Christian Life Centre v Associated Mission Churches of Papua New Guinea [2002] PNGLR 41 (9 August 2002)

NATIONAL COURT OF JUSTICE

CHRISTIAN LIFE CENTRE

v

ASSOCIATED MISSION CHURCHES OF PAPUA NEW GUINEA;
NEW IRELAND ENTERPRISES PTY LTD;
THE REGISTRAR OF TITLES;
MINISTER OF LANDS; and
THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Kavieng: Lenalia J
26 June; 9 August 2002

LAND LAW – Lease – State Lease – Grant of Leases - Transfer of titles –– Payment made for transfer of titles – Purchaser – Unilateral transfer of lease from one party to the party not known in the agreement to purchase – Actual purchaser not informed about the transfer – Orders in nature of declarations granted.

lease – Nature of transaction – Intention/Exclusive possession.

Facts

Both plaintiff and defendant are registered entities. The members of the former are the original members of the church whilst those of the defendant are a break away group. Before the split, the plaintiff purchased two blocks of state land from the 2nd defendant, a trading company, and its congregation developed the land. The titles to the properties were secretly and fraudulently transferred from the 2nd defendant, the original Lessee, to the first defendant and registered in its name. The plaintiff claimed inter alia that (1) the transfer of title from the 2nd defendant to the 1st defendant was improper and unlawful; (2) the action of the 3rd defendant, the Registrar of Titles in issuing title to the 1st defendant without ascertaining the correct owner of the leases constituted negligent conduct, and as such was unlawful; (3) the conduct of the 4th Defendant in approving the transfer from the 2nd to the 1st defendant without establishing the true owner was negligent and as such unlawful.

Held

1. A state lease confers on the lessee a right to exclusive possession for a period stated in the lease or the remaining term for which the landlord holds the land.

2. The doctrine of privity means a contract cannot as a general rule confer rights or impose obligations arising under it on any person except the parties to it.

3. The Court is satisfied on the balance of probabilities that the original arrangement was between the plaintiff's agents and servants and the 2nd defendant. The Court therefore would grant all declarations sought.

note: The Court did not discuss the effect of registration (i.e indefeasibility) on the plaintiff's claims.

Other cases cited

Claude Neon Ltd v Melbourne Metropolitan Board of Claude Melbourne metropolitan Board of Works (1969) 43 A.L.J.R. 69.
Dunlop Pnewmatic Tyre Co. Ltd.v Selfridge & Co. Ltd. [1915] UKHL 1; [1915] A.C. 847.
Radaich v Smith [1959] HCA 45; (1959) 101 C.L.R. 209.

Counsel

S Madana, for the plaintiff.
No appearance by or for the defendants.

9 August 2002

Lenalia J. This matter was listed for trial before me on 21st of June at Kavieng this year. The matter was heard in absence of all the five defendants and no lawyer represented anyone of them. After having accepted the affidavit evidence on behalf of the plaintiff and after hearing their lawyer's brief submission, I adjourn generally for my decision after receiving the plaintiff's lawyer's submission. The decision was delivered in Kokopo, ENBP. The following discussion is my judgement.

The plaintiff is a church organization and a registered legal entity having registered under the Companies Act, way back on 16th of July 1969. The first defendant is also a church organization and is a legal entity by its registration on 8 September 1983. The second defendant is a company limited by shares. The third and fourth defendants are agents of the fifth defendant, the Independent State of Papua New Guinea.

The plaintiff purchased and became the lessee of two blocks of land stated as State Leases being allotment numbers 41 and 42 located in Section 33 in the township of Kavieng, New Ireland Province. The plaintiff purchased the two blocks in order for its organization to establish itself. All assets on the property were developed and built by the plaintiff and it's congregation in the Kavieng town. These blocks of land were purchased from the second defendant whom I suppose, although it does not clearly appear from the evidence, was the original lessee.

