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Don v Public Curator of Papua New Guinea [2017] PGNC 194; N6869 (13 September 2017)

N6869

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]


WS NO 1194 OF 2014


BETWEEN
RUTH DON
Plaintiff


AND
PUBLIC CURATOR OF PAPUA NEW GUINEA
First Defendant


AND
ALEX WERNER
Second Defendant


AND
COMFORT TOURS & TRAVEL LIMITED
Third Defendant


AND
REGISTRAR OF TITLES
Fourth Defendant


AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant


Madang: Cannings J
2016: 15 March, 20 May,
2017: 13 September


LAND – government land – residential property – State Lease – whether fraud involved in transfer of State Lease – meaning of “fraud” in Land Registration Act – actual fraud – constructive fraud.


LIMITATION PERIODS – Frauds and Limitations Act, Section 19 – whether claim of fraud by alleged de facto partner of deceased registered proprietor of State Lease is an action re personal estate of deceased person.


Facts


The third defendant became registered proprietor of a State Lease over a residential property in a town in the following circumstances: on the same day, 26 October 2010, that the lease was transmitted to the Public Curator (the first defendant) pursuant to letters of administration, the lease was transferred by the Public Curator to a person regarded as the deceased registered proprietor’s son (the second defendant), who transferred it to the third defendant. The original registered proprietor died in April 1996. The plaintiff claimed that she was his de facto wife and that he had left a will, leaving the property to her. Probate of that will had, however, never been obtained. The plaintiff commenced proceedings against the defendants in 2014, claiming that all transactions on 26 October 2010, in particular the transfer to the third defendant, were cases of fraud (both actual fraud and constructive fraud were pleaded) and should be declared null and void and cancelled. She also sought damages. A trial was conducted. The first defendants argued as a preliminary point that the proceedings should be summarily dismissed for being time-barred by Section 19 of the Frauds and Limitations Act. As to the substantive question of whether fraud was involved in transfer of the State Lease, they denied the allegation. The fourth and fifth defendants (the Registrar of Titles and the State) took no part in the trial.


Held:


(1) As to the preliminary issue: Section 19 of the Claims By and Against the State Act did not apply as the plaintiff’s primary cause of action was fraud in relation to the transactions of 26 October 2010, rather than a claim to the personal estate or to any share or interest in the personal estate of the deceased person. The preliminary argument failed.

(2) Under Papua New Guinea’s Torrens Title system of land registration the general principle is that once the transfer of a State Lease is registered, an indefeasible title is conferred on the registered proprietor, subject only to the exceptions in Section 33(1) (protection of registered proprietor) of the Land Registration Act, including Section 33(1)(a), which states: “The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except ... in the case of fraud”.

(3) “Fraud” means actual fraud or constructive fraud (where it is proven that the circumstances in which a person has obtained title are so unsatisfactory, irregular and unlawful as to warrant the setting aside of title).

(4) Here, the plaintiff failed to prove actual fraud. She also failed to prove constructive fraud as there was insufficient evidence to show that the circumstances in which the transfers of the State Lease took place on 26 October 2010 were unsatisfactory, irregular or unlawful, given that: the plaintiff had not in the period of 14 years after the death of her alleged de facto husband obtained probate of the purported will on which she based her claim to an interest in the property; the order of the National Court of 12 August 2010 granting letters of administration to the Public Curator was never set aside; the decision of the Public Curator to regard the second defendant as the son and primary beneficiary of the deceased estate was unremarkable; it was open to the second defendant to transfer his interest in the property (to sell it) to whoever he wanted at whatever price he wanted; and there was no credible evidence of any impropriety on the part of any of the defendants, including the third defendant.

(5) All relief sought by the plaintiff was refused and the proceedings were dismissed. All interim orders were dissolved. The plaintiff was given one month to vacate the property. The plaintiff was ordered to pay the third defendant’s costs.

Cases cited:


The following cases are cited in the judgment:


Emas Estate Development Pty Ltd v John Mea & Ors [1993] PNGLR 215
Eric Kiso v Bennie Otoa & Ken Wutnalom (2013) SC1222
Julius Pololi v Bryan James Wyborn (2013) N5253
Koitachi Ltd v Walter Schnaubelt (2007) SC870
Kol Toki v Moeka Morea (2016) SC1588
Konze Kara v Public Curator (2010) N4055
Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120
Mudge v Secretary for Lands [1985] PNGLR 387
PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126


STATEMENT OF CLAIM


This was a trial in which the plaintiff sought declarations and orders regarding a State Lease, the registered proprietor of which was the third defendant.


