N836

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

NATIONAL CAPITAL DISTRICT INTERIM COMMISSION

V

CRUSOE PTY LTD;

KALA SWOKIN, MINISTER FOR LANDS;
JOHN YAWI, ACTING SECRETARY FOR LANDS;
THE REGISTRAR OF TITLES;
THE CHAIRMAN OF THE LAND BOARD;
THE GOVERNMENT PRINTER;
AND THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Waigani
Brunton J

June 1989
July 1989
9 February 1990

PLANNING LAW- Judicial Review - Town Planning Act Ch 204 - "Special use zone" - Town Planning Act s 6(1) - Mandatory or directory - Who is an interested party?

REAL PROPERTY - State leases of town land - Exemption from tender - Land Act s 57(4) - "Special reason".

REAL PROPERTY - Failure of the Land Board to take action on an application for a special purpose lease - Appeal to the Minister against a refusal by the Town Planning Board to re-zone a special use zone to commercial zone - Ministerial discretion to exempt land from public tender.

ADMINISTRATIVE LAW - Natural justice rules - Delay in applying for relief.

Facts

The applicant applied to the Land Board in 1983 for a special purpose lease over a block of urban land (Lot 29) in order to construct a car park. Its application became lost in the system despite some attempt by the applicant to follow it up. In 1988, first respondent, Crusoe Pty Ltd, applied to the Town Planning Board to have part of the same block re-zoned for commercial purposes. Its application was refused and Crusoe appealed to the Minister. The Minister, without notifying any other interested party, upheld the appeal. Crusoe applied to the Minister to have the portion of land it was interested in exempted from public tender. The Minister granted the exemption. At the hearing of the Land Board to consider Crusoe's application for a commercial lease over the land, the applicant objected, but the Board recommended that a lease be granted, and the Minister approved the grant of the lease. The applicant sought judicial review and renewed its application for a special purpose lease.

Held

1. The applications of the NCDIC for a special purpose lease over Lot 29 are to be heard by the Land Board as a matter of priority.

2. Should the Board decide to excise part of the land from Lot 29 to be developed commercially, that part shall be put up for public tender under s 57 of the Land Act.

3. The Minister's decision on the appeal by Crusoe against the decision of the Town Planning Board not to re-zone Lot 29 is quashed. Crusoe may go back for rehearing, but due notification is to be given to all interested parties.

4. The Minister's decision to exempt part of Lot 29 from public tender under s 57(4) of the Land Act is quashed.

5. The decision of the Land Board to recommend the granting of a lease over Lot 29 to Crusoe is quashed.

6. The State and all its employees, agents and instrumentalities are enjoined from implementing, or in any dealings whatsoever arising from the decision of the Land Board.

7. The applicant is to have costs which should be shared equally between the first respondent Crusoe, and the State.

Cases Cited

Papua New Guinea cases cited

Application of the NCDIC, Re [1987] PNGLR 339.
Gegeyo v Minister for Lands & Physical Planning [1987] PNGLR 331.
Premdas v The State [1979] PNGLR 329.
Rahonano v Enai, (Re Hitau) [1971-72] PNGLR 58.
Raz v Matane [1986] PNGLR 38.

Other cases cited

Attorney-General of Hong Kong v Ng Yuen Shiu [1983] 2 AC 629.
General Electric Co Ltd v Price Commission [1975] ICR 1.
Re Blackman's Special Leases (1931) 13 QCLLR 194.
Re Scott's Application (1902) 2 QCLLR 21.
Ridge v Baldwin [1964] AC 40.
S S Constructions Pty Ltd v Ventura Motors Pty Ltd [1964] VR 229.
Schmidt v Secretary of State for Home Affairs [1969] 2 Ch 149.

Counsel

K Naru and I Kola for the applicant.
P Paine for the first respondent.
Z Gelu for the second, third, fourth, fifth, sixth, and seventh respondents.

9 February 1990

BRUNTON J: This is an action by the National Capital District Interim Commission (hereafter the NCDIC) to protect a piece of land near Tabari Place, Boroko, which supposedly had been zoned for a special purpose, as a public car-park. It is a dispute about taking urban land out of public use and putting it into private hands. It is a dispute not only between a statutory body and a private person, but between the local and national levels of government.

The NCDIC has been concerned for some time about what it sees as the arbitrary actions of the Minister for Lands re-zoning public land in Port Moresby, such as parks, green spaces, sewerage easements, and water-tank allotments, for commercial purposes or for private housing development. 

Crusoe Pty Ltd (hereafter Crusoe), the first respondent, managed to persuade the second respondent, the Minister for Lands and Physical Planning (hereafter the Minister) to re-zone part of allotment 29 section 26, Reke Street, Boroko, (hereafter Lot 29) to commercial use, allegedly without the NCDIC knowing about the re-zoning. Eventually, the land was allocated by the Land Board to Crusoe, and the NCDIC lost control over it.

The matter first came before Amet J on 7 January 1989, ex parte, when the NCDIC sought and obtained interim orders against all the respondents preventing any further dealing in the land until such time as the orders were lifted. That order was sought and granted five days after Crusoe had been declared the successful applicant for the land.

On 9 February 1989, the NCDIC, by originating summons, sought leave to obtain orders for judicial review, declaration, and either an order in the nature of mandamus or a mandatory injunction against the respondents. On 10 February 1989, the applicant obtained leave to apply for judicial review, and the interlocutory restraining orders were extended.

By the notice of motion dated 13 February 1989, the applicant moved for orders that:

1. the decision by the Acting Secretary for Lands and Physical Planning on 2 February 1989 to declare Crusoe Pty Ltd as the successful applicant for a State Lease over land described as part of Lot 29 be declared null and void and of no effect, or invalid;

2. the decision by the Minister for Lands and Physical Planning on 21 October 1989 upholding an appeal by Crusoe Pty Ltd in rezoning land described as part of Lot 29 be declared null and void and of no effect, or invalid;

3. the Government Printer be restrained from publishing in the National Gazette any notification by the Minister for Lands or his servants and agents that the land described as part of Lot 29 be rezoned from special use to business (commercial) use or any other use;

4. the Court declare that the land described as part of Lot 29 be zoned for special use or, alternatively, declare as valid the original zoning of the land as special use;

5. the Registrar of Titles be restrained from registering Crusoe Pty Ltd or any other party as the holder of a State Lease in relation to Lot 29; and

6. an order in the nature of mandamus or mandatory injunction be granted requiring the Land Board to hear the applicant's applications dated 10 March 1982 and 5 January 1989 in relation to Lot 29.

At the hearing of the notice of motion on 17 February 1989, the matter was stood over to the 24th of that month and the injunctions were extended. On 1 March 1989, the matter was moved into the civil call-over list for hearing and the restraining orders generally were extended until the determination of the review.

