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Camilus v Mota [2022] PGSC 17; SC2210 (4 March 2022)

SC2210


PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCA NO. 109 OF 2017


BETWEEN:
ALBERT CAMILUS
First Appellant


AND:
AKAMI OIL PALM LIMITED
Second Appellant


AND:
DAVID MOTA – representing ENO, Chairman ILG
First Respondent


AND:
DAVID JOHN – Representing Nakise Clan
Second Respondent


AND:
RAIYMOND JACK – Representing Menem Clan
Third Respondent


AND:
ALPHONSE KURAI – Representing Otho Clan
Fourth Respondent
AND:
PASSINGAN KARIEN – Representing Kathkathe Clan
Fifth Respondent


AND:
MESAK RUO – Representing Lovuth Clan
Sixth Respondent


AND:
SAMSON WAIYU – Representing D9 Settlers Lessees
Seventh Respondent


AND:
MARAREA LAND GROUP INCORPORATED
Eight Respondent


AND:
DARIUS BOAS – Chairman of Meloks ILG for and on behalf of himself and the RIGULA Customary Land Owners (as annexed hereto under Schedule “A)
Nineth Respondent


AND:
MELOKS INCORPORATED LAND GROUP
Tenth Respondent


AND:
HENRY WASA in his capacity as Registrar of Titles
Eleventh Respondent


AND:
SECRETARY, DEPARTMENT OF LANDS & PHYSICAL PLANNING
Twelfth Respondent


AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Thirteenth Respondent


Waigani: Manuhu, Kassman, Narokobi JJ
2021: 28th June
2022: 4th March


PRACTICE & PROCEDURE – pleading fraud – where no actual fraud is found, can the court instead find there was constructive fraud.


LAND LAW – meaning of “fraud” in s 33 (1)(a) of Land Registration Act.


LAND LAW – Actual and constructive fraud – whether it is open to the court to find constructive fraud when it finds as a matter of fact that there was no actual fraud.


LIMITATION OF ACTION – whether s 18 of the Frauds and Limitation Act 1988 applies to contrastive fraud when the pleadings claimed actual fraud.


NON-APPEARANCE OF A PARTY – whether non-appearance of a party was prejudicial to the appellant’s case and a meritorious ground of appeal.


This is an appeal from a decision of the National Court where the court nullified the second defendant’s state lease over two portions of land in West New Britain Province (Portions 104C and 2628C). The portions of land were obtained from their customary landowners through the Special Agriculture and Business Purpose Lease (hereafter SABL) process by the second appellant. The customary landowners claimed that the portions of land were obtained fraudulently, however, the court of first instance found instead that there was constructive fraud by the Appellants. The appellants raise six grounds of appeal, but relied on five at the hearing of the appeal:


Held:


(1) [By the Court] The dispute in the National Court did not relate to dispute over ownership of customary land, and therefore the National Court properly had jurisdiction to deliberate on the matter as it concerned propriety of a State Lease.

(2) [Per Manuhu J and Narokobi J] “Fraud” for the purpose of section 33(1)(a) of the Land Registration Act 1981 means actual fraud or constructive fraud. Consequently, as a matter of practice, when fraud is pleaded, it would be open to the court to find actual fraud or, in the alternative, constructive fraud in circumstances where, for instance, the process of transfer of title or lease was irregular or unlawful or unconscionable.

(3) [Per Kassman J] It is implicit in s.33 (1) (a) of the Land Registration Act 1981 that “fraud” means fraud committed by the registered proprietor or actual fraud. That is the only ground upon which a registered proprietor’s title can be rendered invalid.

(4) [Per Manuhu J and Narokobi J] The conclusion reached by the trial judge was that there was no actual fraud but there was constructive fraud. Constructive fraud is sometimes called equitable fraud. Constructive fraud is fraud in equity to which s 16 of the Frauds and Limitation Act does not apply. The trial judge correctly held, that pursuant to s 18 of the Frauds and Limitation Act, a claim in equity, such as constructive fraud, is not affected by s 16.

(5) [Per Kassman J] Where the common law claim of fraud is pleaded, declaratory relief cannot be described as equitable relief for the purpose of s 18 of the Frauds and Limitation Act 1988.

(6) [Per Kassman J] Since the learned trial judge found that the claim was based on fraud, the learned trial judge erred in law when he proceeded to find the claims were of constructive fraud.

(7) [Per Narokobi J] The State has a responsibility to defend her decisions. By not appearing in the National Court can mean that the State concedes to the claim, so it is not a correct proposition to suggest that without their participation (and leading of evidence), the court should not find against the Appellants. The court will make its findings on the best admissible evidence before it.

Cases Cited:
Papua New Guinea Cases


Dibiaso v Kuma [2005] PNGLR 680
Emas Estate Development Pty Ltd v. John Mea [1993] PNGLR 215
Eric Kiso v Bennie Otoa and Ken Watnalom (2013) SC1222
John Soto & Ors v Our Real Estate [2018] PGSC 55
Julius Pololi v Bryan James Wyborn (2013) N5253
Koitachi Ltd v Walter Schnaubelt (2007) SC870
Kol Toki v. Moeka Morea (2016) SC1588.
Lae Bottling Industries Ltd v. Lae Rental Homes Ltd (2011) SC1120
Mudge v. Secretary for Lands [1985] PNGLR 387
MVIT v. John Etape [1994] PNGLR 596
National Council of Young Mens Christian Association of Papua New Guinea (Inc) v Firms Services Ltd (2017) SC1596
Paga No. 36 Ltd v Joseph Ealedona & Ors [2018] PGSC 17
Papua Club Inc v Nasaum Holdings Ltd [2004] PGNC 178
The Papua Club Inc v Nusuam Holdings Ltd (No.2) (2004) N2603
PNG Deep Sea Fishing Ltd v. Luke Kritten (2010) SC1126
Sali Tagau & Selon Limited v Vitus Kais [2018] PGSC 97 SC1755
Vitus Kais v Selon Ltd (2016) N6159


Overseas Cases


R v Williams [1953] 1 Q.B. 660


Legislations Cited:


Claims By and Against the State Act 1996 s 5
Constitution, National Goals and Directive Principles
Constitution s 155(4)
Frauds and Limitations Act 1988 ss 16 and 18
Land Act 1996 ss 10, 11 and 102
Land Disputes Settlement Act 1975
Land Registration Act 1981 s 33


Other Authorities:


Concise Oxford English Dictionary
Stroud’s Judicial Dictionary of Words and Phrases, Fifth Edition


Counsel:


Kevin Makeu and Paul Othas, for the First and Second Appellants
Jackson Tandawai, for the First to Seventh, Ninth and Tenth Respondents
Rex Mannrai, for the Eight Respondent
Irene Mugugia, for the Eleventh, Twelfth and Thirteenth Respondent


