Madang Timbers Ltd v Wasa [2021] PGSC 84; SC2154 (30 September 2021)

SC2154

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 23 OF 2019

BETWEEN
MADANG TIMBERS LIMITED
Appellant

AND
HENRY WASA, REGISTRAR OF TITLES, DEPARTMENT OF LANDS AND PHYSICAL PLANNING
First Respondent

AND
BENJAMIN SAMSON, DEPUTY REGISTRAR OF TITLES, DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Second Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

AND
ZHENG ERHUNG
Fourth Respondent

Waigani: Manuhu, Berrigan and Miviri, JJ
2021: 28^th July and 30^th September

APPEAL - Mode of commencement – Failure to comply with Order 16, National Court Rules

Cases Cited:
Papua New Guinean Cases

Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906
Peter O’Neill v Nerrie Eliakim (2016) SC1522
Application by Namah [2020] PGSC 22; SC1934
State v Rush; Application by Rush [1984] PNGLR 124
Aircair Pty Ltd v Co-ordinated Air Services Pty Ltd [1988-89] PNGLR 549
Michael Gene v. Hamidian Rad [1999] PNGLR 444
Francis Kawage v Solicitor-General & The State (1999) N1875
Open Bay Timber Ltd v Dekena (2013) N5109
Keko v Barrick (Nuigini) Ltd (2015) N7569
Amos Ere v National Housing Corporation (2016) N6515
Jimm Trading Ltd v Maddison (2017) N6749

Overseas Cases

SZFDE v Minister for Immigration and Citizenship [2007] HCA 35; (2007) 232 CLR 189
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

References Cited
Section 33 of the Land Registration Act, Chapter No 191
Sections 2 and 4, s 16 of the Frauds and Limitations Act
Orders 4 and 16 of the National Court Rules

Counsel

Mr J. Kare, for the Appellant
Mr S. Ketan, for the Fourth Respondent

DECISION ON APPEAL

30^th September, 2021

1. BY THE COURT: This an appeal against the decision of the National Court on 5 February 2019 dismissing proceedings OS 351/2011 for being an abuse of process and untenable.
   

BACKGROUND

2. The proceedings concern two properties, Allotments 6 and 27, Section 14 Madang (the Properties) initially issued as State Leases on 4 June 1996 to John Gossiba Gig, since deceased. There are two sets of the State Leases each purportedly showing the transfer of the State Leases by John Gossiba Gig to two different persons. One set shows transfers registered to the Appellant in 2004. The other shows transfers registered to the Fourth Respondent in 2010.
   
3. The Appellant (the plaintiff in the lower court) filed an originating summons against the First, Second and Third Respondents claiming the following relief:
   

1. A declaration that the Plaintiff was at all material times the registered proprietor of Allotments 6 and 27, Section 14, Madang, Madang Province (the Properties).

2. A declaration that except as provided for by the Land Registration Act, Chapter No. 191 (the LR Act), the First and Second Defendants do not have the power to cancel the certificates of title for the respective Properties.

3. A declaration that the certificates of title held by the Plaintiff to the respective Properties are valid.

4. An order that the First and Second Defendants shall forthwith cancel the purported certificates of title issued for the respective properties to John Gossiba Gig dated 4th June, 1996.

4. Leave was subsequently granted to the Fourth Respondent to join the proceedings by her Honour, Justice Davani. Directions were also given that the proceedings be converted to writ of summons and statement of claim.
   
5. In its statement of claim the Appellant sought the above relief. It claimed that it purchased the Properties from John Gossiba Gig in 1996 and became registered proprietor on 8 November 2004. It was informed by letter dated 4 August 2010 from the Second Respondent that Mr Gig denied selling the property to it and that the former Registrar of Titles, Karo Lavi, had issued two new titles to John Gossiba Gig, effectively nullifying and cancelling the titles held by the Appellant, such that the Second Respondent recognised the titles held by the Fourth Respondent.
   
