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Southern Highlands Provincial Government v National Housing Corporation [2001] PGNC 104; N2110 (18 June 2001)

N2110
PAPUA NEW GUINEA


[IN THE NATIONAL COURT OF JUSTICE]


OS NO. 91 OF 2001


BETWEEN:


SOUTHERN HIGHLANDS PROVINCIAL GOVERNMENT

Plaintiff/Applicant


AND:


NATIONAL HOUSING CORPORATION

Defendant/Respondent


Mt Hagen: Davani,J
2001: 18 May & 18 June 2001


PRACTICE AND PROCEDURE – Plaintiffs application for restraining orders against Defendant will not succeed as Defendant as registered proprietor has indefeasible title to property, exceptions referred to in s.33(1)(a-i) of Land Registration Act, not proven – Plaintiff must specifically plead aspects of illegality in the Statement of Claim to show that it has a legal right or interest in or over a matter – National Court Rules 0.8 r.14, Land Registration Act s.33(1)(a-i).


Cases Cited:
Employers Federation of Papua New Guinea Waterside Workers & Seamens Union & Lawrence Titimur & Ors (N393 11 October 1993);

Craftworks Niugini Pty Ltd v Allan Mott (SC525 27 June 1997);

JT Stratford & Son Limited v Lindley [1964] 3 All ER 102;

American Cyanamid Co. v Ethicon Ltd [1975] UKHL 1; [1975] AC 396;

National Housing Corporation v Yama Security Services Pty Limited N1985;

Robinson v National Airlines Commission [1983] PNGLR 476;

Phillips v Phillips [1878] UKLawRpKQB 96; [1878] 4 QBD, 127;

Paul John v Gerd Lindhardt and Serricom Pty Ltd N1938;

Bruce v Oldhams Press Ltd [1936] 3 All ER 287;
Haro Yamis v Viviso Seravao, Minister for Landsand Ors, unnumbered and unreported judgment of 9th November 1988.


Counsel:
J. Nandape for the Plaintiff/Applicant
H. Kapal for the Defendant/Respondent


18 June 2001


DECISION
(Interlocutory Application)


DAVANI, J: This is an application by the Plaintiff government seeking various interim orders. It’s Notice of Motion filed on 20 February, 2001 reads:


"1. An order restraining the Defendant on its servants or agents from having any further dealings or selling or assigning of any interest over State houses described as Ex Army Houses located in the township of Mendi, Southern Highlands Province to former landowners or anybody until the substantive matter in this application is heard.


  1. An interim order restraining the former landowner or any body who is not an employee of the State from occupying State Houses described as Ex Army Houses located in the township of Mendi, Southern Highlands Province.
  2. An order that the time limited for service of this Notice of Motion pursuant to the Rules of this Honourable Court be abridged and that such provision of such rules as would prevent the orders sought otherwise being made dispensed with.
  3. Such further or other orders as this Honourable Court considers fit.
  4. Costs be in the cause."

By the Plaintiffs originating summons filed on 20 February 2001, it seeks the same restraining orders as pleaded in paragraph 1 of the Notice of Motion and other Declaratory orders in relation to the Ex Army Houses.


The Plaintiff and the Defendant (‘Applicant’ and ‘Respondent’ respectively) have each filed written submissions.


The Respondent filed Notice of Intention to Defend on 8 March 2001. It also filed an affidavit in response to the Applicants affidavits, that of Paul Asukasa sworn on 7 March 2001 and on


The Applicant, in support of its application, filed the affidavit of Mathew Tamutai sworn on 20 February 2001 and the affidavit of Hosea John sworn on 15 February 2001.


Facts

It appears from the affidavit before the court that the undisputed facts are that:


  1. The Australian Defence Force (‘ADF’) whilst based in Mendi in the Southern Highlands Province (‘SHP’), had built 15 houses for their personnel to reside in.
  2. On the 28th September 1999, the ADF, on completion of its project in the Southern Highlands, by a Deed of Grant of the same date, "returned the land to the Independent State of Papua New Guinea through its statutory agent the National Housing Corporation (‘NHC’) and

"........ assigned the Property to the NHC by way of grant".


  1. The Land(s) in question are;

On 2 December 1999, the Defendant executed Memorandum of Understanding with the Susumba Association where it agreed to sell the association four (4) of the houses located on the Susumba customary land.


On 16 February 2001, the Defendant executed another Memorandum of Understanding with the Murumbu Association where it agreed to sell three (3) of the six (6) houses located on the Murumbu customary land.


