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Topalakai v Tovot [2010] PGNC 114; N4106 (9 April 2010)

N4106

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS NO 351 OF 2009

LOUIS TOKIVOVON TOPALAKAI
Plaintiff

V

DANIEL TOVOT
Defendant

Kimbe: Cannings J
2009: 15 September,
2010: 9 April

JUDGMENT

LAND – claim by registered proprietor for possession of land against person who has occupied it with permission of registered proprietor for 30 years – whether registered proprietor agreed to transfer the land to occupant.

The registered proprietor of a State Lease was absent from the land for 30 years. In his absence he permitted another person to occupy it. When the registered proprietor returned, he asked the occupier to leave but he refused, saying that his father had purchased the land from the registered proprietor 30 years ago. There was circumstantial evidence of a transfer taking place but no formal instrument of transfer was in evidence and the certificate of title did not show any transfer.

Held:

(1) Under the principle of indefeasibility of title enshrined in Section 33 of the Land Registration Act, the registered proprietor of a State Lease holds it "absolutely free of all encumbrances" subject to limited exceptions, including in the case of fraud and encumbrances notified by entry or memorial on the relevant folio of the Register of Titles.

(2) Here, no encumbrances were on the relevant title and the absence of such encumbrances was not due to fraud.

(3) The plaintiff, being the registered proprietor, has unencumbered title to the land and it was appropriate to grant a declaration to that effect and to order that the defendant give up vacant possession to him.

Cases cited

The following cases are cited in the judgment:

Elizabeth Kanari v Augustine Wiakar (2009) N3589
Leonard Gaua v Joe & Theresia Amir (2010) N3891
Mudge v Secretary for Lands [1985] PNGLR 387
Pius Koroguen v Christine Wagen (2008) N3422

ORIGINATING SUMMONS

This was an originating summons in which the plaintiff sought declarations and orders to enforce his interest in land.

Counsel

L T Topalakai, the plaintiff, in person
D Kari, for the defendant

9 April, 2010

1. CANNINGS J: This case is about a dispute over ownership and possession of a block of land in the Tamba oil palm settlement near Kimbe. The block is formally described as Portion 569, Milinch Megigi, Fourmil Talasea. It is 6.2 hectares in area. The land is the subject of a State Lease, an agricultural lease, Volume 41, Folio 33.

2. The registered proprietor of the block is the plaintiff, a Tolai man, Louis Tokivovon Topalakai. He became the registered proprietor – the lessee – on 24 April 1968 and has remained so ever since. In the early 1970s he moved on to the block and planted 3.2 hectares of oil palm. He was a schoolteacher at the time. In 1979 he went back to East New Britain to do further teaching training and ended up working there for almost 30 years. Before he left the block, he arranged to leave it in the hands of another Tolai man, Arthur Oliver Tovot.

3. What exactly the nature of the arrangement with Mr Tovot was, is a matter of great contention. Mr Topalakai says that it was an oral benefit sharing agreement and that Mr Tovot was only a caretaker. Mr Tovot was allowed to live on the block and sell the oil palm in return for sending some money periodically to Mr Topalakai. On the other hand, Mr Tovot's son – the defendant, Daniel Tovot (Mr Tovot senior having died in 1999) – says that his father actually purchased the block from Mr Topalakai in 1979.

4. Whatever the nature of the arrangement, the fact is that the Tovot family has been living on and working the block for almost 30 years without interruption by the plaintiff. Upon his retirement as a teacher, Mr Topalakai returned from East New Britain in 2008. He asked the defendant to leave but he refused, saying that his father had purchased the land from Mr Topalakai 28 years ago. The Provincial Administrator at one stage in 2008 issued a notice to quit under Section 145 of the Land Act against the defendant but the defendant failed to comply with that also.

5. Mr Topalakai has therefore brought the matter to the National Court seeking a declaration that he is the owner of the land and an order that the defendant give up vacant possession to him.

