N3375

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

APP NO 230 0F 2005

TONY YAGON
FOR HIMSELF & ON BEHALF OF
SETTLERS OF DYLUP PLANTATION
Appellant

V

NOWRA NO 59 LTD
TRADING AS DYLUP PLANTATION
Respondent

Madang: Cannings J
2008: 20 February, 16 May

LAND – Summary Ejectment Act proceedings – State Lease – descendants of contract labourers permitted to live on land for many years – whether long period of possession creates equitable interest – whether settlers can be evicted from land on which they have been permitted to live for long a period – whether reasonable notice to vacate must be given – whether settlers entitled to compensation.

Contract labourers were employed and allowed to settle on a plantation 80 years ago. Their descendants – known as ‘settlers’ – have remained living on the plantation, which is now the subject of a State lease. The lessee – known as the ‘owner’ of the land – had a dispute with the settlers and obtained an eviction order in the District Court under the Summary Ejectment Act. The settlers appealed to the National Court. 

Held:

(1)	The District Court can only issue an eviction order under the Summary Ejectment Act, Section 6, against persons who have no right, title or licence to be in possession of land.

(2)	Here, the settlers have an equitable interest in the land, arising from their long period of permitted occupation, which is akin to a licence to occupy it.

(3)	Their licence does not give them the right to remain on the land forever. Their right is only to remain there for a reasonable time and perhaps to be compensated prior to being required to leave.

(4)	As the settlers had a licence to be on the land, an essential precondition to the making of an order under Section 6 of the Summary Ejectment Act was absent.

(5)	The District Court erred in law by making the order.

(6)	The appeal was allowed and the District Court order quashed. 

(7)	Obiter dictum: the best way to resolve the dispute in the absence of an out of court settlement is for either side to commence fresh proceedings in the National Court seeking declarations as to the respective interests of the parties in the land.

Cases cited

The following cases are cited in the judgment:

Amos Bai as Representative of Lae Squatter Settlements v Morobe Provincial Government and The State [1992] PNGLR 150
Gawi v png Ready Mixed Concrete Pty Ltd [1981] PNGLR 396
Gawi v png Ready Mixed Concrete Pty Ltd [1984] PNGLR 74
Koang No 47 Limited v Monodo Merchants Limited and Melpa Properties Limited (2001) SC675
Koitaki Farms Ltd v Kemoko Kenge and Other Squatters at Itikinumu Plantation (2001) N2143
Siso Naso v National Housing Corporation (1999) N1947

APPEAL

This was an appeal from a decision of the District Court ordering the appellant and other settlers to vacate land owned by the respondent.

Counsel 

E Hampalekie, for the Appellants
Y Wadau, for the Respondent

16 May, 2008 

1. CANNINGS J: This is an appeal against a decision of the District Court concerning land known as Dylup Plantation in the North Coast area of Madang Province. 

2. The plantation was established in the 1920s. People from nearby villages such as Budum and Bulua were employed as labourers and allowed to settle there. They and their descendants, such as Tony Yagon and the 176 other appellants in this case, have, until recently, been allowed by successive owners of the plantation to remain on the land. The ‘settlers’, as they are commonly known, have built houses and planted cash crops such as coconut and cocoa and regard the part of the plantation where they have been living as their home.

3. The present owner of the plantation is a company called Nowra No 59 Ltd, which acquired it in 1989. It is regarded as the ‘owner’ even though, strictly speaking, it is the lessee. The true owner is the State. The company is the lessee under a State Lease over Portion 376, Milinch Malas, Fourmil Karkar, an area of 579 hectares.

4. In recent years the company and the settlers have had a falling out. The company says it had an agreement with the settlers that obliged them to sell their produce to the company and to not disturb the company’s operations in return for the settlers being allowed to remain there. The company says the settlers breached the agreement by selling their produce on the open market and allowing criminal activities to take place. The settlers say there was no such agreement but, if there were, it was breached as the prices the company offered for their produce were well below what was available on the open market.

5. In 2004 the company commenced proceedings in the Madang District Court under the Summary Ejectment Act to move the settlers out. On 13 April 2005 Magistrate Mr Mark Selefkairiu issued an eviction order giving the settlers two months to leave and remove all their properties, failing which the Police were authorised to forcibly remove them. The settlers have appealed against that order, which has been stayed pending the result of this appeal. 

