincial Government to Namalu Pty Ltd was fraudulently done. The Plaintiff alleges that, this renders the subsequent transactions on the land illegal.
   

The Sixth Defendants application

8. The sixth defendant alleges that the Plaintiff’s claim is frivolous and has no cause of action and seeks summary dismissal under Order 8 Rule 27 and Order 12 Rule 40 of the National Court Rules.
   

Issues

9. The main issue for consideration is whether the Plaintiff’s proceeding be summarily dismissed for frivolity and for disclosing no reasonable cause of action.
   

Law

10. Order 12 Rule 40(1) of the National Court Rules reads:

“Frivolity, etc. (13/5)

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-

• (a) No reasonable cause of action is disclosed; or
• (b) The proceedings are frivolous or vexatious; or
• (c) The proceedings are an abuse of the process of the Court,

The Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

11. The law on applications under Order 12 Rule 40(1) of the National Court Rules is settled. In the case, PNG Forest Products v State (1992) PNG LR84-85 the Court adopting some English Court phrases stated that a court be slow and cautious in entertaining applications for dismissal of proceedings on the grounds of a party disclosing no reasonable cause of action. A Plaintiff should not be driven from the judgment seat unless the case is “unarguable” or the cause of action is “obviously and almost incontestably bad, or plainly untenable. In that case, the Court also said the Court has a discretionary power to dismiss if the proceedings are an abuse of the Court process.
    
12. On the other hand, there are other string of cases that developed the principle that, where the case is vexatious or frivolous and that it is unlikely to succeed, the case can be summarily determined. Ronny Wabia v BP Exploration Co. Ltd (1998) PNGLR 8, and Wabia v BP Petroleum (2009) N4337 and National Provident Fund Board v Maladina & Others (2003) N2486.
    
13. In NPF v Maladina, Kandakasi J, (as he then was) said:
    

“The law on pleadings generally is settled in our jurisdiction. A clearest statement of the law is by the Supreme Court in Motor Vehicles Insurance (PNG) Trust v. John Etape, in these terms:

"‘besides requiring that certain matters be pleaded specifically, the rules also contain a number of provisions which require a party to furnish in or with his pleadings, particulars of his claim or defence or other matter pleaded. The function of particulars is ‘to let (a party) know what case he will have to meet and to enable him to know what evidence he ought to be prepared with’. The object is ‘to ensure as far as is practicable, that proceedings between parties would result in a determination of the rights of the parties according to law and to limit if not eradicate the number of cases in which technologies can cause the proceedings to miscarry. Generally speaking justice will be more readily and speedily attained if each party is fully aware of the precise nature of the allegations made by the other’.

Particulars are in fact an extension of the pleadings — they control the generality of the pleadings. In Pilato -v- Metropolitan Water Sewerage and Drainange Board, McClemens J said at 365 – ‘Pleadings define the issues in general terms. Particulars control the generality of the pleadings and restrict the evidence to be led by the parties at the trial and give the other party such information as may enable him to know what case he will be met with at the trial and prevent surprise. Evidence enables the tribunal within the ambit of the general definition of the issues, affected by the pleadings and limited by the particulars, to decide where the truth lies’."

14. In my view, the purpose of Order 12 Rule 40(1) of the National Court Rules is to provide for summary determination of the Plaintiff’s proceedings where it is plain and clear based on the pleadings that no triable cause of action is disclosed or where some common and proven facts show that the proceedings will not succeed if it proceeds to trial. Where common and proven facts show that the claim is untenable, no amount of evidence, or amendment to the pleadings will cure or improve the facts on which the claim is based. It is in the interest of all parties to terminate the proceedings early to avoid cost of a prolonged and winding litigation. The Court should not give the impression that the factual situation will change with the passing of time or that the Plaintiff’s chances of success will improve with more litigation. After all, the Court has a duty to protect itself from abuse of the its’ process by entertaining unmeritorious claims which will only consume time and resources.
    