DECISION


4th March, 2022


  1. MANUHU J: This is my ruling on the appeal against the National Court decision to nullify two Special Agriculture and Business Leases (“The Leases”) granted to the second appellant which involved two pieces of land in West New Britain Province, namely Portion 104C and Portion 2628C, which were formerly customary land.
  2. The proceeding was commenced by the first, second, third, fourth, fifth, sixth, ninth and tenth respondents, who claimed to be customary landowners from Lavege Village (“The Laveges”). They claimed that they entered into an agreement with the first appellant and his wife to sell only 40 hectares of land. They were surprised to learn later that 577 hectares of land was converted into Portion 104C and Portion 2628C which become the subject of the two Leases. They claimed that the conversion was carried out fraudulently in that it was done without their knowledge and consent. They claimed that the first appellant fraudulently used their signatures in the sale of 40 hectare to procure the granting of the Leases to the second appellant. The eighth respondent, who represented the customary landowners of Vaisisi Village (“The Vaisisis”) also claimed that they were the true customary landowners of Portion 2628C. They alleged that the grant of the Lease over Portion 2628C to the second appellant was procured by fraud in that they were not consulted and, they never gave their consent to the grant of the Lease. They also sought to nullify the Lease over Portion 2628C.
  3. In their defence, the appellants claimed that the two portions of land were owned by the Laveges who sold the subject portions to them. The sale was done with the full knowledge and due consent of the Laveges. Therefore, there was no fraud committed.
  4. From the facts, the claim by Laveges that they were the customary landowners of Portion 104C was not in dispute. On the other hand, the Vaisisis disputed the Laveges claim over Portion 2628C. That notwithstanding, both groups alleged fraud against the appellants, and, after a full hearing, they succeeded. The Leases were nullified by the trial judge after finding that there was constructive fraud in the process. Aggrieved by the decision of the trial judge, the appellants filed this appeal.
  5. The grounds of appeal are:
  6. The first ground of appeal is without merit. The trial judge carefully isolated the competing customary land interests and rights issues from the legal issues concerning the Leases and decided accordingly. The trial judge’s decision did not affect the Laveges and the Vaisisis their rights to pursue their competing claims under the Land Disputes Settlement Act. In any event, the appellants did not claim customary land interests in the pieces of land in question and as such, this ground of appeal is clearly misconceived.
  7. The second ground of appeal is that the trial judge erred in fact and in law in that the issue of constructive fraud was never pleaded by the respondents in their statement of claim and as a matter of law the trial judge should not have considered and made findings on the issue of constructive fraud.
  8. Under the Torrens system of land registration, as codified in section 33 of the Land Registration Act, a registered proprietor holds an indefeasible title: Mudge v. Secretary for Lands [1985] PNGLR 387 unless one of the exceptions set out in Section 33(1) is established. Fraud is one of those exceptions.
  9. What does “fraud” mean? In Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215 (“Emas”), the Supreme Court held that “fraud” under Section 33(1)(a) includes equitable or constructive fraud. There is a long line of cases which support this view, including PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126, Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120 and Kol Toki v Moeka Morea (2016) SC1588.
  10. However, there is also another line of Supreme Court cases that says that fraud means actual fraud, not constructive or equitable fraud. In John Soto & Ors v Our Real Estate (2018) PGSC 55, it was held that “the fraud concerned must be actual fraud by the registered proprietor in procuring registration, not constructive fraud.” See also Papua Club Inc v Nasaum Holdings Ltd (2004) PGNC 178, Paga No. 36 Ltd v Joseph Ealedona & Ors (2018) PGSC 17, Koitachi Ltd v Walter Schnaubelt (2007) SC870 and Eric Kiso v Bennie Otoa & Ken Wutnalom (2013) SC1222.
  11. The trial judge considered the differing views and decided to take the Emas line of thought. With due respect, I also prefer the Emas line of thought on the basis that section 155 (4) of the Constitution has conferred power to the Supreme Court and the National Court “to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.”
  12. In Papua New Guinea where procedural breaches and irregularities over transfer and registration of Titles and Leases are common occurrences, often involving customary land, the courts would be justified in maintaining a liberal interpretation of “fraud” under section 33(1)(a) of the Land Registration Act “to do justice in the circumstances of a particular case.”
  13. I entirely agree with the trial judge when he said:

“36. In PNG land is a critical natural resource required by National Goal Number 4 to be conserved and used for the benefit of the present generation and for the benefit of future generations. National Goal No 4 (natural resources and environment) of the Constitution and its accompanying Directive Principles state:


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.

WE ACCORDINGLY CALL FOR—

(1) wise use to be made of our natural resources and the environment in and on the land or seabed, in the sea, under the land, and in the air, in the interests of our development and in trust for future generations; and

(2) the conservation and replenishment, for the benefit of ourselves and posterity, of the environment and its sacred, scenic, and historical qualities; and

(3) all necessary steps to be taken to give adequate protection to our valued birds, animals, fish, insects, plants and trees.”


“37. Under Section 25(2) (implementation of the National Goals and Directive Principles) of the Constitution all governmental bodies are obliged to apply and give effect to the National Goals and Directive Principles as far as lies within their respective powers. As I pointed out in Louis Medaing v Ramu Nico Management (MCC) Ltd (2011) N4340 the National Goals and Directive Principles are in the Preamble to the Constitution. They underlie the Constitution. They are the proclaimed aims of the People of Papua New Guinea. They cannot be ignored. They must be taken into account by the Court when interpreting laws and when deciding what relief should be granted to persons such as the plaintiffs who have proven errors of law have been committed by governmental officials and bodies. Section 25(3) of the Constitution states:”


“Where any law, or any power conferred by any law (whether the power be of a legislative, judicial, executive, administrative or other kind), can reasonably be understood, applied, exercised or enforced, without failing to give effect to the intention of the Parliament or to this Constitution, in such a way as to give effect to the National Goals and Directive Principles, or at least not to derogate them, it is to be understood, applied or exercised, and shall be enforced, in that way.”


“38. Decisions about the transfer of interests in customary land must be made carefully and thoughtfully and in strict accordance with procedures prescribed by law. Those procedures have in this case been flouted. Actual fraud has not been proven, but constructive fraud has been proven. This is therefore a “case of fraud” for the purposes of Section 33(1)(a) of the Land Registration Act.”


  1. For the foregoing reasons, I am of the considered opinion that “fraud” for the purpose of section 33 means actual fraud or constructive fraud.
  2. Consequently, as a matter of practice, when fraud is pleaded, it would be open to the court to find actual fraud or, in the alternative, constructive fraud in circumstances where, for instance, the process of transfer of title or lease was irregular or unlawful or unconscionable.
  3. Turning back to this case, on the question of pleading fraud, the trial judge wasn’t impressed. At para. 14 of the judgment, the trial judge criticized the pleadings, thus:

“14. Before addressing the third preliminary argument, I digress to comment on the pleadings. I have taken a liberal approach to the pleadings as both sides have been less than precise in drafting them. The plaintiffs’ statement of claim focuses on actual fraud, when they should have expressly pleaded constructive fraud, at least as an alternative. The defence of the first and second defendants is convoluted and reads more as a submission than a pleading, yet it does not plead the preliminary arguments raised at the trial.”


  1. The appellants did not appeal against these findings. Therefore, the trial judge’s view on the pleadings stands.
  2. The trial judge was also critical of counsel on their failure to address sufficiency of pleadings in their final submissions. From the middle of para. 14, the trial judge observed, thus:

“During submissions, all counsel seemed uninterested in arguing about pleadings. Counsel for the first and second defendants did not attempt to argue that the plaintiffs should not be allowed to base their case on constructive fraud (on the ground that it was not expressly pleaded). Counsel for the plaintiffs did not attempt to argue that the first and second defendants’ preliminary arguments should not be entertained (on the ground that they were not pleaded in the defence).”