These properties were:

- Section 24 Lot 3 Military Road Mendi

- Section 24 Lot 5 Military Road Mendi

- Section 24 Lot 9 Military Road Mendi


- Section 4 Lot 3 Sappers Road Mendi

- Section 4 Lot 9 Sappers Road Mendi


Application before me


The Applicant government argues that by s.30 of the Organic Law on Provincial and Local Level Government, (‘OLP & LLG), the provincial administrator shall carry out the roles and functions of the National Departments and agencies. The Applicant argues that the NHC has breached these provisions by failing to involve the SHP in its dealings with the land in question.


The Applicant further argues that by virtue of s.68 of the National Housing Corporation Act No. 6 of 1990, (‘NHC’) the purpose of the NHC is a public purposes and as such it should be serving the needs of the public rather than a select few. Ms Nadape for the Applicant argues that there is the dire need for housing in the Southern Highlands province for the public.


The Applicant argues that these are serious issues to be determined and that the balance of convenience is such that an interim order should be granted restraining the Defendant or its servants or agents in the term requested.


The Applicant also requests that the restraining orders should also extend to the landowners and privately employed people who now occupy the houses and that if the trend is to continue, then the occupants will be led to believe that they have unconditional rights to continue to reside in these houses.


The Respondent on the other hand relies on ss.6(1) of, 28(1)(c) and 30 of the NHC Act and submits respectively that;


"The corporation may acquire, hold and dispose property"

"Subject to the Act, the function of the Corporation are to sell houses to illegible persons".


"The Corporation may do all things that re necessary or convenient to be done for or in connection with the performance of its function".


The Respondent submits that the Deed of Grant empowers the National Housing Corporation to conduct dealings on the land(s) in question, as they have effectively been re-transferred by the ADF to the NHC.


In relation to the motions before me grounds 1 and 2 will be discussed together.


Ground No.1 - Applicant seeks orders restraining the Respondent from dealing with the ADF houses more specifically dealings with the landowners, until the substantive matter is dealt with.


Ground No. 2 - The Applicant seeks orders restraining the former landowners or others not employees of the state from occupying the ADF Houses.


The law on interim injunctions is settled in Papua New Guinea. An applicant for an interim injunction must satisfy the court on a number of matters before the court grants an interim injunction.


The relevant principles, since the House of Lord’s decision in JT Stratford & Son Limited v. Lindley [1964] 3 All ER 102; are laid down in American Cyanamid Co. v. Ethicon Ltd [1975] UKHL 1; [1975] AC 396; which has been adopted as part of the underlying law in this jurisdiction. These principles are set out by Kapi, DCJ in Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers & Seamens Union & Lawrence Titimur & Ors (N.393, 11th October, 1993, unreported). The Supreme Court in Craftswork Niugini Pty Ltd v. Allan Mott, (SC525, 27th June, 1997, unreported) cited the same principles. His Honour Sevua, J in his judgement Haro Yamis v. Viviso Seravo, Minister for Lands & Ors, (WS 713/98, unreported, unnumbered, 9th November, 1998) also reaffirmed those principles.


In JT Stratford (supra) the House of Lords stated the principle to be that, an applicant seeking an interlocutory injunction must establish a prima facie case. However, the House of Lords reconsidered that principle and expanded on it in American Cyanamid (supra) and since then, the principles have had a good reception in this jurisdiction. Apart from Craftwords Niugini Pty Ltd (supra), the following are some of the cases soon after Independence where these principles were adopted: Norah Mairi v. Alkan Tololo & Ors [1976] PNGLR 59; Mt Hagen Airport Pty Ltd v. Gibbes & Anor [1976] PNGLR 216; Mauga Logging Company Ltd v. South Pacific Oil Palm [1977] PNG LR 80.


The principles established in Employers Federation of Papua New Guinea (supra) are:


"1. Is there action not frivolous or vexatious?

Is there a serious question to be tried?

Is there a real prospect that the applicant will succeed in the claim for an injunction at the trial?


All these questions laid down the same test. See Smith v. Inner London Education Authority [1978] 1 All ER 411 at 419.


  1. The Court must then consider whether the balance of convenience lies in favour of granting or refusing interlocutory relief.
  2. As to the balance of convenience, the Court should first consider whether if the applicant succeeds, he would be adequately compensated by damages for the loss sustained between the application and the trial, in which case no interlocutory injunction should normally be granted.
  3. If damages would not provide an adequate remedy, the Court should then consider whether if the applicant fails, the defendant would be adequately compensated under the applicant’s undertaking in damages, in which case there would be no reasons on this ground to refuse an interlocutory injunction.
  4. Then one goes on to consider all other matters relevant to the balance of convenience, an important factor in the balance should, other things being even, preserve the status quo; and
  5. When all other things are equal, it may be proper to take into account in tipping the balance the relative strength of each party’s case as reviewed by the evidence before the Court hearing the interlocutory application".