Somehow the plaintiff, who was supposed to be the lessee of the abovementioned properties, was not afforded the titles for what it had purchased and for reasons only known to the first and second defendants. As it appears and according to all the evidence by the Plaintiff's representatives, the titles were secretly and unilaterally transferred from the former lessee to the first defendant. Pastor David Muap filed an affidavit on 12th March 1999 containing a lengthy summary of how the plaintiff applied for and purchased the two properties. (re annexures to Pr. David's affidavit). There is evidence that the manageress of the second defendant unilaterally arranged for the transfer of the two properties to the First Defendant.

The plaintiff now claims that what the first and second defendant did was wrong in law. The plaintiff, through its agents in Kavieng seek the following declarations:

1. A Declaration that the conduct of the first defendant through its servant Hosea Mina in arranging and effecting the transfers of the titles for the State Leases, allotment 41 and 42 of section 33 in the town of Kavieng from the Second defendant to the first defendant to be improper and without legal basis and as such unlawful.

2. A Declaration that the conduct of the second defendant, through its servant Moya Saunders, in effecting the transfers of the titles for the State Leases, allotments 41 and 42 of Section 33 in the town of Kavieng from the second defendant to the first defendant to be improper and without legal basis and as such unlawful.

3. A Declaration that the conduct of the third defendant in issuing titles for the State Leases Allotment 41 and 42 of Section 33 in the town of Kavieng, and in the name of the first defendant without first ascertaining the proper and correct owner and occupier of the State Leases as constituting negligent conduct and as such unlawful.

4. A declaration that the conduct of the fourth defendant in approving the transfer of the titles for the State Leases, allotment 41 and 42 of section 33 in the town of Kavieng, from the second defendant to the first defendant without first properly establishing who the occupier is and who the true owner should be as constituting negligent conduct and as such unlawful.

5. A declaration that the conduct of the fourth and fifth defendants in failing to prepare and issue the titles for the State Leases, to Allotments 41 and 42 of section 33 in the town of Kavieng, and to the plaintiff and within reasonable time after the land had been sub-divided constituted negligent conduct and as such unlawful.

6. A declaration that the first defendant had no immediate lawful right to possession of the State Leases, on allotments 41 and 42 of section 33 in the town of Kavieng prior to it obtaining titles to the properties.

7. A declaration that the plaintiff had immediate and lawful right of possession of the State Leases, on allotments 41 and 42 of section 33 in the town of Kavieng,and to the exclusion of the whole world and including the first defendant immediately prior to the properties being transferred to the first defendant.

8. An order that the defendants effect the immediate transfer of the properties being allotments 41 and 42 of section 33 in the town of Kavieng, and from the first defendant to the plaintiff.

9. Such other orders, including directions, as this Honourable Court deems appropriate.

The evidence in support of the claim by the plaintiff is overwhelming. After the plaintiff purchased the two properties from the second defendant, one Mrs. Moya Saunders never expedited the titles to the plaintiff. It is not clear from the evidence of the Plaintiff as to when the purchase of the two blocks were made. However, it was submitted on behalf of the plaintiff that the plaintiff had been using the premises for the last twenty or so years.

The evidence contained in the affidavit of Pr. Muap is that the members or followers of the plaintiff in Kavieng raised funds to build the church and other assets upon the two allotments. That back then, Pastor Liuaki Taufa and Pastor Peter lason were former Pastors of the Plaintiff based in Kavieng. They had been pastors providing shepherd care to the Kavieng town church of the plaintiff. It is noted from the evidence that there were disagreements held by Pastors Peter Iason and Liuaki Taufa on one side and the Church Board or executive arm of the laintiff in relation to doctrinal issues which caused a problem and caused a split between them.

Due to the differences in doctrinal beliefs, Pastor Peter Iason and Pastor Liuaki Taufa and a handful of their supporters, or what we might call followers, deserted and aligned themselves with the Associated Mission Churches of Papua New Guinea, which is now the first defendant. According to Pr. David Muap, the members of the Associated Mission Churches of Papua New Guinea in Kavieng were formerly members of the Christian Life Centre. They used to attend church services and conduct other church business together with the members of the plaintiff at the properties in issue and Pastor Peter Iason was formerly a properly appointed Pastor of the Plaintiff.

