N6530
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 479 OF 2015

PATRICK YAL FOR HIMSELF AND ON BEHALF OF BAMAIA WAN CLAN OF REMPI, MADANG DISTRICT, MADANG PROVINCE
First Plaintiffs

PAIS KOB FOR HIMSELF AND ON BEHALF OF ALOPA MASUALAUG CLAN OF MEDIBA, MADANG DISTRICT,  
MADANG PROVINCE
Second Plaintiffs

JOSEPH KUBALI FOR HIMSELF AND ON BEHALF OF SAREPI CLAN OF BUDUP, MADANG DISTRICT, MADANG PROVINCE
Third Plaintiffs 

WILLIE KAITOK FOR HIMSELF AND ON BEHALF OF BARPI CLAN OF BUDUP, MADANG DISTRICT, MADANG PROVINCE
Fourth Plaintiffs 

ALBERT KOLI FOR HIMSELF AND ON BEHALF OF ALEODIK CLAN OF BUDUP, MADANG DISTRICT, MADANG PROVINCE
Fifth Plaintiffs 

V

MISSION OF THE HOLY GHOST (NEW GUINEA) 
PROPERTY TRUST
First Defendant

RD FISHING PNG LIMITED
Second Defendant

JOHN ANDRIAS, SECRETARY FOR COMMERCE, TRADE AND INDUSTRY
Third Defendant

MADANG MARINE PARK HOLDINGS LIMITED
Fourth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Madang: Cannings J
2016: 6, 12 October
2017: 27 October

LAND – leasehold land, formerly freehold – Land (Ownership of Freeholds) Act, Chapter 359 – interests of traditional owners of land – compensation claim by traditional owners against the State for deprivation of rights and interests in land: Constitution, Section 53 (protection from unjust deprivation of property).  

The plaintiffs claimed to be traditional owners of a portion of land earmarked for industrial development in a rural area. The land is formerly freehold land owned by the first defendant. In 1993-1994 an application was made under the Land (Ownership of Freeholds) Act Chapter 359 to the Minister for Lands to convert the land to leasehold land. The application was granted and the first defendant acquired a substitute lease over the land, which it transferred to a provincial government, which then transferred it to another party, which then transferred it to the second defendant, which then surrendered the lease to the State (the fifth defendant). The land was then subdivided into two new portions, with the second defendant being granted a State lease over one of the subdivided portions, while a State Lease over the other was granted to the fourth defendant. The plaintiffs sought declarations that in dealing with the land, the defendants, in particular the first defendant and the State, failed unlawfully to take into account their interests in the land arising from their traditional ownership of it, contrary to the Land (Ownership of Freeholds) Act, and that their interests in it had been adversely affected. They sought an order for compensation on just terms against the State as the “expropriating authority”, pursuant to Section 53(2) of the Constitution. The defendants argued that the proceedings should be summarily dismissed for various reasons: (a) abuse of process (as the National Court had no jurisdiction, this being a case concerning ownership of customary land); (b) res judicata (as the same land was the subject of a similar claim in previous proceedings, which was dismissed); (c) improper mode of commencement (as  the proceedings are founded on allegations of fraud and should have been commenced by writ of summons); (d) being time-barred (failure to comply with the six-year limitation period under Section 16 of the Frauds and Limitations Act 1988;  (e) failure to comply with Section 5 of the Claims By and Against the State Act 1996 (as the plaintiffs did not give notice of their intention to make a claim within six months after the occurrence out of which the claim arises). The defendants asserted that if their preliminary arguments failed, the proceedings should still be dismissed as the plaintiffs’ claims were misconceived.  

Held:

(1)	All preliminary arguments were dismissed: (a) there was no abuse of process as the Court was not determining any claim of customary ownership of land; (b) the facts in support of the res judicata defence were vague and unsubstantiated; (c) the plaintiffs’ case was not founded on fraud, so there was no obligation to commence proceedings by writ; (d) the claim was not time-barred under the Frauds and Limitations Act;  (e) there was no evidence of failure to comply with Section 5 of the Claims By and Against the State Act.

(2)	There was a failure on the part of the first defendant and the State, during the period that the application to convert the land from freehold title to a leasehold interest was made and determined, to acknowledge and take into account the enduring interests of the plaintiffs in the land arising from their being amongst its traditional owners and in continuing occupation and use of parts of the land, contrary to the obligations imposed on the first defendant and the State under Part IV (conversion of interests to avoid frustrations) of the Land (Ownership of Freeholds) Act. Conversion of the land from freehold to leasehold title was affected by illegality.  

(3)	The plaintiffs’ interests in the land was adversely affected by the actions of the defendants, to the extent that those interests had been compulsorily acquired by the State, as an expropriating authority, giving rise to an entitlement to just compensation on just terms under Section 53(2) of the Constitution. 

(4)	Declarations and orders were made accordingly.

Cases cited

David Mota v Albert Camillus (2017) N6810
Doriga Mahuru v Hon Lucas Dekena (2013) N5305
Galem Falide v Registrar of Titles (2012) N4775
Gawi & Kari v The State (2012) N4814
Gawi v png Ready Mixed Concrete Pty Ltd [1984] PNGLR 74
Joe Koroma v Mineral Resources Authority (2009) N3926
Lomot Chauka v Elthy Biang (2012) N4854
Mamun Investments Pty Ltd v Ponda [1995] PNGLR 1
Michael Kewa v Elias Mai Kombo (2016) SC1542
Mission of the Holy Ghost (New Guinea) Property Trust v Administration of the Territory of Papua and New Guinea [1969-70] PNGLR 365
Napanapa Landowners Association v Gaudi Logae (2016) SC1532
Roderick Tovo Bibilo v Gerard Balbagara (2008) N3291
Shaw v Commonwealth of Australia [1963] PNGLR 119
Simon Puraituk v The State (2007) N3204
Supreme Court Reference No 4 of 1980 [1982] PNGLR 65
Terry Shelly v Yawe Riyong (2017) SC1567
The following cases are cited in the judgment:
The State v Lohia Sisia [1987] PNGLR 102
Tin Siew Tan v Thomas John Pelis (1999) N1804 
Titi Christian v Rabbie Namaliu (1996) SC1583
Vitus Kais v Sali Tagau (2016) N6159

ORIGINATING SUMMONS 

This was a trial in which the plaintiffs sought declarations and orders for compensation against the State regarding alleged compulsory acquisition of their interests as traditional owners of land converted from freehold to leasehold title. 

Counsel

G Pipike, for the Plaintiffs
B B Wak, for the First Defendant
B W Meten, for the Second Defendant
S Maliaki, for the Third and Fifth Defendants

27th October, 2017

1.      CANNINGS J: This case is about a portion of land in the Vidar area of Madang District known for a long time as Portion 625, an area of 860 hectares. The plaintiffs are five local men who say they represent various clans who are amongst the traditional owners of the land. Some of them live on an area of five hectares around Budup village, which lies within the boundaries of Portion 625. They say that the traditional owners have been “shut out” of developments regarding the land and their interests have been ignored. They seek compensation from the State.

2.     The land is formerly freehold land owned by the Mission of the Holy Ghost (New Guinea) Property Trust (the first defendant, “the Mission”). In 1993-1994 an application was made under the Land (Ownership of Freeholds) Act Chapter 359 to the Minister for Lands to convert the land to leasehold land. The application was granted and a State Lease over the land was granted to the Mission. The State Lease was subsequently transferred to a number of other parties before it was transferred to RD Fishing Ltd (the second defendant, “RD Fishing”). 

