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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 572 OF 2017
BETWEEN
STEAMSHIPS LTD
Plaintiff
AND
HON. ANO PALA as MINISTER FOR JUSTICE & ATTORNEY –GENERAL on behalf of the Head of State acting on Advice
First Defendant
AND
NATIONAL EXECUTIVE COUNCIL comprising of the Prime Minister as the Chairman of the NEC and other members
Second Defendant
AND
HON. BENNY ALLAN as MINISTER FOR LANDS
Third Defendant
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant
AND
TASION GROUP LIMITED
Fifth Defendant
Waigani: Makail, J
2019: 09th December
2023: 22nd December
JUDICIAL REVIEW – Review of decision to uphold appeal by a non-party to an application for renewal of State Lease before Land Board – Appeal by non-party upheld and State Lease awarded to non-party – Land Act, 1996 – Sections 62 & 120(2)
JUDICIAL REVIEW – Application for renewal of State Lease – Appeal against Land Board recommendation to grant renewal of State Lease – Grounds of – Ultra vires – Error of law – Unreasonableness – Bias – Fraud – Actual and constructive fraud – Land Act, 1996 – Sections 57, 62 & 120 – Land Registration Act – Section 33(1)(a)
EVIDENCE – Similar fact evidence – Character evidence – Witness found liable for fraud in unrelated court proceedings – Propensity to re-offend – Use of similar fact evidence in judicial review proceedings discussed – Adoption of common law principles on similar fact evidence in civil proceedings – Relevant principles discussed and applied – Constitution – Schedule 2.2
PRACTICE & PROCEDURE – Locus standi – Proof of locus standi – Company as applicant for judicial review – Company as applicant for renewal of State Lease – Two companies – Amalgamation of two companies – Effect of – Companies Act, 1997 – Sections 232, 238 & 239
PRACTICE & PROCEDURE – PLEADINGS – Pleading of grounds of judicial review – Fraud – Incorporation of company – Officers of State department as shareholders and directors of company – Reliance on nexus or association between shareholders and directors of company and officers of State department – Inference of fraudulent conduct to be drawn – Reliance on unrelated National Court judgment – Finding of fraud against director of company in unrelated proceeding – Failure to plead allegations – No leave granted to rely on grounds – National Court Rules – Order 16, rules 3(2)(a), 3(4) & 6(2) & (3)
PRACTICE & PROCEDURE – Application for costs on solicitor/client basis – Conduct of lawyer and party to proceeding – Costs unreasonably incurred – Requirement to give prior notice – Forewarning notice to seek costs on solicitor/client basis – Costs on solicitor/client basis awarded on higher scale than costs on party/party basis – Lack of evidence of forewarning notice – Application declined – National Court Rules – Order 22, rules 34 & 35
Facts
Following a National Court decision and order directing a re-hearing of the plaintiff’s application for renewal of a State Lease, the Papua New Guinea Land Board (“Land Board’) re-heard the application and recommended to the Head of State to renew the State Lease of the plaintiff. The plaintiff was the sole applicant before the Land Board. No-one else appeared at the Land Board re-hearing or made any objection to the plaintiff’s application for renewal. An appeal was made by a company called ‘Tasion Group Holding Ltd’ who was a non-party at the Land Board re-hearing. Further, it was a non-party to this proceeding. The Head of State acting on advice of the Minister upheld the appeal, and the State Lease was registered to the fifth defendant (Tasion Group Limited). It is from this decision that this proceeding was filed. At the trial, the State parties objected to the plaintiff from commencing this proceeding on the ground that it lacked the requisite locus standi. They argued that the plaintiff was not the original registered proprietor. It was a company called New Guinea Motors (1988) Pty Ltd and it should have been this company who should have applied for renewal and should have commenced this proceeding. The plaintiff responded that New Guinea Motors (1988) Pty Ltd was amalgamated with it prior to the expiry date of the State Lease. Pursuant to Sections 232, 238 and 239 of the Companies Act, 1997 it had the requisite locus standi to commence this proceeding.
Held:
(1) it is logically relevant to determine a matter in issue.
(2) it is used to rebut a defence.
(3) it is not oppressive or unfair to the other side.
(4) the other side has fair notice of it and is able to deal with it.
(5) to give a fair notice to the other side, it must be pleaded as a separate ground or part of a series of grounds of judicial review in the Statement made pursuant to Order 16, rule 3(2)(a) of the National Court Rules.
(a) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(b) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(c) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(d) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
Cases Cited:
Papua New Guinea Cases
Paga No. 36 v. Eleadona & Ors (2018) SC1671
Dominic Philip v. The National Education Board (2008) N4024
Sammy Lodge Ltd v. L&A Construction Ltd & Ors: OS (JR) No 520 of 2017 (Unreported & Unnumbered Judgment of 14th December 2018 per Thompson J)
The State v. Stafford Hambo (2010) N4036
Nambawan Super v. Allan and Ors (2014) N5707
Steamships Trading Company Limited v. Garamut Enterprises Limited & Ors (2000) N1959
Chief Collector of Taxes v. Bougainville Copper Limited (2007) SC853
Mudge v. Secretary for Lands [1985] PNGLR 387
The Papua Club Inc v. Nusaum Holdings Limited (No. 2) (2004) N2603
Koitachi Farms Limited v. Walter Schnaubelt (2007) SC870
Emas Estate Development Pty Limited v. John Mea & Ors [1993] PNGLR 215
National Broadcasting Corporation v. Sam Tasion & T.G. Holding Limited trading as Freeway Motors (2019) N8083
Rex Paki v. MVIL (2010) SC1015
Kalan Constructions v. Louiss John Chegg (2014) N5665
Paul Paraka v. POSFB (2014) SC1363
PNG Water Board v. Gabriel M. Kama & Ors (2005) SC821
PNG Ports Corporation Limited v. Canopus No. 71 Limited (2010) N4288
Overseas cases
Mood Music Publishing Co. Ltd v. De Wolfe Ltd [1976] Ch 119
Counsel:
Mr. E. Anderson & Ms. J. Nigs, for Plaintiff
Mr. R. Uware, for the First to Fourth Defendants
Mr. R. J. Webb SC & Mr. T. Cooper, for Fifth Defendant
JUDGMENT
22nd December 2023
1. MAKAIL, J: This is an application for judicial review of a decision of the State defendants (first to fourth defendants) on or about 05th May 2017 to:
(a) grant a purported “appeal” by the fifth defendant against a recommendation of the Papua New Guinea Land Board (“Land Board”) to grant a renewal of a State Lease to the plaintiff, and
(b) simultaneously, grant a State Lease of the whole of the land to the fifth defendant instead.
Allegations of Fact
2. The plaintiff alleges that the disputed land is known as Allotment 2, Section 387, Hohola, Port Moresby, registered as State Lease of Volume 11, Folio 2551 (“State Lease”). It is a major commercial site located on Waigani Drive close to its end at Hubert Murray Highway in Boroko. It houses the “Big Rooster” 4-mile premises, a car yard, and other businesses. The period of the State Lease was forty-six years commencing on 22nd February 1961 and expiring 22nd February 2007. The registered proprietor prior to its expiry was a company called New Guinea Motors (1988) Pty Ltd.
3. The disputed land has a long history going back to 8th May 2006 when the plaintiff applied for renewal of the State Lease over the land as it came toward its due expiry date. It took a while for the Land Board to consider the plaintiff’s application for renewal and when it eventually did, it refused the application and instead, awarded the State Lease to a company called ‘Tasion Group Holdings Limited’.
4. At the material time a Mr Sam Tasion was the Chairman of the Land Board and Tasion Group Holdings Limited was a company owned by Mr. Tasion. Without approval or authority of the plaintiff, this company had taken a sublease of a part of the land from which it operated a car yard.
5. The plaintiff filed a judicial review proceeding in the National Court to review the decision of the Land Board. On 28th March 2014, the National Court presided by David J upheld the judicial review proceeding and declared null and void the decision
of the Land Board to refuse the plaintiff’s application for renewal of the State Lease and conversely, the decision of the
Land Board to grant a Section 99 Lease to Tasion Group Holdings Limited. Furthermore, the Court ordered that the application for
renewal be remitted to the Land Board for re-hearing.
6. On 08th February 2016 the Land Board re-heard the plaintiff’s application for renewal and recommended that, the State Lease to the
plaintiff, to be renewed. By that time, Mr Tasion was no longer the Chairman of the Land Board and the plaintiff was the sole applicant.
Notably, no-one else appeared at the Land Board re-hearing or made any objection to the plaintiff’s application for renewal.
7. After the Land Board made the recommendation, it was recorded by the Secretary of the Department of Lands and Physical Planning that there was an appeal by an unknown party. No information was given or available about whom it was that appealed.
8. It was eventually made known to the plaintiff that the appeal was by a company called ‘T.G. Holding Limited’. It is not a party to this proceeding, but the appeal was upheld, and the State Lease was registered to the fifth defendant (Tasion Group Limited). The appealed decision was published in the National Gazette on 05th May 2017. It is from this decision that on 03rd July 2017 the plaintiff filed this judicial review proceeding. On 08th August 2017 the plaintiff was granted leave to apply for judicial review. Subsequently, on 17th August 2017 it was granted a stay of the appealed Board’s decision.
Grounds of Review
9. According to the further amended statement made pursuant to Order 16, rule 3(2)(a) of the National Court Rules (“NCR”), the plaintiff relies on the following grounds of review:
(a) Ultra vires.
(b) Error of law on the face of the records.
(c) Bad Faith and Breach of Section 155(6) of the Constitution.
(d) Taking account of irrelevant considerations.
(e) Failing to take into account of relevant considerations.
(f) Not giving a proper opportunity to be heard.
(g) Bias and Fraud.
(h) Breach of Section 41 of the Constitution.
Parties’ Evidence
10. The plaintiff relies on the following affidavits:
(a) Affidavit in Support of Mary-Ann Hill sworn 28th June 2017 and filed on 03rd July 2017.
(b) Affidavit in Support of Mary-Ann Hill sworn and filed on 18th August 2017.
(c) Affidavit in Support of Betty Oilline Chan sworn and filed on 18th August 2017.
(d) Affidavit in Support of Mary-Ann Hill sworn 16th October 2017 and filed on 17th October 2017.
(e) Affidavit of Service of Tau Uamaki sworn and filed on 17th April 2018.
(f) Affidavit of Deborah Onga sworn and filed on 25th July 2019.
(g) Affidavit of Hoko Steven sworn 10th July 2019 and filed on 25th July 2019.
(h) Affidavit in Support of Arthur Burnand sworn and filed on 07th August 2019.
(i) Affidavit in Support of Deborah Onga sworn and filed on 07th August 2019.
(j) Affidavit in Support of Rose Pakop sworn and filed on 14th October 2019.
11. The first to fourth defendants relies on the following affidavits:
(a) Affidavit of Tiri Wanga sworn and filed on 08th September 2017.
(b) Affidavit of Benjamin Samson sworn 18th January 2018 and filed on 22nd January 2018.
(c) Affidavit in Support of Benjamin Samson sworn 13TH March 2018 and filed on 05th April 2018.
(d) Affidavit of Russell Uware sworn 26th March 2018 and filed on 27th March 2018.
(e) Affidavit of Oswald Tolopa sworn and filed on 24th September 2019.
12. The fifth defendant relies on the following affidavits:
(a) Affidavit of Teddy Tasion sworn 02nd November 2017 and filed on 06th November 2017.
(b) Affidavit of Teddy Tasion sworn 17th September 2019 and filed on 19th September 2019.
Findings of Fact
13. Relying on the case of Paga No. 36 v. Eleadona & Ors (2018) SC1671, the fifth defendant submits that in summary the Supreme Court held that:
(a) The onus of establishing fraud lies with the party asserting it.
(b) The seriousness of such allegation of fraud demands proof commensurate to the standard required in criminal proceedings, that is beyond reasonable doubt.
(c) The fraud which must be shown is actual fraud by the registered proprietor in acquiring title.
(d) Where allegations are made that statutory breaches amount to fraud it follows that it must be established whether or not the registered proprietor was involved in them, and the involvement was fraudulent.
(e) Statutory breaches of themselves are not enough.
14. The fifth defendant submits that the affidavits of the plaintiff’s witnesses fall short of establishing that it procured the State Lease of the land by fraud. However, a large portion of all parties’ evidence consists of documents and unless it expresses an opinion, or a submission on law, or hearsay, or irrelevant, or conclusory assertion, or oppressive, it is open to the Court to extract the relevant facts from the affidavits and documents. The fifth defendant also objects to the tender of affidavits filed in the earlier Court proceeding OS (JR) No 756 of 2009 but annexed to the affidavits of the plaintiff’s witnesses’ affidavits on the grounds that they are inadmissible. However, there is no rule of law prohibiting the receipt and reliance of the affidavits in the form that they have been tendered and this objection is dismissed. From analysing the above affidavits and documents and considering the grounds of objection on admissibility of the assertions in the affidavits, respectfully, the Court will adopt the plaintiff’s outline of facts in its submissions and make the following findings of fact:
Commencement of State Lease
15. On 10th April 1967, the disputed land in this proceeding was leased to Ray Ronald Eric Field.
16. By its term the State Lease commenced on 22nd February 1961, and it was to expire after 46 years and 41 days which was 03rd April 2007.
State Lease was transferred to New Guinea Motors (1988) Pty Ltd
17. On 18th October 1994, the State Lease was transferred to New Guinea Motors (1988) Pty Ltd.
18. On 02nd September 1998 Steamships Automotive Pty Limited changes its name to Steamships Automotive Limited.
19. The original name for Steamships Automotive Limited is New Guinea Motors (1988) Pty Ltd.
Formation of Steamships Limited
20. On 28th December 2004, Steamships Automotive Limited and other companies in the Steamships group amalgamated and formed a company known as Steamships Limited (“Steamships”). Steamships is the plaintiff in this proceeding.
Commercial Lease Agreement with Big Rooster, U.A.A. Group (PNG) Ltd and Yumi Yet Limited
21. The disputed land is a large area of land and the plaintiff entered into commercial lease agreements with a number of different companies, for different segments of the land, including Big Rooster, the U.A.A. Group (PNG) Ltd and Yumi Yet Limited to lease part of the land on the State Lease.
22. Each of the commercial lease agreement have been registered on the plaintiff’s State Lease prior to its expiration.
23. A related company of the fifth defendant, called T.G. Holding Ltd trading as Freeway Motors purport to have a verbal lease agreement with the U.A.A. Group (PNG) Ltd which is commenced on or about in year 2002.
24. No written lease agreement as required by Section 54 of the Land Registration Act was entered into by T.G. Holding Ltd or ‘Freeway Motors’ from U.A.A. Group (PNG) Ltd or anyone else, and no consent from the plaintiff was obtained, nor any approval by the Minister of any sublease as is required by Section 128 of the Land Act.
