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Decision 2000 Ltd v Sipison [2017] PGNC 169; N6778 (30 May 2017)

N6778


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS (JR) NO. 353 OF 2016


BETWEEN:


DECISION 2000 LIMITED
Plaintiff


AND:
LUTHER SIPISON, ACTING SECRETARY OF THE DEPARTMENT OF LANDS & PHYSICAL PLANNING
First Defendant


AND:
YANJOL APIN, ACTING REGISTRAR OF TITLES
Second Defendant


AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant


AND:
NATIONAL HOUSING ESTATES LIMITED
Fourth Defendant


AND:
KOREA NIUGINI HOUSING LIMITED
Fifth Defendant


Waigani: Nablu, J
2017: 5th April
30th May


JUDICIAL REVIEW – State Leases – cancellation of State Lease – Section 160 and 161, Land Registration Act – whether Registrar complied with Section 160 and 161 – whether subsequent grant of State Lease valid – cancellation not done properly – subsequent grant of State Lease improper and not valid - Section 33(1)(c), Land Registration Act – prior instrument of title – Judicial Review granted.


Cases cited:


Ping Tan Enterprises Ltd v. Henry Wasa and Others (2016) N6512


Counsel:


D. Mel, for the Plaintiff
E. Mel, for the First and Second Defendant
C. Gagma, for the Fourth and Fifth Defendant


30th May, 2017


1. NABLU J: The plaintiff seeks to review the decision of the Registrar of Titles to cancel the plaintiff’s State Lease Volume 34 Folio 189 for the land described as Section 81 Allotment 26 Matirogo, National Capital District on 17th January 2012.


2. There is a bit of a long sordid history about this land dispute that spans from 1997 and had four (4) court cases over the same piece of land. The original grantee of the State Lease was Christian Fellowship Church (PNG) Inc. They had commenced proceedings against the State by way of a Writ of Summons in 1997. They obtained default judgment against the State. Dr John Nongorr, who was their lawyer at the time and the principal of the plaintiff was granted the land to off-set the outstanding legal fees.


3. Following sub – division and re – surveying of the land, the plaintiff was granted the title over Section 81 Lot 26 on 7 July 2009. The grant of the State Lease was effected on the basis of a Court Order from those proceedings and the threat of contempt of Court.


4. In 2010, the National Housing Corporation (NHC) joined the first proceedings that is WS 511 of 1997 and challenged the Court Order, seeking to set it aside because, it argued that they were the registered proprietor. The NHC’s claim was based on the ground that they had some houses situated on the land, therefore, it was State Land which they had a licence or right to occupy. The NHC sought and were granted interim restraining orders to restrain the plaintiff from dealing with the land sometime in 2010.


5. There was a consent Court Order endorsed by the parties. By consent, the parties agreed to delete the figure “2” before the figure “6” in the Court Order. In 2011, the NHC lawyers then caused a letter to the Registrar that requested to him to cancel the plaintiff’s title to Lot 26 Section 81, on the ground that the original Court Order referred to Allotment 6 not 26. Therefore, there was sufficient evidence of tampering with a Court Order which amounted to fraud.


6. The Registrar then cancelled the State Lease. The Minister than subsequently granted the State Lease for Business purposes on 21 December 2015. The decision was published in the National Gazette No. G34 on 22 December 2015. The State Lease was granted to the fourth defendant, National Housing Estates Limited over Allotment 26, Section 81, Matirogo, NCD. It is this decision which the plaintiff seeks to review. Mr Mel of counsel for the plaintiff also informed the Court that Dr Nongorr was the subject of an investigation for allegations of fraud and he was later absolved of any impropriety.


7. The plaintiff seeks declaratory orders, orders in the nature of certiorari and mandamus and costs.


8. The plaintiff relied on the affidavits of Una Niggins and John Nongorr. There are numerous affidavits filed during the course of the proceedings. They are all contained in the Review Book.


9. In response, the defendants relied on the Affidavit of Madeline Paulisbo and Benjamin Samson both filed on 17th August 2016. Further affidavits of Madeline Paulisbo filed on 19th August 2016 and Benjamin Samson filed on 23rd August 2016. The defendants also relied on the affidavit of Moses Philip and Chul Jeong which were filed on 14th September 2016. The State filed and relied on the affidavit of Luther Sipison which was filed on 30th September 2016.


10. There are six (6) grounds of review which the plaintiff relies on to challenge the first defendant’s decision.


11. However it is clear, that the plaintiff contends that the State Lease granted by the first, second and third defendants to the fourth defendant over the same piece of land is unlawful because there was a prior interest over the same land which was valid. They argued that Section 33(1)(c) of the Land Registration Act was breached.