6. The Appellant further claimed that: it was never afforded a right to respond to the complaint made by Mr Gig; the First and Second Respondents had no power under the Land Act No 45 of 1996 (LA) and the Land Registration Act, Chapter No 191 (LRA) to issue, or re-issue new State Leases, or to register the transfer of the Land to the Fourth Respondent as the Appellant was the registered proprietor of the Land, the State Leases held by the Appellant were not cancelled, and Mr Gig was no longer the registered proprietor of the Land. Furthermore, the Second Respondent’s claim were false as Karo Lavi was no longer employed with the Department of Lands and Physical Planning as the Registrar of Titles at the relevant time, and the First, Second and Third Respondents, their agents or servants forged the signatures of Mr Lavi. The Appellant also alleged fraud on similar grounds.
   
7. None of the First, Second or Third respondents appeared in the lower court, nor before this Court on appeal.
   
8. The Fourth Respondent filed a notice of motion in the lower court objecting to the competency of the proceedings on the following grounds: a) the proceedings should have been commenced under Order 16 of the National Court Rules; b) the State was not properly served the requisite s 5 notice under the Claims By and Against the State Act, 1996; and c) there was no written document confirming the alleged sale of the Properties and transfer of title to the plaintiff as required by s 2 of the Frauds and Limitations Act 1988.
   
9. The learned trial judge dismissed the Fourth Respondent’s objection as to the Claims By and Against the State Act but upheld the other grounds, and dismissed the proceedings.
   

GROUNDS OF APPEAL

10. The notice of appeal contains nine grounds of appeal. On the appeal the Appellant summarised the grounds as follows, such that the learned trial judge erred:
    
    1. in finding that the wrong mode of proceeding had been used as the relief sought was declaratory in nature and the Appellant had a choice to proceed under Order 16 or Order 4 of the National Court Rules;
    2. in not finding that the doctrine of issue estoppel applied and the issue of the mode of proceeding had been heard and determined on a previous occasion;
    100. in finding that ss 2 and 4 of the Frauds and Limitations Act applied. Even if it did, the issue was a substantive issue which was not pleaded, and was furthermore, statute barred by s 16 of the Frauds and Limitations Act;
    4. in summarily dismissing the proceedings when the case was not appropriate for summary dismissal.
       

GROUND a): PROPER MODE OF PROCEEDINGS

11. In our view the appeal turns on whether the proceedings were brought via the proper mode.
    
12. His Honour found that:
    

“In my view, relief sought numbered 2 and 3 challenge the administrative decision of the Registrar of Titles as a public authority, viz, to cancel the State Lease held by the plaintiff and recognize the fourth defendant as the registered proprietor of the Land. Further, in relief numbered 4, the plaintiff is in essentially claiming an order in the nature of certiorari, to quash the decision of the Registrar of Titles.

The effect of the orders 2, 3 and 4 would be that the transfer of title to the Land to the plaintiff is lawful, and subsequently the registered transfer of title to the fourth defendant and the purported cancellation of the title to the plaintiff are both invalid. That is to say that the plaintiff is seeking to achieve what should be achieved by seeking orders in the nature of certiorari pursuant to the judicial review process.

Where declaratory relief sought does not state that an order in the nature of a prerogative writ such as certiorari is sought, but the practical effect is that orders in the nature of a prerogative writ are sought, application for judicial review in accordance with Order 16 should be pursued and not proceedings commenced under Order 4; Amos Ere v National Housing Corporation (2016) N6515. That case re-affirms the principle that orders in the nature of a prerogative writ shall be sought pursuant to Order 16 and constitutes an abuse of process if sought under Order 4; Michael Gene v Hamidian Rad [1999] PNGLR 444 and Telikom (PNG) Ltd v ICCC (supra).”

13. The Appellant submits that it sought declaratory relief only and as such was at liberty to commence proceedings either by way of judicial review or by way of ordinary originating summons. The declarations merely sought to declare the powers of the Registrar and its rights, which were already protected under s 33 of the LRA. There was no decision to be quashed as there had been no decision to cancel the Appellant’s title as yet, and the order for cancellation of the Fourth Respondent’s title was simply consequential upon the declarations sought.
    
