Tzen Plantations Ltd v Open Bay Timber Ltd [2014] PGSC 15; SC1380 (9 September 2014)

SC1380

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM 10 OF 2013

BETWEEN:

TZEN PLANTATIONS LIMITED
Appellant

AND:

OPEN BAY TIMBER LIMITED
First Respondent

AND:

PAPUA NEW GUINEA FOREST AUTHORITY
Second Respondent

AND:

HON LUKAS DEKENA, Minister for Lands & Physical Planning
Third Respondent

AND:

HENRY WASA, Registrar of Land Titles
Fourth Respondent

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Respondent

AND:

SECRETARY, Department of Lands & Physical Planning
Sixth Respondent

AND:

PAPUA NEW GUINEA LAND BOARD
Seventh Respondent

Waigani: Hartshorn, Makail and Poole JJ
2013: 30th October,
2014: 9th September

APPEAL – section 139A Forestry Act considered

Cases cited

Papua New Guinea cases

Ulelio v. Nelulo Land Group, Registrar of Titles and The State (1998) N1699

Overseas Cases

Commonwealth v. Western Australia [1999] HCA 5

Counsel:

Mr. I.R. Molloy and Mr. I. R. Shepherd, for the Appellant
Mr. J. Brooks, for the First Respondent
Mr. K. Iduhu, for the Second Respondent
Ms. I. Mugugia, for the Third to Seventh Respondents

9th September, 2014

1. BY THE COURT: This is an appeal against a judgment of the National Court that granted an application for judicial review and decided that a State Lease held by the appellant (Tzen Plantation) was null and void. The first and second respondents (Open Bay Timber) and the (Forest Authority), oppose the appeal. The third to seventh respondents take no position on the appeal for the reason that they supported Tzen Plantation's case in the National Court proceeding.

2. The case concerned title to land referred to as Portion 777 Milinch Open, Fourmil Rabaul, East New Britain Province, over which Tzen Plantation had a registered State (Agricultural) Lease (Land). Open Bay Timber and the Forest Authority claimed that:

a) ownership of the Land had previously passed to the Forest Authority pursuant to s. 139A Forestry Act 1991;

b) Tzen Plantation had obtained its title by fraud;

c) Tzen Plantation had obtained title in circumstances so unsatisfactory as to amount to constructive fraud.

3. The National Court found in favour of Open Bay Timber and the Forest Authority on issues (a) and (c), and in favour of Tzen Plantation on issue (b). In the result the National Court amongst others, declared Tzen Plantation's State Lease was null and void, and declared the land was vested in the Forest Authority.

4. Tzen Plantation contends that this appeal raises the following main issues:

a) what interest, if any, passed to the Forest Authority under s. 139A Forestry Act:

b) can registered title under the Land Registration Act be overturned by constructive fraud or only by actual fraud of the registered proprietor; and

c) if registered title can be defeated by constructive fraud, was that the appropriate result in the circumstances of this case.

Whether ownership of the Land had passed to the Forest Authority

5. Tzen Plantation submits that the primary judge erred in finding that the Land had passed to the Forest Authority pursuant to s. 139A Forestry Act as:

a) the Land was not "land in the name of the State" as referred to in s. 139A Forestry Act and that section does not apply;

b) Alternatively, if s. 139A Forestry Act does apply, it only vested in the Forest Authority, the same, but no greater or other right or interest in property that existed in the Forest Authority's predecessors before the coming into operation of the Forestry Act, which was a right of occupancy and not title to the Land;

c) Further or alternatively any right of occupancy of the predecessor of the Forest Authority was cancelled.

Whether the Land was "land in the name of the State"

6. Sections 138 and 139A Forestry Act are as follows:

"138. Transfer of assets etc., to the Authority.

(1) All—

(a) assets (other than land held by the State) which, immediately before the coming into operation of this Act, were held or occupied by the Department of Forests and all liabilities and obligations of the Department of Forests immediately before the coming into operation of this Act; and

(b) assets (other than land held by the State) which immediately before the coming into operation of this Act were held or occupied by the Forest Industries Council and all liabilities and obligations of the Forest Industries Council immediately before the coming into operation of this Act,

are, on that coming into operation, transferred to and become assets and liabilities and obligations of the Authority.

(2) Where any property transferred under Subsection (1) is land registered under the Land Registration Act (Chapter 191), the Registrar of Titles shall, without formal transfer and without fee, on application in that behalf by the Authority, enter or register the Authority in the Register kept under that Act and, on entry and registration, grant a certificate of title, lease or other instrument evidencing title to the land within that Act.

139A. Transfer of land to the Authority.

(1) All land in Papua New Guinea in the name of the State held under a Certificate of Occupancy or set aside for use by the Department of Forests or the Forest Industries Council immediately before the coming into operation of this Act is, on and from the coming into operation of this Act deemed to have been transferred to and to have become the property of the Authority.

(2) Where land referred to in Subsection (1) is land registered under the Land Registration Act (Chapter 191), the Registrar of Titles shall, without formal transfer and without fee, on application in that behalf by the Authority, enter or register the Authority in the Registrar kept under that Act and, on entry and registration, grant a certificate of title, lease or other instrument evidencing title to the land within that Act."

7. Tzen Plantation submits that to speak of land being "in the name" of a person or entity as s. 139A Forestry Act does, contemplates a person or entity having title and specifically registered title. The State was not registered as proprietor of any interest in land on the coming into force of the Forestry Act.

