N3041

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 434 OF 2004

TAMATI INARA, KUNIA KAKIRA AND ORIE KORI
OF AOBERI INCORPORATED LAND GROUP, SOGERI
Plaintiff

V

SOGE MARIORI, JAPHET MEIA AND INOA ORI
OF DAURI INCORPORATED LAND GROUP, SOGERI
First Defendant

JASON TIREME, MANAGER, GOVERNMENT ACCOUNTS,
BANK OF PAPUA NEW GUINEA
Second Defendant

BANK OF PAPUA NEW GUINEA
Third Defendant

PEPI KIMAS, SECRETARY,
DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Fourth Defendant

CHARLES MOBUTUNA, BRANCH MANAGER,
BANK SOUTH PACIFIC LIMITED
Fifth Defendant

BANK SOUTH PACIFIC LIMITED
Sixth Defendant

WAIGANI: CANNINGS J
17 DECEMBER 2004, 31 AUGUST 2005, 1, 31 MARCH 2006

JUDGMENT

Land – ex-gratia compensation payment by National Government to customary owners of State land – deed of release – dispute about entitlement to proceeds of compensation payment – declarations sought.

Judgments and orders – jurisdiction of National Court – inherent power of National Court to make orders necessary to do justice in the circumstances of a particular case.

Unless otherwise indicated reference in this judgment to "the plaintiffs" means the representatives of the Aoberi Incorporated Land Group and "the defendants" will mean the representatives of the Dauri Incorporated Land Group.

The plaintiffs are leaders and agents of a clan that claimed to be traditional joint-owners of a parcel of land transferred many years ago to the State. The defendants are leaders and agents of a clan that claims exclusive traditional ownership of the same land. The land has over the years been developed by the National Government and is the site of valuable State assets: schools. Over a period of more than ten years the plaintiffs and the defendants negotiated with the National Government for payment to them of compensation for the land, which they claimed had been obtained too cheaply by the colonial administration in the pre-Independence period. The National Government agreed with the plaintiffs and the defendants on the total amount of compensation payable. Two instalments were paid, the money being paid equally to the plaintiffs’ and the defendants’ clans. When the third and final instalment was due the plaintiffs and defendants signed a deed of release and a cheque for K632,416.00 was drawn by the National Government. The defendants’ clan was the sole payee on the cheque and the defendants deposited the cheque into their clan’s bank account. The plaintiffs cried foul and commenced these proceedings, claiming that their clan is entitled to half the proceeds of the cheque. The defendants maintain that their clan is the sole beneficiary of the proceeds of the cheque as it is the exclusive traditional owner of the land. 

Held:

(1)	The compensation payment agreed by the National Government to be paid for the land was properly regarded as an ex-gratia payment.

(2)	It is not the function of the National Court in proceedings of this nature to undertake anything other than a cursory inquiry into the merits of an ex-gratia payment, so as to be satisfied that the payment is neither manifestly excessive nor unconscionably inadequate and that the beneficiaries of the payment appear to have a legitimate expectation to receipt of the payment.

(3)	In particular, where the National Government has agreed to make an ex-gratia payment and a deed of release has been signed by the intended beneficiaries, the National Court should not undertake anything other than a cursory inquiry, so as to be satisfied that judgments formed by technical experts in the Department of Lands and Physical Planning are not so outlandish as to be unreasonable.

(4)	In the circumstances, having undertaken the cursory inquiries required, the court was satisfied that the compensation agreement was entered into in good faith between the National Government, the plaintiff’s clan and the defendants’ clan, and the intention of the parties to the agreement was that the two clans would share the proceeds of the compensation payment equally.

(5)	It is in the interests of justice to make orders to give effect to the agreement in those terms; and orders were made accordingly, subject to any person other than the two main disputing clans giving notice to the contrary within 21 days. 

Cases cited

There are no cases cited in the judgment.

Abbreviations

The following abbreviations appear in the judgment:

PNG – Papua New Guinea 
DLPP – Department of Lands and Physical Planning
K – Kina

Tables

The following tables appear in the judgment:

1 –	Plaintiffs’ affidavits	
2 –	Defendants’ affidavits	
3 –	Affidavit by Secretary for Lands and Physical Planning	

SUMMONS

This was an originating summons in which the plaintiffs sought a declaration about their entitlement to a share of a compensation payment made by the National Government.