3.     RD Fishing later surrendered the lease to the State (the fifth defendant). The land was then subdivided into two new portions, Portion 1349 (known as “Maiwara”) and Portion 1350 (known as “Vidar”). RD Fishing was granted a State Lease over Portion 1349, while a State Lease over Portion 1350 was granted to Madang Marine Park Holdings Ltd (the fourth defendant). These transactions were effected as part of the National Government-sponsored Pacific Marine Industrial Zone (“PMIZ”) project. 

PLAINTIFFS’ CASE

4.    The plaintiffs advance two fundamental propositions: 

•	First, that the conversion of the Portion 625 from freehold to leasehold title was affected by illegality in that the defendants, in particular the Mission and the State, failed unlawfully to acknowledge or take into account the plaintiffs’ interests in the land arising from their traditional ownership of it. 

•	Secondly that the effect of that illegality is that the plaintiffs’ interests in Portion 625 have been adversely affected and deprived of them by the State, giving rise to a right to just compensation on just terms under Section 53(2) of the Constitution. 

RELIEF SOUGHT 

5.     The plaintiffs seek declarations that in dealing with the land, the defendants, in particular the Mission and the State, failed unlawfully to acknowledge or take into account their interests in the land arising from their traditional ownership of it, contrary to the Land (Ownership of Freeholds) Act, and that their interests in it have been adversely affected. They seek an order for compensation on just terms against the State as “expropriating authority”, pursuant to Section 53(2) of the Constitution. Specifically the plaintiffs seek relief, by originating summons, in the following terms:

1.	An order declaring that the plaintiffs are the traditional landowners of and have lived on and therefore have a direct as well as an indirect interest as defined under Section 4 of the Land (Ownership of Freeholds) Act 1976 in the land described as Portion 625 Milinch of Kranket, Fourmil of Madang, Madang Province (State Lease, Volume 4, Folio 65) which is now sub-divided into Portions 1349 and 1350 Milinch of Kranket, Fourmil of Madang, Madang Province.

2.	An order declaring that first defendant when applying for a substituted lease under the Land (Ownership of Freeholds) Act 1976 in 1993 failed to submit or lodge with its said application evidence of the plaintiffs and their interest in the land described as Portion 625, Milinch of Kranket, Fourmil of Madang (now sub-divided into Portions 1349 and 1350) as required under Section 17 of the Land (Ownership of Freeholds) Act 1976.

3.	An order declaring that there were no conditions stipulated in the substitute lease that made adjustments for the rights and interest of the Plaintiffs in the subject and as provided under Sections 18 and 22 of the Land (Ownership of Freeholds) Act 1976.

4.	An order declaring that the approval and grant of the substitute lease to the first defendant on the 17th June 1993 and the subsequent sales and transfers of the land to the second defendant including the subdivision of the said Portion 625, Milinch of Kranket, Fourmil of Madang into Portions 1349 and 1350 has adversely affected the interests and rights of the plaintiffs.

5.	An order pursuant to Section 24(3) of the Land (Ownership of Freeholds) Act 1976 and Section 53(2) of the Constitution of Papua New Guinea that the fifth defendant shall pay just compensation on just terms to the plaintiffs for deprivation of their interest and rights in the land described herein namely Portion 625, Milinch of Kranket, Fourmil of Madang (now sub-divided into Portions 1349 and 1350).

6.	An order in the nature of an injunction restraining the second, third, fourth and fifth defendants from constructing any further improvements on or engaging in any business on or conducting any other works on Portions 1349 and 1350, Milinch of Kranket, Fourmil of Madang, Madang Province including and in relation to the current development of the Pacific Marine Industrial Zone until further orders of the Court

7.	Such further or other orders this Honourable Court sees fit.

8.	Costs of the proceedings.

6.     At trial the plaintiffs abandoned the claim for relief in paragraph 6 of the originating summons.

DEFENDANTS’ POSITION

7.     The defendants argue that the proceedings should be summarily dismissed for various reasons. If their preliminary arguments fail, the defendants argue that the plaintiffs’ claims are misconceived.

ISSUES 

8.      The following issues arise:

1	What is the history of Portion 625?

2	Should the proceedings be summarily dismissed?

3	Was conversion of the land from freehold to leasehold title affected by illegality?

4	Are the plaintiffs entitled to compensation?

5	What declarations or orders should the Court make? 

1	WHAT IS THE HISTORY OF PORTION 625?

9.      The history of the land, up to 1970, is set out in the judgment of Minogue CJ in the pre-Independence Supreme Court in Mission of the Holy Ghost (New Guinea) Property Trust v Administration of the Territory of Papua and New Guinea [1969-70] PNGLR 365. That was an appeal by the Mission against an order of the Chief Land Titles Commissioner, rejecting the Mission’s claim to re-stablish ownership of the whole of a large area of land known as “the Rempi land”, comprising 4,775 hectares, of which Portion 625 formed part. 

1900 to 1920s

10.      The Rempi land including Portion 625 was acquired by the German New Guinea Company on behalf of the German colonial administration in 1901. After World War I, the Rempi land was vested in the Custodian of Expropriated Properties who sold it in 1927 to Mr Solomons, an accountant of Rabaul, for 4,819.00 pounds. Mr Solomons sold it shortly afterwards to the Mission for 9,819.00 pounds. 

1930s

11.     The Mission began “planting up” the Rempi land and erecting buildings including churches on it. Most of the local people were adherents of the Roman Catholic faith. A substantial coconut plantation was established on Portion 625 and labourers were brought in, particularly from Bogia District and the Sepik area, and settled on the land.

1940s to 1960s

12.     There were problems over several decades in getting the Rempi land surveyed. The Mission struggled to prove its ownership for the purposes of being granted a certificate of title by the Registrar of Titles. 

13.     In 1956 the Director of Native Affairs made claims for protection of five “native reserves” within the Rempi land, then in 1961 the Director claimed “native customary rights” over the whole of the Rempi land and asserted that the land had never been lawfully alienated. 

14.     In 1965 the Mission lodged a claim with the Land Titles Commission to assert its interests over the whole of the Rempi land. A hearing before the Chief Land Titles Commissioner began on 13 May 1965 in Madang. Some hearings took place at Rempi village. A decision was handed down on 4 October 1966. The Chief Land Titles Commissioner rejected the Mission’s claim. 