14. Order 16 Rules (1) and (2) of the National Court Rules provide that (emphasis ours):
    

“(1) An application for an order in the nature of mandamus, prohibition, certiorari or quo warranto shall be made by way of an application for judicial review in accordance with this Order.

(2) An application for a declaration or an injunction may be made by way of an application for judicial review, and on such an application the Court may grant the declaration or injunction claimed if ...”

15. It is now well settled that a party wishing to challenge the decision of a governmental body or public authority must use Order 16 of the National Court Rules if orders in the nature of prerogative writs are sought. The requirement under Order 16(1) is mandatory. If only an injunction or declaration is sought, the plaintiff has a choice - Order 4 or Order 16 can be used: Michael Gene v. Hamidian Rad [1999] PNGLR 444; Telikom PNG Ltd v Independent Consumer and Competition Commission (2008) SC906.
    
16. As the Supreme Court made clear in the latter case at [128] to [131], the essential consideration in determining the proper mode of commencement is the substance or effect of the relief being sought:
    

“We do not consider that it is correct to say that whenever a person wishes to challenge the decision of a governmental body or public authority, the challenge must be made by using Order 16. It is a matter of considering the relief being sought and applying Order 16, Rule 1, to see whether Order 16 is mandatory (Rule 1(1)) or optional (Rule 1(2)).”

17. If the substance or effect of the relief being sought is orders in the nature of declarations and injunctive orders then it is optional to use the judicial review procedure under O 16 r 1(2) or the procedure under O 4 r 3. If the substance or effect of the relief being sought is orders in the nature of prerogative orders, then proceedings must be brought pursuant to O 16 r (1).
    
18. In our view the relief sought in this case was in substance and effect orders in the nature of prerogative writs, namely certiorari quashing the decisions of the First and Second Respondents to register the Fourth Respondent’s title, and an order of mandamus compelling them to cancel the Fourth Respondent’s title. We agree therefore with the learned trial judge that the Appellant was seeking to achieve what should have been achieved by seeking orders pursuant to the judicial review process.
    
19. We do not agree that there was no decision which was sought to be reviewed. The act of registration by the Registrar is an administrative action or decision. Section 23 of the LRA (registration of instruments) provides that:
    

“Where the Registrar is satisfied that an instrument relating to a transaction is in registrable form he shall register that instrument in the manner provided by this Act.”

20. Furthermore, an order requiring the First and Second Respondents to cancel the Fourth Respondent’s title was an order compelling them to perform an act in accordance with their duties under the LRA, such that it was an order of mandamus.
    
21. In Michael Gene v. Hamidian Rad [1999] PNGLR 444 the Supreme Court approved the following passage from Injia J in Francis Kawage v Solicitor-General & The State (1999) N1875:
    

“I have reservations concerning the regularity of the procedure employed in this application. An application by an interested party for an order for mandamus to compel a statutory authority to perform its statutory duty where it has refused or failed to perform that duty is required to be commenced by an application for judicial review under Order 16 of the National Court Rules. Order 16 r (1) provides that: ‘An application for an order in the nature of mandamus, prohibition, certiorari or quo warrant shall be made by way of an application for judicial review in accordance with this Order’. The requirement under O 16 r (1) is mandatory. A person aggrieved by the failure of a statutory authority to perform its statutory duty has no right to seek an order for mandamus in the Courts. He only does so by leave of the National Court; O 16 r 3. This is the normal procedure to be adopted when the Court is asked to intervene to compel an administrative authority to perform its statutory duty function.”