THE GROUNDS OF THE ACTION

The grounds upon which the relief is sought are as follows:

1. the applicant has sufficient interest in the land described as Lot 29, but it was never notified in regards to its application in relation to that land, and its application was never considered by the Land Board.

2. the notification and grant of the land to Crusoe was irregular in that Lot 29 was zoned special use, and the Lands Minister's decision to rezone the land to business use was against professional advice in that he took into account irrelevant considerations and did not take into account relevant considerations.

3. the decision by the Minister for Lands to rezone the land was invalid because:

(a) He does not have power under the Town Planning Act Ch 204 to rezone a special use zone; and

(b) if he does have power, he failed to advertise in the National Gazette his decision to rezone; because that has not been done, the grant is invalid and must be set aside.

THE PARTIES: NCDIC

The main function of the NCDIC under the National Capital District Government (Preparatory Arrangements) Act Ch 392 s 10 is "to control, manage and administer the National Capital District and to ensure the welfare of the National Capital District and of the persons in it". The NCDIC has powers, inter alia, "to acquire, hold, dispose of, mortgage or pledge property, land and buildings" and "to develop or improve land". The NCDIC has a law-making power that has effect "only in so far as (is) not inconsistent with any Act of the Parliament" (s 40(7)). In particular, that includes power to legislate in respect of town planning, the Building Board, roads and bridges, parks and gardens, land and land development, public transportation (s 41(1)). The purpose of the NCDIC is public purposes (s 46).

THE PARTIES: CRUSOE PTY LTD

Stanley Rupa Pala in his affidavit sworn on 8 February 1989 attested to a company search of Crusoe Pty Ltd, which showed that it had two shareholders, Ian Ling-Stuckey and Richard Wong, who each owned one share. The company had a nominal and issued capital of K10,000.

It had a paid up capital of K1. The directors of the company were Ian Ling-Stuckey, Richard Wong, Benjamin Passingan and Lucas Senar. In his affidavit dated 14 June 1989, Mr Ian Ling-Stuckey described himself as "a director and major shareholder in Crusoe Pty Ltd".

THE PARTIES: THE STATE

Although the State, through its Minister and boards, controls town planning and the disposition of urban land under the Town Planning Act Ch 204 and the Land Act Ch 185, and although the NCDIC has power in these areas "only in so far as (is) not inconsistent with an Act of the Parliament", it is clear that Parliament intended a general devolution of power to the NCDIC in those designated areas, subject to existing national legislation.

A devolution of power is part of the process of decentralisation. It is a necessary component in the transformation of our society from a centralist, colonial state to a democracy in which power truly vests in the hands of people, as distinct from vesting it in a centralist bureaucracy or in national ministers. Even though many antiquated colonial and centralist statutes remained in effect after Independence (the Town Planning Act and the Land Act are examples), the thrust of the Constitution was to begin the process of devolution, though legal power vested in national authorities.

It follows then that, despite formal power vesting in the National Government, in those areas where Parliament has expressed its intention to begin the process of devolution, any exercise of power must be carried out giving due comity to those new institutions operating at a lower level of government. Where the intention of Parliament was to devolve or begin to devolve powers, the lower levels of government should not be treated unreasonably or in a cavalier manner by state authorities. Proper regard should be shown to the legislative intent expressed in the statutes which established the lower levels of government. In short, the National Government should not treat provincial governments, the NCDIC, or like entities unreasonably.

THE FACTS

The background facts for this judgment were established in affidavits of six individuals. They include four representatives of the NCDIC: Mr G P Edwards, Manager of Parks, Gardens, and Sports; Mr K Naru, lawyer: Mrs I Kola, legal officer; and Mr S R Pala, legal clerk; Mr Samuel Manikot, Chairman of the PNG Land Board; and Mr Ian Ling-Stuckey, a director and major shareholder of Crusoe.

There was evidence that as far back as December 1962 Lot 29 was considered to be land set aside for public purposes and was shown as a special-use zone: Edwards para 2. Certainly, 12 April 1968 Lot 29 (described on the map as 25), was shown on the town planning maps as a special purpose use zone: Edwards para 2 annexure AA. The official attitude towards this block was re-affirmed on 25 October 1972, when the police applied to the Town Planning Board to establish a police officer's mess on Lot 29. The Board refused to grant the application, saying that "it is zoned special use and has been earmarked for a carpark": Edwards para 2 annexure AAA.

The NCDIC took over the administration of Port Moresby from the Port Moresby City Council on 21 April 1982.

The evidence showed that in 1982 property developers in Boroko were required to contribute to a fund which had the purpose of providing or maintaining public carparks. In particular, the NCDIC received K27,000 from developers in the expectation that a carpark would be constructed in Reke Street: Edwards para 3. It was established that about this time, the NCDIC reached agreement with the Departments of Physical Planning, Transport, and the Police to develop a traffic strategy for Tabari Place. The essence of the strategy was to remove the traffic from Tabari Place and to provide car-parking at the rear of the commercial area: Edwards para 4. It was also proposed that a shopping-mall be established in the area.

On the 10 March 1983, the NCDIC applied to the Land Board (hereafter Board) for a special purposes lease over Lot 29: Edwards para 7 annexures D and E. No acknowledgement from the Board was received by the NCDIC in relation to this application. The Board took no action to secure the NCDIC's obvious interest in Lot 29. On 17 April 1985, NCDIC followed up its application for a special purpose lease by letter to the Secretary of the Department of Lands and Surveys. This letter points out:

"While the carpark is being developed on only part of Lot 29 the remaining area will be required to be developed as part of stage two. Funds are programmed for this work in 1986. It will be necessary to develop stage 2 along with the closure of Tabari Place for the proposed mall": Edwards para 7 annexure F.

Again, the Land Board remained silent. It was aware that the NCDIC was committing resources to develop section 26, and that the NCDIC required the whole of Lot 29. Yet, it did not respond to an application lawfully submitted by the NCDIC, and it took no action to preserve the interests of the public, or the interests of the NCDIC. The failure of the Board to acknowledge the concerns of the NCDIC, and its applications was, at best, quite negligent.

On 16 July 1985, the NCDIC consulted with the Tabari Place traders and concluded that the "Reke Street car park north of Angau Drive should be upgraded before Tabari Place is closed to traffic". Stage 1 of the Reke Street car park was completed in 1985: Edwards para 9.

On 26 May 1988, the NCDIC approved a plan to close Tabari Place and relocate car parking along Reke Street: Edwards para 6 annexures B and C. But on 21 September of that year, Mr Ling-Stuckey applied on behalf of Crusoe to the Papua New Guinea Town Planning Board for a variation of the zoning of Lot 29 from special use to commercial use: Ling-Stuckey para 2 annexure A. This application consisted of a short letter and two sketches.

