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• N6850
  PAPUA NEW GUINEA
  [IN THE NATIONAL COURT OF JUSTICE]

  OS (JR) NO. 704 OF 2013

  BETWEEN
  MAPAI TRANSPORT LTD
  First Plaintiff

  AND
  MOROBE PROVINCIAL GOVERNMENT
  Second Plaintiff

  AND
  ROMILLY KILA PAT – SECRETARY FOR LANDS & PHYSICAL
  PLANNING
  First Defendant

  AND
  HON. BENNY ALLEN, MINISTER FOR LANDS & PHYSICAL
  PLANNING
  Second Defendant

  AND
  THE INDEPENDENT STATE OF PAPUA NEW GUINEA
  Third Defendant

  AND
  SANAMO CONSTRUCTIONS LTD
  Fourth Defendant

  AND
  SUPER SERVICES LTD
  Fifth Defendant

  Waigani: Makail, J
  2017: 12th April & 15th August

  JUDICIAL REVIEW – Application for judicial review – Review of grant of
  title – State lease – Allegation of fraud – Title granted in breach of established

• Page 2 of 14

• procedure – Fraud inferred from breaches and irregularities – Title set aside
  – Land Registration Act – Section 33 (1) (a)
  Cases cited:
  Maryanne Mosoro v. The State & Kingswell Limited (2011) N4450
  Sulawei Limited v. Luther Sipison, & The State (2017) N6640
  Mudge v. Secretary for Lands [1985] PNGLR 387
  Koitachi Limited v. Zhang (2007) SC870
  Eric Kiso v. Bennie Otoa & Ken Wutnalom (2013) SC1222
  Emas Estate Development Pty Ltd v. John Mea & Ors [1993] PNGLR 215
  Steamship Trading Company Limited v. Garamut Enterprises Limited (2000)
  N1959
  HiLift Co Pty Limited v. Miri Setae & Ors [2000] PNGLR 08; (2000) N2004
  Rosemary John v. James Nomenda (2009) N3851
  Tau Kamuta v. David Sode (2006) N3067
  Joseph Mondolame v. The State (2015) N5878
  Port Moresby Gun Club Inc v. Hon. Benny Allen & The State (2016) N6500

  Counsel:
  Mr. P. Mawa & Ms. D. Culligen, for First Plaintiff
  Mr. D. Levy, for Second Plaintiff
  Mr. M. Wangatau, for First, Second & Third Defendants
  Mr. D. Dusal, for Fourth Defendant
  Ms. V. Geroro, for Fifth Defendant

  JUDGMENT

  15th August, 2017

  1. MAKAIL, J: This is an application for judicial review. It concerns a
  dispute in relation to a portion of land described as Allotment 2, Section 111,
  situated in Lae, Morobe Province (“Subject Land”).
  2. Parties relied on the following affidavits which were tendered by consent:

  • Affidavit of Jacob Luke sworn on 31st July 2013 and filed 2nd October
  2013 – Exhibit “P1”.

  • Affidavit of Daisy Culligan sworn on 12th December and filed 22nd
  December 2016 – Exhibit “P2”.

• Page 3 of 14

• • Affidavit of Ann Marie Tomain sworn and filed 222nd December 2016 –
  Exhibit “P3”.

  • Affidavit of Terah Baloiloi sworn on 22nd September and filed 23rd
  September 2016 – Exhibit “P4”.

  • Affidavit of Joseph Kopol sworn and filed 24th November 2013 – Exhibit
  “D1”.

  • Affidavit of Joseph Kopol sworn and filed 9th September 2016 – Exhibit
  “D2”.

  • Affidavit of Joseph Kopol sworn 21st September and filed 22nd
  September 2016 – Exhibit “D3”.

  • Affidavit of Joseph Kopol sworn 2nd February and filed 3rd February
  2017 – Exhibit “D4”.