According to Pastor David Muap, back in 1991 an Australian named Collin Bourne, it is not clear from the evidence if Collin was a Pastor or not, introduced into Papua New Guinea a doctrinal belief. The new doctrine was about being baptised only in the name of Jesus. This new doctrine was introduced in the Duke of York Islands during a Conference held for the New Guinea Islands Pastors of the plaintiff. The new teaching does not recognize and accept the biblical teaching of being baptised in the name of "God the Father, God the Son and God the Holy Spirit."

After the new doctrine was introduced most, if not all, Christian Life Centre Pastors in the New Guinea Islands who attended the Duke of Yorks Conference were re-baptised. Upon return to their respective Churches, they began to teach the new doctrine. It is noted that the above events were taking place in isolation and without the knowledge of the Pastor in General or Chairman of the Christian Life Centre in Port Moresby.

When these issues came to light, Pastor Peter Iason and Pastor Liuaki Taufa were approached by their Waigani counterparts in the hope to give up the new doctrine but to no avail. It appeared that Pastors Peter and Taufa could not heed the admonition issued to them from the Christian Life Centre in Waigani. The result was that out of the 300 Church members who used to attend the plaintiff's Church in Kavieng, only 40 Church members stayed and continued to Worship with the plaintiff in Kavieng. Most members broke away and aligned themselves with the first defendant together with Pastor Peter Iason.

Evidence by the plaintiff's agents and servants suggest that when Peter Iason left he and his group took with them Church official records, financial records, the Church boat and vehicle with the intention of possessing them, together with the assets situated on the two properties that are the subject of this discussion. The plaintiff's vehicle and boat were returned with assistance from the police in Kavieng. Despite this, all other Church records and official receipts were either destroyed or withheld by Pr. Peter Iason. He is also suspected of having misappropriated a large amount of money belonging to the Plaintiff.

Although it does not clearly appear from the evidence how the arrangement to transfer the leases was effected, it would appear that after leaving the plaintiff's organization, Pastors Peter Iason and Luaki Taufa secretly approached Mr. Hosea Mina of the first defendant's Office in Rabaul, whom the Court takes to be somebody holding a responsible, senior or influential position in the management of the first defendant. It is not clear from the total evidence what post Mr. Mina actually holds.

As far back as 9 November 1993, some nine years ago, Pr. David Muap, the then Chairman of the Christian Life Centre (PNG) Inc., wrote to Mr. Kila Launa, the then Regional Lands Officer with the Department of Lands and Physical Planning at the Moresby Head office, requesting that allotments 41 and 42 located in section 33 in the town of Kavieng were to be registered under the name "Christian Life Centre (PNG) Inc." and not under any other name, not even under "Christian Life Centre Kavieng." The concern then was that because the Kavieng Church was the agency of the Christian Life Centre (PNG), (see Ann. "H"), it should be registered under the National Body which in law has capacity to sue and be sued and may own property of its own.

Pastor Muap followed up with a letter to the second defendant requesting certain information be made available to them about the titles and transfer, because despite the purchase being made sometime back, the Plaintiff had not received the titles as yet. Following this, a lot of correspondences were effected between the parties and their lawyers, including the plaintiff's former lawyer Mr. Mane Isana. In fact Pr. Muap wrote to Mr. Mina of the first defendant, then to the second defendant's administration and even their lawyers. In an attempt to answer queries raised by Pr. Muap and their former lawyer, Mrs. Moya Saunders, the Manageress of the second defendant explained to Mr. Isana that, the titles were with their lawyers in Rabaul, Warner Shand Lawyers.

