N7999

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) No. 566 of 2017

BETWEEN:
DARRYL KAMEN
Plaintiff

AND:
TIRI WANGA
Acting Secretary for Lands and Physical Planning
First Defendant

AND:
HON. BENNY ALLEN
Minister for Lands and Physical Planning
Second Defendant

AND:
HENRY WASA
Acting Registrar of Titles
Third Defendant

AND
INDEPENDENT STATE OF
PAPUA NEW GUINEA
Fourth Defendant
AND:
L & A CONSTRUCTION LIMITED
Fifth Defendant

Waigani: Thompson J
2019: 6 September & 12 September

JUDICIAL REVIEW - Decision Of Minister To Recommend Upholding Appeal And Grant Of State Lease - Decision Of Head Of State Acting On Advice To Uphold Appeal And Issue State Lease - Whether Minister Only Empowered To Refer Matter Back To Land Board For Re-Hearing - Whether Procedural Error Tantamount To Fraud - Fraud Required To Be Pleaded And Proved Against Registered Proprietor

Counsel:

Mr. D Kamen, in Person	
Mr. I. Molloy, with Mr E. Asigau, for the Fifth Defendant

12th September, 2019
	
1.   THOMPSON J:  THE FACTS: These proceedings concern title to an area of land on Portion 627 Granville (“the land”).  On 4 March 2015 the 1st - 4th Defendants issued a Licence to the 5th Defendant to occupy the land for business purposes to do a feasibility study on an Urban Development Lease for presentation to the Land Board.

2.	On 21 October 2015 the Land was advertised in the Government Gazette G681 for tender for the UDL.  The Plaintiff and the 5th Defendant were among ten applicants, who lodged submissions to the Land Board.

3.	On 29 February 2016 the 1st - 4thDefendants issued another Licence to the 5th Defendant, who continued with work for the feasibility study, and who expended about K4 million on development work.

4.	At its 2016 Meeting, the Land Board made a decision to recommend that the UDL be granted to another applicant, Samey Lodge Ltd, and duly notified the Plaintiff and 5th Defendant of its decision. Pursuant to S62 of the Land Act, the Plaintiff, 5th Defendant and another unsuccessful applicant each lodged appeals against the decision, to the 2nd Defendant.

5.	On 4 May 2017 the Head of State acting on advice made a decision to uphold the 5th Defendants appeal, and to grant the UDL to the 5th Defendant.  The Decision was published in the Government Gazette G354.

6.	The State Lease for the UDL was subsequently issued to the 5th Defendant on 16 May 2017.  The 5th Defendant has remained the registered proprietor of the land since then.

7.	Samey Lodge Ltd issued proceedings on 6 June 2017 seeking judicial review of the decision, which was refused by this Court on 14 December 2018.   The Plaintiff issued these judicial review proceedings on 29 June 2017, seeking to quash the Head of State’s decision to uphold the appeal and issue the Lease to the 5th Defendant, to quash the Minister’s Decision to recommend to the Head of State to uphold the appeal and grant the Lease to the 5th Defendant, to quash the Minister’s Decision to grant the Lease to the 5th Defendant, and to quash the 1st Defendant’s action in publishing the decision in the Government Gazette.

8.	The Relief sought included an interim injunction to prevent the UDL title from being registered in the 5th Defendant’s name, but that registration had already occurred more than a month before the proceedings were issued.

9.	The Grounds in the Statement allege an error of law by the Minister in granting the Lease instead of referring the matter back to the Land Board for re-hearing.  This was said to be ultra vires, a breach of natural justice, and unreasonable in the Wednesbury sense.

10.	The Grounds in the Statement contain no allegation of fraud, either constructive or actual, against any of the Defendants.  

The Law	

11.	Under S33 of the Land Registration Act, (“the LRA”) the registered proprietor holds indefeasible title subject only to the specific prescribed exceptions.  Such exceptions, including fraud, must be distinctly pleaded and with particularity, and fraud must be fraud by the registered proprietor or actual fraud (see Paga No. 36 Ltd v Joseph Ealedona (2018) SC1671 and John Soto v Our Real Estate Ltd (2018) SC1701).

12.	If fraud is pleaded with particularly, it must then be proven.  The onus of proof in fraud is higher than on the balance of probabilities, and will rise in accordance with the gravity of the alleged fraud (see Paga No 36 Ltd v Ealedona, supra).

13.	Under S62 (5) of the Land Act, it is the Head of State acting on advice, who shall determine an appeal, and his decision is final.

Application to the facts

14.	The error of law alleged by the Plaintiff is that the Minister had no power to issue the Lease after upholding the appeal, and that under S62 (5), he only had the power to refer the matter back to the Land Board for re-hearing.

15.	It was not in fact the Minister who made the decision to uphold the appeal and grant the Lease, it was the Head of State.

