Mountain Property Holdings Ltd v Sagaling [2023] PGNC 377; N10522 (11 October 2023)

N10522

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 203 OF 2020

BETWEEN:
MOUNTAIN PROEPRTY HOLDINGS LIMITED
Plaintiff

AND
JACK SAGALING
First Defendant

AND
KELLY SAGALING
Second Defendant

AND:
BOB SAGALING
Third Defendant

AND:
WARIL INCORPORATED LAND GROUP
Fourth Defendant

AND:
FUSION MATERIALS & MACHINARIES LIMITED
Fifth Defendant

Lae: Dowa J
2022: 4^th August
2023: 11^th October

LAND LAW – state lease -– plaintiff seeking declaratory relief of ownership of state lease –Indefeasibility of title under section 33 of Land Registration Act- Seeking orders for possession- and permanent injunctions from adverse dealings on land and from harassment or intimidation - defendants dispute claim on the basis encroachment to customary ownership, disputing that the injuncted land was outside the Plaintiff’s land- court has no jurisdiction to deal with disputes over alienated customary land– the appropriate body to hear disputes over alienated customary land is the Land Titles Commission - Orders granted in favour of the Plaintiff.

Cases Cited:
Mudge -v- Secretary for Lands [1985] PNGLR 387
Godowan Investment Ltd v Wambea (2018) N7263
Kimas v Oala (2015) SC1475
Robinson v Airlines Corp [1983] PNGLR 476
Medaing v Ramu Nico Management (MCC) Ltd (2011) SC1144

Counsel:
S. Kesno, for the Plaintiffs
T Cook, for the Frst Defendant
K Keindi, for Second, Third and the Fourth Defendants

RULING

11^th October 2023

1. DOWA J: This is a ruling of the Plaintiff’s application for orders amongst others, a declaration that it is the registered proprietor of Portion 410, Milinch of Erap, Fourmil of Markham, Morobe Province registered as State Lease Volume 11, Folio 126.
   
2. By Originating Summons, the Plaintiff seeks the following orders:
   
   1. A declaration that the Plaintiff is the registered Lessee of Portion 410, Milinch of Erap, Fourmil of Markham in the Morobe Province registered as State Lease Volume 11, Folio 126 (herein after “Portion 410”).
      
   2. A declaration that the Defendants, jointly or severally, are not the owners of Portion 410 and that any dealings, sale or purchase of part of Portion 410 by the Defendants, is null and void and of no effect.
      
   3. An order that the Defendants, their servants, agents, associates, or representatives be restrained from settling, clearing or making any improvements on Portion 410 Milinch of Erap, Fourmil of Markham, Morobe Province.
      
   4. An order that the Defendants, their servants, agents, associates or representatives vacate Portion 410, Milinch of Erap, Fourmil of Markham forthwith, failing which the Plaintiff shall use all force necessary to evict the Defendants, their servants, agents, associates or representatives from Portion 410 Milinch of Erap, Fourmil of Markham, Morobe Province.
      
   5. An interim order that pending the determination of these proceedings, the Defendants, their servants, agents, associates and representatives be restrained from settling, clearing or making any improvements on Portion 410, Milinch of Erap, Fourmil of Markham, Morobe Province.
      

Background facts

3. The Plaintiff is a company and the registered owner of the property described as Portion 410, Milinch of Erap, Markham, Morobe Province. The land contains 138 hectares and is situated at 10 Mile, along the Okuk Highway and stretches down along the Wau/Bulolo Highway. The First, Second and Third Defendants are brothers from Busanim/Yalu Village, Wampar, Huon Gulf District. The Defendants claim they are the customary landowners of Portion 410. One of the brothers, sold a portion of land on Portion 410 to the Fifth Defendant. The Fifth Defendant moved in and cleared the place for development. The work has been stayed by an order of this Court pending the determination of the proceeding. To avoid confusion, the portion of land, the subject of this proceeding shall be referred to as “the injuncted land”.
   

Evidence

4. The Plaintiff relies on the following affidavits:
   
   1. Affidavit of Maso Mangape sworn 26^th and filed 30^th June 2020.
   2. Affidavit of Stanis Anea sworn and filed 2^nd September 2021.
   3. Affidavits of Stanis Anea sworn 11^th September 2021 and filed 15^th September 2021.
   4. Affidavit of Stanis Anea sworn 31^st May 2022 and filed 2^nd June 2022.
      
