N5139

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

APPEAL NO. 86 OF 2008

BETWEEN:

RONALD NAPITALAI
Appellant

AND:

WILLIAM AND JILA TOLUANA
Respondents

Goroka: Yagi J
2013: 04th & 28th March

APPEAL – District Court – jurisdiction of District Court relating to land – District Courts Act, Section 21(4)(f) – a District Court has no jurisdiction where title to land is bona fide in dispute – there must be evidence showing distinct, formal, legal step taken to challenge proprietor's title – a letter expressing an opinion or a unregistered caveat are not formal or legal steps.

APPEAL – District Court – jurisdiction of District Court relating to residency of defendant and place where cause of action arose – District Courts Act, Section 21(5)(a) and (b) – interpretation – wide and liberal interpretation to be given - a District Court has jurisdiction irrespective of the existence of one or two factors in s. 21(5).

Cases cited

Tony Yandu v Peter Waiyu (2000) N2894 
Jant Ltd v Kell (2013) N4953
Mudge v Secretary for Lands [1985] PNGLR 387
Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215 Koitachi Ltd v Walter Schnaubelt (2007) SC870
Chern Jin Fa v Naniura [1990] PNGLR 506

Counsel:

N. Amoiha, for the Appellant
No appearance by the Respondents

DECISION

28th March, 2013

1.	YAGI, J: The appellant appeals against a decision of the Goroka District Court made on 7th May 2008. The decision relates to a complaint brought by the respondents against the appellant under the Summary Ejectment Act for possession over a property. The District Court found in favour of the respondents and consequently made orders for eviction and giving possession to the respondents.

2.	The parties, through their respective counsel, appeared before the Court during the call-over on 05th February 2013 and applied for a date to be fixed for the hearing of the appeal. Accordingly, the appeal was fixed for hearing on 04th March 2013 at 9.00 am. The Court furthermore directed the parties to file written extract of arguments and the appellant to file and serve a formal notice of hearing. 

3.	The appellant complied with the directional orders in terms of filing an extract of arguments and filing and service of notice of hearing. The respondents failed in terms of filing an extract of arguments.

4.	At the hearing no appearance was made by the respondents either by counsel or in person. Having heard counsel for the appellant and noting that a notice of hearing was duly served the Court proceeded to the hearing of the appeal. Moreover, no application for adjournment was pursued by the respondents.

Background

5.	This is a family dispute over a residential property. The parties are closely related. The appellant and the respondent William Toluana are brothers not by blood but by adoption. William Toluana was adopted into the appellant's family. Their father, Napitalai Cecil Toluana is a retrenched public servant. He was formerly employed by the Division of Primary Industry (now Agriculture & Livestock) in Goroka Eastern Highlands Province. He was retrenched from the public service in 1990.

6.	While Mr. Toluana was employed in the public service he entered into a Government Sell Off Scheme (GSOS) managed by the National Housing Corporation. The National Housing Corporation offered to sell to him a residential property described as Section 51 Allotment 15 Goroka Eastern Highlands Province contained in State Lease Volume 5 Folio 22 (the property). He was occupying the property with his family at that time when the offer was made.

7.	It was a condition of the sale under the GSOS that Mr. Toluana would make instalment payments by way of salary deduction towards the purchase price of the property. He did not fulfil this part of his obligation and consequently he fell into substantial arrears including interests being charged. The amount was about K26,800.00. It appears the arrears accumulated over the years after his retrenchment from employment.

8.	After Mr. Toluana was retrenched he returned to live in his village in the East New Britain Province. He left behind his family in Goroka who continued to reside in the property. Those that remained on the property included his wife and other members of the family.

9.	At all material times the appellant lives and works in Port Moresby. His wife and probably children live on the subject property with Mrs. Lucy Toluana, who is the mother of the appellant and the respondent William Toluana. She is quite old and is a full time resident or occupant of the property.

The Dispute

10.	The respondents commenced eviction proceedings against the appellant in the District Court in July 2007. A complaint was laid under s. 6 of the Summary Ejectment Act Chapter 202. It was defended by the appellant. Two interlocutory applications were entertained by the District Court. The first was an application by the National Housing Corporation to be joined as a party (second defendant). This application was refused. The second application was by the appellant to have the proceedings dismissed or alternatively, he be removed as a party in the proceedings. This application was also denied by the Court.

11.	The District Court heard the evidence from both parties and found in favour of the respondents and thereby made orders accordingly. I note from the depositions that the Magistrate recognised the peculiar circumstances in the case involving close family members and accorded them opportunity for a negotiated settlement of the dispute before delivering his decision. Despite this opportunity the parties were unable to reach a compromise.

Grounds of appeal

12.	The appellant appeals against the decision of the lower court on 3 grounds. The grounds are:

"(a)	The District Court did not have jurisdiction under Section 21(4)(f) of the District Court Act to hear the matter when title to land or ownership was in issue.

