Lau v Maniwa [2016] PGSC 47; SC1528 (31 August 2016)

SC1528

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM No. 19 OF 2014

BETWEEN:
HUI TECK LAU – in his capacity as director of Wewak Agriculture Development Ltd & directors of Sepik Oil Palm Plantations Ltd
First Appellants

AND:
WEWAK AGRICULTURE DEVELOPMENT LIMITED
Second Appellant

AND:
SEPIK OIL PALM PLANTATION LIMITED
Third Appellant

AND:
DANIEL MATU, MATHEW KOIMO, BOB SUMBOI, GEORGE WRONGDIMI, WILLIE JONDUO AND ANDREW KABAI
Fourth Appellants

AND:
LEO MANIWA for himself and on behalf of Kowiru Villagers
First Respondents

AND:
PHILIP DAGUN, ELIAS MAIMBE, MICHAEL CAYBAH, MICHAEL MAMBER, FRANCIS JIM, PETER YUWORA, ERNEST WAMB, JACOB WINDUO AND FLORIAN SABNA
Second Respondents

AND:
HONOURABLE PUKA TEMU in his capacity as Minister of Lands & Physical Planning
Third Respondent

AND:
PEPI KIMAS in his capacity as Secretary of Lands & Physical Planning
Fourth Respondent

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Respondent

Waigani:Lenalia J,Higgins & Kangwia,JJ
2016: 28^th June& 31^st August

CUSTOMARY LAND – Land Act 1996 ss.10(2)(3) and (4), 102(2),(3), Constitution s.53, 255; - Special Agricultural and Business Lease – Consent of customary landowners must be free and informed – all landowners or their authorized representatives to consent – Evidence of lack of proper consent – failure to comply with Land Act – SABL void and of no effect – appeal dismissed.

CASE CITED:

Maniwa v Malijiwi& others [2014] PGNC25

COUNSEL:

MessrsG. Egan & P. Kuman, for the 1^st, 2^nd& 3^rdAppellants
MrM. Muga, for the 4^th Appellant
Mr H. Wally, for the 1^st, 2^nd& 3^rd Respondents
Mr R. Saulep, for the 4^th& 5^th Respondents

DECISION

31^st August, 2016

1. BY THE COURT: This is an appeal from a decision of Gavara–Nanu J given on 4 July 2014 in the National Court at Waigani.
   
2. The proceeding out of which the appeal arises was an application for judicial review under Order 16 of the National Court Rules and the appeal is instituted pursuant to Order 10 of the Supreme Court Rules.
   
3. That application had challenged, on behalf of customary landowners, the grant over their lands of a Special Agriculturaland Business Lease (SABL) granted by the State to the third appellant (Sepik Oil Palm Plantation Limited).
   
4. In his decision, his Honour noted the competing contentions of the parties. Whilst the current appellants submitted that the SABL was properly granted, the plaintiff landowners now the first and second respondents submitted to the contrary. In particular, they alleged that ss.9,10 and 102 of the Land Act 1996 were not complied with; that a purported consent by a director of a landowner company, Limaso Holding Limited, was invalid and in breach of the Land Groups Incorporation Act 1974 and that s.37 of the Survey Act 1969 had not been complied with.
   
5. There had been a public meeting at Turubu Primary School to persuade landowners to consent to the second and third appellants’ development proposal. That meeting was attended, it was asserted, by many people outside the area of the proposed SABL as well as some within it.
   
6. Having regard to the evidence tendered on behalf of the landowners, his Honour was satisfied that the SABL had been granted in breach of ss.10(2),(3),(4); 102(2)&(3) of the Land Act 1996.
   
7. In particular, his Honour noted there was no evidence of enquiries of landowners by the Minister (3^rd Respondent) as to whether the landowners did or did not require the use of the land in question for the period of the lease (99 years). Further, that the landowners had not agreed with the Minister for the acquisition of their land for the purposes of the SABL.
   
8. In addition, his Honour found that the process of consultation was inadequate, contrary to the Constitution s.5, and did not conform to the objectives of the Goals of the National Goals and Directives Principles. In particular the consultation meeting did not adequately communicate with the variety of landowners in the affected area.
   
9. No Instrument of Lease was produced so as to show that the landowners had signed it. Thus, his Honour found, ss.10, 11 and 102 of the Land Act were not complied with and the SABL was issued in breach of s.53 of the Constitution. The SABL was, therefore, null and void.
   
10. Of fundamental importance is respect for and support of the rights conferred under the customary system of land ownership.
    