  • Affidavit of Wanju Hanafi sworn 21st February and filed 27th February
  2014 – Exhibit “D5”.
  Uncontested Facts
  3. From these affidavits the uncontested facts are:

  • Between 20th and 26th November 2009, three events occurred. First the
  Second Plaintiff’s Land Program Advisor sought special consideration
  from the Second Defendant to “free up” the subject land and make a
  direct grant to the First Plaintiff for the purpose of expanding the First
  Plaintiff’s business operation and assisting disabled people residing on
  the subject land under the care and support of the Second Plaintiff.

  • Secondly, the Governor for Morobe Province recommended to the
  Second Defendant supporting the proposal for the First Plaintiff to be
  granted a State lease for the subject land. Finally, a temporary occupancy
  licence was issued to the first plaintiff to occupy the subject land for a
  period of one year.

  • In 2010 a series of events took place:

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• ¬ 27th January, the Fourth Defendant was incorporated and operating
  in its head office in Mendi, Southern Highlands Province.

  ¬ 19th October, the State lease of the subject land was forfeited.

  ¬ 22nd September, an exemption from advertisement of the subject
  land was granted by the First Defendant as delegate of the Second
  Defendant. The reason for that was to enable the First Plaintiff to
  expand its transport business.

  ¬ 23rd September, the First Plaintiff and Fourth Defendant were the
  only applicants considered for the subject land by the Land Board
  despite the exemption notice.

  ¬ 18th October, the First Plaintiff’s application was rejected by the
  Land Board. The Fourth Defendant was recommended the grant of
  State lease subject to a number of conditions and restrictive
  covenants, one of them being the lease to be used for a Business
  (Light/Industrial) purpose.

  ¬ 26th November, the temporary occupancy licence issued to the
  First Plaintiff for the subject land expired.

  • On 3rd February 2011, a State lease for residential purpose for 99 years
  was granted to the Fourth Defendant by the Second Defendant.

  • In 2012 three significant events occurred:

• Page 5 of 14

• ¬ 18th April, the Fourth Defendant proceeded to rezone, reclassify
  and subdivide the subject land without complying with the
  development conditions.

  ¬ 30th May, the Fourth Defendant sold part of the sub-divided land
  described as Allotment 22, Section 111 to Polraven No. 48 Limited.

  ¬ 22th September, the Fourth Defendant sold part of the sub-divided
  land described as Allotment 24, Section 111 to Polraven No. 48
  Limited.

  • On 12th April 2013 the Fourth Defendant executed contracts of sale to
  transfer Allotments 21 and 24, Section 111 from it to the Fifth Defendant.
  On behalf of the Polraven No. 48 Limited the Managing Director of the
  Fourth Defendant Joseph Kopol executed the contracts of sale to transfer
  Allotments 22 and 23, Section 111 to the Fifth Defendant.
  Contested Facts
  4. The contested facts are, according to the First Plaintiff:

  • On 15th November 2016, a search was conducted at Government Printing
  Office of National Gazettal Publications from November 2011 to
  December 2012.

  • On 6th December 2016, a further search was conducted at Government
  Printing Office by Senior Typesetter Officer of National Gazettal
  Publications from November 2011 to December 2012.
  5. As for the Fourth Defendant, the gazettal notice was published twice.
  First was in the National Gazette No. G307 dated 20th December 2010 which
  established that the Fourth Defendant was recommended the successful
  applicant. The reference to “LJ/111/001 is a typographical error and the correct
  reference should be “LJ/111/002 for the grant of Allotment 2, Section 111, Lae

• Page 6 of 14

• where an appeal was lodged against the Land Board recommendation.
  6. Secondly, the appeal by the First Plaintiff to the Second Defendant was
  unsuccessful and the recommendation of the Land Board was upheld by the
  Second Defendant. A notice of gazettal was published in the National Gazette
  No. G21 dated 26th January 2011.
  Exemption of land from being advertised
  7. It was the exemption notice under Section 69 of the Land Act that the
  First Plaintiff supported by the Second Plaintiff relied on as the first ground to
  have the title of the Fourth Defendant set aside.
  8. It was contended that the notice of exemption conferred on it an exclusive
  right to be the sole applicant to the Land Board for a grant of a State lease.
  9. However, it was not to be, that at the Land Board meeting, the Fourth
  Defendant’s application was somehow included and considered. The Fourth
  Defendant was recommended as the successful applicant to be granted a
  Business (Light/Industrial) Purpose lease.
  10. It was strongly argued that this is not some mal administrative error, but
  rather a subversion of the statutory process by the Land Board. It was a gross
  abuse of power whereby the decision of the Land Board and the Second
  Defendant must be set aside.
  11. Furthermore, the Land Board did not give reasons for its decision to
  recommend the Fourth Defendant ahead of it, and where there are no reasons,
  the Land Board’s decision/recommendation is unreasonable.

