N2483

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS. 202 OF 1999

Between:

LAE RENTAL HOMES LTD
(Plaintiff)

And:

VIVISO SERAVO
(First Defendant)

And:

THE INDEPENDENT STATE OF PNG
(Second Defendant)

LAE: KIRRIWOM, J
2003: 12TH SEPTEMBER & 27th OCTOBER

ADMINISTRATIVE LAW – Judicial Review – Jurisdiction - Delay – Factors contributing to delay in prosecution of review – Applicant not wholly responsible – Substantive issues outweigh delay factor – Need to balance interest between delay and dispensation of justice – Exercise of discretion.

ADMINISTRATIVE LAW – Judicial Review of administrative decisions – Rules of natural justice – Breach of – Right to be heard – Right to put case – Ministerial decision – Revocation of lease – No proper and legitimate grounds – No reasons – No explanation – No material relied upon in evidence – Land Act Ch. 45, ss.57, 58,59 & 60.

ADMINISTRATIVE LAW – Judicial Review – Appeal against Land Board decision – Forfeiture of lease – Rules of Natural Justice - Breach of - Right to be given notice – Right to be heard – Dismissal of appeal – Failure to give reasons – Failure to explain – Failure to defend – Land Act Ch. 45, ss.62-63, ss.122 - 124.

ADMINISTRATIVE LAW – Judicial Review – Grounds – Fraud – Errors of law – Breaches of – Land Act Ch. 45 – Gross violations of mandatory statutory requirements under the Act – Alienation of Government land and State Leases – Land Act Ch. 45, ss.64, 65, 68, 69, 71 and 74.

Papua New Guinea cases cited and or referred to:
Kekedo v Burns Philip (PNG) Ltd & Ors [1988-89] PNGLR 122
Pius Sankin v Papua New Guinea Electricity Commission [2002] Unreported National Court Judgment (19th July 2002) – N2257
Godfrey Niggints v Henry Tokam [1993] PNGLR 66
Benson Gegeyo & Ors v Minister for Lands and Physical Planning [1987] PNGLR 351
Application of the National Capital District Commission [1987] PNGLR 339

Overseas cases and materials referred to or cited:
General Electric Co Ltd v Price Commission [1975] ICR 1
Lawyers Practice Manual (NSW), Redfern Legal Centre, Lawbook Co. Ltd Vol. 2 pp.1305/6-7

Facts:

Applicant for judicial review was a registered title holder of a commercial lease in a prime location in the city of Lae that was taken away from him through revocation and forfeiture procedures provided under the Land Act Ch.45 under the hand of a former Minister and A Delegate of the Minister which departmentally was admitted to be illegal and fraudulently executed and an appeal under section 62 of the Land Act to the First Defendant for the reversal of the decision of the Land Board failed, held:

(1)	That the purported revocation of the Grant of Title to Lae Rental Homes Ltd in respect of the parcel of land known as section 65 allotment 1 volume 144 folio 6 Lae Morobe Province by the former Minister Sir Albert Kipalan KBE LLB MP on an unspecified date in April of 1996 was improper and is therefore null and void ab initio;

(2)	That the subsequent forfeiture of the Plaintiff’s title to the same parcel of land by J. Painap A Delegate of the Minister for Land was done in breach of the provisions of the Land Act and is null and void ab initio;

(3)	That the Land Board decision number 1999 made 14 May 1998 allocating the land in question namely section 65 allotment 1 volume 144 folio 6 Lae Morobe Province to Lae Bottling Industries Ltd was not made in accordance with the Land Act Ch.45 and is void for illegality;

(4)	That the dismissal of the Plaintiff’s appeal against the Land Board’s decision number 1999 communicated to the Plaintiff on 24 March 1999 cannot be sustained and must be quashed as it was arrived at without good reasons and in the absence of transparency and principles of good governance; 

(5)	That the Defendants pay the Plaintiff’s costs on solicitor-client scale.

Full facts are in the judgment.

Counsel:
M. Titus for the Plaintiff
No appearance for the Respondent 

27th October 2003

KIRRIWOM, J:

6.	This is an application for judicial review under O.16 of the National Court Rules. Leave pursuant to Rule 3 NCR was granted to the Plaintiff/Applicant on 2nd November 1999. The matter was then left in abeyance until it came before me on 12th September, 2003 after lapse of close to four years since leave was given. 

7.	Delay is an important factor in judicial review applications. It is not an issue in this trial. However on the facts of this case delay of four years after leave was given for this matter to now come before the court for trial on substantive issue is not an insignificant oversight or omission. It defeats the whole purpose for judicial review. The urgency of the matter necessitates commencement of the action by way of originating summons so that it is dealt with urgently, expeditiously and determined within the shortest time possible by avoiding the rigmaroles of lengthy pleadings associated with proceedings commenced by writ of summons. And the fact that the matter is undefended is not an excuse for the court to gloss over it without at least appraising itself of the reasons for the delay in the interest of justice. In my view there must be exceptionally good reasons for the court to entertain this application.

8.	The law requires under O.16 r.5 (4) NCR that within twenty one days after leave has been obtained the Plaintiff must set the summons down for hearing. The matter was fixed for trial thereafter and trial date was set. But that hearing was aborted and thereafter the matter never got back on the list for all manner of reasons including heavy court list. The plaintiff explained the delay in the affidavit of Jim Ninjipa the Managing Director of Lae Rental Homes Ltd sworn 14th September, 2000 filed in support of its application to transfer this case to Mt Hagen in September 2000 in order to get a hearing. This built-up of frustration of the Plaintiff’s proprietor would have been about the time when there was only one resident judge in Lae. The Plaintiff explains in his affidavit paras 2 - 4:

"2.	I also understand that the Solicitor General has an office in Mt Hagen, Western Highlands Province and it will be convenient for that office and cost-effective to hear this case in Mt Hagen.

