N4529

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 911 of 2010

DARIUS BOAS chairman of the Meloks ILG for and on behalf of the Rigula customary Landowners
First Plaintiff

AND:

MELOKS INCORPORATED LAND GROUP
Second Plaintiff

AND:

ALBERT CAMILUS
First Defendant

AND:

AKAMI OIL PALM LIMITED
Second Defendant

Kimbe: Kawi, J
2010: 20th August

LAND LAW- acquisition of customary land more than the agreed hectares to be allocated to the defendants - Serious allegations of fraudulent conduct involved in acquiring more customary land over and above what was agreed upon-Notice of Motion- Application for interim injunction to maintain status quo and not to acquire more traditional - Status quo relates to stopping of all works while serious issues of fraudulent conduct are investigated.

Injunction - Principles of grant or otherwise of an interim injunction considered- whether application discloses serious triable or arguable issues- Allegations of fraudulent conduct present serious issues worthy of the court's consideration - Fraud an exception to the general rule on indefeasibility of title - Triable issues for consideration- Balance of convenience favors granting of Injunction - Applicants stand to suffer from loss of their customary lands - Applicants have an interests to protect in their customary land from being acquired - Application for interim injunctive relief is hereby granted.

Brief Facts

The Plaintiff sought an interim injunction against the defendants to restrain the defendants from acquiring more customary lands and expanding their business operations. It was argued that the defendants had through fraudulent conduct and misrepresentation acquired more customary lands over and above the 40 hectares, initially agreed upon to allocate to the four (4) sons of the defendants.

 It was agreed between the plaintiffs and the first defendant that the 40 hectares of land would be registered under the names of the four children of the first defendant.The first defendant however did not register the land under the name of his 4 children, in accordance with the agreement, but under the name of his family company, the second defendant. Both defendants subsequently acquired an additional 305.75 hectares of customary land without the knowledge and consent of the traditional owners and had it registered as State lease portions 104c and 2628c, Milinch of Megigi (SE) and Dagi (NE), Fourmil of Talasea. The Plaintiffs alleged that the defendants had acquired an additional 305.75 hectares of customary land through fraudulent conduct and fraudulent misconduct. On an application to for an interim injunction to restrain the defendants from acquiring more customary lands to acquire more lands and expand their business operations and from harvesting fresh fruit bunch from Portion 104c:

Held:

(1) The plaintiffs have produced sufficient evidence to show that there are serious questions to be tried and that they have what appears to be an arguable case.

(2) The plaintiffs have adduced evidence to show that they have interests to be protected. These interests include protecting more of their traditional lands from being acquired by the defendants. The balance of convenience therefore lies in favour of granting the interim injunction. Payment of compensation would not be a sufficient recompense to the plaintiffs.

(3) Serious questions to be tried arise from consideration by the court, once allegations of fraud are made. Under section 33(1) of the Land Registration Act, Fraud is an exception to the general rule on indefeasibility of Title.

Cases Cited.

Pacific (NG) Ltd -v- William Brad Anderson, Karson Construction (PNG) Ltd and Donner Construction (PNG) Ltd (2002) N2062
Employees' Federation of PNG –v–PNG Waterside Workers Unions & Ors [1982] N392 
Robinson -v- National Airline Commission [1983] PNGLR 475
Mudge –v– Secretary for Lands [1985] PNGLR 387.
Elizabeth Kanari –v–Augustine Wiakar (2009) N3589
Emas Estate Development Pty Ltd –v–John Mea & Ors [1993] PNGLR 21 
Steamships Trading Company Ltd –v–Garamut Enterprises Ltd (2000) N1959, 
Hi-Lift Company Pty Ltd –v– Miri Setae [2000] PNGLR 80
Ramu Nickel Ltd –v– Temu (2007) N 32525
Yakananda Business Group Inc –v–Minister for Lands (2001) N 2159 
Lae Rental Homes Ltd –v– Viviso Seravo (2003) N2483
Ewasse Landowners Association Incorporated – v– Hargy Oil Palm Limited [2005] N2878
Koitachi Ltd –v– Walter Schnaubelt (2007) SC 870

Counsel:

Mr. J. Unido, for the Plaintiffs 
Mr. G. Linge, for the Defendants

20th August, 2010

1. KAWI, J: By a Notice of Motion dated 20th August 2010, the first and second plaintiffs moved pursuant to Order 14 Rule 10, of the National Court Rules, that the plaintiffs be granted the following orders;

(1)	The defendants (by themselves, their servants, agents or otherwise) be restrained from harvesting the oil palm fruits bunch or any related work on the subject State lease, portion 104c, Milinch of Megigi (SE) and Dagi (NE) Fourmil of Talasea, West New Britain Province, be withheld until further orders.

