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Toimb v Lesley [2013] PGNC 250; N5389 (24 October 2013)

N5389

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS (JR) NO 77 OF 2012

STEPHEN TOIMB & FLORIAN S BAHIN
Plaintiffs

V

AMMIE LESLEY
First Defendant

SAMAX & SONS LIMITED
Second Defendant

REGISTRAR OF TITLES
Third Defendant

MINISTER FOR LANDS & PHYSICAL PLANNING
Fourth Defendant

PAPUA NEW GUINEA LAND BOARD
Fifth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Defendant

Madang: Cannings J
2013: 12 June, 15, 16 August, 24 October

JUDICIAL REVIEW – decision of Land Board to recommend granting of State Lease – application for review by persons with pre-existing interest in land – whether any error of law made by Land Board.

The plaintiffs applied for judicial review of the decision of the Land Board to recommend to the Minister for Lands that State Leases over two pieces of land be granted to the first and second defendants. Those Leases were subsequently granted in accordance with the Board's recommendation. One of the plaintiffs had in 1997 been notified by the Secretary for Lands that he was the successful applicant for State Leases over the two pieces of land. He claimed that he paid the necessary fees to enable the Leases to be granted to him but despite his best efforts in pursuing the matter the Leases did not materialise. He nevertheless regarded himself as the lawful occupier of each piece of land and in 2002 allowed the other plaintiff to enter the land, improve it and run a business on it. The plaintiffs say that they received no notice that their interests in the land were to be forfeited or that the two pieces of land were again available for lease or that the Land Board was again considering applications for granting State Leases. They applied for judicial review on three grounds: (1) error of law by the Minister in not granting the State Leases to the successful applicant; (2) error of law by the Land Board in not notifying the plaintiffs that their interests in the land had been forfeited; and (3) breach of natural justice constituted by failure of the Land Board to invite the plaintiff in actual possession of the land to make an application to be granted State Leases.

Held:

(1) The Minister for Lands is responsible under Section 65 of the Land Act for granting of State Leases and is not obliged as a matter of course to act in accordance with recommendations of the Land Board. No error of law was proven against the Minister. Further, the plaintiff who was the successful applicant in 1997 failed to prove that, after being notified that he was the successful applicant, he paid the sum of K16,349.45 in respect of the piece of land that he was required to pay within three months in order to secure each Lease. The first ground of review was dismissed.

(2) No Lease over either piece of land was granted to either of the plaintiffs, so the provisions of the Land Act regarding forfeiture of State Leases were inapplicable. The second ground of review was dismissed.

(3) The Land Board was under no obligation to notify either plaintiff that the land had been advertised for lease, or to invite the plaintiff who was in actual occupation of the land to make an application for granting of a Lease. There was no breach of the principles of natural justice.

(4) As all grounds of review were dismissed all relief sought by the plaintiffs was refused.

Cases cited

The following cases are cited in the judgment:

Dale Christopher Smith v Minister for Lands (2009) SC973
Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215
Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959

Counsel

P K Kunai & B B Wak, for the plaintiffs
T M Ilaisa, for the first defendant
B W Meten, for the second defendant
S Phannaphen, for the third to sixth defendants

24th October, 2013

1. CANNINGS J: The plaintiffs Stephen Toimb and Florian Bahin apply for judicial review of the decision of the Land Board (the fifth defendant) dated 11 February 2010 to recommend to the Minister for Lands and Physical Planning that State Leases be granted over two pieces of land in Madang town. The Board's recommendation was that State Leases be granted as follows:

• Section 150, Allotment 4 to Ammie Lesley (the first defendant); and
  
• Section 150, Allotment 5 to Samax & Sons Ltd (the second defendant).
  

2. Those Leases were on 24 November 2010 granted in accordance with the Board's recommendation and the first and second defendants are now the registered proprietors of Section 150, Allotments 4 and 5 respectively.

3. The plaintiffs are aggrieved by what has happened due to their pre-existing interests in the land. In 1996 both pieces of land were advertised as being available for lease. Mr Bahin lodged applications, which were considered by the Land Board, and on 6 February 1997 he was notified by the Secretary for Lands that he was the successful applicant for State Leases over both pieces of land. He claims that he paid the necessary fees to enable the Leases to be granted to him but despite his best efforts in pursuing the matter the Leases did not materialise. He nevertheless regarded himself as the lawful occupier of each piece of land and in 2002 allowed Mr Toimb to enter the land, improve it and run a business on it. Mr Toimb says that he has spent a lot of money making the land, which was previously swampy, suitable for the scrap metal business he has been operating on it since 2002. The plaintiffs say that they received no notice that their interests in the land were being forfeited or that the two pieces of land were again available for lease or that the Land Board was again considering applications for granting State Leases. They apply for judicial review of the Land Board's recommendations on three grounds:

(1) error of law by the Minister in not granting the State Leases to the successful applicant (paragraphs 3(a) to (d) of the statement under Order 16, Rule 3(2)(a) of the National Court Rules);

(2) error of law by the Land Board in not notifying the plaintiffs that their interests in the land had been forfeited (paragraphs 3(e) and (f) of the statement under Order 16, Rule 3(2)(a) of the National Court Rules); and

(3) breach of natural justice constituted by failure of the Land Board to invite the plaintiff in actual possession of the land to make an application to be granted State Leases (paragraph 3(g) of the statement under Order 16, Rule 3(2)(a) of the National Court Rules).

