Ready Mixed Concrete Pty Ltd v The State, Samana and Kiamba [1981] PNGLR 396 (13 October 1981)

Papua New Guinea Law Reports - 1981

[1981] PNGLR 396 - png Ready Mixed Concrete Pty Ltd v The State, Utula Samana and Samson Kiamba 

[1981] PNGLR 396

N319

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

PNG READY MIXED CONCRETE PTY. LIMITED

V

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

AND

UTULA SAMANA

AND

SAMSON KIAMBA

(REPRESENTATIVE OF A CLASS OF 511 PERSONS)

Lae

Miles J

7 September 1981

9-11 September 1981

13 October 1981

ESTOPPEL - Equitable estoppel - Lease of government land - Occupied by “squatter” settlement - Right of occupants analogous to licence - Whether lessee takes subject to equitable interest - Nature of remedy.

CONSTITUTIONAL LAW - Protection of basic rights and freedoms - In National Court - Unjust deprivation of property - Order terminating right to possession - Not amounting to deprivation of property - Constitution, s. 53.

In March 1981, after two years of negotiations the Secretary for Natural Resources “leased” to the applicant, for ninety-nine years, certain lands (“the land”) within the town of Lae. In or about 1969 a handful of people started living on the land, and with the passage of time more people “squatted” with them and particularly after a large flood in 1976. The 1981 Census revealed some 511 people (“the occupants”) in all, the vast majority of whom had not been there longer than five years and who occupied substantial dwellings, erected at their own expense, in an established urban village atmosphere. By the beginning of 1981 it was found that they had some sort of expectation that they would be able to reside on the land for some indeterminate time in the future. Both the applicant and the State were well aware of the existence and extent of the occupants, but had taken no action.

In proceedings by the applicant seeking to obtain vacant possession of the land:

Held:

(1)      The State having raised no objections to the presence of the occupants, they should be regarded as having acquired an equitable interest analogous to a licence.

Crabb v. Arun District Council [1975] EWCA Civ 7; [1975] 3 All E.R. 865 at p. 868 adopted and applied.

(2)      In the circumstances therefore the applicant, as holder of the legal estate, was estopped from insisting on his full legal title;

Willmott v. Barber [1880] UKLawRpCh 183; (1880) 15 Ch. D. 96 referred to.

(3)      It would be just and equitable to make declaratory orders recognizing the applicant’s right to possession subject to the equitable rights of the occupants to remain in possession for periods of one year or six months as appropriate.

(4)      An order which has the effect of depriving the occupants of their right to possession does not amount to a compulsory taking of property under s. 53 of the Constitution, and is not therefore prohibited under that section.

Action.

These were proceedings in which the plaintiff company sought various declarations and orders which would obtain for it vacant possession of certain lands the subject of a lease from the State.

Counsel:

J. Baulch, for the applicant.

J. Goodman, for the first respondent.

T. Doherty, for the second and third respondents.

Cur. adv. vult.

13 October 1981

MILES J:  This is a claim by the applicant (referred to as “the company”) to assert its rights under certain leasehold arrangements entered into between itself and the State concerning some land within the township of Lae upon which more than 500 people now reside. As Lord Denning M.R. said in Crabb v. Arun District Council[dcxlv]¹:

“This case cannot be properly understood without a map, but I will try to explain it as best I can.”

The company relies upon its leasehold rights to ask for the several orders set out in the originating summons. It will be necessary to deal in due course with each of the orders sought but in the meantime it is sufficient to say that the thrust of the company’s claim is that it is entitled as against all other persons to immediate vacant possession of the land. The State has put submissions to the court on some aspects of the case as it is entitled to do as first respondent to the originating summons and in particular opposition to orders as sought and numbered 5 and 6. There is an order sought against the second respondent Mr. Umula Samana, Premier of Morobe Province, which needs to be considered. The real issue is however whether as against the company the persons in present occupation of the land have any interest recognizable by the court which would defeat or limit the company’s rights under the leasehold interest which it has acquired. Those persons (called the “occupants” in the judgment), so it is claimed form a class which is represented by Mr. Samson Kiamba who is himself residing on the land, and Mr. Kiamba has been given leave to be joined as a third respondent to the originating summons.