11. Of significance there is the 4^th of the National Goals and Directive Principles:
    

“We declare our fourth goal to be for Papua New Guinea’s natural resources and environment to be conserved and used for the collective benefit of us all, and be replenished for the benefit of future generations”.

12. To that provision may be added s.53- protection from unjust deprivation of property.
    
13. It forbids the compulsory acquisition of property not only otherwise than by an Organic Law or Act of Parliament but only, even then, where:
    

“(a) The property is required for-

(i) a public purpose; or
(ii) a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind,

that is so declared and so described, for the purposes of this section, in and Organic Law or an Act of Parliament; and

(b) the necessity for the taking of possession or acquisition for the attainment of that purpose or that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected.”

14. Whilst s.53(5)states that the State is not prevented from acquiring,
    

“Ownerless or abandoned property” (s.53(5)(c)).”

That does not apply to customary land.

15. The Land Act 1996 refers to customary land defining it under s.2. The land in question here is customary land. That is not in contention.
    
16. Section 10 of the Land Act does provide for acquisition of customary land. It provides:
    

“(1) Subject to Section 11, customary land shall be acquired in accordance with this Section and shall be authorized by such instruments and in such manner as approved by the Minister.

(2) The Minister, on behalf of the State, may acquire customary land on such terms and conditions as are agreed between him and the customary landowners.

(3) Subject to subsection (4), the Minister shall not acquire customary land unless he is satisfied, after reasonable enquiry that the land is not required or likely to be required by the customary landowners by person upon whom the land will or may devolve by custom.

(4) Where the Minister is satisfied, after reasonable enquiry, that any customary land is not required or likely to be required for a certain period of time but is of the opinion that the land may be required after that period, he may lease that land from the customary landowners for the whole or a part of that period.”

17. Section 11 specifically deals with SABLs. It provides:
    

“(1) The Minister may lease customary land for the purpose of granting a special agriculture and business lease.

(2) Where the Minister leases customary under Subsection (1), an instrument of lease in the approved form,executed by or on behalf of the customary landowners, is conclusive evidence that the State has a good title to the lease and that all customary rights in the land except those which are specifically reserved in the lease, are suspended for the period in the lease, are suspended for the period of the lease to the State.

(3) No rent or other compensation is payable by the State for a lease of customary land under subsection (1).”

18. These provisions are designed to ensure that customary landowners whose title is, after all, usually collective, rather than individual, are protected from the loss of their interest in the land whether it be a result of the actions of exploitative outsiders or fraudulent or self-interested co-owners.
    
19. It is also apparent that customary land may only be acquired by the State with the agreement of the relevant customary landowners. Where customary owners are residing on and/or cultivating the land in question it would be very difficult for the Minister to be satisfied that the land was not required by the traditional owners.
    
20. It should also be noted that “government land” does not include land leased by the State from traditional owners (s.2).Further, under s.66 a State Lease may not be inconsistent with the terms on which the State has leased that Land from customary landowners. It would be expected that the lease from the landowners would reserve the rights of occupation and cultivation customarily enjoyed by them as well as preservation of sacred and ceremonial sites.
    
21. That leads into s.102 which provides:
    

“(1) The Minister may grant a lease for special agricultural and business purposes of land acquired under Section 11.

(2) A special agricultural and business lease shall be granted-

• (a) To a person or person: or
• (b) To a land group, business group or other incorporated body, to whom the customary landowners have agreed that such a lease should be granted.”
  

22. It is noteworthy that, whilst a body corporate may be bound by a decision of a majority, which may be a special majority, of members, there is no such provision in respect of customary owners save that which might be provided by customary law.
    
23. SABLs are exempt from compliance with ss.49, 68-76, 82-84 and 122 of the Land Act. None of those provisions affects the issues raised by the plaintiff landowners.
    
24. The SABL in question was purportedly granted over a portion of land in East Sepik Province and known as Portion 144c. It is known as Turubu Sausso and comprises 123,200hectares.
    
25. The respondents contended that no free and informed consent was given to the proposed lease by the customary landowners, further, that no proper Land Investigation report was done and no land survey properly carried out.
    
26. There was ample evidence to support the contention that informed consent of the landowners was lacking.
    
27. Indeed, the facts surrounding the meeting of 25 July 2008 bespeak a conclusion that it was inadequate. It is not even clear that the portion of the meeting explaining the SABL was in a language that the landowners present could understand let alone that they represented or were all the affected landowners.
    