ISSUES

1. What arrangement was made in 1979 between Mr Topalakai and Mr Tovot Senior?
   
2. Does the principle of indefeasibility of title apply in Mr Topalakai's favour?
   
3. What orders should the court make?
   

1 WHAT ARRANGEMENT WAS MADE IN 1979 BETWEEN MR TOPALAKAI AND MR TOVOT SENIOR?

6. Mr Kari, for the defendant, refers to two documents that are in evidence, dated December 1979 and January 1980, that indicate that Mr Topalakai entered into an agreement with Mr Tovot Senior to transfer (ie sell) the block to Mr Tovot Senior.

7. The December 1979 document is a pro-forma document prepared by the Department of West New Britain headed 'Information Required for Preparation of Transfer'. It describes the block and it names Mr Topalakai as transferor and Mr Tovot Senior as transferee. The consideration to be received by the transferee is "cash sale K3,500.00". As for the transferor's reason for selling, it is shown as "finds it hard to work and develop the portion as he is a teacher". It indicates that stamp duties, registration and legal fees, totalling K36.50, were paid at BMS Kimbe on 20 December 1979.

8. The January 1980 document is a letter from New Britain Palm Oil Development Ltd to Harrisons & Crosfied (PNG) Ltd, on the subject of 'land transfers', which states:

The attached transfer preparation advices [including the December 1979 document referred to above] have been received from the Department of West New Britain. Provided no advice is received to the contrary from any addressee of this letter [a cc was addressed to seven other recipients] within two weeks, we shall amend our records and commence paying the transferee.

9. Mr Kari points out that Mr Topalakai agreed in evidence that he received K3,500.00 from Mr Tovot Senior in 1979-80 and submits that this could only have been intended as the purchase price for the block, as that is the amount shown on the Department of West New Britain form as being the consideration to be received by the transferee.

10. These are valid arguments but I consider that the evidence falls short of demonstrating that, in fact, Mr Topalakai and Mr Tovot Senior entered into an agreement to transfer the block. Perhaps that was Mr Tovot Senior's genuine understanding of the arrangement and perhaps that was the impression given to the relevant authorities at the time. But against that is the sworn evidence of Mr Topalakai that he did not agree to transfer the block to Mr Tovot Senior, that he only allowed him to occupy the block as a caretaker and that the money he received was part of the benefit sharing agreement that they had entered into and did not represent the proceeds of sale of the block. Furthermore, there is no evidence that the block was transferred. No instrument of transfer is in evidence and it must be presumed from this that none was ever executed. The defendant said in his sworn testimony that he had sighted an instrument of transfer at the Lands Office in Kimbe but if that was really the case why is it not in evidence?

11. I conclude that the plaintiff has established on the balance of probabilities that he did not transfer the block to Mr Tovot Senior in 1979-1980 or at any other time. They had a benefit sharing agreement, that is all, which allowed Mr Tovot Senior and his family and descendants, including his son, Daniel Tovot, permissive occupancy of the block.

2 DOES THE PRINCIPLE OF INDEFEASIBILITY OF TITLE APPLY IN MR TOPALAKAI'S FAVOUR?

12. Papua New Guinea has adopted a Torrens Title system of land registration for alienated government land. We apply the principle of indefeasibility of title. Registration of leases vests an indefeasible (unforfeitable) title in the registered proprietor subject only to the exceptions in Section 33(1) of the Land Registration Act (Mudge v Secretary for Lands [1985] PNGLR 387).

13. Section 33(1) (protection of registered proprietor) of the Land Registration Act, relevantly states:

The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except -

(a) in the case of fraud; and

(b) the encumbrances notified by entry or memorial on the relevant folio of the Register.

14. There are other exceptions (in paragraphs (c) to (i)) but none are relevant here. The only ones that have any chance of applying are (a) and (b).