On 11 October 1988, the Town Planning Board rejected the application on the basis that the site had been "officially designated for a public carpark": Edwards para 11 annexure 1. On 12 October, the Town Planning Board formally advised Crusoe of the rejection of its application: Ling-Stuckey para 3 annexure B. Then, on 17 October, Mr Richard Wong, a director of Crusoe, appealed under s 10 of the Town Planning Act: Ling-Stuckey para 4 annexure C. This appeal was constituted by a one-page letter, with no grounds of substance offered in support to the appeal; this view of the grounds of appeal is discussed later in this judgment.

On 21 October 1988, the Minister for Lands, without any notification either to the Town Planning Board, the NCDIC, or any other interested party, upheld Crusoe's appeal from the Town Planning Board and re-zoned Lot 29 for commercial use, stipulating that the proposed building must have two levels of carpark and that the areas surrounding the buildings are to be carparks: Edwards para 11 annexure J. Although no notification was given by the Minister to the NCDIC, a copy of the Minister's letter to the PNG Town Planning Board containing his decision was sent to Crusoe. The appeal was approved within five working days: Ling-Stuckey para 5 annexure D. 

Perhaps the next step that Cursoe took to secure title to Lot 29 was to approach the Minister and to get him to make an order not to allocate the lot by public tender. Lot 29 was to be allocated without advertising. Sometime between 24 October 1988 and the hearing of the Land Board on 7 December 1988, Crusoe had applied to the Minister under s 57(4) of the Land Act to have the granting of Lot 29 exempted from public tender: Manikot para 7. In short, Crusoe made sure that it was the only contender for Lot 29.

On 24 October 1988, Crusoe made an application for a State lease over part of Lot 29: Ling-Stuckey para 6 annexure E. This annexure shows that the documentation for a project that was supposed to cost between K4.5 and K5 million was sparse. Indeed, it lacked details and contained no description of how the proposed building was to make a profit, who would occupy it, and what the cash-flows were likely to be. The application was accompanied by a letter to the Minister thanking him for his decision to uphold Crusoe's appeal on re-zoning.

On 23 November, the Land Board advised Crusoe that its application was to be heard on 7 December 1989: Ling-Stuckey para 7 annexure F. On 6 December, NCDIC's officers read National Gazette G76 of 24 November and discovered that Crusoe had applied for a commercial lease over the undeveloped portions of Lot 29: Edwards para 9. On 7 December 1989, Mrs Kola of NCDIC appeared before the Land Board and objected to Crusoe's application. The evidence of the Chairman of the Land Board that the "The lawyer representing the National Capital District Interim Commission during the hearing of the Land Board did not object to the Company's application": Manikot para 9, is met by the affidavit of Mrs Kola, who swears that she did object: Kola 24 February 1989 para 2(c). The evidence of Mrs Kola is to be preferred because it is consistent with the conduct of the NCDIC. Mrs Kola's first affidavit was sworn on 13 February 1989, and served the same day on the State Solicitor: Pala 16 February 1989 para 4. The affidavit of the Chairman of the Land Board, Mr Manikot, was sworn on 23 February 1989. It does not attempt to contravert Mrs Kola's evidence in a systematic manner. It does not deal with her testimony paragraph by paragraph. In particular, it does not specifically traverse paragraphs 3 and 4 of her affidavit of 13 February. All it does is make a general assertion that she did not object. That is not the way to plead. An assertion by one party, if it is to be rebutted, must be met squarely.

It was at the Land Board hearing that the NCDIC learnt for the first time that Crusoe had obtained the re-zoning of Lot 29 from special purpose to commercial use: Edwards para 10: Mrs Kola 13 February 1989 para 1-5. Although, Mrs Kola made it known to the Board that her client was unaware of the re-zoning, that did not appear to have put the Land Board on its guard. The Land Board unanimously agreed to recommend the granting of Lot 29 to Crusoe. The reasons given to support this recommendation were:

"5. It is the opinion of the PNG Land Board, after hearing evidence that the commercial development proposed by Crusoe Pty Ltd:

(a) Would not diminish car parking space for the general public that otherwise were to be provided by National Capital District Interim Commission.

(b) The conditions imposed by the Minister for Land and Physical Planning for two levels of carpark space for the general public plus car park space for the general public around the building was clear and in the best interest of the Boroko Commercial Area and the people of National Capital District.

(c) Would in fact, provide a car park for the general public at no cost to the National Capital District, the people of Port Moresby and the general tax payer and that if there were any costs, these would in essence, be marginal or negligible.

(d) Would provide much needed commercial and residential floor space (without taking away suitable public car parking space) in a congested Boroko centre and therefore, exert downward pressure on our seemingly uncontrolled and escalating floor rentals in the National Capital.

(e) Is of a magnitude uncommonly entered upon by PNG National Companies and is actively encouraged by our Governments. Completion of such a project would provide abundant benefits to the state via several forms of taxes and assist small scale business requiring floor space in Boroko which is currently experiencing an acute shortage. The benefits of such a major development are well documented.

6. It is also the opinion of the Land Board that section 26, allotment 29, Boroko, is an important parcel of land and that land utilisation in this area should account for the total built environment. As such, the Board believes that development of a car park only, is a gross under - utilisation of this land and incorporates only one small aspect of the built environment." Manikot paras 5 and 6.

On 8 December 1988, the NCDIC awarded a contract to Kasiava Constructions Pty Ltd for the reconstruction of Reke Street: Edwards para 9 annexure G. It is not clear from the evidence whether or not the NCDIC (the Commissioners as distinct from the staff) knew about the events in the Land Board the day before, because it was only on the 8th that the Town Planning Board, by telephone, confirmed to Mrs Kola that Lot 29 had been rezoned from special to commercial use: Kola 13 February 1989 para 7-9.

The following day, 9 December, the NCDIC sent a letter to the Land Board pointing out irregularities in the re-zoning and asking the Board to defer its decision: Edwards para 12 annexure K. The NCDIC received no reply from the Land Board to this letter. The Land Board had been informed about possible difficulties with the allocation of Lot 29, yet it chose to proceed regardless.

On 12 December, the Land Board advised Crusoe that a recommendation had been made to the Minister for the granting to it of a lease over Lot 29: Ling-Stuckey para 9 annexure G. It may be noted that no notification or reply was sent by the Land Board to the NCDIC.

On 13 December, the Minister appointed Mr Ian Ling-Stuckey as a member of the Land Board: National Gazette No 80 dated 22 December 1988 at 1417.

On 23 December, the NCDIC sent a letter to the Minister requesting that the Minister "refuse" the appeal to re-zone by Crusoe and instruct the Land Board to hear the application by the NCDIC for a special purpose lease over Lot 29: Edwards para 12 annexure L. There was no reply from the Minister to this letter. It may be inferred that the Minister was aware that the NCDIC had legal objections to the manner in which he had re-designated the zoning of Lot 29, and that the NCDIC also had a prior, unheard application before the Land Board in respect of that lot.