28. The form of Lease issued (AB302) is itself extraordinary. It alienates the land for 99 years and contains no reservation of the customary rights of the traditional inhabitants of the Land. The form of consent/undertaking referred to in the lease is, in itself, an extraordinary document. It reads:
    

“CONSENT/UNDERTAKING

by

LIMAWO HOLDINGS LIMITED

This Letter of Consent/Undertaking is made and/or given by us, the undersigned as agents and representatives of the customary landowners by way of our appointment as executives of the Limawo Holdings Limited (a landowner company). This consent and/or undertaking is in relation to the land that is the subject of a Special Agriculture and Business Lease (Lease/Lease Back) in the East Sepik Province for an area of about 116,840 hectares as depicted on Survey Plan Catalogue No: 3/624.

We do hereby commit ourselves, for and on behalf of the customary landowners, to this consent/undertaking by declaring, for all intents and purposes, that the Department of Lands & Physical Planning, through its Departmental Head and its senior officers, have unambiguously explained the consequences of our wish, as agents and representatives of the customary landowners, to issue the Special Agriculture and Business Lease to a company known as the ‘SEPIK OIL PALM PLANTATION LIMITED’ rather than the preferable option of issuing the Special Agriculture and Business Lease to the Incorporated Land Groups (ILG’s).

As such we knowingly and consciously declare further that we, the landowners of the various Incorporated Land Groups being the members or shareholders of the landowners’ company called ‘LIMAWO HOLDINGS LIMITED’ and our descendants hereinafter WILL & SHALL NOT take issue with the Independent State of Papua New Guinea or any of its agents such as the Department of Lands & Physical Planning on any matter pertaining to the Special Agriculture and Business Lease that we have requested knowingly to be issued to SEPIK OIL PALM PLANTATION LIMITED.

We also declare further in no uncertain terms that this consent and/or undertaking can and shall be used in the Court of law as a true testament of the customary landowners of the subject area in our capacity as their agents and/or representatives and WE WILL be responsible to them for any grievances that arise, be it the Court of law or otherwise, as a result of the Special Agriculture and Business Lease being issued to the SEPIK OIL PALM PLANTATION LIMITED, a joint venture company in which we, the customary landowners, own a 20% share and our joint venture partners, a Wewak Agriculture Development Limited, owns the remaining 80% share.

We, were reminded by the Departmental Head of the Department of Lands & Physical Planning that the issuance of the Special Agriculture and Business Lease to a company was very risky in that since the company is the State lease proprietor (owner) and its’ got a legal personality (like a real person) the land becomes an automatic asset and in the event of bankruptcy the subject land can be liquidated just like any of the company’s assets and we, the customary landowners, might lose our land for the duration of the lease.

We, were again sternly reminded in no uncertain terms that the Special Agriculture and Business lease was to be issued to a company that we had only 20% control over and despite being advised by the Department of Lands & Physical Planning against that option we, the undersigned, chose to maintain that arrangement. Hence, if anything whatsoever happens henceforth we WILL & SHALL NOT take issue with the State or any of its agents such as the Department of Lands & Physical Planning.

We, the undersigned, declare that we, the customary landowners, and many others did join and were part of the East Sepik Provincial Administration awareness team that conducted the awareness on the Oil Palm Project in the project area and we all did accept and understand the awareness.

Limawo Holdings Limited, being the landowner’s company holds a 20% equity share in the Sepik Oil Palm Plantation Limited which is the developer company whilst 80% is held by our joint venture partner, Wewak Agriculture Development Limited, a company duly incorporated and registered in Papua New Guinea pursuant to the Companies Act with its parent company known as Sin Yew Industries SDN BHD based in Malaysia. The parent company reputably involved in the Oil Palm Business, logging, housing development in Malaysia, Hong Kong and China and other parts of Asia.

Upon the issuance of the Special Agriculture and Business Lease Title to our nominated proprietor, SEPIK OIL PALM PLANTATION LIMITED, we will ensure our developer partner funds the project as per our Joint Venture Agreement pertaining to the clauses on the funding component. Our developer partner, Wewak Agriculture Development Limited, has expanded money already in mobilizing landowners, conducting awareness, financing surveys and the Land Investigations, documenting the formation of Land groups, etc. They have also assured us that they will finance the project once the Special Agriculture & Business Lease title is secured in the name of the joint venture company, SEPIK OIL PALM PLANTATION LIMITED.

We do not anticipate mortgaging or selling this Special Agriculture and Business Lease Title as we do not understand that the land is still our customary land and as and when the 99 years lease period expires the land reverts back to us as our customary land, however, in the unlikely event of such occurrences we will be entirely responsible and the State or any of its agents are INDEMNIFIED. We also fully understand that our action in consenting and making the undertaking binds us, all the customary landowners within the project area and our future descendants.