8. As to this submission, s. 139A (2) Forestry Act begins:

"Where land referred to in Subsection (1) is land registered under the Land Registration Act (Chapter 191)......."

9. This wording, envisages that there may be land referred to in s. 139A (1) that is not land that is registered under the Land Registration Act. Given this, we are satisfied that the meaning of "land in the name of the State" in s. 139A (1) should not be confined to the meaning submitted by Tzen Plantation. We are further satisfied that the Land comes within s. 139A (1) Forestry Act.

Whether s. 139A Forestry Act vested a great right or interest

10. Tzen Plantation submits that although it may be said that a literal reading of s. 139A (and s. 138 which is in similar terms) supports the interpretation that what was transferred to the Forest Authority was "title to the land", thereby converting what had been a mere right of occupancy to "ownership", that is not the meaning that was intended. The purpose of s. 138 and s.139A, Tzen Plantation submits, was to vest in the Forest Authority the same, but no greater or other right or interest in property, than existed in the Forest Authority's predecessors before the coming into operation of the Forestry Act.

11. A purposive approach to the interpretation of s. 139A and s. 138 as distinct from a literal reading should be taken otherwise absurd results will arise. For instance, Tzen Plantation submits, a lease for a term of years over property would be converted to a transfer of the lessor's entire interest in the property. In the case of s. 138 it would amount to a compulsory taking of the property without just compensation contrary, in the case of a citizen, to s. 53 Constitution.

12. As to the meaning that was intended by sections 138 and 139A, s. 138 coming into force in 1993 and s. 139A in 1996, the primary judge noted as to s. 139A that counsel for Tzen Plantation notified the court that none of the extrinsic aids to interpretation to which he referred, being any Parliamentary debate or explanatory memoranda, shed light on its interpretation.

13. In this regard we note that in s. 1(3) Forestry Act, it is provided that:

"(3) For the purposes of Section 53 (1) (Protection from unjust deprivation of property) of the Constitution and the Land Act (Chapter 185) it is hereby declared that-

(a) forestry purposes; and

(b) the purchase of logs under Section 115 (1)(a),

are public purposes."

14. This section was part of the Forestry Act 1991, and was amended in 1993 by the Forestry (Amendment) Act 1993 to include s. 1(3) (b). The Forestry (Amendment) Act 1993 also provided for the inclusion of s. 138 Forestry Act.

15. In our view, that this declaration in s. 1(3) with specific reference to s. 53 (1) Constitution was part of the Forestry Act 1991, and has been continued with notwithstanding amendments to the Forestry Act in 1993 and 1996, when there would have been opportunities to either remove or amend the declaration, is indicative of an intention that the purpose and meaning of the Forestry Act is to include the taking of property or the acquisition of interests or rights over property.

16. Given this and the consideration by the primary judge of whether a literal reading of s. 138 and s.139A would lead to unfair and absurd results, a consideration with which we respectfully agree, we do not find any error by the primary judge on this issue.

17. As to a literal reading and interpretation of s. 138 and s. 139A contravening s. 10 Constitution which provides that Acts of Parliament are to be read and construed subject to the Constitution, as the declaration has been made in s. 1(3) Forestry Act as provided for in s. 53 (1) Constitution, we are not satisfied that s. 10 Constitution is breached as submitted by Tzen Plantation.

18. As to the submission of Tzen Plantation that there is a presumption of statutory interpretation, "that a statute does not divest the Crown of its property, rights, interests or prerogatives unless that is clearly stated or necessarily intended": Commonwealth v. Western Australia [1999] HCA 5 paragraph [34], and that this presumption should apply in this instance to interpret s. 139A to mean that what was vested in the Forest Authority was the same, but no greater or other right or interest in property than existed in the Forest Authority's predecessors before the coming into operation of the Forestry Act; this presumption is reflected in s.31 Interpretation Act which is as follows:

"31. Rights of the State.

A statutory provision does not adversely affect the rights of the State or bind the State unless—

(a) it is expressed to do so; or

(b) it appears by necessary implication that the State is bound by the provision."

19. The first line of s. 139A(1) specifically refers to "land.... in the name of the State...". There is then a qualification as to that land. Then s. 139A(1) provides that "...on and from the coming into operation of this Act deemed to have been transferred to and to have become the property of the Authority." Section 139A(1) therefore expressly states that certain land in the name of the State is deemed to have been transferred to and to have become the property of the Authority. The necessary implication of this in our view, is that the State is bound by this provision. Consequently this submission of Tzen Plantation is rejected.

20. Given the above, we are satisfied that the Land was deemed to have been transferred and to have become the property of the Forest Authority by virtue of s. 139A Forestry Act as at the date that s. 139A came into force pursuant to the Forestry (Amendment No.2) Act 1996. From that date, as the Land was the property of the Forest Authority, only the Forest Authority could deal with the Land. The State could not, as it no longer owned and did not have the property of the Land. Consequently, the purported State Lease granted to Tzen Plantation was the result of an error of law and is a nullity. In this regard we refer to the decision of Woods J. in Ulelio v. Nelulo Land Group, Registrar of Titles and The State (1998) N1699.

21. As a result of this finding it is not necessary to consider the other submissions of counsel. This appeal is dismissed. The costs of and incidental to the appeal shall be paid by the appellant to the first and second respondents.
_____________________________________________________________

Ashurst Lawyers: Lawyers for the Appellant
Gadens Lawyers: Lawyers for the First Respondent
Fairfax Lawyers: Lawyers for the Second Respondent
Office of the Solicitor General: Lawyers for the Third to Seventh Respondents