Papindo Trading Company Limited v Oswald Tolopa and Others

• Jurisdiction: Papua New Guinea
• Judge: Dowa J
• Judgment Date: 21 April 2023
• Neutral Citation: N10211
• Citation: N10211, 2023-04-21
• Counsel: K Keindip, for the Plaintiff,S Maliaki, for the First, Second, Fifth & Sixth Defendant,R Mannrai, for the Third Defendant,C Kos, for the Fourth Defendants
• Docket Number: W.S NO. 1519 OF 2019
• Hearing Date: 24 September 2021,21 April 2023
• Court: National Court

N10211

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

W.S NO. 1519 OF 2019

Between:

Papindo Trading Company Limited

Plaintiff

v.

Oswald Tolopa, Acting Secretary, Department of Lands & Physical Planning

First Defendant

and

John Rosso, Minister for Lands & Physical Planning

Second Defendant

and

Tiklim Coffee Estates Limited

Third Defendant

and

Tarina Limited

Fourth Defendant

and

Benjamin Samson, Registrar of Titles

Fifth Defendant

and

The Independent State of PNG

Sixth Defendant

Lae: Dowa J

2021: 24^th September

2023: 21^st April

LAND LAW — state lease — plaintiff seeking declaratory relief of ownership of state lease — seeking orders to compel Lands Department to comply with orders in OS 84 of 2014-nullifying forfeiture Notice and cancellation of second state lease and restoration of original title to the plaintiff.

Whether Court can compel cancellation of forfeiture and nullification of second state lease on grounds of constructive fraud-Whether administrative process for grant of second state lease was fraudulent-Onus of proof lies with the plaintiff — Whether innocent third party obtained good title-Indefeasibility of title under section 33 of Land Registration Act —

What is the effect of valid court orders-whether orders have retrospective effect-and whether alternative relief for damages sufficient compensation where compliance of court orders not possible and where substantive reliefs not available. All main reliefs refused but judgment entered for plaintiff for the alternative remedy for damages (to be assessed awarded).

Attorney-General Act-Solicitor-General has statutory duty to act on instructions from Attorney — General and specific instructions from state departments to represent them.

Preliminary issue-Claims by and Against the State Act-Whether lack of notice under section 5 of the Act can be raised by a party other than the State-held a party other than the State can raise the issue as it goes to the competency of the proceedings where the State isa party.

Cases Cited.

OS No.84 of 2014 – Papindo Trading Co. Ltd v Romily Kila Pat & Ors

OS 678 of 2015- Tiklim Coffee Estates Ltd v Council John Zakli and other

Yaferaka Incorporated Land Group v Nama-Aporo Landners Association (2020) N8303.

Kopyota Investment Ltd v National Housing Commission (2022) SC 2339

Mamun Investment Limited v Koim (2015) SC 1409

Mudge v Secretary for Lands (1985) PNGLR 387

Pius Tikili v Home Base Real Estate Ltd (2017) SC1563

PNG Bible Church Inc v Carol Mandi (2018) SC1724

Rosemary John v James Nomenda (2010) N3851

Toki v Helai (2016) SC1558

Vaki Vailala v NHC (2017) N6598

Mota v Camilus (2017) N6810

Ramu Nickle v DR Temu (2007) N3252

Polem Enterprise Ltd v Attorney General (2008) SC911

Yap v Tan (1987) PNGLR 227

Daiva v Pukali ((2002) N2289

Tasman Building Company v Genia (2011) N4412

Augwi Ltd v Xun Xin Xin (2014) SC1616

Angoman v Independent Public Business Corporation of PNG (2011) N4363

Kisombo v Apore (2020) N8683

Derwent Ltd v Pakena (2020) N8294

Berr v Yango (2015) N5859

Papua Club Inc v Nusaum Ltd (2005) SC 812

Niugini Table Birds v Nasap (2000) N2018

Anego Company Ltd v Finance Corporation Ltd (2013) N5391

Augerea v Kelola (2014) N5582

Finance Corporation Ltd v Kombra (2020) N8285.

Ross Bishop v Bishop Brothers (1988–89) PNGLR 533

Vaki v Damaru (2016) SC1557

Mondo Merchant Ltd v Melpa Properties Ltd (1999) N1863

Opi v Telikom PNG Ltd (2020) N8290

Philipae v Igaso (2011) PNGNC N4366

Counsel:

K Keindip, for the Plaintiff

S Maliaki, for the First, Second, Fifth & Sixth Defendant

R Mannrai, for the Third Defendant

C Kos, for the Fourth Defendants

Gamoga & Co. Lawyers: Lawyers for the Plaintiff

Solicitor General Lawyers: Lawyers for the First, Second, Fifth & Sixth Defendants

Mannrai Lawyers: Lawyers for the Third Defendant

Charles Kos Lawyers: Lawyers for the Fourth Defendant

JUDGMENT

21^st April, 2023

1. Dowa J. The Plaintiff seeks reinstatement of its Title (First State Lease) and cancellation of the title (Second State Lease) issued to the third Defendant over property described as Allotment 12 Section 1 Mt Hagen on grounds of constructive fraud.