3.	I have been advised by my lawyers that it is not likely that there is going to be a second judge appointed in Lae and that most civil matters are still pending and are waiting to be heard. I also believe it is unlikely that the situation will improve until next year."

4.	I seek that this matter be transferred to Mt Hagen National Court where there is a resident judge and I also understand that there is a resident judge in Goroka. I believe the work load may be lighter there than in Lae." (Emphasis is mine)

9.	The Plaintiff’s application was dismissed. And still the matter failed to get to a hearing. The Plaintiff explained in his evidence that he relied on his lawyer and constantly checked on him but was given the same message tape-recorded message ‘we can’t get a hearing date because the judge has very heavy schedule’. The monotony went almost forever and the Plaintiff’s hope of getting a hearing faded away. The lawyers subsequently discontinued acting for the Plaintiff. 

10.	The delay in the prosecution in this matter must be regretted. The year in which the Plaintiff sought to have the case transferred was the most opportune time for this trial to have been fast-tracked when the particular subject land was at the peak of much controversy in the city of Lae as published in the media (see Exhibit "P7"). Nothing happened thereafter for two years until the lawyers belatedly filed a Notice Ceasing To Act on 2nd December 2002. 

11.	I set out the chronology of the pleadings just to give a full scenario at a glance:

7/07/99 -	Plaintiff filed originating summons
09/07/99 -	Plaintiff filed Notice of Motion seeking leave to apply for judicial review.
11/10/99 -	Leave application was heard
02/11/99 -	Court granted leave to the Plaintiff to apply for judicial review.
10/02/00 -	Notice of Trial filed and trial fixed for 04/08/00 but never proceeded.
27/09/00 -	Plaintiff filed Motion for an order to transfer proceedings to Mt Hagen.
29/09/00 -	Court refused application for transfer of proceeding to Mt Hagen.
26/07/01 -	Pre-Trial Review Form filed incomplete
02/12/02 -	Warner Shand Lawyers filed Notice Ceasing to Act.
19/03/03 -	Notices of Change of Lawyers filed by Mirupasi Lawyers.
14/04/03 -	Letter from Mirupasi Lawyers requesting for the case to be placed on the call-over list for a hearing date to be given.
29/08/03 -	Advise to Mirupasi Lawyers fixing 11/09/03 as trial date of this matter in Court 3.
11/09/03 - Trial was adjourned for Plaintiff’s lawyers to contact the Solicitor General about the Defendants’ representation
12/09/03 -	Trial proceeded in the absence of the Defendants and or their lawyers

12.	Mr. Titus for the Plaintiff argued that delay is just one factor in this entire case but the court must also look at the flagrant abuses of the Land Act on the evidence that will be presented. These breaches amount to a deliberate fraud on the Act itself that this court simply cannot and ought not to ignore them in the overall context of the case. He submitted that these gross violations of the law amounting to nothing less than deliberate fraud far outweigh the delay factor for the court to invoke its inherent jurisdiction and do justice where it is due. 

13.	I am of the view that delay ought not to be the only factor on the question of the court exercising its jurisdiction in this case. Delay is just one factor amongst others including sufficient interest, arguable case, important questions of law and the like that case law authorities have established. These are the guiding principles of judicial review application which are not only essential for purpose of obtaining leave to apply for judicial review but are of equal force and weight at the substantive trial of the review application itself. 

14.	I accept the evidence of Mr Ninjipa on the reasons he gave for the delay. I am satisfied that the plaintiff took a very cautious approach in this matter at all times in order that the defendants appeared which would then expedite the hearing. The defendants’ lack of appearance despite service being effected and proper notices given since the proceedings were commenced contributed to the delay as well. I am of the view that the delay cannot be landed squarely on the Plaintiff. The court and the defendants have also added to this appalling state of affair. This case is just one illustration of internal management deficiencies in the system that disadvantages parties that the court must as a matter of course and good administration take its fair share of blame when exercising its discretionary powers on the preliminary jurisdictional questions that become apparent of the face of the record at a glance or if raised by one of the parties to the dispute to dismiss the proceeding. 

15.	The facts of this case are that the Plaintiff obtained a 99 year commercial lease over a block of land in the City of Lae being State Lease Volume 144 Folio 6 Section 65 Allotment 1, Lae Morobe Province to which he held a valid Title since 10 January 1991. The Title Deed was not issued to him until 25 January 1996. A copy of the Title Deed is marked as Annexure "A" in the Affidavit of Jim Ninjipa sworn 7 July 1999 – Exhibit ‘P1’.

16.	On this property it made substantial improvements to the value of over K400, 000.00. In 1995 by a Commercial Lease Agreement dated 20 December 1995 the Plaintiff entered into sublease agreement with Lae Bottling Industries Pty Ltd on a monthly rental of K3, 000.00 under the lease – see Exhibit ‘P4’. 

17.	Lae Bottling Industries Ltd did not pay the rents under the Agreement and consequently the Plaintiff also fell into arrears in meeting its annual lease payments to the State. The Plaintiff took Lae Bottling Industries P/L to court to recover the unpaid rents under the agreement. Various events unfolded or took place regarding the piece of land during the time the Plaintiff was engaged in court battle with Lae Bottling Industries P/L culminating in the forfeiture of the lease and allocation of the land to Lae Bottling Industries P/L which is the subject of the Plaintiff’s appeal that was dismissed. This dismissal is now the subject of this review application. 