16.	The plain meaning of “may”, which allows the Head of State a discretion, has always been relied on by the Head of State and the 1st – 4th Defendants to issue Leases in the ordinary course of performing their statutory functions, and is demonstrated by the Gazettal Notice in this case of the Head of State’s decisions on 30 appeals, showing that some appeals were refused, some were upheld with leases granted, and some were upheld and referred back for re-hearing. 

17.	Section 62 (5) specifically says that if an appeal is upheld, the Head of State (not the Minister) “may”, not “shall”, refer it back for re-hearing.   By necessary implication, this gives the Head of State a discretion.  If he upholds the appeal, he may make a decision to issue the Lease, or he may make a decision to refer it back for re-hearing.  No basis has been pleaded or shown for the plain meaning of the word “may” to be interpreted quite differently  as meaning “shall”.

18.	As this was the only basis for the alleged error of law, the Plaintiff has failed to establish that any such error was made by the Minister, or indeed by the Head of State.

19.	On this point, although it is the Head of State who makes the decision on the Appeal, not the Minister, the Plaintiff has not sought to review the Head of State’s decision or join him as a party through his statutory representative, the Attorney- General.

20.	In relation to natural justice, the Plaintiff has not pleaded any basis for the allegation that it was unfair for the Minister to “give preference to” and make a decision to issue the Lease to the 5th Defendant, when there were two other unsuccessful applicants.  Only one applicant could be ‘preferred’ or chosen, and this would always leave two other unsuccessful applicants.  No basis was pleaded or shown why the decision to choose the 5th Defendant was unreasonable or an abuse of power.  Further, the decision was not made by the Minister, it was made by the Head of State.
21.	In his submissions, the Plaintiff said that “if the mandatory requirements of the Land Act were not complied with, then the decisions and conduct of the Defendants is illegal or amount to fraud on statute (sic)”.  He relied on a National Court decision in Kapiura Trading Ltd v Thomas Bullen and ors (2012) N 4903, to support a proposition by reference to Emas Estate Development Pty Ltd v John Mea and ors (1993) PNGLR 215, that if the circumstances of the grant of title were sufficiently unsatisfactory, irregular or unlawful, it may be tantamount to fraud within the meaning of S33 of the Land Registration Act.

22.	This Court is bound by the Supreme Court decisions, including Koitachi Ltd v Walter Schnaubelt (2007) SC 870, Paga No 36 Ltd v Ealedona, supra, and John Soto & ors v Our Real Estate Ltd, supra, which have determined that fraud must be of the registered proprietor or actual fraud.  I respectfully adopt the finding in John Soto’s case that:

“Contrary to the appellant’s contention, the fraud concerned must be actual fraud by the registered proprietor in procuring registration, not constructive fraud …… and that fraud had to be distinctly pleaded with particularity”.

23. There was no pleading, and no suggestion, that the 5th Defendant had acted dishonestly, or had even committed any procedural errors.

24.	Even if it was accepted that procedural errors leading to a grant of title may be taken into account, such errors would have to be shown to be of such seriousness that they were tantamount to fraud so as to warrant setting aside the registration of title, by coming within the meaning of “fraud” in S33 of the Act. 

25.	The errors alleged against the Minister were not established, but even if they had been, they were not sufficiently unsatisfactory, irregular or unlawful to be tantamount to fraud and to warrant setting aside the registration.  They were also not errors committed by the registered proprietor, the 5th Defendant.

26.	Furthermore, and in any event, the Plaintiff has not pleaded any allegation of constructive or actual fraud against any of the Defendants, including the 5th Defendant.  Unless fraud has been pleaded with particularity, it cannot be raised (see Paga No 36 Ltd and John Soto, supra).

27.	In relation to the allegation against the 1st Defendant, his action in publishing the Head of State’s decision in the Government Gazette, was not a decision made in the exercise of his discretion.  The 1st Defendant was not a decision-maker, and his action in publishing the Head of State’s Decision in the Government Gazette was merely performing an administrative act. 

Conclusions

28.	The Plaintiff has not pleaded or proven any fraud, actual or otherwise, against either the registered proprietor or any of the other Defendants.

29.	The Plaintiff has not established any error of law or breach of natural justice, and so has not proven any of the Grounds in the Statement.

30.	Even if the alleged errors had been proven, no basis was pleaded or shown by the Plaintiff as to how this would entitle him to set aside the registered proprietor’s indefeasible title by coming within one of the exceptions under S33 of the Land Registration Act.

30.	The Court therefore orders:

(a)	The Plaintiff’s application for judicial review, is refused.
(b)	The Plaintiff is to pay the 5th Defendant’s costs, to be agreed or taxed.

_________________________________________________________________
In person:                    Lawyer for the Plaintiff		
Pacific Legal Group:  Lawyers for the 5thDefendant