Michael Kewa v Elias Mai Kombo

• Jurisdiction: Papua New Guinea
• Judge: Gavara-Nanu J, Hartshorn & Higgins JJ
• Judgment Date: 13 October 2016
• Citation: (2016) SC1542
• Court: Supreme Court
• Year: 2016
• Judgement Number: SC1542

Full : SCA No 141 of 2014; Michael Kewa, Michael Ua Poning, Macdonald Poning & others and Pangumb Business Group Incorporated v Elias Mai Kombo (2016) SC1542

Supreme Court: Gavara-Nanu J, Hartshorn & Higgins JJ

Judgment Delivered: 13 October 2016

SC1542

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA No. 141 OF 2014

BETWEEN:

MICHAEL KEWA, MICHAEL UA PONING, MACDONALD PONING & OTHERS

First Appellants

AND:

PANGUMB BUSINESS GROUP INCORPORATED

Second Appellant

AND:

ELIAS MAI KOMBO

Respondent

Waigani: Gavara-Nanu J, Hartshorn & Higgins JJ

2016: 29thAugust & 13th October

REAL PROPERTY – purchase of State Lease – whether for purchaser’s benefit or as representative of a clan group – constructive trust for clan group

FRAUDS & LIMITATIONS ACT 1988 – s.18 imposes no time bar on claims for equitable relief

LAND REGISTRATION ACT – Title obtained by fraud on beneficiaries of trust – meaning of fraud

EQUITY – allegation of breach of trust – fraud on beneficiaries – equitable remedies sought

PNG Cases Cited:

Aihi v The State (no.1) [1981] PNGLR 81

Comrade Trustee Services Ltd v Dangle [2011] PNGSC 5; SC 1105

Mamun Investment Ltd v Koim [2015] PGSC 9; SC 1409

Mereke v PNG Federation of Cooperative Associations Ltd [2007] PGNC 98, [19] & [20])

Mudge&Mudge v Secretary for Lands &ors [1985] PNGLR 387

Papua Club Inc v Nasaum Holdings Ltd &ors[2004] PGNC 178; N2603

Raka v Maimu [2013] PGNC 285

Overseas Cases Cited:

AON Risk Services Australia Limited v Australian National University [2009] HCA 27

Barry v Heider [1914] HCA 79; (1914) 19 CLR 197

Cassegrain v Gerard Cassegrain& Co Pty Ltd [2015] HCA 2

Cohen v Cohen (1929) 42 CLR 91

Commonwealth of Australia v Cornwell [2006] ACTCA 7

Corin v Patton [1990] HCA 12; (1990) 169 CLR 540

Dalton v Christofis [1978] WAR 423

Harris v Digital Pulse Pty Ltd [2003] NSWCA 10

Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464

Re Vandervilles Trust [1971] AC 912

Re Warren (deceased) [1918] VLR 209

The Bell Group (in liq) v Westpac Banking Corporation (no.9) [2008] WASC 239

COUNSEL:

Mr.J. Talopa, for the 1st& 2ndAppellants

Mr.J. Poya, for the Respondent

DECISION

13th October, 2016

1. BY THE COURT: This is an appeal from a decision of Poole J delivered on 14 October 2014 in the National Court at Mt Hagen.

2. The proceedings related to land known as Allotment 1 Section 57, City of Hagen (the land), alleged to have traditionally belonged to the members of the Mogei Pangumb Clan (the clan). However, the clan had no title to it. It had long before become State land. It then became available for leasing. The then members of the clan decided, it was alleged, to incorporate their group. This they ultimately did under the name Pangumb Business Group Incorporated (see Business Groups Incorporation Act 1974).

3. In 1987, the clan members allegedly resolved to delegate to the respondent the task of applying for and obtaining for them a State Lease over the land. The respondent obtained the lease but in his own name. His Defence asserted that he obtained the lease on his own behalf and not on behalf of the clan.

4. By motion notified on 19 December 2003, the respondent sought to rely on the Frauds and Limitations Act 1988 (cited incorrectly as “Statute of Fraud and Limitation Act”) to defeat the appellants’ claim. On 11 August 2004, that leave was refused by Salika J (as he then was) on the ground that it had not been pleaded in the Defence.

5. Thus the respondent sought to amend his Defence to rely upon that statute. In an affidavit to support a fresh application, his lawyer deposed that the proceedings to dispute the issue of the State Lease were barred by virtue of s.12 of the Frauds and Limitations Act.

