National Airports Corporation Ltd v Airport Guest House Ltd [2019] PGSC 90; SC1867 (8 November 2019)

SC1867

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REV NO 96 OF 2018

BETWEEN
NATIONAL AIRPORTS CORPORATION LIMTED
Applicant

AND
AIRPORT GUEST HOUSE LIMITED
First Respondent

AND
ROMILY KILA PAT – SECRETARY FOR DEPARTMENT OF LANDS
Second Respondent

AND
BENJAMIN SAMSON
ACTING REGISTAR OF TITLES
Third Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Respondent

AND
NATIONAL HOUSING CORPORATION
Fifth Respondent

Waigani: Makail, Koeget & Thompson JJ
2019: 30^th October & 8^th November

SUPREME COURT REVIEW – Review of decision to quash cancellation of instrument of title – Interest of applicant – Claim of right of occupation pursuant to Certificate of Authorised Occupancy – Constitution – Section 155(2)(b) – Land Registration Act – Sections 160 & 161

Cases Cited:

Dynasty Estates Limited v. Nambawan Super Limited & Ors (2015) SC1427

Counsel:

Mr. S. Raneva, for Applicant
Mr. L. Tangua, for First Respondent
Mr. M. Tukulia, for Second, Third &Fourth Respondents
No appearance, for Fifth Respondent
Mr. D. Simizi, for an interested party

JUDGEMENT

8^th November, 2019

1. MAKAIL, J: This is an application to review a decision of the trial judge of 24^th July 2018 pursuant to Section 155(2)(b) of the Constitution. That decision was made in a judicial review proceeding concerning a property situated in the city of Mt Hagen. The trial judge quashed the decision of the third respondent to cancel the title of the first respondent to the property and remitted the matter to the third respondent to re-hear it according to law.

2. The sole issue before the trial judge was whether the first respondent followed the procedure for cancellation of an instrument of title under Sections 160 and 161 of the Land Registration Act (“the Act”). The trial judge held that “following the procedure prescribed under section 160 of the Act is a precondition for the exercise of power under Section 161 of the Act”.

3. He further held that when the first respondent did not respond to the summons issued by the third respondent to deliver up the instrument of title, the third respondent did not apply to the National Court to issue a summons for the first respondent to appear before the Court and show cause why the instrument should not be delivered up as required by Section 160(2) of the Act.

4. Section 160(2) provides:

“Where a person refuses or neglects to comply with a summons under Subsection (1), or cannot be found, the Registrar may apply to the Court to issue a summons for that person to appear before the Court and show cause why the instrument should not be delivered up”.

When the third respondent proceeded without following this procedure and cancelled the instrument of title of the first respondent, his actions was not only ultra vires, but also deprived the first respondent of its right to natural justice.

5. The complaint by the applicant is not about the trial judge’s finding that the third respondent failed to follow the procedure in Section 160 of the Act to cancel the instrument of title of the first respondent. It is about neither being a party nor heard in the judicial review proceeding at the National Court, and if it was a party (defendant) or heard, it would have argued that it was a holder of a Certificate of Authorised Occupancy (“CAO”) and that there was in existence an interim injunction in a related legal proceedings restraining the respondents from dealing with the property. That Court order was brought to the notice of the trial judge by the lawyers for the second, third and fourth respondents but the trial judge failed to give consideration to it.

6. It is said that those matters formed a basis of the applicant’s claim to having an interest in the property and that, if it had been a party (defendant) or heard it would have defended the first respondent’s decision to cancel the title of the first respondent.

7. Significantly, the trial judge did not make any finding in relation to who was the title holder of the property because it was not an issue which required his consideration. He focussed on the procedure for cancellation of title and quashed the decision of the third respondent to cancel the instrument of title of the fifth respondent. Where the issue of who the legal title holder of the property was, has not been determined, it does not arise in this review.