12. The defendants on the other hand, argued that the grant of the State Lease is valid and the Registrar was right in cancelling the plaintiff’s title because it was tainted with fraud as evidenced by the tampering of the Court Order which granted the State Lease to the plaintiff.


13. In PNG, the Principle of Indefeasibility of title is paramount since we have adopted and applied the Torrens System of Title Registration. Section 33 of the Land Registration Act codifies this common law principle. Section 33 has been the subject of numerous judicial consideration over the years.


14. It is necessary to set out Section 33 of the Land Registration Act:


  1. The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except –
    1. in the case of fraud; and
    2. the encumbrances notified by entry of memorial on the relevant folio of the Registrar; and
    1. the estate or interest of a proprietor claiming the same land under a prior instrument of title; and
    1. in case of the omission or misdescription of any right-of-way or other easement created in or existing on the same land; and
    2. in the case of wrong description of the land or of its boundaries; and
    3. as to a tenancy from year to year or for a term not exceeding three years created either before or after the issue of the instrument of title of the registered proprietor; and
    4. as provided in Section28; and
    5. a lease, licence or other authority granted by the Head of State or a Minister and in respect of which no provision for registration is made; and
    6. any unpaid rates, taxes, or other money which, without reference to registration under this Act, are expressly declared by a law to be a charge on land in favour of the State or of a department or officer or the State or of a public corporate body.
  2. The operation of Subsection (1) is not affected by the existence in any other person of an estate or interest, whether derived by grant from the State or otherwise, which, but for this Act, might be held to be paramount or to have priority.(Emphasis mine)

15. Before deciding the issue whether the plaintiff’s title supersedes or is superior to the fourth and fifth defendant’s title. We need to first consider the issue of whether the plaintiff’s State Lease was cancelled properly and in accordance to the mandatory statutory process under the Land Registration Act.


16. The legal issues for determination by the Court are;


  1. Did the Registrar of Titles exercise its power under the Land Registration Act properly?
  2. Did the Registrar comply with the procedure under Sections 160 and 161 of the Land Registration Act?

17. I am of the view that we have to consider the issue of whether the second defendant was correct in cancelling the plaintiff’s title first, if the answer to that question is in the affirmative, the next issue to determine is whether the process of granting of a State Lease under the Land Act was complied with.


18. The land described as Allotment 26, Section 81, Matirogo, National Capital District was owned by the plaintiff. The State Lease was granted on 9 July 2009 for a period of 99 years. When the plaintiff lodged an application to sub-divide the land they proceeded to surrender their State Lease. They discovered that there was another existing State Lease over the same land. Ms Niggins states in her affidavit filed on 17 June 2016 that they were never notified that their title was “...invalid, tainted or cancelled or otherwise no good” (see pages 12-18 of Volume 1 of the Review Book).


19. That evidence is corroborated by Dr Nongorr’s affidavit which was filed on 17 June 2016 (see page 112-115 of Volume 1 of the Review Book) which stated that they were never notified by the Department of Lands or the Registrar of Titles that their title was bad or had been cancelled.


20. The National Housing Corporation (NHC) claim, on the other hand, is that they own the land. Their claim of the land is based on three main reasons. The first reason is that the land has some NHC properties located on the land. The second reason is that the plaintiff’s title to the land was fraudulently granted. The claims for fraud arise from the fact that the land was fraudulently granted to the plaintiff through a Court Order and not according to the provisions under the Land Act.


21. The NHC filed a claim against the plaintiff. The plaintiff contested those proceedings. The defendants claimed that the plaintiff’s ownership of the land was through threats of contempt proceedings to enforce the National Court order which resulted from the earlier Court decision in WS 511 of 1997 relating to the same land. The National Housing Corporation then transferred their title to their related entity National Housing Estate Ltd.


22. The third reason is that the proceedings were then settled by consent. The initial Court Order which formed the basis of the grant of the State Lease to the plaintiff, which stated the description of the land as Allotment 6, Section 81, Matirogo, NCD. That Court Order was amended, it is not known who altered the Court order by writing figure ‘2’ in front of the figure ‘6’ to make the Allotment number read as 26. The parties then later varied the Order. According to the NHC, the grant of the State Lease was fraudulent for that reason. (See the affidavit of Madeline Paulisbo filed on 17 August 2016 at pages 322-327 of Volume 2 of the Review Book).