  1. Despite the lack of assistance from counsel, the trial judge explained how he would approach the arguments, thus:

“15. The best approach is to deal with all arguments raised by both sides, without being overly concerned about whether the arguments are supported by the pleadings. This might offend purists. It might sound irregular or contrary to the purpose of pleadings: to guard against trial by ambush (PNGBC v Jeff Tole (2002) SC694; Mond v Okoro [1992] PNGLR 501). However, where both sides engage in an ambush, of sorts, and neither of them complain about it, why should the Judge step in and insist on adherence to the pleadings? The more general purpose of pleadings is to ensure that there are no surprises or shock tactics employed at the trial. To ensure fairness. Here I am satisfied that there have been no surprises or shock tactics and the proceedings have been fairly conducted. Hence a liberal approach is required.”


  1. The trial judge found that there was no evidence of compliance with section 10, section 11 and section 102 of the Land Act. The trial judge found that the grant and registration of the Leases were “so unsatisfactory, dubious and irregular”.
  2. In my view, while fraud was alleged, on the pleadings and evidence, it was open to the trial judge to find that there was no actual fraud as alleged but there was constructive fraud.
  3. I would dismiss this ground of appeal.
  4. The third ground of appeal is that the trial Judge erred in fact and in law in finding that the proceeding was not time barred under Section 16 of the Frauds and Limitations Act (“The Act”) in that the claim was one based on equity when the pleadings clearly identified the claim to be that of tort of fraud for which Section 16 is applicable.
  5. The conclusion that was reached by the trial judge was that there was no actual fraud but there was constructive fraud. Constructive fraud is sometimes called equitable fraud. Constructive fraud is fraud in equity to which section 16 does not apply. The trial judge also noted, quite correctly, that pursuant to section 18, a claim in equity, such as constructive fraud, is not affected by section 16.
  6. I would also dismiss this ground of appeal.
  7. The fourth ground of appeal alleges that the trial judge erred in fact and in law in finding that the primary relief sought in the statement of claim was an equitable relief when the pleadings clearly established that the primary relief and declarations sought were clearly based on principles of tort of fraud.
  8. This ground of appeal raises the same issues under the second and third grounds of appeal. My discussions under those grounds also apply here.
  9. Accordingly, this ground of appeal is also without merit and should be dismissed.
  10. The final ground of appeal was abandoned.
  11. I find, ultimately, that the whole appeal lacks merit and should be dismissed with costs which, if not agreed, shall be taxed.
  12. KASSMAN J: This appeal arises from a decision of the National Court in Kimbe by His Honour Justice Cannings (“the learned trial judge”) made on 27 July 2017 in National Court proceedings referenced WS No. 1418 of 2014 David Mota, Eno Incorporated Land Group, David John, Nakise Clan, Raymond Jack, Menem Clan, Alphonse Kurai, Otho Clan, Passingan Karien, Kathkathe Clan, Mesak Ruo, Lovuth Clan, Samson Waiyu, D9 Lessees, Mararea Land Group Incorporated, Darius Boas, Chairman, Meloks ILG for and on behalf of himself and RUGULA Customary Landowners, Meloks Incorporated Land Group -v- Albert Camillus, Akami Oil Palm Limited, Henry Wasa, Registrar of Titles, Department of Lands & Physical Planning and the State.
  13. The Notice of Appeal was filed on 7 August 2017. The appeal was heard on 28 June 2021. I have had the benefit of reading the draft decisions of my brother judges Manuhu J and Narokobi J from which I note my brothers have each ruled they will uphold the decision of the learned trial judge and dismiss the appeal. This is my decision on the appeal.
  14. In this decision, I will refer to the parties in this appeal in the following manner. The First Appellant Albert Camillus as “Camilus”, the Second Appellant Akami Oil Palm Limited as “Akami”. The First to Seventh Respondents as the “seven clans”, the Eight Respondent Mararea Land Group Incorporated as “Mararea ILG”, the Ninth Respondent Darius Boas as “Boas”, the Tenth Respondent Meloks Incorporated Land Group as “Meloks ILG”. Together, the First to the Eleventh Respondents I refer to as “the Claimants”. The Eleventh Respondent Henry Wasa, Registrar of Titles as “the ROT”, the Twelfth Respondent the Secretary for the Department of Lands & Physical Planning as “the Secretary” and the Thirteenth Respondent The Independent State of Papua New Guinea as “the State”. I also refer to both Special Agricultural Business Leases as “SABLs.”
  15. At the hearing of the appeal, the parties addressed the court on the Appeal Book Volumes 1, 2 and 3 filed 20 September 2019 [document # 79]. Counsel for Camilus and Akami were Kevin Makeu and Paul Othas and they relied on written submissions filed 3 July 2020 [document #84]. Counsel for the seven clans, Boas and Meloks ILG was Jackson Tandawai who relied on written submissions filed 8 April 2021 [document # 93] and the Further Amended written submissions filed 12 May 2021 [document # 96]. Counsel for Mararea ILG was Rex Mannrai who handed up written submission filed 9 July 2020 [document # 87). Counsel for the ROT, the Secretary and the State was Irene Mugugia of the Office of Solicitor-General who did not file a written submission but made oral submissions at the hearing.

Background


  1. The basic background, facts and issues at trial are stated by the learned trial judge in paragraphs 1 to 6 of the decision under appeal which are not disputed in this appeal, so I repeat them below.

“1. Cannings J: This case is about two portions of land in the Central Nakani area of West New Britain Province, which are subject of Special Agricultural and Business Leases. The lessee or registered proprietor of each lease is the second defendant, “Akami” Oil Palm Ltd, a company of which Albert Camillus, the first defendant, is a primary shareholder and a director. The two portions, which are close to each other, in the vicinity of Mt Pago, near the junction of the Kapiura and Leaururu Rivers, are:

  1. The Minister for Lands and Physical Planning, on behalf of the State (the fifth defendant), granted “Akami” Oil Palm Ltd, under the Land Act 1996, a 99-year Special Agricultural and Business Lease over Portion 104C on 19 March 2008 and over Portion 2628C on 8 April 2008.
    1. The plaintiffs claim that they are or represent the customary owners of the two portions of land or that they have lived on the land for many years with permission of the customary owners. The plaintiffs claim that the customary landowners were not consulted on and did not agree to the leases being granted to the second defendant. They argue that the circumstances surrounding the granting of the leases to the second defendant involved actual fraud, and constructive fraud. They seek declarations that the leases are null and void and an order that the leases be quashed.
    2. The first and second defendants argue that the plaintiffs’ case should be summarily dismissed on three preliminary grounds:
      1. non-compliance with Section 5 of the Claims By and Against the State Act 1996;
      2. being time-barred by Section 16 of the Frauds and Limitations Act 1998; and
      1. non-compliance with a deed of release.
    3. As to the substantive question of whether fraud was involved in the granting of the two leases, the first and second defendants absolutely deny these allegations. They assert that the genuine customary landowners – and they say that the most of the plaintiffs are not genuine customary landowners – agreed to their land being transferred and that they signed a purchase agreement in respect of each portion of land and were paid in accordance with those agreements.
    4. The third, fourth and fifth defendants (the Registrar of Titles, the Department of Lands and Physical Planning and the State) took no part in the trial”.