(2)	Any monies due and owing to the defendants by the New Britain Palm Oil Limited from the harvesting oil palm fruit bunch or any related work on the State lease, portion 104c, Milinch of Megigi (SE) and Dagi (NE) Fourmil of Talasea, West New Britain Province be withheld until further orders.

(3)	The defendants (by themselves, their servants, agents or otherwise) whosoever acting or claiming for or through the said defendants, including their bankers be forthwith restrained from dealing with what so ever and however with the monies or any portion thereof being the proceeds of the earnings from the harvest of the fresh fruit bunch from the said State lease, be withheld under the Akami Oil Palm Limited bank Accounts. 

2. By a Writ of Summons, the plaintiffs instituted legal proceedings against the defendants to recover the land described as Portion 104c, Milinch of Megigi (SE) and Dagi (NE) Fourmil of Talasea, West New Britain. The plaintiffs allege that the land in question is still customary land and its registration as a State lease by the defendants is null and void abinitio. The statement of claim alleges fraud.

3. Under Section 33 of the Land Registration Act, the general rule is that upon registration, a person has a valid title against any person claiming adverse possession.

4. The exception to this general rule is that where fraud is alleged and is proven, then a valid title to the property can be declared null and void.

5. In this case the statement of claim alleges fraud and particulars of this have been pleaded in the Statement of claim. Pursuant to the statement of claim the motion seeking an interlocutory injunction was moved. 

6. I must emphasize from the outset that I am not dealing with the substantive or the main proceedings on foot commenced by the plaintiff. I am only dealing with the application of interim injunctive relief. Injunction is an equitable remedy and it is a matter for the exercise of the discretion of the courts. The plaintiff has no right to an injunction. Rather it must convince the court to exercise its discretion to grant the remedy sought in his/her favour.

7. Injia, J, as the then was, summarized the principles on the grant of an interim injunction in the case of AGK Pacific (NG) Ltd -v- William Brad Anderson, Karson Construction (PNG) Ltd and Donner Construction (PNG) Ltd (2002) N2062. His Honour outlined the principles as follows;

"The grant of an injunction relief, interim, permanent, mandatory or otherwise, is an equitable remedy and it is discretionary. The principles governing the court's grant of interim injunctions are set out in various cases ……..but I consider the principles of equity developed by the equity courts, in various cases and restated by Kapi DCJ in Employees' Federation of PNG –v–PNG Waterside Workers Unions & Ors. N392 (1982) to be a comprehensive statement of the law. In essence, an applicant for an interim injunction must satisfy two basic requirements:-

(a)	That there is a seriousness to be determined; and

(b)	That the balance of convenience favors' the grant of interim injunction to preserve the status quo."

8. Andrew J, in the case of Robinson -v- National Airline Commission [1983] PNGLR 475, summarized the principles in this way:

"An interlocutory injunction, the purpose of which is to preserve the status quo, will be granted, where just and convenient. The plaintiff must prove that he has a serious, not a speculative case, which has a real possibility of ultimate success and he has a legal or equitable right, title or interest, which might be jeopardized if the injunctive relief were not granted; it is then for the court to determine whether nonetheless the injunctive should not go taking into account, such factors as the adequacy of damages as a remedy, the possibility of alternative remedies, whether there has been any latches or delay, the strength of the grounds of defence, what if any undertakings the defendant is prepared to give and mostly hardship and the balance of convenience."

9. In essence the plaintiff in an application of interim injunctive orders to preserve the status quo, must positively answer these questions;

1.	Are there serious questions to be tried? Does the plaintiff have an arguable and not a speculative case?

2.	Does the balance of convenience favour granting the injunction?

3.	Is an injunction necessary to do justice in the circumstance of this particular case?

1.	ARE THERE SERIOUS QUESTIONS TO BE TRIED? DOES THE PLAINTIFF HAVE AN ARGUABLE CASE?

10. The question here is whether the plaintiff have raised serious allegations? I will answer this question of whether the proceedings presents a serious question for trial by reference to the pleadings and the evidence before me 

11. The plaintiff alleges serious instances of fraudulent conduct against the defendants. In particular the plaintiffs state that the land in question State Lease, Portion 104c, Milinch of Megigi (SE) and Dagi ((NE) Fourmil of Talasea, West New Britain Province, was acquired through fraudulent means.

12. In particular it is alleged that on the 15th of March 2000, a meeting was held at the home of the first plaintiff at Lavege village, Hoskins. During that meeting all customary landowners present agreed to allocate 40 hectares of customary land to the four (4) children of Albert Camillus and his wife Adi Camillus. The 40 hectares were to be divided into 10 hectares each to be registered under the name of the 4 children. Instead of having the land registered under the name of his four children, the first defendant had the land registered under his family company, Akami Oil Palm Limited, the second defendant in this suit. It is further alleged that the second defendant acquired and registered more than the allocated 40 hectares of land. In fact it is alleged that the second defendant acquired and registered 345.75 hectares of customary land which is now referred to as State lease, Portion 104c and Portion 2628c (D9).