It is evident that the transfer was effected unilateraly by the first and second defendants. This may explain the long delay in processing the titles in favour of the plaintiff. Mrs. Saunders, at the initial stages of the plaintiff agents enquires, did or could not have the courtesy to inform the plaintiff's agents and servants of the whereabouts of the titles, but instead contacted Mr. Hosea Mina and Mr. John Reeves of Warner Shand Lawyers in Rabaul. Mrs. Saunders, in an undated letter to Mr. Mina, suggested that she agreed with Pastor Peter Iason about the two properties being purchased by the Kavieng congregation but not the National Body, which I take to be the Christian Life Centre (PNG), and she even suggested that the titles would be processed and eventually transferred to the first defendant.

Not until 6 May in 1998 did Mrs. Saunders write to the plaintiff's former lawyers advising that the titles had been processed in the name of the first defendant and, as well, that such titles were in the hands of Mr. John Reeves, in Warner Shand Lawyers office in Rabaul.

From all correspondence by the agents and servants of the second defendant, it appears that, Mrs. Moya Saunders had been properly briefed by either Mr. Mina or Pastor Peter Iason about the secret arrangement they were engaged in to unilaterally transfer the two leases to the first defendant. It appeared that Mrs. Saunders was of the view that because the National Body did not raise the money to erect the assets being affixed to the two blocks they should be transferred to the first defendant.

These were state leases and subject to the conveyancing practice adopted pursuant to the Land Act of 1996 Ch. No. 45. All the land in the country falls under two basic land tenure systems. They are the un-alienated land owned and controlled by customary ownership and alienated land. The subject of s 5 of the Land Act is acquisition of land by Declaration by the Minister of Lands and the privately owned freeholds. In any event, the state leases on the two allotments 41 and 42, on section 33 were and are the subject of Mission Leases granted by the State pursuant to ss 96, 97 and 98 of the Land Act.

It is not really clear from the evidence how and why Mrs. Saunders came into the picture in this deal but be that as it may mission leases are granted for a term not exceeding 99 years and no rent fees are payable. It is rather unfortunate to find that there is no copy of the lease agreement nor is there a copy of the transfer to determine the issues of transfer and the terms of the lease. The Court is assuming that such documents are in the possession of the first defendant. There is overwhelming evidence that despite repeated request by correspondence from the plaintiff servants to Mrs. Saunders, of the second defendant, the first defendant's agents and even the third and fourth defendants, were quite negligent in performing their administrative responsibilities as required of them by the law, more particularly in terms of dealing with these leases and their transfer. I find there were no honest and open dealing by the servants and agents of the first and second defendants.

Evidence led in favour of the plaintiff establishes that there was clearly a split between one group of people who were originally followers and church members of the plaintiff's organization. Only a handful (40) of members chosed to remain with the plaintiff's organization out of the 300 or so members. Those who left the umbrella of the plaintiff, and apparently aligned themselves with the first defendant, may have thought it right to take possession of the two properties. Looking at the manner of secret arrangements effected to have the leases transferred to the first defendant, I must conclude that such deal was unilaterally effected by the first, second and third defendants without first giving notice to the plaintiff's agents and servants.

Under the Land Act, where a State lease is created or granted, a relationship of landlord and tennant's created. Such a lease confers upon the tenant or lessee, the right to exclusive possession for the period stated on the leases, as is the case with State Leases and in other cases for a period less than that for which the landlord holds the land. A lease therefore confers on the tenant the right to exclude all persons from the "demised" premises, by way of contrast a licensee who is a person to whom permission is granted to use such land confers no such right: (see "Introduction to Land" by Peter Butt at 90-93).

Though it is not so clear from the evidence, and it was not pressed in submission, if Peter Iason was allowed to build a house for himself on this church property, my view is he would be a licensee having no right whatsoever to be there and the Plaintiff has the right to evict him from the Church premises.

In the absence of evidence from the five defendants,coupled with the absence of the lease documents, the job of determining the terms of the lease becomes a mammoth task for the Court to disentangle. For these reasons, the task of deciding the terms of the leases must now be gained by reference to the parties original intentions and their subsequent conducts. Even that, the relationship of the parties,should be determined by the law and not by the label they choose to put on it: Radaich v Smith [1959] HCA 45; (1959) 101 C.L.R. 209.

