Soto v Our Real Estate Ltd [2018] PGSC 55; SC1701 (31 August 2018)

SC1701

PAPUA NEW GUINEA
[IN THE SUPREME COURT JUSTICE]

SCA NO. 85 OF 2017

BETWEEN:

JOHN SOTO for himself and as representative
of eighteen (18) others
First Appellant

AND:
ARUA GUBA for himself and on behalf of
Kaevega Clan Incorporated Land Group of Baruni, National Capital District
Second Appellant

AND:
OUR REAL ESTATE LIMITED
Respondent

Waigani: Kariko, Logan & Frank JJ.
2018: 28^th & 31^st August

LAND REGISTRATION ACT – indefeasibility of title – exceptions to indefeasibility – s 33(1)(a) Land Registration Act – requirement for actual not constructive fraud to be alleged and proved

PRACTICE AND PROCEDURE – challenge to indefeasibility of title of registered proprietor – reliance on fraud exception – s 33(1)(a) Land Registration Act – failure to allege fraud in statement of claim or proposed amended statement of claim – whether proceeding disclosed cause of action – whether National Court erred in dismissing proceeding summarily

Cases cited:

Mudge v Secretary for Lands [1985] PNGLR 387
Mamun Investments Pty Ltd v Ponda [1995] PNGLR 1
Papua Club Inc v Nasaum Holdings Ltd [2004] PGNC 178
Paga No 36 Ltd v Eleadona [2018] PGSC 17; SC1671

Legislation:

Land Act 1996, s 92
Claims By and Against the State Act 1996, s 5
Land Registration Act (Ch 91), s 33(1)

Counsel:

Mr P. Pato, for the Appellants
Mr D. Kop, for the Respondent

31^st August, 2018

1. BY THE COURT: On 30 September 2010 the Second Appellant purported to sell to the First Appellant for consideration certain land called “Dobona”, north-west of Hohola, Port Moresby. The Second Appellant had earlier purported for consideration to lease that same land to the First Appellant for a period of 50 years. The land was said by the Second Appellant to be the subject of customary ownership of the Kaevaga Clan of which the Second Appellant was the representative.

2. That same land was the subject of a number of State Leases granted in 2013 to the Respondent, Our Real Estate Limited (ORL) as registered proprietor under s 92 of the Land Act 1996 (PNG).

3. In 2016, the Appellants instituted proceedings in the National Court in which they claimed a declaration that the land concerned was customary land and that the subdivision which was a precursor to the granting of the State Leases was null and void. Originally, the State and a number of officers or emanations of the State were parties to the proceeding as well as ORL. But the Appellants failed to give prior notice to the State as required by s 5 of the Claims By and Against the State Act 1996 (PNG). They never rectified this deficiency. On 17 February 2017, on the application of the State party defendants (First to Sixth Defendants), the Appellants’ claims against those defendants were dismissed. That left ORL, the Seventh Defendant named in the Writ, as the sole defendant in the National Court.

4. ORL subsequently brought an application that the Appellants’ claim as against it be dismissed on the basis that it disclosed no reasonable cause of action. For their part, the Appellants sought leave to amend their original statement of claim. On 9 June 2017, the dismissal application was granted.

5. At the time when ORL’s application was made, it had yet to file a defence. So it was not yet apparent on the pleadings whether there was any dispute as to whether, in 2010 and earlier, the land was held in customary ownership by the Kaevaga Clan as represented by the Second Appellant. It is trite that the National Court does not have jurisdiction to determine controversies as to customary ownership of or other interests in land.

6. The reasons for judgment of the learned primary judge were delivered orally. They were, with respect, compressed but they were sufficient unto the day nonetheless. It is tolerably clear that the basis for the summary dismissal was that, neither as originally pleaded nor as proposed to be amended, was there a distinct allegation of fraud made against ORL in relation to its becoming the registered proprietor of the State Leases.

7. Of course, a proceeding ought not to be dismissed summarily except in a clear case. But this was such a case.

8. Upon the registration of the State Leases, an indefeasible title vested in ORL as registered proprietor, subject only to the exceptions for which s 33(1) of the Land Registration Act (Ch 91) provided: Mudge v Secretary for Lands [1985] PNGLR 387; Mamun Investments Pty Ltd v Ponda [1995] PNGLR 1. Of these exceptions, only the fraud exception for which s 33(1)(a) of that Act provides was of any possible application. Contrary to the Appellants’ contention, the fraud concerned must be actual fraud by the registered proprietor in procuring registration, not constructive fraud: Papua Club Inc v Nasaum Holdings Ltd [2004] PGNC 178 (Gavara-Nanu J); recently expressly approved by the Supreme Court in Paga No 36 Ltd v Eleadona [2018] PGSC 17; SC1671 (30 May 2018). And that fraud had to be distinctly pleaded with particularity. This the Appellants did not originally, and self-evidently from the draft amended statement of claim could not, do.

9. For these reasons, the learned primary judge was correct to dismiss the proceeding summarily.

10. The orders must therefore be that:

1. The appeal is dismissed.
2. The Appellants pay the Respondent’s costs of and incidental to the appeal to be taxed if not agreed.

_________________________________________________________
Patten Legal: Lawyer for the Appellant
Daniel Kop Lawyers: Lawyer for the Respondent