15. Mr. Joseph, counsel for sixth defendant, submits that the proceedings be summarily dismissed for the following reasons:
    
    1. The claim is statute barred under section 16 of the Frauds and Limitations Act
    2. The Plaintiff did not give section 5 notice under the Claims by And Against the State Act
    100. The National Court has no jurisdiction to deal with customary land interests over alienated land.

Statute /Time Barred

16. I will deal with each of the grounds as submitted. In respect of ground (a) Mr. Joseph submits the allegation of fraud allegedly committed by Namalu Pty Ltd took place in September 1996. The claim is statute barred under section 16 of the Frauds and Limitations Act. It is not saved by section 18 of the Act. Mr. Niniwale, counsel for the Fifth Respondent, supports the application for dismissal.
    
17. Section 16 of Frauds and Limitations Act reads:

“LIMITATION OF ACTIONS IN CONTRACT, TORT, ETC.

(1) Subject to Sections 17 and 18, an action–

(a) that is founded on simple contract or on tort; or

(b) to enforce a recognizance; or

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrues’’............

18. The Plaintiff pleaded in the statement of claim a series of allegations of fraud committed by the Defendants either individually or in collusion with others. The first allegation of fraud is allegedly committed by the Second Defendant, Namalu Pty Ltd in September 1996, 26 years ago. Under section 16 of the Frauds and Limitations Act an action that is founded on a simple contract or tort shall not be brought after the expiration of 6 years commencing on the date on which the cause of action arose. An allegation of fraud is a tortuous action and falls under the statutory provision of section 16.
    
19. The action can only be saved under section 18 of the Act. Section 18 provides that section 16 does not apply to any claims for specific performance of a contract or for injunction or other equitable reliefs. The facts pleaded show this is an action based on allegations of fraud and thus, it can not be saved by section 18.
    
20. I have considered the affidavits of Paul Siwi and Bob Sagaling both filed on 17^th October 2022 on behalf of the Plaintiff. Both deponents gave history of the land acquisition and land transactions. They decided to act because of recent eviction proceedings against them by the Fourth Defendant. Mr. Siwi deposed that the Plaintiff came to learn of the fraud only recently. He did not elaborate the exact date when they have acquired such knowledge of the alleged fraud. Even then the law is now settled by the Supreme Court in various decisions that the cause of action based on an allegation of fraud arises on date of transfer and not the date the aggrieved party uncovered the fraud. Refer to Mamun Investment Ltd-v-Nixon Koi (2015) SC1409, John Hiwi-v-Rebdle Rimua (2015) SC 1460 and Nodepa Plantation Ltd-v-Balat (2020) SC1927.
    
21. In the present case the allegations of fraud arose 26 years ago. I find the Plaintiff’s proceedings are time barred and have become an abuse of process to allow it to continue.
    

Section 5 Notice

22. The next issue is whether the Plaintiff complied with section 5 of the Claims by And Against the State Act. Section 5 provides.

No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this section by the claimant to–(a) the Departmental Head of the Department responsible for justice matters; or(b) the Solicitor-General.

23. The sixth defendant who raised the issue is not the State nor a State Instrumentality. Should a party other than the State raise this issue. In my view a party other than the State can raise the issue of want of section 5 Notice. It is a threshold issue questioning the competency of the proceedings. It can be raised by any party other than the State or State agency if the State or State agency is a party in the proceedings. The Court can on its own volition raise the issue as well. In Kopyoto Investment Ltd (trading as Lodge 10) v National Housing Corporation [2022] PGSC 138; SC2339, the Court said this at paragraph 5 of the judgment:

“5. At the first hearing of the appeal, pursuant to its inherent jurisdiction, the Court of its own volition required the parties to make submissions on whether s. 5 Claims By and Against The State Act (Claims Act) and s. 25 National Housing Corporation Act (NHC Act) were applicable in the circumstances of the case and if so whether those provisions had been complied with. The appellant took no issue with the Court of its own volition raising the issue of s. 5 Claims Act and cited Bluewater International Ltd v. Mumu (2019) SC1798 in this regard. We refer to State v. Nimbituo (2020) SC1974, as an example of this Court of its own volition, raising the s. 5 Claims Act issue.”