5. The First Defendant relies on the affidavit of Jack Sagaling sworn 25^th October 2021 and filed 26^th October 2021.
   
6. The Second, Third and Fourth Defendants rely on the following affidavits:
   
   1. Affidavit of Edward Itaarson sworn on 13^th and filed 20^th July 2022.
   2. Affidavit of Bob Sagaling sworn and filed 13^th May 2021.
   3. Affidavit of Greg Kasen sworn 18^th and filed 24^th March 2022.
      

The fifth Defendant did not participate in the proceedings.

The Plaintiffs Claim

7. Based on the facts sworn in the affidavits filed, this is the summary of the Plaintiffs claim. The Plaintiff is the registered proprietor of Portion 410. It purchased the land from Buanbub Plantation Pty Ltd and the title was transferred to it in December 2002. The land contains 138 hectares. The land was previously described as Portion 201 comprising of a single portion before it was sub divided into Portions 408 and 410. Portion 408 is occupied by IPI Service Station and Portion 410 includes the rest of the property where the IPI main office is situated and stretching across the main Highway to the IPI Transport depot and down to the Bulolo Highway. The portion of land sold to and cleared by the Fifth Defendant contains an area of 1.03 hectares situated along the Wau/Bulolo highway, adjacent to the Defendant’s customary land. The Plaintiff says, although the Defendants dispute the boundary, the injuncted land is within Portion 410. The Plaintiff relies on the evidence presented by Stanis Anea. Mr. Anea is a surveyor in the employ of the Surveyor General’s Office of the Department of Lands and Physical Planning and is based in Lae as the Co-ordinating Surveyor for the Momase Region. Mr. Anea who conducted a land and aerial survey of the Portion 410 and the surrounding area confirms that the cleared portion of land the subject of these proceedings is within the boundary of the Portion 410.
   

The Defendants Claim

8. The Defendants oppose the application. The main gist of their evidence and submission is that the cleared land is customary land and is not within the boundary of Portion 410. The Defendants claim that Portion 410 does not extend across Okuk Highway to cover the site where the clearance was done. The Defendants rely on the affidavit of Greg Kasen, a private surveyor, who rebuts the evidence of the government surveyor, Stanis Anea, on the basis that the latter is not a registered surveyor, and not qualified to conduct the survey and thus the survey report is unreliable. The First Defendant raises a preliminary issue on res judicata as well.
   

Issues

9. The issues for consideration are:
   
   1. Whether the proceedings are an abuse of the process on the grounds of res judicata.

ii. Whether the Plaintiff is the proprietor of Portion 410.

3. Whether the injuncted land cleared by the Fifth Defendant is within the boundary of Portion 410.
   
4. Whether the Plaintiff is entitled to the reliefs sought.
   

Consideration of the Issues

(i) Whether the proceedings are an abuse of the process based on res judicata

10. The First Defendant raises the issue of res judicata on the basis that the Plaintiff instituted and obtained similar restraining orders in proceedings -OS No. 377 of 2008 against the first Defendant and one other. In my view the contention by the first Defendant is misconceived. In the earlier proceedings, the first Defendant dealt with the Plaintiff’s property in a similar manner to that of the present proceedings. The Court granted declaratory and restraining orders identical to the terms currently sought. The Plaintiff is instituting the proceedings because the first defendant repeated the tort of trespass and illegal conversion of the Plaintiffs property again. The only difference is that the party he dealt with then is different to the one in the current proceedings. The orders issued in OS 377 of 2008 does not stop the Plaintiff from instituting the current proceedings as it involves a different portion of the same land, Portion 410, and a different party in the fifth Defendant which is a separate cause of action. I will therefore reject this preliminary objection for being unmeritorious.
    
    • (ii) Whether the Plaintiff is the registered proprietor of Portion 410
      

11. The second issue to determine is whether the Plaintiff is the owner of Portion 410.The Plaintiff has produced, a certificate of title, issued under State Lease, Volume 11 Folio 126 over the subject land, Portion 410. The Title shows the Plaintiff as the current registered owner. Section 32 of the Land Registration Act provides that where an instrument of title describes a person as the proprietor of an estate or interest, that person is the registered proprietor of the estate or interest. Section 33 of the Land Registration Act provides that a registered proprietor of an estate or interest holds it absolutely free from all encumbrances except for fraud and other exceptions set out in (1)(a) to (f). (Mudge -v- Secretary for Lands (1985) PNG LR 387)

12. The defendants have not disputed that the Plaintiff is registered as proprietor of Portion 410. They are, however, disputing the boundary of Portion 410 in relation to the injuncted land which they claim is customary land.

