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Supreme Court of Papua New Guinea |
SC2134
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO. 04 OF 2019
BETWEEN
JIMMY CHARLIE for himself andon behalf of ENEHAKO INCORPORATED LAND GROUP (ILG Reg. No.02 of 2014) as Interim Chairman and authorised
Clan Representative
First Appellant
AND
ENEHAKO INCORPORATED LAND GROUP (ILG Reg. No. 02 File No. 17900)
Second Appellant
AND
ANDREW MALD
Third Appellant
AND
MR & MRS EVAN (IVAN) PAKI
First Respondents
AND
PACIFIC MEDICAL CENTER INC.
Second Respondent
AND
DI TENE VATA LAND GROUP INC.
Third Respondent
AND
MR CHARLES MANDA, Acting Surveyor General of Papua New Guinea
Fourth Respondent
AND
ROMILY KILA PAT in his capacity as Secretary for Lands and a Delegate of the Minister for Lands & Physical Panning
Fifth Respondent
AND
BENJAMIN SAMSON, in his capacity as Acting Registrar of Titles, Department of Lands & Physical Planning
Sixth Respondent
AND
HON. BENNY ALLAN, MP, Minister for Department of Lands & Physical Planning
Seventh Respondent
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Eighth Respondent
Waigani: Cannings, David & Makail JJ
2021: 29th June & 17th August
SUPREME COURT – Appeal against dismissal of proceeding – Failure to disclose a reasonable cause of action, being frivolous and vexatious and an abuse of process – National Court Rules – Order 12, rule 40(1)(a), (b) & (c).
CAUSE OF ACTION – Identification of cause of action – Customary landownership dispute as opposed to fraud – Subject matter of the proceeding – Allegations of fraud perpetrated on title of land – Fraud may be actual or inferred from breaches of statutory procedure – Land Registration Act – Section 33 – Land Act, 1996 – Sections 10, 11 and 12
Facts
The first and second appellants commenced proceeding in the National Court and sought orders for the return of their customary land. They were supported by the third appellant who was an occupant of a portion of it. By an order of the Court of 5th August 2016 in a related proceeding, this proceeding was consolidated with two other proceedings because this piece of land was the common interest. All these proceedings will be referred to as the consolidated proceedings. The first and second appellants claimed that they are customary landowners of this piece of land known as Hohokaie situated at Dogura in the National Capital District. This piece of land is also referred to as part of the land in Central Claim 88 and comprised 22.5 hectares. It has been registered as Portion 2917C in the name of the second appellant. To verify their claim of ownership, they relied on a Native Land Titles Commission decision of 25th January 1960 which awarded this piece of land to them. That decision has not been set aside by a higher authority. It was affirmed by a subsequent Local Land Court decision of 8th July 2013. The respondents applied by motion to dismiss the consolidated proceedings on the ground that there was a dispute as to the ownership of this piece of land and that the National Court lacked jurisdiction to determine it. The learned primary judge upheld the motion and dismissed the consolidated proceedings. He held that the Court lacked jurisdiction thus, the consolidated proceedings failed to disclose a reasonable cause of action, frivolous and vexatious and abuse of process pursuant to Order 12, rule 40(1)(a), (b) and (c) of the National Court Rules.
Held:
(1) The pleadings in the statement of claim demonstrated that the appellants relied on fraud to set aside the grant of title of two portions of land to the second respondent under Section 33 of the Land Registration Act. They relied on actual fraud or fraud inferred from breaches of statutory procedure under Sections 10, 11 and 12 of the Land Act 1996.
(2) The National Court did not lack jurisdiction to determine a cause of action where the subject matter is the return of land and where fraud was perpetrated on the title of the registered proprietor under Section 33 of the Land Registration Act.
(3) Fraud may be actual or inferred from the breaches of procedure under Sections 10, 11 and 12 of the Land Act 1996.
(4) The learned primary judge made an identifiable error in the exercise of his discretion when he held that the subject matter in the proceeding is a customary landownership dispute, upheld the motion and dismissed the proceeding for want of jurisdiction: Curtain Bros (PNG) Ltd v. University of Papua New Guinea (2005) SC788.
(5) The allegations in the statement of claim demonstrated that this is not a case where the proceeding disclosed no reasonable cause of action or the cause of action is obviously and almost incontestably bad such that it should be dismissed.
(6) The appeal is upheld and the decision of the National Court to dismiss the proceeding for want of jurisdiction is quashed and matter is reinstated and remitted to the National Court for trial.