The company was incorporated on 14th March, 1968, under the Companies Act 1963. On 8th August, 1969, it changed its name to its present somewhat unusual title, png Ready Mixed Concrete Pty. Limited. It is wholly owned and controlled by non-citizens, a fact which was stressed by Ms. Doherty who appeared for both Mr. Samana and Mr. Kiamba. It carries out operations at Ibis Street, Lae where it occupies a site on the west bank of the Bumbu River which flows south into the sea some distance away. The company’s activities have I gather been restricted to the mixing and supply of wet concrete. All the cement used in the process has to be imported. In 1978-1979 the company decided that it would be cheaper to import cement in bulk rather than in bags. To do this it needed facilities for bulk storage of cement. At the same time the company was considering extending its operations into the manufacture of concrete building blocks. For both these purposes additional land was required. Between the sea and the land already occupied by the company there was land which the company considered might be suitable for its purposes and in July, 1979 the company made a request to the Department of Lands that such land be made available pursuant to the provisions of the Land Act 1962.

The land in question is part of what has variously been described as part of the Lae Town Purchase, or the Lae Administration Land or the Town or City of Lae or simply government land. It is part of nearly 12,000 acres which is the whole of the land in Certificate of Title, Register Book Vol. 31 Fol. 153 issued in the name of the former Administration on 16th January, 1942. The sketch diagram on the certificate of title indicates the boundaries of the then Town of Lae and shows the eastern boundary of the town as following the west bank of the Bumbu River. The subject land for the most part adjoins the river. It has been subdivided and consists of Lots 25, 26, 27 and 28 of Section 42 as shown on map (exhibit D in these proceedings) being cadastral Sheet No. 3, Milinch of Lae, Fourmil of Markham, issued by the Department of Lands, Survey and Environment in December, 1978. That map, exhibit D, shows the eastern boundary of the City of Lae on the east and not the west bank of the river, the town boundary apparently having been extended to include the river itself on 2nd January, 1976. I will return to the nature and usage of the land shortly.

Following the company’s request, the land was advertised as available for tender in the Government Gazette on 15th November, 1979, and on 14th February, 1980, there was a further advertisement in the Gazette notifying, inter alia, that the Morobe Province Land Board would meet at the Provincial Government Conference Rooms at Lae on 20th February, 1980, to consider tenders received for leases over several parcels of land, including the subject land. The names of those tendering were set out in a list. It was not possible to correlate the names of those tendering to the individual parcels of land available. The Land Board met and took time over its deliberations. On 19th February, 1981, by notification in the Government Gazette it was publicly announced that the company was successful in its application for leases over each of the four allotments comprising the subject land. On 6th March, 1981, the Secretary for Natural Resources delivered to the company in respect of each allotment a notice under s. 37a of the Land Act setting out a summary of moneys payable and other terms and conditions of the leases and requiring the company to return a duly completed notice of acceptance and to pay certain sums by 3rd April, 1981. The company paid the moneys and returned the completed notices within the time stipulated.

Apart from the above, no formal lease has been entered into although I am told that it is the practice for an instrument or deed in the form of a lease to be executed by the Minister for Lands and the lessee. The notice under s. 37a stipulates that the terms and conditions of the lease, in addition to those implied by the law into every Government Lease, are as set out in an annexure to the notice; the notice itself sets a term of ninety-nine years and amongst other things fixes the rent and lays down certain building and improvement conditions.

The case for the third respondent and those he represents is that they have, or had at the time the company acquired its interest in the land, an equitable right to be and continue in occupation of the land, that such right was enforceable against the State prior to the grant of the leasehold interest to the company, that the company took with notice of their equity and that accordingly their equity is enforceable against the company.

It occurred to me only since the close of argument that the case presented on behalf of the occupants may have proceeded on a false assumption, namely that any leasehold interest which the company may have acquired is a legal interest in the land as contrasted with an equitable interest. The importance of the distinction is that if the company’s interest is a legal one, then it takes subject to any outstanding equity only if it has notice of such; if the company’s interest is an equitable one only, it takes subject to any prior equity regardless of whether or not it has had such notice. It was assumed I think for the purpose of hearing that the company had a legal title in the leasehold and hence much of the evidence and argument was concerned with the question of whether and to what extent the company knew of the presence of the occupants on the land at the time it acquired its title. This is a civil case and the issues are defined between the parties themselves. I shall consider the case on the basis that the company has acquired a legal leasehold estate but without making a positive decision to that effect, and without consideration of what implications, if any, arise from the facts first, that no lease has been executed and secondly, that the company’s interest has not been registered under the Lands Registration Act.

