Kilanda v Enga Provincial Government [2023] PGSC 54; SC2405 (2 June 2023)

SC2405

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 34 OF 2022 (IECMS)

BETWEEN:
IMMANUEL KILANDA
Appellant

AND:
ENGA PROVINCIAL GOVERNMENT
First Respondent

AND:
LIPU KAUNGAKALI
Second Respondent

AND:
ALLEN ANE – REGISTRAR OF TITLES DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Third Respondent

AND:
THE STATE
Fourth Respondent

AND:
NATIONAL HOUSING COMMISSION
Fifth Respondent

Waigani: Batari, Manuhu, Dowa JJ
2022: 23^rd November
2023: 2^nd June

PRACTICE AND PROCEDURE – State land – Certificate Authorizing Occupancy – Fraudulent acquisition of – Pleadings – Sufficiency of.

COST – Judicial discretion – Interest on costs – Appropriateness of.

Cases Cited:
Motor Vehicles Insurance (PNG) Trust v James Pupune [1993] PNGLR 370
The Central Bank of PNG v Gabriel Tugiau [2009] SC1013
Bluewater International Limited v Mumu [2019] SC1798
Ising v Ande [2014] SC1359

Counsel:
R. J. Lains, for the Appellant
L Kandi, for the First Respondent

2^nd June, 2023

1. BY THE COURT: The appeal is against the decision of Kangwia, J in Wabag on 24^th March 2022 where his Honour ruled in favour of the first respondent who alleged fraud in the transfer of interest in State land, namely, Section 8 Allotment 1 in Wabag, Enga Province, to the appellant and others without its knowledge, authority, and consent.
   
2. There were six grounds of appeal. The appellant submitted however that only three issues arise from the six grounds. The proposed issues verbatim are:
   
   • Whether the revocation of the Certificate Authorising Occupancy (CAO) was an issue for the learned trial judge to consider and determine?
   • Whether the first respondent failed to plead the alleged fraud with sufficient particularity in its amended statement of claim?
   • Whether the learned trial judge erred when he awarded interest on costs?
     
3. We will consider the appeal accordingly.
   

4. In relation to the first issue, the first argument by the appellant is that “there is nil fact being pleaded concerning the status of the CAO” (sic.). Therefore, the trial judge’s findings on the revocation of the CAO were not based on the pleadings and is therefore an error of law.

5. The principles on pleadings and sufficiency of pleadings are not controversial. See Motor Vehicles Insurance (PNG) Trust v James Pupune [1993] PNGLR 370, The Central Bank of PNG v Gabriel Tugiau [2009] SC1013 and Bluewater International Limited v Mumu [2019] SC1798.

6. Application of principles to the pleadings in this case is contentious. In this case, in paragraph 7, the first respondent pleaded that it was the registered proprietor of the subject property and is protected under a Notice of Reservation under section 49 of the Land Act.

7. In paragraph 8, it was pleaded that the second respondent applied for and obtained title to the property without the first respondent’s knowledge, authority, and consent. In paragraph 9, it was pleaded that the subject property was unlawfully sold to the appellant.

8. Disputes concerning fraudulent transfers of land titles are resolved by ascertaining the existence and validity of title deeds and instruments. In this case, proper consideration of the claims would not be possible without considering the relevant registered instrument of title held by the parties. The type of instrument was pleaded in paragraph 7. If there was any doubt, the appellant did not seek further and better particulars of the first respondent’s title deed.

9. The statement of agreed facts referred to the instrument as the CAO. Evidence on the CAO and its revocation was tendered without objection and cross-examination. The appellant made submissions on the CAO and its revocation. The only instrument that was relevant throughout the proceeding was the CAO.

10. For the foregoing reasons, the argument that there were insufficient pleadings on the status of the CAO is without merit.

11. The second argument is that it was not disputed that the CAO was revoked on 31^st March 2000. It was argued that the effect of this is that the trial judge was prevented from considering and deliberating on the revocation of the CAO. With due respect, we disagree. A statement of agreed and disputed facts serves the purpose of assisting the judge to manage the evidence in a trial. It is not evidence. Nor does it override the actual evidence on a particular matter.