Background Facts

2. Since 1996 the Plaintiff, Papindo Trading Co. Ltd, was the registered proprietor of the property, described as Allotment 12 Section 1 Mt Hagen, on State Lease volume 110 Folio 146. On 20^th March 2013, Papindo's title to the land was forfeited and cancelled by Department of Lands and Physical Planning principally on the grounds that the Papindo failed to comply with the improvement covenants in the State Lease.

3. In February 2014, Papindo filed a Judicial Review application challenging the decision for the forfeiture in proceedings, OS No. 84 of 2014 – Papindo Trading Co. Ltd v Romily Kila Pat, and others. On 9^th May 2014, the National Court in Mt Hagen granted leave for Judicial Review and issued an interim restraining order against the Department of Lands and Physical Planning from dealing with the land until final determination of the substantive proceedings. On 12^th May 2016, the National Court in Lae made a final decision on the substantive proceedings, declaring the forfeiture of the Plaintiff's title as void and of no effect, quashed the forfeiture notice and the decision of the Lands Secretary and Minister for Lands, and ordered the cancellation of the forfeiture on the Title Deed and to enter Papindo's name on the Title Deed.

4. Meanwhile, on 11^th June 2014, while the proceedings in OS 84 of 2014 were on foot, a new State Lease Volume 17 Folio 175 over the same property was issued to Tiklim Coffee Estates Ltd, the third Defendant. On 21^st June 2018, the third Defendant sold and transferred the property to Tarina Limited, the Fourth Defendant.

The Plaintiff's allegations

5. Papindo alleges that the Defendants either collectively or severally: i) wrongfully dealt with the subject property in granting a new State Lease to Tiklim whilst there was an interim restraining order in place; and ii) failed to reinstate the State Lease to Papindo after the Court declared the forfeiture invalid and iii) unlawfully facilitated the transfer and registration of the new State Lease from Tiklim to Tarina.

6. The Plaintiff therefore seeks amongst others, orders for: i) Cancellation of the forfeiture of Papindo's Title (enforcement of the National Court decision), ii) Reinstatement of Papindo's Title (enforcement of the National Court decision), iii) nullification of the new State Lease issued to Tiklim Coffee Estate Ltd, iv) nullification of Transfer of the Title from Tiklim to Tarina Ltd and other consequential orders including an alternative relief for damages.

The Defendants' Defence

7. The Defendants deny the claim, pleading in their respective defences that: i) they were not aware of the proceedings in OS 84 of 2014 including the orders of the Court; ii) the Plaintiff misled the Court in OS 84 of 2014 in obtaining a decision that is questionable, iii) all due process under the Land Act was followed in the grant of the new State Lease to the third defendant, iv) No fraud was committed in the issuance of the new Title to the third Defendant and the subsequent transfer of Title to the fourth Defendant and v) the fourth defendant is an innocent bona fide purchaser in good faith and the Title acquired by the fourth Defendant is indefeasible.

8. Apart from the defence on the merits, the defendants have raised a preliminary competency issue that the proceedings are incompetent for lack of notice to the State under section 5 of the Claims by and Against the State Act.

Issues

9. The pleadings, evidence and submissions of the parties pose the following issues for determination:

i) Whether the proceedings are incompetent for lack of Notice under the section 5 of the Claims by and Against the State Act.

ii) Whether the issuance of the second State Lease by the first, Second, Fifth and Sixth Defendants to Tiklim Coffee Estates Ltd is fraudulent.

iii) Whether the transfer of Title from Tiklim Coffee Estates Ltd to Tarina Ltd is fraudulent.

iv) Whether the substantive Orders of 12^th May 2016 affect the indefeasibility of title under section 33 (1)(c) of the Land Registration Act.

v) Whether the defendants be charged with contempt of Court.

vi) What shall become of the Orders of 16^th May 2016

vii) Would the alternative relief in damages be sufficient remedy for the Plaintiff.

Trial.

10. The trial was conducted over two days. The parties presented affidavit evidence as well as oral examination.

Plaintiff's Evidence

11. Apart from oral evidence, the Plaintiff relies on the Affidavits filed by i) Sir Soekandar Tjandra sworn and filed 17 May 2021 marked as “Exhibit P1” and ii) Affidavit of David Gera sworn December 2019 & filed 11 February 2020 marked as “Exhibit P2”.

Sir Soekandar Tjandra

12. The Plaintiff's evidence is led by Sir Soekandar Tjandra, KBE, Managing Director of the Plaintiff, Papindo Trading Company Ltd. This is the summary of his evidence. Papindo is the registered proprietor of the property, Allotment 12, Section 1, Mt Hagen. Papindo purchased the property from Melpa Properties Ltd in December 1996. The property was initially mortgaged to Public Officers Superannuation Fund (POSF) and subsequently to ANZ Bank. Papindo attempted to develop the property but was stopped by disgruntled landowners and as a result it remained undeveloped.

13. In December 2012, Papindo received Notice to Show Cause issued by the Department of Lands and Physical Planning dated 17^th December 2012. On 15^th January 2013, the Plaintiffs lawyers, Gamoga & Co, responded to the Notice to Show Cause. On 2^nd April 2013 the Lands Department wrote to their lawyers confirming that the title was forfeited. The forfeiture was gazetted on 20^th March 2013.

14. Aggrieved by the decision, Papindo filed a Judicial Review Application proceeding – OS No.84 of 2014 – Papindo Trading Co. Ltd v Romily Kila Pat, Benney Allen and the Independent State of PNG. On 9^th...