Plaintiff’s Application for a New State Lease in 2006
25. On 08th May 2006, the plaintiff applied for ‘renewal’ of the State Lease (“the Renewal Application”).
26. The Renewal Application was in the name of ‘Steamships Ltd’. As New Guinea Motors (1988) Pty Ltd was amalgamated with the plaintiff, the amalgamation and process of were set out in an accompanying letter and supporting document with the Renewal Application to notify the Land Board of the status of the plaintiff.
27. On the same day the plaintiff paid K22,275.00 to the Department of Lands and Physical Planning (“Department of Lands”) as the land lease rent for 2006.
28. Substantial improvements have been constructed on the land including retail outlets such as Big Rooster and other retail outlets.
The Year 2007
29. Despite follow ups, the Land Board did not list the Renewal Application during 2006 or 2007.
The Year 2008
30. In 2008 Mr Sam Tasion became a member of the Land Board and the Renewal Application was listed for consideration at the Land Board Meeting No. 1 of 2008.
31. On 03rd April 2008 by Gazette Notice G52 public notice was given that the plaintiff’s Renewal Application would be heard at the April 2008 Land Board meeting.
32. A day before the Land Board meeting on 15th April 2008 Mr Tasion wrote to the Land Board in his capacity as Executive Chairman of T. G. Holdings.
33. On 16th April 2008 the Land Board met. At this first consideration of the plaintiff’s application, there was no appearance at the Land Board by T.G. Holding Ltd, or Tasion Group Limited or any Tasion related entity. Mr Tasion knew that the plaintiff’s application was on for hearing at that and the laeter 208 Land Board meeting. The plaintiff’s application was deferred.
34. On 30th April 2008 the Land Board wrote and advised the plaintiff that its Renewal Application had been deferred pending a full inspection report to be prepared by the Department of Lands.
35. On 19th June 2008 the National Gazette published the results of the Land Board Meeting No. 1 of 2008.
36. On 04th September 2008 the Land Board published in the National Gazette No. G160 various applications for deliberations in the Land Board Meeting No. 4 of 2008.
37. On 05th September 2008 the executive officer of the Land Board wrote a memorandum to the members of the Land Board and advised them of the agendas for the meeting from 22nd to 24th September 2008. From this information, Mr Tasion knew the plaintiff’s Renewal Application was scheduled for hearing.
38. On 08th September 2008 the Land Board wrote and advised the plaintiff of the Meeting No. 4 of 2008 from 22nd to 24th September 2008, the plaintiff’s Renewal Application was listed for deliberation in that meeting.
39. At the second Land Board Meeting consideration of the plaintiff’s Renewal Application on 22nd September 2008 there was no appearance at the Land Board Metting by T.G. Holding Ltd, or the fifth defendant or any Tasion related entity. Mr Sam Tasion being a member of the Land Board since 28th February 2008 excused himself from the meeting because of T.G. Holding Ltd’s application and to avoid conflict of interest.
40. However, the Secretary for Department of Lands and Physical Planning Mr Pepi Kimas says that “The Executive Chairman for T.G. Holdings (Mr Sam Tasion) who was a sublessee of UAA who subleases from the Plaintiff had made several conferences to my office expressing its Company’s interest in the subject land and queried why it had to pay rentals when the Plaintiff’s lease had expired.”
41. On 06th October 2008 the Land Board wrote and advised the plaintiff that the Land Board had recommended not to renewing that State Lease due to the plaintiff not complying with the lease conditions.
42. On 31st October 2008 Gadens Lawyers wrote to the Minister and appealed the decision of the Land Board in not recommending the plaintiff’s application to renew the State Lease.
43. On the same day Gadens delivered to the Chairman of the Land Board by way of courtesy a copy of the appeal to the Minister.
44. On 07th November 2008 the Land Board wrote to the Minister and sought Minister’s endorsement of the recommendations made by the Land Board in its meeting in September 2008.
45. On 10th November 2008 the Secretary for Department of Lands wrote a memorandum to the Minister and sought the Minister’s endorsement of the recommendations made by the Land Board in its meeting in September 2008.
46. On 11th November 2008 the Minister made his decision on the recommendations by the Land Board in its meeting in September 2008.
47. On 13th November 2008 the Secretary for the Lands published in the National Gazette No. G211 the result of the Land Board meeting of September 2008 to the effect that the plaintiff’s application for renewal of the State Lease was refused.
The Year 2009
48. On 07th January 2009 the Land Board wrote to Gadens Lawyers and acknowledged receipt of the plaintiff’s appeal dated 31st October 2008.
49. On 12th May 2009 the Department of Lands wrote to the plaintiff and asked it to enjoy the benefit of the property on the land but to refrain from any dealings pending the decision of the appeal.
50. On 18th May 2009 the Office of the Valuer General prepared a valuation report on the improvements on the State Lease.
51. On 17th June 2009 the Land Board wrote to the plaintiff and advise that its appeal has been forwarded to the Legal Section for its investigation, processing, and submission to the Head of State.
52. On 20th August 2009 the Department of Lands issued a tender notice for the State Lease. The State Lease was advertised in the National Gazette No. G158 as land available for leasing. The cut-off date for lodging a tender in compliance with the Tender Notice was 3.00 pm on Wednesday 09th September 2009. The Tender Notice did not state a reserve price.
53. No application was received by the Department of Lands from the fifth defendant, or Mr Tasion or any other Tasion company within the time provided.
The Year 2010
54. On 12th February 2010 the Secretary for Lands prepared a submission and made recommendations to the National Executive Council (“NEC”) that the plaintiff’s appeal be dismissed, the plaintiff be compensated for the land and the property and land be processed to the Land Board for a new grant.
55. The Secretary for Lands explained in the NEC submission that the Land Board did not approve the plaintiff’s Renewal Application due to the plaintiff’s failure to comply the Clause 1(c) of the State Lease Title.
56. The plaintiff became aware of the NEC submission and the alleged non-compliance of condition 1(c) on 21st July 2010 when the first, second and third defendants produced documents to Court in the earlier proceeding OS (JR) No 756 of 2009.
57. On 24th February 2010 the Head of State dismissed the plaintiff’s appeal and confirmed the Land Board’s recommendation for the plaintiff to be compensated for the land and property and the land to be processed to the Land Board for a new grant.
58. On 25th February 2010 the Secretary for Lands confirmed the decision of the Head of State.
59. On the same day the decision of the Head of State was published in the National Gazette No. G35.
60. On 08th March 2010 the Department of Lands issued rent due notice of K22,275.00 to New Guinea Motors (1988) Pty Limited for the State Lease.
61. On 09th March 2010 the plaintiff paid the annual land rent of K22,275.00.
62. Over a year after the tender closing date, on 28th October 2010 T.G. Holding Ltd applied for a State Lease over the land. This was 13 months late.
63. The Department of Lands accepted T.G Holding Ltd’s application but did not provide any explanation for accepting it about 13 months late.
64. The application was also not accompanied by payment of the prescribed fee under Section 70 of the Land Act. However, according to the official receipt for the application fee issued by the Department of Lands, it was paid in February 2011. This was about 4 months after the lodgement of the application.
65. On 04th December 2009 the plaintiff commenced judicial review proceeding OS (JR) No 756 of 2009 to review the decision of the Land Board
to refuse its application for renewal of its State Lease and decision of the Minister and Secretary for Department of Lands to grant
a Lease to T.G. Holding Ltd over the property on the land subject of the State Lease.
66. The application for judicial review was heard on 13th April 2012 and the final decision was handed down on 28th March 2014. The terms of the final order were:
1. The application for judicial review is granted.
The Year 2014
67. On 14th August 2014 an inspection was carried out on the property by the Department of Lands for purposes of an application for renewal by the plaintiff to renew the State Lease over the land. The inspection report was prepared on 12th January 2015.
68. On or about 27th August 2014 the plaintiff was informed by the Department of Lands Allocation Section, who are responsible for the preparation of Tender applications that the name of the applicant on the plaintiff’s application form did not correspond to the name on the title deed and the plaintiff were requested to amend the tender application.
69. The plaintiff’s application was then amended in accordance with the Department of Land’s views.
70. On 22nd September 2014 the plaintiff’s application for renewal of State Lease over the land was published in the National Gazette No. G428, listed as Iten No 6 under the name New Guinea Motors (1988) Pty Limited.
71. On 23rd September 2014 the plaintiff lodged an Amended Application for Renewal of the State Lease under cover letter dated 17th September 2014 simply changing the name of the application from the plaintiff to one of its earlier names which had been on the former State Lease, ie ‘New Guinea Motors (1988) Pty Ltd.
72. On 10th October 2014 an independent valuation of the property was carried out by Yagur Property Valuations valuing the property at K20 million. It valued the land at K15.5 million and improvements at K4.5 million.
The Year 2015
73. A National Gazette Notice No. G85 dated 05th February 2015 was published listing all the matters that were to go before the PNG Land Board in Meeting No. 01 of 2015. The plaintiff’s application for renewal was listed as Item No 6 under the name of New Guinea Motors.
74. On 24th February 2015 the plaintiff’s application went back before the Land Board for consideration. At the hearing of 24th February 2015 there was no appearance by the fifth defendant or any associated Tasion interests.
75. On 13th April 2015 there was a letter from the Land Board to the plaintiff recommending that the plaintiff’s application for renewal is deferred due to “an objection made by a sub-lessee Freeway Motors”.
76. The State defendants or the fifth defendant did not produce any document in discovery of any type of written objection by Freeway Motors or ant Tasion interests in the period leading up to 24th February 2015 Land Board meeting. The only documents disclosed communications from any Tasion entity over the 13 years period that were discovered are:
(a) A letter of 15th April 2008.
(b) The out-of-time formal application by T. G. Holding Ltd lodged on 28th October 2010 without paying the prescribed fee.
(c) An appeal letter by T.G. Holding Ltd after the Land Board recommended the plaintiff’s application in 2017.
77. On 16th June 2015 the plaintiff wrote to the Land Board requesting that the Land Board provide details of the objection by Freeway Motors so that the plaintiff could respond to the objection. It was provided with no such document evidencing an objection.
The Year 2016
78. On 18th January 2016 the plaintiff wrote to the Land Board requesting to to relist its Renewal Application for hearing.
79. On 08th February 2016 the plaintiff’s Renewal application was heard.
80. On 24th February 2016 the Land Board informed the plaintiff of its decision to recommend that the State Lease be granted to it.
81. On 21st March 2016 “Tasion Group Holdings” Limited wrote to the Minister for Lands appealing against the recommendation to grant the State Lease to the plaintiff.
82. On 03rd May 2016 the plaintiff obtained a copy of the National Gazette No. G252 stating that the decision of the Land Board to recommend the grant of the State Lease to Steamships was under appeal and listed as Item No 1755. There were no other details provided.
83. On 23rd June 2016 the plaintiff wrote a letter to the Minister for Lands requesting the Minister to reject the appeal and issue the State Lease to it.
84. On 27th July 2016 the Secretary for Lands prepared a submission to the NEC on the appeal by “Tasion Group Limited”.
85. On 23rd November 2016 the plaintiff wrote to the Minister for Lands requesting that the appeal be rejected, and the State Lease be issued to it.
The Year 2017
86. On 06th February 2017 there was a recommendation from the Minister for Lands to the Head of State to uphold the appeal by Tasion Group Limited. However, there was no appeal by Tasion Group Limited and for a State Lease to be granted in favour of Tasion Group Limited.
87. On 04th May 2017 the Head of State made a decision upholding the appeal by Tasion Group Limited. However, again there was no appeal by Tasion Group Limited and stating that a State Lease be issued to Tasion Group Limited.
88. The very next day on 05th May 2017 the National Gazette No. G355 was published recording the decision of the Head of State to first, uphold the appeal by Tasion Group Limited and secondly, to grant a State Lease in favour of Tasion Group Limited.
89. On 09th May 2017 there was a letter from the Secretary for Lands to the plaintiff under the name of New Guinea Motors (1988) Pty Ltd informing the plaintiff of the decision of the Head of State to grant the State Lease to Tasion Group Limited and stating that decisions on appeals are final.
90. On 11th May 2017 there was a letter of grant from the Secretary for Lands to “Tasion Group Limited” informing Tasion Group Limited that it was named as the successful applicant for the State Lease.
91. On 11th May 2017 a Lease Acceptance Form was sealed by T.G Holding Limited in the acceptance of the terms of the State Lease over the land offered to Tasion Group Limited and the affixing of the sealed witnessed by a person who was not a director of either T. G. Holding Ltd or Tasion Group Limited. This person is identified as Teddy Tasion.
92. Also, on 12th May 2017 a BSP Bank Cheque in the sum of K14,870.60 was paid to the Department of Lands by Tasion Group Limited as payment of land rentals for the year 2017.
93. On 17th May 2017 the State Lese Volume 83, Folio 91, over Allotment 1 Section 387 was registered in favour of Tasion Group Limited.
94. On 03rd July 2017 the plaintiff commenced this proceeding and on 08th August 2017, the National Court presided by Nablu J granted leave to the plaintiff to apply for judicial review.
95. On 17th August 2017 the National Court granted orders to stay the decision of the Head of State to grant a State Lease to Tasion Group Limited until final determination of the proceeding or until further order.
Inference Drawn from Lack of Evidence
96. In analysing the evidence, where evidence is to be adduced by a party but not forthcoming, it is open to the Court to make necessary inferences. Accordingly, based on all the affidavits filed by the parties in this proceeding, it is clear on the evidence that there is:
(a) No new objection by ‘Freeway Motors’ in the period between the earlier judgment of the National Court of March 2014 rejecting the earlier assertions by Tasions interests and the Land Board hearings of 2016.
(b) No application for a State Lease of the land by the fifth defendant.
(c) No appeal by the fifth defendant against the recommendation to grant a State Lease to Steamships.
(d) No advice by the NEC to the Head of State to uphold the purported appeal by the fifth defendant.
(e) No advice by the NEC to the Head of State to grant a State Lease of the land to the fifth defendant.
(f) No validly signed Lease Acceptance Form by the fifth defendant.
(g) No application made under Section 40(1) of the Land Registration Act to register the fifth defendant’s purported State Lease without execution by the fifth defendant.
(h) No evidence as per Section 40(2) of the Land Registration Act to show that the State Lease has been granted to the fifth defendant and that in all the circumstances the fifth defendant could not be located.
(i) No memorial as per Section 40(3) of the Land Registration Act was made by the Registrar of Titles on the State Lease to show that the State Lease has been registered without the signature of the Lessee.
(j) The only application by Tasion interests is the out-of-time application made in October 2010 by T.G. Holding Ltd – 11 months after the closing of tenders in September 2009.
(k) No supporting documents attached to the application for a State Lease by T.G. Holding Ltd in its application dated 28th October 2010.
(l) Not accompanied by payment of the prescribed application fee as per Section 70(b) of the Land Act in order for the application by T. G. Holding Ltd to be registered.
(m) No approval documents from the Land Board or Land Authority given to the fifth defendant, T.G. Holding Ltd or any other companies or entities affiliated to Sam Tasion, a director of the fifth defendant for purposes of constructing any improvements on the land.
