N3116

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 1064 2005

BETWEEN:

RAMU NICKEL LIMITED
Plaintiff

AND:

HONORABLE DR. PUKA TEMU MP, THE MINISTER FOR LANDS AND PHYSICAL PLANNING
First defendant

AND:

JONATHON NINKAMA, LINDSAY GIDEON AND JANIS TENGEU AS MEMBERS OF THE PAPUA NEW GUINEA LAND BOARD
Second defendant

AND:

GANGLAU LAND OWNER COMPANY LIMITED
Third defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth defendant

Waigani/Kokopo: Lay J
2006: 21 July
2007: 11 January

JUDICIAL REVIEW - Land Act s 12 and s 13 - compulsory acquisition for declared public purpose - whether land can be used for undeclared purpose.

JUDICIAL REVIEW- Mining Act s 41(2)(a) and s 120(3) - rights of mining tenement holder vis-à-vis rights of holder of subsequently issued State Lease.

JUDICIAL REVIEW - grant of relief - where error found, whether relief should be granted. 

Cases Cited:

Papua New Guinea Cases

Application of Desmond Gigimat [1982] PNGLR 322 at 323. 
Kekedo v Burns Philip (PNG) Ltd [1988-89] 122.
Kim Foon & Sons Pty Ltd v Minister for Finance and Planning (1993) N1464. 
Mision Asiki v Manasupe Zurenuoc SC 797. 
Steamships Trading Co Ltd. v Garamut Enterprises Ltd. (2000) N1959
Hi Lift Co. Pty Ltd v Miri Setae (2000)N2004

Overseas Cases

Merriku Council v Kerr [1928] CLR
Vaughan Construction Co Ltd v Attorney General (Nova Scotia) [1967] 384 F 2d 504;
Higginson v United States (1967) 380 F 2d 504. 
Associated Provincial Picture House v Wednesbury Corporation [1974] 2 ALL ER 680. 
Council of Civil Service Unions v Minister for the Civil Service [1984] ALL ER 935 at 953. 
O’Keefe v An Bord Pleanala 1993 1 I.R. 41. 

Facts

The Plaintiffs were granted mining tenements of certain land part of which was the subject of free to hold title held by the State encumbered by an agricultural lease to Lutheran Mission. The Agricultural Lease was compulsorily acquired for the public purpose of mining for the Ramu Nickel Project pursuant to the powers granted by the Land Act. Subsequently the Second Defendant granted an agricultural lease to the Third Defendant over the land the subject of the compulsory acquisition.

Held

1.	Having acquired the land compulsorily for mining purposes the State is bound to see that the land is used for that purpose alone, at least while it is required for that purpose;

2.	The land is not available for leasing while it is the subject of the mining tenements;

3.	The Land Board failed to give proper weight to a relevant consideration, namely that the land was not available for leasing and failed to direct itself properly in law; 

4.	The grant of a State lease to the Third Defendant is quashed; 

5.	The Defendants are to pay the Plaintiffs costs. 

Counsel

I shepherd, for the Plaintiff
No appearance for the Defendants

11 January, 2007

1.	LAY, J.: The Plaintiff seeks judicial review of a decision of the Second Defendant made by Special Land Board meeting No. 01/2004 on 20 February 2004 to recommend to the First Defendant the grant of an agricultural lease over portions 109 and 110, milinch Pommern, fourmil Madang ("The Land") to the Third Defendant. 

2.	The Plaintiff was granted leave for judicial review on 23 February 2006. The matter was set down for hearing on 24 April 2006. It was not heard then and came before me on 10 July 2006 when the matter was stood over to the 12 July 2006 for hearing at 1:30 p.m. On that day on the application of the First, Second and Fourth Defendants made by J. Kumura the matter was stood over to 21 July 2006 at 9:30 a.m for hearing. At 11:30 a.m. on 21 July 2006, there was no appearance for the First, Second and Fourth Defendants. Mr. D. Lambu of the Solicitor General's office informed the Court that J. Kumura had gone out of Port Moresby on circuit. On the application of the Plaintiff the matter proceeded ex parte.

