Patrick Yal for himself and on behalf of Bamaia Wan Clan of Rempi, Madang District, Madang Province and Pais Kob for himself and on behalf of Alopamasualaug Clan of Mediba, Madang District, Madang Province and Joseph Kubali for himself and on behalf of Sarepi Clan of Budup, Madang District, Madang Province and Willie Kaitok for himself and on behalf of Barpi Clan of Budup, Madang District, Madang Province and Albert Koli for himself and on behalf of Aleodik Clan of Budup, Madang District, Madang Province v Mission of The Holy Ghost (New Guinea) Property Trust and RD Fishing PNG Ltd and John Andrias, Secretary for Commerce, Trade and Industry and Madang Marine Park Holdings Limited and the Independent State of Papua New Guinea (2019) N8342

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 22 November 2019
• Court: National Court
• Citation: (2019) N8342
• Docket Number: OS No 479 of 2015
• Year: 2019
• Judgement Number: N8342

Full Title: OS No 479 of 2015; Patrick Yal for himself and on behalf of Bamaia Wan Clan of Rempi, Madang District, Madang Province and Pais Kob for himself and on behalf of Alopamasualaug Clan of Mediba, Madang District, Madang Province and Joseph Kubali for himself and on behalf of Sarepi Clan of Budup, Madang District, Madang Province and Willie Kaitok for himself and on behalf of Barpi Clan of Budup, Madang District, Madang Province and Albert Koli for himself and on behalf of Aleodik Clan of Budup, Madang District, Madang Province v Mission of The Holy Ghost (New Guinea) Property Trust and RD Fishing PNG Ltd and John Andrias, Secretary for Commerce, Trade and Industry and Madang Marine Park Holdings Limited and the Independent State of Papua New Guinea (2019) N8342

National Court: Cannings J

Judgment Delivered: 22 November 2019

N8342

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 479 OF 2015

PATRICK YAL FOR HIMSELF AND ON BEHALF OF BAMAIA WAN CLAN OF REMPI, MADANG DISTRICT, MADANG PROVINCE

First Plaintiffs

PAIS KOB FOR HIMSELF AND ON BEHALF OF ALOPAMASUALAUG CLAN OF MEDIBA, MADANG DISTRICT,

MADANG PROVINCE

Second Plaintiffs

JOSEPH KUBALI FOR HIMSELF AND ON BEHALF OF SAREPI CLAN OF BUDUP, MADANG DISTRICT, MADANG PROVINCE

Third Plaintiffs

WILLIE KAITOK FOR HIMSELF AND ON BEHALF OF BARPI CLAN OF BUDUP, MADANG DISTRICT, MADANG PROVINCE

Fourth Plaintiffs

ALBERT KOLI FOR HIMSELF AND ON BEHALF OF ALEODIK CLAN OF BUDUP, MADANG DISTRICT, MADANG PROVINCE

Fifth Plaintiffs

V

MISSION OF THE HOLY GHOST (NEW GUINEA)

PROPERTY TRUST

First Defendant

RD FISHING PNG LIMITED

Second Defendant

JOHN ANDRIAS,

SECRETARY FOR COMMERCE, TRADE AND INDUSTRY

Third Defendant

MADANG MARINE PARK HOLDINGS LIMITED

Fourth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fifth Defendant

Madang: Cannings J

2019: 3rd & 4th September, 17th October, 22nd November

2020: 3rd March, 5th June

LAND – compulsory acquisition – liability of expropriating authority to pay just compensation on just terms to traditional owners of land – assessment of just compensation on just terms –Constitution, Section 53 (protection from unjust deprivation of property).

The Court determined at an earlier hearing that the fifth defendant, the State, was liable under s 53(2) of the Constitution, as the expropriating authority, to pay each of the five plaintiffs “just compensation … on just terms” for compulsory acquisition of their traditional land. There was then a separate hearing on assessment of compensation. The plaintiffs, relying primarily on reports by two registered valuers, argued that they should be paid a total of K54 million, to be distributed equally amongst themselves and the clans they represent. The State argued that the plaintiffs should be awarded nothing, as they had: (a) improperly asserted interests in customary land, inviting the Court to invoke jurisdiction it did not have; (b) improperly commenced the proceedings by originating summons; (c) failed to disclose a cause of action; (d) not proved that they were the traditional owners;(e) not proved that they were the nominated clan representatives;(f) not proved any property losses; (g) not presented independent evidence showing the boundaries of each of the plaintiff’s clan’s land within the area that was valued.

Held:

(1) The State’s arguments (a) to (e) were summarily dismissed as they were relevant only to liability, which had already been determined.