Counsel:
B Takin for the plaintiff
A Maipson for the 1st defendant
No appearance by the 2nd, 3rd, 4th and 5th defendants

CANNINGS J: 

INTRODUCTION

This case is about a dispute over compensation that the National Government decided to pay to traditional landowners of a parcel of land on the Sogeri Plateau in Central Province. The money was compensation for land transferred by traditional landowners to the Government in colonial times.

BACKGROUND

The land in question is Portion 1031 Milinch of Granville. Over the years it has been developed by the National Government and is the site of valuable State assets: schools. It is the land on which Sogeri National High School and Sogeri Community School are located, in the township of Sogeri.

The two main protagonists in the dispute are:

•	the Aoberi clan, represented in these proceedings by the plaintiffs, Tamati Inara, Kunia Kakira and Orie Kori of the Aoberi Incorporated Land Group, Sogeri; and

•	the Dauri clan, represented in these proceedings by the first defendants, Soge Mariori, Japhet Meia and Inoa Ori of the Dauri Incorporated Land Group, Sogeri.

Five other defendants have been joined, representing the Bank of Papua New Guinea (the Central Bank), the Department of Lands and Physical Planning and Bank South Pacific Ltd. They have taken no active part in the proceedings, have not been represented and have not been in jeopardy of having any orders adverse to their interests made by the court. 

Over a period of more than ten years the plaintiffs and the defendants negotiated with the National Government for payment to them of compensation for the land, which they claimed had been obtained too cheaply by the colonial administration in the pre-Independence period. The National Government agreed with the plaintiffs and the defendants on the total amount of compensation payable. Two instalments were paid, the money being paid equally to the plaintiffs’ and the defendants’ clans. When the third and final instalment was due the plaintiffs and defendants signed a deed of release and in August 2004 a cheque for K632,416.00 was drawn by the National Government. The defendants’ clan was the sole payee on the cheque and the defendants deposited the cheque into their clan’s bank account. 

The plaintiffs cried foul and commenced these proceedings. They say that the cheque was ill-drawn. Somebody made a big mistake when the cheque was drawn. The plaintiffs say that they are traditional joint-owners of Portion 1031 and are entitled to half of the amount of the cheque: K316,208.00. 

The defendants maintain that their clan should be the sole beneficiary of the proceeds of the cheque as it is the exclusive traditional owner of the land. The defendants say that the cheque was not drawn in their favour by mistake. The plaintiff says that that cheque should have been drawn jointly in favour of them together with the first defendant. The plaintiffs say that they are joint owners of Portion 1031 and that they are entitled to half of the amount of that cheque.

COURT PROCEEDINGS

The plaintiff commenced these proceedings on 12 August 2004 by filing an originating summons, seeking a declaration that the plaintiffs are entitled to 50% of the land compensation money for Portion 1031.

On 13 August 2004 the National Court (Gavara-Nanu J) ordered the fourth defendant, the Secretary for Lands and Physical Planning, to pay K316,208.00 being 50% of the total compensation payment, into the National Court Registrar’s trust account, pending the outcome of the substantive proceedings. 

On 8 December 2004 I conducted a pre-trial conference with the lawyers for the plaintiffs and defendants. It was agreed that the court should make its findings of fact based on the affidavits filed on behalf to the parties. Witnesses would not give oral testimony and there would be no cross-examination. The trial commenced on 17 December 2004 and continued on 31 August 2005 when I directed that it was necessary to obtain evidence from the Secretary for Lands and Physical Planning. It was envisaged that the Secretary would give oral evidence but I later decided that that was unnecessary. The Secretary swore an affidavit on 6 February 2006, which was received into evidence on 1 March 2006.

EVIDENCE

The plaintiffs and defendants each filed a bundle of affidavits, which are summarised in the tables below, together with the affidavit of the Secretary for Lands and Physical Planning, summarised separately. Column 1 of each table gives the affidavit number, column 2 describes the deponent and column 3 summarises the evidentiary content. 