Cases Cited:
Curtain Bros (PNG) Ltd v. University of Papua New Guinea (2005) SC788
Emas Estate Development Pty Ltd v. John Mea [1993] PNGLR 215
Eric Kiso v. Bennie Otoa & Ken Wutnalom (2013) SC1222
Koitachi Farms Ltd v. Walter Schnaubelt (2007) SC870
Lae Bottling Industries Ltd v. Lae Rental Homes Ltd (2011) SC1120
Lord & Company Ltd v. Inapero (2014) SC1624
Louis Lucian Siu v. Wasime Land Group Incorporated (2011) SC1107
Mudge & Mudge v. The State [1985] PNGLR 305
Papua Club Inc v. Nusaum Holdings Ltd (No 2) (2014) N2603
PNG Forest Products Pty Ltd v. Independent State of Papua New Guinea [1992] PNGLR 85
Ronny Wabia v. BP Exploration Operating Co. Ltd [1998] PNGLR 8
Talibe Hegele v. Tony Kila (2012) SC1180
Tender Wak v. John Wia (2008) N3356
Victor Golpak v. Patrick Alongerea and Ors [1993] PNGLR 491
Windi v. University of Papua New Guinea (2020) SC1979
Counsel:
Mr. J. Kolo, for Appellants
Mr. J. Aku, for First and Second Respondents
No appearance, for Third Respondent
Mr. M. Pepi, for Fourth to Eighth Respondents
JUDGMENT
17th August, 2021
1. BY THE COURT: The first and second appellants commenced a proceeding in the National Court and sought orders for the return of their land. They were supported by the third appellant who is an occupant of a portion of it. By an order of the Court of 5th August 2016 in a related proceeding, the proceeding was consolidated with two other proceedings because this piece of land was the common interest. These proceedings will be referred to as consolidated proceedings. The first and second appellants claimed that they are customary landowners of this piece of land known as Hohokaie situated at Dogura in the National Capital District. This piece of land is also referred to as part of the land in Central Claim 88 and comprised 22.5 hectares. It has been registered as Portion 2917C in the name of the second appellant.
2. To verify their claim of ownership, they relied on a Native Land Titles Commission decision of 25th January 1960 which awarded this piece of land to them. That decision has not been set aside by a higher authority. It was affirmed by a subsequent Local Land Court decision of 8th July 2013. The respondents applied by motion to dismiss the consolidated proceedings on the ground that there was a dispute as to the ownership of this piece of land and that the National Court lacked jurisdiction to determine it. The learned primary judge upheld the motion and dismissed the consolidated proceedings. He held that the Court lacked jurisdiction thus, the consolidated proceedings failed to disclose a reasonable cause of action, were frivolous and vexatious and an abuse of process pursuant to Order 12, rule 40(1)(a), (b) and (c) of the National Court Rules (“NCR”).
Grounds of Appeal
3. The appellants appealed against the decision of the National Court to dismiss their proceeding described as WS No 951 of 2015: Jimmy Charlie & Enehako Incorporated Land Group & Andrew Mald v. Mr and Mrs Evan (Ivan) Paki, Pacific Medical Centre Inc, Di Tene Vata Land Group Inc &Ors. They seek inter alia, an order to quash the decision of the National Court to dismiss their proceeding and not the consolidated proceedings. Given this, our consideration of the appeal will be confined to proceeding WS No 951 of 2015 commenced by the appellants.
4. The main ground of appeal raised arguments in relation to whether the cause of action was based on ownership over this piece of land and if so, the National Court would lack jurisdiction. The appellants contended that the subject matter of their proceeding is fraud and breach of statutory process under the Land Act, 1996. They will prove at trial that the third respondent misrepresented to the first and second respondents that it was the customary landowner of this piece of land and did not obtain their consent or approval before disposing of the land. Secondly, they will prove that fraud can be inferred from the breach of the statutory process for acquisition of customary land from the customary landowners and subsequent grant of two titles to the second respondent.
Jurisdiction of National Court
5. Where the subject matter of the proceeding relates to ownership of customary land and if the cause of action requires the Court to determine ownership of customary land, the Court will lack jurisdiction. In Talibe Hegele v. Tony Kila (2012) SC1180, the Supreme Court held that the test to apply is:
“(1) If in proceedings in the National Court a question arises whether the Court has jurisdiction due to the subject matter of the proceedings relating to ownership of customary land, the question of jurisdiction is to be determined by characterisation of the cause of action. If the cause of action requires the Court to determine ownership of customary land, the Court will lack jurisdiction. If some other cause of action is being prosecuted, the proceedings will fall within the jurisdiction of the Court”.