Having stated the law, I will now consider the plaintiff’s application.


Firstly, I have already adverted to the remedies the plaintiff is seeking in this action which includes a claim for an injunction.


It is trite law that a party is not entitled to a remedy he has not pleaded in his claim. In this case, the plaintiff has pleaded an injunction as being one of its reliefs.


Does the applicant have a legitimate claim, which raises a serious question to be tried? As Sevua, J. stated in the National Housing Corporation v. Yama Security Services Pty Limited N1985 pg 6, "the Applicants evidence at the hearing of his application must disclose material facts that he has a real prospect for succeeding in his claim for an injunction at the trial. The Court must be satisfied that the claim is not frivolous or vexatious" This was succinctly stated in Robinson v. National Airlines Commission [1983] PNGLR 476 at 480 where Andrew J stated;


"What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success and that he has property or other interests which might be jeopardized if no interlocutory relief were granted. Then it becomes a matter of seeing if, in all the circumstances of the case, the court should nonetheless exercise its discretion by declining to issue an interlocutory injunction."


The Applicants originating summons pleads the reliefs sought and for the application before us, the two reliefs stated earlier.


In relation to evidence before the Court, the Affidavit of Mathew Tamutai, the principal of Tamutai Lawyers, refers to instructions he received from his client, the Applicant’s representatives. That is not direct evidence and contains material that is hearsay. e.g. paragraph 3 of his Affidavit;


"3 The Administrator has raised concern that the National Housing Corporation is disposing State Houses described as Ex Army Houses in Mendi when it is supposed to be involved in residential development for State Employees".


I would have preferred affidavit from the Applicant’s representative to reaffirm that statement. The other Affidavit filed for the Applicant is that of Hosea John, the Applicant’s Deputy Provincial Administrator, Affidavit dated 15th February 2001. In that Affidavit, Mr John refers to a meeting to be held in Lae to discuss the disposal of the ADF houses. The Plaintiff was invited by the Defendant to attend this meeting. This letter which is attached to Mr Tamutai’s Affidavit as Annexure ‘B’ states;


"The subject meeting is scheduled to be held in Lae form 13th – 15th February 2001 purposely to deliberate on the allocation of the ex army houses care taken by the land owners. I suggest your office to make prior arrangements to meet NHC officials to negotiate on the allocation of some houses to the Southern Highlands Provincial Government. I have had few meetings with Mr Wilfred Arikapu and Mr Barclay Tenza form your office and the are aware of the issues."


I do not know if the Plaintiffs representatives attended the meeting as the both parties have not presented evidence to confirm this. It may be that if the Plaintiff’s representatives had attended the meeting, that would have put to rest the fears they raised that landowners may forcefully seize state houses and land. I don know as I was not addressed on this aspect by both parties.


I must exercise care and caution here as issues posed in the Plaintiffs lawyers written submissions and Mr Hosea’s evidence that landowners may seize other properties, is only speculation.


There is no evidence before me that there is a serious of questions to be tried. If as submitted by the Plaintiff, the functions of the Defendant Corporation, shall fall on the Provincial Administrator (re s.74(1)(e) of OLPG & LG), then this aspect is not pleaded. O 8 R 14 of the National Court Rules states clearly that the party pleading shall plead specifically, in this case,


"........ any fact showing illegality;


(a) which he alleges makes any claim, defence or other case not maintainable"

The Defendant has not pleaded. In fact, the Plaintiff’s submissions on this aspect have taken the Defendant ‘by surprise’. In the case Phillips v. Phillips [1878] 4QBD 127, p139, relied on by Sakora J in Paul John v. Gerd Lindhardt and Serricom Pty Ltd N1938, Lord Justice Cotton said;


"In my opinion it is absolutely essential that the pleading not be too embarrassing to the Defendants, should state those facts which will put the Defendants on their guard and tell them what they have to meet when the case comes on for trial".


Lord Justice Scott in Bruce v. Oldhams Press Ltd [1936] 3 All E R 287 at p.249 also said; (and relied on by Sakora J in the Paul John case);


".... Necessary for the purpose of formulating a complete cause of action, and if any one "material" statement is omitted, the statement of claim is bad".


Clearly the plaintiff has not shown in its pleadings what serious question there is to be tried, as he has not pleaded these matters.


The claim is also frivolous and vexatious in that not only is it not properly pleaded, but that it does not have or demonstrate a legitimate claim or at all.


Furthermore, the Respondent has shown in evidence before me that it has title to the said properties.