8. However, it is significant to note that, the trial judge gave the parties a further opportunity to return to the third respondent to revisit the issue of cancellation of title when he ordered that the matter to be remitted to the third respondent to re-hear it according to law. This part of the Orders of the trial judge required the third respondent re-hear the matter. The matter to be re-heard is whether there is a case for the first respondent’s title to the property to be cancelled, this time by following the procedure set out in Section 160 of the Act. It is also open to the applicant to make representation to the third respondent to re-hear the matter and participate at that hearing.

9. The onus of proof of the applicant’s interest to entitle it to successfully have the trial judge’s decision quashed pursuant to the inherent power of the Supreme Court must be more than a right of occupation accorded to it pursuant to the CAO.

10. It is doubted if this kind of interest can be equated to the same level as an interest of a successful applicant for a State Lease – Urban Development Lease at the Land Board and yet was completely left out in a judicial review proceeding which the Court quashed the decision of the Land Board. The Supreme Court held that the appellant had an interest and was denied natural justice. It quashed the decision of the National Court, granted leave to the appellant to join and remitted the matter to the National Court for a re-trial: Dynasty Estates Limited v. Nambawan Super Limited & Ors (2015) SC1427.

11. The applicant’s right of occupation is further in doubt when it had not been shown by the applicant where in the legislation does the CAO derive its authority. Furthermore, except for the assertion of a right of occupation, it is not known what kind of rights and obligations are being conferred on the applicant by the CAO.

12. Against those is the first respondent’s indefeasible title, conferring on the first respondent a right of occupation and quiet enjoyment of the property. Unless one or more of the grounds found in Section 33(1) of the Act is present, the first respondent’s title must prevail over the applicant’s right of occupation under the CAO and the complaint by the applicant that it was neither a party nor heard in the judicial review proceeding in the National Court is not an identifiable error.

13. Even the question raised by the applicant in relation to compliance or otherwise of the interim injunction in the related legal proceeding conferred no more than a right to preserve the status quo of the property pending the determination of the issues in that legal proceeding. It does not confer an exclusive right to occupy the property for an unspecified or unlimited period of time and the trial judge made no error in failing to give consideration to it.

14. Having considered these matters, the complaint by the applicant must be found to be without merit and the application to review will be dismissed with costs to the respondents, to be taxed, if not agreed.

15. KOEGET, J: I am in agreement with the reasons and conclusions reached by Makail J and Thompson J and have nothing further to add.

16. THOMPSON, J: Before the hearing of this Supreme Court Review commenced, counsel made an application on behalf of William Sam Akeim, to be joined as a party. The Court declined to hear the application.

17. Before opening the Review Application, the Applicant’s lawyer made an application for leave to adduce further evidence. After hearing submissions and determining that it was an application to adduce fresh evidence, leave was granted to the Applicant to withdraw its Application filed on 24 October 2019, with costs in the Review.

Review Application

18. On 30 March 2017, the 1^st Respondent, Airport Guest House Limited (“AGH”) issued judicial review proceedings in the Mount Hagen National Court, seeking to review the 3^rd Respondents’ decision of 19 June 2014 to cancel AGH’s Certificate of Title over Lot 12 Sec 24 Mount Hagen (“the land”).

19. The Grounds for that Judicial Review were essentially that:

(a) in 2011, proceedings on O.S.807 of 2011 were issued by the National Judicial Staff Services (“NJSS”) against the National Airports Corporation (“NAC”) and the National Housing Corporation (“NHC”) claiming ownership of the land, and on 24 October 2011 NJSS obtained an ex parte interim Order restraining the Defendants from dealing with the land, pending the determination of the proceedings;

(b) by a Grant made on 10 May 2011 and gazetted on 20 February 2012, title to the land was issued to the NHC, which sold the land to AGH, who became the registered proprietor on 28 March 2012, but that on 19 June 2014 its Certificate of Title was cancelled by the 3^rd Respondent ;