3.	The Plaintiff is the registered proprietor, subject to a 31.5 percent equitable interest held by Orogen Minerals (Ramu) Limited, in the following mining tenements issued by the Department of Mining with respect to the Ramu Nickel Project (RNP):

1.	Special Mining Lease No. 8 granted 26 July 2000 for 40 years.
2.	 Mining easement No. 78 granted 6 July 2000 for 40 years;
3.	Mining easement No. 79 granted 26 July 2000 for 40 years;
4.	Lease for mining purposes No. 43 dated 26 July 2000 for 40 years;
5.	Lease for mining purposes No. 42 dated 26 July 2000 for 40 years;
6.	Mining lease No. 149 granted 26 July 2000 for 20 years.

The Land is within these mining tenements.

4.	Certificate of Title Volume 27 Folio 142 gave freehold title to the Land for the Administration of the Territory on 16 January 1942.

5.	By agricultural lease Volume 65 Folio 26, the Fourth Defendant leased portion 109, Milinch Pommern, Fourmil Madang, to Lutheran Mission Madang, which subsequently became vested in Evangelical Lutheran Church of New Guinea Property Trust by virtue of the provisions of the Lutheran Mission New Guinea Repeal Act 1976.

6.	By gazettal G51 dated 28 March 2002, the First Defendant's delegate gave notice that, pursuant to s.13 (6) of the Land Act, s.13 (1) to 13(5) of the Land Act (notice to treat procedure) did not apply with respect to portion 109 and that the land contained in Agricultural Lease Volume 65 Folio 26 was required by the Fourth Defendant for the mining purposes of the Ramu Nickel Project ("RNP"). The gazette notice was in the following terms:

"I Guan K. Zurenouc, OBE,. A delegate of the Minister for Lands, by virtue of the powers conferred by section 13(6) of the Land Act 1996, as amended to date and all other powers me enabling, hereby declare that s.13(1)-(5) of the Land Act 1996, shall not apply to and in respect of the land specified in the Schedule hereto and the requirement for Notice to Treat be and is hereby dispensed for the following special reasons:-

1.	That the land is required for Mining Purposes of the Ramu Nickel Project. 

2.	That the original traditional landowners of the land have requested for urgent action.

3.	The urgency for the State to make land available for the Ramu Nickel Project as required under Mining Development Contract with Developers.

4.	Prevention of dealings inconsistent with the terms and conditions of the agricultural lease now held over the land."

Scheduled

An agricultural lease of the land known as Mindiri being the whole of portion 109, Milinch of Pommern, Fourmil of Madang containing an area of 81.5 hectares be the same a little more or less and being the whole of the land contained in State Lease Volume 65, Folio 26. Department of Lands file reference: 1329/0109. Dated this 20th day of March 2002."

7.	By notice in the same Gazette the land was compulsorily acquired.

8.	By gazettal notice G63 dated 8 June 2004, the Second Defendant gave notice that the Third Defendant had successfully applied for and was granted an Agricultural Lease over the Land at Special Land Board Meeting No. 01/2004.

9.	The Department of Justice and Attorney General requested the Secretary, Department of Lands and Physical Planning to cancel the issue of the agricultural lease to the Third Defendant, but this has not occurred.

Submissions

10.	The Plaintiff submits that the Second Defendant ignored:

1.	Or did not give any consideration to the fact that the State had already acquired the land by compulsory acquisition on the 28th of March 2002.

2.	The claims of other land owners continue and the Board ought to have known the traditional owners were also interest in the land:

3.	The Plaintiff had priority over any other person with respect to ownership of the land within the mining tenements pursuant to section 120 of the Mining Act;

4.	By issuing a lease, presumably pursuant to s.102 of the Land Act, the plaintiff and any other land groups were denied natural justice in that they were not given the opportunity to tender or object.