(b)	The District Court Goroka did not have jurisdiction to hear the matter against the Appellant/Defendant under Section 21(5) of the District Courts Act as the Appellant was not a resident of Goroka at the relevant time.

(c)	Further to ground (b) above the Appellant was not an occupant and was not a resident or occupant of the property subject to District Court proceedings to be a proper party to the said proceedings and substantial miscarriage of justice occurred when he was named as a Defendant and involved in the proceedings."

13.	He therefore seeks orders to quash the decision of the District Court and for costs.
 
14.	It is clear from the 3 grounds that the central issue in this appeal concerns the jurisdiction of the District Court. Grounds (b) and (c) are related as they raise the issue of residency under s. 21(5) whilst ground (a) raises the question of jurisdiction under s. 21(4)(f) of the District Courts Act. I therefore propose to deal with grounds (b) and (c) together. 

15.	I will now deal with the grounds of appeal.

Jurisdiction of the District Court under s. 21(4)(f)

16.	Section 21 states:

"21.	Civil jurisdiction.

(1)	Subject to this Act, in addition to any jurisdiction conferred by any other law, a Court has jurisdiction in all personal actions at law or in equity where the amount of the claim or the amount or value of the subject matter of the claim does not exceed—
(a)	where the Court consists of one or more Principal Magistrates—K10,000.00; and
(b)	where the Court consists of one or more Magistrates—	K8,000.00.
(c)	. . .
(d)	. . .

(2)	(Repealed.)

(3)	Subsections (1) shall not be taken to limit the jurisdiction of Courts in cases where, by any law, money, irrespective of amount, may be recovered before a Court.

(4)	A Court has no jurisdiction in the following cases:—

(a)	where the validity or effect of a devise or bequest or a limitation under a will or settlement, or under a document in the nature of a settlement, is in dispute; or
(b)	the infringement of trade names; or
(c)	an action for or in the nature of slander of title; or
(d)	an action for illegal arrest, false imprisonment or malicious prosecution; or
(e)	for seduction or breach of promise to marry; or
(f)	when the title to land is bona fide in dispute.

(5)	Subject to this section, a Court has jurisdiction when—

(a)	the defendant, or one of two or more defendants, as the case may be, is usually resident, or carries on business; or
(b)	the cause of action wholly or partly arose; or
(c)	the defendant has given an engagement or written promise to pay a debt or sum at a specified place,

in the area for which the Court is constituted.

(6)	A Court has jurisdiction under this section notwithstanding that the defendant is not within the country, if the defendant is within a State or a Territory of or under the authority of Australia.

(7)	Subsection (6) applies whether the defendant has or has not ever been resident in or carried on business in the country.

(8)	For the purposes of Subsections (6) and (7), "defendant" means, where there are more defendants than one, a defendant not within the country." (emphasis added)

17.	The appellant argues that the District Court is devoid of jurisdiction to hear the complaint because the title to the property was bona fide in dispute.

18.	The appellant submits that the title to the subject property was in dispute because there was evidence before the lower court to that effect. Counsel argues that in view of these evidences the Magistrate committed an error of law to the extent that he proceeded to determine the complaint when on the evidence he was deprived of jurisdiction to hear the complaint by virtue of s. 21(4)(f). To substantiate the argument counsel for the appellant points to 2 supporting documents produced as evidence by the appellant in the court below. The first is a document in the form of a caveat which the appellant purported to register with the Registrar of Titles. The second is a letter dated 20th April 2007 from the National Housing Corporation Legal Office to the respondents disputing title. Counsel further relied on the 2 decisions by Cannings J in Tony Yandu v Peter Waiyu (2000) N2894 and Jant Ltd v Kell (2013) N4953 where his Honour basically held that for an argument to be successfully sustained under s. 21(4)(f), it must be shown that a interested party in the land has taken a "distinct, formal, legal step to challenge the proprietors title" in respect to the land in question. It is on the basis of these 2 documents that the appellant submits that there was ample evidence pointing to a bona fide dispute in the title.

19.	Whilst I find agreement with the statement of the law expressed by Cannings J in Tony Yandu (supra) and Jant Ltd (supra), in my view the evidence relied upon by the appellant are inadequate or insufficient and just do not measure up. I say this for these reasons.

20.	Firstly, in relation to the caveat, this document although it is in the prescribed form having being filled out with relevant details and purporting to be signed by Napitalai Cecil Toluana and dated 13/7/05, the caveat form was not lodged at nor registered with the Office of the Registrar of Titles. Moreover, there is no official stamp of that office marked onto the document nor payment of lodgement fee made. In my view, unless the caveat is lodged, stamped and registered with payment of an appropriate lodgement fee, such a document do not constitute a formal or legal instrument and hence a formal or legal step within the principle enunciated in the 2 decisions of his Honour Justice Cannings which I earlier referred to. This view is consistent with s. 85 of the Land Registration Act which provides that a caveat does not take effect until it is accepted and noted by the Registrar of Titles. Section 85 is stated in the following terms:

"85.	Commencement.