Preliminary rulings by the trial judge


  1. The learned trial judge first dealt with three preliminary arguments raised by Camillus and Akami for summary dismissal of the claims.
  2. Firstly, it was argued there was failure to give notice of intention to make a claim against the State within six months of occurrence of the cause of action as required by section 5 of the Claims By and Against the State Act. It was argued the cause of action alleging fraud occurred in about March and April 2008 when the two SABLs were granted, and the claimants had until about September or October to give notice of intention to make a claim against the State and the claimants failed to do that and that was fatal to the proceedings. However, the learned trial judge found the claim was not a “monetary claim” against the State and neither was it a claim for an order such as an injunction that would involve direct cost or prejudice to the State. For those reason, it was not necessary to give notice of intention to make a claim against the State. This ruling was not challenged in the grounds of appeal.
  3. Secondly, it was argued the claim was time-barred pursuant to section 16(1) of the Frauds & Limitations Act, as the claim was founded on the tort of fraud which had to be commenced within six years of the accrual of the cause of action. It was argued the alleged fraud occurred in about March and April 2008 when the two SABLs were granted. The learned trial judge noted the claim was filed on 14 November 2014 which was a period of six months after the time limitation had expired on a date in April 2014. However, the learned trial judge found the claim was not founded on simple contract or tort or any other form of action covered by section 16(1) of the Frauds & Limitations Act. Further, the learned trial judge was of the view the primary remedies sought were declarations that the two SABLs were obtained by fraud and orders quashing those SABLs. The learned trial judge held the view the declarations were not sought on the basis of a breach of contract or the tort of fraud or other common law principles, but on equitable principles. Further, the mandatory injunctions sought were equitable remedies. For those reasons, the learned trial judge found the provisions of section 16 did not apply to the claims of Claimants as section 18 provides “Section 16 does not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief.” These findings are addressed in my consideration of the grounds of appeal 3.3 and 3.4 below.
  4. Thirdly, it was argued a Deed of Release signed by certain office holders of Eno ILG released Akami from claims in relation to Portion 104C. The learned trial judge found the deed did not bind all the Claimants and was no bar to the commencement of the proceedings by persons who were not parties to the deed. This ruling was not challenged in the grounds of appeal.

Substantive determination by the trial judge


  1. After discussing the pleadings of the parties and the evidence and submissions made at trial, the learned trial judge then found there was overwhelming evidence of non-compliance with sections 10, 11 and 102 of the Land Act which provide elaborate procedures for the grant of SABLs. The learned trial judge’s findings on the evidence produced at trial are summarised in paragraph 34 of the judgment. Then at paragraph 35, the learned trial judge said the SABLs “are so unsatisfactory, dubious and irregular as to be tantamount to fraud”. The learned trial judge followed the line of authority of the Supreme Court in support of the constructive fraud approach in the cases of Emas Estate Development Pty Ltd v. John Mea [1993] PNGLR 215, PNG Deep Sea Fishing Ltd v. Luke Kritten (2010) SC1126, Lae Bottling Industries Ltd v. Lae Rental Homes Ltd (2011) SC1120 and Kol Toki v. Moeka Morea (2016) SC1588. The learned trial judge then declared both SABLs null and void and ordered both SABLs be quashed.

GROUNDS OF APPEAL


  1. The six grounds of appeal are stated above in full in the decision of my brother Manuhu J. I will just summarise and deal with each of the grounds 3.1, 3.2, 3.3, 3.4 and 3.5. Ground 3.6 was abandoned.
  2. In Ground 3.1, it was argued the learned trial judge erred in law in assuming jurisdiction and determining ownership of the land by custom. This ground of appeal is misconceived. The learned trial judge was not dealing with the issue of ownership of customary land. The principal issue at trial was whether proper process according to law was followed in the grant of the SABLs. The learned trial judge found there was overwhelming evidence of non-compliance with sections 10, 11 and 102 of the Land Act which provide elaborate procedures for the grant of SABLs. The learned trial judge then declared both SABLs null and void and ordered both SABLs be quashed. This was not a determination of ownership of customary land. I dismiss this ground of appeal.
  3. In Ground 3.2, it was argued the issue of constructive fraud was never pleaded in the Statement of Claim and the learned trial judge erred in considering and determining that as an issue. The learned trial judge addressed the pleadings of the parties at paragraph 14 of the decision and then set out his preferred approach in dealing with the arguments of the parties in paragraph 15 of the decision. There, the learned trial judge provided his reasons for identifying and addressing the issue of constructive fraud. I find no error in the approach taken by the learned trial judge. The learned trial judge duly exercised powers of the trial court to identify the critical issues arising for determination of the claims before the court. I find no error in this approach and I dismiss this ground of appeal.
  4. I will deal with the next two grounds together. Ground 3.3 raised the critical issue whether the learned trial judge erred in finding this was a claim in equity when it was a claim in the tort of fraud and was time-barred by Section 16 of the Frauds and Limitations Act. Ground 3.4 also raised another critical issue whether the learned trial judge erred in finding the primary relief sought in the statement of claim was equitable relief when the pleadings raised a claim in the tort of fraud and the claim was time-barred by Section 16 of the Frauds and Limitations Act.
  5. I have looked at the Amended Statement of Claim of the Claimants filed 31 July 2015 which raised allegations of fraud alleging the fraudulent use of signatures to falsely represent that the consent of landowners was obtained to the grant of both SABLs. Allegations also raised were that the land was stolen or converted without the knowledge and consent of the owners. Further, it was claimed there was no proper identification of the legitimate landowners. As discussed above, the learned trial judge found the claim was not founded on simple contract or tort or any other form of action covered by section 16(1) of the Frauds & Limitations Act.
  6. Further, the learned trial judge was of the view the primary remedies sought were declarations that the two SABLs were obtained by fraud and orders quashing those SABLs were sought. The learned trial judge found the declarations were not sought on the basis of a breach of contract or the tort of fraud or other common law principles, but on equitable principles. Further, the mandatory injunctions sought were equitable remedies.
  7. With respect, the allegations of the claimants were clearly expressed as being based on fraud. The word “fraud” is defined in the Concise Oxford English Dictionary as “wrongful or criminal deception intended to result in financial or personal gain”. In Stroud’s Judicial Dictionary of Words and Phrases, Fifth Edition, the word “fraud” is defined as being “a term that should be reserved for something dishonest and morally wrong” and further in the context of theft of property “means that the taking is done intentionally, under no mistake and with knowledge that the thing taken is the property of another person (R v Williams [1953] 1 Q.B. 660).” The claim was that one or both of the SABLs were issued on the strength of documents created and authorising some other transaction and not the grants over land of an area far in excess of the area of land agreed. Further, it was also claimed there was no authorisation at all for the grant of one SABL over certain land. The claimants alleged there was fraudulent use of signatures to falsely represent that the consent of landowners was secured authorising the grant of both SABLs.
  8. In The Papua Club Inc v Nusuam Holdings Ltd (No.2) (2004) N2603, Gavara-Nanu J said:

“The word ‘fraud’ in s. 33 (1) (a) of the Land Registration Act, is not defined anywhere in the Act, but s.45 (1) makes it clear that fraud means more than constructive or equitable fraud. In this regard, it is noted that s. 146 (d) and (e) also provide for the ejectment of a registered proprietor from land if the title is obtained through fraud. Section 146 (4) makes it even more clear although not specifically expressed, that fraud in that section does not refer to fraud by the person from whom the registered proprietor acquired the title or the estate; rather, it is fraud by the registered proprietor himself or herself when acquiring title. Thus, it is implicit from these provisions that “fraud” in s.33 (1) (a) means fraud committed by the registered proprietor or actual fraud. That is the only ground upon which a registered proprietor’s title can be rendered invalid.”


That view of the word “fraud” was adopted by the Supreme Court in Koitachi Ltd v Walter Schnaubelt (2007) SC870 and was followed again by the Supreme Court in Eric Kiso v Bennie Otoa and Ken Watnalom (2013) SC1222 where the court also discussed in detail the Torrens system of title by registration which exists under the Land Registration Act. With respect, I adopt that discussion and statement of the law.


