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Desh Besh Enterprises Ltd v National Housing Corporation [2021] PGNC 501; N9273 (12 November 2021)

N9273

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 159 OF 2018


BETWEEN:
DESH BESH ENTERPRICES LIMITED
Plaintiff


AND:
NATIONAL HOUSING CORPORATION
First Respondent


AND:
BENJAMIN SAMSON REGISTRAR OF TITLES
Second Defendant


AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant


Waigani: Miviri J
2021: 11th & 12th November


PRACTICE & PROCEDURE – Judicial Review & appeals – Substantive notice of Motion – Cancellation State Lease – Procedural Impropriety Section 160 (2)(3) & Section 161 (1) (a) Land Registration Act – Error of Law –Ultra Vires – Evidence of Non-Compliance – Unfair Unreasonable Decision – material relied sufficient – Motion granted – Certiorari Lies – Decision of Register of Titles Quashed – Cost follow event.


Cases Cited:

Raumai No.18 Ltd v Country Motors Ltd [2018] PGNC 592; N7952

National Airports Corporation Ltd v Airport Guest House Ltd [2019] PGSC 90; SC1867

Feo v Samson [2020] PGNC 86; N8270

CRCE Property Ltd v Samson [2020] PGNC 304; N8511

Raina No. 1 Ltd v Elisha [2015] PGNC 158; N6051

Tumba (trading as Kamkumung Bakery) v Samson [2020] PGNC 468; N8721

Ping Tan Enterprise Ltd v Wasa [2016] PGNC 314; N6512

Mainland Holdings Ltd v Stobbs [2003] PGNC 10; N2522

Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122
Counsel:


P. Moses, for the Plaintiff
L. Tangua, for First Respondent
B. Kulumbu, for Second & Third Respondents

RULING


12th November, 2021

  1. MIVIRI, J: This is the Ruling on the Plaintiff’s substantive notice of motion of the 16th May 2018 seeking judicial review against the decision of the Second defendant, who cancelled the State Lease described as Section 227, Allotment 202, volume 80, Folio 214 (Hohola) Tokarara National Capital District. The decision was made on the 04th December 2017.
  2. The plaintiff Desh Besh Limited a registered company who is registered under the Company’s Act 1977 was granted Leave by this Court on the 05th May 2018. Formally the subject property was portion 182 (cat No. 49/1176) vacant land that formed part of land on which the National Housing Corporation is located. Portion 182 was subdivided in or about March 2017, creating Allotments 201 and 202 under section 227. Allotment 201 was about 2.00 hectares and allotment 202 was about 0.069 hectares. On the 09th March 2017 the Minister for Lands and Physical Planning granted Special Lease over section 227 Allotments 201 and 202 to the NHC under section 92 of the Land Act 1996.
  3. On the 10th March 2017 the title for allotment 202 was transferred to Desh Besh Enterprises Ltd pursuant to a purported Contract for Sale (undated) and transfer Instrument dated 05th January 2017 for the sum of K 700,000.00. At the same time allotment 201 was sold and transferred to the plaintiff for the sum of K50, 000.00 under a purported Contract for Sale (undated) and transfer Instrument dated 05th January 2017. The total selling price for both Allotments 201 and 202 was K 750, 000.00. Plaintiff only paid K 300, 000.00 by ANZ cheque No. 000188 dated the 10th June 2016 as payment for both Allotments. And refused to pay the remaining balance of K 450, 000.00. Since April 2017 subsequent management of the National Housing Corporation under the then Acting Managing Director Mr. Kenneth Cooke issued notices to the Plaintiff demanding the payment of the outstanding K 450, 000.00. Which was denied by the Plaintiff on the basis that the parties agreed for the plaintiff to pay only K 300, 000.00 pursuant to a purported Settlement Statement dated the 15th June 2016.
  4. On the 26th July 2017 the National Housing Corporation wrote to the Registrar of Titles the second defendant when the plaintiff refused to settle the remaining balance, favourable to invoke his powers under sections 160 & 161 of the Land Registration Act and administratively recall the plaintiff’s titles for Allotments 201 and 202.
  5. For Allotment 201, NHC advised the Registrar of Titles that the Plaintiff had defaulted in settling the outstanding balance of the purchase price. And for Allotment 202, the NHC advised that it had erroneously signed the Contract of Sale documents with the Plaintiff over that Allotment when the Allotment had already been sold to one Johannes Hapa.
  6. On 18th October 2017 the Registrar of Titles summoned the Plaintiff to surrender the title for allotment 202 only within 21 days and forewarned of cancellation if not surrendered. On the 30th October 2017 the Plaintiff responded to the summons and refused to comply. When he refused to surrender the title the Registrar of Titles cancelled the plaintiff’s title or State Lease for Allotment 202 on 04th December 2017. That decision is now the subject of this review.
  7. There are two basic grounds of review pleaded in the Statement in support by the Plaintiff in this review. Firstly, he contends that the Registrar of Titles had erred in law in cancelling the State Lease registered to the Applicant, after a legally binding commercial transaction between the Applicant and that the Second Respondent, failed to comply with section 160 (2) (3) of the Land Registration Act 1981, and make decision to cancel the Plaintiff/Applicant’s State Lease described as Section 227, Allotment 202, Tokarara, National Capital District.
  8. Secondly the First Respondent before exercising its powers failed to fully comply with the procedure set out in section 160 (3) of the Land Registration Act by issuing proceedings in the National Court.
  9. The plaintiff seeks the following two reliefs pleaded in his Substantive Notice of Motion:
  10. The issue raised for trial is, whether the Registrar of Title can cancel the title under section 161 (1) without complying with the process under section 160 (2) of the Land Registration Act 1981?
  11. The plaintiff relies on the affidavit in support of the Notice of Motion dated the 19th March 2018 of Kamal Hussain General Manager of Desh Besh Enterprices Limited. Relevantly he deposes that on the 20th October 2017, we received a letter (Annexure H) dated the 18th of October 2017, from the office of the Second Respondent requesting us to deliver owners copy of the State Lease to his office.” That letter alleges fraud in the sale of the subject property and therefore requests the surrender of the Owners copy of the title to the Acting Registrar Henry Wasa. It is a summons served and after the lapse of 21 days failing the cancellation of the title will eventuate.
  12. That is also evident by annexure “K” letter dated the 05th December 2017 written to Korerua & Associate Lawyers, subject is cancellation of Registration of Transfer to Desh Besh Enterprises Limited over allotment 202 section 227 Hohola (Tokarara), NCD as contained in State Lease volume 34 Folio 124. It is written by Benjamin Samson Registrar of Titles. “I write regarding the above and in response to your response dated 30th October 2017 to the Summons under section 160 (1) of the Land Registration Act 1981 of the then Acting Registrar of Titles, Henry Wasa dated 18th October 2017 to your client, Desh Besh Enterprises Limited for the delivery up of the original owners copy of the title for the cancellation of the transfer entry/endorsement to them.