23. The date of the Grant of the Lease was purportedly made on 12th June 2002 as per the Court Order and the registration of the cancellation of the State Lease was made on 17 January 2012. According to that affidavit, another reason why the State Lease was cancelled, was that there was no development of the Land since 2009 (see paragraph 14 at page 324, Volume 2 of the Review Book).


24. On 8th November 2010, the NHC filed an application seeking restraining orders to restrain the plaintiff from dealing with the land (Allotment 26, Section 81, Matigoro). This Court Order purportedly cancelled the title (page 358 of the Review Book).


25. Based on that Court Order, Mr Moses Philip of Korerua Lawyers then wrote to the Registrar of Titles and requested that he cancel the title to Allotment 26 Section 81, Matirogo, NCD, because the Court order was for Allotment 6 Section 81 and not Allotment 26 Section 81.


26. The defendants argued that subsequently the fourth defendant was duly granted the land.


27. Section 33 of the Land Registration Act protects a registered proprietor. A title holder has statutory protection over any other competing interests. The only exception is those instances provided under Sections 33(1)(a) to 33(1)(i) of the Land Registration Act.


28. In this case, in order to consider whether the grant to the fourth defendant was valid, we have to, in my view consider whether the plaintiff’s title was cancelled properly and within the provisions of the Land Registration Act.


29. Section 160 and 161 of the Land Registration Act requires that the plaintiff must first summon the registered proprietor of the State Lease.


30. See the case of Ping Tan Enterprises Ltd v. Wasa and Others (2016) N6512 in that case, I set out the process in which the Registrar of Title’s can exercise its statutory powers to cancel a title. I am not aware if that decision was appealed against to the Supreme Court. Therefore, I maintain my view of the process of cancellation of State Leases.


31. The Registrar of Titles must summon the registered proprietor first before they can cancel a title or exercise the power to cancel. I was also of the view that where there is an allegation of fraud, and there was clear evidence of fraud, the Registrar did not have the power to determine whether there was fraud. Cases of fraud must be determined by a Court. The Registrar only had the power to correct mistakes on the entry or correct any apparent errors or omissions on the Certificate of Title.


32. It is clear in the evidence before me, that the process under Section 160 and 161 of the Land Registration Act was not complied with. There is simply no evidence that the Registrar of Titles cancelled the title according to Section 160 and 161 of the Land Registration Act. There is no evidence of a summons issued to the plaintiff asking them to deliver-up the title for cancellation or even a letter to the plaintiff asking them to show cause.


33. Ms Niggins and Dr Nongorr state they were not aware that the plaintiff’s title was cancelled until they lodged an application to sub-divide the land. In the affidavit of Mr Sipison, he annexes a copy of the cancelled title. I note the date it was cancelled is not apparent (see pages 884 and 895-896 of Volume 3 of the Review Book).


34. I also find that the letter from Korerua Lawyers was dated 14th January 2011 (pages 898-899 of Volume 3 of the Review Book). In the same affidavit of Luther Sipison, he annexes an advertisement by the Registrar of Titles dated 16 July 2016 (at page 902 of Review Book Volume 3). The summons was issued for Korea Niugini Housing Ltd (the fifth defendant). They responded to the summons and it was later accepted by the Department of Lands that the land was duly granted to the National Housing Corporation in compliance with various National Executive Council Decisions and that the land was transferred to the fourth defendant.


35. Those decisions were made in 2006 and 2007. In essences all the prime properties were to be granted to the fourth defendant by Ministerial Instrument dated 21 November 2012 (see page 885 of Volume 3 of the Review Book).


36. I am of the view that the Registrar of Titles cannot unilaterally cancel the plaintiff’s title without first complying with the mandatory statutory procedure provided by Sections 160 and 161 of the Land Registration Act. Furthermore, the Registrar does not have the power to determine fraud and proceed to cancel or set aside a title on the basis of fraud.


37. My view is affirmed when I referred to the evidence of Benjamin Samson in his affidavits, he filed on 27 August 2016. I treat Mr Samson’s evidence with suspicion. Because the deponent at the time of deposing to the affidavit was on suspension from duties as the Registrar of Titles (see pages 383 and 448 of Volume of the Review Book). In that affidavit he states that he cancelled the registration of State Lease Title Volume 34 Folio 189 which related to Allotment 26 Section 81, Hohola, NCD on 17 January 2012 in compliance with a Court Order by consent of the parties made on 14 December 2010 in proceedings WS 511 of 1997. Interestingly, he states that at the time of cancellation he acknowledged that the State Lease was not delivered up.