  1. In this case, as in the Selon case, the learned trial judge considered the declaratory orders sought to be equitable relief ruling the section 16 time-bar issue inapplicable as provided by section 18 however, the Supreme Court in Selon held that “... where the common law claim of fraud is pleaded, declaratory relief cannot be described as equitable relief for the purpose of section 18”. On this issue, the Supreme Court followed Julius Pololi v Bryan James Wyborn (2013) N5253. I agree and also adopt that approach in this matter.
  2. As stated above, the learned trial judge found there was overwhelming evidence of non-compliance with sections 10, 11 and 102 of the Land Act which provide elaborate procedures for the grant of SABLs and the learned trial judge found the numerous instances of non-compliance “are so unsatisfactory, dubious and irregular as to be tantamount to fraud”. In Koitachi, the Supreme Court said fraud in Section 33 of the Land Registration Act means actual fraud by the registered proprietor and “,,, once the land is registered, the owner obtains indefeasibility of title which cannot be invalidated by any unregistered interests or mere irregularities except fraud by the registered proprietor or actual fraud”.
  3. I agree with counsel for Camilus and Akami that despite the view of the learned trial judge that the claim was not based on fraud, the learned trial judge went on to discuss and find that there was no actual fraud and then proceeded to find the claims were of constructive fraud. Also, as submitted by counsel for Camilus and Akami, the learned trial judge relied on his own decision in Vitus Kais v Selon Ltd (2016) N6159 which was overturned on appeal by the Supreme Court in Sali Tagau & Selon Limited v Vitus Kais [2018] PGSC 97 SC1755. In that decision, the Supreme Court noted the differing views of the Supreme Court and declined to discuss the issue and said “We do not intend or wish to discuss which of the two is the correct view. We would leave that to an appropriately constituted bench of the Supreme Court to decide.” For the reasons I have discussed above, I uphold Grounds 3.3 and 3.4.
  4. In Ground 3.5, it was argued the learned trial judge erred in finding there was constructive fraud by the non-compliance with the requisites of Sections 10, 11 and 102 of the Land Act 1996 when such findings were not based on evidence from the Department of Lands & Physical Planning either from the Registrar of Titles or the Secretary of the Department who have custody of the records and knowledge of the critical facts and circumstances. I have addressed the substance of this ground in my consideration of Grounds 3.3 and 3.4. It is not necessary to consider Ground 3.5.
  5. In conclusion, I have dismissed Grounds 3.1 and 3.2, I have upheld Grounds 3.3 and 3.4 and I have not considered it necessary to address Ground 3.5 in view of my determination of Grounds 3.3 and 3.4. However, I note that I am in the minority on the ultimate outcome of this appeal.
  6. NAROKOBI J: This is an appeal from a decision of the National Court where the court nullified the second defendant’s state lease over two portions of land in West New Britain Province (Portions 104C and 2628C). The portions of land were obtained from their customary landowners through the Special Agriculture and Business Purpose Lease (hereafter SABL) process by the second appellant. The customary landowners claimed that the portions of land were obtained fraudulently, however, the court of first instance found instead that there was constructive fraud by the Appellants.
  7. The orders appealed against were that:
    1. The Special Agriculture and Business Purpose Lease in respect of Portion 104C, Milinch Megigi, Fourmil Talasea, West New Britain, granted to Akami Oil Palm Limited dated 19th March 2008, is declared null and void and is quashed.
    2. The Special Agriculture and Business Purpose Lease in respect of Portion 2628C, Milinch Megigi, Fourmil Talasea, West New Britain, granted to Akami Oil Palm Limited dated 8th April 2008, is declared null and void and is quashed.
    1. The Third Defendant, the Registrar of Titles, shall within 21 days after the date of service of this order, amend the Register of State Leases and all other records of the State under his control to give effect to these declarations.
    1. Subject to any specific costs order made in the course of the proceedings, the first and second Defendants shall pay the Plaintiff’s costs of the proceedings on a party-party basis, which shall, if not agreed, be taxed.
    2. Time for entry of the order is abridged to the date of settlement by the Registrar, which shall take place forthwith.
  8. The following grounds of appeal were advanced to challenge the decision of the National Court:
    1. His Honour erred in law in failing to find that he did not have jurisdiction to deal with this matter when the issue of customary ownership was yet to be decided which would have ultimately determined this issue of locus standi of the Respondents to file proceedings in the first place.
    2. His Honour erred in fact and in law that the issue of constructive fraud was never pleaded by the Respondents in their Statement of Claim and as a matter of law the trial judge should not have considered and make findings on the issue of constructive fraud.
    1. His Honour erred in fact and in law in deciding that the proceeding was not time barred under Section 16 of the Frauds and Limitations Act in that the claim was one based on equity when the pleadings clearly identified the claim to be that of Tort of Fraud for which Section 16 is applicable.
    1. His Honour erred in fact and in law in finding that the primary relief sought in the statement of claim was an equitable relief when the pleadings clearly established that the primary relief and declarations sought were clearly based on principles of Tort of Fraud.
    2. His Honour erred in fact and in law in finding that there was constructive fraud in that Sections 10,11 and 102 of the Land Act 1996 were not complied, when such findings should have been appropriately based on evidence from or lack thereof from the Lands Department as these are matters within their knowledge and in the absence of any defence or evidence from Lands, the trial judge unfairly decided against the Appellants.
    3. His Honour erred in fact and in law in finding that the Appellants had not provided any evidence to substantiate compliance with processes of obtaining SABLs when there was evidence before the Court that a Commission of Enquiry had already made findings that the Appellants had followed due process, thus would have neglected the issue of constructive based on balance of probabilities.
  9. I have considered each ground of appeal and I will address each ground of the appeal separately, except for ground six, which was abandoned.
  10. On the first ground, that the National Court lacked jurisdiction as the dispute related to ownership of customary land, I consider that this ground of appeal is misconceived. It is not disputed that the customary land had in fact been converted to State land, that is an SABL in respect of Portion 104C, Milinch Megigi, Fourmil Talasea, West New Britain, and in respect of Portion 2628C, Milinch Megigi, Fourmil Talasea, West New Britain. They were leased to Akami Oil Palm Limited by the State. This became apparent from the exchange between His Honour Kassman J and Mr Makeu. The dispute between customary landowners now coming to the fore only lends credibility to the respondents claim, that due process was not followed. This would entitle the respondents to have standing in the proceedings in the National Court as they are challenging their dispossession of the opportunity to claim ownership customarily. The issue before the National Court was the title issued by the State, and not over who owns the customary land. If the appeal fails, then the portions of land will revert to customary land and the dispute between the respondents will be litigated in the appropriate forum.
  11. The second ground relates to the adequacy of pleadings. On this issue, the National Court said:
    1. Before addressing the third preliminary argument, I digress to comment on the pleadings. I have taken a liberal approach to the pleadings as both sides have been less than precise in drafting them. The plaintiffs’ statement of claim focuses on actual fraud, when they should have expressly pleaded constructive fraud, at least as an alternative. The defence of the first and second defendants is convoluted and reads more as a submission than a pleading, yet it does not plead the preliminary arguments raised at the trial. During submissions, all counsel seemed uninterested in arguing about pleadings. Counsel for the first and second defendants did not attempt to argue that the plaintiffs should not be allowed to base their case on constructive fraud (on the ground that it was not expressly pleaded). Counsel for the plaintiffs did not attempt to argue that the first and second defendants’ preliminary arguments should not be entertained (on the ground that they were not pleaded in the defence).
    2. The best approach is to deal with all arguments raised by both sides, without being overly concerned about whether the arguments are supported by the pleadings. This might offend purists. It might sound irregular or contrary to the purpose of pleadings: to guard against trial by ambush (PNGBC v Jeff Tole (2002) SC694; Mond v Okoro [1992] PNGLR 501). However, where both sides engage in an ambush, of sorts, and neither of them complain about it, why should the Judge step in and insist on adherence to the pleadings? The more general purpose of pleadings is to ensure that there are no surprises or shock tactics employed at the trial. To ensure fairness. Here I am satisfied that there have been no surprises or shock tactics and the proceedings have been fairly conducted. Hence a liberal approach is required.
  12. The following are the established process the learned trial judge found which must be complied with for an SABIL lease to be granted, which the appellant does not dispute, and I do not see any difficulty in adopting the process prescribed by the learned trial judge (at para 32 of the judgment):