(n) No applications or correspondence between the NCDC Physical Planning Board or the NCDC Building Board and the fifth defendant, T.G. Holding Ltd or any other companies or entities affiliated to Sam Tasion, a director of the fifth defendant regarding building improvements on the land.
(o) No documents, correspondence, or applications etc. passing between the Chairman of the Land Board/Land Board and the fifth defendant, T.G. Holding Ltd or any other companies or entities affiliated to Sam Tasion, a director of the first defendant in relation to the land generally.
(p) No documents, correspondence, applications in possession of the Land Board and the Chairman of the Land Board concerning Sam Tasion as former members of the Land Board and his dealings with the Land.
(q) No evidence of the claimed expenditure on building improvements in any of:
(r) No documents or correspondence showing development done to the land by the fifth defendant from the time the fifth defendant moved onto the land up until the present.
(s) No sublease agreement between the fifth defendant and the U.A.A. Group by which the fifth defendant relied on to start occupying the land, specifically noting any improvement or development conditions in the sublease agreement.
(t) No correspondence between the NCDC and the fifth defendant, T. G. Holding Ltd and any other Tasion related entities in relation to the land.
Preliminary Objection on locus standi of plaintiff
97. The first to fourth defendants whom I shall refer to as the State parties or defendants object to the plaintiff commencing this judicial review proceeding on the ground that it lacks the requisite locus standi. They submit that even though leave was granted to it to seek review of the decision, the grant of leave does not act as a bar to them objecting to the plaintiff’s standing to commence this proceeding.
98. I consider that it is not necessary to decide the question of whether locus standi can be revisited after leave has been granted. As parties have made extensive submissions on the question of locus standi it is appropriate that it be determined on its merits. There is no dispute that the original registered proprietor of the State Lease was ‘New Guinea Motors (1988) Pty Ltd’ which I will refer to as New Guinea Motors. According to the State parties, New Guinea Motors is a separate legal entity from the plaintiff. To that extent, I agree with the State parties: see Section 16 (Separate legal personality) of the Companies Act, 1997,
99. However, the question is whether the amalgamation of New Guinea Motors and the plaintiff conferred standing on the plaintiff. The State parties submit that the plaintiff may have amalgamated with New Guinea Motors, but it failed to execute Form 35/98. This Form is described as a “Miscellaneous Form” with a copy of the Amalgamation Certificate from the Registrar of Companies of the name from the former registered proprietor to the new registered proprietor. Consequently, the State Lease remained under the proprietorship of New Guinea Motors until it expired in 2007.
100. It will be observed that an amalgamation of two or more companies is permitted under Section 232 of the Companies Act, 1997. It states:
“232. Amalgamations.
Two or more companies may amalgamate, and continue as one company, which may be one of the amalgamating companies, or may be a new company.”
101. Where two or more companies are amalgamated, Section 238 states:
“238. Effect of certificate of amalgamation.
On the date shown in a certificate of amalgamation—
(a) the amalgamation is effective; and
(b) where it is the same as a name of one of the amalgamating companies, the amalgamated company has the name specified in the amalgamation proposal; and
(c) the Registrar shall remove the amalgamating companies, other than the amalgamated company, from the register, and otherwise give effect to the amalgamation; and
(d) the amalgamated company succeeds to all the property, rights, powers, and privileges of each of the amalgamating companies; and
(e) the amalgamated company succeeds to all the liabilities and obligations of each of the amalgamating companies; and
(f) proceedings pending by, or against, an amalgamating company may be continued by, or against, the amalgamated company; and
(g) a conviction, ruling, order, or judgment in favour of, or against, an amalgamating company may be enforced by, or against, the amalgamated company; and
(h) any provisions of the amalgamation proposal that provide for the conversion of shares or rights of shareholders in the amalgamating companies have effect according to their tenor.”
102. To my mind, based on Sections 232 and 238 above, there can be no doubt in law that New Guinea Motors and the plaintiff are not different companies after the amalgamation. They are one company. It follows that the State parties’ objection to the standing of the plaintiff is one of not being notified by the plaintiff that it (plaintiff) has amalgamated with New Guinea Motors and will be applying for the renewal of the State Lease in place of New Guinea Motors is not determinative of the question of locus standi. The question of notice of amalgamation was sufficiently addressed by the plaintiff.
103. The undisputed evidence is that at the time of the application for renewal of the State Lease in 2006, the Land Board was expressly informed by letter, of the amalgamation. It was also provided with a copy of the Certificate of Amalgamation. These documents were before the Land Board from the very first day, right up to the present. It was clear that the application was on behalf of the registered proprietor as the amalgamated company, which pursuant to Section 238(d) of the Companies Act, 1997, had succeeded to the rights and property of New Guinea Motors.
104. When the fifth defendant’s appeal was successful, the proper name to be used for the party bringing the judicial review proceeding was the plaintiff, which is the current name of the amalgamated company and not New Guinea Motors. The Statement made under Order 16, rule 3(2)(a) of the NCR reinforced and made known this position at paragraph 1 as follow:
“Steamships Ltd is a company incorporated under the Companies Act and registered in Papua New Guinea (and was formerly known, in part, by way of amalgamation as New Guinea Motors (1988) Pty Ltd and is capable of being sued and suing in its own name”.
105. The Miscellaneous Form which the State parties maintain should have been used by the plaintiff to put the Registrar of Titles on notice must make way for the law under the Companies Act, 1997. This is because the Form 35/98 is prima facie simply a generic form under the Land Registration Act, Ch 191 for miscellaneous matters for which no other form applies and could not possibly be read as imposing any legal obligation to notify a change of name in conflict with Section 239(1) of the Companies Act, 1997.
106. Section 239(1) & (2) of the Companies Act, 1997 states:
“239. Effect on registers.
(1) Where an amalgamation becomes effective, no person charged with the keeping of any books or registers shall be obliged, solely by reason of the amalgamation becoming effective, to change the name of an amalgamating company to that of the amalgamated company in those books or registers or in any documents.
(2) The presentation to any person of any instrument (whether or not comprising an instrument of transfer) by the amalgamated company—
(a) executed or purporting to be executed by the amalgamated company; and
(b) relating to any property held immediately before the amalgamation by an amalgamating company; and
(c) stating that the property has become the property of the amalgamated company by virtue of this Part,
shall, in the absence of evidence to the contrary, be sufficient evidence that the property has become the property of the amalgamated company.”
107. By law under Sections 232, 238 and 239, New Guinea Motors (1988) Pty Ltd was amalgamated with the plaintiff and the plaintiff did not lack the requisite locus standi to commence this proceeding. The preliminary objection is dismissed.
Ultra vires
108. Under this ground the plaintiff submits that the fifth defendant was a non-party at the re-hearing before the Land Board. Consequently, the Minister acted ultra vires the power conferred on him under Section 62 of the Land Act, 1996 to hear the fifth defendant’s appeal, upheld it and awarded the land to the fifth defendant.
109. Section 62 of the Land Act, 1996 provides:
“62. Appeals.
(1) A person aggrieved by a decision of the Land Board may, not later than 28 days after notice is forwarded under Section 58(10), forward a notice of appeal to the Minister.
(2) An appeal shall be accompanied by a prescribed fee.
(3) If the Head of State, acting on the advice of the Minister, thinks that the appeal has been made on frivolous grounds, the Head of State, acting on the advice of the Minister, may reject the appeal.
(4) Subject to Subsection (5), the Head of State, acting on the advice of the Minister, shall determine an appeal under this section, and his decision is final.
(5) Where an appeal under this section is upheld, the Head of State, acting on the advice of the Minister, may refer the matter back to the Land Board for re-hearing.” (Emphasis added).
110. With respect, I am of the view that the phrase “A person aggrieved by the decision of the Land Board may......” used in Section 62(1) above includes a non-party to the re-hearing at the Land Board for the application for renewal of the State Lease. Consequently, it was within the discretionary power conferred on the Minster to consider the fifth defendant’s appeal, uphold it and award the land to it. This ground is dismissed.
Not giving a proper opportunity to be heard
111. The real issue is whether the plaintiff was notified by the non-party’s appeal as a matter of prudence. The plaintiff submits that this is where the State parties and in particular the third defendant failed to inform the plaintiff of the appeal made by T.G. Holding Limited. The evidence of the plaintiff shows that numerous requests were made to the third defendant for information but were to no avail.
112. I note that while the State parties and in particular the third defendant are under no legal duty under Section 62 (supra) to inform the plaintiff of the appeal by a non-party, a cardinal principle of natural justice also known as audi alteram partem requires that no person shall be condemned unless the person has been given prior notice of the allegations and a fair opportunity to be heard. The Courts in this jurisdiction has recognised this principle and have applied it in numerous cases. The case which the plaintiff cites in its submissions in Dominic Philip v. The National Education Board (2008) N4024, I think, best explains the application of the principle in the context of introducing fresh evidence. Injia DCJ (as he then was) states:
“On judicial review, as a general rule, the plaintiff is not permitted to challenge the primary decision or to reargue or rehash arguments raised before the primary-decision making body. Also on judicial review, as a general rule, the plaintiff on review will not be permitted to rehash his case or arguments raised before the appellate body and considered by it. The primary task of the Court is to review the decision on record, made by the appeal body and determine whether the grounds of review are established by the plaintiff and the appropriate relief ought to be granted. The review court will not, should not and has no jurisdiction to go outside the scope of matters considered by the appellant body. One of the very few exceptions to the general rule is allegations of denial of natural justice under the two constituents of that principle, namely nemo judex in sua causa and audi alteram partem. There are those cases where the plaintiff or another person is directly affected by the decision and claims that he or she was not given an opportunity to be heard by the primary body or the appeal body; or that new evidence may come to light after the decision that members of the decision-making body were unduly influenced in making the decision such that the decision-making process was tainted. In such cases, the plaintiff or such a person may be allowed to address the Court and to adduce “fresh evidence” and opportunity given to prove his or her case. These principles are well established.”
113. According to the plaintiff, the decision to grant the appeal was made without giving it as respondent to the appeal, a proper opportunity to be heard, in breach of the rule of audi alteram partem. It submits this is so in particular where neither the grounds of the appeal, the appeal itself nor any part of it were communicated to it and it was given a proper opportunity to be heard on appeal. Moreover, it says that in the five-page appeal submission prepared by the Secretary for Lands to the NEC dated 27th July 2016, there was no consideration of its position, even if it were just a brief mention of its Renewal Application.
114. Furthermore, it says that it was not informed of the appeal by Tasion Group Holding Ltd to the Minister. It also says that Tasion Group Holding Ltd is a non-party because it was not the one who applied for tender of the State Lease to the Land Board. The applicant was T.G. Holding Ltd. Then it only became aware that there was an appeal lodged against the Land Board decision when it obtained a copy of the National Gazette No. G252 on 03rd May 2016. It further says that after learning about the appeal, it wrote three letters between 23rd June 2016 and 09th May 2017 to request the Minister for Lands to provide to it details of the appeal so that it could respond to the appeal or seek dismissal of the appeal. It did not receive any response and by then on 05th May 2017 the State Lease that was granted to the fifth defendant commenced.
115. From the plaintiff’s submissions, I determine that there are two parts to the ground on breach of the rule in audi alteram partem. The first is in relation to not been informed of the appeal by Tasion Group Holding Ltd and the second is in relation to not being given the opportunity to be heard on the appeal. As to the first part, I am of the view that the failure to inform the plaintiff of the appeal by a non-party – Tasion Group Holding Ltd despite the plaintiff’s repeated requests for the information is indicative of a deliberate decision by the State parties and in particular the third defendant to conceal the non-party’s appeal from the plaintiff hence indicative of an ulterior motive.
116. It will be noted that the plaintiff has adduced evidence to support this inference. Here and very briefly, I uphold the plaintiff’s submissions that the five-page appeal submission prepared by the Secretary for Lands to the NEC dated 27th July 2016, there was no consideration of its position, even if it were just a brief mention of its Renewal Application. Further, I am of the view that it is one-sided and favoured the fifth defendant. This point will be expounded in the other grounds of review later in the judgment. For now, in my view, as it was one-sided and favoured the fifth defendant, I accept the submission I can infer that these were the reasons why the Minister did not respond to the plaintiff's request for information about the appeal and/or provide a copy of the appeal to the plaintiff. I can also infer that these were the reasons for concealing the appeal and allowing it to be decided in favour of the fifth defendant by the Minister.
117. The second part of the ground is in relation to being not given the opportunity to respond to the appeal. I dismiss it because while I have accepted that a party having an interest in the appeal such as the plaintiff in this case is entitled to be informed of the appeal and/or given a copy of appeal to the Minister for Lands, I agree with the reasoning of the National Court in Sammy Lodge Ltd v. L&A Construction Ltd & Ors: OS (JR) No 520 of 2017 (Unreported & Unnumbered Judgment of 14th December 2018 per Thompson J), a case which the plaintiff seeks to factually distinguish from this case. It was held that there is no entitlement to be heard on an appeal under Section 62 of the Land Act, and no entitlement to require the Head of State, acting on advice, to give reasons.
118. I am of the view that there is no expressed procedure in Section 62 of the Land Act by which the Minister for Lands may adopt to allow an interested party to the appeal from a decision of the Land Board such as the plaintiff in this case, to be heard. However, I consider that the appeal submission prepared by the Secretary for Lands to the Minister must be a fair and objective one and not one-sided or biased towards the party appealing. Where it is observed to be one-sided or biased towards the party appealing, it is open to the aggrieved party to rely on it as a separate ground of review in a judicial review proceeding. This point will be expounded under the ground of bias later in the judgment. For now, it is sufficient to find the appeal submission was one-sided and favoured the fifth defendant were the reasons why the Minister did not respond to the plaintiff's request for information about the appeal and/or provide a copy of the appeal to the plaintiff. Moreover, these were the reasons for concealing the appeal and allowing it to be decided in favour of the fifth defendant by the Minister.
No Application for State Lease over land by the Fifth Defendant
119. But before addressing the issues the plaintiff raises in relation to the appeal to the Minister for Lands, I want to go back, and address issues raised in relation to the application for a State Lease at the Land Board following the judgment of the National Court of 28th March 2014. According to the plaintiff, it relies on the ground that the fifth defendant did not apply for a State Lease over the land. The said application was by another company. There are two companies at the centre of the controversy in this ground, T.G. Holding Ltd and Tasion (Group) Limited.
120. The plaintiff submits that T.G. Holding Ltd and Tasion (Group) Limited are owned and controlled by Mr Sam Tasion. Mr Sam Tasion is the sole Shareholder and current Director of T.G. Holding Ltd. According to the plaintiff, Freeway Motor is a registered business name of T.G. Holding Ltd. Freeway Motors has conducted a care sales business from part of the land at all material times. It did not have a commercial lease from it (plaintiff), but sub-leased in some fashion from an entity leasing part of the land from it (plaintiff) but was allowed to remain in occupation and accepted rentals from it until the dispute over the land arose.
