Open Bay Timber Limited and Papua New Guinea Forest Authority v Hon Lucas Dekena, Minister for Lands & Physical Planning and Henry Wasa, Registrar of Titles and The Independent State of Papua New Guinea and Secretary, Department of Lands & Physical Planning and Papua New Guinea Land Board and Tzen Plantations Limited (2013) N5109

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 26 March 2013
• Citation: (2013) N5109
• Court: National Court
• Docket Number: OS (JR) NO 927 OF 2011
• Judgement Number: N5109

Full Title: OS (JR) NO 927 OF 2011; Open Bay Timber Limited and Papua New Guinea Forest Authority v Hon Lucas Dekena, Minister for Lands & Physical Planning and Henry Wasa, Registrar of Titles and The Independent State of Papua New Guinea and Secretary, Department of Lands & Physical Planning and Papua New Guinea Land Board and Tzen Plantations Limited (2013) N5109

National Court: Cannings J

Judgment Delivered: 26 March 2013

N5109

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 927 OF 2011

OPEN BAY TIMBER LIMITED

First Plaintiff

PAPUA NEW GUINEA FOREST AUTHORITY

Second Plaintiff

V

HON LUCAS DEKENA,

MINISTER FOR LANDS & PHYSICAL PLANNING

First Defendant

HENRY WASA, REGISTRAR OF TITLES

Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Defendant

SECRETARY,

DEPARTMENT OF LANDS & PHYSICAL PLANNING

Fourth Defendant

PAPUA NEW GUINEA LAND BOARD

Fifth Defendant

TZEN PLANTATIONS LIMITED

Sixth Defendant

Waigani: Cannings J

2013: 13, 14, 15, 26 March

JUDICIAL REVIEW – decision to grant State Lease – whether decision contrary to Forestry Act, Section 139A (transfer of land to the Authority) – whether actual fraud by a registered proprietor is a proper ground of judicial review, Land Registration Act, Section 33(1)(a) – whether errors of law committed in decision-making process culminating in granting of State Lease – remedies – principle of indefeasibility of title – whether constructive fraud established.

The Secretary for Lands granted a 99-year State Lease to the sixth defendant over a portion of land for agricultural purposes. The first plaintiff, a timber company, and the second plaintiff, the Papua New Guinea Forest Authority, were aggrieved by the Secretary’s decision and other decisions leading up to it and sought judicial review of those decisions and relief that would have the effect of quashing the sixth defendant’s lease and confirming the plaintiffs’ interests in the land, on three grounds: (1) granting of the lease was contrary to the Forestry Act, Section 139A, under which the land was the property of the PNGFA; (2) the sixth defendant obtained title by actual fraud; (3) gross and extensive error of law constituted by statutory breaches, resulting in the sixth defendant obtaining title in circumstances that were so unsatisfactory, irregular and unlawful as to amount to constructive fraud.

Held:

(1) Section 139A of the Forestry Act deems all land in Papua New Guinea in the name of the State that was held under a certificate of occupancy or set aside for use by the Department of Forests immediately before the coming into operation of the Forestry Act (25 June 1992) to have been transferred to and become the property of the Authority. The subject land was held by the Department of Forests under a certificate of occupancy at the relevant time and is therefore deemed to have been transferred to and become the property of the Authority on and from the coming into operation of the Forestry Act. The land remained the property of the Authority on the date of grant of the State Lease to the sixth defendant. The lease was granted contrary to the Forestry Act, Section 139A. The first ground of review was upheld.

(2) Actual fraud by a registered proprietor is a ground on which a State Lease can be quashed under Section 33(1)(a) of the Land Registration Act. However it is not a proper ground of judicial review unless the registered proprietor is a public official or governmental body. Here the registered proprietor was a private corporation so the ground of review alleging actual fraud against it was not properly before the Court (it should have been pleaded, if at all, by writ of summons and statement of claim under Order 4 of the National Court Rules). Further, the evidence was not sufficient to prove actual fraud against the sixth defendant. The second ground of review was dismissed.