TABLE 1: PLAINTIFFS’ AFFIDAVITS

Exhibit	Description	Content 	
A	Kakira Kunia, 
12.08.04	He is the chairman of Aoberi Land Group – Aoberi and Dauri are joint-traditional owners of Portion 1031 – in 1990 the Valuer-General valued the land at K963,400.00 – the first compensation payment was made in May 1991: K227,459.75 – the government cheque was paid to both Aoberi and Dauri Land Groups – in July 1994 the second instalment was paid: K100,000.00 – however, Aoberi clan was given inadequate shares of those amounts – when the third instalment was paid Aoberi clan’s name was not on the cheque – they were forced to sign the deed of release by officers of the DLPP.	
B	Kakira Kunia, 
19.08.04	This affidavit explains the need to add some parties to the proceedings – it was sown for the purposes of the application for the interim injunction.	
C	Kakira Kunia, 
13.09.04	This affidavit annexes copies of various documents, including the cheque and remittance advice from 1991 showing "Aoberi and Dauri Clans" as joint-payees – whereas the 2004 cheque has only Dauri Clan as the payee – also annexes the deed of release dated 06.08.04 – also annexes a letter from the Secretary for DLPP dated 31.07.02 to the Dept of Prime Minister and NEC referring to Aoberi and Dauri clans as the joint owners of "Sogeri High and Primary Schools".	
D	Tamati Inara, 
07.12.04	This affidavit annexes a number of documents intended to refute claims made in an affidavit of Willie Toina for the defendants) of 02.12.04 – annexes an internal DLPP memo of 17.07.02 by Mervyn Taumomoa, Deputy Director, Southern and highlands Region, which states: "total balance of K632,416.00 for the Sogeri school land should be paid out to Aoberi and Dauri clans without any further delay". 	
E	Tamati Inara, 
06.02.06	This affidavit seeks to clarify a matter raised in the Secretary’s affidavit of 06.02.06 in which the Secretary refers to a third clan – Taburi clan – as having an interest in Portion 1031 – Tamati Inara states that Taburi’s name was included by mistake and that this was cleared up prior to the signing of the deed of release by the DLPP delegation led by Deputy Secretary Operations, Romilly Kila Pat.	

TABLE 2: DEFENDANT’S AFFIDAVITS

Exhibit	Description	Content 	
D1	Guba Meia,
21.09.04	States that he is one of the older members of Dauri Land Group – born in 1927 – gives a detailed account of the history of Portion 1031.	
D2	Soge Mariori,
21.09.04	He is the chairman of Dauri Land Group – states that Dauri clan is the true and genuine owner of Portion 1031 – the plaintiffs have not taken sufficient interest in the dispute – the money was paid in 2004 due to the defendants’ actions – the defendants are entitled to all the money.	
D3	Japhet Meia,
21.09.04	He is the assistance secretary to Dauri Land Group – previous compensation payments were shared with Aoberi clan as a token of goodwill, not because they were entitled to anything – Aoberi owns some of the surrounding land but not Portion 1031 – Aoberi clan had been paid compensation previously for Iarowari Station and were supposed to have shared it with Dauri clan but failed to do so. 	
D4	Willie Toina,
29.09.04	He is a Dauri clan member – the idea of making compensation claims for the Iarowari and Sogeri school land started in 1988, led by Dauri clan – Dauri clan members have never been happy that they have been forced to share compensation already paid to them with Aoberi clan – they have shared with them to preserve the peace but historically Aoberi have been paid for land that was not theirs.	
D5	Wahia Guba,
29.09.04	He is a senior elder and leader of Dauri clan – gives a detailed account of the history of Portion 1031 – Aoberi clan is lying to the court by saying that it is a part-owner of Portion 1031. 	
D6	Willie Toina,
02.12.04	Refers to his earlier affidavit and gives further details of the work done by Dauri clan in following up on compensation claims.	

TABLE 3: AFFIDAVIT OF SECRETARY,
DEPARTMENT OF LANDS AND PHYSICAL PLANNING

Exhibit	Description	Content 	
S	Pepi Kimas,
06.02.06	He has been Secretary, DLPP, since April 2002 – on 06.08.04 the Deputy Secretary Operations, Romilly Kila Pat, led a departmental delegation to Sogeri and successfully settled the balance of an outstanding compensation award for Portion 1031 – deed of release was executed – Mr Pat was one of the signatories – both Aoberi and Dauri clans were represented – "the sum of K632,416.00 was the balance payment that was intended for all intents and purposes to be paid to the Taburi, Aoberi and Dauri clans as depicted in the deed of release but unfortunately the cheque was printed in the name of the Dauri clan" – "the misprint of the cheque was explicitly explained and the landowner representatives agreed that they would distribute the monies accordingly amongst the Taburi, Aoberi and Dauri clans after the cheque was cashed" – "the payment of K632,416.00 was for all the clans, Taburi, Aoberi and Dauri clans and was to be distributed amongst them".	

