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Tokilang Land Group Inc v Tabaule Enterprises Ltd [2020] PGNC 528; N8829 (7 December 2020)

N8829

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 159 OF 2020

BETWEEN:
TOKILANG LAND GROUP INC.
Plaintiff

AND:
TABAULE ENTERPRISES LIMITED
First Defendant

AND:
FRANCISCO PANFILO in his capacity as Bishop of ROMAN CATHOLIC ARCHDIOCESE OF RABAUL
Second Defendant

Kokopo: Suelip AJ
2020: 14^th October & 7^th December

CIVIL – Practice and procedure – application to dismiss proceedings for disclosing no cause of action, for being frivolous and vexatious, and abuse of court process – agricultural state lease - allegations of fraud in evidence – incorrect mode – plaintiff’s locus standi – plaintiff held original title initially – land subdivided and titles granted to first defendant and another entity – particulars to be properly pleaded – proceeding to continue on pleadings

Papua New Guinea Cases

Kittika v. Kavana [2010] N4051
Maki v. Pundia & anor [1993] PNGLR 337
Wapua v. Lopkopa (2009) SC1048
Andakelka Limited v. Petronas Limited [2010] N3976

References

Land Registration Act 1981
Lands Acquisition (Development Purposes) Act Ch. No. 192

Counsel

Cecelia Pulapula, for the Plaintiff
Jeremiah Kihanges, for the First Defendant
Samantha Kiene, for the Second Defendant

RULING

7^th December, 2020

1. SUELIP AJ: In the Notice of Motion filed 2 October 2020, the first defendant seeks orders pursuant to Order 12 rule 40(1)(a),(b) and (c) of the National Court Rules, for these proceedings to be dismissed in its entirety as it does not disclose a reasonable cause of action, for being frivolous and vexatious, and for being an abuse of Court process, and for costs of and incidental to these proceedings.

2. I heard oral submissions on 14 October 2020 and reserved my ruling. This is now my ruling on the first defendant’s application.

Facts

3. Briefly the facts of this matter are these. Originally, the land described as the Varzin Plantation which is Allotment 4 Portion 84, Milinch of Kokopo, Fourmil of Rabaul (“Varzin Plantation”) was traditional land until it was acquired by a Mr Wolff, a German who came prior to WW1. Then a Mr Tom Gerret bought the property and when he died, his wife Ellen Richards became the registered owner of that land which contains 608 acres. In 1975, the property was transferred to the State and after the State passed the Lands Acquisition (Development Purposes) Act to enable the customary landowners of plantations to buy back their land, a landowner group was formed from the major clans within the area and they set up Medway Pty Ltd, a company which later changed to Tabaule Enterprises Pty Ltd, and in 1982, changed to the first defendant, to run the affairs of the plantation.

4. Subsequently, in 2007, the title to the plaintiff as the proprietor of Varzin Plantation was relinquished and the plantation was subdivided into 3 different titles identified as:

(i) Portion 2901 – this was given as a ‘gift’ to the Roman Catholic Archdiocese of Rabaul.

(ii) Portion 4215 and Portion 2902 were granted to the first defendant.

5. Portions 2902 and 4215 are state agricultural leases whilst Portion 2901 is special purpose (Public Institution – Health and Ancillary Facilities).

6. In the originating summons, the plaintiffs are primarily seeking declarations that they are the registered legitimate proprietor of the Varzin Plantation. They are also seeking vacant possession of the subject land.

Issues

7. Whether these proceedings should be dismissed for disclosing no reasonable cause of action, for being frivolous and vexatious, and for being an abuse of process?

The law

8. The basis for the defendant’s application is Order 12 Rule 40 (1)(a), (b) and (c) of the National Court Rules which provides:

40. Frivolity, etc.

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings –
(a) no reasonable cause of action is disclosed; or
(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

First defendant’s arguments

9. The first defendant’s arguments are threefold. Firstly, the first defendant submits that there are allegations of fraud found in evidence from both the plaintiff and the first defendant and therefore fraud needs to be sufficiently proven. For this reason, the first defendant says that since there are no particulars of fraud pleaded in the originating summons, this proceeding should be dismissed. They rely on Kittika v. Kavana [2010] N4051 and Maki v. Pundia & anor [1993] PNGLR 337.

10. The second argument raised by the first defendant is that the plaintiff has used the incorrect mode of proceeding where there are allegations of fraud, which argument follows on from the first argument. They rely on Wapua v. Lopkopa (2009) SC1048, where the then Chief Justice Injia stated as follows:

“A proceeding founded on constructive fraud commenced by originating summons is liable to be dismissed on the pleadings”.

11. They also rely on Andakelka Limited v. Petronas Limited [2010] N3976 where Her Honor, late Justice Davani stated that:

“Proceedings pleading fraud must be commenced by Writ of Summons”

12. As to the last argument, the first defendant submits that the Gazettal No.G106 of 14 August 2003 that granted the agricultural lease for Varzin Plantation to the plaintiff, made reference to Tokilang Land Group Association Inc. (the Association). It submits that Association was removed by IPA. A copy of the Association Extract as at 10 September 2020 shows the association status as “removed”. Therefore, it is argued that the plaintiff, which does not have its name (Tokilang Land Group Inc.) on the Gazettal No. G106 of 14 August 2003, and identifies itself as such, has no legal standing to institute this proceeding.