18.	Without any prior notice or warning, on an unspecified date in April of 1996 by instrument issued under the hand of the then Minister for Land, Sir Albert Kipalan KBE, LLB, MP, the grant of lease to the Plaintiff over the land known as Volume 144 Folio 6 Section 65 Allotment 1 Lae Morobe Province was revoked - see Exhibit ‘P6’. Prior to this revocation and unbeknown to the Plaintiff, by some weird turn of events, another Title Deed on the same piece of land was issued dated 29th March 1996 in favour of Lae Bottling Industries P/L (see Exhibit ‘P5’). The events that unfolded after this revelation were just as chaotic as well as corrupt and I will as best as I can sequentially set out what took place according to the evidence before me to demonstrate the fraud committed in depriving the Plaintiff the title to the subject land. 

19.	In or about 2nd October, 1997 Mr Ninjipa received a Notice to Show Cause – see Annexure "E" to Ninjipa’s affidavit (Exhibit ‘P1’). The Plaintiff’s lawyers then responded by letter dated 20/10/97 to this Notice – see Annexure "F" to Exhibit ‘P1’. 

20.	However by strange turn of events the Plaintiff learnt through Notice in the National Gazette dated 11th December, 1997 G.108 that its grant of title to the land in question already revoked by the former Minister Sir Albert Kipalan KBE LLB MP was further extinguished by instrument of forfeiture (FORFEITURE OF STATE LEASE) signed by J. Painap as A Delegate of the Minister for Lands dated 3rd day of December, 1997 (see Annexures ‘C’ and ‘D’ to J. Ninjipa’s affidavit – Exhibit ‘P1’). 

21.	On 14th May 1998 the Lands Board granted another Lease over the same property Allotment 1 Section 65 to Lae Bottling Industries Pty Ltd unbeknown to the Plaintiff. Plaintiff was not put on notice of the hearing by the Land Board and was generally unaware.

22.	On 25th June 1998 upon becoming aware through other persons the Plaintiff lodged an appeal to the Minister for Lands as required under the Land Act – see Annexure ‘H’. The procedure for dealing with appeals is set out in ss. 62 – 63 of the Land Act. The Head of State, under subsection (5) of s.62, acting on advice determines the appeal and his decision is final.

23.	The Plaintiff’s appeal was dismissed and he was advised of this by letter dated 24th March 1999 under the hand of the Department of Lands Secretary Morris Alaluku – see Annexure ‘J’ in Affidavit of Jim Ninjipa – Exhibit P1.

24.	The Plaintiff applied to the court for the review of this decision and his grounds for review principally are:

(25)	The First and Second Defendants failed to give any reasons for dismissing the Plaintiff’s appeal against the Land Board decision No. 199 that forfeited the lease to the Plaintiff in respect of Section 65 Allotment 1 State Lease Volume 144 Folio 6 Lae Morobe Province.
(26)	The hearing by the Minister was conducted contrary to the principles of natural justice. 
(27)	No tribunal doing justice would have decided against the Plaintiff/Applicant. 
(28)	A decision of a subordinate tribunal is subject to judicial review jurisdiction of the National Court where the Plaintiff/Applicant, according to the principles developed by case law in this jurisdiction and elsewhere that we have adopted and applied as guide establishes one or more of the following grounds:
(29)	Breach of the rules of natural justice
(30)	Failure to observe procedure required by law
(31)	Absence of jurisdiction or authority
(32)	Taking an irrelevant consideration into account
(33)	Failing to take a relevant consideration into account
(34)	Improper purpose or bad faith
(35)	The exercise of discretionary power at the direction or behest of another
(36)	The exercise of discretionary power in accordance with a rule or policy without regard to the merits of a particular case
(37)	Unreasonable exercise of power
(38)	Uncertainty and other abuses of power
(39)	Error of law
(40)	Fraud
(41)	No evidence
(42)	Failure to make a decision.1

25.	In this case the Plaintiff’s contention is that the Minister’s revocation of the title issued to the plaintiff on the land and then subsequent forfeiture of title to the Plaintiff without any notice as required under the Land Act by J. Painap A Delegate of the Minister for Land and then allocation of the same piece of land to Lae Bottling Industries Ltd by the Land Board contrary to the provisions of the Land Act and not providing good reasons and then dismissing its appeal also without giving any good reasons place this case in a worst category of gross dereliction of statutory responsibility amounting to fraud, dishonesty at the highest level and misuse of ministerial power and authority. 

26.	This proceeding has not been defended from the time it was filed. There is no question as to service of documents on the Solicitor General as is obvious from the Affidavits of Service filed by the process servers. Despite services the Solicitor General did not enter an appearance for the Defendants and to this date the matter remains undefended. I am satisfied on the abundant evidence before me that the Solicitor General has been kept informed every step of the way when an application was made since the institution of the proceedings and has been constantly kept informed of the development in this case but has chosen to adopt a passive stance on the matter rather than either oppose or concede to the Application. In my view the failure is no bar to the Plaintiff proceeding with this action in the absence of the Defendants in person or through legal representatives. 