FINDINGS OF FACT

Negotiations between those who held themselves out as the traditional landowners of Portion 1031 and the National Government have been going on for 18 years. In 1990 the Valuer-General valued the land at almost K1 million and it became government policy to pay the traditional landowners compensation.

Instalments of compensation were made in May 1991 (K227,459.75) and July 1994 (K100,000.00). On each occasion a cheque was drawn in favour of both the Aoberi and the Dauri clans. 

In about 2001 a departmental task force was set up to resolve the issue of ownership and entitlement to compensation for the use of much of the land on the Sogeri Plateau by various governmental bodies over many years. It is well known that the city of Port Moresby relies for its water and electricity supply on the natural resources that exist on the Sogeri Plateau. The National High School at Sogeri is a famous educational institution and it continues to be an important part of the national education system. There are important national assets on land that was formally customarily owned on the Sogeri Plateau.

In August 2004, the third and final instalment (K632,416.00) was paid. The August 2004 payment was made as the result of the deliberations of DLPP committee led by the Deputy Secretary, Operations, Mr Pat. It was the Department’s position that the compensation payments should be shared amongst at least the Aoberi and Dauri clans – and possibly a third clan, Taburi.

A deed of release was executed on 6 August 2004 in the following terms:

DEED OF RELEASE

THIS DEED OF RELEASE is made the ………6th……… day of AUGUST 2004.

BETWEEN:	THE INDEPENDENT STATE OF PAPUA NEW GUINEA (now called the Releasee’s) of the one part;

AND:	Representatives of Taburi, Aoberi and Dauri Clans of Sogeri and for and on behalf of the customary landowners having ownership of the customary right of IYTANA AND YARMARATANA Land in the Koiari District of Central Province, (now called the Releasor’s) of the other part;

WITNESS that in consideration of the payment to the Releasor’s by the State for the sum of SIX HUNDRED AND THIRTY TWO THOUSAND FOUR HUNDRED AND SIXTEEN KINA (K632,416.00) NIL TOEA, the Releasor’s hereby:

(a)	RELEASE the State its servants and agents from and against all actions, suits, claims, demands and cost whatsoever which might have or but for the execution of this Deed might have had arising out of or relating directly or indirectly to or connected with damages suffered by the Releasor’s in connection with the occurrence described in the Schedule.
(b)	INDEMNIFY AND AGREE FOREVER TO KEEP INDEMNIFIED the State its servants and agents from all actions, suits, claims, demands and cost which may [be] brought or made against them in (a) relates:
(c)	AGREE FOREVER not to interfere, disrupt, damage or do any act whatsoever to the State properties constructed at or on IYTANA AND YARMARATANA LAND now or at any time hereafter.

THE SCHEDULE

All that piece of land known as IYTANA AND YARMARATANA containing approximately 47.3 hectares legally described as Portion 1031 Milinch GRANVILLE Fourmil MORESBY situated in the KOIARI District of CENTAL PROVINCE.

The cheque was drawn only in favour of the defendants, the Dauri clan. I am satisfied after considering the evidence of the Secretary, that this was a mistake. The intention of the departmental delegation was that the compensation would be shared.

SUBMISSIONS FOR THE PLAINTIFF

Mr Takin, for the plaintiffs, submits that the issue of traditional ownership of Portion 1031 has been settled by the deliberations of the DLPP, in consultation with the relevant clans. This court should not therefore enter into a fresh inquiry on those issues. The clans have shared the first two instalments of compensation, which reflects the commonly held and historically correct position that they are joint-owners. 

SUBMISSIONS FOR THE DEFENDANTS 

Mr Maipson, for the defendants, submits that there is ample evidence before this court to enable it to find that the Dauri clan is the exclusive traditional owner of Portion 1031. The plaintiffs have adduced no worthwhile evidence to support their spurious claim to part-ownership of the land. The fact that the cheque for K632,416.00 was drawn in favour of the Dauri clan reflects the ultimate position of the DLPP. It is the correct position and the one that should be enforced by this court. 

RELEVANT LAW

The significant feature of this case is that the contentious compensation payment and the two instalments that preceded it have been made outside any formal legal process. The payments have not been made pursuant to any legislative provisions. The discussions and meetings and consultations that took place were informal. There is nothing necessarily wrong or unlawful about the way that things have happened. But the informal nature of the proceedings means that it is difficult for this court to now review what has happened according to any established criteria, such as the conventional principles of judicial review. 

