Albright Ltd v Mekeo Hinterland Holdings Ltd and Lucas Dekena, Minister for Lands & Physical Planning and Romilly Kila-Pat, Secretary for Lands & Physical Planning and the Independent State of Papua New Guinea (2017) N8335

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J.
• Judgment Date: 08 June 2017
• Court: National Court
• Citation: (2017) N8335
• Docket Number: WS 258 of 2012
• Year: 2017
• Judgement Number: N8335

Full Title: WS 258 of 2012; Albright Ltd v Mekeo Hinterland Holdings Ltd and Lucas Dekena, Minister for Lands & Physical Planning and Romilly Kila-Pat, Secretary for Lands & Physical Planning and the Independent State of Papua New Guinea (2017) N8335

National Court: Hartshorn J.

Judgment Delivered: 8 June 2017

N8335

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 258 OF 2012

BETWEEN:

ALBRIGHT LIMITED

Plaintiff

AND:

MEKEO HINTERLAND

HOLDINGS LIMITED

First Defendant

AND:

LUCAS DEKENA, MINISTER FOR

LANDS & PHYSICAL PLANNING

Second Defendant

AND:

ROMILLY KILA-PAT, SECRETARY FOR

LANDS & PHYSICAL PLANNING

Third Defendant

AND:

INDEPENDENT STATE OF

PAPUA NEW GUINEA

Fourth Defendant

Waigani: Hartshorn J.

2016: 21st June

2017: 8th June

LEASE– Trial – damages - plaintiff seeks declaratory relief and damages against the defendants for breaches alleged State defendants’ statutory duties of care to plaintiff – plaintiff contends defendants owe it common law duties of care

LEASE - plaintiff has sub sublease agreement with first defendant - State defendants contend amongst others, that they do not owe a statutory duty to plaintiff– state defendants contend the Sub sublease agreement between first defendants and plaintiff is their private commercial arrangement and does not concern the State or its agents

DUTY OF CARE – whether state owed a statutory duty to plaintiff - whether there was any negligence by the State defendants - whether breach of s10 and 11 of Land Act occurred giving rise to damages claim by plaintiff - breach of the relevant provisions of the Land Act cannot be enforceable by a private right of action by an entity in the position of the plaintiff – plaintiff could have a claim against first defendants but not against the state defendants – plaintiffs claim dismissed.

DUTY OF CARE – whether state owed a common law duty of care to the plaintiff - The plaintiff’s loss must be a reasonably foreseeable result of the defendant’s conduct - there must be a prior sufficient relationship of proximity between the plaintiff and the defendant - it must be fair, just and reasonable to impose liability on the defendant - no actions on behalf of the State that are able to be considered as being indicative of the State assuming any of the risk – no action has been taken by the State that exhibits it has special relationship with plaintiff – no existence of prior sufficient relationship of proximity between the State defendants and plaintiff – plaintiff has not satisfactorily established that State defendants owe a duty of care to it – proceedings dismissed with costs to the defendants

Cases Cited:

Papua New Guinea Cases

Mathias Goma & 703 Ors v. Protect Security & Communications Ltd (2010) N4606

Catholic Diocese Wabag Board of Trustees v. Enga Provincial Government (2011) N4562

Mathias Goma & 703 Ors v. Protect Security & Communications Ltd (2013) SC1300

Etepa v. Baki (2015) SC1502

Overseas Cases

Atapattu, R. (On the Application of) v. The Secretary of State for the Home Department [2011] EWHC 1388 (Admin)

Caparo Industries Ltd v. Dickman [1990] 2 AC 605

X (minors) v. Bedfordshire [1995] 3 All ER 353

Customs and Excise v. Barclays Bank plc [2006] UKHL 28

Franklins Pty Ltd v. Metcash Trading Ltd [2009] NSWCA 407

Hope v. Revenue and Customs [2017] EWHC 812 (Ch)

Counsel:

Ms. M. Wal and Ms. H. Singut, for the Plaintiff

Ms. I. Mugugia, for the Second, Third and Fourth Defendants

8th June, 2017

1. HARTSHORN J: On 30th November 2007, the State issued to the first defendant, Mekeo Hinterland Holdings Ltd (Mekeo), a Certificate of Title for a Special Purpose Agriculture and Business Lease (SABL) (Sublease), over certain customary land. The land the subject of this Sublease had been leased by Customary Landowners to the State pursuant to an Instrument of Lease for Customary Land dated 16th November 2007 (Lease).