1970

15.     Minogue CJ heard the Mission’s appeal against the Chief Land Titles Commissioner’s decision in July 1970. His Honour delivered judgment on 4 December 1970, upholding the appeal. He summarised the evidence given before the Chief Land Titles Commissioner, in the following terms:
The hearing of the claims and reference began before the Chief Commissioner of the Land Titles Commission at Madang on 13th May, 1965. Unfortunately the shorthand notes and transcript thereof of the hearing on this day were not able to be produced and by consent I allowed to be used on the appeal an affidavit made by Mr Bredmeyer who appeared at that hearing. From this affidavit it appeared that counsel for the native claimants was not able to proceed with his case because he did not know at that stage what witnesses he would be able to call. The Chief Commissioner decided to hear the Mission evidence in the absence of the native claimants and this procedure was consented to by Mr Bredmeyer. One Father Saiko who represented the appellant, tendered a letter dated 14th February, 1940 from the Registrar of Titles to a Father Madigan which accompanied the certificate of title volume 8 folio 100 to which I have previously referred. It had already been produced in the previous case which dealt with the Saint Michael land and which was heard on a day preceding this hearing and was marked as an exhibit in that earlier case. Evidence was then given by Father Saiko who stated that he was business manager of the Mission of the Holy Ghost at Alexishafen and had come to that mission in 1945. He was familiar with the history of the Rempi land both from Mission records and from conversations with old natives of the area and with pre-war missionaries. That history was as follows.
The land was purchased by three officials of the German New Guinea Company. It was later surveyed in German times and the survey included five native reserves. The New Guinea Company did not use the land and it was known as virgin land. The Mission built a church on one of the native reserves in German times and took care to build it on the native reserve and not on the company’s land. The Custodian of Expropriated Property expropriated the property after World War I and sold it to Mr Solomons who almost immediately resold it to the Mission. This sale was of course evidenced by the conveyance to which I have earlier referred. The Mission began to plant up the land and to erect buildings on it, and in the 1930s, because it was desirous of having a registered title, it caused both properties to be surveyed. The land was now planted up in part and was, so he said, a valuable property. He further stated that the natives in the area were mostly adherents of the Catholic Church. He also took care to point out that the Mission did not lay any claim to the five native reserves within the Rempi property.
One Brother Eder also gave evidence to the effect that he had been at the Mission at Alexishafen since 1928 and was familiar with the Rempi property. He had walked the boundaries of the property with the former native owners, once shortly after his arrival at Alexishafen just after the purchase by the Mission and again in 1936 or 1937 with Surveyor McKenzie and with the Rempi natives to show the surveyor the German stones, ie their survey markers. According to him the Australian survey closely followed that made earlier by German surveyors. There had been no claims by natives to ownership of or of inadequate compensation for the land before World War II and he did not know of any claims by natives post-war. Relationships between Rempi natives and the Mission were good. In the 1920s and the 1930s he had worked on the planting-up of Rempi. The coconut plantings and other improvements on the land had all been made by the Mission.
Counsel for the native claimants was present throughout the hearing which was then adjourned to allow the native claims to be investigated. It was not resumed until 18th April 1966 when there was a further application for an adjournment, it then being disclosed that no further preparation on the part of the native claimants had been made. The only contribution made by counsel for the native claimants was to inform the Chief Commissioner that she had instructions that, before any further investigations were undertaken, the Mission should negotiate (I presume with the claimants) with regard to the boundaries. The hearing was adjourned to a date to be fixed and was eventually resumed on 3rd October 1966.
A number of native witnesses were called and after reading the transcript supplied by the Commission I formed the view that the evidence as a whole was of an inconclusive nature. One Madoko testified that he had heard that Rempi was sold by his ancestors and that they received payment in the form of axes and a few trade goods. He did not know the quantity. His father had told him that his ancestors did not know what they were doing as they could not speak Pidgin and the surveyors placed the cements without such ancestors realizing the implications of this action. He thought it was a German who bought the land with trade goods and that that German sold the land to the Mission. Cross-examined, he agreed that some payment was made but it was not enough, and that he and his people thought the purchase price was not sufficient. However, he finally stated that he was not over-upset that his ancestors received only a small price for this area of land.
A witness Kape who appears to have come from the same village as Madoko, disclaimed any interest in the subject land. One Nanan named five pieces of land in which his clan was interested without specifying their location. He did not give any evidence with regard to traditional belief as to the manner of acquisition of Rempi by the New Guinea Company although he knew there had been some payment made, and he further informed the Commission that the question of insufficient payment was raised with the authorities in 1948.
A witness, Miag, from the Sempi [sic] group of people, named 14 pieces of land as being under dispute but again no one appears to have sought to have these pieces identified within the general context of Rempi. His belief was that at the time of the original acquisition his ancestors had no idea of there being any German designs on their land. He went on to say that only now has the dispute arisen because his people are short of land.
The next witness, Ganui, claimed that some Germans originally placed cement markers on the Rempi land and that his ancestors did not know that the payment of tomahawks and bush knives made to them was for the sale of their land. Upon being asked if he knew of any complaint after the Japanese occupation he stated that “we” disputed the purchase of the land in 1948.
Four other witnesses were called but stated no more than that they agreed with what the previous witnesses had said. The last witness, Kison, added that his clan was without land and that he was living on land of another group, his land having been taken away.
16.       His Honour explained the Chief Land Titles Commissioner’s decision as follows:
Counsel for the Administration, who appears to have been also conducting the case on behalf of the appellant, shortly addressed the Chief Commissioner and made the point that if the land registration procedure had been fully applied before the War, the land would have been registered. He submitted that the Chief Commissioner should apply Section 67(3) of the Land Titles Restoration Ordinance and restore a fee simple title to the Mission. Counsel for the native parties involved contented herself with the observation that she thought there should be a final order of no restorable interest, whereupon the Chief Commissioner with equal brevity said: “Well you can have it. There will be a finding of no restorable interest.” He announced that he would give reasons for his decision on the morrow and on 4th October 1966 published such reasons. I think it desirable to set them out in full and they are as follows:
“This matter has caused me a great deal of concern. If there had been no question of native rights in this matter it would still have caused me concern. Taking the evidence for the claimant mission as a whole I am not satisfied that it was entitled to be registered. Taking the evidence for the claimant segment by segment some of it is probative but some of it leaves doubts. I have looked at the facts as a whole and as individual items, I have as it were even turned them upside down. So far as probabilities are concerned, I cannot find a balance in favour of the mission on the scale between possibility and certainty. An example is Exhibit A. The letter could refer to Rempi or to Saint Michael. In the claim to Saint Michael the claimant relied on the letter as establishing a certificate of title to Saint Michael, that title was restored. It was conceded that the letter does not refer to both properties. I think that this matter was, in the 1930s, far from finalized. On the evidence before me I cannot infer at this late stage how it might have been finalized. I am obliged to seek the solution to these matters within the confines of the four corners of the legislation. I cannot resort to social engineering. …
On my view of the facts (excluding the irrelevant ones) there is only one course open to me and that is to direct that a final order of no restorable interest issue.”

17.      His Honour, Minogue CJ, found error in the Chief Land Titles Commissioner’s reasoning:
In my view he has misplaced and shrunk the four corners of the legislation. I have come to the conclusion that he could not have considered the complete application of the repealed provisions and that he did not direct his mind to the way in which a court would have approached the matter on a reference to it. Although the Commission sat in Rempi village which I take to be situated somewhere on the subject land no attempt seems to have been made to investigate the nature and extent of the native interests nor to define the native reserves shown in the plan before him. The Chief Commissioner had before him evidence of initial purchase by the appellant, nearly 40 years’ undisturbed occupation by it and considerable expenditure on improvements. True it is that he gained no great assistance from counsel either in the presentation of the case or in the arguments adduced. But I can come to no other view than that he did not apprehend the effect of s 67(3) and consequently did not see the necessity for attempting to notionally apply the repealed provisions of the Registration Ordinance. …
Accordingly, in my view, the Chief Commissioner misconceived the ambit of s 67(3) and in consequence failed to properly investigate, hear and determine the claims and reference before him. This failure amounts to an error in law and entitles the appellant to succeed on its appeal.
The appeal will be allowed and the matter must go back for rehearing.

