Hela Provincial Government v Habolo Buildings & Maintenance Ltd [2025] PGNC 216; N11344 (30 June 2025)

N11344

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 497 OF 2023 (IECMS) (CC4)

BETWEEN:
HELA PROVINCIAL GOVERNMENT
Plaintiff

AND:
HABOLO BUILDINGS & MAINTENANCE LTD
First Defendant

AND:
BENJAMIN SAMSON- IN HIS CAPACITY AS THE SECRETARY OF LANDS & PHYSICAL PLANNING
Second Defendant

AND:
IAN SINDEK- IN HIS CAPACITY AS THE REGISTRAR OF TITLES
Third Defendant

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

AND:
ANGAWAI HABOLO
Fifth Defendant

AND:
JACOB POPUNA- PUBLIC TRUSTEE OF PAPUA NEW GUINEA
Sixth Defendant

WAIGANI: COATES J
30 JUNE 2025

MEDIATION – Agreement – Conversion to orders – one party disagrees with conversion to orders – no evidence to support its position – Orders made

Cases cited

Illius v Bias [2018] PGNC 514; N7618C
Counsel

G Manda and A Manda for the plaintiff
J Apo for the first defendant
J Siki for the fifth defendant
F Aki for the sixth defendant

DECISION

1. BY THE COURT: In a complicated dispute over land at Tari in Hela Province, orders were made for mediation to give the parties opportunity to settle the matter on terms they had control over.
   
2. The matter came before the Court after a Writ of Summons was filed claiming that the first defendant obtained title and a registered business lease over the disputed land by fraudulent conduct between the years 2009 and 2012.
   
3. Reduced to the bare allegations, the plaintiff, the Hela Provincial Government, claimed that while it occupied the land, the first defendant obtained title over the land, and such was prejudicial because it had improved the land with buildings.
   
4. At the time, the late Sir Matiabe Yuwi, a member of the then Hela Transitional Authority Board, which transitioned into the Hela Provincial Government, had an interest in the first defendant company and this was allegedly never disclosed. That Sir Matiabe died is the reason the sixth defendant, the Public Curator, is involved in the matter.
   
5. The plaintiff claims it was then "kept in the dark" on the dealings of the first defendant in obtaining the interests in the land which are now registered under the Land Registration Act 1981.
   
6. The plaintiff's Writ of Summons seeks to have the interests of the first defendant in the land quashed, cancelled or held to be null and void and the plaintiff's occupation of the land declared to be lawful.
   
7. The matter was referred to mediation, by consent, on 25 October 2024.
   
8. Mediation was conducted by an experienced judge/mediator on 19 November 2024, and resulted in an agreement, with the Mediator's Certificate issued certifying settlement.
   
9. The parties then drafted orders to be made by consent, based on the agreement.
   
10. On 10 April 2025, the Court was advised that one of the parties, the Plaintiff, had withdrawn consent to the converting of the terms of the agreement into orders.
    
11. There are now Notices of Motions before the Court – the first defendant, with the support of the fifth and sixth defendants, seeking orders to convert the agreement into orders of the Court and the plaintiff seeking to set aside the mediated agreement.
    
12. I should state that the second, third and fourth defendants, being government entities, made no representations and therefore can be taken to have a neutral stand as to the decision of the Court.
    
13. I should also state that a proceeding, WS No. 1717 of 2015, a matter dealing with some of the same parties but concerning an assessment of damages in connection with usage of the same land, was determined in a decision handed down by Makail J on 18 March 2025. It is a separate matter from the subject matter of this proceeding and is now under appeal. In referring again to this decision I will call it the Mesne Profit decision – because it is referred to as that later below.
    
14. I can do justice to the parties by determining their Notices of Motion together, as the considerations stem from the power to make mediated agreements into orders.
    
15. The Court's power, it is claimed, to make an agreement coming from a mediation into orders stems from the Rule 13 of the ADR Rules, which states:
    

13. ENFORCEMENT

(1) Subject to sub rule (3) an agreement reached during mediation shall have the same force and effect and may be enforced in the manner as if it were an agreement or contract reached in the ordinary course of business or conduct of the parties except for;

(a) A lack of an essential element for the existence of a legally binding and enforceable contract; or

(b) where legislation specifically prohibits the parties from negotiating and resolving the subject of their dispute.

(2) Subject to sub rule (3) and any prevailing custom, where a mediation Involves a group or groups of people dealing with the collective interests of the group or groups, an agreement by the majority of the members of the group or groups shall be binding on all members and any such agreement shall be enforced notwithstanding any dispute by an individual member.