6. We accept the above statement of principle because customary landownership disputes fall exclusively within Section 3 of the Land Disputes Settlement Act, 1975 (“Act”) as “disputes as to interests in customary land, or as to the position of boundaries of any customary land”. A consideration of the dispute as to “interest” according to Section 2 of the Act “includes any interest in land of whatsoever nature that is recognized by the custom of the people of the area in which the land is located” and the term “land” is defined as “customary land ...........”.See also Louis Lucian Siu v. Wasime Land Group Incorporated (2011) SC1107, Tender Wak v. John Wia (2008) N3356, Victor Golpak v. Patrick Alongerea and Ors [1993] PNGLR 491 and Ronny Wabia v. BP Exploration Operating Co. Ltd [1998] PNGLR 8.
Issue
7. Is the subject matter being prosecuted in the proceeding in the National Court related to ownership of customary land and the Court will lack jurisdiction to determine it?
Pleadings
8. We turn to the pleadings to answer this question because they identify the subject matter of the proceeding. Our task has not been made easy when we note that the pleadings in the statement of claim run into 57 paragraphs with longwinded and repetitious statements. Ideally, they could have been brief and clearly expressed to identify the subject matter of the proceeding. However, we are of the view that they sufficiently identify the subject matter of the proceeding:
9. From the above summary of facts, we reject the first and second respondents’ submissions that the pleadings failed to particularise the allegations of fraud. We are satisfied that the subject matter of the proceeding is one of fraud being perpetrated on the title of two portions of land which the appellants claimed to own. Fraud is one of the grounds, if not, we suggest the single most prolific ground in this jurisdiction to set aside an indefeasible title of a registered proprietor of a State Lease under Section 33 of the Land Registration Act.
10. Fraud may be actual or inferred from the circumstances of the grant of title to the registered proprietor where it is so unsatisfactory and irregular that it is tantamount to fraud, warranting the setting asset of the registration of title. The appellants relied on both: see Mudge & Mudge v. The State [1985] PNGLR 305; Emas Estate Development Pty Ltd v. John Mea [1993] PNGLR 215; Papua Club Inc v. Nusaum Holdings Ltd (No 2) (2014) N2603; Koitachi Farms Ltd v. Walter Schnaubelt (2007) SC870; Lae Bottling Industries Ltd v. Lae Rental Homes Ltd (2011) SC1120 and Eric Kiso v. Bennie Otoa & Ken Wutnalom (2013) SC1222.
11. In the former case, they alleged that as customary landowners of the land they were not informed by the third respondent of its intention to dispose of the land to the first and second respondents. The third respondent is not a customary landowner of the land and had no title to pass to the first and second respondents. Not only that, but they alleged that the disposition of the land was without their consent or approval.
12. Contrary to the first and second respondents’ submissions that there is no evidence to prove the existence of customary land described as Central Claims 80 and 88, where the allegations are that the first and second appellants are customary landowners of this piece of land supported by a Native Land Titles Commission decision and a Local Land Court decision which have not been set aside and the respondents have notice of them, these allegations reinforce the first and second appellants’ submissions that the subject matter for the learned primary judge to determine in the proceeding is not about a dispute in relation to ownership of customary land but fraud being perpetrated on the title to this piece of land. The appropriate time to investigate the allegation of fraud is at trial and not by a summary hearing as was done in this case: see Lord & Company Ltd v. Inapero (2014) SC1624 and Windi v. University of Papua New Guinea (2020) SC1979.
13. In the case of the latter, we accept the appellants’ submission that fraud may be inferred from the conduct of the respondents
for failing to comply with the statutory process for acquisition of customary land under the Land Act, 1996. We note that the statutory regime imposed a duty on those charged with the acquisition of customary land to ensure that every step
of the statutory process must be attended to. Based on the summary of the pleadings highlighted above, fraud may be inferred from
the breach of duty under Section 10 which states:
“10. Acquisition of Customary Land by agreement.
(1) Subject to Section 11, customary land shall be acquired in accordance with this Section and shall be authenticated by such instruments and in such manner as are approved by the Minister.
(2) The Minister, on behalf of the State, may acquire customary land on such terms and conditions as are agreed on between him and the customary landowners.
(3) Subject to Subsection (4), the Minister shall not acquire customary land unless he is satisfied, after reasonable inquiry, that the land is not required or likely to be required by the customary landowners or by persons on whom the land will or may devolve by custom.
(4) Where the Minister is satisfied, after reasonable inquiry, that any customary land is not required or likely to be required for a certain period 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”.