In the New Year, on 5 January 1989, the NCDIC lodged a fresh application for a special purpose lease over Lot 29: Edwards para 13 annexures M and N. This application appears to have been ignored by the Land Board, and by the Minister. The decision was taken at ministerial level to grant Lot 29 to Crusoe, and on 2 February the National Gazette G8 notified that Crusoe was the successful applicant for Lot 29: Ling-Stuckey para 10 annexure H. On 6 February, officers of the NCDIC read National Gazette G8 showing Crusoe as the successful applicant for a "Residential and Business (Commercial) Lease" over part of Lot 29: Edwards 14 annexure 0. The following day, 7 February, Mr Edwards of the NCDIC, learnt that the Minister's office was instructed by the Lands Department to issue a lease to Crusoe: Edwards para 15. Immediately, the NCDIC commenced these proceedings in the National Court.

Two days later, on 9 February, the Town Planning Board in a letter to the Minister protested his decision to uphold the appeal by Crusoe to re-zone Lot 29. The Town Planning Board supported the position taken by the NCDIC that re-zoning was not in the public interest: Naru 24 February 29 annexure A.

On 4 August 1989, the Minister appointed Mr Ian Ling-Stuckey as a member of the Town Planning Board: National Gazette G51 of 10 August 1989 at 1086; and on 17 October 1989, the Minister appointed Mr Ling-Stuckey as Deputy Chairman of the Town Planning Board: National Gazette G69, 26 October 1989 at 1468.

THE APPLICANT'S CASE

The applicant's case has four prongs. First, it attacks the failure of the Land Board to take action on its applications on 10 March 1983 for a special purposes lease over Lot 29, which had been pressed by the NCDIC in its letter of 17 April 1985.

Secondly, it attacks the decision of the Minister to allow the appeal by Crusoe against the decision of the Town Planning Board not to re-zone Lot 29.

Thirdly, it attacked the Minister's decision to exempt Lot 29 from public tendering.

And finally, the NCDIC seeks to quash the declaration by the Minister that Crusoe was the successful applicant for Lot 29.

(A) NCDIC'S APPLICATION OF 10 MARCH 1983

In relation to the application by the NCDIC on 10 March 1983 for a lease over lot 9 the applicant asked for "An order in the nature of mandamus or a mandatory injunction requiring the Land Board to hear the applicant's applications dated 10 March 1982 and 5 January 1989 in relation to the land described as allotment 29 section 26 (Reke Street) Boroko."

I will deal with the application made on 5 January 1989 later. The respondents pointed out that there had been a considerable delay since the application was first made, which may be explained in terms of the neglect of the applicant to commence proceedings. The National Court Rules say at O 16 r 4:

4. Delay in applying for relief.

(1) Subject to this Rule, where in any case the Court considers that there has been undue delay in making an application for judicial review or, in a case to which Sub-rule (2) applies, the application for leave under Rule 3 is made after the relevant period has expired, the Court may refuse to grant:

(a) leave for the making of the application; or

(b) any relief sought on the application,

if, in the opinion of the Court, the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.

(2) In the case of an application for an order of certiorari to remove any judgment, order, conviction or other proceeding for the purpose of quashing it, the relevant period for the purpose of Sub-rule (1) is four months after the date of the proceeding.

(3) Sub-rule (1) is without prejudice to any statutory provision which has the effect of limiting the time within which an application for judicial review may be made."

The NCDIC decided not to take legal action after its follow-up letter of 17 April 1985 and proceeded to construct a car-park on Lot 29, regardless of the fact that it did not have legal title to the land, and that legal title vested with State: Edwards paras 7 and 8. Although, it may have been unwise for the NCDIC to proceed to build a car park on Lot 29 without a formal special purpose lease in 1985, it did advise the State of what it was doing. The State was party to the original declaration of Lot 29 as a special-use zone set aside for a public car park, although no gazettal notice was produced to the Court. No one else had rights in that land which could be prejudiced unless, of course, the State wanted to build a public car-park on Lot 29, and there is no evidence that it did. On the whole, although there was a delay by the NCDIC, the State cannot claim to be prejudiced, nor can the State rely on any "detriment to good administration", because it was the State, through its maladministration (the failure to respond to the NCDIC's application), that provoked the dispute in the first place.

Can Crusoe rely on the delay? Crusoe knew that Lot 29 was zoned or regarded as special use, and it may be inferred that Crusoe knew that, after 1985 the NCDIC was building a car-park on part of Lot 29. Indeed, Crusoe proceeded as if Lot 29 was zoned for special purposes. Its initial approach to the Town Planning Board, on which the NCDIC, had representation, was rebuffed. The appeal to the Minister against the Town Planning Board decision was made without notification to the Town Planning Board or the NCDIC which I hold to be an obviously interested party. Crusoe argued that the Town Planning Act did not require it to notify anybody of the appeal. That is true, but the Town Planning Act is, as Mr Payne for Crusoe remarked, perhaps with some over-statement, "the most poorly drafted piece of legislation on the books". It has recently been repealed and replaced by the Physical Planning Act 1989 (No 39 of 1989).

Crusoe relied on an absence of specific statutory direction to notify other interested parties, presumably in the expectation that their ignorance and their consequent inability to make representations to the Minister, could only further the chances of Crusoe obtaining a decision on the appeal in its favour. That is unfair conduct.

The NCDIC was only informed that Lot 29 had been re-zoned on 7 December 1988, although Crusoe's application for a commercial lease over the undeveloped portions of Lot 29 was advertised in the National Gazette on 24 November 1988. The NCDIC began disputing the re-zoning on 9 December 1988. On 5 January 1989, the NCDIC lodged a fresh application for a special purpose lease over Lot 29, and on 7 February 1989, it commenced proceedings in court.

It appears that, once the NCDIC was aware of what was happening to the re-zoning of Lot 29, it took reasonable steps to protect its interests, and so the delay should not be considered as "undue". If Crusoe was prejudiced at all by what appears to be a long period of time between the NCDIC's original application and its defence of its interests now, then Crusoe was prejudiced largely by its own conduct. For that reason, Crusoe cannot rely on the delay in bringing the action to deprive the NCDIC of its right to review.

The omission of the Land Board, or the State to entertain the application of 10 March 1983 and the follow-up of 17 August 1985 is open to review, and is not cut down by National Court Rules O 16 r 4.

(B) THE APPEAL FROM THE TOWN PLANNING BOARD

The applicant sought to set aside or quash the decision of the Minister for Lands and Physical Planning on 21 October 1988 to allow the appeal to re-zone Lot 29 from special to commercial purposes, and any decision of the Minister to declare that Crusoe was the successful applicant for Lot 29.

The basis of the applicant's submission were that:

1. a vital condition precedent in s 6 of Town Planning Act had not been respected by the Minister,

2. Crusoe was out of time in lodging its appeal over the zoning of Lot 29, and

3. the Minister failed to notify interested parties of his decision to re-zone.