  12. First, the Fourth Defendant contended that under Section 70 of the Land
  Act, it is open to the Land Board to consider its application because “all
  applications for State lease” does not exclude any person or entity from
  applying.

  13. This submission is untenable and must be rejected because it is contrary
  to the express intention of Section 69 of the Land Act. Once a State lease is
  exempted from being advertised, it means that it is not to be advertised. The
  person or entity granted the exemption has an entitlement to being a sole
  applicant for the State lease to the exclusion of others.

  14. Secondly, it contended that the exemption notice is void and the First
  Plaintiff is not entitled to rely on it because there is no written agreement
  between the First Plaintiff and the Third Defendant to develop the subject land
  for the expansion of the First Plaintiff’s business operation as required by

• Page 7 of 14

• Section 69 of the Land Act. It relied on the case of Maryanne Mosoro v. The
  State & Kingswell Limited (2011) N4450 to support its submission.

  15. In my view, the decision of the Land Board is more or less similar to the
  case of Sulawei Limited v. Luther Sipison, & The State (2017) N6640. In that
  case, the Plaintiff’s judicial review application to have the decision of the Land
  Board to ‘re-advertise’ a land as being available for leasing despite a Ministerial
  exemption from being advertised was refused.

  16. In that case, it was contended that the Minister’s power to grant an
  exemption was irrevocable and on that ground the Land Board acted beyond its
  powers to recommend to the Minister to ‘re-advertise’ the land and allow other
  applicants to apply for it.
  17. It was held that the Ministerial exemption is part of the decision-making
  process by which the Minister may grant a State lease on the land. The Land
  Board’s function is to consider and recommend a grant of State lease to the
  Minister. However, ultimately it is the Minister who is conferred the discretion
  to make a grant. Given this, there was no substantive decision for the Court to
  review and the judicial review application was dismissed.
  18. In this case, I accept the Plaintiffs’ submission that the exemption
  conferred on the First Plaintiff an exclusive right to be the sole applicant for
  subject land. When the Land Board included and considered and furthermore,
  recommended the grant of a State lease to the Fourth Defendant, it not only
  acted beyond its powers but contrary to the Ministerial exemption.
  19. The difference between this case and Sulawei case (supra) is that in this
  case, the Land Board made a recommendation of a grant to the Minister while
  in Sulawei, it did not. Finally, the Land Board undermined the Minister’s
  decision, especially where it gave no reasons for allowing the Fourth Defendant
  to come into consideration.
  20. The Fourth Defendant’s submission that the exemption notice is void and
  incapable of supporting the Plaintiffs’ case must fail for two reasons. First, the
  validity of the exemption notice is not the subject of the judicial review
  application in this case. Thus, it must be taken on face value that it is valid for
  all intent and purposes.
  21. In any event, the Court is not bound by the Mosoro decision (supra).
  While there is no written agreement between the First Plaintiff and the Third
  Defendant, the overwhelming uncontested evidence is that the subject land is
  needed for significant business and public interests project. The First Plaintiff
  intended to use the land for the expansion of its trucking business and at the
  same time assist and support the Second Plaintiff to house and pay for utilities

• Page 8 of 14

• for disabled people residing on the subject land. Is that not a project or
  undertaking that satisfies one of the conditions for a grant of an exemption
  under Section 69 (2) (d) of the Land Act? Surely, it does.
  22. The application for judicial review will be upheld on this ground. As to
  the grant of relief sought, I am of the view that such ground is not sufficient to
  set aside the title of the Fourth Defendant under Section 33 of the Land
  Registration Act. For it must be established that one of the grounds in Section
  33 exists for the title to be set aside, fraud being one of them and a common
  one: Mudge v. Secretary for Lands [1985] PNGLR 387, adopted and applied in
  Koitachi Limited v. Zhang (2007) SC870 and Eric Kiso v. Bennie Otoa & Ken
  Wutnalom (2013) SC1222.