“To lawfully grant a Special Agricultural and Business Lease over customary land the Minister for Lands and Physical Planning and all interested parties must comply with all of the requirements of Sections 10, 11 and 102, which can be summarised as follows:


(a) the Minister must first be 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” (s 10(3));
(b) the customary land must then be acquired by the Minister by lease under Section 11(1);
(c) the terms and conditions of that lease must be “agreed between him and the customary landowners” (s 10(2));
(d) acquisition of the land must be “authenticated by such instruments and in such manner as are approved by the Minister” (s 10(1));
(e) the purpose of the Minister leasing the land under Section 11(1) must be for granting a Special Agricultural and Business Lease of that land (s 11(1));
(f) there must be an instrument of lease under Section 11(1) in the approved form executed by or on behalf of the customary landowners (s 11(2));
(g) the customary landowners must agree on the Special Agricultural and Business Lease being granted to the lessee (s 102(2));
(h) there must be a statement of agreement for the purposes of Section 11(2) in the instrument of the Special Agricultural and Business Lease (s 102(3)).”
  1. It must be borne in mind what amounts to constructive fraud as stated in the seminal case of Emas Estate Development Pty Ltd v Mea, Swokin, and The State [1993] PNGLR 215:

“My view is that the circumstances are so irregular and unlawful at the very outset to the subsequent transactions that it ought not to prevail.”


  1. In paragraph 26 ii of the amended statement of claim, the eighth plaintiff pleads that there was no proper landowner identification, proper meetings were not held, and there was inadequate awareness. Steps (a), (b), (c) and (g) and (h) above of ss 10 and 11 of the Land Act 1996 relate directly to what the eighth plaintiff pleaded.
  2. Paragraph 10(b) of the Appellant’s Defence pleads that the defendants (now Appellants) complied with the SABL process.
  3. I have considered the transcripts and it confirms the learned trial Judge’s findings. Constructive fraud related to whether the SABL procedures were complied with. Mr. Makeu made submissions on whether the SABL process were complied with or not. The transcripts at pg 689 of the Appeal Book contains the submissions of Mr Makeu:

“My friend has submitted that there are certain guidelines or policies in the Lands Department regarding the grant of the SABL and he has outlined them in his submissions at pages 10 to 11 and 12. Your honour will note that most of those guidelines, actually my client has complied with them.”


  1. Considering the pleadings and the circumstances of this case, the Appellants were not taken by surprise, led evidence and made submissions, so it was open to his Honour to rule in the way he did. In fact, the transcripts of the SABL inquiry into the portions the subject of the present proceedings was tendered in court, which parties considered and made submissions on. The SABL inquiry outcome was favourable to the Appellants. The Respondents, especially the 8th Respondent who claims ownership of both portions 104C and 2628C (in opposition to the 1st to the 7th respondents) says they were not consulted. This goes to the heart of the SABL process in terms of giving free, informed and prior consent to before being dispossessed of their land under the Land Act. There was no evidence that the State conducted this process.
  2. In MVIT v. John Etape [1994] PNGLR 596 Kapi DCJ, Brown and Konilio JJ said:

“Where the plaintiff however is allowed to embark at the trial, on matters which are generally included in his allegation of ‘loss of income earning capacity’ by calling evidence relating to his salary loss for instance, the defendant cannot complain unless he objects at the time before the trial Judge and is overruled. No such objection to the evidence which the plaintiff sought to lead in the absence of particulars, was made at the trial.


We would reiterate what this Court said in Motor Vehicles Insurance (PNG) Trust -v- Pupune (SC 452 of 14 December 1993) that where evidence is led without objection, a Court is entitled to make findings on the basis of such evidence provided it is within the general ambit of the plaintiff's claim. Here the general ambit included both general damages for injuries suffered and a claim for loss of income earning capacity. Loss of wages in those circumstances may well illustrate the loss of income earning capacity.”


  1. I adopt the above reasoning. I find that this was what happened in this case. Constructive fraud is within the ambit of actual fraud. Where actual fraud is not found, it is open to the court to consider constructive fraud on the evidence led before the court. This relationship between actual fraud and constructive fraud is explained by Gavara-Nanu J in Papua Club Inc v Nasaum Holdings Ltd (2004) N2603:

“(4) There was no fraud by the first defendant when acquiring the title over the property. Thus the first defendant has indefeasible title. Fraud, under s.33 of the Land Registration Act, 1981, means actual fraud or fraud by the registered proprietor. Thus the land once registered under the first defendant’s name conferred a title which is indefeasible, unless it can be shown that the title was acquired through fraud or through seriously and grossly irregular means. In the latter cases, fraud is not the essential factor. In such a case, the courts have broad equitable supervisory powers under s.155(4) of the Constitution to invalidate such title even though no fraud is established.”


  1. His Honour in the case above, while making this finding makes reference to Emas Estate Development Pty Ltd v Mea, Swokin, and The State. Whilst I appreciate that subsequent Supreme Court authorities such as John Soto & Ors v Our Real Estate (2018) PGSC 55 have held that fraud must be actual fraud, due to the differing views, the learned trial judge made this observation:

22. Constructive fraud exists where the circumstances of transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title. There is now a strong line of Supreme Court authority in support of the constructive fraud approach: Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215, PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126, Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120 and Kol Toki v Moeka Morea (2016) SC1588.


23. That line of authority is, in my view, binding on the National Court, more so than cases such as Koitachi Ltd v Walter Schnaubelt (2007) SC870 and Eric Kiso v Bennie Otoa & Ken Wutnalom (2013) SC1222, in which the Supreme Court has indicated that proof of actual fraud is necessary.


  1. His Honour Gavara-Nanu J in Papua Club Inc v Nasaum Holdings Ltd further explains:

However, it suffices to say that I do not find the two judicial precedents in Emas Estate Development –v- John Mea and Others (supra) and Mudge -v- Secretary for Lands (supra) in any way conflicting. The effect of the principle in Emas Estate Development -v- John Mea and Others (supra) as applied in Steamships Trading Company Ltd -v- Minister for Lands and Physical Planning and Others (supra) and Hi Lift Company -v- Miri Sata and Another (supra) is that, if there are serious and gross or flagrant breaches of the mandatory statutory procedures as set out in the Land Act, in the issuance of a title, then such breaches would operate to vitiate the validity and the indefeasibility of the title, although fraud may not be involved . Thus, the title would be invalid just like the title which is obtained through fraud. Thus, it is clear from this that, Emas Estate Development -v- John Mea and Others (supra) has introduced a new and added ground on which a title may be invalidated. It is new in the sense that it is outside the exceptions enumerated in s. 33 of the Land Registration Act.