18.     As the Mission’s appeal was successful, the question of ownership of the Rempi land, including Portion 625, was to be the subject of a fresh hearing.  

1970 to 1974

19.     The Mission’s claim to ownership of the whole of the Rempi land, including Portion 625, was reheard by Chief Land Titles Commissioner, R W Cruickshank, at Madang in June 1974. A final order was made in the following terms:

PAPUA NEW GUINEA
NEW GUINEA LAND TITLES RESTORATION ORDINANCE 1951–71
NOTICE OF MAKING OF FINAL ORDER

TAKE NOTICE that on the 2nd day of July 1974 the Land Titles Commission made a Final Order in respect of the piece of land known as Rempi, District of Madang.

The said Final Order declares the following interests to have existed at the appointed date in the said piece of land:

1	Estate in fee simple by the Mission of the Holy Ghost (New Guinea) Property Trust over those parts of the claimed land known as “HULAHAN” Portion 622 (excluding the area known as “WAGAIWAN”) “MAILON” Portion 623 and VITAR-MAIWARA, Portion 625 (excluding an area of 5 hectares, 49 areas, more or less, adjacent to BUDUP village over which full native customary rights have been retained by the BUDUP group of BUDUP village).

2	Not established that the Mission of the Holy Ghost (New Guinea) Property Trust was entitled to an interest in the remainder of the land known as REMPI in respect of which interest it was registered or entitled to be registered as the owner thereof and that full native customary rights were retained over that land.

20.     The order confirmed that the Mission was:

•	with the exception of approximately five hectares adjacent to Budup village, (the village of the third, fourth and fifth plaintiffs) the owner of a freehold estate in Portion 625;

•	the owner of freehold estates in two other areas, Portions 622 and 623;  

•	not the owner of the balance of the Rempi land, in respect of which “full native customary rights were retained”. 

1990s: alleged undertaking by Mission to give Portion 625 back to traditional owners 

21.     The first plaintiff Patrick Yal has given evidence of an undertaking given in the 1990s by “the local priest at Sek” on behalf of the Catholic Church, and presumably that means the Mission, “that they were giving the land back to us”. Mr Yal says that there was a ceremony held and the Church was thanked. 

22.     I find that evidence unsubstantiated and unreliable. I decline to find that any undertaking was given by the Church or the Mission to return Portion 625 to its traditional owners. Mr Yal’s evidence is nevertheless relevant as it does explain the plaintiffs’ motive for commencing the present proceedings. At paragraph 22 of Mr Yal’s affidavit (exhibit P10) he states:

We were cheated by the Catholic Church because instead of returning the land to us, they gave it away. We lost out on the 11 hectares promised to us and we have lost our rights to our gardens, cemeteries and other interests and we are now surrounded by this large project created right in our backyard and we are squeezed right in the middle of Portions 1349 and 1350.

1993-1994

23.     It was in 1993 and 1994 that, for purposes of the present case, the most significant transactions regarding Portion 625 occurred. That is when an application was made under the Land (Ownership of Freeholds) Act Chapter 359 to the Minister for Lands to convert Portion 625 to leasehold land. 

24.     The actual application is not in evidence and the Mission denies making it. The Vicar-General of the Madang Catholic Archdiocese, Father Joseph Durerro SVD, has given evidence for the Mission that in 1992 the Mission sold Portion 625 to Madang Provincial Government for the sum of K865,000.00. Father Durerro states that it was the Madang Provincial Government – not the Mission – which applied for and was granted, in 1993, a substitute lease.

25.     That version of events is not supported by the evidence. There is evidence of an agreement for the sale of Portion 625 dated 29 May 1992 between the Mission and the Madang Provincial Government. However there is no evidence of completion of that agreement. Nor is there evidence of any transfer of the freehold estate in Portion 625 to Madang Provincial Government prior to the grant of a substitute lease to the Mission. The only reasonable inference to draw from the evidence is that it was in fact the Mission that applied for the substitute lease.  

26.     I find that at some time in 1993 the Mission made an application under the Land (Ownership of Freeholds) Act Chapter 359 to the Minister for Lands to convert Portion 625 to leasehold land. The application was granted and on 23 February 1994 a substitute lease over the land was granted to the Mission, in the following terms:

Land (Ownership of Freeholds) Act 1976

LEASE

SUBSTITUTE LEASE UNDER SECTION 22

THE MINISTER hereby grants to: THE MISSION OF THE HOLY GHOST (NEW GUINEA) PROPERTY TRUST IN PAPUA NEW GUINEA (hereinafter called “the Lessee”) a Substitute Lease under Section 22 of the Land (Ownership of Freeholds) Act 1976 (hereinafter called “the Act”) for a period of 99 years from the day of Seventeenth June One Thousand Nine Hundred and Ninety-three of all the piece or parcel of land to which the following description applies:

PORTION ALLOTMENT	MILINCH SECTION	FOURMIL- TOWN	AREA	PROVINCE	

625	
KRANKET	
MADANG	
860 Ha
Be the same a little more or less	
MADANG	

as shown on a Registered Survey Plan Catalogue No 12/234 in the Department of Lands and Physical Planning.

EXCEPTING AND RESERVING therefrom the reservations implied in and related to Substitute Leases by the Act TO HOLD unto the Lessee for the said term subject to the terms provisions restrictions and conditions contained in the Act and the Regulations thereunder and to the reservations covenants terms and conditions hereinafter set forth.

1.	Rent - Nil
2.	Improvement Covenants – Nil
3.	The lessee will excise any easements over the same as may from time to time be required by the State for roads, electricity, water reticulation, sewerage and drainage or telecommunication under the Land Act 1962, in respect of the excision and surrender of such portions or the grant of such easements as though there had been a compulsory acquisition of the same under that Act.
4.	The obligation on the part of the owner to recognise as such any public roads or rights of way or landing places subsisting on the said land.

SIGNED, SEALED AND DELIVERED BY Joseph A Aoae, a delegate of the Minister, this 23rd day of February One Thousand Nine Hundred and Ninety- four.

This lease is subject to the encumbrances more particularly described in Certificate of Title Vol 28 Folio 65 in favour of the State
Dated the 25th day of February 1994.
Deputy Registrar of Titles

27.     The effect of the substitute lease was, under Section 24(2) of the Land (Ownership of Freeholds) Act, to vest ownership of Portion 625 in the State and to convert the Mission’s interest in the land from freehold to leasehold title. Section 24(2) states:

On the commencement of the substitute lease—

(a)	the absolute ownership of the land vests in the State; and
(b)	the substitute lease shall, subject to this Act, be deemed to be a State lease granted under the Land Act and the provisions of that Act that apply generally to State leases apply accordingly; and
(c)	all other rights, titles, interests in, over or in connexion with the land take effect, as far as they are capable of so taking effect in relation to the substitute lease.

1994 to 2009

28.     There are a number of endorsements on the substitute lease, showing that the following registered transactions regarding Portion 625 took place in the period from 1994 to 2009:

•	16 May 1994: the lease was transferred from the Mission to Madang Provincial Government; 

•	26 May 1994: the lease was  transferred from Madang Provincial Government to Herea Dae Company No 44 Pty Ltd, which changed its name to ZZZ PNG Canning Pty Ltd, the name change being registered on the lease on 20 June 1994;

•	10 July 1997: the lease was transferred from  ZZZ PNG Canning Pty Ltd to RD Fishing PNG Pty Ltd; 

•	19 May 2009: the lease was surrendered by RD Fishing Ltd. 