121. Tasion (Group) Limited is a 100% subsidiary of T.G. Holding Ltd. Its directors are Mr Sam Tasion since date of incorporation and Mr Teddy Tasion since November 2017. When Mr Teddy Tasion signed the Lease Acceptance Form on 11th May 2017 and affixed the seal of T.G. Holding Ltd on it, he was not a director and unauthorised to sign the Lease Acceptance Form and affix the seal of T.G. Holding Ltd. In so doing he falsely and fraudulently misrepresented to the Secretary for Lands that he was a director of either T.G. Holding Ltd or Tasion (Group) Limited.
122. Next, the plaintiff draws the Court’s attention to the name of the company on the letterhead that purports to be the ‘appeal’ to the Minister for Lands which the Head of State purported to uphold and grant. The name of the company is ‘Tasion Group Holdings Ltd’ which it says does not exists based on search of companies records at Companies Office.
123. Based on the lack of rebuttal evidence from the defendants outlined at [96(b)] above, I find as a fact that there is no application for a State Lease by the fifth defendant. Despite this, a State Lease over the land was issued to Tasion Group Limited. There is no record of this company in existence. The two companies in existence are T.G. Holding Ltd and Tasion (Group) Limited. I uphold the plaintiff’s submissions that under the doctrine of separate legal entity, they are two separate companies. I will expound on this point later under the ground on no appeal to the Minister for Lands by the fifth defendant. For now, I accept that T.G Holding Ltd and Tasion (Group) Limited are owned and controlled by Mr Sam Tasion. He is the sole shareholder and director of T.G Holding Ltd.
124. However, when it came to appealing the Land Board’s decision to the Minister for Lands, the appeal letter dated 21st March 2016 was under a different company called ‘Tasion Group Holdings Ltd’ and Mr Sam Tasions did not sign the appeal letter. It was signed by Mr Teddy Tasionas director. Furthermore, Mr Sam Tasion did not sign the Lease Acceptance Form following the appeal. It was Mr Teddy Tasion. At the material time, Mr Teddy Tasion was not a director of T.G. Holding Ltd and was unauthorised to sign the appeal letter and Lease Acceptance Form.
125. In all the circumstances I am satisfied that the inference open to be drawn from these facts which I so found is that, as Mr Sam Tasion was a member of the Land Board at the material time, he made sure that Mr Teddy Tasion signed the appeal letter and Lease Acceptance Form to conceal the nexus or association between him and the Land Board to give the impression that the procurement and registration of the State Lease Title of the fifth defendant was free of fraud.
Similar Fact Evidence
126. An additional ground which the plaintiff invites the Court to take into consideration is Mr Sam Tasion’s past history to assess the credibility of his evidence. At [173] of its written submissions, it submits “..........that the court take cognisance of the findings of the Supreme Court in para 31 dot-point 3 of SC1926 PNGBC v. Sam Masukaman Tasion, being unrelated proceedings involving Mr Sam Tasion, the proprietor of the Tasion Group and director of T.G. Holding Ltd and Tasion (Group) Ltd. In SC1926, Mr Tasion had endeavoured to hide a personal financial asset from his creditor by falsely claiming the asset belonged to a company, not him personally, and he falsified documents to give that impression. The Supreme Court held against him and stated:
127. It is not clear from these submissions if the plaintiff is relying on similar fact evidence to invite the Court to draw an adverse inference to the credibility of Mr Sam Tasion as a witness and a fact in issue, it being whether Mr Teddy Tasion was a director of T.G. Holding Ltd and signed and affixed the seal of T.G. Holding Ltd on the Lease Acceptance Form. Similar fact evidence is commonly applied in criminal law and criminal proceedings like in The State v. Stafford Hambo (2010) N4036. According to legal texts and commentaries, similar fact evidence is a form of character evidence that relates to extrinsic misconduct by an accused and presumed inadmissible. It is described as an exception to bad character evidence. In the text-book Peter Murphy, A Practical Approach to Evidence, Third Edition Black Stone Press 1980, at 107 the learned author identifies three different meanings given to the word ‘character’ in the law of evidence:
“Firstly, it may refer to the reputation in which a person is held in his community, among those by whom he is known; secondly, it may refer to the disposition of a person to behave in a certain way; thirdly, it may refer to specific incidents in the personal history of the subject, for example previous convictions for criminal offences.
Each of these meanings of the word ‘character’ may also be regarded as a possible method of proving the character of a person, since a person’s character may be an amalgam of each of these factors, it would be reasonable to assume that the law of evidence would permit proof of each. At common law, however, the actual position was very different. Only the reputation of a person in his community, good or bad, was regarded as competent evidence of character. Evidence of the opinion of a witness (as opposed to evidence of reputation) was excluded. So also were evidence of disposition to behave in a certain way and evidence of prior acts on the part of the subject.” (Emphasis added).
128. It appears that there are two views in relation to the use of evidence of reputation of a person and evidence of the opinion of a witness by the Courts in England: one under statute and the other under common law. Murphy alluded to them when referring to a landmark case tracing back to 1865 at the same page (107) of the same text-book thus:
“It should be added, however, that the law may not have been truly settled on this point until the landmark case of R v. Rowton [1865] EngR 53; (1865) Le & Ca 520, and that even then, the evidence of general reputation produced powerful dissent.”
129. The debate between the use of character evidence between statute and common law in England seemed to have eased and the focus seemed to have shifted to the question of relevance of character evidence. Murphy observed at 108 of the same text-book (supra):
“The test which is emerging in modern authorities is one of relevance.”
130. In this jurisdiction, in criminal proceedings the question of relevance of character of an accused person and/or his evidence is provided in Section 15 of the Evidence Act – ‘Accused as Witness as to Prior Conviction’. However, the question of how similar fact evidence is used to establish the bad character of a defendant in judicial review proceedings under Order 16 of the NCR is unclear. The plaintiff did not address this question when inviting the Court to consider the judgment in SC1926 PNGBC v. Sam Masukaman Tasion, being the proprietor of the Tasion Group and director of T.G. Holding Ltd and Tasion (Group) Ltd. In civil cases, according to Murphy, at 158 of the same text-book (supra):
“Although it has been said that in civil cases, even where similar-fact evidence is technically admissible, the court has a discretion, and should refuse to admit it unless it would not only ‘afford a reasonable presumption as to the matter in dispute, but would be reasonably conclusive, and would not raise a difficult and doubtful controversy of precisely the same kind as that which the jury have to determine’ the rule in modern times is almost certainly the same as that in criminal cases. Now that jury trial is comparatively rare in civil cases, the judge has ample power to reject evidence which will not assist him in the determination of the pleaded issues, and can deal with the likelihood of prejudice in the same way.”
131. At the same page of the text-book, Murphy discusses the Court of Appeal judgment in Mood Music Publishing Co. Ltd v. De Wolfe Ltd [1976] Ch 119 a breach of copy right case. According to the summary of the facts and judgment of the Court by the learned author:
“The plaintiffs were owners of the copyright work called ‘Sogno Nostalgico’. They alleged that the defendants had infringed such copy right by supplying for broadcasting a work called ‘Girl in the Dark’. It was not disputed that the works were similar, but the defendants contended that the similarity was accidental, and denied copying, even though ‘Sogno Nostalgico’ was composed prior to ‘Girl in the Dark’. It was held that evidence was relevant and admissible to show that the other occasions the defendants had reproduced works subject to copyright, one of the three relevant occasions being a reproduction by the defendants as a result of an ‘entrapment’ set up by the plaintiffs for the express purpose of obtaining evidence against the defendants. Lord Denning MR said (ibid. at 127):
The criminal courts have been very careful not to admit such evidence unless its probative value is so strong that it should be received in the interests of justice; and its admission will not operate unfairly to the accused. In civil cases the courts will admit evidence of similar fact if it is logically probative, that is, it is logically relevant in determining the matter which is in issue: provided that it is not oppressive or unfair to the other side: and also that the other side has fair notice of it and is able to deal with it.”
132. At 159 of the same text-book, Murphy discusses another case of use of similar fact evidence in an action for recovery of loss of a diamond deposited with a bank.
“In Sattin v. National Union Bank (1978) 122 SJ 367, a plaintiff who claimed in respect of the loss by the defendant bank of a diamond which he deposited with them as security for an overdraft, was held to be entitled to adduce evidence of another occasion when jewellery so deposited had been found to be missing. The Court of Appeal’s decision was based on the relevance of the evidence to rebut the defence that the defendants had used reasonable safeguards in securing the property deposited with them by customers.”
133. Based on the foregoing discussions, similar fact evidence can be used in civil proceedings and the principles can be adopted in this jurisdiction under Schedule 2.2 of the Constitution. In judicial review proceedings, I consider that similar fact evidence can be used subject to the plaintiff meeting these requirements:
(1) it is logically relevant to determine a matter in issue.
(2) it is used to rebut a defence.
(3) it is not oppressive or unfair to the other side.
(4) the other side has a fair notice of it and is able to deal with it.
(5) to give a fair notice to the other side, it must be pleaded as a separate or part of a series of grounds of judicial review in the Statement made pursuant to Order 16, rule 3(2)(a) of the National Court Rules.
134. As to the last requirement I consider that in a case where fraud is alleged against a registered proprietor’s State Lease Title, and similar fact evidence is used to prove fraud, it is necessary for the plaintiff to plead it as a ground of review or part of the ground of judicial review in the Statement made pursuant to Order 16, rule 3(2)(a) of the NCR to put the defendant on notice of what to meet at trial. Once it is pleaded, evidence of that nature can be adduced by the plaintiff at trial to establish fraud.
135. In the present case, it is not necessary to consider the first three requirements because the plaintiff has failed to meet the fourth and fifth requirements. It failed to give a fair notice as it neither pleaded nor obtained leave to rely on similar fact evidence in the Statement made pursuant to Order 16, rule 3(2)(a), 3(4) & 6(2), (3) & (4) of the National Court Rules. It follows that the defendants had no notice that the question of bad character based on the findings in the unrelated proceeding in SC1926 PNGBC v. Sam Masukaman Tasion & Tason (Group) Ltd (supra) will be adduced as a similar fact evidence to have the Court make an adverse finding in relation to Mr Sam Tasion’s character. For this reason, the plaintiff has failed to make a case for the Court to consider this further ground on past history of Mr Sam Tasion and propensity to re-offend and it is rejected.
No appeal by fifth defendant
136. Moving on to the ground on no appeal to the Minister by the fifth defendant, the plaintiff submits that the fifth defendant did not and/or never appealed against the recommendation of the Land Board to grant a State Lease to it (plaintiff). It was the company called T.G. Holding Ltd who appealed against the recommendation of the Land Board. The plaintiff further submits that T.G. Holding Ltd and the fifth defendant (Tasion Group Limited) are two separate and distinct entities, and the appeal must be by T.G. Holding Ltd.
137. The fifth defendant did not specifically respond to the plaintiff’s submission on this point but submits that “on 21st March 2016 the Tasion Group of which the 5th defendant is a member lodged an appeal against the decision of the Land Board”. It refers to a letter addressed to the third defendant dated 21st March 2016 as the appeal against the decision of the Land Board. For this reason, it submits that it is wrong for the plaintiff to allege that it did not appeal against the decision of the Land Board.
138. In expounding on the issue of separate legal entity, I accept the plaintiff’s submissions that T.G. Holding Ltd and the fifth defendant (Tasion Group Limited) are two separate and distinct entities. This is further confirmed by the company extract of each company which shows that:
(a) T.G. Holding Ltd (1-41397) whose sole shareholder is Sam Tasion; who is also the only current director. The others who were directors ceased such as Teddy Tasion was a director until 20th June 2011 and Terry Tasion was director until 1st February 2007 with other family members also directors at different times over the years up to 2007.
(b) Freeway Motors (6-224630) is a registered business name of T.G. Holding Ltd. Freeway Motors has conducted a car sale business from part of the land at all material times. It never had a commercial lease from the plaintiff, but originally subleased in some fashion from an entity leasing part of the land from the plaintiff.
(c) The plaintiff did not originally object and allowed Freeway Motors to remain in occupation and accepted rentals until it applied for renewal of its State Lease when it was about to expire.
(d) Tasion (Group) Limited (1-25420) a 100% subsidiary of T.G. Holding Ltd whose directors are Sam Tasion (since incorporation) and Teddy Tasion (since November 2017).
(e) There is no company called Tasion Group Holdings Ltd in existence. This is the name on the letterhead of the appeal which the Head of State upheld and awarded the State Lease to the fifth defendant.
139. Further, I accept the plaintiff’s submissions that the separate personality of a company cannot be understated. A misdescription of the name of the company is not optional because first pursuant to Section 17(1) of the Companies Act, 1997:
“Subject to this Act and to any other law, a company has, both within and outside the country—
(a) full capacity to carry on or undertake any business or activity, do any act, or enter into any transaction; and
(b) for the purposes of Paragraph (a), full rights, powers, and privileges.”
140. Secondly, Section 26 of the Companies Act, 1997 imposes a duty on a company to clearly state its name in the following terms:
“26. Use of company name.
(1) A company shall ensure that its name is clearly stated in—
(a) every written communication sent by, or on behalf of, the company; and
(b) every document issued or signed by, or on behalf of, the company that evidences or creates a legal obligation of the company.
(2) Where—
(a) a document that evidences or creates a legal obligation of a company is issued or signed by or on behalf of the company; and
(b) the name of the company is incorrectly stated in the document,
every person who issued or signed the document is liable to the same extent as the company where the company fails to discharge the obligation unless—
(c) the person who issued or signed the document proves that the person in whose favour the obligation was incurred was aware at the time the document was issued or signed that the obligation was incurred by the company; or
(d) the Court is satisfied that it would not be just and equitable for the person who issued or signed the document to be so liable.
(3) For the purposes of Subsections (1) and (2) and of Section 155, a company may use any of the following abbreviations in its name:—
(a) "Co" or "Coy" instead of the word "Company";
(b) "Ltd" instead of the word "Limited";
(c) "&" instead of the word "and".
(4) Where, within the period of 12 months immediately preceding the giving by a company of any public notice, the name of the company was changed, the company shall ensure that the notice states—
(a) that the name of the company was changed in that period; and
(b) the former name or names of the company.
(5) Where a company fails to comply with Subsection (1) or (4)—
(a) the company commits an offence and is liable on conviction to the penalty set out in Section 413(1); and
(b) every director of the company commits an offence and is liable on conviction to the penalty set out in Section 414(1)”.
141. Thirdly, it is even an offence not to clearly state the name of the company and the company and every director of the company is liable to a penalty set out in Section 413(1) and Section 414(1) of the Companies Act, 1997.