I am of the opinion that the principle applied in Emas Estate Development -v- John Mea and Others (supra) is a good and sound principle to be adopted and applied in this jurisdiction, where such breaches are very common and are done deliberately. It is a novel principle providing a judicial precedent which is relevant and significant in the development of the underlying law.


In that regard, it is to be noted that the courts in this jurisdiction have broad equitable supervisory powers given to them by s.155 (4) of the Constitution. Thus, the courts can, in the exercise of such powers, invalidate titles which are issued in gross and serious violation of the mandatory statutory procedures as set out in the Land Act. Section 9 of the Constitution states the supremacy of the Constitution over all other laws, including the statutes. Thus, the courts in the exercise of their inherent powers under s.155 (4) of the Constitution can correct any such anomalies, although they may fall outside of the exceptions stated in s. 33 of the Land Registration Act.


  1. I agree with the learned trial judge for the reason that due to lack of clarity from the Supreme Court, he was entitled to take the approach he took. I for myself am persuaded to sanction the court of first instance for the reasons advanced in PNG Deep Sea Fishing Ltd v Critten (2010) SC1126:
    1. In our view, the principle enunciated in Emas is a necessary safe guard against the abuse of the process prescribed for the proper, fair, transparent and legal allocation of State Leases. In a jurisdiction like PNG where there is ready abused of legislatively prescribed process particularly over a much sought after resources like land, and other regulatory requirements for safety and well fare of the nation, the decision in Emas becomes very important. The situation in PNG is not the same as in England, Australia or elsewhere, where the state owns most of the land and there is a large supply of land. Also, unlike Australia and England, there is in PNG, a ready resort to abusing legislatively prescribed process particularly in relation to land as much as other important resources. Under Mudge, people who either deliberately or by their own conduct chose not to follow the proper process laid for applying for and being granted State Leases and eventual registration to gain from their own illegal and improper conduct or failures, which cannot be allowed. Hence it makes sense to qualify the application of the decision in Mudge and those following.
  2. In my view this approach will promote the National Goals and Directive Principles, and I discuss this in my concluding remarks below.
  3. It will be appreciated that the relief claimed remained the same, despite the court finding that there was constructive fraud as opposed to actual fraud. An appropriate analogy is with actual trust and constructive or implied trust. Where the court does not find actual trust, it can nevertheless find there was an implied or constructive trust (Dibiaso v Kuma [2005] PNGLR 680). In my respectful view, the learned trial judge did not make a finding on an issue that was so remote to the questions before the court so as to unfairly prejudice the Appellants. I dismiss the second ground of appeal.
  4. The third ground centers around whether the circumstances of this case are such that s 18 of the Frauds and Limitation Act apply to the proceedings, in which case the six-year time limit in s 16 of the said Act does not apply to the present case.
  5. The first to the seventh plaintiff claims the following reliefs:
    1. A declaration that the First and Second Defendants are entitled to only 40 hectares of the land described as ROKA No. 2 or after alienation described as Portion 104 pursuant to the agreement dated 15th March 2000.
    2. A declaration that the title issued to the Second Defendant in respect to the land and premises described as Portion 2628C, Milinch of Megigi, Fourmil Talasea, West New Britain Province is null and void abinitio.
    1. A declaration that the land and premises described as Portion 2628C, Milinch of Megigi, Fourmil Talasea, West New Britain Province is a Customary Land.
    1. An Order in the nature of Certiorari to remove into the Honourable court and squash the titles, more particularly Special Agriculture and Business lease on Portion 2628C issued to the Second defendant.
  6. The eighth plaintiff was added later in the piece and seeks similar reliefs to the original plaintiffs:
    1. A declaration that the First and Second Defendants are entitled to only 40 hectares of the land described as ROKA No. 2 or after alienation described as Portion 104 pursuant to the agreement dated 15th March 2000.
    2. A declaration that the title issued to the Second Defendant in respect to the land and premises described as Portion 2628C, Milinch of Megigi, Fourmil Talasea, West New Britain Province is null and void abinitio.
    1. A declaration that the land and premises described as Portion 2628C, Milinch of Megigi, Fourmil Talasea, West New Britain Province is a Customary Land.
    1. An Order in the nature of Certiorari to remove into the Honourable court and squash the titles, more particularly Special Agriculture and Business lease on Portion 2628C issued to the Second defendant.
  7. The ninth plaintiff, also a recent addition, sought the following reliefs:

  1. A declaration that the Title of the Second Defendant of the lands and premises described as portion 104C and 2628C, Milinch of Megigi, (SE) and Dagi (NE), Fourmil of Talasea, West New Britain Province is null and void ad imtio;
  2. A declaration that the lands and premises described as Portion 104C and 2628C, Milinch of Megigi, Fourmil of Talasea, West New Britain Province is a customary land.
  1. An order for the possession of the lands and premises.
  1. An injunction to restrain the two Defendants (by themselves, their agents, servants of otherwise) from remaining in possession of the lands and premises and from harvesting the Fresh Fruit Bunch of the Oil Palm Trees, and other related activities for the purpose of purpose of benefiting from the said lands and premises.
  2. Mesne profits of the lands from the date of its registration until possession is delivered up or, in the alternative, an account of the mesne profits from the date of registration until possession is delivered up and payment to the Ninth and Tenth Plaintiffs of the monies found to be due and owing.
  3. Special Damages in the sum of K14,055.00.
  4. Interest at 8% pursuant to the Judicial Proceedings (Interest on Debts and Damages Act, Chapter 52.
  5. Costs of the Proceedings.
  6. Any other orders the Court deems just.
  1. This ground of appeal arises from this finding of the National Court:


Section 18 requires the Court to assess the nature of the primary relief sought by the plaintiffs. If it is equitable relief, the proceedings are not subject to the time limitation in Section 16. The primary remedies sought by the plaintiffs are declarations that the second defendant obtained the two Special Agricultural and Business Leases by fraud and orders quashing those titles. The declarations are not sought on the basis of breach of contract or the tort of fraud or other common law principles, but on equitable principles. They are equitable remedies (Mamun Investment Ltd v Nixon Koi (2015) SC1409). Likewise with the orders. They are sought on the basis of equitable principles. They are properly regarded as mandatory injunctions. They are also, in this case, equitable remedies.