The questions for determination then are first, what was the nature of the interest, if any, vested in the occupants at the time of the company being granted the lease, and secondly, did the company have notice of such interest so that it took subject to that interest?

The existence of any interest at all being vested in the occupants was strenuously denied by both the company and the State and the evidence needs to be examined with some care. Several witnesses were called in order to establish the existence and extent of the interest alleged. I do not think it is necessary to examine the evidence of each witness in detail. I am quite convinced that the witnesses were on the whole and as far as they were able speaking truthfully but as had to be expected, some matters of detail, particularly dates and times, could not be clearly established. Essentially the case for the occupants on the evidence is as follows. Until about 1968-1969 the land was for practical purposes vacant although it or land very close to it was used for access to the river to get gravel for commercial purposes and some of the land was used for access to the premises of South Pacific Timber (as it then was) on the south western side. On the opposite side of the river there was and is a substantial settlement of people living on customary land but who were not the customary landowners. Many of the immigrant people, if I may call them that, were Sepiks. The customary owners have been referred to as the Ahi Association. The Ahi Association were the owners of the subject land until it became government land and part of the town of Lae in 1942 and indeed the Ahi maintained some claim to the subject land, or at least to compensation for its loss, until 1979 when the State paid them a sum of money which was apparently accepted in final satisfaction.

In about 1968-1969 there was a dispute between some of the Sepiks and the Ahi Association relating to the activity of Sepik pigs and a small group of people decided to move across the river to the town side where the land appeared vacant but where some gravel extraction was taking place. Among the people who moved were Mr. Samson Kiamba the third respondent and Mr. Andrew Poli who gave evidence. The witnesses claim that as many as twenty people moved on to the land at that stage and built houses, at first from bush materials but later, and when more people were moving onto the land, from permanent materials. At first they lived quite close to the river and may not have been on the subject land itself. The river has in the meantime caused considerable erosion of the bank and the settlers moved further away from the river. The land is lowlying and swampy. There was considerable flooding in 1972 which seems to have resulted not only in considerable numbers moving onto the higher ground but in bringing more people across the river from the eastern side. When the original settlers moved in they clearly knew that the land was not theirs for the taking and they expected that it probably did belong to the Ahi (there is evidence that some people to this day pay rent to the Ahi). As the years went by however it must have become clear to them that it was “government” land of some description. Mr. Poli himself worked in the town in some health service and saw maps on which it was shown as government land. He and other people living there used to talk about it and wonder when “the owner” was going to approach them. However when I say that they realized it was government land, I do not believe that they had any real concept that it was land vested in the national government as opposed to any other official body such as the town council. Over the years the population on the land increased, more and more dwellings were erected, trees and vegetable crops were planted and harvested. Some of the swampy land was filled in the manner followed in the East Sepik Province. The average cost at current values of erecting the type of house that is commonly found on the land is K1,600. By the beginning of 1981 there was a substantial community established of some seventy buildings used for dwellings with over five hundred residents. Children have been born and raised there and attend local schools. Many of the adults work in employment in Lae itself. There is no electricity or water connection or garbage collection but health inspectors and social workers go in there more or less regularly. The residents have been counted by census takers and as we were forcibly reminded by Mr. Umula Samana, they vote in elections. Whilst most of the people are Sepiks there are others from the Highlands and other areas, including Morobe. Overall the picture is painted of an established urban village which has followed a bona fide existence for a substantial time. The present situation is well shown in the recent aerial photographs exhibited before me.

This historical picture however has to be measured against some of the more objective evidence. The witnesses claimed that their present numbers have been maintained for about ten years. There were put into evidence on behalf of the State a number of official aerial photographs taken over the years for the purpose of survey and the like. Expert evidence was given by the provincial surveyor Mr. Huntingdon as to what these photographs disclose. Whilst this is a perfectly proper subject for expert evidence (similar to medical evidence in relation to x-rays) the court is required to reach its own conclusion on the matters of fact to which the photographs relate. I think that perhaps Mr. Huntingdon is a little conservative as to the number of apparent buildings or structures that are discernible in the photographs. At any rate it seems to me that the photographs indicate that in April, 1969 there were two buildings on the land (they are not visible in the photographs taken in September, 1969). In 1973 there are three and possibly more. In 1975 there appear to be as many as twelve. The photographic evidence stops there and there is nothing further until the recent photographs taken earlier this year.