15. As to (a) – fraud – there are two schools of judicial thought about what has to be shown to prove a case of fraud (Elizabeth Kanari v Augustine Wiakar (2009) N3589). Even if the wide view of fraud were taken – it includes irregularities that are tantamount to fraud and constructive fraud – the defendant has not adduced any evidence to show that, though the block was sold to his father somehow, by some irregularity, the transfer was not registered by the Registrar of Titles. So the exception in Section 33(1)(a) does not apply.

16. As to (b) – encumbrances – none appear on the official copy of the State Lease (the 'certificate of title') that has been admitted into evidence. The only encumbrance recorded since the title was issued in 1968 is a mortgage to the Papua and New Guinea Development Bank. It was registered on 7 January 1971 and discharged on 27 January 1977. The exception in Section 33(1)(b) does not apply.

17. As there is no evidence of fraud and no existing encumbrances on the relevant folio of the Register, Mr Topalakai is protected by the principle of indefeasibility. He holds Portion 569 absolutely free of all encumbrances. Neither the defendant, Mr Daniel Tovot, nor any person other than Mr Topalakai has any legal interest in the land.

3 WHAT ORDERS SHOULD THE COURT MAKE?

18. As Mr Topalakai is the registered proprietor, with unencumbered title to the land, the Court should grant a declaration to that effect and order that the defendant give up vacant possession to him.

19. Mr Tovot might feel that this is unfair as he and his father and other family members have by all accounts been working the block for 30 years. They feel that they have worked hard and improved the block and, after all, it has been like a home for them for a very long time. But the law is clear. This is not customary land, where the courts can take into account how custom operates and makes a decision on who deserves the land or who should be allowed to own it. This is alienated Government land, covered by a State Lease. Special laws apply. Changes in ownership must be formally recorded under laws such as the Land Act and the Land Registration Act. The Courts are obliged to enforce these laws rather strictly. If we do not, there will be chaos.

20. Having said that, if Mr Tovot feels hard done by, he could perhaps consider filing an unjust enrichment claim against Mr Topalakai. The law recognises that someone who has occupied and improved land without any legal right of occupation might be able to sustain a claim against the owner of the land who allowed them to stay there for a long time before requiring them to leave (Pius Koroguen v Christine Wagen (2008) N3422, Leonard Gaua v Joe & Theresia Amir (2010) N3891).

21. As to the date on which the Court's order will come into effect, I will allow a grace period of one month.

22. Costs normally 'follow the event', ie the party that loses a case has to pay the costs of the winning party. But this is always a matter of discretion. In view of the nature of this dispute and the circumstances of the case, I will order that the parties bear their own costs.

ORDERS

(1) The registered proprietor of Portion 569, Milinch Megigi, Fourmil Talasea, State Lease, Volume 41, Folio 33 – "the land" – is Louis Tokivovon Topalakai.

(2) The defendant, Daniel Tovot, and all his family, agents, servants and all other associates, shall, on or before 9 May vacate the land and give up peaceful possession of the land to the plaintiff, Louis Tokivovon Topalakai, and shall not prior to that date or at any other time damage or destroy oil palm or any other crops or any other property of economic value on the land, including any dwellings or other structures and shall not after 9 May 2010 enter the land or interfere in any way with the plaintiff's peaceful enjoyment of the land.

(3) The plaintiff, Louis Tokivovon Topalakai, shall be entitled to occupy the land with effect from 10 May 2010 and shall not before that date enter the land or interfere in any way with the defendant's enjoyment of the land.

(4) The Sheriff and the Police are authorised, from 10 May 2010 onwards, to take such reasonable steps as are necessary to give effect to these declarations and orders.

(5) The Oil Palm Industry Corporation shall from the date of this order take all such steps as are necessary to give effect to these declarations and orders.

(6) The parties will bear their own costs.

(7) Time for entry of this order is abridged to the date of settlement by the Registrar, which shall take place forthwith.

Judgment accordingly.
____________________________

Lawyer for the plaintiff: Nil
Public Solicitor: Lawyer for the defendant