West New Britain Provincial Government v Pepi S Kimas, Secretary, Department of Lands and Physical Planning and Francis Tanga, Chairman, Land Board, & Members of The Land Board and The Independent State of Papua New Guinea and Qunqing Trading Ltd (2009) N3834

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 30 December 2009
• Docket Number: OS (JR) NO 88 OF 2008
• Citation: (2009) N3834
• Court: National Court
• Year: 2009
• Judgement Number: N3834

Full Title: OS (JR) NO 88 OF 2008; West New Britain Provincial Government v Pepi S Kimas, Secretary, Department of Lands and Physical Planning and Francis Tanga, Chairman, Land Board, & Members of The Land Board and The Independent State of Papua New Guinea and Qunqing Trading Ltd (2009) N3834

National Court: Cannings J

Judgment Delivered: 30 December 2009

N3834

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 88 OF 2008

WEST NEW BRITAIN PROVINCIAL GOVERNMENT

Plaintiff

V

PEPI S KIMAS, SECRETARY,

DEPARTMENT OF LANDS AND PHYSICAL PLANNING

First Defendant

FRANCIS TANGA, CHAIRMAN, LAND BOARD, &

MEMBERS OF THE LAND BOARD

Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Defendant

QUNQING TRADING LTD

Fourth Defendant

Kimbe: Cannings J

2009: 25 June, 30 December

LAND – State Leases – certificate authorising occupancy – licence to occupy – exemption of land from advertisement – indefeasibility of title.

LAND – State Leases – exemption of land from advertisement – Land Act, Section 69 – circumstances in which land can be exempted from advertisement – Section 69(2)(d): where the State has agreed to provide land – manner of making, executing, evidencing an agreement by the State.

LAND – State Leases – principle of indefeasibility of title – exceptions under Land Registration Act – Section 33(1)(a: in the case of fraud – meaning of fraud.

The Secretary for Lands granted a 99-year State Lease to a company over land in a provincial capital. The provincial government was aggrieved by the Secretary’s decision and other decisions leading up to it and sought judicial review of those decisions on various grounds including error of law (constituted by breaches of the Land Act), breach of the principles of natural justice, abuse of power and fraud. The company argued that none of the grounds of review had merit but even if they had merit the company now has indefeasible title to the land subject only to actual fraud, which the plaintiff has not proved.

Held:

(1) Notice must be given by notice in the National Gazette of all Government land available for leasing unless the land has been exempted from advertisement.

(2) The Minister may only exempt land from advertisement in one of the circumstances prescribed by Section 69(2) of the Land Act.

(3) If Section 69(2)(d) is relied on (“where the State has agreed to provide land for the establishment or expansion of a business, project, or other undertaking”), there must be evidence of an agreement by the State executed or entered into by an authorised person on behalf of the State.

(4) A decision to grant a State Lease over land that has been unlawfully exempted from advertisement is affected by error of law and is unlawful.

(5) In the present case the land was unlawfully exempted from advertisement and therefore the decision to grant the State Lease over it to the fourth defendant was unlawful.

(6) Given the circumstances in which the State Lease was unlawfully granted it was a case of fraud for the purposes of Section 33(1)(a) of the Land Registration Act. The granting and registration of the Lease were ineffective at law and should not be allowed to stand.

(7) Declarations and orders made accordingly.

Cases cited

The following cases are cited in the judgment:

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

Hi-Lift Company Pty Ltd v Miri Setae [2000] PNGLR 80

Isaac Lupari v Sir Michael Somare (2008) N3476

Koitachi Ltd v Walter Schnaubelt (2007) SC870

Lae Rental Homes Ltd v Viviso Seravo (2003) N2483

Mudge v Secretary for Lands [1985] PNGLR 387

NCDIC v Crusoe Pty Ltd [1993] PNGLR 139

Ramu Nickel Ltd v Temu (2007) N3252

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

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

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

Counsel

R Bradshaw, for the plaintiff

Z Gelu, for the 4th defendant

30 December, 2009

1. CANNINGS J: There is a vacant block of land in the centre of Kimbe, the capital of West New Britain Province, which has become the subject of considerable controversy. Allotment 3, Section 31 is half a hectare in area and located adjacent to the provincial government headquarters, across the road from the town market.