Sections 6 and 10 of the Town Planning Act read:

"6. Zoning of towns

(1) The Board may, by notice in the National Gazette:

(a) divide a town or part of a town into one or more zones; or

(b) declare that a town or part of a town is a single zone; or

(c) declare that a town or part of a town is a redevelopment Zone.

(2) A redevelopment Zone may be declared on land that is, or is part of, Zone, and the declaration does not affect the incidents of the other zoning".

"10. Appeals

(1) A person who is aggrieved by, or wishes to object to:

(a) a declaration under Section 6; or

(b) the granting or refusal of consent under Section 7.

may, within the prescribed time appeal to the Minister.

(2) On an appeal under Subsection (1), the Minister:

(a) may confirm, revoke or vary the relevant notice under Section 6 or the grant or refusal of the consent under Section 7, as the case may be; and

(b) in the case of an appeal against a declaration under Section 6 - shall notify the result of the appeal in the National Gazette."

The applicant relied on the words "by notice in the National Gazette" in s 6(1) of the Town Planning Act to submit that the Minister had not complied with an essential condition precedent to the exercise of his discretion on appeal under s 10 of that Act. Section 10 empowers the Minister to "confirm, revoke or vary the relevant notice under Section 6". Section 10(1) of the Act did not authorise Crusoe to appeal to the Minister unless a declaration had been made under s 6; and because there was no declaration under s 6, the Minister did not have the power to hear the appeal.

There was no evidence before me that Lot 29 had ever been made the subject of notice under s 6(1)(a) or (b) of the Town Planning Act. It had on a number of occasions been designated by the Town Planning Board as "special use zone" or "special purposes - public carpark". But I did not see a National Gazette with any s 6 notice in respect of Lot 29.

The legal questions are:

1. Is the requirement of notification in s 6(1) of the Act mandatory or merely declaratory?

2. Is the requirement of a declaration in terms of s 6(1)(b) necessary to ground an appeal to the Minister under s 10(1)(a) of the Act?

3. Does there have to be a notice under s 6(1) for the Minister "to confirm, revoke or vary", i.e., is the requirement for a notice under s 10(2)(a) mandatory or declaratory?

4. Is the requirement under s 10(2)(b) that the results of an appeal be notified in the National Gazette mandatory or declaratory?

5. To what extent does the absence of notice under either s 6(1) or s 10 breach the audi alteram partem rule?

First, as a matter of fact, it is found here that there was no notification under s 6(1) and no notification under s 10(2)(b) in the National Gazette.

De Smith's Judicial Review of Administrative Action, 4th Edition p 142-3 says:

"Judges have often stressed the impracticability of specifying exact rules for the assignment of a procedural provision to the appropriate category [mandatory or declaratory]. The whole scope and purpose of the enactment must be considered, and one must assess "the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act". In assessing the importance of the provision, particular regard may be had to its significance as a protection of individual rights, the relative value that is normally attached to the rights that may be adversely affected by the decision and the importance of the procedural requirement in the overall administrative scheme established by the statute. Furthermore, much may depend upon the particular circumstances of the case in hand ... If, on the other hand, the primary purpose is to promote the public interest rather than the interests of individuals, the courts are likely to take a strict view of minor deviations from a statutory code of procedure on the part of persons seeking to obtain exemption from the prescribed system of regulation."

At p 144, de Smith says:

"Some classes of procedural requirements, are so important that they will nearly always be held to be mandatory. For example, an administrative authority which fails to comply with a statutory duty to give prior notice or hold a hearing or make due inquiry or consider objections in the course of exercising discretionary powers affecting individual rights will seldom find the courts casting an indulgent eye upon its omissions."

At p 145, the text reads:

"For many years the formalities surrounding the issue, service and content of enforcement notices (preliminary to taking measures to secure compliance with planning controls) were construed rigorously and literally by the courts; later they tended to consider whether disregard of a formal or procedural requirement by the local planning authority might have substantially prejudiced the developer. The principle that failure to observe formal or procedural rules in the administrative process may be venial if no substantial prejudice has been caused to those immediately affected now appears in a number of statutory contexts."

It is noted that these broad principles have been applied in planning cases. In S S Constructions Pty Ltd v Ventura Motors Pty Ltd [1964] VR 229 at 237, Gillard J said:

"In order to decide whether legislative provisions are mandatory or directory it would appear there are certain guides to indicate, but there is no conclusive test to decide into which category legislation may fall. The scope and object of the statute, it is said in the cases, are of primary and possibly of vital importance. Secondly, provisions creating public duties and those conferring private rights or granting powers must be distinguished. The former generally are regarded as directory, whereas the latter are generally accepted as mandatory (emphasis mine), particularly where conditions are attached to the exercise of the duty or the power, as the case may be. Thirdly, in the absence of an express provision, the intention of the legislature has to be ascertained by weighing the consequences of holding a statute to be directory or imperative. 'When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, and at that same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done': per Privy Council in Montreal Street Railway Co v Normandin [1917] AC 170 at 175. See also Caldow v Pixell (1877) 2 CPD 562; R v Lincolnshire Appeal Tribunal; ex parte Stubbins [1917] 1 KB 1 at 9; Pope v Clarke [1953] 2 All ER 704; Edward Ramia v African Woods [1960] 1 WLR 86 at 99; [1960] 1 All ER 627; Cullimore v Lymne Regis Corporation [1962] 1 QB 718; [1961] 3 All ER 1008; McCrudden v Borough of Horsham Waterworks Trust (1895) 21 VLR 504 at 514; Tilbury & Lewis v Marzorini [1940] VLR 245; Greenwood v Camberwell (City of) [1922] VLR 177 at 185."

The legislative intent is clear in requiring gazettal in order to advise all interested parties that a town, or part of a town, has been made the subject of a Town Planning Board decision. Gazettal is important because a zoning or re-zoning can affect private property rights. It is also necessary, as is the case here, because it may affect the responsibilities or duties of those individuals or institutions that are entrusted with public or communal interests. To make a decision and not to gazette it is to keep everybody who may have such an interest in the dark.

It is very much in the public interest to have notices placed in the National Gazette. Accordingly, I hold that the words "by notice in the National Gazette" in s 6(1) of the Town Planning Act are mandatory in their effect. The zoning of towns under s 6(1) must be notified by publication in the National Gazette. That is only fair. Otherwise, individual property owners could be prejudiced by what otherwise would be a "hole-in-the-corner" decision, and not knowing about a re-zoning, could not appeal under s 10 to the Minister, to protect their property rights. Also, the wider public interest may be affected.

It follows, then, that any divisions or declarations of a town into zones, s 6(1)(a) or (b), must be published in the National Gazette, and that such a division or declaration is necessary to ground an appeal under s 10(1)(a). Otherwise, there is nothing to appeal about.