142. Given the above reasons, I am satisfied that the appeal must be by T.G. Holding Ltd. Based on the letter of appeal, the appeal was not in the name of T.G. Holding Ltd. It was in the name of Tasion Group Holdings Ltd. These are two different companies and names and cannot be ignored. It follows that just as the State defendants insisted on the plaintiff’s lack of locus standi based on the doctrine of separate legal entity of a company, the same rule applies to T.G. Holding Ltd and Tasion Group Limited. The appeal was by an entity other than T.G. Holding Ltd. Then it is quite confusing because the State Lease was registered to the fifth defendant (Tasion Group Limited). There lies the first error of law on the face of the record.
143. The error runs right through to the requirements for the appeal, one of which is the payment of a prescribed fee of K500.00. A sum of K500.00 was paid by T.G. Holdings Ltd on 24th March 2016 and a copy of the receipt has been produced. There is no mentioned of the fifth defendant and on the face of it, the fifth defendant did not pay the prescribed fee for its appeal.
Lack of proper consideration, irrelevant and unlawful reasons
144. Under this ground the plaintiff relies on lack of proper consideration, irrelevant and unlawful reasons for the refusal to renew the State Lease to it and to instead grant the State lease to the fifth defendant.
145. The plaintiff refers to a five-page appeal submission prepared by the Secretary for Lands dated 27th July 2016 which may be found at annexure “M” to the affidavit of Tiri Wanga filed 8th September 2017 and identifies the discrepancies in it as follows:
(a) the appellant was Tasion Group Ltd when there was no appeal by Tasion (Group) Ltd. It is clear that the appellant was either a nullity or, at best was by T.G. Holding Limited.
(b) The reference at paragraph 3.3 to Tasion Group Limited being a party to the earlier Court proceeding is incorrect. A different entity altogether, T.G. Holding Ltd was a party to the earlier Court proceeding.
(c) Paragraph 3.4 states that “....did significant improvements worth millions of Kina......” on the land.
146. It is noted that in the letter from T.G. Holding Ltd to the Minister for Lands dated 21st March 2016, it only mentioned that “significant or substantial improvements” were made by T.G. Holding Ltd. For this reason, I accept the plaintiff’s submission the assertion at paragraph 3.4 that “.... did significant improvements worth millions of Kina......” on the Land is in direct conflict with the letter from T.G. Holding Ltd to the Minister for Lands dated 21st March 2016 because the letter only mentioned that “significant or substantial improvements” were made by T.G. Holding Ltd and there is no mention of the improvements being worth millions of Kina. In my view, the first defendant cannot claim that the different expressions are simply a matter of semantics. On the contrary, they go to the core of the dispute because these was the information that was put before the Minister to advise the Head of State to decide the appeal in favour of the fifth defendant.
147. The plaintiff identifies further discrepancies in the five-page appeal submission prepared by the Secretary for Lands dated 27th July 2016 as follows:
(d) Paragraph 3.6 states that “....the Appellant appealed to the Minister for Lands & Physical Planning to use his indulgence and rescind the recommendation of the Land Board to award the Land in the appellants favour or withdraw the item and have the land subdivided so that it will apply for parts of the Land it had improvements on.” In response to this paragraph, the Minister for Lands, in addition to what is asked for in the appeal letter dated 21st March 2016 which was for the application to be reheard for purposes of a sub-division, the Minister said that the Land should be awarded in favour of the Appellant, Tasion Group Limited.
(e) At paragraph 4.2, the Secretary states that “The fact that the appellant was not listed even though it applied for the land goes on to prove that the Department breached a statutory requirement under Section 58(2) of the Land Act 1996.......Hence the Board’s decision which was made without first inviting the appellant must be rescinded and the appellant be allowed and listed as an applicant for this land as an interested person.”
148. According to the plaintiff, the first point to note is that there was an out of time and un-fee tender application for a State Lease on 28th October 2010 by T.G. Holding Ltd. The Minister failed to take this factor into consideration when advising the Head of State in determining the fifth defendant’s appeal. Secondly, there was never any application by Tasion Group Limited. Even if there was such an application which the plaintiff denies, only its renewal application existed after the National Court handed down its decision on the earlier Court proceeding. Similarly, the Minister failed to take this factor into consideration when advising the Head of State in determining the fifth defendant’s appeal.
149. Next, the plaintiff submits that given it made a renewal application for the State Lease to the Land Board and not a fresh application, when the National Court in the earlier proceedings remitted the matter for re-hearing before the Land Board, the re-hearing was for its renewal application of the State Lease of land. For this reason, the fifth defendant or any other applicant for that matter was precluded from applying for the same State Lease of land.
150. According to the Acting Secretary of the Department of Lands Mr Tiri Wanga, the Department followed the due process when it allowed the fifth defendant to appeal the decision of the Land Board to the Minister. At paragraph 14 of his affidavit filed 08th September 2017 he deposes that “Tasion Group Ltd appealed this recommendation of the Land Board to the Minister for Lands & Physical Planning under Section 62 of the Land Act 1996 as an interested person doing business on the land and had permanent structures on it.”
151. In taking up the Acting Secretary’s point in submissions, counsel for the State defendants submits that as the disputed land is subject of a State Lease, when its term expired, the interest in land reverted to the State and the State is at liberty to reallocate to any interested applicant. The State defendants were then at liberty to grant a State Lease of the land to the fifth defendant. As for the plaintiff, they submit, the plaintiff’s remedy is in damages in the form of payment for improvements under Section 120 of the Land Act. Where the State fails to pay for improvements, it is at liberty to sue to recover the costs of improvements within six months of the non-renewal of its State Lease.
152. As to the fifth defendant, at paragraph 43(c) of its written submissions, it submits that “In advising the Head of State on 6 February 2017 to make the decision to grant a lease to the 5th defendant, the Minister did not follow one aspect of his Department’s submission and it did result in an irregularity on his part. The submissions observed the decision of this Court in Nambawan Super v. Allan and Ors [2014] N5707 that where a former lessee seeks a new lease there should be an advertisement for tenders absent an exemption pursuant to s.69(2) of the Land Act”. However, the omission to advertise the land being available for leasing is minor and there is no basis in the evidence for a finding that the Minister fraudulently advised the Head of State to allow the appeal and grant a lease to the fifth defendant despite that part of the Department’s submission.
153. The plaintiff is correct to say that when the final decision was handed down on 28th March 2014 by the National Court in the earlier proceeding, only the defined term “the Renewal Application” was referred back to the Land Board as confirmed by paragraphs 126. 4 and 126. 5 of the final order of the Court. It is also clear throughout the judgment that by the words “Renewal Application” the Court was referring to the plaintiff’s application.
154. However, it should be pointed out that there is no expressed provision in the Land Act for a renewal application for a State Lease of land to be made to the Land Board nor is there a distinction made between a renewal application and a fresh application for a State Lease in Section 57(2) of the Land Act because of the words “all applications for grant of leases” is used to define the functions of the Land Board when considering applications for grant of State Leases. The closest provision is Section 120(2). It refers to improvements and payment for improvements. In a case where after the expiration of the term of a State Lease of land and there are improvements on the land, and the lessee is granted “a further lease of the land”, the lessee is not required to pay for improvements under Section 84 of the Land Act, unless he has received payment for the improvements under Section 120.
155. As to the State defendants’ and the fifth defendant’s submissions that as the plaintiff’s State Lease had expired and the State defendants were at liberty to reallocate it to the fifth defendant without the need for advertising the land as being available for leasing under Sections 68 and 69 of the Land Act, I am not satisfied that in a case where a lessee of a State Lease has applied for its renewal prior to its expiration, there is a requirement for the Secretary of the Department of Lands to advertise it as being available for leasing. The reason is simple, until it has expired, the lessee is the current State Leaseholder, and the land under the State Lease is not vacant.
156. Preferably, the application for renewal should be decided by the Land Board prior to the expiration of the term of the State Lease. The question of payment of improvement does not arise until the Land Board is considering the application for renewal.
157. As to the case of Nambawan Super v. Allan and Ors (2014) N5707 it is noted that it is unclear from the facts whether the plaintiff had applied for renewal of its State Lease prior to its expiration. The major issue in that case was how the new lessee came to know about the land being available for leasing and applied for it when it was not advertised or not exempted from being advertised. This is the distinction and the reason I find that case of no assistance to determine the question of renewal of a State Lease. For these reasons, I am of the view that in a case where a lessee applies for renewal of its State Lease prior to its expiration, it is not necessary for the Secretary to advertise the land as being available for leasing. Approaching the question of renewal of a State Lease in this way gives the lessee the opportunity to be the sole applicant for renewal.
158. It follows that based on the Court’s decision I am satisfied that the matter remitted for re-hearing at the Land Board is the plaintiff’s “Renewal Application”. The “Renewal Application” would fall within the phrase “further lease of land” used in Section 120(2). Accordingly, the “Renewal Application” should be the sole matter for deliberation at the Land Board meeting. Now there are good reasons for this proposition. One of them is the requirement for the applicant to demonstrate to the Land Board that it has put up improvements and the value of the improvements to comply with one of the covenants of the State Lease. The other is to demonstrate that it has not breached any covenants of the State Lease, for example, it has not defaulted in paying land rent.
159. Where the Land Board determines that the applicant has breached the covenants of the State Lease, it is open to it to refuse to grant the “Renewal Application” of the State Lease. Where the Land Board determines not to grant a “further lease of land” to the applicant, it is open to the Secretary for Department of Lands to advertise the State Lease in the National Gazette as being available for leasing under Section 68 (Advertisement of Lands Available for Leasing) and Section 69 (Duty to Advertise State Leases) of the Land Act.
160. In my view, the question of renewal of the State Lease cannot be decided in isolation. Paramount to that decision is the question of improvement on the land. In a case where the applicant has put up substantial improvements such as buildings and upon expiration of the State Lease, it is not renewed, Section 120(3) of the Land Act comes into play and it is where “the Minister shall, within six months after the expiration, pay the outgoing lessee the value of the improvements on the land....”.
161. Secondly, where on the expiration of the term of the State Lease of land and there are improvements on the land, and the lessee applies for and is not granted a further lease of the land, the Minister shall, within six months after the expiration, pay to the outgoing lessee the value of the improvements on the land. In the final case, Section 120(5) states that where the lessee does not apply for “further lease of the land” the subject of his lease, no payment for improvements on the land will be made at the expiration of the State Lease, but he may remove the improvements as are severable on or before the surrender with little damage as may reasonably be to the land.
162. At paragraphs 90 to 109 of the decision in the earlier proceeding the National Court was not satisfied that upon the expiration of the State Lease, the Minister made payment for improvements on the land to the plaintiff. To my mind, the Land Board was correct to consider the plaintiff’s “Renewal Application” to the exclusion of T.G. Holding Ltd and recommend that the State Lease to the plaintiff be renewed. The Land Board’s decision should have concluded the matter. However, the Secretary for Lands allowed and facilitated T.G. Holding Ltd to appeal the decision of the Land Board to the Minister and eventually, the appeal was upheld. The Secretary’s lack of proper consideration of the “Renewal Application” is apparent when he allowed T.G. Holding Ltd to appeal to the Minister and that he took into consideration irrelevant and unlawful reasons when he submitted a five-page appeal submission prepared by him to the Minister dated 27th July 2016 which was biased in favour of Tasion’s company. In any case, there was never any application by Tasion Group Limited and the Secretary’s comments in the five-page appeal submission are biased in favour of Tasion’s company.
163. Further discrepancies which the plaintiff identifies in the five-page appeal submission prepared and submitted by the Secretary states that “The third ground of appeal is that the National Court Ordered for the renewal application to be referred back to the Land Board for a rehearing. The appellant was an applicant in a previous hearing of the Board and if the Court ordered for a rehearing of the application, the appellant should have been included as this item is a referral from the National Court and being an applicant previously, it should have also been listed as an applicant. Hence, the considering of this item by the Land Board without listing the applicant is a breach of the National Court Orders.”
164. For the reasons given above, in the earlier Court proceeding the National Court ordered reconsideration of the “Renewal Application”, a defined term for Steamships’ “Renewal Application” for a State Lease over the land and not just any application. For this reason, the Secretary should not have advised the Minister to consider the fifth defendant or T.G. Holding Ltd’s appeal and in so doing, misled the Minister and the latter erred in his judgment when he upheld the appeal and granted the State Lease to the fifth defendant or T.G. Holding Ltd.
165. The appeal submission also does not differentiate between the fact that Tasion interest only occupied a portion of the whole State Lease area. I accept the plaintiff’s submissions that the submission is misleading and give off the impression that Tasion was occupying the whole land and made improvements on the whole land of the State Lease it occupied.
166. Finally, I note at the conclusion of the appeal submission by the Secretary, he recommended that “the recommendation of the Board in favour of New Guinea Motors Pty Ltd must be quashed as it is an unregistered entity and therefore cannot own and dispose of property under its name”. However, I accept the plaintiff’s submissions that this conclusion fails to accept the fact that New Guinea Motors was amalgamated into Steamships Ltd. As I have outlined the doctrine of amalgamation in the early part of the judgment, an amalgamated company is now Steamships Ltd, and it is the applicant for renewal of the State Lease.
167. However, as I have also found, it was at the request of the Department of Lands that Steamships reverted to the name New Guinea Motors. In the circumstances, Steamships Ltd does have the legal capacity to own and dispose of property and it was on this legal basis that it applied for renewal of its State Lease.
168. For the foregoing reasons, I am satisfied that not only did the Secretary for Lands misled the Minister, but also falsely and hypocritically ensured that the appeal is favourable to the fifth defendant.
Non-payment of improvements on expiration of State Lease
169. Under this ground the plaintiff submits that Section 120(3) and (4) are mandatory provisions. The Minister for Lands shall compensate a lessee for the value of improvements within six months after the expiration of the lease on or before the grant to the new lessee. In this case the Minister has not compensated it for the value of improvements within six months after the expiration of the lease on or before the grant of the lease to the fifth defendant. The Minister’s failure to pay compensation constitutes breaches of the mandatory provisions of Section 120(3) and (4) of the Land Act. It relies on the National Court case of Steamships Trading Company Limited v. Garamut Enterprises Ltd (2000) N1959 to reinforce its submissions.
170. Similarly, the State defendants and the fifth defendant did not rebut these submissions but repeat their submissions that the plaintiff is entitled to sue the State for non-payment of value of improvements.
171. I uphold the plaintiff’s submission that Section 120(3) and (4) (supra) are mandatory provisions and must be complied with by the Minister for Lands. The Minister for Lands shall compensate a lessee for the value of improvements within six months after the expiration of the lease on or before the grant to the new lessee. For this reason, it is wrong for the defendants to submit that the plaintiff’s remedy is to sue for damages to recover the value of improvements. I also uphold the plaintiff’s submission that in this case the Minister has not compensated it for the value of improvements within six months after the expiration of the lease on or before the grant of the lease to the fifth defendant.
172. The consequence of the Minister’s failure to pay compensation constitutes breaches of the mandatory provisions of Section 120(3) and (4) of the Land Act: Steamships Trading Company Limited v. Garamut Enterprises Ltd (supra). When these breaches are considered together with the other breaches and irregularities identified by the plaintiff, they reinforce the inference that the mandatory obligation by the Minister to compensate the plaintiff for the value of improvements was by-passed to ensure that the fifth defendant’s application for the State Lease is given priority. This ground is upheld.