Counsel:


G Pipike, for the plaintiff
M Koimo, for the First Defendant
E Wurr, for the Second Defendant
H Masiria, for the Third Defendant


13th September, 2017


  1. CANNINGS J: This case is about a residential property in Madang town, Section 26, Allotment 20, Bougainvillea Drive, near Binnen Harbour. The plaintiff, Ruth Don, has occupied the property for more than 20 years.
  2. Until 26 October 2010 the registered proprietor of the State Lease over the property was Jan Werner, who died in April 1996. The plaintiff claims that she was the late Mr Werner’s de facto wife. She also claims that he made a will and left the property to her. She has, however, never obtained probate on that purported will.
  3. On 26 October 2010 the Registrar of Titles (the fourth defendant) registered a number of transactions regarding the property:
  4. The plaintiff alleges that those transactions are fraudulent. She commenced proceedings against the defendants in 2014, seeking declarations that all the transactions, in particular the transfer to the third defendant, are null and void, and orders that the transactions be cancelled, on the ground of fraud. She also seeks damages.
  5. She says that she has been thwarted by the Public Curator over many years in proving the will and obtaining probate. She says that letters of administration granted in August 2010 by the National Court to the Public Curator (giving the Public Curator authority to administer the estate of the late Mr Jan Werner) were a result of fraudulent and false documents being put to the Court and collusion between the defendants. She says that the second defendant, Alex Werner, has falsely and fraudulently held himself out as being the son of the deceased Jan Werner.
  6. The first, second and third defendants have filed defences, denying all allegations of fraud. The fourth defendant (the Registrar of Titles) and the fifth defendant (the State) did not file defences and have played no part in the proceedings.
  7. A trial was conducted. It was argued as a preliminary point that the proceedings should be summarily dismissed for being time-barred by Section 19 of the Frauds and Limitations Act. The following issues arise:

1 Should the proceedings be summarily dismissed?


  1. Are the circumstances in which Comfort Tours and Travel Ltd became registered proprietor a case of fraud?

3 What declarations or orders should the Court make?


  1. SHOULD THE PROCEEDINGS BE SUMMARILY DISMISSED?
  2. The defendants submitted that the proceedings are time-barred by Section 19(1) (actions claiming personal estate of a deceased person, etc) of the Frauds and Limitations Act, which states:

(1) No action in respect of any claim—


(a) to the personal estate; or

(b) to any share or interest in the personal estate,


of a deceased person, whether such claim is under a will or on intestacy, shall be brought after the expiration of twelve years commencing on the date when the right to receive the personal estate or the share or interest in the personal estate accrued.


(2) No action to recover arrears of interest in respect of any legacy, or damages in respect of such arrears, shall be brought after the expiration of six years commencing on the date when the interest became due.


  1. The argument is that the plaintiff’s “action” (the present proceedings) is a “claim” “to the personal estate ... of a deceased person” (the late Jan Werner). Hence it should have been “brought” (commenced) within 12 years after the date “when the right to receive the personal estate ... accrued”, ie within 12 years after the date of death (April 1996). The proceedings should have been commenced by April 2008 but the proceedings were not commenced until 2014, therefore the proceedings are time-barred.
  2. In determining this argument, I adopt the approach taken by Hartshorn J in Konze Kara v Public Curator (2010) N4055 and Julius Pololi v Bryan James Wyborn (2013) N5253. It is necessary to characterise the action as a “claim” “to the personal estate ... of a deceased person” before the 12-year limitation period under Section 19 is imposed. I reject the defendants’ argument that that is the proper characterisation of the plaintiff’s action. Her primary cause of action is fraud in relation to the transactions of 26 October 2010, rather than a “claim” to the personal estate or to any share or interest in the personal estate of the late Mr Jan Werner. The preliminary argument is rejected.
  3. ARE THE CIRCUMSTANCES IN WHICH COMFORT TOURS AND TRAVEL LTD BECAME REGISTERED PROPRIETOR A CASE OF FRAUD?
  4. The critical issue is whether the third defendant obtained title to the property in a case of fraud. Under Papua New Guinea’s Torrens Title system of land registration, registration of a lease vests an indefeasible (unforfeitable) title in the registered proprietor subject only to the exceptions in Section 33(1) of the Land Registration Act Chapter 191. Most significantly Section 33(1) (a): “in the case of fraud” (Mudge v Secretary for Lands [1985] PNGLR 387). The plaintiff alleges both actual fraud and constructive fraud.