In this case, there was no evidence before me that Lot 29 was notified under s 6(1) of the Town Planning Act, for zoning purposes. But there is a presumption that things have been done right: "omnia praesumuntor rite essa acta." In Rahonamo v Enai (re Hitau) [1971-72] PNGLR 58, Clarkson J said at 66:

"The presumption on which the Crown relies is as expressed by Brewer J in Knox County v National Bank (1892) 147 US 91, 97; 37 Law Ed. 93 as quoted by Griffith CJ in McLean Bros & Rigg Ltd v Grise (1906) 4 CLR 835, 850:

'it is a rule of very general application, that where an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act.'

It may well be difficult in any particular case to say whether the factual situation justifies the presumption. After all, it is common experience that not all things are done legally. But we are not dealing with some inflexible rule of law, but merely with a presumption which if justified places some evidential burden on the party against whom the presumption operates." 

In the case before me, the affidavit of Geoffrey Pearce Edwards shows that there was evidence that the Town Planning Board considered that Lot 29 was zoned "special use" and earmarked for a car park as far back as 1972. Crusoe made no evidentiary challenge to that fact. They have not discharged the evidentiary burden of regularity in the status of Lot 29, and I presume it to be duly notified under s 6(1) of the Town Planning Act.

The question here is not whether a decision to zone must be notified in the National Gazette under s 6(1) for the purposes of appeal under s 10(1) of the Town Planning Act, but whether the decision of the Town Planning Board to exercise a discretion to refuse to change the zoning of a block of land is a decision that must also be notified in the National Gazette.

It seems to me that, if the Board did, in fact, change the zoning of land, then beyond doubt it should publish that change in the National Gazette, because property rights may be affected, and there may be other matters of public interest affected as well.

But where the Board refuses to alter the existing zoning of a block of land, after an application, the same considerations, at least superficially, do not apply. Superficially, it may be thought that, if the Board refuses to re-zone, then there is no public interest in publicizing. After all, who apart from the applicant-appellant has had their rights affected by the decision to refuse re-zoning? Who is aggrieved apart from the applicant-appellant?

The problem with this point of view is that it does not give a proper consideration to the intention of the whole of the statute. Section 10(2)(a) gives power to the Minister to "confirm, revoke or vary the relevant notice under Section 6". Clearly, there has to be a "notice" to confirm, revoke or vary in the first place. But, more importantly, if the notice under s 6(1) is not mandatory, then it is not only possible but probable that the decision of the Minister, as distinct from the decision of the Board to refuse re-zoning, could affect prior existing property rights or the broader public interest.

In the case of a refusal of the Board to re-zone, and an appeal by the applicant against the decision of the Board, it is open to the Minister to change the regime under which the subject-land is governed; that is something that could affect the property rights of others, or the public interest.

If the decision not to re-zone has not been notified, none of the potentially interested parties can be alerted to the fact that s 6 has been in play, and that s 10 may possibly be in play. The first time interested parties may know is when they read the notification under s 10(2)(b) of the Town Planning Act, by which time it may be too late.

The Town Planning Act has been repealed by the Physical Planning Act 1989, certified on 4 December 1989 (Act 32 of 1989).

Nevertheless, I am mindful of s 60 of the Constitution, which reads:

"In the development of the rules of the underlying law in accordance with Sch 2 (adoption etc, of certain laws) particular attention shall be given to the development of a system of principles of natural justice and of administrative law specifically designed for Papua New Guinea, taking special account of the National Goals and Directive Principles and of the Basic Social Obligations, and also of typically Papua New Guinean procedures and forms of organization".

Counsel were not able to refer me to any cases on ss 6 or 10 of the Town Planning Act. It seems to me that where a judge is faced with an outdated and inadequate piece of legislation, and no existing underlying law, then the administrative law must be developed in accordance with s 60 of the Constitution. In my view, s 60 of the Constitution requires that the following rules of the underlying law be developed to apply to the Town Planning Act.

1. Sections 6 and 10 of the Act need to be considered as mandatory. In order to be effective, the decisions of the Town Planning Board under s 6(1) of the Town Planning Act must be notified in the National Gazette.

2. The decision of the Town Planning Board to alter the status of a zone or to re-zone a piece of land should be notified in the National Gazette.

3. The decision of the Town Planning Board to refuse an application to have land re-zoned must also be notified in the National Gazette.

4. Where an applicant to the Town Planning Board is aggrieved over a decision of the Board, in order to properly effectuate the appeal to the Minister under s 10 of the Act, the appellant must give reasonable notice to other likely interested parties.

Who is an interested party? This will depend on the circumstances of the case. But the more obvious persons who may need to be notified are adjoining land-owners, known business competitors, and public authorities. Public authorities such as local government councils, town or city authorities, provincial governments, and public utilities such as the Electricity Commission, the Water Board, the Post and Telecommunication Commission, are the most obvious. This list is not exclusive.

How should an interested party be notified? There are a number of ways. An advertisement may be placed in one of the newspapers where there are a large number of potential parties. This also may be an appropriate method of notification where it may be uncertain who is an interested party. Otherwise, letters written to the parties, with some form of evidence of delivery, may be sufficient.

What should be in the notice? The fact that an appeal is being made, the address of the appellant, and the brief grounds for the appeal need to be advised.

Notification of appeal should be given with sufficient time for other potential parties to make representation to the Minister. Normally, a reasonable period of 14 days should be allowed between notification and the Minister's determination of the appeal, but the case may demand either a shorter or longer period, depending on the circumstances.

On the issue of whether the decision of the Minister under s 10(2)(b), on appeal, has to be notified, it is clear from the principles discussed that such a decision is likely to affect existing property rights, or the public interest, and that it should be mandatory for the Minister to publish the result of the appeal in the National Gazette.

To summarise my view of the legal questions raised and discussed so far:

1. the requirement for notification in the National Gazette in s 6(1) of the Town Planning Act is mandatory;

2. there has to be a declaration in terms of s (6)(1)(b) of the Act, in order to ground an appeal to the Minister, and any alteration in the status of land has to be notified, including a decision not to alter the status of land, or to re-zone;

3. there has to be a notice under s 6(1) for the Minister to confirm, revoke, or vary what is a mandatory requirement of s 10(2)(b) of the Act;

4. it is also a mandatory requirement that the Minister notify the results of an appeal under s 6(1)(b) by publishing them in the National Gazette in accordance with s 10(2)(b).

Accordingly, the Minister in not complying with essential conditions precedent to found a lawful decision on appeal, acted beyond his powers. For that reason, I quash Minister's decision of 21 October 1988 to uphold the appeal of Crusoe against the decision of the Town Planning Board of 11 October 1988. That decision was made without statutory notification and, also, on general principles, without duly notifying the Board to allow it to answer the terms of Crusoe's appeal.