(c) the basis of the cancellation was said to be that the Title had been wrongly granted to the NHC and wrongly transferred to AGH in breach of the 2011 Court order;

(d) AGH was not named as a party to the proceedings on OS 807 of 2011, and was not served with the documents;

(e) in 2012 the NJSS issued proceedings on OS 397 of 2012 against AGH and NHC, seeking to challenge the title to the land, but those proceedings were dismissed on 10 July 2013;

(f) in February 2014 the 3^rd Respondent gave notice to AGH that he required it to surrender its Certificate of Title for cancellation, based on the 2011 interim court order, AGH refused to surrender the title, and heard nothing more until it subsequently found that the title had been cancelled.

20. AGH issued the judicial review proceedings in the Mount Hagen Court on OS 361 of 2017, and on 24 July 2018 the National Court upheld the judicial review and set aside the 3^rd Respondents’ decision to cancel the title.

21. On 16 May 2019 NAC issued these proceedings, seeking Review of the National Court Decision.

Grounds

22. The grounds for Review are essentially that NAC should have been but was not given the opportunity to be heard in those Mount Hagen proceedings, as it was not named as a party or served with the documents as a person directly affected by the proceedings, and that the primary Judge erred in failing to find that the title was issued to the NHC in breach of the court order on OS 807 of 2011.

23. In relation to the first issue, I reject the argument that NAC was directly affected by the proceedings and so should have been named or served.

24. The decision which was the subject of those Mt. Hagen proceedings, was a decision by the 3^rd Respondent purporting to cancel AGH’s Certificate of Title pursuant to S161 of Land Registration Act. The cancellation which was entered on the Registrar’s copy of the title referred to cancellation of the State Lease and said that “cancellation is hereby effected under S161 of the Land Registration Act Chapter 191 pursuant to National Court Order No. OS 807/2011”.

25. The 3^rd Respondent had issued a letter headed “Summons for Title Production” to AGH in February 2014, summonsing AGH to produce the original Owner’s copy of the State Lease. There was no evidence that the 3^rd Respondent had issued a similar “summons for production” to the NHC, and it could not have done so, because the NHC was no longer the owner, and did not hold the Owner’s copy of the title.

26. The prima facie meaning of the endorsement on the Registrar’s copy, was that he had cancelled AGH’s Certificate of Title because of a purported breach of the 2011 Court Order. The result of such a cancellation was that the title reverted to the NHC.

27. The 3^rd Respondents’ decision only affected AGH and NHC. They were the only entities who had ever been issued with a Certificate of Title and had been the registered proprietor of a State Lease over the land.

28. NAC had never been the registered proprietor of the land, and had never been issued with a Certificate of Title. At its’ highest, NAC’s claim was that on an unknown date, NAC’s predecessor in title had been issued with a “Certificate of Authorized Occupancy” of the land.

29. The NAC’s lawyer was unable to produce a copy of this Certificate, or identify what it was, or to identify the section of an Act which authorized the issue of such a Certificate, or the purpose and the effect of such a Certificate.

30. Any alleged Certificate could not have been a Licence under S125 of the Land Act, which only permits the temporary use of land and in any event, is only valid for twelve months. It could not have been an authority issued by the Minister under S138 of the Land Act which is headed “Temporary Occupation”, which allows an authorized person to enter certain types of land and temporarily occupy it for as long as is necessary for the purpose of any works connected with the carrying out of a public purpose. S139 of the Land Act provides that a person authorized under S138 may carry out certain activities, including the erection of sheds and other buildings of a temporary character, but no authority is given for the construction of a house or permanent building.

31. The NAC therefore produced no evidence that it had any right or entitlement to occupation, let alone ownership of the land, prior to the Grant of the title to the NHC and its subsequent transfer to AGH.

32. Even if NAC did have an instrument showing some type of interest in the land, S17 of the Land Registration Act provides that an instrument is not effective to create an interest unless it is registered. No such instrument was ever registered.