Non-compliance with the Court’s Decision in OS (JR) No 756 of 2016
173. The next ground the plaintiff relies on may be dismissed if it were the sole ground of review because it is unnecessary and of no utility to reaffirm a judgment of the National Court by a further judgment of the National Court. However, it is not the case in the present case.
174. In the present case, the plaintiff relies on Section 155(6) of the Papua New Guinea National Constitution (“Constitution”) to assert that the National Court judgment in the earlier Court proceeding was in its favour. The judgment was not appealed from or reviewed. Therefore, the judgment is binding on the defendants and all persons including the defendant in this proceeding are to give effect to the judgment.
175. Section 155(6) of the Constitution states:
“Subject to any right of appeal or power of review of a decision, it is the duty of all persons (including the Law Officers of Papua New Guinea and other public officers in their respective official capacities), and of all bodies and institutions, to comply with and, so far as is within their respective lawful powers, to put into effect all decisions of the National Judicial System.”
176. The defendants did not rebut these submissions, but the State defendants reinforced their earlier submissions that the plaintiff lacked the requisite locus standi to apply for judicial review and New Guinea Motors was not a registered entity to be approved a further State Lease. On the other hand, they say that as an unsuccessful applicant for renewal of a State Lease, the plaintiff’s remedy is in damages in the form of payment for improvements.
177. As there are no submissions that Section 155(6) of the Constitution does not apply, the plaintiff’s submission that the defendants were bound to give effect to the judgment of the National Court in the earlier Court proceeding is upheld. Based on the order of the National Court set out at [66] above, the plaintiff’s Renewal Application was referred to the Land Board for a re-hearing, but as explained at [162] above after the Land Board recommended the State Lease to be granted to the plaintiff, the fifth defendant was allowed to appeal that decision to the Minister which was not supposed to be the case. When this ground is considered together with the other grounds, it reinforces the inference that the defendants deliberately refused to give effect to the judgment of the National Court to deprive the plaintiff of its State Lease when it expired.
Bias and Fraud
178. The plaintiff submits that individually and collectively the actions of the State defendants in making each of the decisions set out in Part 2 of the Further Amended Statement were biased against it, and in favour of Mr Tasion or interests associated with him and amounted to fraud.
(a) One of the factors which supports the inference that the fifth defendant’s State Lease was procured by fraud is the delay in the proper hearing and disposition of its application for a State Lease filed 08th May 2006. This was pointed out by the National Court in its judgment in the earlier Court proceeding OS (JR) No 756 of 2009.
(b) The second was the false assertion that the plaintiff had failed to comply with covenant (c) of its former State Lease and no new State Lease should be issued to it in accordance with its application filed 08th May 2006.
(c) Thirdly, a further false assertion and accepting that the fifth defendant or any related entity was in proper legal occupation of the land from 2002 when in fact the fifth defendant or any related entity:
179. The State defendants and the fifth defendant did not directly rebut these submissions. However, the first observation to make is that except for a period of seven days before the meeting of the Land Board that the Chairman of the Land Board must publish in the National Gazette a list of the applications and other matters to be considered and lands to be dealt with by the Board of the meeting under Section 58(1) of the Land Act, there is no expressed provision in the Land Act which fixes a time for the Land Board to hear an application for a State Lease or a Renewal Application for a State Lease after it has been lodged at the Land Board.
180. However, in my view, that does not give the Land Board the right to unreasonably delay the hearing of the application. The question of delay will depend on how long after the lodgement of the application the Land Board hears the application. In the present case, the National Court in the earlier proceeding OS (JR) No 756 of 2009 observed that it took more than two years from the lodgement of the plaintiff’s Renewal Application of 08th May 2006 to 06th October 2008 for the Land Board to recommend to the Minister not to renew the plaintiff’s State Lease. In my view, the delay was unnecessary and unreasonable because this was not a fresh application for a State Lease and the Land Board will treat the application as being ‘new’ but a Renewal Application. The Land Board had the necessary and relevant information to decide the Renewal Application. Where necessary and required, it is perfectly entitled to request for updated information in relation to improvements on the land. Two reports were done. First, a valuation report which was prepared on 18th May 2009 which was well after the decision of the Land Board of 06th October 2008. Second, an inspection report dated 12th January 2015 which was prepared and placed before the Land Board at the re-hearing.
181. In my view this is another example of procrastination by the State defendants with the intention of making sure that the fifth defendant’s application for a State Lease of the disputed land is listed at the Land Board meeting for consideration. In ensuring that the fifth defendant’s application is listed at the Land Board meeting, the officers of the fourth defendant through the Department of Lands reported to the Land Board that the plaintiff breached covenant (c) of the State Lease. The allegation fails to have regard to the plaintiff’s long standing and occupation of the land. It was only after the National Court judgment and before the re-hearing of the plaintiff’s Renewal Application that the Land Board directed officers of the Department of Lands to conduct an inspection and provide a report which they did.
182. The inspection report favoured Freeway Motors because it was reported under the subheading ‘Improvement on Land’ that Freeway Motors had a Car sales yard with Administrative Offices. It makes no mention of the improvements put up by the plaintiff. It also does not state if any members of the staff of the plaintiff were invited to comment on any improvements put-up by the plaintiff.
183. Finally, in relation to the report that the plaintiff breached covenant (c) in relation to “assign, mortgage, charge, encumbrance, sublet, subdivide, part with possession of or otherwise deal with the said land without the assent in writing of the Administrator being first had and obtained,” this assertion contradicts the evidence of registration of subleases by U.A.A Group (PNG) Limited on 10th April 2006 and entered 18th April 2006 and Yumi Yet Limited on 26th March 2007 and entered 04th April 2007 on the State Lease of the plaintiff by the Registrar of Titles.
184. The first glaring irregularity is that the State defendants do not know what they are saying. On the one hand the Land Board is saying the plaintiff did not obtain consent of the Secretary of the Department of Lands to sublease parts of the land to U.A.A. Group (PNG) Limited and Yumi Yet Limited and on the other, the Registrar of Titles has registered the subleases of these two companies on the Register as noted in the State Lease of the plaintiff signifying the Secretary’s consent.
185. The second glaring irregularity is that there is no mention of a sublease of part of the land by the plaintiff to the fifth defendant or Freeway Motors in the State Lease of the plaintiff. One wonders how the fifth defendant or Freeway Motors came to be a sublessee of the plaintiff. Interestingly, the inspection report does not say that there is a sublease agreement between the plaintiff and the fifth defendant or Freeway Motors to the Land Board. If the fifth defendant has a sublease agreement with one of the plaintiff’s sublessees, that, is another instance of irregularly and illegality because it is not allowed.
186. The third glaring irregularity is that if the fifth defendant or Freeway Motors claim that it has a sublease with the plaintiff, there is no evidence that it has paid stamp duty for the lease agreement to the Stamp Duties Office (IRC) under the Stamp Duties Act. Finally, there is no evidence that the fifth defendant or Freeway Motors has obtained Ministerial Approval for the sublease of part of the land under Section 128(2) of the Land Act.
187. It is open to infer from these glaring irregularities that the officers of the fourth defendant through the Department of Lands conspired with the fifth defendant to obtain the State Lease for the fifth defendant.
(d) Fourthly, making a false and fraudulent assertion that the fifth defendant, or any related entity substantially or significantly improved the land, in accordance with law or at all in that:
188. In relation to this ground the fifth defendant makes no rebuttal submissions, and it would follow that despite its assertion that it or any of its related entity has made substantial or significant improvements to the land, there is no evidence of the following to substantiate this assertion:
189. In my view, the lack of rebuttal evidence leaves open the inference in each case uncontroverted and strengthens the plaintiff’s assertion that there were irregularities in the procurement process of the fifth defendant’s State Lease Title. In the circumstances I am satisfied that these irregularities strengthen the inference that the officers of the fourth defendant through the Department of Lands conspired with the fifth defendant to obtain the State Lease of the land for the fifth defendant.
(e) The fifth factor was a further false and fraudulent assertion in the appeal letter of 21st March 2016 that the fifth defendant or Tasion entities more generally had not been given an opportunity to make a case to the Land Board for refusal of the application by the plaintiff, when:
(f) Sixthly, having the Land Board Meeting No. 1 of 2015 defer the hearing of the plaintiff’s application on the basis of there being some unspecified ‘objection’ by Freeway Motors, when:
190. The fifth and sixth grounds will be considered together. Similarly, the State defendants and the fifth defendant did not rebut each of the points by the plaintiff. The two major issues taken up by the plaintiff in these grounds are the fifth defendant’s claim of denial of natural justice and the fifth defendant’s assertion that it objected to the plaintiff’s Renewal Application.
191. In relation to the assertion that the fifth defendant was not given the opportunity to make a case to the Land Board for refusal of the application by the plaintiff, I note the plaintiff relies on Section 58(1) of the Land Act to refute the assertion and also establish that the assertion is false and fraudulent because the Chairman of the Land Board published in the National Gazette its application for hearing at the Land Board meeting in 2008 and 2016 as outlined at bullet points 1, 2 and 5 of [189] above.
192. As far as the plaintiff is concerned, the publication of its application in the Gazettal Notice is sufficient notice to the fifth defendant of its application to the Land Board. However, there is also Section 58(2) of the Land Act which states that “The Chairman shall notify by post every person who, in his opinion, is interested in an application or matter, of the date on which it will be considered by the Land Board.” To engage Section 58(2), first the Chairman must form an opinion that the fifth defendant has an interest in the application. Secondly, if the Chairman is satisfied that the first defendant has an interest in the application, he shall notify by post (maybe a letter as notice) to the fifth defendant of the date on which the application will be considered by the Land Board. It is clear neither the Chairman of the Land Board nor the fifth defendant relied on Section 58(2) because there is no evidence that the Chairman of the Land Board was satisfied that the fifth defendant had an interest in the plaintiff’s application and notified the fifth defendant of the date of the Land Board meeting. Similarly, there is no evidence that the fifth defendant’s complaint of not been given the opportunity to be heard was based on Section 58(2). It follows there is no basis for the fifth defendant to assert that it was not given an opportunity to make a case to the Land Board for the refusal of the plaintiff’s application. In my view, it has falsely and fraudulently misled the Secretary for Lands to advise the Minister to recommend to the Head of State to uphold the appeal and grant the State Lease to it.
193. Furthermore, from the findings of fact at [32] above, a day before the Land Board meeting, on 15th April 2008 Mr Sam Tasion wrote to the Land Board in his capacity as Chairman of T.G. Holdings. It is clear from the fourth paragraph of the said letter that Mr Tasion and/or T. G Holdings objected to the plaintiff’s Renewal Application. The inference here is Mr Tasion and/or T.G Holding were aware of the plaintiff’s Renewal Application before the Land Board, and this is why they objected to it in the letter of 15th April 2008. This is a further example of the fifth defendant falsely and fraudulently misleading the Secretary for Lands to advise the Minister to recommend to the Head of State to uphold the appeal and grant the State Lease to it.
194. As to the question of ‘objection’ further findings of fact at [36] and [37] above, shows that after the Land Board published in the National Gazette No. G160 the various applications for deliberations in the Land Board Meeting No. 4 of 2008, on 05th September 2008 the executive officer of the Land Board wrote a memorandum to the members of the Land Board and advised them of the agendas for the hearing from 22nd to 24th September 2008. Mr Sam Tasion was a member of the Land Board at that time and from this information he knew that the plaintiff’s Renewal Application was scheduled for hearing.
195. Fast forward to 2014, the said letter was subject of discussion in the earlier Court proceeding OS (JR) No 756 of 2009. I uphold the plaintiff’s submission at [80] of page 79 of the judgment that the National Court comprehensively rejected the objection made in the said letter and it is no longer a proper basis for the delay or refusal of the plaintiff’s Renewal Application.
196. I find that there was no ‘objection’ or ‘new objection’ by the firth defendant or any Tasion entities to the Land Board to object to the plaintiff’s Renewal Application. Despite this the Land Board Meeting No.1 of 2015 was deferred on a false and fraudulent misrepresentation by the fifth defendant. This was another tactic employed by Mr Tasion to delay the Land Board Meeting to consider the plaintiff's Renewal Application. After almost two years after the judgment of the National Court in OS (JR) No 756 of 2009 of 18th March 2014, on 24th February 2016 the Land Board recommended the State Lease to be granted to the plaintiff. This is another case of the fifth defendant falsely and fraudulently misleading the Land Board and the Land Board acquiescing the fifth defendant’s false and fraudulent misrepresentation to deter the Land Board meeting for the convenience of the fifth defendant.
197. The false and fraudulent misrepresentation did not cease but continued in the appeal to the Minister when the appeal by ‘Tasion
Group Holding Ltd’ was lodged to the Minister in the letter dated 21st March 2016 where it stated at the fourth paragraph that:
“The premise of our objections stems from a number of reasons but more particularly the lack of notice given to us as an interested party.”
198. There is no evidence that the Secretary for Lands was satisfied that the fifth defendant has an interest in the plaintiff’s Renewal Application and had notified it of the date of the Land Board meeting under Section 58(2) (supra). In any event, as found, the judgment of the National Court in OS (JR) No 756 of 2009 is unequivocal in relation to the matter remitted for re-hearing by the Land Board – it was the plaintiff’s Renewal Application. As I have found, as it was the Renewal Application, there is no requirement for other applicants including the fifth defendant or any Tasion entities to apply for the State Lease to the Land Board. This is another case of Mr Teddy Tasion and ‘Tasion Group Holding Ltd’ falsely and fraudulently misleading the Minister to intervene for them in their quest to secure the State Lease for them. In the end the appeal was upheld, and the State Lease was not granted to ‘Tasion Group Holding Ltd’ based on the appeal letter of 21st March 2016, but the fifth defendant – Tasion Group Limited.
199. In my view, the fifth defendant’s assertion of not being given the opportunity to be heard and relying on an ‘objection’ that did not exist were done on purpose and that is to either have the Land Board delay its hearing and then grant the State Lease to it or have the Head of State acting on advice of the Minister uphold the appeal and grant the State Lease to it.
200. I uphold grounds five and six.
(g) The seventh ground is that the Tasion entities was not an applicant or otherwise interested in the land but yet was given by officers of the fourth defendant through the Department of Lands documentation to which it was not entitled, and which was subsequently attached to the appeal letter of 21st March 2016 being:
201. The State defendants and the fifth defendant did not rebut this submission. I reject the reasons advanced by the plaintiff in its submissions that these documents were not allowed to be disclosed to the fifth defendant. In my view, they are relevant for the purpose of preparing and filing an appeal to the Minister by an aggrieved person under Section 62 of the Land Act. However, I would still uphold this ground because it was not necessary to provide copies of these documents to the fifth defendant and any Tasion entities. This view proceeds on the premise that the decision to uphold the plaintiff’s “Renewal Application” concluded the matter and no appeal to the Minister shall lie.