6. That application came before Cannings J at Mt Hagen on 13 October 2004. On 15 October 2004 his Honour ruled that the proposed amendment was ineffective as it referred to an inapplicable provision. The Frauds and Limitations Act 1988 s.12 related to a different subject matter. His Honour noted, in passing, that, perhaps, s.16 was relevant.

7. Following that decision the respondent made a further application in the National Court to strike out the Statement of Claim. This time it came before Lay J. That application sought to rely on s.16 of the Frauds and Limitations Act 1988. Lay J delivered his decision on 17 June 2005.

8. His Honour acknowledged that the Statement of Claim was defective but was capable of asserting a viable cause of action if amended. That, he suggested, could be by seeking a declaration that the respondent held the State Lease in trust for the appellants.

9. The Writ of Summons was duly amended pursuant to leave granted by Lay J. The amendment sought that the Certificate of Title “be declared null and void and of no effect or be deleted”. It further sought that the Title be “transferred to or reissued to Pangumb Business Group Incorporated”.

10. It failed overtly to take up the suggestion to state expressly that the defendant held the State Lease in trust for the clan group but it did seek an amendment of the identity of the lessee which would follow from that trust if it was found to exist.

11. By a Defence dated 7 March 2005 the respondent continued to rely on “Section 12 of the Statutes of Fraud and Limitation Act”. It was asserted that the “cause of action” arose, at the latest,on 2 September 1993 and current proceedings were time-barred.The respondent further asserted that he applied for and obtained the State Lease, not on behalf of the clan, but for his own personal benefit “as a private citizen”.

12. On 8 February 2007 the respondent filed a further affidavit asserting that the second appellant had been “dissolved”. The respondent had also been granted, on 3 December 2003, a right to subdivide the subject land.

13. That, however, if the original State Lease and the rights thereunder were held on trust, merely transferred the trust to the individual leases.

14. On 31 August 2008, Simon Kama, a clan member it seems, swore an affidavit deposing, inter alia, that the first appellant, Michael Kewa, had admitted to him that he was pursuing this claim for his personal benefit and would concede the respondent’s claim if the latter gave him a small portion of the land. However, he also attested that, though deregistered, the second appellant had been reregistered on 30 November 2007. It was formed in 1988 to acquire rights to an adjoining block of land being Allotment 4 Section 56 Mt Hagen. We note the dissolved corporation was Pangumb Business Group. The corporation registered in 2007 is Pangamb Business Group (Inc.). The discrepancy is not explained and is, doubtless, immaterial.

15. On 20 August 2009 the respondent sought two orders. First that the appellants’ proceedings against him be dismissed as ‘Statute Barred’ alternatively that the reference to an unidentified “7 others” be struck out.

16. One of the annexures to an affidavit of Rev. Joe Pentipa, filed on behalf of the appellants, is a letter, signed by the respondent (and 5 others) on behalf of “MogeiPangumb Clan”, claiming the land (Section 57 Allotment 1) as ancestral land. Their claim to ownership was disputed by another group of MogeiPangumb clan members, including some of the named appellants. One of the signatories to that letter of dispute, Mr Leo Mek, sought to withdraw his support for it because, he said, the respondent was “officially authorised by our village leaders”, to apply for the State Lease over the land.

17. This does not suggest any doubt over the status of the respondent as a trustee, though the beneficiaries plainly would require further identification.

18. On 23 October 2009 the respondent again applied to dismiss the proceedings, this time under s.16 of the Frauds and Limitations Act 1988. The matter came before Yalo AJ. His Honour was critical of the process leading to the State Lease being granted to the respondent, the land originally having been communal land used for recreation. He noted the serious allegations of fraud against the respondent and concluded that the case of the appellants (then the first appellantsonly) was arguable.

19. By way of reply to the respondent’s affidavits, the appellants annexed certain letters apparently written or signed by the respondent. On 18 July 1990, re the land the subject of this dispute, he had signed a letter to the authorities contemplating the issue of the State Lease as “Spokesman for the MogeiPangumb Clan”. On 12 May 1991, he signed a letter to the Lands Department complaining of the lack of land for the MogeiPangumb clan and claiming Allotment 1 Section 57ie the land, on its behalf. That letter was dated 18 February 1992. It is true that others including the first appellants disputed his right to represent them but that did not detract from the capacity in which he held himself out. (see letter 9/8/93 parts of those annexures).

20. On 1 April 1996, Mr Kombo, the respondent, wrote to the Papua New Guinea Land Board seeking waiver of rental on Allotment 1Section 57 and reissue of the Lease for “business purposes”.

21. He recited:

“… it is...