I did pursue your response and have noted its content. However, you are hereby informed that I have invoked section 161 of the Land Registration Act 1981 and have cancelled the entry No. S.76650 depicting the transfer of Desh Besh Enterprises Limited on the subject State Lease title.


Accordingly, the proprietorship/ownership of the subject property, allotment 202 section 227 (Tokarara) Hohola, National Capital District has now reverted back to the National Housing Corporation.


In addition, I suggest that you advise Desh Besh Enterprises Limited to deliver up the original owners copy in their custody to this office for the cancellation of the transfer entry to be endorsed on it and thereafter return the title to the National Housing Corporation.


Nevertheless, you are at liberty to seek redress in a competent court of law should you and your client feel aggrieved of by decision. Find attached herewith a copy of the subject title indicating the cancellation for your reference.” It is signed by Benjamin Samson Registrar of Titles.


  1. This letter is responded to by annexure “L” a letter under hand of lawyers of the Plaintiff pointing out that the cancellation and entry S3.79999 made on the subject State Lease is unlawful because section 160 has not been complied with fully. That powers under section 161 can be only applied after giving effect to section 160. And then the advice for section 160 (2) (3) (4) and (5) to be pursued by the respondents.
  2. Looking at the evidence filed by the First Defendant of Henry Joseph Mokono sworn 22nd September 2021, and filed 23rd September 2021, the newly appointed Managing Director of NHC, the following are relevant evidence to the issue raised. He discloses that on the 04th December 2017 the Registrar of Titles Benjamin Samson cancelled the title for Allotment 202 under section 160 & 161 of the Land Registration Act following a complaint from the NHC. Reasons for the cancellation were (a) Fraud (Incomplete/Inconclusive sale/purchase, and (b) Fraud (double sale of same allotment). He too corresponds the evidence of the recall and cancellation of title over properties section 227 Allotment 201 & 202, Hohola, (Tokarara), National Capital District. The letter dated the 26th July 2017, written to the Registrar of Titles to use his powers under section 160 and 161 to recall the title over the subject state lease sold to Desh Besh. It is written by the legal officer of the NHC Paul Pera.
  3. Then the response is annexure “R” letter dated 18th October 2017 written by Henry Wasa as Acting Registrar of Titles to The Managing Director Desh Besh, summons to surrender special state lease title, volume 80 folio 214 over land known as allotment 202 section 227 Hohola, National Capital District.
  4. The Law applicable to the facts set out above are sections 160, and 161 of the Land Registration Act which are in the following terms:

160. PRODUCTION OF INSTRUMENTS WRONGLY ISSUED, ETC.

(1) Where it appears to the satisfaction of the Registrar that–

(a) an instrument has been–

(i) issued to a person in error; or
(ii) fraudulently or wrongly obtained by a person; or

(b) an instrument is fraudulently or wrongly retained by a person; or
(c) an instrument held by a person contains a misdescription of the boundaries, area, or position of land; or
(d) an instrument held by a person contains an entry or endorsement–

(i) made in error; or
(ii) fraudulently or wrongly obtained; or

(e) an instrument of title is held by a party to an ejectment action whose right to the land has been determined,

he may summon that person to deliver up the instrument.

(2) Where a person refuses or neglects to comply with a summons under Subsection (1), or cannot be found, the Registrar may apply to the Court to issue a summons for that person to appear before the Court and show cause why the instrument should not be delivered up.

(3) Where a person served with a summons issued under Subsection (2) refuses or neglects to attend before the Court at the time appointed by the summons, the Court may issue a warrant directing the person so summoned to be apprehended and brought before the Court for examination.

(4) On the appearance before the Court of a person summoned under Subsection (2) or apprehended by the warrant under Subsection (3), the Court may examine him on oath and order him to deliver up the instrument.

(5) Where a person refuses or neglects to comply with an order under Subsection (4), the Court may commit him to a corrective institution for a period not exceeding six months unless the instrument is sooner delivered up.

(6) Where a person–

(a) has absconded or keeps out of the way so that a summons under Subsection (2) cannot be served on him; or
(b) has refused or neglected to comply with an order under Subsection (4),

the Registrar shall if the circumstances of the case so require–

(c) issue to the proprietor of the land an instrument as provided in this Act in the case of a certificate of title lost or destroyed; and
(d) enter in the Register–

(i) notice of the issue of an instrument and the circumstances under which it was issued; and
(ii) such other particulars as he thinks necessary.

And Section 161. CANCELLATION AND CORRECTION OF INSTRUMENTS AND ENTRIES.

(1) Subject to Subsection (2), the Registrar may–

(a) cancel or correct an instrument delivered up under Section 160; and
(b) in any other case, on such evidence as appears to him sufficient, correct errors or omissions in–

(i) the Register or an entry in the Register; or
(ii) the other duplicate certificate of title or an entry on that duplicate.

(2) Where a correction is made under Subsection (1)–

(a) the Registrar–

(i) shall not erase or render illegible any words; and
(ii) shall affix the date on which the correction was made together with his initials; and

(b) the Register or other duplicate certificate of title so corrected has the same validity and effect as if the error had not been made except as regards an entry made in the Register before the time of correcting the error.

(3) Where the Registrar is satisfied that a matter in a certificate of title does not affect the land to which the certificate relates, he may record on the title the cancellation of that matter in such manner as he considers proper.

