N7647

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 900 OF 2016

HENRY MANUI
First Plaintiff

NCD MAPRIK CULTURAL CO-OPERATIVE SOCIETY
Second Plaintiff

-V-

EDDIE MADONI & ORS
Defendants

Waigani:  Kariko, J
2017: 24th November & 15th December

CIVIL PRACTICE & PROCEDURE – application to dismiss proceedings – locus standi – whether reasonable cause of action disclosed – whether claim is tenable or an abuse of process – Order 12 Rule 40, National Court Rules

REAL PROPERTY – State Leases – whether lessee has rights or interests after expiry of the term of the State Lease

Cases Cited: 

Kerry Lerro v Phillip Stagg & Ors (2006) N3050 
Phillip Takori & Ors v Yagari & Ors (2008) SC905 
The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603
The Papua Club Inc v Nusaum Holdings Ltd (2005) SC812
Thomas Taiya Ambi v Exxon Mobil Ltd (2012) N4844

Legislation:

Land Act 1996 
National Court Rules

Counsel: 

Mr A Kumbari, for the Plaintiffs
Mr D Wapu, for the Defendants

RULING

15th December, 2017

1.	This is an application by the defendants seeking to have this proceeding dismissed pursuant to Order 12 Rule 40 National Court Rules on the basis that no reasonable cause of action is disclosed and that the action is frivolous and vexatious. 

2.	The dispute in this proceeding concerns land described as Portion 2895 Granville (Hohola) National Capital District (the Land) as contained in Urban Development Lease Volume 49 Folio 205 (the Lease). The plaintiffs mainly seek a declaration that the NCD Maprik Cultural Co-operative Society (the Society) is the registered lease-holder of the Lease. The plaintiffs also seek an order that the defendants (who are apparently in occupation of the Land and are therefore unlawful trespassers) be restrained from interfering with the Society’s development of the Land. 

Application to dismiss

3.	Order 12 Rule 40 gives the Court power to dismiss a proceeding if no reasonable cause of action is disclosed, or if the claim is frivolous or vexatious or it amounts to an abuse of process.

4.	The relevant principles in relation to applications under this Rule are well settled; see for example Kerry Lerro v Phillip Stagg & Ors (2006) N3050 and Phillip Takori & Ors v Yagari & Ors (2008) SC905. 

5.	The principles may be summarized as follows:

(1)	A plaintiff should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power to summarily dismiss. 	
(2)	The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.
(3)	Order 12 Rule 40 gives the Court power to terminate claims which are plainly frivolous or vexatious or untenable.
(4)	A frivolous claim is one that is characterized as a claim that is clearly untenable, and is bound to fail if tried.
(5)	A vexatious claim is one that is also untenable but is pursued merely to put the other party to unnecessary trouble and expense.

6.	If the Court finds that a plaintiff has no standing, the proceeding or claim should be dismissed as being frivolous or vexatious, an abuse of the process of the court, and for not disclosing a reasonable cause of action; Thomas Taiya Ambi v Exxon Mobil Ltd (2012) N4844. 

Main issue

7.	Of the several grounds raised by the defendants in support of their application, the main argument is that the five years term of the Lease expired on 2nd July, 2017 and therefore effective that date, the Society ceased to be the registered lease-holder and the Lease reverted to the State. That being the case, the plaintiffs no longer have standing to continue the case and their claims cannot be sustained and are certain to fail.

8.	In response the plaintiffs contended that while the Lease may have expired the Society remained the registered lease-holder unless and until the Lease is cancelled. It was further argued that the Society’s application for sub-division of the Land is still being processed by the Department of Lands and therefore their interest in the Land as the registered lease-holder has continued.

Consideration

9.	Section 108 Land Act 1996 states that a UDL is for a period of 5 years. There is no dispute that the Lease was issued on 3rd July 2012 and its term lapsed on 2nd July, 2017. 

10.	In The Papua Club Inc v Nusaum Holdings Ltd (No 2) (2004) N2603, Gavara-Nanu J discussed the provisions of the Land Act and in particular Part X that deals with State Leases, and concluded that the Act provides for land owned by the State to be leased for a term of years on conditions and upon the expiration of the term, the ownership of the land reverts to the State. His Honour stressed that when the term of the State Lease ends the State will “as a matter of law, automatically assume ownership.” This principle was re-affirmed by the Supreme Court in the appeal from his Honour’s judgement; The Papua Club Inc v Nusaum Holdings Ltd (2005) SC812. The Supreme Court also confirmed that when the term of a State Lease lapses, the outgoing lessee has no right to a renewal of the lease or a grant of a new lease and has no ‘reversionary rights’ in the land.

11.	Following those judgements and applying the relevant principles concerning an application under Order 12 Rule 40, I must find for the defendants in their application. The plaintiffs have no standing to continue this court action. That means there is no reasonable cause of action and the proceeding is frivolous and vexatious and is an abuse of process.

Order

12.	The Court orders that: 

(1)	this proceeding be dismissed

(2)	the plaintiffs shall pay the defendants’ costs of and incidental to the proceeding, to be taxed if not otherwise agreed.
________________________________________________________________
Kumbari Lawyers: Lawyers for the Plaintiffs
Punau & Company Lawyers: Lawyers for the Defendants