Actual fraud


  1. Mr Pipike for the plaintiff submitted that there was evidence of actual fraud in that two false documents were put to the National Court for the purpose of the Public Curator being granted letters of administration on 12 August 2010: a statutory declaration (that Alex Werner was his son) allegedly made by the late Jan Werner on 7 September 1993 and a birth certificate (showing that the late Jan Werner was Alex Werner’s father) issued on 28 June 2010. Mr Pipike submitted that the claim that Alex Werner was the late Jan Werner’s son (biological, adopted or foster son) was deliberately false and that the evidence put to the National Court in 2010 was a manifestation of collusion on the part of the first, second and third defendants to deprive the plaintiff of her lawful entitlement to the property.
  2. I reject these submissions as they are an improper attempt by the plaintiff to challenge the order of the National Court of 12 August 2010 to grant letters of administration to the Public Curator. It is improper as the order of 12 August 2010 has not been set aside and has not been the subject of appeal to, or review by, the Supreme Court. The plaintiff cannot properly come to the National Court in separate proceedings, several years later, and argue that the Court’s decision was wrong or based on false evidence. It is an abuse of process for the plaintiff to attempt to avoid the effect of the grant of letters of administration in this way.
  3. The reasonable inferences to be drawn from the Court’s granting, on application by the Public Curator, letters of administration to the Public Curator in August 2010, are that:
  4. I reiterate that the current proceedings were commenced four years after the August 2010 order of the Court and the trial in the current proceedings took place six years after the order was made. All evidence and argument put to the Court in the current proceedings that attempt to get the Court to go behind or second guess the August 2010 order or the evidence on which it was based or the circumstances in which it was made, are an abuse of process.
  5. There is a dearth of evidence of actual fraud surrounding the 26 October 2010 transactions. The allegations of actual fraud are based on suspicion, emotion and innuendo – not evidence – and I reject them entirely.

Constructive fraud


  1. Constructive fraud exists where the circumstances of transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title. There is now a strong line of Supreme Court authority in support of the constructive fraud approach: Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215, PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126, Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120 and Kol Toki v Moeka Morea (2016) SC1588.
  2. That line of authority is, in my view, binding on the National Court, more so than cases such as Koitachi Ltd v Walter Schnaubelt (2007) SC870 and Eric Kiso v Bennie Otoa & Ken Wutnalom (2013) SC1222, cited by Ms Masiria for the third defendant, in which the Supreme Court has indicated that proof of actual fraud is necessary.
  3. The issue therefore becomes whether the transactions of 26 October 2010 – in particular the transfer from Alex Werner to Comfort Tours & Travel Ltd – involved constructive fraud. If that is determined in the negative, the plaintiff’s case will fail. If it is determined in the affirmative, the question of remedies will arise.
  4. I find insufficient evidence to show that the circumstances in which the transfers of the State Lease took place on 26 October 2010 were unsatisfactory, irregular or unlawful, given that:

This is not a case of either actual fraud or constructive fraud.


  1. WHAT DECLARATIONS OR ORDERS SHOULD THE COURT MAKE?
  2. All relief sought by the plaintiff must be refused and the proceedings will be dismissed. All interim orders, which have had the effect of allowing the plaintiff to remain on the property pending the outcome of these proceedings, will be dissolved. The plaintiff will be given one month to vacate the property. As to costs, it is appropriate that the plaintiff pay the third defendant’s costs. The Public Curator can bear his own costs and likewise with the second defendant, who was represented by the Public Solicitor.

ORDER

(2) The plaintiff and all other persons in occupation of the subject property, Section 26, Allotment 20, Bougainvillea Drive, Madang, shall vacate the property, removing all their personal properties and possessions, by 12 noon on 13 October 2017, leaving the property and all buildings and other structures on it, in good order and condition.

(3) If the plaintiff and other persons in occupation of the subject property fail to comply with order (2), the third defendant and the Police are authorised, from 12 noon on 13 October 2017, to take all reasonable steps necessary to remove the plaintiff and other persons in occupation of the subject property, from the property, including the use of reasonable force, and to seize and destroy their properties and possessions, provided that such steps are taken under the supervision and control of the most senior member of the Police Force available at that time in the vicinity of the subject land.

(4) Subject to any specific costs orders made in the course of the proceedings, the plaintiff shall pay the third defendant’s costs of the proceedings on a party-party basis which shall if not agreed be taxed, and other parties shall bear their own costs of the proceedings.

Judgment accordingly.
_______________________________________________________________
GP Lawyers: Lawyers for the Plaintiff
Kipes Lawyers: Lawyers for the First Defendant
Public Solicitor: Lawyer for the Second Defendant
Fairfax Legal: Lawyers for the Third Defendant

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