The law

11.	On the hearing of a judicial review the court is not necessarily concerned with the merits of the decision but with the decision making process: Application of Demas Gigimat [1992} PNGLR 322 at 323 (Woods J). Judicial review may be available where there is a lack of power, there is an error of law on the face of the record, there is a breach of the rules of natural justice, or in breach of the "Wednesbury principles" (see Associated Provincial Picture House v Wednesbury Corporation [1974] 2 ALL ER 680) a power is exercised in an unreasonable manner, or a decision is made which no reasonable tribunal could have reached: See Council of Civil Service Unions v Minister for the Civil Service [1984] 3 All ER 935 at 953 per Roskill LJ; Kekedo v Burns Philip (PNG) Ltd [1988-89] 122 at 124 per Kapi DCJ.. This latter consideration is often referred to as "Wednesbury unreasonableness". The principle is summarized by Doherty J in Kim Foon & Sons Pty Ltd v Minister for Finance and Planning N1464 (1996) as follows:-

(a)	it must be a real exercise of the discretion;

(b)	the body must have regard to matters which it is expressly or by implication referred by the statute conferring the discretion;

(c)	it must ignore irrelevant considerations.

(d)	it must not operate on the basis of bad faith or dishonesty;

(e)	it must direct itself properly in law; and

(f)	it must act as any reasonable person would act and must not be so absurd in its action that no reasonable person would act in that way. 

The Mining Act s. 120 provides:

120.	Effect of registration.

(1)	except in the case of fraud, the registered holder of a tenement shall have priority over any other person in respect of that tenement subject only to—

(a)	an encumbrance or other interest which is notified on the register; and

(b)	conditions contained in the grant of the tenement or imposed in respect of the tenement by this act.

(2)	except in the case of fraud—

(a)	no informality or irregularity in the application for or in the proceedings previous to the grant or extension of term of a tenement shall affect the title of the registered holder of the tenement; and

(b)	no person dealing with a registered holder of a tenement—

(i)	needs to inquire into the circumstances under which the registered holder or any previous registered holder became registered; and

(ii)	shall be affected by notice of any unregistered interest and the knowledge that any such unregistered interest is in existence shall not of itself be imputed as fraud.

(3)	a grant of a freehold or leasehold estate in land shall not affect in any way any existing tenement acquired or continued in existence under this act.

Section 12 of the Land Act gives authority to the Minister to acquire land for public purposes, in the following terms:

12.	Compulsory acquisition.

(1)	the minister may, on behalf of the state—

(a)	after the expiration of a period of two months after the service of a notice to treat, or of notices to treat under section 13, in relation to any land; or

(b)	at any time where, after diligent search and inquiry, he is satisfied that the owner of the land cannot be located; or

(c)	at any time after he has given a certificate under section 13(6) in relations to any land,

By notice in the national gazette, declare that the land, other than any interest in respect of which a notice to treat has been withdrawn, or any chattel, is acquired by compulsory process under this act for a public purpose specified in the notice.

(2)	on the publication of a notice under subsection (1), the land or chattel to which the notice applies is—

(a)	vested in the State; and

(b)	freed and discharged from all interests, trusts, restrictions, dedications, reservations, obligations, contracts, licenses, charges and rates.

12.	Section 13 of the Land Act provides for the Minister to issue a notice to treat to any owner of land which the State wishes to compulsorily acquire. However, pursuant to s.13 (6) the notice to treat procedure is not required if the Minister certifies that "there are special reasons why the section should not apply". 

13.	The scheme for acquiring land under the Land Act provides:

1.	It may be acquired by agreement or compulsion: See s.7:

2.	If it is acquired by agreement it can be acquired permanently or by lease for a term: See s.10 and 11;

3.	If land is acquired compulsorily, it must be acquired for a public purpose: See s.12(1);

4.	The Minister must serve a notice to treat on the owner, subject to the exception mentioned above: See s.13;

5.	Once a notice of compulsory acquisition is gazetted, the land vests in the State: See s.12 (2);

6.	The interest of the former owner is converted to a right to compensation: See s.14.

14.	For the purposes of the Land Act, mining purposes are declared to be public purposes: see Mining Act s.1(3).

15.	In a civilized society the State does not take the property of an individual unless it is for the common good. Starting with our Constitution the law recognizes this principle. Constitution s.53 provides:

"... No interest in or right over property may be compulsorily acquired, except in accordance with an organic law or an Act of the Parliament and unless (a) the property is acquired for-

i) a public purpose; or

ii ) a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind,

that is declared and so described, for the purposes of this section, in an organic law or an Act of the Parliament..."