  1. The main case that the Appellants rely on to challenge this finding of the National Court is the case of Tagau v Selon Ltd (2018) SC1755, where the court relevantly stated:
    1. In Julius Pololi v Bryan James Wyborn (2013) N5253, cited by the trial Judge, it was held that “As to whether the declaratory relief sought can be categorised as equitable relief, it is necessary to examine the pleadings in order to determine the true nature of the relief sought”.
    2. The trial Judge considered the declaratory orders sought by the respondents to be equitable relief and therefore ruled that Section 18 of the Frauds Act rendered the time-bar under Section 16 inapplicable.
    3. In the Wyborn case, the court held that where the common law claim of fraud is pleaded, declaratory relief cannot be described as equitable relief for the purpose of Section 18 of the Frauds Act.
    4. It is obvious that the primary Judge, having erred in classifying the respondents’ claim as one of constructive fraud, again fell into error in determining the declarations sought amounted to equitable relief and operated to render Section 16(1) of the Frauds Act inapplicable.
  2. My ruling on this ground follows from what I determined on the question of adequacy of pleadings. I have found on the second ground of appeal that the learned trial judge correctly proceeded to deal with the matter as one of constructive fraud. Constructive fraud has its basis in equity (National Council of Young Mens Christian Association of Papua New Guinea (Inc) v Firms Services Ltd (2017) SC1596 and Papua Club Inc v Nasaum Holdings Ltd (2004) N2603).
  3. In Tagau, the Supreme Court held that the declaratory relief that were granted were based on actual fraud and are not therefore equitable relief. In this case, since the relief was awarded on a right created by equity, which I have upheld as being correctly determined, it would necessarily follow that the remedies sought are therefore equitable. In my view s 18 of the Frauds and Limitation Act applies to the circumstances of this case and the action is not precluded by virtue of s 16 of the said legislation. I therefore dismiss ground three of the appeal.
  4. Ground four asks whether the primary relief sought in the statement of claim was an equitable relief when the pleadings clearly established that the primary relief and declarations sought were based on principles of the tort of fraud.
  5. The trial judge found that there was constructive fraud – an equitable right of sorts (National Council of Young Mens Christian Association of Papua New Guinea (Inc) v Firms Services Ltd (2017) SC1596 and Papua Club Inc v Nasaum Holdings Ltd (2004) N2603). An equitable right was therefore the source of the reliefs granted, which in any case were nonetheless equitable in nature per se, being declarations and injunctions. But I make no finding on the issue of whether declaration and injunctions are equitable relief or statutory relief. All I am determining now, based on my reading of Tagau is that by virtue of the source of the reliefs claimed, the reliefs were subsequently rendered equitable. I also adopt the reasons I offered for ground three of the appeal here and on that basis dismiss ground four of the appeal too.
  6. Ground five of the appeal relates to the lack of interest of the State defendants to defend the matter. It arises from this finding of the court:
    1. In this case, I see no evidence that any of those requirements have been met. The defendants are reasonably expected to have the evidence to show that all of the requirements have been met, But there is none. The Registrar of Titles and the Department of Lands and Physical Planning and the State were joined to the proceedings as defendants. It is reasonably expected that they would also have the documentary evidence that the necessary procedures were followed. But they have shown no interest in the case. This strengthens the conclusion I am driven to draw: that there is no evidence of compliance, and this is because the mandatory procedures were not followed.

34. I find that:

(a) there was no proper and lawful independent identification of who the customary landowners were, and there was no formation of opinion by the Minister that he was satisfied 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, as required by Section 10(3);

(b) neither portion of land was acquired, by lease, by the Minister under Section 11(1);

(c) there was no agreement between the Minister and the customary landowners as to the terms and conditions of the lease by the State, as required by Section 10(2);

(d) there was no authentication of acquisition of the land, by the instruments and in the manner required by Section 10(1);

(e) there was no statement in writing that the purpose of the Minister leasing the land was for granting a Special Agricultural and Business Lease, as required by Section 11(1);

(f) there was no instrument of lease under Section 11(1) in the approved form executed by or on behalf of the customary landowners, as required by Section 11(2);

(g) there was no agreement by the customary landowners that the Special Agricultural and Business Leases would be granted to Akami Oil Palm Ltd;

(h) there was no statement of agreement for the purposes of Section 11(2) in the instrument of either of the Special Agricultural and Business Leases, as required by Section 102(3).


  1. The elaborate procedures in Sections 10, 11 and 102 of the Land Act exist for a reason: to ensure that leases over customary land are granted only after a thorough identification and investigation of the land and the customary landowners and their agreement to what is proposed.
  2. I find this ground to be without merit. Although there may not have direct pleadings against the State as the Appellants contend, paragraph 26 ii of the Statement of Claim as I stated above, refers to compliance with the statutory process, which therefore invited the State to be involved (as it is already named as a party). The State has a responsibility to defend her decisions. By not appearing can mean that the State concedes to the claim, so it is not a correct proposition to suggest that without their participation (and leading of evidence), the court should not find against the Appellants. The court makes its decision on the best admissible evidence that is available before it. In any case, if the Appellants thought that the State’s participation was critical to their case, avenues are available in the National Court Rules to ask the court to summon the State defendants to attend and give evidence. They did not avail themselves of that opportunity. On the other hand, clearly the Respondents thought they could run their case from their own evidence without the need for the State although they named them as Defendants along with the Appellants. They were clearly interested parties and adduced evidence on the compliance or lack thereof of the Land Act 1996. This should not now be held against them. I dismiss this ground of appeal.
  3. The final ground of appeal asserts that the Commission of Inquiry had already made findings that the Appellants had followed due process, thereby negating the finding of constructive fraud by the trial judge. This ground of appeal was abandoned on the basis that it repeats ground five of the notice of appeal. I will therefore not consider this ground.
  4. In the final analysis, I am reminded by this case of my duty under s 25(2) of the Constitution to give effect to the National Goals and Directive Principles, non-justiciable as they are. This was what the court of first instance did. After considering the land the subject of the proceedings, paying particular attention to its “sacred, scenic and historical” qualities and the concern for “future generations” and the interests of the parties as against the law governing the facts of the case, I am led to take a course that will implement the wisdom of our founding ideals. In my humble opinion, I would be exercising the judicial power of the People conferred on me, in such a way as to give effect to their underlying constitutional aspirations – in this case National Goal 4 of the Constitution:

4. Natural resources and environment.

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.


WE ACCORDINGLY CALL FOR—

wise use to be made of our natural resources and the environment in and on the land or seabed, in the sea, under the land, and in the air, in the interests of our development and in trust for future generations; and

(1) the conservation and replenishment, for the benefit of ourselves and posterity, of the environment and its sacred, scenic, and historical qualities; and
(2) all necessary steps to be taken to give adequate protection to our valued birds, animals, fish, insects, plants and trees.
  1. The approach I have taken alluded to above, in the exercise of the People’s judicial power, is sanctioned by s 25(3) of the Constitution.
  2. As I have dismissed all grounds of appeal, it naturally follows that the appeal must fail and the appellant pays the respondents costs, to be taxed if not agreed.
  3. BY THE COURT: By majority of Manuhu and Narokobi JJ with (Kassman J dissenting), this court dismisses the appeal and upholds the decision of the learned trial judge. Further, this court orders that the Appellants shall pay the Respondents costs of the appeal, such costs to be assessed on a party and party basis and to be taxed if not agreed.
  4. The formal orders of the court are:
    1. The appeal is dismissed.
    2. The decision of the National Court made on 27 July 2017 in proceedings WS No. 1418 of 2014 David Mota, Eno Incorporated Land Group, David John, Nakise Clan, Raymond Jack, Menem Clan, Alphonse Kurai, Otho Clan, Passingan Karien, Kathkathe Clan, Mesak Ruo, Lovuth Clan, Samson Waiyu, D9 Lessees, Mararea Land Group Incorporated, Darius Boas, Chairman, Meloks ILG for and on behalf of himself and RUGULA Customary Landowners, Meloks Incorporated Land Group -v- Albert Camillus, Akami Oil Palm Limited, Henry Wasa, Registrar of Titles, Department of Lands & Physical Planning and the State is upheld.
    3. The Appellants shall pay the Respondents costs of the appeal, such costs to be assessed on a party and party basis and to be taxed if not agreed.

Judgment accordingly:
____________________________________________________________________
Paul Othas Lawyers: Lawyers for the First and Second Appellants
Thomas & Co Lawyers: Lawyers for the First to Seventh, Ninth and Tenth Respondents
Mannrai Lawyers: Lawyers for the Eight Respondent
Solicitor-General: Lawyers for the Eleventh, Twelfth and Thirteenth Respondent

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