This is deposed to in Paul Asukasa’s Affidavit of 7 March 2000. Mr Asukasa has attached to his affidavit copy of a Deed of Grant from the ADF to the Defendant, that I alluded too earlier. The Deed of Grant states;


"1. The ADF on behalf of the commonwealth of Australia will return the land to the Independent State of Papua New Guinea through its statutory agent, the NHC.


  1. The ADF on behalf of the Government of Australia will assign the property to the NHC by way of grant.
  2. NHC accepts unconditionally the aforesaid grant to the full value of the Property in the full understanding that the Property is granted in its state of repair on the date of assignment being the date of this Deed;...
  3. NHC will after the aforesaid grant, deal with the Property in accordance with the National Housing Corporation Act, and further complete at its cost any formal documentation if necessary pursuant to the Land Registration Act ...."

The Defendant submits it has done the correct thing by the NHC Act and the Deed. It argues that pursuant to s.6(1), of the NHC Act, it can "...Acquire, hold and dispose of property".


Also attached to Mr Asukasa’s Affidavit are copies of State Leases for 99 years from 15 June 1995 to 14 June 2004 for properties;


These State leases are all in the Defendants name as Lessee.


Annexure C to Mr Asukasa’s affidavit is a copy of the National Gazette No. G11 dated 10th February 2000 confirming declaration of Land grant of leases under ss.111 and 113 of the Land Act. The properties in question are the eight (8) properties not mentioned above and that are the subject of these proceedings.


Section 111 of the Land Act is contained in Part X1 of that Act which deals with "Grant of State Leases of improved government land to the National Housing Corporation" states;


"The Minister may, by notice in the National Gazette, declare Government improved residential land to be land to which this part applies"


s.113 states:


"S.113 Minister may grant lease.


The Minister may, in respect of land to which this part applies, grant a lease to the National Housing Corporation on such conditions as he thinks proper".


So the then Minister for Lands, relying on the above provisions granted the leases to the Defendant.


The State leases are registered under the provisions of the Land Registration Act Chapter 191. The lessee has indefeasible title as the registered proprietor (re: Mudge v. Secretary for Lands & The State [1985] PNGLR 387), thus confirming that the Defendant has indefeasibility of title. This has not been swayed by any evidence at all to show the existence of the exceptions referred to in S.33(1)(a-i ) of the Land Registration Act. This is the provision that protects Registered proprietors, that a registered proprietor of an estate holds it free from all encumbrances (my stress) except for the exceptions referred to therein. I will not discuss these exceptions, as they are not applicable thereby being irrelevant.


From all the evidence before me I am unable to find that the Plaintiff has a valid claim at law. I have only been furnished with assumptions and speculations.


The Plaintiff has a speculative case for reasons I have alluded to. As Andrew J stated in Robinson v. National Airline Commission [1983] PNGLR 476 at 480;


"What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success and that he has property interests which might be jeopardized if no interlocutory relief were granted. (my stress).


I find therefore that the Plaintiff has not established that there is a serious question to be tried or that it has property interests that might be jeopardized to warrant the granting of the injunction.


I will now discuss the last component being the hardship and balance of convenience. Relying on the evidence before me and the principles enunciated in the Employers Federation of Papua New Guinea (supra), obviously, the balance of convenience does not favour the granting of the injunction, in view of the fact that the Defendant has indefeasibility of title in the properties the subject of these proceedings and further, that the Plaintiff has not shown or demonstrated a cause of action, at all, that it has a serious, not a speculative case that has a real possibility of ultimate success and that it has property interests that might be jeopardized unless interlocutory relief were granted.


The Plaintiff has not shown a legal right or interest by his pleadings and Affidavits filed. As Sevua J stated in Haro Yamis v. Viviso Seravao, Minister for Lands and ors, unnumbered and unreported judgement of 9th November 1988 at pg 4:


"An Applicant must have a legal right or interest in or over a matter, the subject of a suit, which he seeks to protect by injunctive relief".


For the Plaintiff, that right or interest is nonexistent. He has not shown the rights or interests that must be protected. These are properties owned by the defendant who will deal with them as it sees fit according to the terms of the Deed of Grant and which it has now done by entering into the Memorandum of Understanding with the two customary land groups.


If the Plaintiff is concerned about the manner in which the houses have been and are being allocated, then I will go so far as to suggest that they file the correct originating process and to commence negotiations with the Defendant as to how they can assist in this venture.


I will refuse all the orders sought and will also dismiss the originating summons.


I also order that the Plaintiff pay the Defendants party/party costs of the application to be taxed if not agreed upon.
_________________________________________________________________________
Lawyers for the Plaintiff: National Housing Corporation (In house lawyer)
Lawyers for the Defendant: Tamutai Lawyers


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