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Raka v Taule [2011] PGNC 2; N4196 (17 January 2011)

N4196

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS NO 219 OF 2009

GARI RAKA
First Plaintiff

MARTHA SILIWEN
Second Plaintiff

V

PETER TAULE
First Defendant

NEW BRITAIN PALM OIL LIMITED
Second Defendant

Kimbe: Cannings J
2009: 17 September,
2010: 29 January, 9 April,
2011: 17 January

JUDGMENT

LAND – claim by registered proprietor for possession of land and declaration of ownership against person who has occupied it for 24 years – whether registered proprietor agreed to transfer the land to occupant's father – effect of unregistered transfer.

The first plaintiff, who was registered proprietor of a State Lease over a block of land, entered into an agreement to transfer the lease to a purchaser in 1979. In 1986 the purchaser died, and the first defendant, claiming to be his son, occupied the land. No transfer of the land was ever effected. The registered proprietor sought possession of the land, arguing that he was never paid the full purchase price, but the purchaser's son resisted. The registered proprietor in 2008 transferred the land to the second plaintiff, who also sought possession of the land, but still the purchaser's son resisted, relying on the 1979 agreement and his and his father's continued possession of the land for 30 years. The plaintiffs commenced proceedings in the National Court, seeking declarations and orders as to their ownership and right to possession of the land.

Held:

(1) The 1979 agreement for sale of the land was incomplete as the first defendant's father failed to pay the full purchase price and, in any event, no transfer was registered.

(2) The first plaintiff held undisturbed title until 2008, when the title was validly transferred to the second plaintiff.

(3) 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.

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

(5) The second plaintiff, being the current registered proprietor, has unencumbered title to the land and it was appropriate to grant a declaration to that effect and to order that the first defendant give up vacant possession to her, subject to an order that the first defendant be refunded the part-payment of the purchase price under the 1979 agreement.

Cases cited

The following cases are cited in the judgment:

Cathy Mas v Steven Oiza (2009) N3835
Elizabeth Kanari v Augustine Wiakar (2009) N3589
Leontine Ofoi v Kris Bongare (2007) N3248
Louis Tokivovon Topalakai v Daniel Tovot (2008) N4106
Mudge v Secretary for Lands [1985] PNGLR 387

ORIGINATING SUMMONS

This was an originating summons in which the plaintiffs sought declarations and orders to enforce their interests in land.

Counsel

G Linge, for the plaintiffs
D Kari & R Beli, for the first defendant

17 January, 2011

1. CANNINGS J: This case is a dispute over ownership and possession of a block of land in the Sarakolok oil palm settlement near Kimbe. The block is formally described as Portion 923, Milinch Megigi, Fourmil Talasea. It is 6.08 hectares in area. The land is the subject of a State Lease, an agricultural lease, Volume 43, Folio 71.

2. The current registered proprietor of the land is the second plaintiff, Martha Siliwen. She became the registered proprietor – the lessee – on 10 July 2008, when the land was transferred to her by the man who says he is her adopted father, the first plaintiff, Gari Raka.

3. Mr Raka, who comes from the Talasea area of West New Britain, had been the registered proprietor since 1969, when Sarakolok was opened up under a Government resettlement scheme. In 1979 he entered into an oral agreement with a Kerema man, Henry Meamo, to sell the land to him. The precise terms of that agreement are disputed but what is clear is that Mr Meamo paid Mr Raka K3,000.00, Mr Meamo moved on to the land and lived there and grew oil palm on it until his death in 1986.

4. Upon Mr Meamo's death, the first defendant, Peter Taule, who says he is Mr Meamo's adopted son, claimed ownership of the block. Mr Taule has been living on the land ever since. The plaintiffs have asked him to leave on several occasions but he refuses to do so. The plaintiffs say that they have been the registered proprietors since 1969 (Mr Raka from 1969 to 2008, Ms Siliwen from 2008 to date) and that Mr Taule has no right to occupy the block. Mr Taule – who says his real name is Peter Taol Meamo – maintains that his father purchased the block from Mr Raka in 1979 and he has every right to be there. He says that he and his father developed the block, and that Ms Siliwen, who is from East Sepik Province, is not Mr Raka's daughter at all, and the 2008 transfer was a sham transaction, with no legal effect.

5. Mr Raka refutes all that. The purchase price under the 1979 agreement, he says, was K7,000.00. Mr Meamo only paid the first instalment. There was K4,000.00 still to pay. That is why there was no transfer of the lease. He has been trying for many years to get the block, which is rightfully his. Mr Taule is not Mr Meamo's son, biological or adopted. Mr Taule is a Chimbu man. Mr Meamo was from Gulf Province. Ms Siliwen is his adopted daughter and he for genuine reasons transferred the land to her in 2008 as he is getting old and wanted to keep the land in the family. Mr Taule is the one engaging in a sham, not him, Mr Raka asserts.

6. Mr Raka and Ms Siliwen have brought the matter to the National Court seeking a declaration that Ms Siliwen is the owner of the land and an order that Mr Taule give up vacant possession to her. New Britain Palm Oil Ltd, the company which buys the oil palm harvested on the block, has been joined as second defendant, probably unnecessarily. It remains a party but has taken no active role in the court proceedings and it is unnecessary to mention it again until pronouncing the terms of the order flowing from this judgment.

ISSUES

1. What is the status of the 1979 agreement between Mr Raka and Mr Meamo?
   
2. What is the significance of Ms Siliwen being Mr Raka's daughter?
   
3. Does the principle of indefeasibility of title apply in Ms Siliwen's favour?
   
4. What orders should the court make?
   

1 WHAT IS THE STATUS OF THE 1979 AGREEMENT BETWEEN MR RAKA AND MR MEAMO?

7. Mr Raka has proven on the balance of probabilities that he entered into an oral agreement with Mr Meamo in 1979 to sell the block for K7,000.00 and that Mr Meamo paid an instalment of K3,000.00 but never paid the remaining K4,000.00. Mr Raka has given sworn evidence to support those claims and there is no credible evidence to rebut what he says.