38. Clearly, Mr Samson did not comply with Section 160 and 161 of the Land Registration Act. Even if Mr Samson states that he did it in compliance with a Court order that argument is without merit. The consent order in my view did not compel the Registrar to cancel the title. It only changed the description of the property from Allotment 26 back to Allotment 6.


39. In my view, the NHEL should have sought a writ of mandamus or judicial review to compel the Registrar of Titles to cancel the title. Instead of doing this, they approached the Registrar to cancel the State Lease. The preponderance of case law and the application of Section 33 of the Land Registration Act is clear, once a State Lease is granted, the only instances which can be lawfully utilized to set aside a State Lease are prescribed in Section 33 (1) of the Land Registration Act.


40. Therefore, I find that the plaintiff’s title was incorrectly and unlawfully cancelled without following the process under Section 160 and 161 of the Land Registration Act.


41. The defendants should have filed an application for judicial review to question the validity of the plaintiff’s title instead of returning to the proceedings WS 511 of 1997 and claiming fraud to set aside the title. These issues should have been raised in a judicial review proceedings.


42. But the events have now since overtaken and therefore the grant to the plaintiff was not challenged in 2009 and cannot be raised in these proceedings before this Court now.


43. Having found that the cancellation of the plaintiff’s title was not done lawfully, that decision is null and void. That now leaves a situation where the plaintiff and the fifth defendant have titles to the same piece of land. Obviously one State Lease has priority over the other. We cannot have a situation were there are two titles for the same piece of land.


44. According to Section 33(1)(c) of the Land Registration Act, a prior interest in the property has priority. Therefore, the title to NHEL and later transfer to the fifth defendant is void and cannot stand.


45. Even if I am wrong, the evidence before me, indicates that the process of the grant of a State Lease was not followed. The Minister for Lands or his delegate had a duty to advertise the land as been available for leasing. Furthermore, if they were aggrieved that there was no development, there is no evidence to suggest that the process of forfeiture under Section 122 of the Land Act was utilized.


46. The plaintiff has made out the grounds of review. The next step is to consider whether the plaintiff is entitled to the relief sought. In the circumstances, the breach of the Land Registration Act is serious. The Registrar unilaterally cancelled the plaintiff’s title, therefore, I am satisfied that the subsequent decision to grant a State Lease over the same piece of land is unlawful and made contrary to the Land Act and should be set aside.


47. For the foregoing reasons, I grant the plaintiff’s application for judicial review and the defendants are to pay the plaintiff’s costs of and incidental to the proceedings to be taxed if not agreed.


Court Order


  1. The Plaintiff’s application for judicial review is granted.
  2. It is declared that the First Defendant’s decision dated 21 December 2015 and published in the National Gazette No. G34 of 2015 (dated 22 December 2015) which was purportedly made pursuant to Section 72 of the Land Act in his capacity as the delegate of the Minister for Lands and Physical Planning to grant a Business (Industrial) Lease to the fourth defendant, National Housing Estates Limited over land described as Section 81, Allotment 26, Matirogo, National Capital District being all the land contained in the State Lease Volume 69 Folio 133 is unlawful, void abinitio and quashed forthwith.
  3. It is declared that the First and Second Defendant’s decision made on 23rd December 2015 to approve and register to the Fourth Defendant a State Lease for Residential Purposes over land described as Allotment 26 Section 81, Matigoro, National Capital District is unlawful, void abinitio and quashed forthwith.
  4. The decision to cancel the Plaintiff’s State Lease Volume 34 Folio 189 for land described as Section 81 Allotment 26, Matirogo, NCD on 17 January 2012 is unlawful and made contrary to Sections 160 and 161 of the Land Registration Act and is declared unlawful, void and quashed forthwith.
  5. The Registrar of Titles is compelled to restore the Plaintiff’s interest and State Lease Volume 34 Folio 189 for land described as Section 81 Allotment 26, Matirogo, NCD forthwith.
  6. The Fourth and or Fifth Defendants’ are to deliver up to the Registrar of Titles, their owners’ copy of the State Lease for cancellation forthwith.
  7. The defendants to pay the plaintiff’s costs of and incidental to the proceedings to be taxed if not agreed.
  8. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

Orders accordingly,


Mel & Henry Lawyers: Lawyers for the Plaintiff
Office of the Solicitor-General: Lawyers for the First, Second and Third Defendant
Gagma & Co. Lawyers: Lawyers for the Fourth and Fifth Defendants


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