27.	The law governing judicial review is pretty well settled in this jurisdiction. Judicial review is available in the area of primarily public law but recent trends have shown that the process is even invoked in private law where individual rights are affected. The principles in Kekedo v Burns Philip (PNG) Ltd & Ors [1988-89] PNGLR 122 state that judicial review maybe available where the decision-making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision that no reasonable tribunal could have reached or abuses its powers.

FAILURE TO GIVE REASONS.

28.	A subordinate tribunal that fails to give reasons for its decisions is deemed or said to have had no good reasons for its decision. In Pius Sankin v Papua New Guinea Electricity Commission [2002] Unreported National Court Judgment (19th July 2002) – N2257 Kandakasi, J held that a failure to provide any reason for a decision on a seriously disputed item may have the effect of the decision being arrived at without any good reasons.

29.	His Honour said:

‘It is settled law, a discretion that is vested in a decision-maker in a democratic country such as ours be exercised on proper consideration as to the relevant facts and the law. There is no such thing as unfettered discretion. Good reasons must be given for an exercise of discretion. A failure to do so may leave open the flood gates for all sorts of allegations that the discretion was exercised for ulterior motives. For examples of authorities on this point see the Application of Moge Enga and Kiupi Group In the matter of a Decision of the Minister for Lands concerning Section 30 Allotment 7 Mr Hagen [1995] PNGLR 31 and an Application of the NCDC [1987] PNGLR 339.’

30.	In Niggints v Tokam [1993] PNGLR 66 Amet, J (as he then was) was deciding on a judicial review application where a Departmental Head chose not to accept a Public Service Commission recommendation for reinstatement of a dismissed public servant but failed to give reasons for not complying with or rejecting that recommendation. His Honour said at p. 71: 

‘…[t]he Department Head who decides in the exercise of his discretion on proper consideration of the Public Service Commission’s recommendation not to accept it should state the reasons for not so accepting the recommendation. It is not sufficient to dismiss the recommendation in the way the First Respondent did: 

"Recommendations from the Public Service Commission are only recommendations. I do not accept the Public Service Commission recommendation and therefore, you remain dismissed."

If so reasons are stated other than this kind of statement it leaves the Court no option than to conclude that there were no good reasons at all. Public officials discharging public duties are required for public accountability to provide reasons for their actions and decisions. If their decision affects substantial interests and welfare of other officers and their families good management and common sense principles of fairness require that reasons be given. 

Powers such as power to dismiss and power to accept or not to accept a recommendation are not absolute and unfettered. They are not intended to be exercised arbitrarily and without good reasons.’

31.	The advice that was relayed to the Plaintiff in relation to its appeal against the revocation was the letter dated 24 March 1999 that I referred to earlier (Annexure ‘J’ of J. Ninjipa’s Affidavit – Exhibit ‘P1’) and it reads: 

‘24th March, 1999
The Managing Director
Lae Rental Homes Pty Ltd
PO Box 774
LAE Morobe Province

Dear sir, 

SUBJECT: APPEAL AGAINST LAND BOARD NO. 1999 ITEM 15 – ALLOTMENT 1 SECTION 
65 – CITY OF LAE – MOROBE PROVINCE 

You are hereby advised that (sic) your appeal against the decision of the Land Board Number 1999 has been rejected by the Head of State on 29th February, 1999 therefore the Land Board’s decision still stands in favour of Lae Bottling Industries Pty Ltd.

Yours faithfully

Signed 

MORRIS ALALOKU
Secretary "

32.	This is all there is in this letter. NO reasons were given for the rejection of the Plaintiff’s appeal. Common sense prevailing, Plaintiff as having a prior Title on the property and who had an existing commercial lease agreement with Lae Bottling Industries Pty Ltd whose rental payments under the Agreement to the Plaintiff was hardly honoured was at least entitled to be given good reasons for its rejection and preferred over its tenant. 

HEARING CONTRARY TO PRINCIPLES OF NATURAL JUSTICE.

33.	The evidence from the Plaintiff’s sole witness Jim Ninjipa shows that Lae Bottling Industries Pty Ltd spear-headed the revocation of its lease over the property allotment 1 Section 65 Lae through fabrication or concoction of evidence in collaboration with officers in the Lands Department of accumulating unpaid rental arrears in excess of K86,000 which seemingly formed the basis for the revocation of his Title. The Plaintiff in reality only owed less than K26,000 which he arranged with the Department to pay by instalments and was agreed to. Based on that understanding several payments were subsequently made in 1998 as evident from the official receipts issued by the Department of Lands and Physical Planning – see Exhibits ‘P2’ and ‘P3’. 

34.	But this is contrary to and in defiance of a Revocation Notice previously issued dated sometime in April 1996 under the hand of the then Minister for Lands Sir Albert Kipalan KBE LLB MP – Exhibit ‘P6’ purportedly acting under Section 25 of the Land Act.

35.	In his affidavit Jim Ningipa in paragraph 13 states: 

‘From my own investigations I find that the Lands Department made the ruling in my favour upholding my Appeal, but when it went for endorsement by the Governor General or the Minister for Lands, it was rejected. ‘

36.	This uncontroverted evidence from the Plaintiff’s Managing Director unveils a whole scenario of events and activities that are tantamount to abuses of proper procedures and deliberate fraud on the system of acquiring land under the Act especially in relation to the State Leases. This is succinctly born out in the subsequent Affidavit of Jim Ningipa sworn 5 September 2003 – Exhibit P13. 