16.	For the purposes of Constitution s.53(1) the compulsory acquisition of property is declared by the Mining Act s.1(4) to be a public purpose reasonably justified in a democratic society and in the national interest.

17.	The people of Papua New Guinea through the Constitution and the Parliament having gone to such lengths to ensure the protection of private property from compulsory acquisition, except where the foregoing stringent conditions apply, it is inconceivable that the Constitution or the Parliament contemplated that property would be compulsorily acquired for a declared public purpose, and then applied to a different purpose which was not so declared, whilst the property was still required for the declared purpose for which it was acquired. That would be tantamount to being a fraud on the Land Act and on the previous owner of the property.

18.	I believe that I am supported in that view by the following passage from Ireland in the Supreme Court in O'Keeffe v An Bord Pleanala 1993 1 I.R. 41. Mann, J. in the course of his judgment at p.324 said –

"despite the absence of authority I have no hesitation in thinking that a the compulsory purchase order made for one purpose cannot lawfully be confirmed for another purpose or for a purpose additional to that for which it was made. Confirmation is the ratification by the confirming authority of what the acquiring authority have resolved to do."

19.	Whilst the legislative regime under consideration there is quite different, the approach is the same. If a public official is given power by Act of the Parliament to compulsorily acquire an interest in land provided it is for a specified and declared purpose which is within a class of approved public purposes, it cannot be right or lawful that having acquired the interest in land for the declared purpose it is then used for some other undeclared purpose; at least whilst the land is still required for the declared public purpose for which it was acquired.

20.	Along the same lines, but on a different point, when land is acquired for a public purpose it must be bona fide acquired for that stated purpose. If land is acquired for a declared public purpose but is immediately used for another purpose, that is prima facie evidence of bad faith on the part of the acquiring authority. See for example Merriku Council v Kerr [1928] CLR 1. In that case a former public road had been acquired as private property. The local council gave a member of the public permission to lay pipes along the (then private) road. The owner of the road obtained an injunction ordering the removal of the pipes. The Council had power to acquire land compulsorily for roads and proceeded to compulsorily acquire that land. The High Court of Australia held the acquisition invalid because the actual purpose of the acquisition was to extract the council from the position it had being placed in by giving permission to place pipes over private land.

21.	Different considerations apply if the land is no longer required for the declared public purpose for which it was compulsorily acquired. If the public authority then proposes to sell it, it is irrelevant that the buyer will use the land for a different purpose: See Vaughan Construction Co Ltd. v Attorney General (Nova Scotia) (1967) 60 DNR (2-D) 692 where the Minister of Public Works expropriated land for the use of a technical college. It was held to be quite irrelevant, that if later a part of the land taken and not required for the original purpose, was to be leased or sold by the authority for another purpose. Where the land ceases to be used for the original purpose or for any purpose at all, unless the legislation under which compulsory acquisition occurred, gives the original owner a right to buy back, he has no such right: See Higginson v United States (1967) 384 F 2d 504 where the Federal Court of Appeals held that where a former owner sought the return of 32,000 acres of land taken from him immediately after World War II for the purposes of an army garrison and not used for any purpose after 1953, he had no right to seek a re-conveyance of the land.

21.	In this case in summary:

1.	26 July 2000 - grant of mining tenements;

2.	28 March 2002 - compulsory acquisition of the Land;

3.	8 June 2004 - grant of agricultural lease.