13. The Plaintiffs further alleged that the first defendant used the signatures of the customary landowners who signed on the Customary Land Transfer Form to mislead the Provincial Lands Officer, that the signatures were the customary landowners for the defendants to acquire and register more than 40 hectares of customary land. As a result of the defendants misrepresentation they acquired 345.75 hectares of customary, which is 205.75'hectares more then the 40 hectares that was agreed upon, and which is now registered under the name of the second defendant.

14. Acquiring and registering 345.75 hectares of customary land, is more than the 40 hectares initially agreed upon. This is in my view a serious allegation of fraudulent conduct as well as fraudulent misrepresentation. It is the court's view that these serious allegations of fraudulent conduct cannot be simply brushed aside. They must be properly assessed in a proper trial. The statement of claim also alleges other instances of fraudulent conduct. 15. The plaintiffs argue that their interests in customary must be protected with the grant of an interim injunction.

16. Papua New Guinea follows the Torrens Title System of land registration for alienated government land. Under the Torrens system of land registration once a piece of land is registered, the fact of registration confers upon the owner an indefeasible (unforfeitable) title in the registered proprietor subject only to the exception in Section 33(1) of the Land Registration Act. see Mudge –v– Secretary for Lands [1985] PNGLR 387.

17. The question therefore arises whether any of those exceptions apply here. The only exception that might apply in this case is Section 33(1)(a): in the case of fraud. Indeed the plaintiffs allege fraud against the defendants here. In their statement of claim the plaintiffs have gone ahead and pleaded particulars of the defendants conduct which they claim amounts to fraudulent conduct. The meaning of fraud was discussed by Cannings J in the case of Elizabeth Kanari –v–Augustine Wiakar (2009) N3589 and His Honor noted that there are two schools of judicial thought on the issue of fraud. 

18. On the one hand in Emas Estate Development Pty Ltd –v–John Mea & Ors [1993] PNGLR 215, the Supreme Court comprising Amet J and Salika J, Brown J dissenting) held that if the circumstances of a forfeiture or transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title.

19. In that case the registered proprietor of a State lease had his lease forfeited in dubious circumstances. The Minister for Lands then exempted the land from public advertisement and a new lease was granted to another person. This all happened in a short space of time while there was an appeal pending against the Minister's decision to grant the lease to a new leasor. Amet J as he then was said:

The issues in this case raise for consideration the principle of title under the Torrens land registration system that hitherto has been applied in this jurisdiction. I do not believe that the system is necessarily appropriate in circumstances such as this, where an individual landowner is deprived of his title to land by irregular procedures on the part of officials and the department of the State, to the advantage of a private corporation. I do not accept that quite clear irregularities and breaches of the statutory provisions should remain indefeasible. I believe that, although these irregularities and illegalities might not strictly amount to fraud, they should nevertheless, still be good grounds for invalidating subsequent registration which should not be allowed to stand. To not to do so would be harsh and oppressive against the innocent individual leaseholder. …"

20. This wide view of "fraud" – includes irregularities that are tantamount to fraud and constructive fraud has been confirmed in the National Court decisions of Sheehan J in Steamships Trading Company Ltd –v–Garamut Enterprises Ltd (2000) N1959, Sevua J in Hi-Lift Company Pty Ltd –v– Miri Setae [2000] PNGLR 80 and Injia DCJ in Ramu Nickel Ltd –v– Temu (2007) N 3252. The view that the National Court has an important role in its judicial review jurisdiction of correcting errors of law made in connection with State leases is supported by the decisions of Sevua J in Yakananda Business Group Inc –v–Minister for Lands (2001) N 2159 and of Kirriwom J in Lae Rental Homes Ltd –v– Viviso Seravo (2003) N2483.

21. The other narrower view of fraud was favoured by the Supreme Court (Gavara-Nanu J, Mogish J and Hartshorn J) in Koitachi Ltd –v– Walter Schnaubelt (2007) SC 870. That court held that the Emas Estate Case was distinguishable on its facts, as it concerned a registered proprietor whose State lease was forfeited and then allocated and registered in the name of a third party.