37.	Paragraphs 2 and 3 of the Affidavit of Jim Ninjipa sworn 5th September 2003 state the following: 

38.	The following procedural errors, irregularities and direct breaches of the Land Act, can be ascertained from my description of the chaotic circumstances relevant to these proceeding in my said earlier affidavit:

(a)	The Notice to Show Cause was not delivered to the Plaintiff in good time to enable proper and appropriate compliance and a response. Instead, it was delivered 1 month and 2 weeks out of the specified period. 

(b)	The figure of arrears in land rates set out to be a cause for the forfeiture of the lease is inconsistent with a subsequent advise from the Defendant indicating that the arrears was only K21,525.00.

(c)	The Minister purportedly caused to forfeit the lease when the Plaintiff had not failed to comply with the Notice to Show Cause and had indeed lodged a response, although hurriedly and delayed, because it received the Notice at the time it did.

(d)	Notice of the purported forfeiture was never served on the Plaintiff.

(e)	Despite the purported forfeiture, in February 1998, the Secretary for Lands, confirmed, by a letter dated 16 February 1998, that the Plaintiff continued to be the registered proprietor or leaseholder of the said land.

(f)	There was no advertisement of the said land available for leasing.

(g)	The Minister did not exempt the said advertisement.

(h)	The Chairman of the Land Board did not notify the Plaintiff by post of the date of the meeting of the Land Board in which the Application for grant of lease to the said land would be determined or decided upon.

(i)	The Minister did not grant a state lease directly.

(j)	The usual tender process pursuant to the Land Act was not complied with in the granting of the lease.

(k)	The Land Board did not ask the Plaintiff to participate in and was not heard during its determination of the grant of the lease of the said land to the Lae Bottling Industries (whom the Plaintiff had subleased the said land to, and who had by its conduct contributed significantly to the chaos giving rise to these proceedings).

(l)	The Land Board did not forward a notice of its recommendation to the Plaintiff. 

(m)	The Land Board failed to give consideration to the chaotic situation the Plaintiff was in, created by the ‘Lae Bottling Industries’ conduct, whom the Land Board granted the lease. 

39.	Therefore, I am able to say, that, in all the circumstances, the decision of the then Minister for Lands and or the Head of State, evidenced by the letter of 24 March 1999, given all the above instances of irregularities: 

(a)	was directly contrary to the Land Act and constituting a circumventing of the Land Act, a condoning of the breaches and irregularities of and under the Land Act, and a further perpetration of continuous corruption of the law.

(b)	inconsistent with the purpose and function of the appeal process, the purpose and function of the ministerial duty and responsibility in the appeal process, and the function and purpose of the Land Board and the Land Act, generally.

(c)	unfair as the Plaintiff was not heard at all during the Land Board determination and if it was heard, no reasonable Board would have made the grant it made and the appeal was the appropriate and immediate opportunity to arrest the wrong caused and the breaches of the law and have the situation corrected. 

40.	To demonstrate to the Court that both the decision of the Minister responsible and the Land Board ought not be sustained by any Court of Law or equity doing justice, the Plaintiff tendered evidence showing that despite the Notice of Forfeiture signed by then Minister for Lands Sir Albert Kipalan in April 1996, a letter from the Secretary for Lands John Painap OBE dated February 19, 1997 addressed to the Managing Director Lae Bottling Industries Pty Ltd and also copied to the Managing Director Lae Rental Homes Pty Ltd expressed in no uncertain terms that the land in question belonged to Lae Rental Homes P/L which has been the legal tenant since 10/01/91 – Exhibit P8. 

41.	The letter (Exhibit P8) reads: 

‘February 19, 1997

Managing Director
Lae Bottling Industries P/L
PO Box 3891
LAE
Morobe Province

Dear Sir

SUBJECT: LEGAL TENANCY OVER ALLOTMENT 1 SECTION 65 – LAE

It has been brought to my notice of your arguments with the Lae Rental Homes P/L over the Legal Tenancy of the above mentioned property.

Please be advised that, an investigation conducted to ascertain the "legal tenancy" revealed that "Lae Bottling Industries P/L" is not the legal tenant to the land for following reasons;

1.	No Land Board hearing meeting minutes to confirm allocations.

2.	No successful applicant gazettal to confirm statutory approval by Minister for Lands and commencement of the date of Lease.

3.	No LAF and LG Notices and fees paid with returned signed LAF to confirm your company’s acceptance of Lease grant. 

4.	No confirmation of signatures of the Secretary or Acting Secretary as delegates of the Minister or Minister on the title as being approved but was signed by the then Forfeiture Revenue Officer – Mr Morea Peter who is now terminated. 

5.	No Volume and Folio numbers confirming having been registered by the Registrar of Titles on the top right-hand corner of the Title. 

I regret to advise that your title was forged and is fake and "not an indefeasible title" meaning that is not legal.

Please be further advised that Lae Rental Homes P/L are the legal tenants having obtained the title over the property under registered title Volume 6 Folio 144 with the lease commencing 10/01/1991.

Should you have any queries over this matter, I would be glad to discuss this with you at your own convenience.

Yours faithfully, 

Signed

JOHN PAINAP 
Secretary

cc: 	The Managing Director
	Lae Rental Homes Pty Ltd
	PO Box 774
	LAE
	Morobe Province 

42.	Secretary Painap’s letter only reinforced an earlier letter to Mr Mathew Minape Lae Bottling Industries P/L dated 15/01/97 from the acting Provincial Administrator of Morobe Ainea R. Sengero MBE which confirmed that Lae Rental Houses P/L was the legal proprietor. This letter is in evidence – Exhibit ‘P10’ and reads: 

‘					Date: 		15 January 1997
					Our Reference: 	001-065-001

Mr Mathew Minape
Lae Bottling Industries P/L
PO Box 3891
LAE
Morobe Province

Dear Sir,

RE:	OWNERSHIP OVER ALLOTMENT 1 SECTION 65 CITY OF LAE

My office has been approached by Mr Jim Nengipa of Lae Rental Houses P/L seeking verification on the ownership of this property.