2009 to present 

29.     After Portion 625 was surrendered to the State, it was subdivided into two new portions. This part of the evidence is non-contentious. It was subdivided into Portion 1349 (known as “Maiwara”) and Portion 1350 (known as “Vidar”). RD Fishing was granted a State Lease over Portion 1349, while a State Lease over Portion 1350 was granted to Madang Marine Park Holdings Ltd (the fourth defendant). These transactions were effected as part of the National Government sponsored Pacific Marine Industrial Zone project.

3	SHOULD THE PROCEEDINGS BE SUMMARILY DISMISSED?

30.     The defendants argue that the proceedings should be summarily dismissed for five reasons: 

(a)	abuse of process; 

(b)	res judicata; 

(c)	improper mode of commencement;

(d)	being time-barred under the Frauds and Limitations Act 1988;  

(e)	failure to comply with Section 5 of the Claims By and Against the State Act 1996. 

(a) Abuse of process 

31.     The defendants argue that the subject of this case is ownership of customary land, therefore the National Court has no jurisdiction and the proceedings are an abuse of process.   

32.     I agree that the National Court does not have original jurisdiction concerning questions of ownership or control of customary land (The State v Lohia Sisia [1987] PNGLR 102). However, as I have said in a number of cases (Roderick Tovo Bibilo v Gerard Balbagara (2008) N3291, Galem Falide v Registrar of Titles (2012) N4775, Doriga Mahuru v Hon Lucas Dekena (2013) N5305) a distinction must be drawn between two sorts of land cases:

•	those in which there is a dispute about whether land is customary land or competing claims to ownership of customary land;

•	those in which the dispute centres on interpretation or application of previous court decisions or judicial or quasi-judicial determinations as to the status of land or its customary ownership.

33.     Only in the first category does the National Court lack jurisdiction. Cases falling in that category must be dealt with by statutory bodies and courts such as the Land Titles Commission, the Local Land Court and the Provincial Land Court. The National Court retains jurisdiction if the case falls into the second category. It does not lose jurisdiction simply because the proceedings happen to relate to land which was once customary land (Joe Koroma v Mineral Resources Authority (2009) N3926).

34.     The present case does not fall into the first category as the Court has not been called upon to decide whether Portion 625 is customary land or which of competing parties are the owners of customary land. Everyone including the plaintiffs accept that Portion 625 (and subsequently Portions 1349 and 1350) is no longer customary land.

35.      The case does not fit neatly into the second category either. It is a unique case as the plaintiffs are claiming that, though they no longer own the land, they have retained enduring interests in it, which have not been properly taken into account by those parties who had a statutory obligation to do so. I am satisfied that the questions of law involved in determination of the plaintiffs’ claim cannot be determined in any court or tribunal other than, in the first instance, the National Court, which has jurisdiction. The argument of abuse of process is rejected. 

(b) Res judicata

36.     The defendants argue that the same land was the subject of a similar claim in previous proceedings, “Simon Deb v Mission of the Holy Ghost Property Trust”, which, they say, were dismissed on 10 October 2016.  The defendants rely on the common law principle of res judicata (the thing has already been decided) to argue that the present proceedings are an abuse of process.

37.     It is settled law, according to a long line of Supreme Court authority including Titi Christian v Rabbie Namaliu (1996) SC1583 and Napanapa Landowners Association v Gaudi Logae (2016) SC1532, that for a case to be regarded as res judicata the following questions must be answered in the affirmative:

(i)	was the earlier decision a judicial decision?
(ii)	was the judicial decision pronounced?
(iii)	did the judicial tribunal have competent jurisdiction?
(iv)	was the judicial decision final?
(v)	did the judicial decision involve a determination of the same question?
(vi)	are the parties the same? 

38.     For the sake of the argument, it can be presumed that elements (i), (ii), (iii) and (iv) are satisfied. However the argument remains vague and unsubstantiated as the defendants have not even referred to the file reference of “Simon Deb v Mission of the Holy Ghost Property Trust”. I have a general recollection of the case as I believe that I was the presiding Judge and I believe that I dismissed the proceedings. But I do not remember whether the proceedings went to trial or why the proceedings were dismissed and I have not been assisted by the defendants with such essential details. I cannot recall whether the questions of fact and law at the centre of the present proceedings were raised and decided in the earlier proceedings. So element (v) is not satisfied. Element (vi) is also not satisfied, as the plaintiff in the earlier proceedings is not amongst the plaintiffs in the present proceedings. The res judicata argument is dismissed. 

(c) Improper mode of commencement

39.     The defendants argue that the plaintiffs’ case is founded on allegations of fraud, so they were obliged by Order 4, Rule 2(1)(b) and Order 8, Rule 30 of the National Court Rules to commence the proceedings by writ of summons and to plead with particularity the allegations of fraud on which they rely. They have however commenced the proceedings by originating summons, which is an improper mode of commencement, and failed to plead any particulars of fraud, which amounts to an abuse of process. 

40.     This argument is based on the false premise that the plaintiffs’ case is founded on allegations of fraud. That is not so. The cause of action is not fraud and the plaintiffs do not purport to argue fraud as the basis for the relief they seek. There was no obligation to commence the proceedings by writ of summons. The defendants’ argument is dismissed. 

(d) Proceedings are time-barred

41.     The defendants argue that the plaintiffs were obliged to commence these proceedings within six years after the date on which the cause of action arose due to the six-year limitation imposed by Section 16(1) of the Frauds and Limitations Act 1988, which states:

Subject to Sections 17 and 18, an action—

(a)	that is founded on simple contract or on tort; or
(b)	to enforce a recognisance; or
(c)	to enforce an award, where the submission is not by an instrument under seal; or
(d)	to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

42.    The defendants argue that the plaintiffs’ action is based on an allegation of fraud in the transfer on 16 May 1994 of the Substitute Lease over Portion 625 from the Mission to Madang Provincial Government, which is the date on which their cause of action accrued. They had until 16 May 2000 to bring an action.  But these proceedings were not commenced until 4 August 2015, which exceeded the statutory time limit by more than 15 years.

43.     I reject that argument for three reasons. First, I have already determined that this is not an action founded on fraud. Secondly, the plaintiffs’ action is not founded on simple contract or tort or any other form of action covered by Section 16(1) of the Frauds and Limitations Act. Thirdly, the action falls within Section 18 (claims for specific performance, etc) of the Frauds and Limitations Act, which states:

Section 16 does not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief.

44.     Section 18 requires the Court to assess the nature of the relief sought by the plaintiffs. If it is equitable relief, the proceedings are not subject to the time limitation in Section 16 (Michael Kewa v Elias Mai Kombo (2016) SC1542, Terry Shelly v Yawe Riyong (2017) SC1567,	Tin Siew Tan v Thomas John Pelis (1999) N1804, Simon Puraituk v The State (2007) N3204, Vitus Kais v Sali Tagau (2016) N6159).  The plaintiffs seek equitable relief in the form of four declarations (and, in addition, an order for compensation). The nature of much of the relief sought means that, even if the proceedings ostensibly are caught by Section 16, Section 16 does not ultimately apply. 

(f) Failure to give notice

45.     The defendants argue that the case should be dismissed as the plaintiffs did not give notice of their intention to make a claim against the State within a period of six months after the occurrence out of which their claim arose, and before commencing the proceedings, as required by Section 5 (notice of claims against the State) of the Claims By and Against the State Act. 