(1) ERROR OF LAW IN NOT GRANTING THE STATE LEASES TO MR BAHIN

4. The plaintiffs argue that the Minister erred in law by not granting State Leases to Mr Bahin as he was notified that he was the successful applicant for both pieces of land and he paid the necessary fees to enable the Leases to be granted to him.

5. It is true that Mr Bahin was notified that he was the successful applicant but there are two flaws in the plaintiffs' argument. First, The Minister for Lands is responsible under Section 65 of the Land Act for granting of State Leases and is not obliged as a matter of course to act in accordance with recommendations of the Land Board. It would need to be shown that the Minister erred in law in a specific way (eg that he took irrelevant considerations into account or acted in bad faith) for this argument to gain traction. As it stands, the argument is simply that an error was made because the Minister did not act in accordance with the Board's recommendations. Such a vague proposition of law has no substance.

6. Secondly, Mr Bahin has failed to prove that, after being notified that he was the successful applicant, he paid the sum of K16,349.45 in respect of each piece of land that he was required to pay within three months in order to secure each Lease. The notification to him stated clearly that he had to pay those sums and that failure to comply "may result in extinguishment of any rights granted". He stated in an affidavit (exhibit P2) that on 6 February 1997 he "paid all necessary fees". However that statement is vague and uncorroborated. I find that in fact he did not pay the necessary fees. It is unsurprising that the Leases were not granted to him. He did not comply with the conditions attached to the Secretary's notification that he was the successful applicant.

7. I find no error of law by the Minister for Lands in the manner contended for by the plaintiffs. This ground of review is dismissed.

(2) ERROR OF LAW IN NOT NOTIFYING THE PLAINTIFFS THAT THEIR INTERESTS IN THE LAND HAD BEEN FORFEITED

8. The plaintiffs argue that the Land Board erred in law by not notifying them that their interests in the land had been forfeited.

9. This argument is based on the false premise that a forfeiture of interests in the land had been effected under the Land Act. There is no evidence of any forfeiture. The reason for that is that no Lease was ever granted to Mr Bahin (or Mr Toimb). Forfeiture of State Leases is effected under Part XV (forfeiture of State Leases and fines) of the Land Act. For a State Lease to be forfeited, it must first be granted. The second ground of review is misconceived and is dismissed.

(3) BREACH OF NATURAL JUSTICE

10. The plaintiffs argue that they were denied natural justice due to the failure of the Land Board to invite them, and in particular Mr Toimb who was in actual possession of the land, to make an application to be granted State Leases. The Land Board did not notify either of the plaintiffs that the land was being considered for allocation to new applicants. This is argued to be unlawful as both plaintiffs had a proprietary interest in the land.

11. I agree that both plaintiffs had an equitable interest in the land, particularly Mr Toimb as he had been in actual possession of the land since 2002. But I do not consider that the mere existence of an equitable interest gave rise to an obligation on the part of the Land Board or any other of the defendants to notify either plaintiff that the land was again available for lease or to invite them to make an application. There was certainly no express obligation imposed under the Land Act and I am unconvinced that any such obligation ought to be implied. There is no complaint by the plaintiffs that the land was not advertised under Section 68 (advertisement of lands available for leasing) of the Land Act as being available for lease. I find no breach of the principles of natural justice. Ground 3 is dismissed.

CONCLUSION

12. An application for judicial review proceeds in two stages. First the plaintiff must establish good grounds for judicial review. Secondly if one or more grounds are established the plaintiff must make a case for a remedy, which is a matter of discretion (Mision Asiki v Manasupe Zurenuoc (2005) SC797, Dale Christopher Smith v Minister for Lands (2009) SC973).

13. Here no ground of review has been established, so the question of remedies does not arise. The plaintiffs want to argue that the doctrine of constructive fraud applies. They assert, on the authority of cases such as Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215, Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959 and Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80, that the circumstances in which title in the land was granted to the first and second defendants are so unsatisfactory, dubious and irregular as to be tantamount to fraud. However, the plaintiffs are in no position to argue that this is a case of constructive fraud as they have been unable to establish a single ground of judicial review. They have failed to prove that any error of law was made by the Land Board or any of the other defendants during the decision-making process that led to the first and second defendants obtaining title in the two pieces of land. All relief sought by the plaintiffs must be refused. Costs will follow the event.

ORDER

(1) The application for judicial review is refused.

(2) All relief sought by the plaintiffs is refused.

(3) Costs of these proceedings shall be paid by the plaintiffs to the defendants on a party-party basis, to be taxed if not agreed.

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

Judgment accordingly.
___________________________________________________
Kunai & Co Lawyers: Lawyers for the Plaintiff
Thomas More Ilaisa Lawyers: Lawyers for the 1st Defendant
Meten Lawyers: Lawyers for the 2nd Defendant
Solicitor-General: Lawyer for the 3rd to 6th Defendants