8. Under Sections 2 and 4 of the Frauds and Limitations Act 1988 an agreement for the transfer of an interest in land must be in writing (Leontine Ofoi v Kris Bongare (2007) N3248). Thus the agreement between Mr Raka and Mr Meamo is unenforceable. This means that if Mr Meamo had paid the remaining K4,000.00 Mr Meamo would not have been able to enforce the agreement to get title to the block transferred to him.

9. Even if it is accepted that Mr Taule is Mr Meamo's son – and I find, despite Mr Raka's assertions to the contrary, that Mr Taule is indeed Mr Meamo's adopted son – Mr Taule has not acquired any interest in the block by virtue of the 1979 agreement.

2 WHAT IS THE SIGNIFICANCE OF MS SILIWEN BEING MR RAKA'S DAUGHTER?

10. Just as there was conflicting evidence about the relationship between Mr Meamo and Mr Taule, there was conflicting evidence about the relationship between Mr Raka and Ms Siliwen. Mr Raka says that Ms Siliwen is his adopted daughter, whereas Mr Taule claims that Ms Siliwen comes from another province, had been living all her life in Lae, and only came to West New Britain in 2007, so she cannot be regarded as Mr Raka's adopted daughter.

11. I find as a fact that Ms Siliwen is the adopted daughter of Mr Raka. Though there is no evidence that he formally adopted her (just as there is no evidence that Mr Meamo formally adopted Mr Taule), I accept the evidence of Mr Raka and Ms Siliwen that 'adoptive father and daughter' is a proper and acceptable way of describing their relationship. However, describing their relationship in that way carries no significance for the purposes of this case.

12. The only thing that is significant is that Mr Raka transferred his interest, as registered proprietor, in the block to Ms Siliwen, and that the transfer was registered and entered on the certificate of title on 10 July 2008. Their legal relationship was that of transferor (Mr Raka) and transferee (Ms Siliwen). On that date Ms Siliwen became the registered proprietor of the block.

3 DOES THE PRINCIPLE OF INDEFEASIBILITY OF TITLE APPLY IN MS SILIWEN'S FAVOUR?

13. 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).

14. 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.

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 – Mr Taule has not adduced any evidence to show that, despite the 1979 agreement between Mr Raka and Mr Taule's adoptive father, Mr Meamo, 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 1969 is a mortgage to the Papua and New Guinea Development Bank. It was registered on 26 March 1971 and discharged on 12 May 1978. 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, Ms Siliwen is protected by the principle of indefeasibility. She holds Portion 923 absolutely free of all encumbrances. Neither the first defendant, Mr Taule, nor any person other than Ms Siliwen has any legal interest in the land.

4 WHAT ORDERS SHOULD THE COURT MAKE?

18. As Ms Siliwen is the registered proprietor, with unencumbered title to the land, the Court should grant a declaration to that effect and order that the first defendant give up vacant possession to her.

19. As I remarked in the similar case of Louis Tokivovon Topalakai v Daniel Tovot (2008) N4106 a person in the position of Mr Taule might feel that this is unfair as he and his father and other family members have, it appears, been working the block for 30 years. But the law is clear. This is not customary land, where the courts can take into account how custom operates and make 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 the Land Act and the Land Registration Act. The Courts are obliged to enforce these laws strictly (Cathy Mas v Steven Oiza (2009) N3835).

20. I will, however, make the transfer of possession from Mr Taule to Ms Siliwen subject to one important condition: the refund, by either Mr Raka or Ms Siliwen, of the K3,000.00 that Mr Meamo paid to Mr Raka in 1979. I make this order under Section 155(4) of the Constitution as I consider that in the circumstances of this particular case such an order is necessary to do justice. I have considered whether interest should be payable on that amount but in the exercise of my discretion an award of interest is not appropriate.

21. As to the date on which the Court's order will come into effect, I will allow a grace period of one month after the payment of the K3,000.00.

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 923, Milinch Megigi, Fourmil Talasea, State Lease, Volume 43, Folio 71 – "the land" – is Martha Siliwen.

(2) Gari Raka or Martha Siliwen shall by 17 February 2011 pay K3,000.00 into the Provincial Treasury Office for the immediate benefit of Peter Taule.

(3) Provided that the payment is made in accordance with order (2), Peter Taule, also known as Peter Meamo, and all his family, agents, servants and all other associates, shall, by 17 March 2011, vacate the land and give up peaceful possession of the land to the second plaintiff, Martha Siliwen.

(4) Peter Taule, also known as Peter Meamo, and all his family, agents, servants and all other associates, shall not at any 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.

Peter Taule, also known as Peter Meamo, and all his family, agents, servants and all other associates, shall not after 17 March 2011 enter the land or interfere in any way with Martha Siliwen's peaceful enjoyment of the land.

(5) Martha Siliwen shall be entitled to occupy the land with effect from 18 March 2011 and shall not before that date enter the land or interfere in any way with Peter Taule's enjoyment of the land.

(6) The Sheriff and the Police are authorised, from 18 March 2011 onwards, to take such reasonable steps as are necessary to give effect to these declarations and orders.

(7) The Oil Palm Industry Corporation and the second defendant, New Britain Palm Oil Ltd, shall take all such steps as are necessary to give effect to these declarations and orders.

(8) The parties will bear their own costs.

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

Judgment accordingly.
____________________________

Linge & Associates: Lawyers for the Plaintiffs
Public Solicitor: Lawyer for the first Defendant