14. As Section 10(2) states that “The Minister, on behalf of the State, may acquire customary land on such terms and conditions as are agreed on between him and the customary landowners” the Minister must first identify the customary landowners of the land. In this case, the allegation is that the customary landowners of this piece of land are the first and second appellants. They stand on the authority of the Native Land Titles Commission decision which awarded the land to them. This decision was affirmed by the Local Land Court in its decision of 8th July 2013. The Minister and the officers of the fourth, fifth and sixth respondents failed to identify the first and second appellants and acquired the land from them. Instead, they identified the third respondent, and the Minister acquired the land from the third respondent who was a wrong party. Proof of these allegations of statutory breaches is a matter for trial and not one appropriate for a summary hearing as was in this case: see Lord & Company Ltd v. Inapero (supra) and Windi v. University of Papua New Guinea (supra).
15. Similarly, if the land was acquired by the Minister under Section 11, Section 11 imposes a duty on the Minister to obtain consent from the customary landowners. Section 11 states:
“11. Acquisition of Customary Land for the grant of special agricultural and business lease.
(1) The Minister may lease customary land for the purpose of granting a special agricultural and business lease of the land.
(2) Where the Minister leases customary land 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 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)”.
16. The question is, did he obtain consent of the first and second appellants? The allegation is that the seventh defendant on behalf of the eighth defendant compulsory acquired this piece of land without obtaining the consent of the first and second appellants before leasing it by way of a grant of a special agriculture and business lease to second respondent.
17. Furthermore, the first, second and third respondents together with the fourth fifth, sixth and seventh respondents failed to comply with the procedure under Section 12 of the Land Act 1996, in that the sixth defendant and its officers conducted a land investigation and deliberately left out the appellants from participating in it. As a result, the appellants were denied the opportunity to bring their interest in the land to the notice of the sixth defendant and his officers. By failing to comply with the requirements of Section 12, the Minister, has on behalf of wrong party, leased the customary land for the purpose of a special agricultural and business lease to a wrong party.
18. We are satisfied that the subject matter of the proceeding is one of fraud perpetrated on the title of first and second appellant’s land. This position is further reinforced by the relief being sought at [57(a) to (m)] of the statement of claim. For example, at [57(a)], the appellants sought:
“A declaration pursuant to Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution that the land known as Hohokaie inclusive of all the land within Portion 2910C Giboea are lands located within Central Claim 88 which was awarded to late Waibua Gege and Enehako Clan by the Native Land Titles Commission on 25 January 1960 under the Native Land Registration Ordinance 1952”.
19. We note that the appellants seek this relief on the authority of the decision of the Native Land Titles Commission which was subsequently affirmed by the decision of the Local Land Court. These decisions recognised the first and second appellants as customary landowners of the land and the second respondent obtained title with the assistance of the fourth, fifth, sixth and seventh respondents without their consent or approval. In summary, they seek an order to have the land returned to them because of fraud.
Exercise of discretion
20. The dismissal of the proceeding by the learned primary judge was at a summary hearing and the power conferred on the National Court to dismiss proceeding under Order 12, rule 40(1)(a), (b) & (c) of the NCR is discretionary and must be exercised based on proper principles. In PNG Forest Products Pty Ltd v. Independent State of Papua New Guinea [1992] PNGLR 85, the Court held that the power to dismiss proceeding for disclosing no reasonable cause of action should be confined to cases where the cause of action is obviously and almost incontestably bad. The plaintiff should not be driven from the judgement seat unless the case is unarguable.
21. For the forgoing reasons, we are satisfied that the learned primary judge made an identifiable error in the exercise of his discretion when he held that the subject matter in the proceeding is a customary landownership dispute, upheld the motion and dismissed the proceeding for want of jurisdiction: Curtain Bros (PNG) Ltd v. University of Papua New Guinea (2005) SC788.
22. We are further satisfied that this is not a case where the proceeding disclosed no reasonable cause of action or the cause of action is obviously and almost incontestably bad such that it should be dismissed. We uphold the appeal in respect of proceeding WS No 951 of 2015, quash the order dismissing the proceeding WS No 951 of 2015, reinstate and remit it to the National Court for trial.
Order
23. The final orders of the Court are:
1. The appeal is upheld.
5. Time shall be abridged.
__________________________________________________________________
Kolo & Associates Lawyers: Lawyers for the Appellants
Manase & Co Lawyers: Lawyers for the First & Second Respondents
Solicitor-General: Lawyer for the Fourth to Eighth Respondents
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