(2) In determining what is “just compensation” for the purposes of s 53(2) of the Constitution, a two-step method should be applied. Step 1: assess compensation in the conventional sense by assessing the value to the plaintiffs of the land expropriated. Step 2: adjust the amount of conventional compensation by taking account of the National Goals and Directive Principles, the national interest, expression of the national interest by the Parliament, the interests of the person affected, and subject to the overriding and enforceable right vested in the person affected to an amount of compensation that is “just”, in the sense that justice must be done in the circumstances of that person’s particular case.

(3) In determining what are “just terms”, the Court ought to determine conditions on which the compensation is payable so that due regard is had to the effect of the order for compensation on the defendant, and to any customary or legal obligations to which the recipient of the compensation is subject, to ensure that is distributed fairly and appropriately to the rightful beneficiaries.

(4) Here, as to step 1, the only evidence relevant to assessment of compensation in the conventional sense was given by the plaintiffs’ witnesses, two registered valuers who assessed the value of the whole portion of land that had been compulsorily acquired as being in the range of K50 million to K54 million. Despite the absence of contradictory evidence, those values ought to be discounted by 90%. Compensation in the conventional sense for all plaintiffs was assessed as K5 million.

(5) As to step 2, adjusting the conventional assessment by taking account of the qualifying considerations in the Constitution, s 53(2) (including the National Goals and Directive Principles, the national interest, the interests of the plaintiff and the plaintiffs’ right to an amount of compensation that is “just”), resulted in compensation in the conventional sense being doubled, to K10 million.

(6) As to “just terms”, it was appropriate that the compensation be payable in four equal instalments over a period of three years, commencing several months after the date of judgment and that the plaintiffs be required to distribute it in accordance with custom.

(7) Ordered: the State shall pay just compensation in the sum of K2 million to each of the five plaintiffs in four instalments of K500,000.00 on a yearly basis commencing in 2020, and ending in 2023; and each plaintiff is obliged to distribute the compensation justly and fairly in accordance with customary principles to the members of the clan he has represented in these proceedings.

Cases Cited

David Mota v Albert Camillus (2017) N6810

Frame v Minister for Lands [1979] PNGLR 626

Louis Medaing v Ramu Nico Management (MCC) Ltd (2011) N4340

Malewo v Faulkner & Ok Tedi Mining Ltd (2009) SC960

Minister for Lands v Frame [1980] PNGLR 433

Mission of the Holy Ghost (New Guinea) Property Trust v Administration of the Territory of Papua and New Guinea [1969-70] PNGLR 365

Patrick Yal & 4 Ors v Mission of the Holy Ghost (New Guinea) Property Trust & 4 Ors (2017) N6530

ASSESSMENT OF COMPENSATION

This was an assessment of “just compensation” on “just terms” that the State was liable to pay to the plaintiffs in respect of compulsory acquisition of their traditional land.

Counsel

G Pipike, for the Plaintiffs

S Maliaki, for the Fifth Defendant

5th June, 2020

1. CANNINGS J: This Court determined by its order of 27 October 2017, following a trial on liability, that the fifth defendant, the State, is liable under s53(2) of the Constitution, as the expropriating authority, to pay each of the five plaintiffs “just compensation … on just terms” in respect of compulsory acquisition of their traditional land. The parties have returned to Court for a separate trial on assessment of compensation, so the issues are:

· what is the amount of “just compensation” that the State is required to pay to the plaintiffs? and

· what are the “just terms” that ought to apply?

LAND

2. The land is in the Vidar area of Madang District, known for a long time as Portion 625, an area of 359.67 hectares. The plaintiffs are five local men who represent various clans who are amongst the traditional owners of the land. Some of them live on an area of five hectares around Budup village, which lies within the boundaries of Portion 625.

3. The modern history of Portion 625 is complex and fascinating and is set out in the judgment of 27 October 2017: Patrick Yal & 4 Ors v Mission of the Holy Ghost (New Guinea) Property Trust & 4 Ors (2017) N6530. I point out that in that judgment, the area of Portion 625 was said to be 860 hectares. It has been clarified in the trial on assessment of compensation that the correct area is 359.67 hectares.

4. The traditional owners lost their land in 1901 when it was compulsorily acquired by the German New Guinea Company on behalf of the German colonial administration. Ownership of Portion 625 has never been restored to them. This is in contrast to other portions of land in the same part of Madang District, for example land around Rempi village, which was restored to customary ownership by virtue of an order of the Land Titles Commission in 1974.

5. In 1927, in the period after the collapse of the German colonial administration due to World War I, the Mission of the Holy Ghost (New Guinea) Property Trust (the first defendant, “the Mission”) acquired freehold title to Portion 625. In 1993-1994 an application was made, under the Land (Ownership of Freeholds) Act Chapter 359, to the Minister for Lands to convert the land to leasehold land. The application was granted and a State...