(3) Where the dispute involves customary land, the agreement shall not be binding unless the majority include persons who had the right to make decisions according to the relevant custom.

(4) Any party to a mediation conducted by mediator may apply to the Court for an order endorsing or giving effect to an agreement reached during the mediation by:

(a) notice of motion if the proceeding is current; or

(b) originating summons if the proceeding has been concluded.

(5) For the purpose of sub rule (4) the applicant show file an affidavit to posing to the relevant facts giving rise to the application which may include a copy of the mediated agreement (if any) or other information evidencing the agreement.

(6) In considering and determining an application under sub rule (3) where question of enforcement of opting out of a mediated agreement arises, the paramount duty of the Court shall be to have regard to the provisions of subrule (1) and to always seek to uphold the agreement of the parties.

16. As can be seen, there is no bar to determining this matter pursuant to subsection (3) of the Rule.
    
17. Counsel for the defendants submitted that the rules, as they are made by the judges, gives the legal basis for the making of the agreement or the conversion of the agreement, into orders.
    
18. I agree with that submission.
    
19. It was pointed out that all parties were legally represented during the negotiations, which means that at all times the plaintiff had access to legal advice.
    
20. The terms of the agreement in the mediator's certificate certifies that:
    

"1. The parties participated in a mediation before me on 19 November 2024 which resulted in a settlement of all the issues in dispute between them in this proceeding.

2. The parties will present draft consent orders finalising this proceeding based on their settlement.

3 I am a mediator accredited in accordance with the PNG national accreditation standards".

21. What the mediator refers to in relation to all issues are those issues stated in the Writ of Summons filed 26 October 2023, as well as the defence documents subsequently filed.
    
22. As stated above, the plaintiff sought orders to the effect that title and interest over the land, identified as Section 2, Allotment 4, Volume 16, Folio 22, at Tari, were irregularly or illegally obtained.
    
23. The defence disputed the claims and also raised the issue of a time bar.
    
24. Other than for the agreement being reached by mediation, these were trial matters and it was clear that the parties had time to consider what case the Court would have before it if the matter went to trial.
    
25. Weather the defendants are correct or not as to the time bar, the fact is that the plaintiff, a provincial government with access to good legal advice, determined that it would embark on a mediation, subsequently embarked on that mediation and came to a consent agreement resolving all issues.
    
26. The defendants also submitted that the onus is on the plaintiff of showing why the agreement should not be converted to court orders given the rules and the wording refered to in the mediation agreement.
    
27. Subject to the court’s discretion which seems to be created under rule 13 subsection 6, I agree with that submission.
    
28. What that means is the matter has to be determined judicially.
    
29. That is supported in the case Illius v Bias [2018] PGNC 514; N7618C, where various grounds were identified which may be considered. The Court referred to them as follows:
    

15. PNG Power's argument of there being no agreement is without merit. This is firstly because the evidence as I already noted discloses the parties having reached an agreement in the terms summarised and noted at paragraph 8 of this judgment. Secondly, the rest of PNG Power's submissions proceeds on the basis that an agreement was reached which they are seeking to opt out on grounds of:

(a) Unfairness and reasonableness of the terms of the agreement;

(b) No valuable consideration passing from the Illius to PNG Power, and

(c) The agreement reached at mediation was subject to the approval of the board of directors of PNG Power and which approval was not given.

30. I note that these are the type of grounds which may be relied on when it is claimed that an agreement should not be made into orders, and there may be other grounds depending on the circumstances.
    
31. Counsel for the plaintiff contended that the plaintiff had mistaken the agreement, as sworn to in the affidavit of Mr Marogo Dagoba, filed 14 May 2025, who states at paragraph 27: "Therefore, the administration agreed to increase our previous offer to settle from K1.8 million two K3.4 million on the clear understanding that we were settling both matters by offering to purchase the property at K3.4 million: WS No 1717 of 2015 – Habolo Building & Maintenance Ltd v Hela Provincial Government and the proceeding herein. We were not to talk about the Mesne Profit claim anymore".
    
32. Apart from having difficulty in accepting that the plaintiff, as a well-funded and well represented provincial government, encountered difficulty by misunderstanding what the mediation was about, this claim comes after the fact and is a bare claim without supporting evidence.
    
33. While it would be improper to refer to the issues raised at the negotiation as the evidence required to support Mr Dagoba's statement, there is secondary evidence which could have been referred to.
    
34. In fact such was referred to by counsel for the first defendant who took me to the affidavit of Mr Newman Yuwi, and correspondence attached to the affidavit.
    