22. In Amos Ere v National Housing Corporation (2016) N6515 the plaintiffs sought various declarations, one of which was that the sale of the property from NHC to A.R.E. was illegal. An order was then sought, that due to the illegality of the sale, the transfer of the Title or State Lease from NHC to A.R.E. be cancelled. The other declarations sought were ancillary to the declaration and order. Hartshorn J found that the declaration in substance or in effect was seeking to achieve what should be achieved by seeking orders in the nature of certiorari, after applying for and being granted leave for judicial review. The practical effect of the declarations, if granted, would be that the decision of NHC to transfer the property would be quashed. As the application had not been made pursuant to Order 16 National Court Rules, the application for the relief sought was an abuse of process: Michael Gene v. Hamidian Rad [1999] PNGLR 444, Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906. See also Keko v Barrick (Nuigini ) Ltd (2015) N7569.
    
23. In this case the practical effect of the relief sought was to quash the decision to register the Fourth Respondent’s title, and then to compel cancellation of it.
    
24. Accordingly, we find that the appropriate means for commencing proceedings in this case was by Order 16.
    
25. In reaching this conclusion we have taken into account the submission that the mode was proper as the Appellant had alleged constructive fraud in the transfer of title to the Fourth Respondent and was therefore obliged to proceed by writ of summons. It relied on Jimm Trading Ltd v Maddison (2017) N6749 in which Kandakasi DCJ approved the comments of Cannings J in Open Bay Timber Ltd v Dekena (2013) N5109 that:
    

“Indeed I query whether in judicial review proceedings an allegation of actual fraud against a defendant who is not a public official or public body whose decisions are the subject of review, is a proper ground of judicial review. Allegations of actual fraud are better prosecuted by writ of summons and statement of claim. Indeed there is a strong argument to say that an allegation of actual fraud against a private individual or corporate body, even if it is to be agitated alongside conventional grounds of judicial review, must unless the leave of the Court is obtained to dispense with the requirements of the Rules be prosecuted by writ of summons.”

26. The Appellant’s submissions are somewhat hard to follow. Firstly, the above two cases were concerned with allegations of actual fraud whilst the Appellant submits that it claimed constructive fraud. Be that as it may, it is our view the Appellants did claim actual, as well as constructive, fraud. The reference to forgery on the part of the First to Third respondents, their agents or servants, cannot be read in any other way.
    
27. Unlike the above two cases, however, the fraud alleged in this case was not on the part of a private individual, namely the Fourth Respondent, but on the part of the First and Second respondents, the public officials, or their servants or agents. The purpose of alleging fraud was to challenge the decisions of those public officials.
    
28. Whilst it is less common, actual fraud may constitute a ground of judicial review. It is a ground at common law and is not precluded by the Rules which specifically provide an inclusive rather than an exclusive statement of grounds. See Order 16 Rule 13.
    
29. Where a decision is procured through fraud, collusion, or perjury, it is said to be induced or affected by fraud and is liable to be set aside: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Aircair Pty Ltd v Co-ordinated Air Services Pty Ltd [1988-89] PNGLR 549; State v Rush; Application by Rush [1984] PNGLR 124; SZFDE v Minister for Immigration and Citizenship [2007] HCA 35; (2007) 232 CLR 189. Whilst this usually concerns the actions of a third party on the decision-maker, rather than the decision-maker themselves, there is no reason why a decision affected by fraud on the part of the decision-maker should not be set aside for being induced or affected by fraud. This is particularly so as orders in the nature of certiorari and/or mandamus may be the only remedy of any utility.
    
30. That is somewhat similar to the situation here. The Appellant was not seeking enforcement of a contract, or damages, or any form of redress against the Fourth Respondent. The Fourth Respondent was not even joined initially. The only remedies of any real utility to the Appellant was the quashing of the decision to register the Fourth Respondent’s title, and the cancellation of the Fourth Respondent’s title, and the only way of achieving those things was through the use of prerogative orders.
    
31. If the Appellant was of the view that it needed to maintain its claims of fraud to achieve those remedies, and could not therefore comply with both Order 16 and Order 4, then it should have sought dispensation from Order 4. In this case, however, for the reasons discussed below, the proceedings were not converted to pleadings at the request of the Appellant, nor for the purpose of enabling it to plead fraud. In addition, the Appellant submitted in response to the Fourth Respondent’s motion in the court below that it was willing to abandon its fraud claims as they were only “collateral” to the claim that the First and Second respondents had breached the law. As such we are not persuaded by the Appellant’s argument that its claim were either based on fraud, or more particularly brought pursuant to Order 4 for that purpose.
    