12. In any event, the revocation of the CAO on 31^st March 2000 was a fact that was not disputed. On the other hand, the validity of the revocation is a question of law that was clearly the core issue in the proceeding. Accepting that revocation took place on a certain date is not acceptance of its validity.

13. For the foregoing reasons, it was necessary for the trial judge to consider and determine the validity of the revocation of the CAO. The appellant’s argument that the trial judge should not have considered it is absurd.

14. At this juncture, we affirm the view taken by the trial judge that a CAO is a Statutory Instrument conferring special kind of interest in State land issued by the Minister for Lands by publication in the National Gazette to governmental bodies for public purposes. It is created and protected by section 49 of the Land Act. It is not a State Lease and is reserved from lease.

15. Section 52 of the Land Act provides that where land is reserved, no lease shall be granted either on application or tender except for a Special Purposes Lease to be issued and registered in the name of the State. The CAO ceases when the holder of the CAO relinquishes its interest in the land to the State or is otherwise revoked by the Minister responsible for Land matters. In the latter case, there is a statutory duty (section 122 of the Land Act) on the part of the Minister to give notice of the proposed action to the authorised occupant. The authorised occupant is thus accorded the opportunity to show cause.

16. In the present case, there is evidence that the CAO was cancelled without the knowledge and consent of the first respondent, the authorised occupant. The first respondent’s interest, the CAO, was issued first in time. The subsequent dealings, the unauthorised subdivisions and grant of state leases, over the land the subject of CAO were correctly found to be irregular and unlawful for breaches of various provisions of the Land Act. The state leases issued to the National Housing Commission and subsequently transferred to the Appellant and the first Respondent could not be saved under section 33 (1) of the Land Registration Act by reason of being fraught with fraud.

17. The third argument is that if revocation of CAO was pleaded, the first respondent chose the wrong mode of proceeding. It should have sought a judicial review of the decision to revoke the CAO. It is clear however that the appellant did not move any application before the trial judge on this issue. By his silence, he is deemed to have submitted to the jurisdiction of the court to determine the claim as it was. Secondly, the claim was against the appellant and other individuals. It was pleaded that they were active participants in the fraudulent theft. They are not State officials. The argument on mode of proceeding being incorrect is therefore without merit.

18. The second issue was whether the first respondent pleaded fraud with sufficient particularities. It is true that fraud is a serious allegation that must be strictly proven. See Ising v Ande [2014] SC1359. In this case, we are of the view that fraud was sufficiently pleaded. The first respondent pleaded that it was the registered proprietor of the land. It was pleaded that the second respondent wrongfully obtained title to the property and then wrongfully sold the property to the appellant. If this is not fraud, what is it?

19. Fraud is when a person commits a wrongful act to receive a benefit. It is wrong to obtain title to a property without the previous owner’s involvement and consent. These were the allegations against the appellant and others who benefited from the alleged fraud. Therefore, we reject the appellant’s contention that fraud was not sufficiently pleaded.

20. The third issue is whether the trial judge erred in awarding interests on costs. The first respondent initially argued that it made submissions to the trial judge to award punitive costs. It was however pointed out firstly that there were no submissions made for the trial judge to award interest on costs; and, secondly, the trial judge did not provide any reason for awarding interests on costs. The first respondent eventually accepted that the trial judge erred when he awarded interest on costs. We agree that the trial judge erred in law in awarding interest on costs.

21. For the foregoing reasons, we would dismiss appeal grounds 3.1, 3.2, 3.3, 3.4 and 3.5. Appeal ground 3.6 is upheld. Consequently, the trial judge’s orders on interest on costs is set aside and quashed. It is substituted with an order for costs on indemnity basis. Costs of this appeal is awarded to the first respondent also on indemnity basis.

Orders accordingly.

________________________________________________________________
M. S. Wagambie Lawyers: Lawyers for the Appellant
Hardy & Stocks Lawyers: Lawyers for the First Respondent