In more recent years the numbers have grown considerably. Mr. Morey, the Provincial Lands Officer who came to Lae in 1977, estimates that the numbers have doubled since then. Mr. Schweinfurth, First Assistant Secretary, Field Services, of the Morobe Provincial Government, said that upon his arrival in 1976 there were at least eleven houses and that there was a big increase after a flood which occurred soon after. Recent census figures were as follows:

1978:  320 residents

1980:  475 residents

1981:  511 residents

At present the average household consists of about seven people.

On the probabilities then, my findings broadly are that there have been a handful of people including Mr. Poli and Mr. Kiamba living on the land for about ten years, that there are up to about sixty people who have been there between five and ten years and that the vast majority of residents have not been there longer than five years. All persons presently occupying the land do so as bona fide residents in dwellings erected by them or by their families at their own expense or the expense of their families. By the beginning of 1981 they had some sort of expectation that they would be able to continue to reside on the land for some indeterminate time in the future. I shall return to the question of that expectation.

I do not think that it is seriously contended on behalf of the State that it was unaware that there were a substantial number of persons in occupation of the land for some time prior to the beginning of 1981. I took counsel for the State to submit that the occupants began as trespassers, were never treated by the State other than trespassers, never regarded themselves as other than trespassers and should still be regarded as trespassers. The evidence as to the knowledge and attitude of the State in the early years is certainly very vague but certainly by 1978 the State was very aware of their presence, and not only of their presence but of their increasing numbers. If the State was unaware that the more recent arrivals were erecting permanent dwellings, that could only be on the basis that it was shutting its eyes to the situation. Mr. Morey and Mr. Schweinfurth both said that they were aware of the presence of the occupants on the land from the time of taking up duties in Lae in 1977 and 1976 respectively and their evidence carries the implication that they were aware of the increase in numbers from then until the beginning of 1981. The knowledge of Mr. Schweinfurth, an officer of the Morobe Provincial Government, is of course not to be imputed to the State. However a significant piece of his evidence was that after being approached by the company regarding the possibility of ejecting the occupants before the lease was granted, Mr. Schweinfurth telephoned the head office of the Department of Lands in Port Moresby to obtain approval for issuing a notice to quit under s. 123 of the Land Act. He was instructed by the Assistant Secretary not to issue a notice to quit and to advise the company to see its own solicitors. It is hard to avoid the conclusion at this stage that the Department was more than willing to hand the problem of the occupants over to the incoming lessee. There is not the slightest shred of evidence that anyone had on behalf of the State expressed any disapproval to any of the occupants as to their presence or activities on the land and the instructions given to Mr. Schweinfurth are in my view strongly suggestive of acquiescence on the part of the State in relation to the situation which had been developing on the land.

It is quite clear on the evidence that the company, through its managing director, Mr. Elliott, was well aware that there were people living on the land at least during the two years preceding the granting of the lease. It may be that the company was not aware of the exact interest, if any, of the occupants—indeed it may be that nobody could know their exact interest until a competent court decided the question. But the evidence leads to the conclusion that Mr. Elliott’s concern was such that he thought it worthwhile to visit Mr. Schweinfurth before the lease was granted in the hope that at least some of the occupants might be removed. In his evidence Mr. Elliott said that he did expect the Department of Lands to grant vacant possession but when asked as to whether at that time he thought that the responsibility of taking effective action to eject the occupants was the Department’s or the company’s, his reply was “a bit of both”. He said that in 1979 he had considered that in fact it would probably be necessary to give the Department “a prod”, that he did not expect them to do it “under their own steam”, that at no time between tendering for the lease and accepting the lease offered did he consider insisting on vacant possession and that at the time of acceptance he did not expect the land to be occupied “for any length of time”.

Before turning to the principles of law to be applied to the facts as above stated, it is desirable to record that counsel have agreed and I think rightly, that with regard to the considerations of Sch. 2.1 of the Constitution the case is not to be decided by any rule of Papua New Guinean custom but by reference to the principles of law and equity as they were in England on 15th September, 1975. All counsel relied upon such principles being appropriate to the circumstances of the case and supportive of the claims by their respective clients. It should be further noted that the company has not taken any point against Mr. Samson Kiamba claiming relief not only in his own right but on behalf of all occupants of the land. Representative or class actions usually present a number of difficulties both procedurally and substantively on the present state of the law but this is possibly a case in which those difficulties may be avoided.