32. In all of the circumstances we are unable to find an error in the learned trial judge’s decision and dismiss ground a).
    

GROUND b): ISSUE ESTOPPEL

33. The Appellant submits that the mode of proceeding was determined by consent order on a prior occasion in the lower court and that the Fourth Respondent was estopped from raising it again before a different trial judge.
    
34. In the court below the Appellant submitted that the parties had previously agreed that the proceedings should be converted into pleadings, for which the originating summons was appropriate.
    
35. The learned trial judge held that without more, including the court transcript of the proceedings before Davani J, he was not satisfied that the issue had been decided by the consent order. Whilst he found that the parties had agreed that the proceedings be converted to pleadings, that did not necessarily mean that it was determined by the Court that the originating summons (converted to pleadings) was the correct mode of proceedings to properly hear the Appellant’s claims.
    
36. Unlike the trial judge we do have the benefit of the transcript. It is apparent from the transcript that the consent orders concerned not the mode of proceedings at all but the joinder of the Fourth Respondent to the proceedings as a party.
    
37. As to the mode of proceedings, the Appellant submitted before Davani J that the proceedings should continue in their original form. After exchanges between the Appellant’s lawyer and the bench, her Honour gave a number of directions such that: the Fourth Respondent was given leave to join the proceedings; the Appellant was given leave to name other defendants upon filing the writ of summons and statement of claim; the proceedings were converted to a writ of summons and statement of claim to allow the plaintiff to comply with the first two directions, within 21 days; and the named defendants were given leave to file and serve their defences within a further 21 days.
    
38. Putting aside the fact that the Court directed the matter to be converted to a writ of summons and pleadings, and not an originating summons and pleadings, a number of matters are clear. The Fourth Respondent, whilst being granted leave to join the proceedings on 20 December 2011, had not yet done so. Its counsel was present but did not address the court on the mode of proceedings. It was not yet joined and was not in a position to do so. Nor was the originating summons converted to writ of summons on the application of the Appellant for the purpose of enabling it to plead fraud. Neither fraud nor judicial review were specifically raised by the court or the Appellant.
    
39. It cannot be said in those circumstances that the issue had been raised and finally determined between the parties in the proceedings: Peter O’Neill v Nerrie Eliakim (2016) SC1522; Application by Namah [2020] PGSC 22; SC1934 at [23].
    
40. Accordingly, we find no error in the learned trial judge’s decision and dismiss ground b).
    

Grounds c) and d): WRITTEN AGREEMENT

41. Grounds c) and d) can be dealt with together. They both concern the learned trial judge’s finding that there was no written agreement evidencing the sale of the Properties to the Appellant and thus that the proceedings were untenable for being unenforceable pursuant to ss 2 and 4 of the Frauds and Limitations Act.
    
42. We agree with the Appellant that the learned trial judge erred in summarily dismissing the proceedings on this basis. The learned trial judge was clearly concerned by the disparities in sale price paid by the Appellant and the Fourth Respondent, and the lack of documentary evidence. Nevertheless, the Appellant was not claiming an action for sale or purchase of land, and the issue had not been pleaded by the Fourth Respondent in its defence. If the matter was relevant, it was a matter for trial. It was not a basis for summarily dismissing the proceedings. We uphold grounds c) and d).
    

CONCLUSION

43. In conclusion, we uphold grounds c) and d) of the appeal but dismiss grounds a) and b). The effect of our decision is to dismiss the appeal.
    

ORDERS:

1. The appeal is dismissed.
   
2. The Appellant shall pay the costs of the Fourth Respondent on a party-party basis to be taxed if not agreed.

______________________________________________________________
Bradshaw: Lawyers for the Appellant
Ketan Lawyers: Lawyers for the Fourth Respondent