46.     Section 5 provides that “no action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this section … within a period of six months after the occurrence out of which the claim arose”.  

47.     This was potentially a good argument as, under Section 2 (suits against the State) of the Act, its provisions “apply to applications for the enforcement against the State of a right or freedom under Section 57 (enforcement of guaranteed rights and freedoms) of the Constitution”. The  present proceedings could be regarded as an application for enforcement of a right or freedom under Section 57 of the Constitution, in the sense that, though the originating summons does not mention Section 57,  the plaintiffs are seeking to enforce their right of protection against unjust deprivation of property under Section 53 of the Constitution.  

48.     However, I dismiss the argument as there is no evidence that the plaintiffs did not give notice. There is a basic principle of litigation to be invoked here: he who asserts must prove (Shaw v Commonwealth of Australia [1963] PNGLR 119, Supreme Court Reference No 4 of 1980 [1982] PNGLR 65, Galem Falide v Registrar of Titles (2012) N4775). The defendants have not proven that the plaintiffs did not give notice. Besides that, this is a threshold argument that should have been advanced by notice of motion before the start of the trial. It is tantamount to an abuse of process for the State to not raise such an argument at the earliest opportunity and to acquiesce in having the case set for trial and then to raise it without notice as a preliminary issue (Gawi & Kari v The State (2012) N4814, Lomot Chauka v Elthy Biang (2012) N4854). 

Conclusion re preliminary arguments 

49.     All preliminary arguments fail. I will now determine the plaintiffs’ claim on its merits.

3	WAS CONVERSION OF THE LAND FROM FREEHOLD TITLE TO LEASEHOLD TITLE AFFECTED BY ILLEGALITY?

50.     The first fundamental proposition underlying the plaintiffs’ case is that when Portion 625 was converted from freehold to leasehold title in 1993-1994 both the Mission and the State failed to comply with obligations imposed on them under Part IV (conversion of interests to avoid frustrations) of the Land (Ownership of Freeholds) Act. Having considered the well-researched and well- argued submissions of Mr Pipike for the plaintiffs on this issue, and noted that the defendants have offered no effective response (as their submissions were focussed on the preliminary arguments and they appeared to have little appreciation or understanding of the plaintiffs’ substantive case), I have been persuaded that the plaintiffs’ first fundamental proposition is sound.

The Mission

51.     The Mission was obliged to provide evidence of the enduring interests of the traditional owners, including the plaintiffs, of Portion 625 when it made the application for the grant of a substitute lease. The term “interests” is defined broadly by Section 2 (interpretation) of the Act: it “means an interest in land and includes an estate in land”. It includes in my view equitable interests, possessory interests and social interests such as those recognised by the Supreme Court in cases such as Gawi v Png Ready Mixed Concrete Pty Ltd [1984] PNGLR 74 and Mamun Investments Pty Ltd v Ponda [1995] PNGLR 1. 

52.     The traditional owners including the plaintiffs had enduring interests in Portion 625 by reason of:

•	their being the descendants of the original owners of the land who – as seems apparent from the judgment of Minogue CJ – were paid a pittance for it by the German New Guinea Company in 1901 before it was expropriated, and then sold in 1927 to Mr Solomons, the accountant from Rabaul, who sold it soon afterwards for a handsome profit to the Mission;

•	some of them being in continuing occupation of the 5-hectare ‘native reserve’ adjacent to Budup village that was excised from Portion 625, and lies within the outer boundaries of Portion 625 and is surrounded by Portion 625, by virtue of the decision of Chief Land Titles Commissioner Cruikshank of 2 July 1974;

•	their continuing use over a number of decades of parts of Portion 625 for gardens, cemeteries and as the site of public facilities such as churches and schools;

•	their practical need to pass through Portion 625 to get access to their ‘native reserve’. 

53.     The obligation of the Mission to provide evidence in its application, of the plaintiffs’ interests in the land, arose under Section 17 (application for conversion) of the Land (Ownership of Freeholds) Act, which states:

(1)	Subject to this Part, the owner of any freehold land or the holder of any frustrated right may apply in the prescribed manner to the Minister for the grant to him of a substitute lease in substitution for his freehold interest or frustrated right, as the case may be.

(2)	An application under Subsection (1) shall be accompanied by the prescribed evidence as to other persons who have interests in the land the subject of the application. [Underlining added.]

(3)	Subject to this Part, an application under this section shall be dealt with as prescribed.
 
54.     Section 17(2) required that the Mission accompany its application with “the prescribed evidence as to other persons who have interests in the land the subject of the application”. The “prescribed evidence” refers to evidence required under Section 2(1) and Form 1 in the Schedule of the Land (Ownership of Freeholds) Regulation. Section 2(1) (application for conversion) states:

An application by the owner of any freehold land or the holder of any frustrated right for the grant of a substitute lease in substitution for his freehold interest or frustrated right, as the case may be, shall be in Form 1.
 
55.     Form 1 is as follows:

APPLICATION FOR SUBSTITUTE LEASE.
The Secretary,
Department of Lands.

I, . . . , of . . . being the owner of freehold land/holder of a frustrated right in freehold land* being all that piece of land described as—

Lot: . . . Section: . . . Fourmil: . . . Town: . . . Province: . . . Portion: . . . Milinch: . . .Lot: . . . Province: . . . contained in Certificate of Title Vol ... Fol ...

apply for a substitute lease under the Land (Ownership of Freeholds) Act in substitution for my freehold interest/frustrated right.*
						(Signature of Applicant.)
						Occupation:
						Postal Address:
*Strike out whichever is inapplicable.

DECLARATION.

I, . . . , of . . . do solemnly and sincerely declare that the statements made by me in reply to the questions below are true and correct in every particular.

Question.						Statement in reply.
State name and address of any
other person or persons who have
an interest in the land the
subject of this application.

What is the nature of that interest?
[Underlining added.]
And I make this solemn declaration by virtue of the Oaths, Affirmations and Statutory Declarations Act, conscientiously believing the statements contained in it to be true in every particular.

Declared at . . . , 19...
Before me:
(insert title of
person before whom
the declaration is made.)

56.     The application for the substitute lease (which I have already found was made by the Mission, not by Madang Provincial Government) is not in evidence. However I uphold Mr Pipike’s submission that it can reasonably be inferred from the evidence before the Court (including the substitute lease, which makes no mention of the traditional owners’ interest in Portion 625) that the Mission did not disclose any interests of the traditional owners including the plaintiffs in Portion 625. 

57.     I find that by failing, when it made the application for a substituted lease, to disclose the interests of the traditional owners in Portion 625, the Mission was in breach of its obligation under Section 17(2) of the Act to provide evidence of those interests in accordance with Section 2(1) and Form 1 of the Regulation.