The claim put forward on behalf of the occupants to defeat the right of the State to possession of the land immediately prior to the granting of the lease is based on the doctrine of equitable estoppel, sometimes called promissory estoppel and in relation to land sometimes called proprietary estoppel. It was discussed at length in the decision of the Court of Appeal in Crabb v. Arun District Council[dcxlvi]² decided on 23rd July, 1975, a date about as close to the date of Papua New Guinean Independence as one needs to go for a statement of the English principles applicable under Sch. 2.1 of the Constitution. The doctrine is summarized in a long passage from Lord Denning M.R. at p. 871 which cites the old authorities. I will not quote the passage in full. It is summarized in one sentence as follows:

“Short of an actual promise, if he by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights—knowing or intending that the other will act on that belief—and he does so act, that again will raise an equity in favour of the other, and it is for a court of equity to say in what way the equity may be satisfied.”

In support of the proposition his Lordship referred to recent English authority such as Inwards v. Baker[dcxlvii]³ and E. R. Ives Investment Ltd. v. High[dcxlviii]⁴. The decision itself has since been followed twice in the Court of Appeal in Jones v. Jones[dcxlix]⁵ and Pascoe v. Turner[dcl]⁶. The pre-Independence Full Court referred to Inwards v. Baker (supra) in The Administration v. Blasius Tirupia; Re Vunapaladig and Japalik Land[dcli]⁷. If I read the judgment correctly their Honours accepted that an equitable defence of the type successfully pleaded in Inwards v. Baker (supra) would have been available had the facts pleaded supported such a defence. The decision of the court on demurrer was that the allegations did not raise the equitable defence which counsel for the defendant sought to rely on. Further it was held that in the absence of an allegation of fraud s. 69 of the Lands Registration Act 1924 protected the registered proprietor from being affected by actual or constructive notice of any claim right title or interest other than as appears in the Register Book. No argument was addressed to me in the present case on the Lands Registration Act. It may be observed however that the doctrine of proprietary estoppel imports the notion of equitable fraud: see judgment of Scarman L.J. in Crabb v. Arun District Council[dclii]⁸ at pp. 876 to 877.

The principles of proprietary estoppel as expounded by Lord Denning M.R. in Crabb v. Arun District Council (supra) should be regarded as part of the underlying law of Papua New Guinea. The question is: how far are they applicable to the present case?

The question should be answered in the following way. Once a significant number of persons had taken up residence on the land, built dwelling houses on it, planted trees and the like, it was up to the State if it wished to protect its right to possession of the land to issue some sort of a warning or statement that persons who came on to the land to take up residence and build and plant crops there did so at their own risk. Yet no such warning issued at any time. The result is that those who came took up residence, built houses, planted crops and the like after say 1976 may be regarded as having sufficient interest in the land as to give rise by early 1981 to an equity entitling them to remain on the land despite the State’s legal right to possession. Because the State raised no objection to the large influx after 1976, those who had come on to the land prior to 1976 were entitled to accept and did accept that their presence also was tacitly approved and so they should be regarded as having acquired a similar equitable interest by early 1981. The right may be regarded as analogous to a licence and how it might be terminated or revoked will be discussed in a moment.

The inference must be drawn from the evidence that the company through Mr. Elliott knew that there were substantial numbers of persons in occupation of the land by the time of the granting of the lease. For two years or thereabouts the company took no steps to encourage the State to obtain vacant possession and despite the latter-hour request to Mr. Schweinfurth to issue a notice to quit, Mr. Elliott fully expected the occupants to be in possession for some time after the lease was granted. The company was in my view taking a calculated chance that sooner or later, though preferably sooner, the occupants would be ejected. In the meantime it refrained from insisting on vacant possession because such insistence may well have resulted in the State withdrawing its offer to grant the lease to the company.

