The Papua Club Inc v Nusaum Holdings Limited, Investment Corporation of Papua New Guinea, Registrar of Titles, The Independent State of Papua New Guinea and The Minister for Lands (2005) SC812

• Jurisdiction: Papua New Guinea
• Judge: Los J, Davani J, Cannings J
• Judgment Date: 02 December 2005
• Court: Supreme Court
• Citation: (2005) SC812
• Docket Number: SCA No 142 of 2004
• Year: 2005
• Judgement Number: SC812

Full Title: SCA No 142 of 2004; The Papua Club Inc v Nusaum Holdings Limited, Investment Corporation of Papua New Guinea, Registrar of Titles, The Independent State of Papua New Guinea and The Minister for Lands (2005) SC812

Supreme Court: Los J, Davani J, Cannings J

Judgment Delivered: 2 December 2005

SC812

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO 142 0F 2004

BETWEEN

THE PAPUA CLUB INC

Appellant

AND

NUSAUM HOLDINGS LIMITED

First Respondent

AND

INVESTMENT CORPORATION OF PAPUA NEW GUINEA

Second Respondent

AND

REGISTRAR OF TITLES

Third Respondent

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Respondent

AND

THE MINISTER FOR LANDS

Fifth Respondent

WAIGANI: LOS J, DAVANI J, CANNINGS J

29 AUGUST, 2 DECEMBER 2005

Real property – land – State Leases – deeds to transfer lease – subleases – 66-year State Lease – effect of – deed for entry into sublease – sublease – whether deed or sublease providing for continuance of interest in land in perpetuity void for uncertainty – need for proper definition of leased premises.

Real property – State Leases – whether a lessee or sublessee under a State Lease can have rights or interests beyond the expiry of the date of the State Lease – scheme of the Land Act.

Real property – State Leases – procedure upon expiry of lease – rights and interests of lessee and sublessee – whether Land Act provides for State Lease compensation and renewal rights – whether lessee holds rights in trust for sublessee – whether lessee holds interests in trust for sublessee.

Supreme Court – appeals – notice of appeal – whether appellant permitted to argue points beyond those relied on in notice of appeal – whether appellant can raise points of law not raised at trial – whether appellant can seek orders not sought at trial – whether Supreme Court can make orders beyond those sought in a notice of appeal.

The appellant is an incorporated social club. In 1939 it was granted a 66-year State Lease over a block of land in Port Moresby. In 1978 it entered into a deed with the second respondent with a view to transferring its lease to the second respondent, on condition that amongst other things the second respondent build a high-rise office building on the land and grant the appellant a sublease for a peppercorn rental. The transfer and sublease were executed, the building was built and the appellant occupied the top floor of the building; and has done so since 1980. In 1998 the second respondent transferred the lease to the first respondent. The first respondent then informed the appellant that its sublease would expire on 19 December 2005 and that it could not thereafter occupy the top floor of the building for the peppercorn rental. The appellant commenced proceedings in the National Court seeking amongst other things a declaration that it was entitled to continue occupying the top floor after 19 December 2005 in accordance with the sublease. The National Court decided the case against the appellant. The appellant appealed to the Supreme Court.

Held:

(1) A lease or sublease can be rendered void and unenforceable if it is uncertain as to the period of the lease or its description of the property to which it purports to relate.

(2) The lease must clearly identify the start-time and end-point of the lease. A lease that purports to operate in perpetuity is contrary to public policy, and void.

(3) The scheme of the Land Act is that no one other than the State is capable of having any interest in land that is subject to a State Lease after it expires, unless and until a new interest is granted under the Land Act.

(4) An outgoing lessee’s interests in the land are extinguished upon the expiry of the State Lease. Therefore a sublessee has no right to have its sublease renewed or to be granted a new sublease.

(5) An appellant can raise an issue of law before the Supreme Court that was not raised in the trial provided it is set out in the notice of appeal and it does not concern a question of fact only and the leave of the court is obtained to argue the point.

(6) In the circumstances, the trial judge properly declared that the sublease was void and unenforceable due to its uncertainty and being contrary to the scheme of the Land Act. The appeal was accordingly dismissed.