33. Under S33 of the Land Registration Act, the registered proprietor holds title free from all encumbrances except those listed in S33 (1). The NAC has not shown that it comes within any of those exceptions. NAC has never issued any legal proceedings to challenge the validity of the indefeasible title held by either NHC or AGH.

34. In the absence of evidence that NAC had any entitlement to ownership, NAC had no interest which was affected, directly or otherwise, by the 3^rd Defendant’s decision to cancel AGH’s title. AGH did not err in not joining NAC as a party, and was not required to serve the documents on NAC.

35. The primary Judge did not err in setting aside the 3^rd Respondent’s decision. The Registrar’s power to cancel title under S161, can only be exercised where the title has been surrendered. If the title has not been surrendered, the Registrar may still correct an error on the title, but has no power to cancel it.

36. Section 160 of the Land Registration Act is clear - where a person refuses to surrender the title, the Registrar may apply to the Court to issue a Summons for that person to appear and show cause. Section 160 does not give the Registrar the power to issue such a Summons, or to cancel the Title. The Court may order the title to be surrendered to the Registrar. Unless and until the title has been surrendered, the Registrar has no power to cancel it.

37. The primary Judge made no error in finding that the 3^rd Respondent failed to comply with the statutory requirements prescribed in S160 and S161 of the Land Registration Act, and thereby made an error of law and acted ultra vires his power.

38. In relation to the 2011 Order, the NAC has not established that title was granted to the NHC in breach of that Order, or that there was an error in not making such a finding.

39. The wording of the Order is not free from ambiguity. The judge initially granted an ex parte interim order restraining any dealings pending the determination of the proceedings. Order 4 Rule 49 (5) of the National Court Rules provides that on hearing an urgent ex parte application, the judge may make an interim order until the return date, and give a specific return date when the interim order becomes returnable.

40. The endorsement on the court file shows that after making the urgent ex parte interim order on 24 October 2011, the matter returned on 31 October 2011, when the judge adjourned it to 17 November 2011, and ordered that “the interim orders made on 24 October 2011 are extended.” When the matter returned on 17 November 2011, the judge adjourned the matter to 16 December 2011, and ordered that the “interim orders made on 24 October 2011 are extended to 16 December 2011”. The matter does not appear to have returned on 16 December 2011, and no further orders were endorsed. When the matter returned on two subsequent illegible dates in 2012, the interim orders were not mentioned or extended. It is therefore not known if the interim orders were still in place, or had expired on 16 December 2011.

41. There was no evidence that the Court Order was served on the NHC. There was no evidence that the NHC had been determined by a Court to have breached the Court Order, or was in contempt of that Order. The Registrar had no basis for carrying out the NAC’s request for the title to be cancelled. The Registrar proceeded to make a decision to cancel AGH’s indefeasible title, based merely on an assertion by NAC of a breach of an interim order, without any court order finding that there had been such a breach. There was not even any evidence of service of the 2011 Order on any of the Defendants in those proceedings, (which did not include AGH, as title had not yet been issued to it).

42. The primary Judge made no error in not finding that the title had been granted or transferred in breach of a court order, which in any event was not an issue which was before him.

43. The only decision for review by the primary Judge, was the 3^rd Respondent’s decision to purport to cancel AGH’s title in reliance on S160-161 of the Act.

44. AGH clearly established that the Registrar had failed to correctly follow the provisions of S 160-161 of the Act, had exceeded his powers by failing to apply to the court for a Summons for AGH to appear and show cause, and by proceeding to cancel a title which had not been surrendered.

45. The application for review of the decision of 24^th July 2018 will be dismissed, and the Applicant shall pay the Respondents’ costs of the proceeding, to be taxed, if not agreed.
________________________________________________________________
Kawat Lawyers: Lawyers for Applicant
Tangua Lawyers: Lawyers for First Respondent
Solicitor General: Lawyers for Second, Third & Fourth Respondents
Jacksons Lawyers: Lawyers for Interested Party