There is another basis why Crusoe's appeal and the Minister's decision should be regarded with suspicion. The grounds of Crusoe's appeal were very thin. In essence the grounds were that Crusoe is a nationally-owned company and that Crusoe has the capability to erect an office block.

The first of these grounds does not form an adequate reason for allowing an appeal. There are over three million Papua New Guinean citizens, and many wholly-owned national companies. The second ground was not supported in the papers that were before me. Perhaps the Minister had other information.

Another aspect of the appeal which generates unease is the speed it went through. It is a matter of public notoriety that the Lands Department is known for its delays. There is a need for Ministers, senior public servants and those who sit on statutory boards, or have discretions to exercise, to be open and fair, and to conduct their business in such a way as to defend their well-earned reputations. There was evidence before me that the Minister, or his staff, had a close relationship with Mr Ling-Stuckey, close enough to have him appointed as a member of both the Land Board and the Town Planning Board, and eventually as Deputy Chairman of the Town Planning Board.

THE AUDI ALTERAM PARTEM RULE

"Natural justice generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed, so that they may be in a position:

(a) to make representations on their own behalf; or

(b) to appear at a hearing or inquiry (if one is to be held); and

(c) effectively to prepare their own case and to answer the case (if any) they have to meet" De Smith 4th Edition p 196.

The Constitution stipulates that:

"59(2) The minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly".

In my view, there is little doubt that that audi alteram partem rule applies to an appeal under s 10 of the Town Planning Act.

The Minister's power on appeal from the Town Planning Board must require him to conduct some sort of an inquiry before coming to a decision. It requires him to decide lites inter partes, that is, in a dispute between the Board and the aggrieved party. The Minister would undoubtedly have to decide questions of mixed fact and law (which are questions of law) which could have a substantial adverse impact on the interests of an individual. By and large, the decisions of the Minister on appeal would not involve matters of high policy. Rather, the type of decision is a matter of municipal or local relevance. As is the case here, the discretion on appeal would involve the use, or a pre-condition to the use of a resource; here it is urban land. Unless finite resources are allocated or used fairly and openly, there is always the danger that patronage and cronyism may be thought to have affected the decision or may have, in fact, affected the decision. In my view, the general proposition of Ridge v Baldwin [1964] AC 40 at 76 that the duty to observe the rules of natural justice should be inferred from the nature of the power conferred upon the authority, should be applied here. Elsewhere, planning legislation is far more sophisticated than the rudimentary act we have in Papua New Guinea. There are elaborate schemes of rules and regulations to ensure public hearings and rights of appeal. The United Kingdom's Town and Country Planning Act 1971 is in point; see for example s 36 of that act. While this legislation has no binding effect here, it does help in pointing to the nature of the power conferred on the authority, and that power is one in which, because of the property rights that are likely to be affected, and because of public interest in having properly and carefully considered town planning decisions made, must be subject to the duty to act fairly and to be seen to act fairly.

A number of matters were raised in argument. It was said that the NCDIC did not have any property rights in Lot 29 because it had not been given a lease under the Land Act. But there can be no doubt that the NCDIC is a lawful body, established under an Act of Parliament with powers "to control, manage and administer the National Capital District and to ensure the welfare of the National Capital District and of the persons in it" (National Capital District Government (Preparatory Arrangements) Act Ch 392 s 10). The evidence before me showed that, prior to the inception of the NCDIC, Lot 29 was designated "special use and earmarked for a car-park". The recent construction of that car-park on part of Lot 29 must have been known to the State, as it could not have been over-looked. The problem was that the Department of Lands, either through turpitude or incompetence, failed to process the NCDIC's applications for title. Although, in retrospect, it might have been unwise for the NCDIC to go ahead and build on a block of land over which it did not have clear title, given the relationships between the Department of Lands and statutory authorities and the known inefficiency within the Department of Lands, the NCDIC did have an expectation that it would eventually get its lease. In my view, that was a legitimate expectation.

In migration matters, there may be doubt as to whether or not the doctrine of legitimate expectation applies in this jurisdiction; see Raz v Matane [1986] PNGLR 38 at 51 per McDermott AJ. I see no reason why such a useful device should be precluded in other areas of administrative law. Premdas v The State [1979] PNGLR 329 was a hard fought case in which the Supreme Court had been confronted by a minister and, as a result, the Minister went to jail. Hard cases make bad law. The principles behind the doctrine of legitimate expectation are sound. "The justification for it is primarily that, when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it should act fairly and should implement its promise, so long as implementation does not interfere with its statutory duty"; Attorney-General of Hong Kong v Ng Yuen Shiu [1983] 2 AC 629 at 638.

The early doctrine of legitimate expectation was developed by Lord Denning in 1969 in Schmidt v Secretary of State for Home Affairs [1969] 2 Ch 149 at 170 and could have been part of the principles and rules of common law at Independence and, therefore, part of the underlying law by virtue of Sch 2.2(1) of the Constitution. If there is any doubt about this, I am prepared to develop the underlying law and administrative law and hold that the rules laid down by the Privy Council in Ng Yuen Shiu are part of the underlying law pursuant to Sch 2.3(1) and s 60 of the Constitution.

But the State did not give the NCDIC an explicit promise that it would grant a lease over Lot 29. How can the NCDIC maintain it had a legitimate expectation? Typically, a legitimate expectation arises, as in migration cases, where a government authority, by its words, leads an individual into believing there is a reasonable basis that some forthcoming act will eventuate; for example, the extension to a foreigner of a right to reside in a country, or conferring on a prisoner a remission from sentence.

But if a legitimate expectation can be said to arise where an authority has promised a certain cause of action, there would be no reason why an expectation could not arise by default, by omission, if as a result of the default or omission, the party relying on the default or omission could have reasonably expected that it would get what it wanted and it acted openly in a manner consistent with that expectation, and the authority was aware or should have been aware of that conduct. Such a rule is both appropriate and applicable to the circumstances of Papua New Guinea because of the notoriety of inefficiency within the public sector, which can so often damage individual rights, but it needs to be administered with good conscience, equity, fairness, reasonableness, and justice.

Accordingly, I find that the NCDIC had a legitimate expectation that it would get a lease over Lot 29, and that it was only the incompetence of the Lands Department that prevented this expectation from being materialised into a right; a lease.

The NCDIC had sufficient interest in Lot 29 through its legal status under the National Capital District Government (Preparatory Arrangement) Act, its occupation of Lot 29, and its legitimate expectation that it would one day get a lease for it to have been notified by Crusoe, and by the Minister, that an appeal had gone to Minister under s 10 of the Town Planning Act in relation to a portion of Lot 29. The failure to notify the NCDIC was a breach of the audi alteram partem rule. Accordingly, I would quash the Minister's decision to re-zone Lot 29 for that reason.