(3) Public officials and governmental bodies have a duty to comply with the law when making decisions relating to allocation of land, including granting of State Leases. Here the plaintiff proved that a number of errors of law were made:

(a) the State Lease was granted over land that was not “Government land” (as defined by Section 2 of the Land Act) contrary to Section 65 of the Land Act, as the land was the property of the Authority;

(b) the land was unlawfully exempted from advertisement in that: the Secretary lacked power to exempt it from advertisement, none of the circumstances in which land may under Section 69(2) of the Land Act be exempted from advertisement applied (in particular the State had not agreed to provide the land for the establishment of a project, on the contrary the State had agreed not to provide the land for a project), the instrument of exemption did not adequately state the reason for exempting the land from advertisement, the Secretary, who had actual knowledge of the plaintiffs’ interests in the land, denied natural justice to them by not notifying them of his intention to exempt the land from advertisement so that the land could be leased to the sixth defendant;

(c) the Chairman of the Land Board, which recommended that a State Lease be granted to the sixth defendant, breached Section 58 of the Land Act by failing to notify the plaintiffs of the date on which the sixth defendant’s application for the State Lease would be heard and of its recommendation that the Lease be granted to the sixth defendant, thereby denying the plaintiffs the opportunity to make representations to the Board and/or appeal to the Minister under Section 62 of the Land Act;

(d) the decisions of the Secretary to exempt the land from advertisement and grant the Lease to the sixth defendant were so unreasonable that no reasonable administrator could have made either decision;

(e) the Deputy Registrar of Titles registered the Lease granted to the sixth defendant contrary to the Land Registration Regulation as the land was already subject to eight separate State Leases, the registered proprietor of which was the PNGFA [including portion 9: 999.99 hectares];

and therefore the third ground of review was upheld.

(4) As two grounds of review were upheld the decision to grant the State Lease to the sixth defendant and related decisions were susceptible to judicial review. Notwithstanding the general principle of indefeasibility of title there is an exception where it is proven that the circumstances in which a person has obtained title are so unsatisfactory, irregular and unlawful as to amount to constructive fraud for the purposes of Section 33(1)(a) of the Land Registration Act. Here the errors of law proven by the plaintiffs under grounds 1 and 3 were so numerous and serious as to amount to constructive fraud, warranting the exercise of the Court’s discretion by granting the relief sought by the plaintiffs. The decisions culminating in the decision to grant the State Lease and the decision to register the Lease were quashed and the court granted consequential relief to reflect those orders.

Cases cited

Papua New Guinea Cases

Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110

Commonwealth v Western Australia [1999] HCA 5

Costello v Controller of Civil Aviation [1977] PNGLR 476

Dale Christopher Smith v Minister for Lands (2009) SC973

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

Medaing v MCC and Iamo (2011) N4340

Mision Asiki v Manasupe Zurenuoc (2005) SC797

Mosoro v Kingswell Ltd (2011) N4450

Mudge v Secretary for Lands [1985] PNGLR 387

NCDIC v Crusoe Pty Ltd [1993] PNGLR 139

Paul Saboko v Commissioner of Police (2006) N2975

Ramu Nickel Ltd v Temu (2007) N3252

Robertson Rataba v Gari Baki (2010) SC1014

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

The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603

Timothy Alex Aipa v Benjamin Samson, Deputy Registrar of Titles (2012) N4777

West New Britain Provincial Government v Kimas (2009) N3834

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

Overseas Cases

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223

Counsel

J Brooks & M Mukwesipu, for the first plaintiff

K Iduhu & M Pala, for the second plaintiff

I Mugugia & S Havori, for the first, second, third, fourth & fifth defendants

I Molloy & I Shepherd, for the sixth defendant

26th March, 2013

1. CANNINGS J: This is a ruling on an application for judicial review. The applicants are the plaintiffs Open Bay Timber Ltd and the Papua New Guinea Forest Authority (“PNGFA”). They apply for judicial review of administrative...