We, the undersigned, as landowners ourselves and being well recognized as the landowners’ Agents/Representatives of the project area and furthermore, as the executives of Limawo Holdings Limited do hereby give consent to the issuance of the Special Agriculture and Business Lease Title over the subject land legally described as Portion 144C part Milinch of Tring, Fourmil of Wewak and part Milinch of Wombun, Fourmil of Ambunti, East Sepik Province hereby declare that we fully and truly understand the cause and consequences of our actions and agree that the said lease be issued to the company known as SEPIK OIL PALM PLANTATION LIMITED for the term 99 years as agreed.

This Consent/Undertaking is made this day 02^nd day of September, 2008, at the Aopi Centre – Waigani, 4^th Floor, Department of Lands and Physical Planning Headquarters.

We, the hereunder, herein sign and affix our company’s (Limawo Holdings Limited) common seal as a means of sealing our declaration and pray to justify and/or confirm our actions if and when taken to task.

1. (Signed) _ 2. (Signed) _

Mr. ARON MALIJIWI Mr. MARTIN G. SHUKIWIE

Chairman Vice Chairman

Limawo Holdings Limited Limawo Holdings Limited

3. (Signed) _ 4. (Signed)

Mr.MALCOLM NAMBON Mr. PAUL BINA

Director Chairman

Limawo Holdings Limited Chairman of Mamutika ILG

(ILG No: 14231)

Witnessed for and on behalf of the Department of Lands and Physical Planning by:-

1. (Signed) 2. (Signed)

Mr. PEPI S. KIMAS, OL Mr. JACOB WAFINDUO

Secretary Manager – Customary Land

Dept. Lands & Physical Planning Dept. Lands & Physical Planning

(Signed)
Mr. IAN
Manager – Legal Services
Dept Lands & Physical Planning”

29. The terms of the Lease and of the consent/undertaking allegedly given on behalf of the landowners are so oppressive that it calls into question whether the customary owners could have understood the arrangement they were being asked to agree to, if indeed they were asked.
    
30. Those seeking an SABL would do well to heed the words of the trial Judge in this case. If a substantial area of customary land is to be acquired, the consent of all the affected landowners with authority to lease the land to the State must be obtained. It must be a free and informed consent. The environmental issues must be properly explored and explained. There was in this case no proper registration of relevant land groups.
    
31. As summarized at [24] of the primary decision,Maniwa v Malijiwi & others [2014] PGNC25, Gavara-Nanu J stated:
    

“....the SABL and the related activities or projects were goingto interfere with and affect their [the landowners] traditional life style, their customary rights to land, rivers, the sea and forests. The SABL was granted to the fifth defendant [the third Appellant] for 99 years, that is how long the landowners would be denied from the use and enjoyment of their land. So the generations of landowners would be affected. That is why the defendants needed to go to the villages in SABL areas and talk to the landowners, in their families, clans and tribes, in the languages they could understand. If they did [not] understand English, Pidgin or Motu, then use interpreters to interpret things in their own languages.”

32. I would add that it would be important to monitor the information given to obtain consent lest, in their enthusiasm for their project, those who stood to profit from it might accidentally or otherwise mislead or deceive the landowners by claiming benefits to them that would not arise and even concealing the detriments both social and environmental that may arise from the proposed project.
    
33. Although his Honour did not refer to it, the provisions of s.255 of the Constitution add further support to his Honour’s criticism of the consultation process required under the Land Act. That is:
    

“255 CONSULTATION

In principle, where a law provides for consultation between persons or bodies, or persons and bodies, the consultation must be meaningful and allow for a genuine interchange and consideration of views.”

34. The consultations in evidence before his Honour did not, as he found, meet this standard.
    
35. It can be added that the State was a party to this appeal and made the powerful submission that the process resulting in the issue of this SABL was flawed and could not be defended.
    
36. In the circumstances, the decision of his Honour Gavara-Nanu is confirmed as are the findings and orders he has made.
    
37. The appellants will pay the respondents’ costs of and incidental to this appeal. Such costs to be taxed if not agreed.
    

______________________________________________________
Kuman Lawyers: Lawyers for the 1^st, 2^nd& 3^rdAppellants
Twivey Lawyers: Lawyers for the 4^th Appellant:
H Best Lawyers: Lawyers for the 1^st, 2^nd& 3^rd Respondents:
Saulep Lawyers: Lawyers for the 4^th& 5^th Respondents