(h) The eighth ground is that the fifth defendant’s related company T.G. Holding Ltd purportedly lodging an application for State Lease of the land, and the fourth defendant through its servants or agent at the Department of Lands accepting the purported application on or about 28th October 2010 when it was well known to both the fifth and fourth defendants that:
202. On its own, this ground would not sustain a finding of fraud against the fifth defendant. However, when it is considered together
with the other grounds, it supports the inference that despite the breaches in that the purported application was 13 months late
and not accompanied by the prescribed fee, the State defendants acquiesced the breaches for the benefit of the fifth defendant by
not insisting on the fifth defendant to comply with these requirements in order for the fifth defendant’s application to go
before the Land Board for consideration.
(i) The number nine ground is that the wrongful seeking by Mr Sam Tsion (a director of the fifth defendant) and its ultimate owner) of, and the grant by the servants or agents of the fourth defendant through the Department of Lands of, a commercial lease of the land pursuant to Section 99 of the Land Act, that was improper for the reasons held by the National Court judgment in OS (JR) No 756 of 2009.
203. This is a specific and direct allegation against Mr Sam Tasion for engaging with the officers of the Department of Lands to ensure that the fifth defendant was recommended a commercial lease instead of the plaintiff by the Land Board. In response, Mr Sam Tasion distances himself from the decision by the Land Board by asserting that he excused himself from the Land Board meeting when the fifth defendant’s application was listed and considered by the Land Board at its meeting.
204. However, it is not necessary for this Court to make a separate finding on this issue because as the plaintiff correctly points out, the National Court in its judgment in OS (JR) No 756 of 2009 had made a finding that Mr Sam Tasion had engaged with the officers of the Department of Lands to ensure the fifth defendant was recommended a commercial lease instead of the plaintiff by the Land Board. The Court’s finding has not been appealed from or reviewed. Given this, it must be given effect to by the parties. This finding puts beyond argument that Mr Sam Tasion conspired with the officers of the Department of Lands to procure the State Lease in favour of the fifth defendant.
(j) The tenth ground is that the lodgement of an ‘appeal’ by a non-existent company signed as a ‘Director’ by a person who was not a director of either of the possibly relevant companies.
205. In addition to my finding at [125] above that Mr Teddy Tasion signed the “appeal” document was to conceal the nexus or association Mr Sam Tasion had with the Land Board, I form a strong impression from this ground that Mr Teddy Tasion was in a hurry to get the appeal before the Minister. In so doing, he ignored the crucial requirement of the correct director to sign the ‘appeal’ document. As held the appeal letter dated 21st March 2016 was signed by Teddy Tasion as Director of Tasion Group Holding Ltd. In my view, such a conduct cannot be described as a slip and inadvertence by the director or the person claiming to be the director of the fifth defendant, but misleading and false. It is misleading and false because as held, according to the extracts of these companies:
(a) Teddy Tasion ceased to be a director of T.G. Holding Ltd on 20th June 2011. This means he was not a director of T.G. Holding Ltd at the material time, and
(b) Teddy Tasion was not a director of Tasion (Group) Ltd until 08th November 2017. This means he was not a director of Tasion (Group) Ltd at the material time.
206. Despite not being the director, Teddy Tasion signed the appeal letter. It supports the inference that Teddy Tasion will do anything under the sun so to speak to secure the State Lease of the land for the fifth defendant, even if it means submitting a false ‘appeal’ document to the Minister. It is false because it does not have the name of the correct director of the fifth defendant.
(k) The number eleven ground is in relation to the wrongful seeking by the fifth defendant and the wrongful grant by the servants or agents of the third and fourth defendants of a State Lease to the fifth defendant on terms so financially favourable to the fifth defendant as to be a breach of the duty of care imposed on the Secretary of the Department of Lands and his officers by Section 5(1) of the Public Finances (Management) Act, 1995 which requires he “takes all necessary actions to ensure the efficient, effective, economical and ethical use of the public money and property which he is responsible”. It is alleged that the terms offered to the fifth defendant and accepted by it were financially advantaged to the fifth defendant, to the detriment of the fourth defendant in that:
to have an annual rental at 5% of the unimproved land value of the land which is calculated as an annual land rent of K22,275.00 and offered by the servant or agents of the first to fourth defendants to the fifth defendant and set out in the said State Lease to represent an unimproved value of only K445,500.00 whereas the actual unimproved land value is many millions of Kinas more than that.
207. Under this ground, similarly, the State defendants and the fifth defendant did not make any direct submissions to rebut the plaintiff’s submissions. The State defendants’ submissions focus on the plaintiff’s lack of locus standi and commencement of a wrong cause of action rather than an action for failure to pay for improvements under Section 120 of the Land Act. The fifth defendant’s submissions are that the alleged statutory breaches identified by the plaintiff are insufficient to sustain a finding of fraud against it. According to it, it is necessary for the plaintiff to establish actual fraud and the evidence adduced by the plaintiff fails to establish it.
208. First, I note that the requirements for a Tender Notice to include a reserve price, putting up improvements to the value of improvements stipulated in the State Lease, and annual rental at a % rate of the unimproved value of the land, and annual land rent are prescribed by either the Land Act or Land Regulation.
209. Secondly, I note that there is no expressed provision in the Land Act and Land Regulation for the Secretary of the Department of Lands to waive these requirements. It follows that these requirements must be complied with and failure to do so may leave open the inference that they were by-passed for some ulterior motive.
210. In this case, from the findings of fact the Tender Notice did not state a reserve price. As to the requirements to state the annual rental rate of the unimproved value of the land and annual land rent, comparing those stated in the expired State Lease of the plaintiff and those stated in the new State Lease of the fifth defendant, the rate of the unimproved value of the land and annual land rent in the former State Lease are $140.00 and $20,000.00 respectively whereas in the latter, 5% and K22,275.00 which represents an unimproved land value of K445,500.00 respectively. I accept the plaintiff’s submissions that the value of the improvements put up on the land by it are higher than the sum stated as the value of the unimproved land value. Secondly, the valuation report states a total sum of K1,313,700.00 as the value of improvement of the new State Lease of the fifth defendant. Thirdly, logic and commonsense would have it that as the land was developed by the plaintiff over the many years it was in occupation, the unimproved land value of the land will increase from its original value.
211. For these reasons, the Land Board failed to first, fix a reserve price in the Tender Notice and secondly, fix a sum commensurate to the unimproved land value of the land was done on purpose to favour the fifth defendant and is one of the factors which strengthens the inference that the fifth defendant conspired with the officers of the fourth defendant to ensure that it be granted the State Lease in place of the plaintiff when it expired.
(l) The number twelve ground is that the Letter of Grant issued to the fifth defendant under Section 75 of the Land Act was not accepted by the fifth defendant executing a Lease Acceptance Form. The Lease Acceptance Form was falsely purportedly executed on or about 15th May 2017 under seal of related company T.G. Holding Ltd affixed under the hand of a person who was not a director of either company at that time, and well knew that to be the case.
(m) The next ground is that the officers of the first to fourth defendants wrongfully accepted from the fifth defendant and actioned the manifestly improper Lease Acceptance Form.
(n) Further, the officers of the first to fourth defendants knowingly purportedly executed and registered a State Lease in favour of the fifth defendant without the proper execution by the fifth defendant of the Lease Acceptance Form under Section 76 of the Land Act, a proper waiver application under Section 40 of the Land Registration Act evidenced in accordance with that Section and so memorialised on the Register.
212. The grounds (l), (m) and (n) and submissions in support of each ground will be considered together because they are directed to how the process of concluding an offer of a State Lease is done. According to Section 75 of the Land Act, a successful applicant is required to execute a Lease Acceptance Form under Section 76 of the Land Act, as proof of its acceptance of the offer of the State Lease by the State. In my view, subject to payment of the prescribed acceptance fee, the execution of the Lease Acceptance Form by the successful applicant is the formalising of a contract between the State and the successful applicant following which a State Lease is issued.
213. Given this, it is my view that the execution of the Lease Acceptance Form by the successful applicant must be genuine and authentic and this means that the person executing it must be either the successful applicant or if an entity such as a company, such as in this case, it must in the name of the correct company and signed by the authorised officer on behalf of the company such as the correct director of the company.
214. In this case, as the Lease Acceptance Form issued to the fifth defendant, it was supposed to be executed by the fifth defendant, but instead executed under seal of the related company T.G. Holding Ltd affixed under the hand of a person who was not a director of either company at that time, and that person well knew that to be the case. This is a further error identified in the decision-making process of the grant of the State Lease to the fifth defendant.
215. The error is further compounded by the fact that the officers of the first to fourth defendants accepting from the fifth defendant and actioning an erroneous Lease Acceptance Form, the first to fourth defendants executed and registered a State Lease in favour of the fifth defendant. Based on the findings of fact at [90] above on 11th May 2017 the Acting Secretary for Lands issued a Notice under Section 75 of the Land Act called Letter of Grant to Tasion Group Limited informing it that the State Lease over the land had been granted to it despite Tasion Group Limited never making an application for the land or paying the prescribed fee to do so.
216. Further, at [91] above also on 11th May 2017 a Notice under Section 76 of the Land Act called a Lease Acceptance Form was sealed with the company seal of a completely different company called ‘T.G. Holding Ltd’ under Teddy Tasion’s signature and returned to the Secretary for Lands. Teddy Tasion was not a director of Tasion (Group) Limited at the material time or of T.G. Holding Ltd and therefore, was not authorised to affix any common seal. The Lease Acceptance Form was sealed with a company seal of T.G. Holding Ltd when the State Lease was offered to Tasion Group Limited, a different company.
217. Based on this ground, it was either a case of a slip and inadvertence or done on purpose by the officers of the first to fourth defendants to execute and register a State Lease in favour of the fifth defendant. I prefer the latter view because the error occurred right from the beginning of the process of procurement of the State Lease and should have been detected by the officers of the fourth defendant had they did their own due diligence and verified the identity of the applicant and its directors at the Investment Promotion Authority-Companies Office.
218. To my mind, to accept the Lease Acceptance Form on its face value and register a State Lease in favour of the fifth defendant without verifying its authenticity is not only false but deliberate act to ensure that the contract between the State and the fifth defendant is concluded uninterrupted for the State Lease to be issued.
219. The final ground is that, the officers of the fourth defendant misled the plaintiff as to the proper name in which to progress the plaintiff’s application, and upon the plaintiff's adopting the procedure so instructed by the fourth defendant, the officers of the fourth defendant then falsely advised the first and/or second defendant and/or third defendant that the plaintiff’s application was rendered improper and the fifth defendant’s appeal should be granted.
220. The error is further compounded by the erroneous advice by the officers of the fourth defendant to the plaintiff to apply for a State Lease to the Land Board using the name of New Guinea Motors which the plaintiff complied and then using this information to advise the Head of State to uphold the fifth defendant’s appeal on the ground that the plaintiff had applied for a State Lease using a wrong company, that is New Guinea Motors.
221. To my mind, this conduct is not only contradictory, but one of double standard to the detriment of the plaintiff. In the end, contrary to the fifth defendant’s submissions that “....there is no evidence upon which it can be said any of the events relied on by the plaintiff evidences fraud on the part of the Minister...” the decision-making process was tainted by the breaches and irregularities outlined by the plaintiff. This in turn means that this conduct further reinforces the inference that the defendants conspired to have the State Lease granted to the fifth defendant upon its expiration.
The Complete Failure of the Registrar of Titles to properly perform his Statutory Function in order to assist Mr Tasion
222. Under this ground, the plaintiff refers to Section 76 of the Land Act and submits that a Lease Acceptance Form executed by the proposed new State Lessee is deemed execution of the State Lease by the State Lessee. I upheld this submission. Section 76 states:
“76. Acceptance of terms and conditions of proposed leases and execution of State Leases.
(1) ............................
(2) A successful applicant, who forwards a duly signed Lease Acceptance Form to the Departmental Head in accordance with Section 75, thereby accepts the terms and conditions of the proposed lease as set out in the Letter of Grant and shall be deemed to have executed the lease on the date on which the Minister executes the lease.”
223. As held earlier at [91] and [123] above, the Lease Acceptance Form was not executed by Tasion Group Limited, but T.G. Holding
Ltd. Even if the defendants rely on Section 40 of the Land Registration Act to claim waiver, I am of the view that there was no proper waiver application made under Section 40 (supra). Section 40 states:
“40. Registration of State lease not executed by lessee.
(1) Where a State lease has been executed on behalf of the State but has not been executed by or on behalf of the lessee the Departmental Head may apply to the Registrar to have the lease registered.
(2) An application under Subsection (1) shall be accompanied by evidence that -
(a) the State lease the subject of the application has been granted to the lessee; and
(b) in all the circumstances of the case it is not practicable to obtain the signature of the lessee.
(3) Where the Registrar registers a State lease on an application under Subsection (1) he shall endorse a memorial on the lease to the effect that the lease was by virtue of this section, registered although not executed by the lessee.”
224. The reasons are as follows:
(a) there was no application made by the Secretary for Land to the Registrar of Titles under Section 40(1) (supra) to register the State Lease to Tasion Group Limited without execution by the lessee.
(b) there was evidence as required by Section 40(2)(a)&(b) (supra) showing that the lease was granted to the lessee and that in all the circumstances, it was not possible to locate the lessee.
(c) there was no memorial under Section 40(3) (supra) made by the Registrar of Titles to show that the State Lease has been registered regardless of the State Lease not being signed by the lessee.
225. I am of the further view that the waiver application made under Section 40 (supra) is necessary in a case where it was not possible to locate the lessee. In a case where a waiver under Section 40 (supra) is not obtained and no or proper reasons are given for it, it is open to infer that it was by-passed for an ulterior motive. In the present case, as there was no waiver under Section 40 (supra), it is a further breach by the defendants, and it is open to infer that it was done to expediate the issuance of the State Lease Title to the fifth defendant before the plaintiff could find out.
Breach of Section 41 of the Constitution
226. The next ground the plaintiff relies on is breach of Section 41 of the Constitution. It relies on a statement in Chief Collector of Taxes v. Bougainville Copper Limited (2007) SC853 at [106] by Kapi CJ, Sevua and Kandakasi JJ which described Premdas v. The State [1979] PNGLR 329 as the leading case on Section 41. In the latter case Prentice CJ relevantly stated:
“I consider that, giving s 41 a fair and liberal meaning as the court is instructed to do by Schedule 1.5(2) of the Constitution, it should be regarded as of general application. The criteria put forward in the section are clearly questions of fact. Both counsel concur in the submission that in assessing the quality of the relevant facts, the test should be an objective one. I feel that the test should be to question whether the Minister and the Committee acted as reasonable men in the circumstances, having regard to the policy of the act on the one hand and the various provisions of the Constitution on the other. [underlining added].”