My Department having now assumed responsibilities on certain land administration functions from the National Lands Department do hereby confirm that Lae Rental Houses P/L is the legal proprietor of this property, as registered in the State Leases Register as Volume 6 Folio 144.

Should you have any queries over this property you should consult with the proprietor through Mr Jim Nengipa.

Yours faithfully,

Signed

A R SENGERO MBE
A/Provincial Administrator 

cc:	Mr Jim Nengipa
C/- PO Box 774
LAE
Morobe Province

43.	Following lodgement of appeal to the Minister by the Plaintiff over the revocation of the lease and allocation of the land to Lae Bottling Industries P/L, two senior advisors to the Minister, in an internal minute to the Minister dated 3rd August 1998 strongly recommended to the Minister to direct the Land Board to return the Titles back to Lae Rental Homes P/L because of the dubious and unscrupulous manner in which the land was allocated to Lae Bottling Industries P/L – Exhibit ‘P9’. 

44.	The Minute (Exhibit ‘P9’) referred to above reads as follows: 

TO		:	MINISTER FOR LANDS

FROM	:	JOHN TOKUNAI & TIRI WANGA 

DATE	:	3rd AUGUST 1998

FILE		:	ML:1-018

SUBJECT	:	SECTION 65 ALLOTMENT 1, CITY OF LAE, MOROBE PROVINCE 

Sir, 

A formal Appeal is now before yo and the Department of Lands from Lae Rental Homes Pty Ltd, concerning the above block of land.

From what we have been able to deduce from the appeal itself including various relevant documents pertaining to the above it would appear that there are certain improprieties including unscrupulous and dubious tactics in the allocation of the above land to the Lae Bottling Industries Pty Ltd.

From the documents we have originally the land was legally granted to Lae Rental Homes Pty Ltd by the Land Board.

On the 20/12/95 Lae Bottling Industries Pty Ltd entered into sublease agreement with the Landlord or Title Holder of Section 65 Lot 1, Lae in this case Lae Rental Homes Pty Ltd, ie; Lae Bottling Industries will rent the property from Lae Rental Homes Pty Ltd.

Sometime later, and mysteriously Lae Bottling Industries P/L went ahead and obtained another fresh new title over the same block of land they were leasing, the manner in which the Titles were obtained is questionable and is currently before the Court.

Our advise to you is to inform you briefly of the circumstances surrounding this controversy and to recommend to you to direct the Land Board and the Department to put a hold on this and study it carefully with a view to returning the titles back to the original owners who is Lae Rental Homes P/L. 

For your advice and directions. 

Signed					signed
JOHN TOKUNAI				TIRI J. WANGA
First Secretary 				Technical Officer (Lands) 

45.	There is no question that the Plaintiff was, until revocation of his title to the land known as Section 65 Lot 1 Lae Morobe Province, the legitimate proprietor and lessee of the State lease Volume 144 Folio 6. Under s. 122 of the Land Act the Minister has power to forfeit a lease for non-payment of rent on the lease, the reason for the Minister purporting to act in this instance. 

46.	However subsection (2) requires the Minister to serve notice on the lessee calling on him to show cause within a specified time why the lease should not be forfeited. And subsection (3) almost makes it mandatory that the Minister shall not forfeit a lease unless–

(a)	The lessee has failed to comply with a notice

(b)	Lessee has failed to show good cause whey the lease should not be forfeited.

47.	There is uncontroverted evidence before me that none of these statutory requirements or pre-requisites were met or adhered to in the manner intended by or as stipulated quite clearly in the Act. The Notices were caused to be served and received much after the events had taken place. The Plaintiff only became aware through other people and by reading in the papers. All transactions were done in secret. The law relating to State lands available for leasing is that they must be advertised by virtue of section 68 of the Land Act unless exempted by the Minister. There is no evidence of the land in question being advertised nor is there any evidence of being exempted from advertisement. 

48.	It is submitted on behalf of the Plaintiff that the prescribed procedures under the Land Act simply did not take place or were not observed at all. This is not denied nor refuted nor challenged in any way.

49.	The plaintiff contends that the breaches ‘are gross and a travesty to the extent that it can be said that the Act was not followed. Further, to the extent that the Minister made the disposition of State Land which was not open to scrutiny but removed from the public without the sanction of the Act, granted private excess to the State Land, conferring an advantage, particularly commercial advantage on a single applicant without reasons, the grant clearly is not only outside the scope and purpose of the Act, unreasonable and unlawful but it is fraud on the Act itself. The grant is in fact a nullity and no lease, no interest in land, no title was issued in accordance with the Act.’

50.	An authoritative statement that underpins any administrative or quasi judicial decision making process is the need to give some explanation or reasons for decision as Amet, J (as he then was) enunciated in Benson Gegeyo & Ors v Minister for Lands and Physical Planning [1987] PNGLR 351 and in the Application of the National Capital District Commission [1987] PNGLR 339 and subsequently reiterated in Godfrey Niggints v Henry Tokam & Ors [1993] PNGLR 66. This is the propositions that if a decision-maker fails, refuses or omits or chooses to give no reasons or explanation for arriving at a certain decision or view or conclusion, the Court must infer as of necessity that the decision-maker did not have good reasons for his decision, view or conclusion.