(C) EXEMPTION OF LOT 29 FROM PUBLIC TENDER

Section 57(4) of the Land Act reads:

"Notwithstanding this section, where for any special reason the Minister thinks fit a State lease of town land may be granted under this Division notwithstanding that the land has not been offered for lease by tender as by this section".

The applicant sought to attack the validity of a decision of the Minister to exempt part of Lot 29 from public tender, as is normally required by s 57 of the Land Act. If the applicant was successful in this attack, it would deprive the Land Board of any authority in recommending a lease be granted to Crusoe over part of Lot 29, because public tendering was a mandatory procedure to validate the granting of a lease.

Section 57(4) allows the Minister to exempt town land from public tender "where for any special reason the Minister thinks fit a State lease of town land may be granted under this Division...." (emphasis added).

The Minister must have identified a "special reason" before he decides to exempt from tendering.

A "special reason" is distinct from a "reason". A reason must be based upon some logic, some rational premise, some objective reality, some honest basis. It cannot be entirely subjective, a fraud, dishonest. A "special reason" obviously requires something more than just a reason. This is because of the general construction of s 57, which establishes a system of public tendering. Public tendering is a fair method of allocating what is a scare national resource - urban land. The procedure provides that there is to be an unimproved valuation put on the land, which is designated the upset value of the land (s 57(1)), that an advertisement is made (s 30), and that interested persons who want the land put in their tenders on the basis of the amount of money quoted above the upset price that the tenderer is prepared to pay for the lease, although the person who offers the highest bid will not necessarily get the lease (s 58(3)).

In order to take urban land out of this scheme, there has to be a "special reason" for doing so. There must be something out of the ordinary.

It may be there has been some mistake by somebody in which a person's property rights had been hurt, as in Re Scott's Application (1902) 2 QCLLR 21 (Queensland Land Court) and 9 Australian Digest, 2nd ed, para 346. But there has to be some substantial reason to overturn the basic principle of land law, which shows a jealous regard in respect of the sale of land by State lease otherwise than in the open market: Re Blackman's Special Leases (1931) 13 QCLLR 194; also in 9 Australian Digest, 2nd ed, para 346.

The evidence before me about the Minister's reasons for exempting Lot 29 from tender was meagre. It consisted of a single paragraph in the minutes of the Land Board, annexure A to the affidavit of Mr Samuel Manikot, Chairman of the Land Board, which recommended that the lease be granted. That paragraph read:

"Crusoe Pty Ltd is a nationally owned Company. The company proposed to erect eight level complex [sic] to accommodate offices, retail and accommodation space and sufficient levels of car park areas for general public use. In viewing the above the land was exempted."

Can these be special reasons? There must be many nationally-owned companies in the real estate development business. What was the special reason given for them not to compete in a public tender? There was no reason given. Is the fact that the applicant proposes to erect an eight-level building with car-parks sufficient reason to take the land out of a public tendering system? In itself, it provides no reason, no justification for exemption.

The public policy behind an open tendering system is important. Open tendering ensures that the state receives a price which is a reflection of the market. There was no evidence before me that Crusoe paid anything more than the K100 application fee for a commercial lease.

Public tendering generates competition, not only in the market, but in ideas. It cultivates innovation, invention, new ideas, and change. It is in the public interest that business, commerce, and bureaucracy, be encouraged to develop. The opposite of competition is monopoly, oligopoly, and autocracy. Under those conditions, change is inhibited - even the Soviet Union now acknowledges this with its policy of perestroika and glasnost.

There is no reason before me, let alone special reason, as required by s 57(4) of the Land Act, upon which the Minister could have based his decision to take Lot 29 out of public tendering. Eight-story office blocks are now not uncommon in Papua New Guinea. They do not require special technology. From my own bedroom window I can see three buildings in the process of construction which appear to me to be in excess of eight stories.

I refer to what Lord Denning said in General Electric Co Ltd v Price Commission [1975] ICR 1 at 12, cited by Amet J in Re Gegeyo v Minister for Lands and Physical Planning [1987] PNGLR 331 at 335:

"If it [the decision-making body] gives no reasons in a case when it may reasonably be expected to do so, the courts may infer that it had no good reason for reaching its conclusion, and act accordingly".

Amet J said in Application of the National Capital District Interim Commission [1987] PNGLR 339 at 343:

"Furthermore it leaves it wide open for allegations and inferences that such decisions were made with ulterior motives and for reasons other than in the public interest. It seems to me that it is even more imperative to consult and give reasons when public authorities, administrative tribunals and executive government are dealing with matters of public interest which will affect the welfare and interest of the public at large, such as public reserves where large sums of public funds are expended by a public trustee to improve such reserves for the benefit and enjoyment of the whole public of a city or town, such as in these two cases. And it behoves the relevant Departmental officers concerned and the decision-making tribunal to be diligent and to act with integrity and fairness and above reproach in the conduct of its business so that no aspersions can be cast upon their motive."

With respect to His Honour, I adopt these words and apply them in this case.

Accordingly, I quash the decision of the Minister for Lands to exempt Lot 29 from public tender.

That of course, has the effect of invalidating the decision of the Land Board to recommend to the Minister that the lease for part of Lot 29 be granted to Crusoe.

In any case, it was a miserable decision. There was no competition.

The papers put before me to support the decision were meagre, being an Application of Tender Form dated 24 October 1988 and a two-paragraph letter from the managing director of First Investment Finance Ltd expressing confidence in the project. The objective evidence, if any was put before the Land Board, as to the financial standing of Crusoe, or the likely cashflow from the project, was not before me. The affidavit of Stanley Pala Rupa, sworn 8 February 1986, showed that Crusoe had a nominal and issued capital of K10,000 and a paid up capital of one kina.

If the project on part of Lot 29 is to go ahead, then it must be opened up to public tendering.

I make the following orders:

1. The applications of the NCDIC for a special purpose lease over Lot 29 are to be heard by the Land Board as a matter of priority.

2. Should the Board decide to excise part of the land from Lot 29 to be developed commercially, that part shall be put up for public tender under s 57 of the Land Act.

3. The Minister's decision on the appeal by Crusoe against the decision of the Town Planning Board not to re-zone Lot 29 is quashed. Crusoe may go back for rehearing, but due notification is to be given to all interested parties.

4. The Minister's decision to exempt part of Lot 29 from public tender under s 57(4) of the Land Act is quashed.

5. The decision of the Land Board to recommend the granting of a lease over Lot 29 to Crusoe is quashed.

6. The State and all its employees, agents, and instrumentalities are enjoined from implementing or entering in any dealings whatsoever arising from the decision of the Land Board quashed in paragraph 5 above.

7. The applicant is to have costs, which should be shared equally between the first respondent, Crusoe, and the State.

_______________

Lawyer for the applicants: Kelly Naru
Lawyer for the first respondents: Warner Shand
Lawyer for the second, third, fourth, fifth, sixth, and seventh respondents: State Solicitor