227. I note the reasoning of the Supreme Court in the above case that the question of breach of Section 41 of the Constitution will depend on the facts of each case. In deciding this question, the test is the reasonableness of the decision or action of the decision-maker or tortfeasor. However, in a judicial review proceeding which is a public law remedy for an aggrieved party to engage, and in a case where the legality of a public body or authority to grant a State Lease Title is being questioned, and where the registered proprietor of State Lease holds an indefeasible title under the doctrine of indefeasibility of title, I am of the view that unless fraud is proved under Section 33(1)(a) of the Land Registration Act a breach of Section 41 of the Constitution will not be sufficient to displace a registered proprietor’s State Lease Title.
228. It is noted at [3.4] of the five-page appeal submission prepared by the Secretary for Lands (supra) that “........[appellant] is a 100% nationally owned company and should be given the preference to apply and own this land as it has been doing business on it for the last 10 years and did significant improvements worth millions of kina where the government must support the appellant under the government’s SME policy.” While I agree that local businesses must be encouraged to participate in the economy, it is not only about promoting local businesses in PNG but also to make sure that they follow the due process under the Laws of the country to establish and grow their businesses. In my view, their participation must be done in a way that it does not infringe on the rights of other businesses under Section 41 of the Constitution.
229. In the present case, based on the breaches and irregularities identified in the process of procuring the fifth defendant’s State Lease Title, I am satisfied that in all the circumstances of the case, the actions of the State defendants specified in Part 2 of the Further Amended Statement are unlawful acts in breach of Section 41 of the Constitution being:
(a) harsh and oppressive; or
(b) not warranted by, and disproportionate to, the requirements of the particular circumstances or of this particular case; and
(c) otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having proper regard for the rights
and dignity of mankind,
and are a fraud on the Constitution.
Breach of Requirement for NEC to Advise Head of State
230. The final ground the plaintiff relies on is breach of the requirement for NEC to advise Head of State to uphold the appeal by Tasion Group Limited and granting a State Lease in favour of Tasion Group Limited. Based on the decision of the Head of State, the plaintiff submits that:
(a) the Head of State relied on an advice that did not exist to grant a State Lease to a company which never applied for the State
Lease nor appealed against the recommendation for the grant of a State Lease to the plaintiff.
(b) there was no appeal by Tasion Group Limited.
(c) there was no advice from the NEC to the Head of State to uphold the appeal.
(d) the Head of State took into consideration irrelevant non-existent considerations and exercised a power he did not have.
231. It further submits that the very next day, on 05th May 2017, a National Gazette Notice No G354 was published showing the decision of the Head of State to uphold the appeal and grant a State Lease to Tasion Group Limited.
232. The first point to make is that Section 62(3) of the Land Act which is quoted at [109] above refers to ‘Minister’ whereas the one quoted by the plaintiff at [203] of its written submissions does not. The plaintiff explains that the word ‘Minister’ has been deleted because the Land (Amendment) Act, 2018 (No. 10 of 2018) which came into force on 17th October 2018 amended Section 62(3) by deleting the word ‘Minister’. It then relies on Section 3 of the Interpretation Act and submits that in the absence of the ‘Minister’ the Head of State must act on the advice of the NEC, not the Minister because Section 3 states that:
““the Head of State, acting on advice” means the Head of State, acting with, and in accordance with, the advice of the National Executive Council.”
233. This interpretation has been upheld by the National Court in Sammy Lodge Ltd v. L&A Construction Ltd & Ors (supra). Adopting this interpretation means that, the Minister must make a recommendation to the NEC to advise the Head of State and not the Minister to make a direct recommendation to the Head of State, in this case, to uphold the appeal by Tasion Group.
234. However, I prefer a purposive approach to the interpretation of Section 62(3) to achieve a fair outcome. An interpretation that the Minister can make a recommendation to the Head of State without the NEC’s advice will not only expediate appeals from Land Board decisions but also give NEC the opportunity to prioritise its workload or commitments. Otherwise, the NEC will be inundated with appeals from the Land Board. In my view, unless the controversy surrounding the grant of a State Lease raises issues of national importance or security, it is open to the Head of State to act with, and in accordance with the advice of the Minister to uphold the appeal, reject the appeal, or remit the appeal to the Land Board for re-hearing. In the present case, it is not necessary for the NEC to be involved in the decision-making process because the evidence does not raise issues of national importance or security. This ground is not made out and is dismissed.
XYZ Holdings Ltd
235. Before concluding, I mention two further issues which the plaintiff invites the Court to consider together with the other grounds already covered in the judgment. First, the plaintiff makes further submissions in relation to what it claims to be a further ground to prove fraud against the defendants. It submits that fraud can be inferred from a company that was established by the Secretary and officers of the Department of Lands with Mr Sam Tasion. The Secretary, officers and Mr Tasion are shareholders and directors of this company. According to the company extract annexed to the affidavit of Mary-Ann-Hill filed 20th November 2019, the Directors are Romily Kila Pat, Ian Kundin, Fred Morove, Benjamin Samson, Sam Tasion and Dirk Tasion. These Directors are also Shareholders and hold one share each. The name of the company is XYZ Holdings Ltd. It was incorporated on 26th May 2009. The plaintiff alleges that XYZ Holdings Ltd shows a nexus or association between Mr Sam Tasion and the Secretary and officers of the Department of Lands because Mr Kila-Pat and Mr Samson held the position of Secretary for Lands at different times when the plaintiff’s Renewal Application went to the Land Board and eventually before the Minister for Lands on an appeal by Tasion Group Holding Ltd. Although Mr Samson filed an affidavit on 22nd November 2019 refuting the allegation, the uncertainty over this ground is that it is not pleaded or expressed in the Further Amended Statement pursuant to Order 16, rule 3(2)(a) of the NCR and the particulars of the allegations of fact are quite sketchy and unclear and it would be unwise to consider it. It is also, my view that it brings up a substantial and serious allegation of conspiracy and fraud against these individuals and it is unclear if leave for judicial review has been granted to the plaintiff to rely on it as a separate ground at trial. Besides, the plaintiff has successfully established the other grounds which collectively point to the fifth defendant conspiring with the State defendants to procure the State Lease Title by fraud. Given this, it is not necessary to consider this ground.
National Broadcasting Corporation v. Sam Tasion & T.G. Holding Limited trading as Freeway Motors (2019) N8083
236. The second matter which the plaintiff makes further submissions is in relation to an unrelated National Court judgment in National Broadcasting Corporation v. Sam Tasion & T.G. Holding Limited trading as Freeway Motors (2019) N8083. According to the plaintiff this judgment was recently delivered by the National Court wherein a significant monetary judgment was entered against Mr Sam Tasion and T.G. Holding Ltd. That was a case of breach of contract of supply of motor vehicles by the defendants to the plaintiff. The judgment in that case is significant and relevant to the present case because the National Court held that the contract was entered into by fraud because it did not comply with the procurement process under the Public Finance (Management) Act, 1995. Furthermore, the defendants agreed to supply 27 motor vehicles of a specific model to the plaintiff but only supplied less than the agreed number including different models to the one initially agreed to. According to the plaintiff, that case is evidence of Mr Sam Tasion and T.G Holding Ltd having a propensity of engaging in fraud or fraudulent activities and supports the inference that they engaged in fraud to procure the fifth defendant’s State Lease Title.
237. However, in my view, this ground brings up a substantial and serious allegation of propensity to re-offend by Mr Sam Tasion and T.G. Holding Ltd and fall under the similar fact evidence rule which I have covered at [126] to [135] above and I will have to agree with the fifth defendant who urges me to disregard this ground because it has not been pleaded or expressed in the Further Amended Statement pursuant to Order 16, rule 3(2)(a) of the NCR. Consequently, the defendants have not been given an opportunity to consider it. Besides, it is not necessary to consider this ground because the other breaches and irregularities identified in the other grounds collectively point to a case of fraud against the fifth defendant.
Law on Proof of Fraud
238. There is no question that an allegation of fraud is a serious matter. I agree with the fifth defendant’s submission at [13(a)] above that the onus of establishing fraud lies with the plaintiff. However, I do not accept its submission at [13(b)] above that the seriousness of such allegation of fraud demands proof commensurate to the standard required in criminal proceedings, that is beyond reasonable doubt. In my view, to use the phrase ‘beyond reasonable doubt’ would be misleading. In expressing this view, it is by no means downplaying the seriousness of fraud, but I think the standard of proof the Supreme Court in the case of Paga No. 36 v. Eleadona & Ors (supra) was referring to is higher than balance of probabilities, but less than beyond reasonable doubt.
239. Fraud can be proved by direct or indirect evidence. In civil proceedings, to establish liability where fraud is alleged, it is necessary to establish the requisite element of intention to deprive another person (the plaintiff) of land or chattel. The intention must be false or fraudulent. Generally, in a case where fraud is alleged against a registered proprietor’s State Lease Title it is common by the plaintiff to use indirect evidence to prove fraud because it is said that fraud is generally committed in secret. It is also said that indirect evidence or to use its legal expression ‘circumstantial evidence’ to establish fraud is good evidence.
240. To satisfy the standard of proof there are two schools of thought held by judges when it comes to deciding whether fraud has been proved pursuant to Section 33(1)(a) of the Land Registration Act. One view is that fraud refers to actual fraud. This is where the party who alleges fraud must established by appropriate evidence that the registered proprietor procured the State Lease Title by fraud: Mudge v. Secretary for Lands [1985] PNGLR 387 and adopted in The Papua Club Inc v. Nusaum Holdings Limited (No. 2) (2004) N2603 and Koitachi Farms Limited v. Walter Schnaubelt (2007) SC870. This is the one view the fifth defendant submits that the Court adopted to decide the allegation of fraud against it.
241. The other view is fraud can be inferred from the breach or irregularities identified by the plaintiff in the process of procurement and registration of the State Lease Title: Emas Estate Development Pty Limited v. John Mea & Ors [1993] PNGLR 215 and adopted in Steamships Trading Company Limited v. Garamut Enterprises Limited & Ors (supra).
242. In the present case, based on the findings of fact and inferences drawn from lack of rebuttal evidence, I am satisfied that the plaintiff has established to the required standard between balance of probabilities and beyond reasonable doubt that Mr Sam Tasion in his capacity as representative of the fifth defendant and also as a member of the Land Board used his position to get the Land Board, the Secretary and officers of the Department of Lands to ensure that the fifth defendant was awarded the State Lease of the land and the fifth defendant is guilty of procuring the State Lease Title by fraud. Fraud proved here is actual fraud.
243. By the same token, the findings of fact and inferences drawn from the lack of rebuttal evidence established to the required standard between balance of probabilities and beyond reasonable doubt that breaches and irregularities in the procurement and registration of the fifth defendant’s State Lease Title was by fraud. Fraud proved here is constructive fraud.
244. According to Section 33(1)(a) of the Land Registration Act, a registered proprietor of a State Lease Title holds an indefeasible title unless fraud is proved. In all the circumstances, I am satisfied that the fifth defendant’s State Lease Title should be set aside on the grounds of fraud.
Conclusion
245. In conclusion, the plaintiff relies on further grounds of judicial review, but they will not be considered because it has successfully established majority of them and not all the orders it seeks in the amended notice of motion filed 24th October 2019 will be granted because general damages, loss of profit, rents and others will require proof. In other cases, as the decision-making process adopted by the State defendants did not involve the National Executive Council, orders sought at paragraphs 1(c) and (d) of the said amended notice of motion will not be granted.
Award of Costs
246. In relation to costs, the plaintiff seeks and makes strong submissions for the defendants to pay costs on solicitor/client basis pursuant to Order 22, rules 34 and 35 of the NCR because it says costs were unreasonably incurred in pursuing its application for renewal including instituting two different Court proceedings over a period of 11 years regarding the same piece of land. It relies on cases of Rex Paki v. MVIL (2010) SC1015, Kalan Constructions v. Louiss John Chegg (2014) N5665 and Paul Paraka v. POSFB (2014) SC1363 to support its submissions that an award of costs on solicitor/client basis is a discretionary matter and will depend on the conduct of the lawyer and the party to the proceeding.
247. While the conduct of the unsuccessful party will determine an award of costs on solicitor/client basis, case law has developed the requirement to give prior forewarning notice to the opposing party for seeking costs on solicitor/client basis because such costs, if awarded, will be on a higher scale than the usual party/party costs: see PNG Water Board v. Gabriel M. Kama & Ors (2005) SC821 and PNG Ports Corporation Limited v. Canopus No. 71 Limited (2010) N4288. In this instance, while the conduct of the defendants supports costs on solicitor/client basis, the plaintiff does not refer to evidence of a prior notice to the defendants for seeking costs on solicitor/client basis in its written submissions. For this reason the application is declined, and costs will be awarded on a party/party basis.
Order
248. In the result the final terms of the order of the Court are:
1. The application for judicial review is upheld.
(a) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(b) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(c) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(d) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(e) Consequently, to the above, a decision and action by the third defendant, its servants, and agents, including the Registrar of Titles, acting on behalf of the fourth defendant to:
(i) execute and,
(ii) have registered and register to the fifth defendant a State Lease Title on 16th May 2017.
(a) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(b) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(c) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(d) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(e) Consequently, to the above, a decision and action by the third defendant, its servants, and agents, including the Registrar of Titles, acting on behalf of the fourth defendant to:
(i) execute and,
(ii) have registered and register to the fifth defendant a State Lease Title on 16th May 2017.
(a) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(b) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(c) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(d) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(e) Consequently to the above, a decision and action by the third defendant, its servants and agents, including the Registrar of Titles, acting on behalf of the fourth defendant to:
(i) execute and,
(ii) have registered and register to the fifth defendant a State Lease Title on 16th May 2017.
(a) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(b) A decision by the Head of State concerning Lot 2 Section 387 Hohola (the Land) on or before 05th May 2017 and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(c) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 upholding an appeal by Tasion Group Ltd against a recommendation by the Land Board to grant a State Lease of the land to the plaintiff.
(d) A decision by the third defendant on a date unknown but on or before 05th May 2017 to advise the Head of State to make the decision set out in and published as Item No. 20 in Gazette G354 dated 05th May 2017 granting the Land to Tasion Group Ltd.
(e) Consequently, to the above, a decision and action by the third defendant, its servants, and agents, including the Registrar of Titles, acting on behalf of the fourth defendant to:
(i) execute and,
(ii) have registered and register to the fifth defendant a State Lease Title on 16th May 2017.
(a) no less favourable than those sought in the plaintiff’s application for a State Lease of the land lodged on or about 08th May 2006, save that:
(i) the commencement date of the new State Lease shall be 04th April 2007; and
(ii) the due date for expiry of the new State Lease sought in the said application of 08th May 2006 shall be a date which is 99 years from the commencement date, being 03rd April 2106.
Judgment and orders accordingly
________________________________________________________________
Dentons PNG Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyers for the First to Fourth Defendants
TL Cooper Lawyers: Lawyers for the Fifth Defendant
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URL: http://www.paclii.org/pg/cases/PGNC/2023/496.html