13. I find as a matter of fact from the undisputed evidence that the Plaintiff is the registered proprietor of land described as Portion 410, Milinch of Erap, Fourmil Markham, Lae under State Lease, Volume 11 Folio 126.

(iii) Whether the injuncted (cleared) land is within the boundary of Portion 410.

14. The Defendants contend that the injuncted land is customary land, outside the boundary of Portion 410. They dispute the survey plans produced by Stanis Anea as lacking credibility.

15. The Plaintiff maintains that the cleared land is within the boundary of Portion 410. It is within the registered state lease and has indefeasible title under section 33 of the Land Registration Act.

16. Portion 410 is a huge portion of land containing 138 hectares. The cleared or injuncted land contains an area of 1.03 hectares. The survey plans produced by the Department of Lands and Physical Planning show, the injuncted land is within Portion 410. The Court notes the contention by the Defendants that the survey plans provided by Stanis Anea is unreliable because Mr. Anea is not a qualified and registered Surveyor. This contention is refuted by Mr. Anea. He says he is registered and is a qualified Surveyor although at the time of the survey he was not yet registered by the PNG Surveyors Board. From evidence presented, I accept the explanation presented by Mr. Anea and am satisfied that Mr. Anea is a qualified surveyor and the survey reports provided are credible. The evidence shows the survey was conducted by involving: i) the physical boundary walking and identification of landmarks and cement pegs, and ii) aerial survey using a GPS coordinated drone which took aerial photographs of the injuncted land. The survey was conducted as per direction of the Court given on 14^th May 2021 by the Department of Lands and Physical Planning which clearly show the cleared land is within the boundary of the alienated land, Portion 410. On the flipside, the Defendants have not provided alternative survey to show that the cleared land is outside the boundary of Portion 410. I am therefore satisfied on the balance of probabilities that the cleared injuncted land is within the boundary of Portion 410.

17. As stated earlier in the judgment that, the law on Section 33(1) of the Land Registration Act is settled. A registered proprietor has indefeasible title under section 33 of the Land Registration Act except for fraud and other exceptions listed in subsection one (1).

18. The issue before the Court is not over proprietorship of Portion 410. Rather the dispute is centered around the boundary of Portion 410 in relation to the adjacent customary land belonging to the Defendants.

19. It is however worth noting that the Defendants are raising serious allegations disputing the Plaintiffs title on Portion 410 insofar as it encroaches onto customary land. They submit Portion 410 does not exist and the survey plans are a recent creation and that the cleared injuncted land is customary land. The defendants seem to be arguing that the circumstances of the acquiring the State Lease over Portion 410 from what used to be customary land is unsatisfactory, irregular, or unlawful. They are questioning the processes involving various legislation and State Departments in the initial acquisition and subsequent creation of various titles over land including Portion 410, the subject of these proceedings. The defendants are indirectly seeking a review of the various administrative decisions.

20. Whilst the allegations are serious, the Defendants have not taken any proper and appropriate action or steps to challenge the title in some tangible ways to raise the issue of bona fide dispute as to title. The First Defendant and the other customary landowners have not commenced any proceedings challenging the title obtained by the Plaintiff. The title was issued many years back. The Defendants and the other customary landowners have been aware since. The validity of the title was not challenged so far, in a Court of competent jurisdiction or the Land Titles Commission.

21. The onus of challenging the validity of title rests on the defendants. In Godowan Investment Ltd v Wambea (2018) N7263, Cannings J said this at paragraph 9 of his judgment:

“The fact that the leases were granted to and registered in the name of the plaintiff gives rise to the presumption that it has good and indefeasible title subject only to the exceptions prescribed by Section 33(1) of the Land Registration Act (Mudge v Secretary for Lands [1985] PNGLR 387). The onus of proving a case of fraud or that any of the other exceptions in Section 33(1) applies rests with the person who challenges the title of the registered proprietor (Niugini Properties Ltd v Londari (2014) N5727).”

22. I am also guided by a National Court decision in Yandu v Waiyu (2005) N2894, where the Court (Cannings J) in dealing with an eviction matter held that:

“2. If the registered proprietor of a State Lease commences proceedings in the District Court to enforce their interest in the land there is no bona fide dispute about title to the Land unless some other person demonstrates that they have taken some distinct, formal, legal steps to disturb that title.”

23. In the present case, the Defendants have not demonstrated to the Court that they have taken appropriate legal steps to disturb the Plaintiff’s title. Therefore, in my view there is no bona fide dispute about title.