  1. It is my view that firstly, cancellation under section 161 will not take place unless the title is delivered up to the Registrar on the basis of what is set out under section 160. And the Registrar must be satisfied that the instrument has been issued in error or fraudulently. The NHC has complained that only K300, 000.00 has been paid for the land, one has had payment twice against it. Therefore, both be called up and cancelled. In itself prima facie is a case to be examined in court. But the evidence is that the instrument has not been delivered up despite being called up. Despite that fact the Registrar has cancelled the instrument in accordance with section 161 of the Act.
  2. There is no evidence that a Court has issued a summons in accordance with section 160 (2) that has prompted appearance in Court, nor is there evidence that, because the plaintiff who has been issued such summons has failed to appear before the Court, a warrant has been issued in accordance with section 160 (3) of the Act. That is not the case here by the evidence set out above. There is no record of appearance in court after summons issued by the Registrar has failed to secure production of the instrument.
  3. Yes, there is evidence here summons has been issued by the Registrar upon the Plaintiff, that is clearly set out and discharged by the evidence I set out above. That is part of the process but not the complete process to warrant the cancellation in reliance upon section 161 of the Act. Now that there is no production of the instrument pursuant to the summons issued by the Registrar, it does not follow that cancellation takes place of the instrument because it has not been delivered up.
  4. What will not happen consistent with the law is that the Registrar will, “apply to the Court to issue a summons for that person to appear before the Court and show cause why the instrument should not be delivered up”. This is not heeded to by the second defendant. There is no evidence of giving effect to it by the second defendant. Procedure of law has not been accorded to complete the cycle of law in section 160 (2) of the Act to give effect to section 161 of the Act, to set what the second defendant has done lawfully in cancelling the instrument of the Plaintiff.
  5. But in so doing the evidence that I have set out above show that he has acted in breach of section 160 (2) of that Act. The Plaintiff has refused or neglected to comply with the summons by the Registrar. It means the Registrar will now apply to the Court to issue a summons to him to appear before the Court. There is no evidence in all of the relevant evidence that I have set out above consistent in compliance with section 160 (2) of the Act. The plaintiff has not appeared before the Court pursuant to that summons to show cause before the court why that instrument should not be cancelled. There is not an iota of evidence in this regard. The right is exercisable before the Court. It is not discharged because there is correspondence between the parties and the lawyers as set out above. That does not give effect and discharges the requirements of section 160 (2) of the Act, so that what follows into section 161 now becomes lawful on the part of the Registrar. It is clear what has set out under section 161 has not been followed from section 160 (2), nor subsection (3). It is clearly ultra vires and erroneous against the dictate of the law.
  6. What has happened here is consistent with Raumai No.18 Ltd v Country Motors Ltd [ 2018] PGNC 592; N7952 (28 September 2018). The second defendant has not secured the instrument from the summons that he has issued. There has been correspondence between him and the plaintiff which has not led to the instrument. The next course open by section 160 (2) was to get a summons issued by the Court to the plaintiff to secure his attendance. If he still did not then section 160 (3) came into play, he would secure a warrant on the basis of the summons by the Court. That has not happened here so section 161 does not come into play. Which is what the Supreme Court has firmed out in National Airports Corporation Ltd v Airport Guest House Ltd [2019] PGSC 90; SC1867 (8 November 2019). As in the present by the facts set out above the Registrar of Titles has not followed procedure set out under section 160 to go onto to exercise 161 of the Act. Which is parallel with the observations made in Feo v Samson [2020] PGNC 86; N8270 (21 April 2020). Here too, the instrument has not been given the second defendant which would have made justification to go into Court for a summons therefrom. It has not happened following. Procedure has been avoided and breached as seen in CRCE Property Ltd v Samson [2020] PGNC 304; N8511 (23 September 2020). It is the same law that has been applied and followed. Raina No. 1 Ltd v Elisha [2015] PGNC 158; N6051 (21 August 2015) is analogous to the facts circumstances here and is in favour of the course pursued by the plaintiff. Recent case of Tumba (trading as Kamkumung Bakery) v Samson [2020] PGNC 468; N8721 (30 September 2020) sets in bold that fact that procedure must be heeded without which the Registrar of Titles actions are illegal, ultra vires and susceptible to certiorari in favour of the Plaintiff.
  7. The allegation of Fraud made against the Plaintiff would have been properly discharged through the Court, not at the discretion of the Registrar of Titles as was done here. There ought to have been Court issued summons produced to secure attendance of the plaintiff in Court consistent with section 160 (2) of the Act: Ping Tan Enterprise Ltd v Wasa [2016] PGNC 314; N6512 (4 November 2016). Because summons produced did not secure the Plaintiff. The Correspondence between plaintiff and defendants did not constitute that section 160 (2) was discharged so that section 161 came into play. Judicial Review is equitable and is accorded upon discretion guided by the principles adopted in that Equity follows the law, because he who seeks equity must come with clean hands: Mainland Holdings Ltd v Stobbs [2003] PGNC 10; N2522 (29 October 2003). And Judicial Review is not examining the reasoning of the authority so that its own view is substituted, it is primarily concerned with the decision-making process: Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122.
  8. Here the aggregate is that the procedure under section 160 (2) (3) and section 161 (1) (a) of the Land Registration Act, have not been followed by the Registrar of Titles on the 04th December 2017, when he cancelled the plaintiff’s title, or State Lease for Allotment 202 Volume 80 Folio 214 (Hohola). His decision was unlawful and breached the law section 160 (2) (3) and section 161 of the Act. Therefore, Declaration lies and is granted pursuant to Order 16 Rule 2 of the National Court Rules the Plaintiff. Because that decision was improper, illegal, or unlawful. The failure to follow Section 160 of the Land Registration Act 1981 is unreasonable within the Wednesbury’s Principles of Unreasonableness.
  9. Therefore, pursuant to Order 16 (2) (a) of the National Court Rules, Certiorari is granted the plaintiff to bring up that Decision of the Registrar of Titles to cancel the Plaintiff’s State Lease described as Section 227 Allotment 202, Volume 80, Folio 214 (Hohola) Tokarara, National Capital District, the Decision made on the 04th of December 2017 into Court and that decision is hereby quashed forthwith.
  10. The formal orders of the Court are:

Orders Accordingly.

__________________________________________________________________

Korerua & Associate Lawyers: Lawyer for the Plaintiff/Applicant

Tangua Lawyers: Lawyer for the First Defendant

Office of the Solicitor General: Lawyer for the Second & Third Defendants

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