35. The correspondence was written after the agreement was reached and while the plaintiff had raised the issue after the fact of the agreement that it sought to have the agreement include the Mesne Profits matter, this was rejected by the first defendant as not being the basis for the agreement.
    
36. The correspondence shows that this rejection was accepted by the plaintiff – see annexures NW 6, 7 and 8 to Mr Yuwi's affidavit.
    
37. What has occurred here then is that the plaintiff, while willing to settle for a certain amount of money, suddenly realised that a loss in this matter at trial would increase the amount of money it would have to pay out.
    
38. In fact counsel said it would now have to pay about two and a half million Kina more if the appeal in the Mesne Profit matter was dismissed and this agreement was upheld.
    
39. That is the strongest case put forward - that the plaintiff misunderstood the proceeding.
    
40. The correspondence in Mr Yuwi's affidavit does not show anything other than that parties understood what was being negotiated and such did not include the Mesne Profit matter.
    
41. That the agreement certificate indicated that all matters were settled and that could be taken as including the Mesne Profit matter is a proposition I reject because the strongest evidence is the correspondence between the parties annexed to Mr Yuwi's affidavit which I have referred to.
    
42. Counsel also attempted to try and argue at that the Hela Transitional Authority Act 2009 in some way negated the ability to come to the agreement, however while the submissions were not clear as to how that would occur under the Act, even though there was reference to Sections 27 and 28 of that Act and headed ‘Transfers to the State’, it is hardly the act of good government to negotiate an agreement such as this and then try and invalidate it later on a specious claim that there may not have been authority to come to the agreement.
    
43. Counsel for the plaintiff also said there is a consideration of justice, and that is true because this decision has to be made judicially, however a general idea of justice where the plaintiff, simply because it disagrees now with its own agreement, misinterprets what a consideration of justice is.
    
44. In the circumstances here I am of the view that the plaintiff had the onus to show why the agreement should or should not be made into orders, but in doing so did not raise any issue of unfairness or unreasonableness, nor any issue going to the elements of a contract, nor that the agreement was subject to an approval of some other part of its organisation which, or who, were not present at the negotiation.
    
45. On that basis, in applying Rule 13 to the agreement, there was capacity to make the agreement, the usual offers and acceptances by both parties, and consideration given to settle the matter.
    
46. Counsel for the first defendant, without objection from the plaintiff, stated the draught orders in the Notice of Motion filed 5 May 2025 may be made as orders and such reflected the agreement.
    
47. Finaly, there were several secondary submissions by counsel for the plaintiff, such as the first defendant requiring consent of the sixth defendant being the Public Trustee to proceed, as well as submissions on standing, but none of these were capable of sustaining objections to the making of the orders sought.
    

ORDERS

1. Pursuant to Rule 12 (a) and (3) of the Rules relating to Accreditation, Regulation and Conduct of Mediators (ADR), the mediation agreement dated 19 November 2024 merged in the signed consent orders executed on 14 and 17 March 2025 be enforced in the following terms:
   1. The property described as Section 2 Allotment 4 Volume 16 Folio 223 in the Township of Tari, Hela Province, is sold by the Plaintiff to the First Defendant for the amount of K3,400,000.00.
   2. The amount of K3,400,000.00 shall be distributed such that:
      1. The plaintiff pay One Million Three Hundred & Fifty Thousand Kina (K1,350,000.00) payable to APO & CO LAWYERS for the benefit of First Defendant's creditors, Lawyers legal fees, Newman Yuwi and Lady Margaret Yuwi.
      2. The Plaintiff pay One Million Four Hundred & Fifty Thousand Kina (K1,450,000) payable to the PUBLIC TRUSTEE OF PAPUA NEW GUINEA for its administration fees and the balance for the benefit of Peter Yuwi, Paul Yuwi, and Martha Yuwi.
      3. The Plaintiff pay Six Hundred Thousand Kina (K600,000.00) to JERRY SIKI LAWYERS for the benefit of Angawai Habolo.
   100. The Plaintiff shall make these payments before or by end of July 2025 with the title of the subject property to be delivered to the Plaintiff in exchange of payment.
2. All other Notice of Motions are dismissed.
3. The Plaintiff shall pay the costs of each Defendant as agreed or as taxed.
4. The time for entry of this Order is abridged to the time of signing by the Court which shall take place forthwith.
   

Judgement accordingly
________________________________________________________________
Lawyers for the plaintiff: Greg Manda Lawyers
Lawyers for the first defendant: Apo & Co. Lawyers
Lawyers for the fifth defendant: Jerry Siki Lawyers
Lawyers for the sixth defendant: Aki & Associates Lawyers