(1)	A caveat does not come into force until it is accepted by the Registrar.

(2)	For the purposes of Subsection (1), a caveat is accepted when the Registrar makes a note to that effect on the caveat.

(3)	Notwithstanding acceptance of a caveat, where the Registrar considers that the caveat does not comply with a provision of this Act he may raise a requisition in relation to that caveat.

(4)	Where a requisition under Subsection (3) is not complied with within the prescribed period the Registrar may annul his acceptance of the caveat."

21.	Secondly, the letter from the National Housing Corporation Legal Office cannot be regarded as a formal or legal step. In my view, the letter is nothing more than simply an expression of a certain legal view or opinion. There is no evidence that other or further step or action was taken to give effect to that view or opinion. If the National Housing Corporation was serious in challenging the title, which was registered in favour of the respondents, then the law on indefeasibility of title is clear. Once title is registered, it is infeasible. That is, it cannot be challenged, unless it can be shown that title was obtained by fraud. (see Mudge v Secretary for Lands [1985] PNGLR 387); Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215 and Koitachi Ltd v Walter Schnaubelt (2007) SC870. A formal or legal step in challenging title on grounds of fraud would involve instituting legal proceedings in a court of competent jurisdiction, in this case, in the National Court. There is no evidence that such a challenge was pursued.

22.	It appears the District Court did take into consideration these documents but ultimately was not convinced that these evidences were sufficient in the light of the applicable legal principles. In his written judgment the Magistrate made the following statements by way of stating the facts:

"He (Cecil Toluana) began to buy the property by instalment, but then went into arrears and the National Housing Corporation repossessed the property. The National Housing Corporation sued Cecil Toluana in the District Court and he appealed against the District Court order to the National Court but lost the appeal. After that the plaintiff (respondents) bought the property from the National Housing Corporation the successor of the National Housing Commission.

When this case was being heard the National Housing Corporation branch in Goroka applied to be included as second defendant. The National Housing Corporation, Goroka branch Manager was questioning the process by which the complainants got the title. I refused his application to be included as a party on the basis that if he dispute(d) the title then he should go to the National Court of Justice to determine the validity of title. As well why should he wait for this case to pursue his interest."

23.	And further after citing the case of Herman Gawi v PNG Ready Mix Concrete Pty Ltd [1984] PNGLR 74 and quoting a statement of principle from the Tony Yandu (supra) case his Worship stated this:

"The complainants (respondents) have title to this property and nobody has taken any steps before any court to disturb that title especially in the National Court of Justice."

24.	In my view the learned Presiding Magistrate did not fall into error. I dismiss this ground.

Jurisdiction of the District Court under s. 21(5)

25.	As regards this ground, the appellant's argument is premised on the fact that the appellant was not physically resident in Goroka or occupying the subject property at the relevant time and therefore it is argued the District Court lacked jurisdiction. 

26.	I have already set out above the provision of s. 21(5). That provision confers jurisdiction on a District Court in 3 situations:

•	Where a defendant is usual resident or carries on business within its territorial jurisdiction (s. 21(5)(a))
•	Where a cause of action arose within its territorial jurisdiction (s. 21(5)(b))
•	Where the defendant undertakes to pay a debt within its territorial jurisdiction (s. 21(5)(c))

27.	The fundamental and material facts are not in dispute. There is no dispute that the appellant resides in Port Moresby and therefore outside of the territorial jurisdiction of the Goroka District Court. There is also no dispute that the subject land is situated in Goroka and therefore within the territorial jurisdiction of the Goroka District Court.

28.	Whilst it is true that the appellant is not a usual resident of Goroka nevertheless it is equally true that the cause of action arose in Goroka. These facts present a catch 22 situation in that there is suggestion that whilst on one hand that there is no jurisdiction, on the other hand there is jurisdiction. In my view a proper construction and reading of s. 21(5) is to apply a wide and liberal interpretation so as to achieve harmony with the object of the legislation and to give effect to its true meaning, intent and spirit. see Chern Jin Fa v Naniura [1990] PNGLR 506. This would appear to be the logical and sensible approach because to construe the provision narrowly and strictly will create inconsistencies and thus frustrate the object of the legislation.

29.	Accordingly and in this case, it is my respectful view that where jurisdiction is granted in any one of the 3 situations under s. 21(5), the District Court is not deprived of jurisdiction irrespective of the existence of one or both other situations under that provision.

30.	For this reason I find that the District Court had jurisdiction to hear the complaint. This ground is also dismissed.

Conclusion, orders and costs

31.	In view of the fact that all grounds of appeal are dismissed, I order that the whole appeal is dismissed in its entirety. As to the question of costs, the general principle is that costs follow the event. In this case the respondents would be entitled to costs, however, as there was no appearance by the respondents at the substantive hearing and costs being a discretionary matter, in the exercise of my discretion I order that each party bear their own costs.

Orders accordingly.

_______________________________________________________________

Javati Lawyers: Lawyers for the Appellant
Stevens Lawyers: Lawyers for the Respondent