  Fraud
  23. The second ground is based on fraud. In this jurisdiction, case law
  established that fraud can be actual or inferred: Mudge (supra), Koitachi
  Limited (supra) and Eric Kiso (supra) for actual fraud and for the latter, see
  Emas Estate Development Pty Ltd v. John Mea & Ors [1993] PNGLR
  215adopted and applied in Steamship Trading Company Limited v. Garamut
  Enterprises Limited (2000) N1959; HiLift Co Pty Limited v. Miri Setae & Ors
  [2000] PNGLR 08; (2000) N2004 and Rosemary John v. James Nomenda
  (2009) N3851.

  24. In this case, the First Plaintiff relied on breaches and irregularities in the
  process of a grant of State lease to establish fraud. It submitted that fraud can
  be inferred and such is sufficient for the Court to set aside the Fourth
  Defendant’s title. It is supported by the Second Plaintiff.
  25. They submitted that fraud can be inferred from the following breaches
  and irregularities:
  • Breach of the exemption notice under Section 69 of the Land Act, in that
  the Fourth Defendant was included, considered and recommended for a
  grant of State lease contrary to the exemption notice.

  • There is no explanation given by the Land Board for the inclusion and
  participation of the Fourth Defendant at its meeting.

  • There is no evidence of the Fourth Defendant applying in the prescribed
  form and payment of the prescribed fee under Section 70 of the Land Act.

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• • No gazettal notice of the Fourth Defendant as the successful applicant for
  a grant of State lease for residence purpose.

  • On or about 18th April 2012, two or so years after the grant of the State
  lease for residential purposes, the Fourth Defendant proceeded to rezone,
  reclassify and sub-divide the subject land without complying with the
  restrictive covenants for development with the intention of selling the
  subject land contrary to Section 67 of the Land Act.

  • On 20th May 2012 the Fourth Defendant sold part of the subdivided land
  described as Allotment 22, Section 111 to Polraven No. 48 Limited in
  breach of the restrictive covenants.

  • On 11th September 2012 the Fourth Defendant sold a further part of the
  subdivided land described as Allotment 24, Section 111 to Polraven No.
  48 Limited in breach of the restrictive covenants.

  • On or about 12th April 2013 the Fourth Defendant executed contracts of
  sale to transfer to Allotments 21 and 24, Section 111 from the Fourth
  Defendant to the Fifth Defendant. The contracts were executed by the
  Managing Director of the Fourth Defendant Mr. Joseph Kopol on behalf
  of the Fourth Defendant.

  • There is no decision by the Physical Planning Board in relation to
  planning permission to subdivide and sell the subject land within two
  years of the grant of the State lease for residential purpose.

  • The original intention of the Second Plaintiff to give up or surrender its
  title by way of the forfeiture and have a title granted to the First
  Defendant for the purpose of its business expansion with the view of also
  housing and supporting disabled people residing on it was completely

• Page 10 of 14

• ignored by the Land Board.
  26. The Fourth Defendant supported by the Fifth Defendant denied any fraud
  and submitted that events have overtaken the challenge to its title because the
  subject land no longer exists. The land has been subdivided and it is the current
  registered proprietor of different portions of land described as:
  • Allotment 21, Section 111, Lae,
  • Allotment 22, Section 111, Lae,

  • Allotment 23, Section 111, Lae, and

  • Allotment 24, Section 111, Lae.