The compensation payment agreed by the National Government to be paid for the land was properly regarded as an ex-gratia payment. It is unusual for a court to be asked to review the terms of an ex-gratia payment or to determine who the correct beneficiaries of the payment are. Unusual, but not improper. I am satisfied that the court does have jurisdiction. However, I do not consider that it should be the function of the National Court in proceedings of this nature to undertake anything other than a cursory inquiry into the merits of an ex-gratia payment, so as to be satisfied that the payment is neither manifestly excessive nor unconscionably inadequate and that the beneficiaries of the payment appear to have a legitimate expectation to receipt of the payment. 

In particular, where the National Government has agreed to make an ex-gratia payment and a deed of release has been signed by the intended beneficiaries, the National Court should not undertake anything other than a cursory inquiry, so as to be satisfied that judgments formed by officials, presumably technical experts, in a government department – in this case the Department of Lands and Physical Planning – are not so outlandish as to be unreasonable. 

MAJOR ISSUES

Given the limited role that I see the court having in this dispute the major issues for the court to resolve after undertaking the cursory inquiries I have identified are:

•	what was the view of the departmental task force regarding ownership of Portion 1031?

•	who did the task force identify as the proper beneficiaries of the compensation? which boils down to – 

•	who is entitled to the K632,416.00 compensation?

WHO IS ENTITLED TO THE K632,416.00 COMPENSATION?

I am satisfied, having considered all the evidence concerning the lengthy background to this dispute, that the compensation payment was neither manifestly excessive nor unconscionably inadequate and that the beneficiaries of the payment appear to have a legitimate expectation to receipt of it. The National Government agreed to make an ex-gratia payment and a deed of release was signed by the intended beneficiaries. I am satisfied that the course of action and position reached by the Department of Lands and Physical Planning was neither outlandish nor unreasonable. 

I am persuaded by Mr Takin’s submission that this court should not enter into further inquiry or deliberations on which clan or clans are the traditional owners of Portion 1031. The defendants’ very detailed affidavits, and Mr Maipson’s equally detailed submissions, invited the court to conduct that sort of inquiry. But this court, in these proceedings, is ill-equipped to do that. There are other forums such as Local Land Courts and the Land Titles Commission in which those sorts of issues can be addressed. 

In the circumstances, having undertaken the cursory inquiries required, I am satisfied that the compensation agreement was entered into in good faith between the National Government, the plaintiffs’ clan and the defendants’ clan, and the intention of the parties to the agreement appears to be that the two clans would share the proceeds of the compensation payment. 

I have some concerns about the role of the third clan – Taburi clan – in light of Mr Kimas’s recent affidavit. However, this clan has not been involved in the court proceedings, which have been continuing for more than 18 months. 

I consider that it is in the interests of justice to make orders to give effect to the views of the departmental task force regarding ownership of Portion 1031. As the task force identified the proper beneficiaries as both the Aoberi and Dauri clans I will declare that they are each entitled to a 50% share of the K632,416.00 compensation, subject to anybody else giving notice of their competing interest within a grace period, which I will set at 21 days. 

REMARKS

This has been a complex case to resolve because the deliberations, meetings and discussions that culminated in the payment of K632,416.00 in 2004 have been poorly documented. If the Government is to engage itself in this sort of compensation exercise in future all those involved need to bring much more discipline and rigour to the recording of agreements and decisions.

ORDERS

I make the following orders and declarations:

1	It is declared that the Aoberi and Dauri clans are each entitled, subject to order No 2 below, to 50% of the proceeds of the Government cheque for K632,416.00 drawn in August 2004 as compensation for Portion 1031, Milinch Granville, Fourmil Moresby, situated at Sogeri in the Koiari District of Central Province.

2	Any person or clan, other than the Aoberi and Dauri clans, who claim any traditional ownership of Portion 1031 or any interest in the proceeds of the cheque referred to in order No 1 above, shall give notice in writing of that claim to the Registrar of the National Court at Waigani within 21 days after the making of this order.

3	This matter shall return to Court before the trial Judge as soon as practicable after the expiry of the 21-day period referred to, for the making of final orders. 

Judgment accordingly.
____________________________

Lawyers for the plaintiff		:	B T Gobu & Associates Lawyers
Lawyers for the defendants		:	Maipson Lawyers