It was put on behalf of the company that the occupants could not rely on proprietary estoppel unless they satisfied the five “probanda” or tests laid down by Fry J. in Willmott v. Barber[dcliii]⁹. But the English authorities are clear that by 1975, although the five “probanda” might be used as a “valuable guide”, the ultimate test was whether in the circumstances it has become unconscionable for the holder of the legal right to insist on its full enforcement. Even if it is accepted that the occupants must have incurred expenditure in the mistaken belief that they already owned a sufficient interest in the property to justify the expenditure (or that they would obtain such an interest), I think that by 1976 some sort of genuine residential community had been established in the land: those who built thereafter or otherwise took action or incurred expenditure which improved the land did so in the belief that the State would recognize their interest.

In these circumstances what order should be made that is just and equitable having regard on the one hand to the company’s right to enter into possession as lessee of the State and the interest of the occupants entitling them to remain in possession at the time the lease was granted? It was put by Ms. Doherty for the occupants that all occupants should be allowed to remain there for the rest of their lives, as was ordered in Inwards v. Baker[dcliv]¹⁰: that however was a case involving a son putting up a substantial proportion of the purchase money for a father’s house on the mutual understanding that the son could use it as his home for as long as he wished. Mr. Poli and Mr. Kiamba have different ideas: they think that they should be allowed to remain on the land until the State finds somewhere else for them to go, not too far away. Mr. Poli says that if the National Government as the father of the nation does not carry out its responsibility of finding some land for him, he will stay on the subject land until he is pushed into the sea, that he regards the land (or part of it surely) as his and available for him to pass on to his children. Mr. Poli has however not always held this view; at one stage he said that if he had been told that the land was government land and that he should get off, then he would have gone long ago. When asked directly, he was unable to say when he had changed his view. It was quite apparent however that the idea that he was entitled to remain on the land until the National Government provided him with something suitable somewhere else came from what he was told—or thinks he was told—by Mr. Umula Samana at a meeting or series of meetings between November 1980 and May 1981. At such meeting or meetings as well as in the witness box Mr. Samana expressed himself eloquently as to what he perceives to be the injustice of the present situation. People listening to him at the meetings may have understood him to be talking about what the law provides when he was obviously talking about what he thinks the law should provide. In my view it could not be just and equitable to order the State to provide alternative residential sites unless it could be shown that suitable land was available, and that has not been done. It should also be said that Mr. Poli (and possibly some of the other occupants) has his own land elsewhere which he holds under customary tenure near Angoram in the East Sepik Province; he understandably prefers to live in Lae where he has his immediate family and his employment.

It has been put on behalf of the State that the court should not grant any relief which recognizes any interest of the occupants in the land because of the general equitable maxims that he who comes to equity must do equity, and that he who comes to equity must come with clean hands. It was submitted that the occupants came onto the land as trespassers and that their status should not be recognized as having changed because they knew that the land belonged to the government and they never took any steps to notify the authorities of their presence, nor to request permission to put up their structures nor to do anything to put the State in a position where it could make an informed decision as to what to do. There is some merit in this submission but there is another side to the argument and it deserves to be mentioned. The company obtained its lease after a series of procedures carried out pursuant to the provisions of the Land Act 1963. There can be no particular criticism of the departmental officers who carried out their duty according to the statutory requirements, and probably more. The case is however an example of the deficiencies in the system. As required by the Act the land was advertised for tender in the Government Gazette, and the meeting of the Land Board at which tenders were considered was similarly advertised. The advertisement stated that any person could attend and give evidence or object to the grant of any application. The advertisement or a summary of it was placed on the town notice board and there were even announcements over Radio Morobe. But as Mr. Morey, the Provincial Lands Officer, fairly and properly conceded in evidence, there was no way in which from a practical point of view the occupants, who were so vitally interested, could have been expected to know that tenders were being called for or that the Land Board was meeting or what was going on generally. There is no doubt that the Land Board came to a proper conclusion on the material before it that the public interest justified the granting of the lease to the company for the purpose of extending its industrial activities. But if the occupants had been given some proper notification and afforded a real opportunity to object to the company’s application and to put their case to the Land Board, other considerations as to competing land use might have prevailed and the lease might never have been granted. Of course the court must deal with the situation as it came to exist in fact with the company acquiring a leasehold interest and a consequent right to possession, but I think that the foregoing disposes of the submission that equitable relief should be refused to the occupants because of their failure to notify their interest to the State.