Cases cited

The following cases are cited in the judgment:

Awoda v The State [1984] PNGLR 165

Birch v The State [1979] PNGLR 75

Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112

Charles Ombusu v The State [1996] PNGLR 335

Connecticut Fire Insurance Co Ltd v Kavanagh [1892] AC 473

Dianne McGrath Fingleton v The Queen [2005] HCA 34

Dinge Damane v The State [1991] PNGLR 244

Emas Estate Developments v John Mea and Others [1993] PNGLR 215

Fly River Provincial Government v Pioneer Health Services Limited (2003) SC705

Keko Aparo and Others v The State (1983) SC249

North Staffordshire Railway Co v Edge [1920] AC 254

Peter Ipu Peipul v Sheehan J, Orim Karapo and Iova Geita, constituting the Leadership Tribunal and Others (2001) N2096

Prudential Assurance Co Ltd v London Residuary Body and Others [1992] 3 All ER 504

Rolf Schubert v The State [1979] PNGLR 66

Sacred Heart Mission (New Britain) Property Trust v Nambumutka Simbali on behalf of the Denangi Lineage and The Director of District Administration (Re Toriu) (1972) FC29

Sutherland v Thomson [1906] AC 51

The Papua Club Inc v Nusaum Holdings Limited and Others (2002) N2273

The Papua Club Inc v Nusaum Holdings Ltd and Others (2004) N2603

University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481

Van Der Kreek v Van Der Kreek [1979] PNGLR 185

Abbreviations

The following abbreviations appear in the judgment:

Inc – Incorporated

Ltd – Limited

PNG – Papua New Guinea

Pty – Proprietary

APPEAL

This was an appeal from a judgment of the National Court refusing an application for a declaration regarding the appellant’s interest in land.

Counsel

N M Cooke QC and B Frizzell for the appellant

J A Griffin QC and M M Varitimos for the 1st respondent

G Egan and F Waleilia for the 2nd respondent

No appearance for the 3rd, 4th or 5th respondents

BY THE COURT:

This is an appeal against a judgment of Gavara-Nanu J in the National Court in which his Honour refused an application by the appellant for a declaration and other remedies aimed at upholding its interests in land. (The Papua Club Inc v Nusaum Holdings Ltd and Others (2004) N2603.)

THE PARTIES

The appellant is the Papua Club Inc. It was the plaintiff in the National Court. Its club premises are on the top floor of a building in Port Moresby. It has been there a long time under a lease that will soon expire. It claims a right to remain there after the lease expires.

The first respondent is Nusaum Holdings Ltd. It is the registered proprietor of the land on which the building stands – Monian Tower – which includes the Papua Club’s premises. The first respondent became the owner, or put correctly, the registered proprietor of the State Lease, in 1998, by acquiring the title from the previous registered proprietor, the Investment Corporation. Nusaum Holdings Ltd was the first defendant in the National Court.

The second respondent is the Investment Corporation of Papua New Guinea. It acquired the State Lease over the property in 1978 from the Papua Club, then erected the building on it and leased a part of the building back to the Club. The Investment Corporation transferred the State Lease to Nusaum Holdings Ltd in 1998. The Investment Corporation was the second defendant in the National Court.

The third respondent is the Registrar of Titles. This person is a statutory office-holder appointed under the Land Registration Act and has been responsible for registering the title to and interests in the land.

The fourth respondent is the Independent State of Papua New Guinea. It is the owner of the land. It is the lessor in the State Lease that was granted under the Land Act, initially to the trustee of the Papua Club (in 1939), and then transferred to the Investment Corporation (in 1978) and to Nusaum Holdings Ltd (in 1998).

The fifth respondent is the Minister for Lands. This person is a member of the Parliament, appointed by the Prime Minister to be a member of the National Executive Council with political responsibility for land matters and statutory responsibilities under various legislation including the Land Act.

The main protagonists are the appellant and the first respondent. The second respondent had a lot at stake in the National Court but in this appeal its role is limited. The third, fourth and fifth respondents, though they have been parties throughout, have had no active involvement in either the National Court or the appeal proceedings.

FACTS

The facts of this case are no longer in dispute.

The appellant is an incorporated social club. In 1939 its then trustees were granted a Crown Lease over a block of land in Port Moresby: Section 3, Allotment 4, Milinch Granville, Volume 5, Folio 1027. This is on the northern side of Douglas Street, downtown Port Moresby, between Hunter and Musgrave streets. The term of the lease is 66 years and 175 days: from 29 June 1939 to 20 December 2005.

In 1975 the appellant was incorporated and the lease was vested in it under the Land Registration Act.

In 1977 the appellant started negotiations with the second...