The State

58.      The State, through the Minister for Lands and Physical Planning, was subject to a number of obligations in the course of determining the Mission’s application. The Minister was obliged, by the Land (Ownership of Freeholds) Act (the Act) and the Land (Ownership of Freeholds) Regulation (the Regulation), to take the following steps:

•	by written notice advise each person noted in the application as having an interest in the land the subject of the application, and require that person to state any objection to or make any representation concerning the application to him in writing within 28 days of the receipt of the notice (Regulation, Section 3(1)(a));

•	advertise in a newspaper circulating in the area where the land is situated that the application has been received and invite persons having an interest in the land to make written representations to him within 28 days of the date of publication of the advertisement (Regulation, Section 3(1)(b)); and 

•	consider any objections or representations and notify the person making the objection or representation whether he (the Minister) proposes to consider or reject the objection or representation or whether he requires further information concerning it (Regulation, Section 3(2));

•	as soon as practicable after receipt of an application for a substitute lease,  notify the applicant in writing whether he proposes to approve or reject the application and whether he intends to impose conditions including “conditions as to the adjustment of rights as between persons who have interests in the land the subject of the application” (Act, Section 18);

•	if the applicant gives a notice of acceptance of the proposal under Section 19(1) of the Act and Section 4 and Form 2 of the Regulation, publish in the National Gazette details of the proposed approval and any conditions to which it is to be subject (Act, Section 19(2));

•	allow any person who is aggrieved by the proposal to grant or refuse an application or by the conditions to which a proposal is to be subject, to make an objection to the proposal by notice of motion to the National Court (Act, Section 20(1), Regulation, Section 5);

•	comply with any order of the National Court directing him to amongst other things “make the grant of the application subject to such further or other conditions as it [the Court] thinks proper for adjusting the rights and liabilities of all persons interested in the land” (Act, Section 20(2));

•	if the National Court makes an order under Section 20(2)(c) of the Act, consider withdrawing the proposal (Act, Section 21);

•	where a proposal is accepted and subject to any order of the National Court and any action taken under Section 21, grant the substitute lease “by notice in the National Gazette” (Act, Section 22(1));

•	on publication of the notice of grant of the substitute lease, forward particulars of the notice and the substitute lease to the Registrar of Titles (Regulation, Section 8(1)). 

59.     The Registrar is obliged, upon receipt of the notice and particulars under Section 8(1) of the Regulation, to amongst other things “note on the substitute lease all other rights, titles, interests in, over or in connexion with the land by appropriate endorsement” (Regulation, Section 8(2)(c)).
 
60.    It will be observed that at least three points in the decision-making process the Minister is obliged to give public notice by newspaper advertisement or notice in the National Gazette of the status of the application for a substitute lease and the nature and extent of the rights of persons other than the applicant in the land. This includes persons who have been recognised or who wish to be recognised as having an interest in the land or who are aggrieved by the proposal to grant a substitute lease. 

61.     In some instances the Minister is obliged, in addition to giving public notice, to give notice in writing to persons, and in such instances the method of service is prescribed by Section 9 of the Regulation. It is essentially personal service or newspaper advertisement plus forwarding the notice to the Local-level Government in whose area the land is situated and placing the notice in a conspicuous place on the subject land. 

62.     Clearly the Act and the Regulation are intended to ensure that the decision-making process regarding granting of substitute leases is conducted in an open and transparent manner. In particular, a full opportunity is to be given to those persons who have been recognised (by the applicant when the application is made) or who wish to be recognised as having an interest in the land, or who are aggrieved by the proposal to grant a substitute lease, to make representations to the Minister on why and how their interests should be accommodated. 

63.     In this case, I see no evidence that any of the above requirements were complied with. The defendants are reasonably expected to have the evidence to show that all of the requirements have been met. But there is none. The Secretary for Commerce, Trade and Industry (the Departmental Head primarily responsible for the PMIZ project) and the State were joined to the proceedings as defendants. It is reasonably expected that they would have the documentary evidence that the necessary procedures were followed. But no evidence has been forthcoming. I conclude that this is because the mandatory procedures were not followed. 

64.     I find that: 

•	no written notice was given under the Regulation, Section 3(1)(a) to the plaintiffs or any other person advising them of their right to object to the granting of the substitute lease or make representations to the Minister (and this was because of the Mission’s failure to give evidence of the plaintiffs’ interest in the application for the substitute lease);

•	there was no newspaper advertisement, under Section 3(1)(b) of the Regulation, of the Mission’s application having been received and of invitations for written representations to be made to the Minister; and 

•	there  was no notice in the National Gazette under Section 19(2) of the Act, publishing details of the proposed approval of the Mission’s application and the conditions to which it would be subject;

•	no one including the plaintiffs was informed that if they were aggrieved by the proposal to grant the application or by the conditions to which the proposed substitute lease would be subject, they had the right under Section 20(1) of the Act to object to the proposal to grant the Mission’s application by filing a notice of motion in the National Court;

•	there was no notice in the National Gazette under Section 22(1) of the Act of the grant of the substitute lease.

Conclusion re alleged illegality 

65.    There was a failure on the part of both the Mission and the State, during the period that the Mission’s application to convert the land from freehold title to a leasehold interest was made and determined, to acknowledge and take into account the enduring interests of the plaintiffs in the land arising from their being amongst its traditional owners and in continuing occupation and use of parts of the land. 

66.     Both the Mission and the State failed to comply with obligations imposed on them under Part IV (conversion of interests to avoid frustrations) of the Land (Ownership of Freeholds) Act and the Land (Ownership of Freeholds) Regulation. Conversion of the land from freehold title to leasehold title was affected by illegality.  

4.      ARE THE PLAINTIFFS ENTITLED TO COMPENSATION?

67.     The second fundamental proposition underlying the plaintiffs’ case is that the effect of the illegality in the conversion of Portion 625 from freehold to leasehold title is that the plaintiffs’ interests in the land have been adversely affected by the State, giving rise to a right of compensation.  

68.     Having considered the detailed submissions of Mr Pipike for the plaintiffs on this issue, and noted that the defendants have offered no effective response, I have concluded that the plaintiffs’ second fundamental proposition is sound.

69.        The effect of the illegality involved in conversion of Portion 625 from freehold to leasehold title is that the plaintiffs’ interests in the land have been adversely affected. Those interests have been compulsorily acquired by being ‘forfeited’, ‘made extinct’ and ‘determined’ in the sense that those terms are used in Section 53(4) of the Constitution. Section 53(4) states:

In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—

(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),

of any right or interest in property.

70.     I find that the State has compulsorily acquired the plaintiffs’ interests in Portion 625 in a way that is not in accordance with any Organic Law or Act of the Parliament or authorised by the Constitution or a law made for the purposes of Section 53(5)(b) of the Constitution. 

71.      It is a Basic Right of the plaintiffs, as it is for all citizens of Papua New Guinea, under Section 53(2) of the Constitution, to be justly compensated if their interests in land are compulsorily acquired. It is that right that they seek to enforce. They are entitled to receive “just compensation” on “just terms” from the “expropriating authority” that has compulsorily acquired their interests.

72.     Section 53 (protection from unjust deprivation of property) of the Constitution states:

Subject to Section 54 (special provision in relation to certain lands) and except as permitted by this section, possession may not be compulsorily taken of any property, and 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 required 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 so declared and so described, for the purposes of this section, in an Organic Law or an Act of the Parliament; and
(b)	the necessity for the taking of possession or acquisition for the attainment of that purpose or for that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected. [Underlining added.]

(2)	Subject to this section, just compensation must be made on just terms by the expropriating authority, giving full weight to the National Goals and Directive Principles and having due regard to the national interest and to the expression of that interest by the Parliament, as well as to the person affected. [Underlining added.]

(3)	For the purposes of Subsection (2), compensation shall not be deemed not to be just and on just terms solely by reason of a fair provision for deferred payment, payment by instalments or compensation otherwise than in cash.

(4)	In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—

(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),

of any right or interest in property.