I propose to make a declaratory order which recognizes the company’s right to possession subject to the equitable right of the occupants to remain in possession for a period of time appropriate to the circumstances. The evidence does not permit a division of the occupants into classes other than a division between those who went into possession before 1976 and those who went into possession thereafter. The only persons identifiable on the evidence belonging to the former class are Mr. Andrew Poli and Mr. Samson Kiamba. They and the members of their immediate households will in effect be permitted to remain in possession for longer than the other occupants of the land.

Before proceeding to consider the terms of the order it is necessary to consider a further and important matter raised in the submission of Ms. Doherty. The submission is that any order which has the effect of depriving the occupants of their right to possession amounts to a compulsory taking of property under s. 53 of the Constitution, and the protective requirements of that section have not been met. The second half of the submission would seem to be quite correct, since according to the terms of s. 53(2) possession may not be compulsorily taken of any property except in accordance with an Organic Law or Act of Parliament and unless certain other conditions are fulfilled. The applicant company in the present proceedings does not rely upon an Organic Law or Act of Parliament, nor do the conditions set out in s. 53(1) appear to have been met. By s. 53(4) a reference to the taking of possession of property is defined to include a reference to—

(a)      the forfeiture

(b)      the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession)

of any right or interest in property.

It has accordingly been submitted that an order having the effect of terminating the right of the occupants to be in possession of the land is a compulsory forfeiture, extinction or determination of a right or interest in property held by citizens and is prohibited by s. 53. If the latter submission is correct it lies within the province of the National Court pursuant to the Constitution, s. 57, to protect the freedom against unjust deprivation of property guaranteed by the Constitution, s. 53.

There are a number of decisions in the National Court to the effect that it is not possible for this Court to exercise its jurisdiction under s. 57(1) and (3) to make an order which is necessary for the protection of a constitutional right or freedom unless this Court both interprets and applies the relevant constitutional provision: e.g. The State v. Kwambol Embogol[dclv]¹¹, The State v. Peter Painke (No. 2)[dclvi]¹² and Re s. 42 of the Constitution and Jacob Hendrich Prai[dclvii]¹³. Conversely it seems to me that the jurisdiction may be exercised even though in the event the National Court may decide to refuse to make an order under s. 57, for whatever reason. To put it another way, the jurisdiction encompasses not only a positive finding that the constitutional right or freedom is violated as a necessary step towards its enforcement and protection — it also extends to a negative finding that there is in the instant case no infringement of any constitutional threat of freedom. For these reasons I conclude that it is not necessary to refer the question now under consideration to the Supreme Court and I decline to take any steps pursuant to the Constitution, s. 18(2).

The Constitution, s. 53, carries the heading “Protection from unjust deprivation of property”. The detailed provisions of the section itself vary markedly from the recommendations of the Constitutional Planning Committee. However-Ch. 5, pars. 85 to 91 of the Committee’s Final Report (Pt. I) make it clear that what the Committee was concerned with was the limitation on the power of government to redistribute wealth by means of the compulsory acquisition of property from citizens. In its final form in the legislation the provision as to acquisition of property was widened to include forfeiture extinction or determination of any right or interest in property. The key word is “compulsorily” which I think implies the exercise of some power conferred by statute on the State or an instrumentality of the State. In my view the section is not directed at the decision of a court which adjudicates declares or determines pre-existing rights. The word “deprivation” in the heading sheds further light on the subject. A person is not deprived of property unless he is stripped of something to which he is entitled. The judgment of a court which determines that a person’s claim to be entitled to possession is not recognized at law or is recognized only to a limited extent (for instance until the happening of some supervening event such as a contrary claim by someone with a better right) does not deprive a person of that interest. On the other hand the powers exercisable under legislation such as the Land Acquisition Act 1974 (to which the Constitutional Planning Committee referred) do have the effect of stripping a landowner of the land to which he is entitled, and of substituting that right to land with a right to compensation. Thus it is that s. 53(2) provides for just compensation to be made by the expropriating authority. It is quite inapposite to consider the applicant company as being in any way an “authority”. Its action in seeking to enforce its right to possession may not be characterized as an act of expropriation. For these reasons I conclude that s. 53 of the Constitution is inapplicable to the present case.

It was submitted by Mr. Baulch for the company that s. 53 does not apply to the circumstances of the present case because by virtue of s. 53(5) the section does not apply, inter alia, to:

“(c)    any taking of possession or acquisition that was an incident of the grant or acceptance of, or of any interest in or right over, that property or any other property by the holder or any of his predecessors in title.”