The intention of the parties is a relevant consideration in the sense that whether the transaction created a lease or licence depends upon the nature of the right which the parties intended to confer upon the person entering the land or the lessee, but once it is established that this right was intended to be the legal right to exclusive possession as distinct from a mere and sole occupation in fact a leasehold interest is created: Claude Neon Ltd v Melbourne and Metropolitan Board of Work [1969] 43 A.L.J.R. 69 at 71.

Looking at the original intention of the parties to this action, it is clear the plaintiff and its original members,prior to the split were purchase some land to establish a centre for themselves. In the early eighties they purchased the two blocks of land from Mrs. Saunders. The plaintiff and its members have used the premises for over 20 years now. The first defendant came into the picture after there had been a split between certain members who cherished a different doctrinal issue in relation to the doctrine that a person should only be baptised in the name of Jesus. The minority group decided to follow the original teaching that on baptism, a church member should be baptised both in the name of God the Father, the Son and the Holy Ghost.

In the law of contract, a contract creates rights and obligations only between the parties to it. A contract does not confer rights on a stranger nor does it impose any obligations on the same. It is a fundamental principle of common law, that no person can sue or be sued on a contract unless he or she is a party to it: Dunlop Pneumatic Tyre Co Lt.v Selfridge & Co. Ltd. [1915] UKHL 1; [1915] AC 847. The doctrine of privity means a contract cannot as a general rule confer rights or impose obligations arising under it on any person except the parties to it.

The question I pose here is, who were the parties to the lease agreement in the instant claim? I may simply answer this by saying that the parties to the agreement were the persons from whose communication with each other the agreement has resulted. This principle does not include cases involving collateral contracts. There may be complicated contract cases involving collateral agreements, which affect the same subject matter.

Mrs. Saunders wrote two undated letters to Mr. Mina and Mr. Reeves. The wording of the one to Mr. Mina was in the following terms.

"Dear Sir,

Roger has handed me your letter regarding the land purchased by Pastor Peter Iason and his congregation.

I am in full agreement that this land was purchased by the Kavieng group and not the National Board. (emphasis added)

From my records it would appear that these Titles are with a law firm in Port Moresby and I will write to them requesting they be forwarded to John Reeves in Rabaul for transfer to the Associated Mission Churches of Papua New Guinea.

Following is a letter received yesterday from C.L.C.

Yours faithfully

M. Saunders." (Signed).

The wording of the letter to Mr. Reeves says:

"Dear John,

Last October, I received the attached letter from Hosea Mina of Rabaul, concerning land purchased some years ago.

I now have the titles in my possession and am anxious to get them to the rightful persons. I agree with Hosea that the local group raised the money for the purchase, not the National Board, and should be transferred accordingly. (emphases added).

Please confirm that you are acting for the "Associated Mission Churches of Papua New Guinea." and I will forward the titles and signed transfers to you for registration on their behalf.

Yours faithfully,

M. Saunder" (signed).

From the tone of the above two letters, anyone reading them would immediately come to the conclusion that when Mrs. Saunders made reference to Pastor Peter Iason arranging for the transfer of the two leases, she was referring to the same in his capacity as a break-away leader of the former CLC members who disassociated themselves from the plaintiff. The underlined phrases of the two letters in terms of "the National Board" is in my view referring to none other than the plaintiff and it's servants prior to the split caused by differences in doctrinal beliefs. From all evidence, I am satisfied on the balance of probabilities that the original arrangement was between the plaintiff's agents and servants and it follows that the Court must grant all declaration sought in their originating summons.

The Court orders the first and second defendants to meet all the costs of these proceedings.

Lawyer for the plaintiff: Madana Lawyers.
Lawyer for the first and second defendants: Nil.
Lawyer for the third, fourth and fifth defendants: Nil.