22. As to the Garamut case, that was said to concern a challenge to the issue of a State Lease on grounds that procedures in the Land Act were not complied with. The court adopted the view of fraud taken in the National Court decision of Gavara-Nanu J in The Papua Club Inc –v– Nusaum Holdings Ltd (No. 2) (2004) N 2603, where His Honour stated:

"The word fraud in Section 33(1)(a) of the Land Registration Act, is not defined anywhere in the Act, but Section 45(1) makes it clear that fraud means more than constructive or equitable fraud …

It is implicit form these provisions that "fraud" means fraud committed by the registered proprietor or actual fraud. That is the only ground upon which a registered proprietor's title can be rendered invalid.

23. As to which of these two views of fraud should be applied in the present case depends upon the circumstances of a particular case .On a most cursory examination of the circumstances of this case, it would seemingly appear that the fraud being perpetrated here is actual fraud. In other words it is fraud perpetrated by the registered proprietor, the two defendants. The narrower view of fraud is preferred as stated by the Supreme Court in the Koitachi case, than the wider view of fraud expressed in the Emmas Estate case. The wide view pioneered by the Supreme Court in Emmas Estate and followed in Garamut Enterprises, Hi-Lift and Ramu Nickel? Or the narrower view propounded by the Supreme Court in Koitachi?

24. Whichever view it may be, what this discussion demonstrates is that there are serious issues to be discussed in this case.

25. Accordingly, by making reference to the pleadings and the evidence presented before me, the court finds that there is a serious questions which can only be answered in a trial proper. 

DOES THE BALANCE OF CONVENIENCE FAVOUR GRANTING THE INJUNCTION?

26. What does this time honored phrase mean? Cannings J, in the case of Ewasse Landowners Association Incorporated – v– Hargy Oil Palm Limited [2005] N2878 interpreted that age old phrase into plain English as follows: What is the best thing to do on an interim basis taking into account the conflicting interests? Where do the interests of justice lie? What will happen if an injunction is not granted? What will happen if an injunction is granted? Who will suffer the greatest inconvenience? In other words who stands to suffer the most inconvenience if an injunction is not granted. Clearly the plaintiffs are ordinary villagers. They have a serious grievance in the manner in which their customary land was acquired and then registered. The total number of hectares of land acquired by the defendants is well over and above what they agreed to allocate to the defendants. The defendants failed to produce a single iota of evidence to show an estimate of how much was spent on developing this plantation, the estimated costs and the kinds of developments that are now taking place with this land. Instead it relies entirely on the indefeasibility of its title to argue against the grant of the interim injunction. They have not produced any evidence whatsoever to counteract the allegations made by the plaintiffs. This being so, I make a finding that if an injunction is not granted, there is a risk that the operations of the second defendant will expand by acquiring more traditional land. I find that the plaintiffs stand to suffer in terms of losing more customary land, if an injunction is not granted. The balance of convenience lies in favour of the grant of injunction. 

2.	IS AN INJUNCTION NECESSARY TO DO JUSTICE IN THE CIRCUMSTANCES OF THIS CASE?

27. Under the Constitution the National Court is established as a Court of Justice. This means that the court has an overriding duty to do justice and to balance the conflicting interest of the parties and any other parties who would be affected by any other orders of this court. Justice is often seen in the eyes of the beholder. If I grant the injunction sought that would stop the defendants from harvesting fresh fruit bunch from their oil palm plantation. That would mean losing money, money which they could live on, or money to pay workers. If the second defendant is employing workers to harvest the fresh fruit bunch, then those workers could be laid off from work. However, the defendants have not produced before me an iota of evident to show this. In absence of any evidence from the defendant I will answer this question of justice from the eyes of the beholder. The plaintiffs have produced some evidence to show that they may well suffer injustice in terms of being evicted from Portion 2628c. There is also evidence to show that the first and second defendants have engaged police to evict any persons who include the plaintiffs from Portion 2628c. An injunction is necessary to do justice in the circumstance of this case.

CONCLUSION

28. All the considerations I have identified favour the grant of injunction. Accordingly the plaintiff shall have the declarations they seek and in addition I will grant an injunction in these terms:

(1)	The defendants are hereby restrained from clearing any bushes to further develop Portions 104c and 2628c for purposes of planting oil palm.

(2)	All or any further work done to expand the operations of the second defendant on Portions 104c and 2628c are hereby stopped.

(3)	The defendants are expressly permitted to harvest fresh fruit bunch from Portions 104c and 2628c and use the money for their own benefits.

(4)	The Kimbe District Court proceedings DC No. 144 of 2010 – Akami Oil Palm Limited –v– Joram Kibe is hereby stayed until these proceedings are fully and finally determined and disposed off.

(5)	 Police are hereby restrained from conducting any further evictions in Portion 104c and in Portion 2628c.

(6)	The defendants are hereby ordered to pay the plaintiff's costs of moving and arguing this motion. 

____________________________________________________________
Moromu Lawyers: Lawyers for the Plaintiff
Gerhard Linge Lawyers: Lawyers for the Defendant