24. Secondly, where customary land is alienated, the process of determining customary ownership and land rights is now vested with the Land Titles Commission. The National Court does not have jurisdiction to deal with the issues raised by the Defendants. 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.”
   

25. 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”.

26. In my view, the Defendants are raising genuine questions on how the land is surveyed and mapped out. How is it that two main highways are cutting through a State Lease, especially when the Titles were issued only recently. That said, however, I find the defendants have not appropriately challenged the Plaintiff’s title to the property, Portion 410, up to now and are therefore not entitled to any reliefs not appropriately sought.

4. iv. Whether the Plaintiff is entitled to the reliefs sought in the Originating Summons
   

27. The Plaintiff seeks several reliefs in the Originating Summons. I will deal with them together. Firstly, the Plaintiff seeks a declaration that it is the registered proprietor of Portion 410. From the evidence provided, it is clear the Plaintiff is the registered proprietor of Portion 410, Milinch of Erap, Fourmill Markham, Lae, State Lease, Volume 11 Folio 126, containing an area of 138 hectares. The cleared injuncted land the subject of these proceedings is within the boundary of Portion 410, and thus the dealing by the Defendants amounts to an illegal encroachment to the quiet enjoyment of possession. I find the dealings between the first and the fifth Defendants over the injuncted portion of land illegal, a nullity and of no effect.

28. Next, the Plaintiff seeks injunctions and restraining orders against the Defendants. Generally, a grant of an interlocutory injunction is discretionary. Its purpose is to maintain status quo until final determination. See Robinson v Airlines Corp (1983) PNGLR 476. A permanent injunction on the other hand is more serious and is sparingly granted. The Supreme Court in Medaing v Ramu Nico Management (MCC) Ltd (2011) SC144 discussed the law on permanent injunction. At paragraphs 58-63of the judgment, the court said, and I quote:

“58. The law in relation to the grant of permanent injunctions is summarised in the text Spry, Equitable Remedies, Injunctions and Specific Performance, Seventh Edition (1980). At pg.392, Spry (supra) states:

"In all cases, it is a matter of discretion whether an injunction will or will not be granted; but the manner of exercise of that discretion depends on the precise nature of the particular rights that it is sought to protect and on all other material circumstances."

59. Spry (supra) quotes further at pg.393 from the case Pride of Derby and Derbyshire Angling Association Ltd v. British Celanese Ltd [1953] ch.149 at 189, which states;
    

"An injunction may nonetheless, be refused, as a matter of discretion, should it appear to be unjust or 'highly unreasonable' to grant it, by reference to established equitable considerations such as laches, hardship, acquiescence, the absence of clean hands or such other matters. Further, statutory rights must be taken into account by the Court."

29. The Plaintiff, as the registered owner, is entitled to peaceful of the use of the property. It is not highly unreasonable or unjust to grant the orders sought. I will therefore grant an order for permanent injunction against the defendants.

30. In addition, the Plaintiff is also entitled to the grant of restraining orders against the Defendants which shall be granted as a further consequential order.

Costs

31. Finally, as to cost, it is discretionary matter. Generally, an order for cost is awarded to a successful party in a contested hearing. The proceedings have been vigorously defended and substantial cost is incurred. In the circumstances, cost shall be awarded to the Plaintiff to be taxed, if not agreed.

ORDERS

32. The Court orders:
    
    1. By way of a declaration that the Plaintiff is the registered proprietor of Portion 410, Milinch of Erap, Fourmil of Markham in the Morobe Province registered as State Lease Volume 11, Folio 126 (herein after “Portion 410”).
       
    2. By way of a declaration that the Defendants, jointly or severally, are not the owners of Portion 410 and that any dealings, sale or purchase of part of Portion 410 especially the injuncted land by the Defendants, is null and void and of no effect.
       
    3. That the Defendants, their servants, agents, associates, or representatives are restrained from settling, clearing, or making any improvements on Portion 410 Milinch of Erap, Fourmil of Markham, Morobe Province.
       
    4. That the Defendants, their servants, agents, associates, or representatives vacate Portion 410, Milinch of Erap, Fourmil of Markham forthwith, failing which the Plaintiff shall use all force necessary to evict the Defendants, their servants, agents, associates or representatives from Portion 410 Milinch of Erap, Fourmil of Markham, Morobe Province.
       
    5. The Defendants shall pay the costs of the proceedings to be taxed, if not agreed.

____________________________________________________________________
Kesno Lawyers: Lawyers for the Plaintiff
Cook & Co. Lawyers: Lawyers for the First Defendant
Gamoga Lawyers: Lawyers for the Second, Third and Fourth Defendants