6. Title to the plantation and the part of it occupied by the settlers is not in dispute. Everyone agrees that the company is the registered proprietor. What is not agreed is how much longer, if at all, the settlers should be allowed to remain on the land and whether they should be paid any compensation.

GROUNDS OF APPEAL

7. The settlers have raised three grounds of appeal. They say that the District Court:

•	made an order that was harsh and oppressive and contrary to natural justice;

•	erred in law and fact by not taking into consideration their equitable interest in the land; and

•	erred in law and fact by not taking into account their claim for compensation for improvements on the land.

HARSH AND OPPRESSIVE OR CONTRARY TO NATURAL JUSTICE?

8. The settlers’ counsel, Mr Hampalekie, has pointed out that the District Court order was made ex parte, in chambers. He submits that the order was made contrary to the principles of natural justice as the settlers were not given a reasonable opportunity to be heard. The District Court order was therefore made harshly and oppressively contrary to Section 41 of the Constitution, he submits.

9. I am not convinced that there was any procedural irregularity in the District Court. The settlers were represented by Mr Waipek of Kunai Lawyers and the case was mentioned several times before the hearing day. The learned Magistrate made notes of the various occasions on which the case was mentioned. The settlers appear to have been given proper notice of the proceedings. It is unclear why their lawyer did not attend court at the critical time. Whatever the reason I am not satisfied that the settlers were denied their right to be heard. There was no breach of natural justice and there is insufficient evidence that the District Court acted harshly or oppressively. 

10. I dismiss this ground of appeal. 

FAILURE TO CONSIDER THE SETTLERS’ EQUITABLE INTEREST IN THE LAND?

11. The settlers argue that they have an equitable interest in the land due to the uninterrupted and unchallenged occupation of it by themselves and their ancestors over a period of 80 years. They say that when the company acquired the land in 1989 it had full knowledge of their long running occupation of it. The company’s legal title to the land was acquired subject to the settlers’ equitable interest in it. They rely on the landmark National Court decision of Miles J in Gawi v png Ready Mixed Concrete Pty Ltd [1981] PNGLR 396 to support their argument. 

12. The company’s counsel, Mr Wadau, did not take serious issue with the proposition that a long time occupier of land can have an equitable interest in it, which might entitle them to occupy it for a reasonable period after they are required by the owner to leave. He stressed, however, that the settlers did not produce any evidence before the District Court to prove their equitable interest. He submits that they were directed to file affidavits on this point but failed to do so. The only evidence before the District Court was that adduced by the company, which showed that the company was the ‘owner’ of the land for the purposes of the Summary Ejectment Act. There was no evidence that the settlers had any right, title or licence to be in possession of the land, so the District Court cannot be said to have erred in law or fact in granting the order for eviction.

13. Mr Wadau is, to a large extent, correct in submitting that the settlers failed to adduce evidence that verified their equitable interest. However, I query whether, in the circumstances of this case, it was necessary for them to do that. The company’s statement of claim sets out the background of the settlers’ occupation of the land; and an affidavit by Mr Wadau filed on 11 March 2005 deposed to negotiations with the settlers’ lawyers about compensation. This material, which formed part of the record of the District Court, was sufficient to put the District Court on notice that the settlers had an equitable interest, of some sort, in the land, which required proper consideration before the District Court proceeded to issue an eviction order.

14. I say this in view of Section 6 (recovery of premises held without right, etc) of the Summary Ejectment Act, which states:

(1)	Where a person without right, title or licence is in possession of premises, the owner may make a complaint to a magistrate of a District Court to recover possession of the premises, and the magistrate may issue a summons in the prescribed form to the person in illegal occupation. [Emphasis added.]

(2)	Where the person summoned under Subsection (1)—

(a)	does not appear before the District Court at the time named in the summons; or

(b)	appears and does not show reasonable cause why possession of the premises should not be given,

the Court may, on proof of the matter of the complaint, issue a warrant directed to a member of the Police Force requiring him, on or before a day specified in the warrant—

(c)	to enter, by force and with assistants if necessary, into the premises; and

(d)	to give possession of the premises to the complainant.