I have considerable difficulty in elucidating what is meant by this paragraph and if the matter had to be decided on this issue, I would have little hesitation in referring the question to the Supreme Court. However I have already decided that the Constitution, s. 53, does not apply to the present case for the reason that the company’s assertion of its right to possession is not a “compulsory” taking of possession, and I decline to make any decision about the applicability of the Constitution, s. 53(5)(c).

Finally I turn to the declaratory orders as sought in the originating summons. Paragraphs 1, 2 and 3 are directed to establishing that the applicant company has an estate in leasehold in the land with the right of immediate vacant possession to the particular exclusion of the present occupants. Paragraphs 5 and 6 seek to establish that the State is under an obligation to secure vacant possession in favour of the applicant. For the reasons given I decline to make orders in these terms.

Paragraph 4 seeks an order that the applicant is entitled to issue a warrant of possession out of the District Court at Lae pursuant to s. 9(2) of the Summary Ejectment Act 1952. I decline to make such an order. If the company seeks at a later stage to commence proceedings in the District Court under the Act then that will be its decision. Alternatively it may consider commencing proceedings in this Court seeking an order for possession. The company apparently feared that without knowing the names of the persons in possession it would be unable to obtain or enforce any order for possession but in this I think it was labouring under a misapprehension. There was no application in the present proceedings that Mr. Samson Kiamba should disclose the names of those he claims to represent.

Paragraph 5 seeks an order that Mr. Umula Samana has acted unlawfully in advising the occupants not to leave until the National Government has provided alternative land for them. For a number of reasons I do not think that such a declaration should be made. Whatever might have happened in the past, I accept Mr. Samana’s assurance that he recognizes the law of Papua New Guinea and I am not convinced that he intends to incite anybody to disobey any order the court may make; in any event nothing in the nature of an injunction is sought. Moreover it was suggested that the conduct complained of constituted an offence punishable by criminal proceedings. If that is so, then the order should be refused on the ground that the equitable jurisdiction of the court may not be used to determine that a person is guilty of a criminal offence without an application of the normal procedures followed in a criminal trial: see P. W. Young “Declaratory Orders”, Sydney 1975 pp. 178 and following. In Papua New Guinea the principle is reinforced by the constitutional guarantee of the full protection of the law to all persons, pursuant to the Constitution, s. 37.

Subject to drafting details upon which I will hear counsel in chambers, I propose to make the following orders:

1.       Order that Samson Kiamba be added as a third respondent to the application.

2.       Declare that the applicant png Ready Mixed Concrete Pty. Limited as lessee of the land described in the Schedule from the Independent State of Papua New Guinea as lessor is entitled to possession of the said land subject to the following:

(a)      the applicant’s right to possession of the said land is not enforceable against Samson Kiamba nor Andrew Poli nor any person who was on 30th June 1981 residing with the said Samson Kiamba or Andrew Poli in the house occupied by him on the said land until one year from today;

(b)      subject to (a) the applicant’s right to possession of the said land is not enforceable against any other person who was on 30th June 1981 residing on the said land until six months from today.

Again subject to hearing from counsel, I propose to make no order as to costs.

SCHEDULE

Allotments 25, 26, 27 and 28, Section 42, City of Lae, Morobe Province.

Orders accordingly.

Solicitor for the applicant: McKeague Avery & Associates.

Solicitor for the first respondent: B. Emos, State Solicitor.

Solicitor for the second and third respondents: Toffamo Mionzing.

[dcxlv][1975] EWCA Civ 7; [1975] 3 All E.R. 865 at p. 868.

[dcxlvi][1975] EWCA Civ 7; [1975] 3 All E.R. 865 at p. 868.

[dcxlvii][1965] 2 Q.B. 29; [1965] 1 All E.R. 446.

[dcxlviii][1967] 2 Q.B. 379.

[dcxlix][1977] 1 W.L.R. 438.

[dcl][1979] 1 W.L.R. 431.

[dcli] [1971-1972] P.N.G.L.R. 229 at p. 243.

[dclii][1975] 3 All E.R. 865.

[dcliii](1880) 15 Ch. D. 96.

[dcliv][1965] 2 Q.B. 29.

[dclv]Unreported National Court judgment N91 dated 7th April, 1977.

[dclvi][1977] P.N.G.L.R. 141.

[dclvii][1979] P.N.G.L.R. 42.