  27. Coupled with that, delay is against the Plaintiffs because when the
  Plaintiffs commenced the proceeding on 1st October 2013, a period of 13
  months had lapsed and the delay is inordinate and unexplained. The Plaintiffs
  have not come to Court with clean hands to be entitled to relief: Tau Kamuta v.
  David Sode (2006) N3067.
  28. Even if the Plaintiffs are successful and the judicial review application is
  upheld, the Court should not grant the relief sought because substantial
  prejudice will be suffered by the Fourth and Fifth Defendants. There, the
  subject land has been sold to the Fifth Defendant and money has been expanded
  to purchase and develop it. Reliance was placed on the case of Joseph
  Mondolame v. The State (2015) N5878 for this proposition.

  29. There was no submission made by the First to Third Defendants even
  though at the heart of the dispute is the exemption notice issued by the First
  Defendant as delegate of the Second Defendant and secondly, the Land Board’s
  recommendation for a grant of State lease in favour of the Fourth Defendant.

  Proof of Fraud

  30. The process of acquiring a State lease (title) in relation to Government
  land is prescribed in the Land Act. In Port Moresby Gun Club Inc v. Hon.
  Benny Allen & The State (2016) N6500 the National Court summarised the
  process at [12] of its judgment. I adopt them. And from the uncontested facts, I
  find that this is a case where the subject land was identified by the First and

• Page 11 of 14

• Second Plaintiffs to establish and foster a partnership for business activities and
  social services for the disabled under the public/private partnership
  arrangement. The First Plaintiff was to use the land to expand its trucking
  business. For the Second Plaintiff, the First Plaintiff was to take the
  responsibility of providing and supporting the disabled people residing on the
  subject land by providing accommodation and paying for utilities. In my view,
  it was an excellent initiative, a project worth investing in and land should have
  been readily made available by the Third Defendant to realise it.

  31. Despite the exemption notice by the First Defendant as delegate of the
  Second Defendant, the Land Board permitted the Fourth Defendant to be
  included and considered at its meeting where it ended up recommending it to
  the Second Defendant to be granted a State lease which the Second Defendant
  did. The recommendation was for a State lease for business (light/industrial)
  lease and not residence purpose.

  32. There is no evidence from the First to Fourth Defendants as to how the
  Fourth Defendant was permitted to apply for the State lease. There is no reason
  given by the Land Board for including the Fourth Defendant in its meeting and
  subsequent recommendation to the Second Defendant for grant of State lease.

  33. Furthermore, there is no evidence of the Fourth Defendant’s application
  in a prescribed form and payment of the prescribed fee to verify that it applied
  for the State lease in the prescribed manner under Section 70 of the Land Act.
  This is another glaring irregularity.

  34. Nonetheless, the Fourth Defendant was entertained by the Land Board
  contrary to the exemption notice. It is title law under Section 69 (1) of the Land
  Act that a State lease shall not be granted unless it is advertised. For reason
  obvious to all, it is to allow interested applicants/persons/entities with the
  capacity to develop it to apply and for the State to fairly distribute the limited
  available land to those who meet the criteria. Equally, for good reasons it may
  exempt land from being advertised if it is satisfied that one or more of the
  conditions under Section 69 (2) of the Land Act exists.

  35. In this case, for good reason, the subject land was exempted from being

• Page 12 of 14

• advertised. Yet it turned out that the Fourth Defendant was a rival applicant
  before the Land Board and eventual successful applicant, despite being
  incorporated a year earlier on 27th January 2010, its head office located
  somewhere in Mendi and having no business track record compared to the First
  Plaintiff. In my view, this is highly questionable and suspicious.

  36. An appeal by the First Plaintiff to the Second Defendant proved
  unsuccessful. While there is conflicting evidence in relation to the publication
  of the gazettal notice of the successful applicant, it does not significantly alter
  the position that the Fourth Defendant emerged the winner and successful
  applicant to the detriment of the Plaintiffs.

  37. Despite the recommendation of the Land Board for a State lease for
  business (light/industrial) purpose to be granted to the Fourth Defendant, the
  grant by the Second Defendant was for State lease for residence purpose for 99
  years. This is a significant inconsistency in the type of State lease granted to the
  Fourth Defendant. This is yet another glaring irregularity which renders the
  transaction questionable and suspicious.