The second defendant’s position

13. The second defendant position is that he was unnecessarily named in this proceeding. Counsel says that there are allegations against the Roman Catholic Archdiocese of Rabaul but not against the third defendant in his official capacity. Further, the second defendant acknowledges that Portion 2901 was a “gift” to the church as a Special Purpose Lease to build a health center. However, because of this dispute, the church has refused to develop that portion of land. The second defendant basically supports the first defendant’s application.

The plaintiff’s response

14. In response, the plaintiff asserts that it is incorporated as an ILG. Counsel for the plaintiff says that the plaintiff was registered on 15 September 2020. However, counsel was unable to provide a copy of her client’s registration to date.

15. Counsel further submits that the State Lease dated 25 September 2003 granted the agricultural state lease to the plaintiff.

16. Counsel also submits the plaintiff has come to Court in the right mode in an originating summons as it holds title to the subject land. Further, it submits that there are no allegations of fraud involved in this proceeding.

Analysis of evidence

17. There is no dispute that the State Lease dated 25 September 2003 granted the agricultural state lease known as Varzin Plantation and described as Portion 84 Lot 4, Milinch Kokopo, Fourmil Rabaul, Volume 15 Folio 154, East New Britain Province, to the plaintiff.

18. However, in 2007, that title to the plaintiff was relinquished and the Varzin Plantation was subdivided into 3 different titles. Portion 2901 was given as a ‘gift’ to the Roman Catholic Archdiocese of Rabaul whilst Portion 4215 and Portion 2902 were given to the first defendant.

19. These titles remain unchallenged to date. The plaintiff no longer holds the title to Varzin Plantation and acknowledges in its evidence that there were 3 subdivisions done as deposed in paragraphs 13 and 15 of the Affidavit of Stanley Timi filed 13 October 2020.

20. Further, the plaintiff is named on the originating summons as ‘Tokilang Land Group Inc.’. The original agriculture lease was granted to ‘Tokilang Clan Association Inc.’. The first defendant provides a copy of the association’s registration from IPA of the entity as ‘Tokilang Clan Association Inc.’ whose association status was removed from the registry. However, the plaintiff says that “Tokilang Land Group Inc.” was registered on 15 September 2020 but has not provided proof of its registration.

21. Although the plaintiff denies there is no allegations of fraud involved in the granting of the new sub titles, there are some allegations in the plaintiff’s evidence which suggest that the first defendant is not comprised of traditional landowners, and these non-traditional landowners applied to the Lands Department to subdivide the Varzin Plantation into three portions. There is also evidence from the first defendant to say that known persons had acted without consent from the plaintiff to relinquish the original title. All these are allegations of fraud and if the plaintiff intends to challenge the 3 new titles then it must plead fraud properly.

22. If the plaintiff had the current title of Varzin Plantation then they had filed the correct mode of proceedings. As they no longer hold the current title, the only way to challenge the new subtitles is pursuant to section 33 of the Land Registration Act, where fraud is one of the grounds and these allegations must be pleaded properly and with particularity.

23. As it is, this proceeding in its current form cannot continue as there are allegations of fraud pleaded by both the plaintiff and the first defendant.

24. Towards the end of the hearing, I suggested parties consider converting these proceedings into a statement of claim to plead better particulars. I have the discretion pursuant to Order 4 rules 31(3)(a) and 35(2)(b) of the National Court Rules to order the plaintiff to file a statement of claim and the proceedings continue on pleadings.

Conclusion

25. I find that the original title to the Varzin Plantation granted to the plaintiff in 2003 has been replaced by 3 subtitles in 2007. Two of these titles are held by the first defendant whilst one was given as a ‘gift’ to the Roman Catholic Archdiocese of Rabaul. Whilst there are allegations of fraud in both the plaintiff’s and first defendant’s evidence, these 3 subtitles remain unchallenged to date. Land titles can only be challenged by fraud or on other grounds provided in section 33 of the Land Registration Act 1981 and fraud must be pleaded properly.

26. I also find that the current mode of proceeding is only acceptable if the title of the subject land is still with the plaintiff. In this case, the subject land has been divided into subtitles and granted to other entities. The plaintiff no longer has the right to seek the reliefs in its originating summons. I have exercised my discretion under Order 4 rules 31(3)(a) and 35(2)(b) of the National Court Rules to continue these proceedings by pleadings.

27. Further, I find that the plaintiff’s locus standi to file this proceeding is uncertain at this juncture. It may well be that the plaintiff is registered as an ILG but as it, it is premature to decide this issue at this preliminary stage.

Orders

28. The Orders of the Court are: -

(i) the first defendant’s application to dismiss this claim is refused.

(ii) the plaintiff shall file and serve on the defendants a Statement of Claim particularizing their cause of action within 2 weeks from today.

(iii) pleadings shall continue thereafter in accordance with the National Court Rules.

(iv) costs shall be in the course of the proceedings.

(v) time is abridged until date of settlement by the Assistant Registrar which shall take place forthwith.

_______________________________________________________________
Public Solicitors : Lawyers for the Plaintiff
Warner Shand Lawyers : Lawyers for the First Defendant
Cornerstone Legal Services : Lawyers for the Second Defendant