51.	This statement was over time echoed in both the Supreme and National Court in judicial review applications and in other proceedings where issues of natural justice arose. The principle finds its roots in administrative law from an English case of General Electric Co Ltd v Price Commission [1975] ICR 1 which was quoted at p. 199 of Review of Administrative Action by H. Whitmore and at Aronson (1st Ed, 1978) where Lord Denning said:

"Parliament often entrusts the decision of a matter to a specified person or body, without providing for any appeal. It may be a judicial decision, or a quasi judicial decision, or an administrative decision. Sometimes Parliament says its decision is to be final. At other times it says nothing about it. In all these cases the courts will not themselves take the place of the body to whom Parliament has entrusted the decision. The courts will not themselves embark on a rehearing of the matter. But nevertheless, the courts will, if called upon, act in a supervisory capacity. They will see that the decision-making body acts fairly. The courts will ensure that the body acts in accordance with the law..… If the decision-making body is influenced by considerations which ought not to influence it; or fails to take into account matters which it ought to take into account, the court will interfere. If the decision-making body comes to its decision on no evidence or comes to an unreasonable finding – so unreasonable that a reasonable person would not have come to it – then again the courts will interfere…. And, of course, if the body acts in bad faith or for an ulterior object, which is not authorised by law, its decision will be set aside. In exercising these powers, the courts will take into account any reasons which the body may give for its decisions. If it 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."

52.	In Gegeyo & Ors v Minister for Lands and Physical Planning (supra) it was a case where the Minister revoked the appointment of the Plaintiffs as Members of the Land Board only three months of their being in office. There were no reasons given except on affidavit belatedly filed that purported to justify the Minister’s revocation which lacked substance and fell quite short of proper reasons. Supported by evidence given by a former long serving Chairman of the Land Board about his encounter with a former Minister in the former government threatening to sack the Members of the Land Board over its decision on a land matter involving him, it was not difficult to see where the Minister’s instructions to act were coming from.

53.	Amet, J at p. 337 said and I quote:

"The plaintiffs have called evidence from the former long serving chairman of the Papua New Guinea Land Board, Mr George Kilamaina who is presently still employed in the Department. He gave evidence of an encounter with Mr Paul Torato who was a Minister in the former government and who was interested in an application before the Land Board. Mr Paul Torato had rung Mr Kilamaina on a number of occasions enquiring about the out come of the application and had made allegations of threats to see to the removal of the Land Board if they did not inform him of their decision or consider favourably his application. He deposed that Mr Torato had threatened to see to it that the Minister revoked the appointments of the members of the Land Board. 

In the end result the defendant has produced no evidence, no materials, no documents, no advice from his Department or from any interested persons to show that the conduct of the four plaintiffs warranted their summary dismissal as members of the Land Board for the National Capital District. 

I accept the affidavits of the four plaintiffs that in the two months and three weeks since their appointment to the Land Board they had conducted themselves with the utmost integrity and honesty. I have nothing before me to doubt their integrity or their honesty. I find the assertions in the affidavit of Micah Wes to be without substance."

54.	In the case of the Application of the National Capital District Interim Commission (supra) which His Honour also decided in the same time as the Gegeyo case, it was a case involving public reserves in two prime locations in the city of Port Moresby. The Minister for Lands and Physical Planning acting pursuant to powers given under section 25 of the Land Act declared two popular spots, the Touagaba Hill Reserve (section 28 Lot 7 Granville) and Ela Beach Recreation Reserve (Section 28, Lot 7) as public reserves and appointed the Applicant NCDIC as the trustee of the Reserve. About a year later, after considerable expenses were put into developing the reserve for public interest, by a Ministerial Delegate those two declarations were revoked through a Notice in the Government Gazette. The Court found that there was power given by law to the Minister or his delegate to revoke the declaration. 

55.	The issue before the Court was the proper exercise of that power. On behalf of the Minister an Affidavit was filed by the Departmental Head that purportedly asserted the Minister’s legal authority as opposed to pleading facts.

56.	At p. 342 – 343 Amet J said: 

"Once again counsel for the State representing the Minister had boldly made the submission that the Minister has absolute unfettered discretion to declare a public recreation reserve and conversely to revoke such a public recreation reserve. It was contended that the Minister need not give any reasons, notice or consult any person. This view is supported by the affidavit of Karipe Pitzz who purports to make legal conclusions about the effect of the various provisions of the Land Act in relation to the powers of the Minster. 

The trusteeship of public recreation reserves has been by regulation entrusted to a statutory corporation which exercises all powers of management, expending finance and incurring liabilities and is liable in law for the supervision and management of such public reserves and therefore in my view it has the right to be informed, advised and consulted if such public recreation reserves which it administers are proposed to be revoked. There can be no justification in logic or equity for the contention that such a statutory organization, entrusted with the administrative and legal responsibility of administering such a reserve, has no right to be informed or consulted. Common sense alone dictates that it must be consulted in view of the expenses it has incurred and proposes to incur. "

57.	His Honour continued at p. 343 – 344:

"If this kind of attitude to administrative decision-making, maintained by the most senior administrative officers advising government ministers and administrative tribunals continues, then it is my strong view that it is erroneous and will continue to bring grave consequences for the State and for the decision-making bodies. 