2. On 14 December 2006 the Secretary for Lands, the first defendant Mr Pepi S Kimas, a delegate of the Minister for Lands, granted a 99-year State Lease over the land to Qunqing Trading Ltd, the fourth defendant, for business/commercial purposes. The West New Britain Provincial Government is aggrieved by the Secretary’s decision to grant the State Lease. It says that proper procedures were not followed, that the land was zoned for public institutional, not business or commercial, purposes, that fraud was involved, that it was not consulted and that preferential treatment was given to a foreign company.

3. The provincial government has been granted leave to seek judicial review of the Secretary’s decision to grant the State Lease and some other decisions leading up to it. This is a trial of the substantive application for judicial review.

HISTORY OF ALLOTMENT 3, SECTION 31, KIMBE

1993

4. On 25 October 1993 a delegate of the Minister for Lands issued a certificate authorising occupancy of the land to the Department of Lands and Physical Planning. It was commonly understood that the Provincial Lands Office wished to occupy the land. However, the land remained vacant.

2000

5. On 2 February 2000 the provincial administrator requested that the land be transferred to the Kimbe Urban Local-level Government for the purposes of a new council chambers but nothing came of the request.

2004

6. On 28 October 2004 Qunqing Trading Ltd expressed interest in acquiring the land for a supermarket. The company had been incorporated on 18 September 2003. Its sole shareholder and director is Wei Qun Lin, also known as Roger Lim and Roger Lin, a Chinese national aged in his 30s. Mr Lin runs a mini-supermarket at Nahavio, 10 km from Kimbe. In a letter to the Deputy Secretary of the Department of Lands and Physical Planning he said he was having difficulty with landowners and had been threatened with eviction so he said he needed to urgently find suitable land in town and relocate his business.

7. On 12 November 2004 Deputy Secretary Romily Kila Pat, a delegate of the Minister, executed a licence in favour of the company authorising it to enter upon and occupy the land for the purpose of “temporary occupancy to do feasibility studies for business (commercial) purposes”. The fee was K360.00.

8. On the same day, 12 November 2004, the company applied for a Business (Commercial) State Lease over the land and paid the fee of K100.00. The proposed purpose was stated as:

Improvements will include duplex costing over K500,000.00. Full fencing, footpath and other related surroundings.

9. On 18 November 2004 the Provincial Lands Adviser, Ben Madiu, wrote a letter in support of the company’s proposal, which he said was to invest K500,000.00 and build a two-storey office complex.

10. On 26 November 2004 Mr Pat wrote a minute to Mr Kimas, advising him to revoke the certificate of occupancy and exempt the land from public advertisement. Mr Kimas acted immediately on that advice by executing two instruments that day, 26 November 2004. One was a ‘revocation of setting aside’, which revoked the certificate of occupancy. The other was a notice under the Land Act, which stated:

LAND ACT 1996

NOTICE UNDER SECTION 69(2)(d)

I, PEPI S KIMAS, a delegate of the Minister for Lands & Physical Planning by virtue of the powers conferred in by Section 69(2)(d) of the Land Act 1996 and other powers me enabling under this division notwithstanding that the land has not been offered for lease by tender. [sic]

The special reason attached to this decision is that the land is required by Qun Qing Trading Limited for Business (Commercial) purposes. The applicant urgently requires a State Land to relocate their existing business activities, which currently exists on a customary. [sic]

The land has been exempted from advertisement, hence 60% of the unimproved value as being the tender price shall be charged on the successful applicant. [sic]

SCHEDULE

All that piece of land described as Allotment 3, Section 31, Kimbe – West New Britain Province.

That notice was not published in the National Gazette.

2005

11. On 28 April 2005 the revocation of the certificate of occupancy was published in the National Gazette.

12. On 15 September 2005 a notice was published in the National Gazette that the application for a State Lease over the land by “Linquing Trading Ltd” [sic] would be an additional item for consideration by the PNG Land Board at its meeting on 27-28 September 2005.

13. On 27-28 September 2005 the Land Board considered the application by Qunqing Trading Ltd and recommended that it be granted a State Lease over the land for business/commercial purposes.

14. On 24 November 2005 Mr Kimas...