Vitus Kais v Sali Tagau

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 15 January 2016
• Citation: (2016) N6159
• Court: National Court
• Year: 2016
• Judgement Number: N6159

Full : WS No 301 of 2010; Vitus Kais, Peter Siarup, Tom Bamatu, Wolef Bamatu, Manuel Ambat, Julius Bamatu, John Sapuri, Sim Sipiel, Mepi Vitus, Erlberth Siarup, Tarius Siarup, Juakim Bunam, Jaul Sagui and John Dap and Masuba Land Group Incorporated v Sali Tagau and Selon Limited and Tropic Timbers Limited and Pepi Kimas, Secretary, Department of Lands & Physical Planning and The Independent State of Papua New Guinea (2016) N6159

National Court: Cannings J

Judgment Delivered: 15 January 2016

N6159

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 301 OF 2010

BETWEEN

VITUS KAIS, PETER SIARUP, TOM BAMATU, WOLEF BAMATU, MANUEL AMBAT, JULIUS BAMATU, JOHN SAPURI,

SIM SIPIEL, MEPI VITUS, ERLBERTH SIARUP, TARIUS SIARUP,

JUAKIM BUNAM, JAUL SAGUI AND JOHN DAP

First Plaintiffs

MASUBA LAND GROUP INCORPORATED

Second Plaintiff

V

SALI TAGAU

First Defendant

SELON LIMITED

Second Defendant

TROPIC TIMBERS LIMITED

Third Defendant

PEPI KIMAS, SECRETARY,

DEPARTMENT OF LANDS & PHYSICAL PLANNING

Fourth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fifth Defendant

Madang: Cannings J

2014: 3 December And 2015: 21 April

2016: 15 January

LAND – Government land – State Leases – Indefeasibility of title – Alleged fraud in granting of State Leases – Meaning of fraud – Whether a case of constructive fraud.

LIMITATION PERIODS – Whether an action commenced more than 10 years after date of alleged fraud is time-barred – Frauds and Limitations Act, Sections 16, 18.

REMEDIES – Appropriate relief where State Lease found to have been granted in a case of fraud – Whether order for forfeiture of Lease should be made.

Facts

The plaintiffs claimed that the second defendant, with the assistance of the first defendant, fraudulently became registered proprietor of a State Lease over agricultural land. The plaintiffs claimed that they were the traditional owners of the land, that it was the National Government’s intention to transfer the land to them as the traditional owners, that the first and second defendants falsely represented to the National Government that the second defendant was a company representing the interests of the traditional owners and that the State Lease was granted on that false premise. The plaintiffs sought orders that the second defendant’s title be forfeited and transferred to them. The first and second defendants argued as a preliminary issue that the proceedings should be summarily dismissed for being time-barred under the Frauds and Limitations Act. As to the merits of the claim, they denied all allegations of fraud and argued that the second defendant had been lawfully granted the State Lease by a tender process and that it was under no obligation, by any trust, express or implied, or any other arrangement, to deal with the land for the benefit of the plaintiffs. The third defendant is a company that lent money to the second defendant so that the second defendant could acquire the Lease. No specific relief is sought against it, but it filed a cross-claim, mainly against the first and second defendants, which has not been pursued, and tends to support the plaintiffs.

Held:

(1) The proceedings were not time-barred by Section 16(1) of the Frauds and Limitations Act as: (a) this was not an action founded on simple contract or tort or any other form of action covered by Section 16(1); and (b) the proceedings are properly regarded, for the purposes of Section 18 of that Act, as a claim for an injunction and other forms of equitable relief, in which case Section 16 does not apply.

(2) The granting of the State Lease to the second defendant was a case of fraud as it had been represented to the State, prior to granting the State Lease, that the second defendant was a company representing the interests of the plaintiffs, when, in fact, it was not. A declaration was made in those terms.

(3) A further declaration was made that the granting of that Lease and the subsequent granting of interests in the land covered by the Lease, including State Leases granted or transferred as a result of the subdivision of that land, are liable, subject to a further hearing or agreement between the parties, to be set aside, forfeited or transferred or subject to such other orders of the Court, as are necessary to do justice in the circumstances of this case.

(4) The question of what further declarations and orders should be made will be addressed at a further hearing.