2. The plaintiff Albright Ltd (Albright), entered into a sub sublease of the land with Mekeo (Sub sublease). Albright was to develop the land and was given exclusive rights by Mekeo to harvest timber and conduct agro forestry projects upon the land for a period of 98 years.

3. In December 2010 the National Court declared that Mekeo’s title to the land that had been granted to it by virtue of the Sublease, was null and void.

4. Albright seeks declaratory relief and damages against the defendants for breaches of what it is alleged are the State defendants’ statutory duties of care to Albright and what it is alleged are all of the defendants’ common law duties of care to Albright. These duties of care are alleged to be that the defendants ensured that Mekeo properly and legally acquired its SABL without any illegality and that the grant of the Sublease to Mekeo complied with sections 10 and 11 Land Act, thus enabling Mekeo to be able to grant a valid Sub sublease to Albright.

5. There was no appearance on behalf of Mekeo at the trial. As I was satisfied that orders of this court relating to service upon Mekeo had been complied with by Albright, the trial was permitted to proceed in the absence of representation of Mekeo.

6. As to the position of Mekeo in this proceeding, on 24th October 2012, default judgment was entered against it and the State defendants. The State defendants successfully applied to set aside the default judgment against them but no such application was made by Mekeo. Subsequently, leave was granted to Albright to amend its statement of claim following an inter partes hearing at which counsel for Mekeo was present. Mekeo then purportedly filed an amended defence but no application has been made to set aside the default judgment against Mekeo. It is the case then that Mekeo has default judgment entered against it for damages to be assessed on the statement of claim filed on 22nd March 2012. I therefore only consider the question of the State defendants’ liability.

7. The State defendants contend amongst others, that they do not owe a statutory duty to Albright, the Sub sublease agreement between Mekeo and Albright is their private commercial arrangement and does not concern the State or its agents and in any event there was no negligence by the State defendants. Further, the negligence of Albright in failing to ascertain that the tenure of the Lease was safe, by verifying that due process had been followed in the State’s acquisition of the customary land contributed to Albright’s loss.

Whether the State owed a statutory duty to Albright

8. The first issue raised is whether the State defendants owed a statutory duty to Albright. Albright contends that the State defendants owed a statutory duty to ensure that they complied with sections 10 and 11 Land Act to ensure that Mekeo acquired a Sublease without any illegality or encumbrances so that Mekeo was able to grant a Sub sublease to Albright.

9. Albright contends that the State defendants breached their statutory duty by not complying with sections 10 and 11 Land Act, when preparing and issuing the Sublease to Mekeo and as a consequence the court declared the SABL, the Sublease, a nullity and that it was void ab initio.

10. The State defendants contend that they do not owe and therefore did not breach any such duty to Albright.

11. Albright relies on the cases of Mahura v. Dekena (2013) N5305 and Maniwa v. Malijiwa (2014) N5687 which held amongst others that s. 10 Land Act contains mandatory requirements that are to be complied with by the Minister concerning the grant of an SABL. Albright contends that as the requirements are mandatory, a statutory duty is imposed upon the Minister to comply with those requirements. This duty, it is contended, is for the benefit and protection of:

a) Customary Landowners of the SABL, to ensure that they have a say in what happens on their land and to protect their usufructuary and customary rights to their land, and

b) Investors and developers of an SABL such as Albright.

12. Albright relies upon amongst others, the House of Lords opinions in X (minors) v. Bedfordshire [1995] 3 All ER 353 and contends that as the Land Act does not provide a remedy for breach of sections 10 and 11, a cause of action lies against the State defendants for breach of statutory duty. Further, the damages that sections 10 and 11 seek to prevent are the actual damages that Albright suffered as a direct consequence of the negligence of the State defendants and that the State defendants were negligent in their duties when issuing the SABL to Mekeo as no proper enquiries were made into the subject land, thereby breaching their statutory duty to Albright.

Consideration

13. The cause of action in tort known as breach of statutory duty was considered by the Supreme Court in Mathias Goma & 703 Ors v. Protect Security & Communications Ltd (2013) SC1300. This appeal was an appeal from my decision in Mathias Goma & 703 Ors v. Protect Security & Communications Ltd (2010) N4606. Both cases considered, and to varying degrees followed, X (minors) v. Bedfordshire (supra). It was held by a majority of the Supreme Court that amongst others:

a) the cause of action known as breach of statutory duty is a tort that is part of the...