(5)	Nothing in the preceding provisions of this section prevents—

(a)	the taking of possession of property, or the acquisition of an interest in or right over property, that is authorized by any other provision of this Constitution; or
(b)	any taking of possession or acquisition—

(i)	in consequence of an offence or attempted offence against, or a breach or attempted breach of, or other failure to comply with a law; or
(ii)	in satisfaction of a debt or civil obligation; or
(iii)	subject to Subsection (6), where the property is or may be required as evidence in proceedings or possible proceedings before a court or tribunal,

in accordance with a law that is reasonably justifiable in a democratic society that has a proper regard for the rights and dignity of mankind; or
(c)	any taking of possession or acquisition that was an incident of the grant or acceptance of, or of any interest in or right over, that property or any other property by the holder or any of his predecessors in title; or
(d)	any taking of possession or acquisition that is in accordance with custom; or
(e)	any taking of possession or acquisition of ownerless or abandoned property (other than customary land); or
(f)	any restriction on the use of or on dealing with property or any interest in or right over any property that is reasonably necessary for the preservation of the environment or of the national cultural inheritance.

(6)	Subsection (5)(b)(iii) does not authorize the retention of any property after the end of the period for which its retention is reasonably required for the purpose referred to in that paragraph.

(7)	Nothing in the preceding provisions of this section applies to or in relation to the property of any person who is not a citizen and the power to compulsorily take possession of, or to acquire an interest in, or right over, the property of any such person shall be as provided for by an Act of the Parliament.
 
73.     Who is the “expropriating authority”? It is the State – not the Mission or any of the other defendants – as it is the authority that committed a number of illegalities in the process of conversion of the land from freehold title to leasehold title, resulting in its compulsory acquisition of the plaintiffs’ interests in the land. Any doubt as to the identity of the expropriating authority is removed by Section 24 (effect of substitute lease) of the Land (Ownership of Freeholds) Act, which states:

This Part is not intended to affect the operation of Section 53 (protection from unjust deprivation of property) of the Constitution, and for the purposes of Section 53(2) of the Constitution the State shall be deemed to be the expropriating authority in relation to any interest (other than a frustrated right) that is adversely affected by the operation of this Part.

Conclusion re compensation 

74.     The plaintiffs’ interests in Portion 625 have been adversely affected by the actions of the defendants, to the extent that those interests have been compulsorily acquired by the State, as an expropriating authority, giving rise to an entitlement to just compensation on just terms under Section 53(2) of the Constitution. 
 
4	WHAT DECLARATIONS OR ORDERS SHOULD THE COURT MAKE?

75.     I will make declarations and orders generally in the terms sought by the plaintiffs. A declaration will be made that the plaintiffs’ interests in the land have been adversely affected to the extent that those interests have been compulsorily acquired by the State, the expropriating authority. I will order that the State is liable to pay just compensation to the plaintiffs on just terms in accordance with Section 53(2) of the Constitution. 

76.     It is apparent that the interests of the traditional owners of Portion 625 have been neglected over many years. Transactions have been taking place, ignoring the fact of their traditional ownership and shutting them out of decision-making. In recent years Portion 625 has been subdivided into two new portions, Portion 1349 and Portion 1350. The residents of the ‘native reserve’ around Budup village are now surrounded by two corporations, both of which, it seems, are intent on developing the land for industrial purposes as part of the PMIZ project. It is not difficult to see why the plaintiffs are aggrieved. 

77.     In Papua New Guinea land is a critical natural resource required by National Goal Number 4 to be conserved and used for the benefit of the present generation and for the benefit of future generations (David Mota v Albert Camillus (2017) N6810). National Goal No 4 (natural resources and environment) of the Constitution and its accompanying Directive Principles state:

We declare our fourth goal to be for Papua New Guinea's natural resources and environment to be conserved and used for the collective benefit of us all, and be replenished for the benefit of future generations.

WE ACCORDINGLY CALL FOR—

(1)	wise use to be made of our natural resources and the environment in and on the land or seabed, in the sea, under the land, and in the air, in the interests of our development and in trust for future generations; and

(2)	the conservation and replenishment, for the benefit of ourselves and posterity, of the environment and its sacred, scenic, and historical qualities; and

(3)	all necessary steps to be taken to give adequate protection to our valued birds, animals, fish, insects, plants and trees.

78.     Under Section 25(2) (implementation of the National Goals and Directive Principles) of the Constitution all governmental bodies are obliged to apply and give effect to the National Goals and Directive Principles as far as lies within their respective powers. As I pointed out in Louis Medaing v Ramu Nico Management (MCC) Ltd (2011) N4340 the National Goals and Directive Principles are in the Preamble to the Constitution. They underlie the Constitution. They are the proclaimed aims of the People of Papua New Guinea. They cannot be ignored. They must be taken into account by the Court when interpreting laws and when deciding what relief should be granted to persons such as the plaintiffs who have proven that statutory obligations and legal processes regarding land in which traditional owners have enduring interests, have been breached. Section 25(3) of the Constitution states:

Where any law, or any power conferred by any law (whether the power be of a legislative, judicial, executive, administrative or other kind), can reasonably be understood, applied, exercised or enforced, without failing to give effect to the intention of the Parliament or to this Constitution, in such a way as to give effect to the National Goals and Directive Principles, or at least not to derogate them, it is to be understood, applied or exercised, and shall be enforced, in that way.

79.     The National Goals and Directive Principles acknowledge the importance of land in all societies in Papua New Guinea. This judgment gives appropriate acknowledgement to the interests of traditional owners of land, even when they do not claim that they any longer own the land. They have enduring traditional interests in the land and it is their right under Section 37(1) of the Constitution to have the full protection of the law in ensuring that those enduring interests are protected and enforced. 

ORDER

(1)	It is declared that the grant of a Substitute Lease in respect of the subject land, Portion 625, Milinch of Kranket, Fourmil of Madang, Madang Province, to the first defendant on 23 February 1994 under the Land (Ownership of Freeholds) Act and subsequent transactions concerning the subject land, including its subdivision into Portions 1349 and 1350, Milinch of Kranket, Fourmil of Madang, Madang Province, have resulted in  the plaintiffs’ interests in the subject land, arising from their being amongst its traditional owners and in continuing occupation and use of parts of the land, being adversely affected, contrary to the obligations imposed on the first defendant and the fifth defendant under Part IV (conversion of interests to avoid frustrations) of the Land (Ownership of Freeholds) Act, those interests being adversely affected to the extent that those interests have been compulsorily acquired by the State, as an expropriating authority, giving rise to an entitlement in the plaintiffs to just compensation, payable by the State, on just terms under Section 53(2) of the Constitution. 

(2)	It is ordered that the fifth defendant is liable as expropriating authority to pay just compensation to the plaintiffs on just terms for compulsory acquisition, in the manner and to the extent declared, of the plaintiffs’ interests in the subject land.

(3)	It is ordered that in the absence of agreement as to the amount of just compensation, there shall be a trial on assessment of just compensation. 

(4)	The determination of the question of costs of the proceedings is deferred to the end of any trial on assessment of compensation. 

Judgment accordingly.
_____________________________________________________________
GP Lawyers:  Lawyers for the Plaintiffs  	
Kunai & Co Lawyers:  Lawyers for the First Defendant		
Meten Lawyers: Lawyers for the Second Defendant	
Solicitor-General: Lawyer for the Third & Fifth Defendants