  38. With already a growing number of glaring irregularities, a further glaring
  irregularity is that the State lease had conditions and restrictive covenants in
  terms of improvement or development of the subject land by the Fourth
  Defendant. While the Fourth Defendant subdivided the subject land, there is no
  evidence that it put up improvements or did any development on it other than
  subdivision.

  39. For instance, the value of the improvement the Fourth Defendant must
  put up is K300,000.00. The restrictive covenant is that it must not sell the
  subject land prior to complying with this improvement condition.

  40. In breach of these covenant and condition, within a space of two or more
  years, the subject land was subdivided. And the Fourth Defendant’s submission
  that the subject land no longer exists is, with respect, superfluous. Obviously,
  and in reality, it exists but it has been given different descriptions given that it
  has been subdivided at the request of the Fourth Defendant.

• Page 13 of 14

• 41. Notwithstanding the evidence of a catalogue plan produced by the Fourth
  Defendant to verify the subdivision of the subject land, there is no evidence that
  the subdivision complied with planning requirements before it was subdivided.
  There is no evidence of subdivision plan proposal and approvals being obtained
  from the relevant authority to support the Fourth Defendant’s claim that the
  subdivision of the land is in order. This is a further questionable and suspicious
  glaring irregularity.

  42. Then two portions of the subdivided land have been sold to the Fifth
  Defendant. Contracts of sale executed between the Managing Director Mr.
  Kopol for the Fourth Defendant and the Fifth Defendant and transfer
  instruments were lodged for formalising the transfer but for this judicial review
  application.

  43. I accept the Plaintiffs’ submission that these events and particularly, the
  sale of the portions of the subdivided land in a short period of time strongly
  suggest that the Fourth Defendant intent to part with the subject land by selling
  it for profit rather than developing it. This inference is further supported by the
  lack or absence of the Fourth Defendant’s business track record coupled with it
  having being registered a year earlier with its registered head office somewhere
  in Mendi.

  44. All these events establish that the Fourth Defendant had one thing in
  mind and that is to acquire the subject land and to sell it for a windfall gain.
  There was never an intention to develop it. As a result, the Plaintiffs lost out big
  time.

  45. I am satisfied that the Plaintiffs have established fraud on the balance of
  probabilities. Fraud has been committed by the Fourth Defendant in the process
  of acquiring title to the subject land. Pursuant to Section 33 (1) (a) of the Land
  Registration Act, the title of the Fourth Defendant in the State lease described as
  Allotment 2, Section 111 must be set aside. Any subsequent grant must follow
  suit because the Fourth Defendant never had good title to pass in the first place.

  46. As to the assertion by the Fourth and Fifth Defendants that the Plaintiffs

• Page 14 of 14

• have been guilty of delay and that the Fourth and Fifth Defendants will suffer
  substantial prejudice if the Court sets aside the title, the Latin maxim “equity
  follows the law” must apply here. Fraud has been proven and the Fourth
  Defendant must not enrich itself of this illegal act. As to the Fifth Defendant, it
  has recourse to a refund of the purchase price for each allotment it has
  purchased or claim for damages against the Fourth Defendant.

  Conclusion

  47. For the foregoing reasons, the application for judicial review will be
  upheld.

  Order

  48. The Plaintiffs have detailed the orders sought in the Amended Notice of
  Motion filed on 13th December 2016 which included declaration, certiorari and
  mandamus. Rather than setting them out in full here, orders will be granted in
  terms of paras. 1, 2, 3, 4, 5 and 7 of the Amended Notice of Motion. A further
  order that the Fourth and Fifth Defendants surrender copies of the registered
  State Leases for Allotments 21, 22 and 24, Section 111, Lae, Morobe Province
  to the Registrar of Titles who shall thereupon cancel the leases. Order sought in
  para. 6 of the Amended Notice of Motion is refused.
  ________________________________________________________________
  Melanesian Legal Services: Lawyers for First Plaintiff
  Manase & Co Lawyers: Lawyers for Second Plaintiff
  Solicitor General: Lawyers for First, Second & Third Defendants
  Dusal & Associates Lawyers: Lawyers for Fourth Defendant
  Twivey Lawyers: Lawyers for Fifth Defendant