24. In the present case, the allegations of fraud are expressly made against the First, Seventh, Eighth, Ninth and Tenth Defendants who are the State and State agents and or Department. It is necessary for the Plaintiff to give Notice where the claim is for the tort of fraud under section 5 of the Claims by and Against the State Act.
    
25. There is no pleadings or evidence that the Plaintiff has served section 5 Notice before commencing the proceedings. The Plaintiff has been advised of the application. The Plaintiff did not file any response to the application on the issue. In the absence of any evidence to the contrary, I find the Plaintiff failed to comply with section 5 of the Claims By And Against the State Act, and the proceedings are therefore incompetent.
    

Lack of Jurisdiction

26. The Third leg of the application is that the National Court lacks jurisdiction to deal with customary land issues on alienated land.

27. It is settled law that where customary land is alienated, the process of determining customary ownership and land rights is now vested with the Land Titles Commission. I say this because the allegations concern customary land rights and interests. The Plaintiff, on behalf of the customary landowners, alleges that their customary land was unlawfully alienated by the colonial administration and is therefore inviting the National Court to determine the issues of acquisition as well as the subsequent fraudulent transactions.

28. In Kimas v Oala (2015) SC1475, the Supreme Court settled the law. At paragraphs 6 and 7 of its judgment the Court said, and I quote:

“6. It is settled law that the National Court has no jurisdiction to hear and determine disputes concerning ownership by custom of any land, including a dispute as to whether any land is or is not customary land. Such disputes fall within the exclusive jurisdiction of the Land Titles Commission under section 15 (determination of Disputes) of the Land Titles Commission Act, which states:

The Commission has, subject to this Act, exclusive jurisdiction to hear and determine all disputes concerning and claims to the ownership by custom of, or the right by custom to use, any land, water or reef, including a dispute as to whether any land is or is not customary land and may make all such preliminary inquiries and investigations as it deems necessary for the purpose of hearing and determining the disputes and claims.

7. Section 15 has been given full effect by the courts over many years. As soon as it becomes apparent that a case involves a dispute about whether a land is or is not a customary land, the court should divest itself of jurisdiction. Such disputes fall within the exclusive domain of the Land Titles Commission.”
   

29. Applying the reasonings in Kimas v Oala, I have expressed a similar view in Katumani & Ors v Elijah Yawing & Ors (2020) N8481. At paragraph 28 of my judgment, I said:

“28. Since the Defendants have raised substantial dispute over ownership, I will address them as well, so the parties have proper and informed understanding of the process involved in furthering their interests. It is trite law that both the district and National Courts have no jurisdiction to deal with disputes over customary land. Such disputes can be dealt with in the first instance by following the procedures and processes in the Land Dispute Settlement Act. Where a title is issued over customary land as in the present case, a disputing party can mount a case with the Land Titles Commission pursuant to section 15 of the Land Titles Commission Act”.

30. In the circumstances, the National Court does not have jurisdiction to deal with some of the issues the Plaintiff raises in the the proceedings.

Conclusion

31. For the reasons given above the Plaintiff’s claim is untenable and is bound to fail if allowed to proceed further. In my view no amendments will cure or improve the case. The parties and the Court will save time and expenses for the proceedings to end now rather than later. I will therefore uphold the Sixth Defendant’s application and dismiss the proceedings with cost to the Defendants.

Orders

32. The Court orders that:

1. The Plaintiff’s entire proceeding is dismissed.
2. The Plaintiff pay the Defendants costs to be taxed if not agreed.
3. Time be abridged.
   

Jaku Lawyers: Lawyers for the Plaintiffs
Ashurst Lawyers: Lawyers for the Sixth Defendant
Rageau Manua & Kikira Lawyers: Lawyer for the Fifth Defendant

Solicitor General Lawyers: Lawyer for the Seventh to the Tenth Defendants