Cases cited

The following cases are cited in the judgment:

Elizabeth Kanari v Augustine Wiakar (2009) N3589

Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215

Helifix Group of Companies Ltd v PNG Land Board (2012) SC1150

Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80

Kapiura Trading Ltd v Bullen (2012) N4903

Koitachi Ltd v Walter Schnaubelt (2007) SC870

Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120

Lae Rental Homes Ltd v Viviso Seravo (2003) N2483

Mamun Investment Ltd v Nixon Koi (2015) SC1409

Mark Lakani v Gabe Ikupu (2015) N6067

Mosoro v Kingswell Ltd (2011) N4450

Mudge v Secretary for Lands [1985] PNGLR 387

NCDIC v Crusoe Pty Ltd [1993] PNGLR 139

Open Bay Timber Ltd v Minister for Lands & Physical Planning (2013) N5109

Ramu Nickel Ltd v Temu (2007) N3252

Steamships Trading Company Ltd v Garamut Enterprises Ltd (2000) N1959

Tau Gumu v PNGBC (2002) N2251

West New Britain Provincial Government v Kimas (2009) N3834

Yakananda Business Group Inc v Minister for Lands (2001) N2159

STATEMENT OF CLAIM

This was a trial in which the plaintiffs challenged the granting of a State Lease over Government land on the ground of fraud.

Counsel

B B Wak, for the Plaintiffs

B W Meten, for the First & Second Defendants

L A Kari, for the Third Defendant

15th January, 2016

1. CANNINGS J: This case is about an area of Government land of 416.9 hectares in Madang District known as Mililat Plantation. The land was made the subject of a 99-year State Lease in the year 2000, when it was described as Portion 237, Milinch of Kranket, Fourmil Madang. The State Lease was granted to the second defendant, Selon Ltd. The land was later subdivided and described as Portions 1056, 1057, 1058, 1059, 1060 and 1061. State Leases were granted over all those portions to Selon Ltd, which has since transferred its interests in one or more of those portions to persons who are not parties to these proceedings.

2. The first plaintiffs, Vitus Kais and 13 others, say that they, and clans they represent, are the traditional owners of Mililat Plantation. They are challenging Selon Ltd’s title. They claim that Selon Ltd, abetted by its managing director, the first defendant, Sali Tagau, fraudulently became registered proprietor of the State Lease over Portion 237 in 2000. The plaintiffs claim that it was the National Government’s intention to transfer the land to them as the traditional owners, that the first and second defendants falsely and dishonestly represented to the National Government that the second defendant was a company representing the interests of the traditional owners and that the State Lease was granted on that false premise. The plaintiffs seek orders that the second defendant’s title be forfeited and transferred to them.

3. The first and second defendants argue as a preliminary issue that the proceedings should be summarily dismissed for being time-barred under the Frauds and Limitations Act, as the alleged fraud was committed in 1999 but these proceedings were not commenced until 2010. As to the merits of the claim, they deny all allegations of fraud. They say that Selon Ltd was lawfully granted the State Lease by a tender process and that it is under no obligation, by any trust, express or implied, or any other arrangement, to deal with the land for the benefit of the plaintiffs.

4. The third defendant, Tropic Timbers Ltd, is a company that lent money to the second defendant so that it could acquire the Lease. No specific relief is sought against the third defendant, but it filed a cross-claim, mainly against the first and second defendants, and tends to support the plaintiffs. It is not clear whether the third defendant wishes to pursue its cross-claim, and the merits of the cross-claim are not addressed in this judgment. The fourth and fifth defendants, the Secretary for Lands and Physical Planning and the State, have not participated in the proceedings.

5. The case is essentially a dispute over title to Government Land between the plaintiffs and the first and second defendants.

ISSUES

6. The following issues arise:

1 Are the proceedings time-barred?

2 Did Selon Ltd obtain the land by fraud?

3 What declarations or orders should the Court make?

1 ARE THE PROCEEDINGS TIME-BARRED?

7. Mr Meten, for the first and second defendants, submitted that the proceedings are time-barred by Section 16(1) (limitation of actions in contract, tort, etc) of the Frauds and Limitations Act, which states:

Subject to Sections 17 and 18, an action—

(a) that is founded on simple contract or on tort; or

(b) to enforce a recognisance; or

(c) to enforce...