I quote again from the text Equity: Doctrines and Remedies by R P Meagher, W M C Gummow and J F R Lehane (2nd ed, 1983) at 409, a brief statement of the court’s jurisdiction in regard to administrative reviews:

"Administrative decisions may be declared inoperative on the ground that they have been reached in bad faith, or as the result of legally irrelevant considerations, or were activated by some improper purpose, or were made on the wrongful assumption of authority, or were otherwise vitiated." 

No affidavit material was filed by Mr Max Day or the Minister now were any such reasons advanced by Mr Karipe Pitzz, the Secretary of the Department, whom one would expect to know. I find the cavalier manner in which the State has defended this application and the decisions of the delegate of the Minister to be most unsatisfactory. It seems to me that there has been no preparation, no attempt whatsoever by counsel or the principal officer in the Department to justify, or to show some reasons in writing for the decisions that were made. And as I have quoted from the cases: 

"If it gives no reasons in a case when it may reasonably be expected to do so, the courts may infer that it has no good reason for reaching its conclusions, and act accordingly."

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 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. I have found in this case and also in Re Gegeyo v Minster for Lands and Physical Planning [1987] PNGLR 331 involving the same Department and the same Minister to be wanting in a lot of respects. The decision-making process, it seems to me, has been taken in a cavalier, haphazard, ill-advised fashion and consequently when these decisions are being challenged and reviewed by the court it exposes the deficiencies in the administrative machinery. In both cases I found the Department and the senior officers, whom one would expect to have given advice and to respond to providing the necessary supportive affidavit materials, to defend the actions of the Ministers, to have been less diligent. 

I consider therefore the applicant trustee of these two reserves had an interest in the decision to be made by the delegate of the Minister and ought in equity to have been given notice and advice of the proposed decision and given an opportunity to be heard. The applicant had made long term plans for the development of the two reserves, had already expended money in relation to the Ela Beach Reserve and was in the process of calling tenders for the development of the second stage, including the piece of land the subject of the declaration, revoking it from public reserve. In these circumstances the applicant, has in my view sufficient interest entrusted unto it on behalf of the public at large of Port Moresby and it ought to have been consulted and heard before a decision was to revoke the declarations of public reserves."

58.	As I stated at the outset that the Defendants have not defended this action and the office of the Solicitor General, the Governments principal legal counsel did not even enter appearance to defend either the First Defendant or even the State which is that Second Defendant in this proceeding. And it is not difficult to see why. The Department’s position is quite clear from Secretary Painap’s letter dated February 19, 1998 (Exh.’P8’). Even advice to the First Defendant after the Plaintiff’s appeal had been lodged by Minute from his advisors Mr Tokunai and Mr Wanga dated 3rd August 1998 (Exh.’P9’) fell on deaf ears. These documents speak for themselves and are clear evidence of admission of perpetuation of fraud through deliberate breaches of the Land Act and violation of principles of natural justice of the right to be heard. 

59.	The Plaintiff which had effected substantial improvement on the land had sufficient interest in the land to be notified of the Land Board hearing so that it could have caused an appearance and to be heard. But that never happened.

60.	I will therefore treat the Defendants’ failure to defend this action as an admission of liability to the matters alleged in the summons. But I express with disappointment that given the apparent lack of defence, this court action ought to have been avoided by the State agreeing to the relief sought by the Plaintiff.

61.	Consequently, as far as this case is concerned, there is no explanation, no reason, no evidence to the contrary and no materials filed or placed before me to show or demonstrate that the Minister had acted properly and in the best interest of the parties and had taken into account all factors that may or may not taint or cast doubts on the appropriateness of his decision. 

62.	I am satisfied on the evidence before me that this is a deliberate and calculated attack and insult to the civil society that observes the rule of law and abides by all its principles in the conduct of its affairs in all facets of life, whether in commerce, politics, welfare or other pursuits or interests in life. This is a deliberate fraud on the Act whose procedures and processes are quite open and articulately stated in detail for all dealings in land including acquisition of land. This is a glaring evidence of corruption and fraud perpetuated at the highest level. 

63.	I therefore find in favour of the Plaintiff and order that the decision of the Head of State and subsequently the Minister dismissing the Plaintiff’s appeal per letter dated 24th March 1999 be removed into this court and be quashed on the ground of fraud, illegality and contrary to principles of natural justice. I further make the following consequential orders:

(1)	That the purported revocation of the Grant of Title to Lae Rental Homes Ltd in respect of the parcel of land known as section 65 allotment 1 volume 144 folio 6 Lae Morobe Province by the former Minister Sir Albert Kipalan KBE LLB MP on an unspecified date in April of 1996 was improper and is therefore null and void ab initio;

(2)	That the subsequent forfeiture of the Plaintiff’s title to the same parcel of land by J. Painap A Delegate of the Minister for Land was done in breach of the provisions of the Land Act and is null and void ab initio;

(3)	That the Land Board decision number 199 made 14 May 1998 allocating the land in question namely section 65 allotment 1 volume 144 folio 6 Lae Morobe Province to Lae Bottling Industries Ltd was not made in accordance with the Land Act and is void for illegality;

(4)	That the dismissal of the Plaintiff’s appeal against the Land Board’s decision number 199 communicated to the Plaintiff on 24 March 1999 cannot be sustained and must be quashed as found as it was arrived at without good reasons and in the absence of transparency and principles of good governance; 

(5)	That the Defendants pay the Plaintiff’s costs on solicitor-client scale.
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Lawyer for the Plaintiff	:	Mirupasi Lawyers
Lawyer for the Defendant 	:	Nil