22.	At all relevant times the free hold title to the Land belonged to the State. However it was encumbered by grant of an agricultural lease to the Lutheran Church. The State compulsorily acquired the lease declaring, as it must do in accordance with statute, that it was acquired for a public purpose, namely mining. In my view that bound the State thereafter to use the land for the declared purpose and to give the holder of the Mining tenements "exclusive occupation for mining and mining purposes": See Mining Act s.41(2)(a), and not to grant user rights for any other purpose while the declared purpose exists.

23.	The land was not available for releasing for agricultural purposes because the State lease had been compulsorily acquired for the public purpose of mining and was the subject of existing mining tenements.

24.	Should I set aside the agricultural lease which has been granted? In Judicial Review proceedings the relief, if any, granted by the court is entirely within the discretion of the Court. In the case of Mision Asiki v Manasupe Zurenuoc SC797 (Jalina, Cannings and Manahu, JJ) the Court said:

It is one thing to establish an error of law or a breach of natural justice and for the court to uphold an application for judicial review. It is another, separate, step to establish a case for a remedy. In judicial review proceedings the remedies to be granted are at the discretion of the court. As Sheehan J stated in Tohian v Geita and Mugugia (No 2) [1990] PNGLR 479, National Court:

… in judicial review, even though the court might find there has been an error, even an error affecting matters of jurisdiction, the court would not thereby be obliged automatically to quash the … proceedings. The remedies available under judicial review remain always at the discretion of the court and will only be granted to avoid injustice.

The Court must therefore look at all the circumstances of the case and decide whether it is appropriate to grant a remedy; and if it is, what the remedy should be. It is not a formality. The court should generally only consider granting a remedy that has been specifically sought by the applicant for review or that would serve a useful purpose. Examples of cases where the court upheld an application for judicial review but did not grant a remedy are: Albert Karo v Ombudsman Commission SCA No 89 of 1995, 07.04.95, unreported, Supreme Court, Amet CJ, Los J, Sheehan J; John Mua Nilkare v Ombudsman Commission (1996) SC498, Supreme Court, Amet CJ, Kapi DCJ, Los J, Injia J; and Allan Pinggah v Margaret Elias, Peter Tsiamalili, Public Services Commission and The State (2005) N2850, National Court, Injia DCJ."

25.	The Plaintiff in these proceedings seeks a review of the procedures by which the Land Board has issued the agricultural lease. What is before the Court is the question of the administration of the Land Board.

26.	There is no doubt in my mind that the Land Board has fallen into error in granting a State Lease over the Land. Whilst the Mining Act Section 120 (3) gives the Plaintiff exclusive use of the land, the existence of a State Lease is liable to cause confusion and lead to contests over the respective rights of the Plaintiff and the holder of the State Lease.

27.	It is not in evidence before me as to whether the State Lease document has yet been issued. The question of indefeasibility of title arises under the Land Registration Act, s 33. In the case of Steamships Trading Co Ltd. v Garamut Enterprises Ltd. (2000) N1959 Sheehan J. held that a breach of the Land Act in the process of issuing the State Lease resulted in a nullity which does not confer indefeasibility upon registration. Similarly in Hi Lift Co. Pty Ltd Miri Setae (2000)N2004 Sevua J. held that a breach of statutory procedure in grant of a State Lease was sufficient to overturn indefeasibility and to quash the grant. It seems to me that reasoning applies where there has been an error in the part of the Board in its consideration of the relevant issues to grant a lease, and where the Board has misdirected itself in law, as in this case. The grant should be set aside because the decision of the Land Board shows that it did not direct itself properly in law and did not give proper weight to the consideration that the land was not available for leasing.

28.	For the reasons expressed, I quash the decision of the Second Defendant made in Special Land Board Meeting No.01/2004 on 20 February 2004 to recommend to the First Defendant the grant of a State Lease to the Third Defendant over Portion 109 and 110, milinch Pommern, fourmil Madang.

29.	The Defendants shall pay the Plaintiff's costs of the proceedings.

______________________________________________________

Blake Dawson Waldron: Lawyer for the Plaintiff 
Solicitor General: Lawyer for the first, second & third Defendants