15. I have underlined the bits of Section 6 that show that this law can only be used where the persons the owner wants to evict are "illegal" occupiers of the land: people who have no "right, title or licence" to be on the land. The settlers did not fall into that category. They are not squatters. There is a big difference between people who just turn up and live on unoccupied land without permission – they can be called squatters – and those who are invited onto the land and stay there for a long time with express or tacit approval before being asked to leave – they can be called settlers (Koitaki Farms Ltd v Kemoko Kenge and Other Squatters at Itikinumu Plantation (2001) N2143).

16. Settlers have an equitable interest in the land, which is akin to a licence to occupy it. Squatters also might have such an interest if they have lived on the land and made their homes there without anyone making a fuss about it. That was the principle of law established in the 1981 Ready Mixed Concrete case. It was accepted as correct by the Supreme Court in Gawi v png Ready Mixed Concrete Pty Ltd [1984] PNGLR 74. The principle has withstood the test of time in subsequent cases such as Amos Bai as Representative of Lae Squatter Settlements v Morobe Provincial Government and The State [1992] PNGLR 150; Siso Naso v National Housing Corporation (1999) N1947; the Itikinumu Plantation case (2001) N2143; and Koang No 47 Limited v Monodo Merchants Limited and Melpa Properties Limited (2001) SC675.

17. This does not mean that the settlers have the right to live on the land for as long as they like. But it does give them the right to be given reasonable notice to leave and perhaps to be compensated for being required to leave.

18. In the present case it might well be argued that the settlers have been given more than enough time to leave as this case has been going on for four years; and there may well be an argument to say that they deserve no compensation or that any compensation should be nominal as they have enjoyed rent-free occupation and use of the land for a long time. Perhaps it would set a bad precedent for people in the position of the settlers to be paid compensation. This, however, is not the right time for those sorts of arguments to be aired.

19. For now, I am concerned with whether the District Court erred in making the order of 14 April 2005 and I have concluded, with respect, after giving the matter careful consideration, that it did. The settlers had an equitable interest in, and therefore a licence to be on, the land. An essential precondition to the making of an order under Section 6 of the Summary Ejectment Act was absent. This was not an appropriate case for the making of an order under Section 6(2).

20. I therefore uphold the second ground of appeal.

FAILURE TO TAKE INTO ACCOUNT CLAIM FOR COMPENSATION? 

21. It is true that the District Court failed to take into account the settlers claim for compensation but this was not an error of law as the District Court had no jurisdiction to deal with a compensation claim. It was dealing with an application under the Summary Ejectment Act and it would have erred in law if it had ordered compensation. 

22. I dismiss this ground of appeal.
 
SHOULD THE APPEAL BE UPHELD?

23. Two of the three grounds of appeal have been dismissed but the critical one, which attacked the basis of the eviction order, has been upheld. The District Court order was infected by error of law and should not have been made. There has been a substantial miscarriage of justice so I will, under Section 230(2) of the District Courts Act, allow the appeal. 

I will under Section 230(1)(c) of the District Courts Act quash the order of 13 April 2005.

WHAT ORDERS SHOULD BE MADE?

24. The settlers want their case remitted to the District Court for a retrial but I do not think that will achieve anything as the District Court will still lack jurisdiction to deal with the matter under the Summary Ejectment Act. The best way to resolve the dispute in the absence of an out of court settlement is for either side to commence fresh proceedings in the National Court seeking declarations and orders as to the respective interests of the parties in the land. The appropriate order, for now, is simply to allow the appeal and quash the eviction order.

ORDER

(1)	The appeal is allowed.

(2)	The order of the Madang District Court of 13 April 2005 in Complaint No 362 of 2004, is quashed.

(3)	No person, including the respondent, shall evict the appellants from, or interfere with their peaceful possession of, the part of Portion 376, Milinch Malas, Fourmil Karkar, that they have been occupying, except by order of the National Court. 

(4)	Costs of these proceedings are to be paid by the respondent to the appellant on a party-party basis, to be taxed if not agreed.

(5)	Time for entry of the order is abridged to the date of settlement by the Registrar, which shall take place forthwith.

_____________________________________

Thomas More Ilaisa Lawyers: Lawyers for the Appellant
Young Wadau Lawyers: Lawyers for the Respondent