N9418

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1053 OF 2009

BETWEEN
JANET PEPAM KEPOLI
Plaintiff

AND
CHRISTIAN LIFE CENTRE
First Defendant

AND
PASTOR WILLIAM IKI
Second Defendant

AND
NATIONAL HOUSING CORPORATION
Third Defendant

AND
THE REGISTRAR OF TITLES
Fourth Defendant

Wabag &Waigani: Makail, J
2021: 5th March
2022: 4th February

PROPERTY DISPUTE – STATE LEASE – Grant of State Lease – Fraud alleged against registered proprietor’s title – Competing interests – Proof of – Evidence of fraud circumstantial – Fraud inferred from conduct of registered proprietor – Land Act, 1996 – Sections 92, 96 & 97 – Land Registration Act, – Section 33(1)(a)

Cases Cited:

Mapai Transport Limited v. Romilly Kila-Pat & Ors (2017) N6850

Counsel:

Ms. N. Noringi, for Plaintiff
Mr. D. Piam, for First & Second Defendants
No appearance, for Third & Fourth Defendants

JUDGMENT
4th February 2022

1.	MAKAIL J: This is a property dispute case.

Allegation of Fraud
2.	The Plaintiff alleged that she is entitled to a property located in Wapenamanda, Enga Province.  It is a State Lease identified as Allotment 13, Section 10.  The First and Second Defendants claimed that they purchased the property from the Third Defendant the National Housing Corporation (NHC).  The Plaintiff alleged the First and Second Defendants procured the title of the property by fraud.  She seeks to have the title quashed under Section 33(1)(a) of the Land Registration Act.

Defence of Good Title

3.	The First and Second Defendants denied the allegation of fraud and said that the First Defendant has good title.  
Evidence

4.	The trial was conducted by affidavit with no cross-examination of deponents.  The following affidavits were tendered for the Plaintiff:

•	Affidavit of Plaintiff sworn on 23rd August 2009 and filed 24th August 2009 (Exhibit “P1”).

•	Supplementary Affidavit of Plaintiff sworn on 29th September 2010 and filed 30th September 2010 (Exhibit “P2”).

•	Additional Supplementary Affidavit of Plaintiff sworn on 24th January 2020 and filed 27th January 2020 (Exhibit “P3”).

•	Supplementary Affidavit of Plaintiff sworn on 23rdJanuary 2020 and filed 24thJanuary 2020 (Exhibit “P4”).

•	Further Additional Affidavit of Plaintiff sworn and filed on 12th November 2020 (Exhibit “P5”).

•	Affidavit of Maku Kopyala sworn and filed on 8th October 2010 (Exhibit “P6”).

•	Affidavit of Nicholas Paisambua sworn on 23rdJanuary 2020 and filed 24thJanuary 2020 (Exhibit “P7”).

•	Affidavit of Jackson Jonah sworn on 23rdJanuary 2020 and filed 24thJanuary 2020 (Exhibit “P8”).

5.	The First and Second Defendants tendered one affidavit by the Second Defendant sworn on 23rd June 2010 and filed 28th June 2010 (Exhibit “D1”).

Evaluation of Evidence

6.	From the affidavits tendered as exhibits “P1” to “P8” and “D1”, I accept and place weight on the affidavits of the Plaintiff and her witnesses, because they are quiet detailed and thorough in terms of setting out the background facts and significantly the dealings between the Plaintiff and officers of the NHC for the sale and transfer of title of the property to the Plaintiff.

7.	On the other hand, exhibit “D1” is vague because it does not tell us who at the NHC the First and Second Defendants submitted their application for tender of property to in their letter dated 20th June 2001.  Except for a reference to a “Mr Paul A” in that letter, the First and Second Defendants do not tell us who this person “Paul A” is and whether, this person was aware of the Plaintiff’s application.  Significantly, the First and Second Defendants do not say if they informed “Paul A” of the Plaintiff’s application for the property.

8.	The Second Defendant does not say that he was not aware of the Plaintiff’s application for tender of property and contract of sale between her and the NHC.  Conversely, he does not say how he came to know about the property and how it was vacant.  Further, he does not say where he signed the contract of sale and if the NHC acting Corporate Secretary Mr Harry Kapal was physically present to witness its signing.

9.	There are also discrepancies in exhibit “DI” which will be pointed out in due course.  They go to show that the truthfulness of the Second Defendant’s evidence in relation to the procurement of the title to the property is doubtful.

10.	For now, I accept the Plaintiff and her witnesses’ evidence and find that the Plaintiff occupied the property since 1990.  It was then a vacant sloppy piece of land that was used as a rubbish dump in front of an AOG Church.  The AOG Church later changed to the First Defendant.  She was interested in purchasing it.

11.	On 3rd December 1992 she was informed by the NHC’s Regional Office in Mt Hagen that the property was transferred to the NHC in 1970.  She attended at the NHC Mt Hagen Office and paid the applicable fees totalling K500.09 for the transfer of property to her.  She produced receipts of payment to verify the payments.  On 24th March 1994, she signed a contract of sale with the NHC.  Nothing was heard from the NHC again until 3rd December 1998 when she signed another contract of sale with the NHC.  At that time the NHC established the Give Away Scheme and after she signed the contract of sale, she paid another lot of fees including the purchase price totalling K9,000.00.  She also produced receipts of payment to verify the payments.  She borrowed the sum of K9,000.00 from POSF to finance the purchase of the property.  

12.	A gazettal notice No. G140 dated 22nd September 2005 was published to confirm that the property was granted to the NHC pending persons entitled to purchase it.  

13.	Unbeknown to her, the property was sold to the First Defendant.  On 22nd November 2005 she received a letter from the First and Second Defendants informing her to vacate the property.  Another letter to vacate the property was given to her on 11th May 2008.  Apart from instituting District Court proceeding to restrain the First and Second Defendants from evicting her, she flew down to Port Moresby and visited the NHC Head Office where she was attended to by Mr Jim Tepi from the Conveyance Section.  She informed him of the dispute over the property.  He asked her to return in two weeks while he looked into the matter.  When she returned after two weeks Mr Tepi informed her that the office file was missing. Nothing further was heard from Mr Tepi or other officers of the NHC to the present.

14.	I further find that the property was not vacant in the legal sense because the Plaintiff made a garden.  The witnesses Mr Maku Kopyala and Mr Nicholas Paisambua corroborated her evidence that she had planted the following fruit trees:

	(a)	Orange trees,
	(b)	Avacado trees,
	(c)	Mandarin trees,
	(d)	Guava trees, and
	(e)	Casuarina trees.

15.	The property is located next to Mr Paisambua’s property, Allotment 14, Section 10.  She is also in the process of acquiring an adjacent property at Allotment 22, Section 10.  The property is being used to accommodate homeless, neglected, parentless and orphans under the banner and charity organisation called Voice of Enda.  She has built dwelling houses and shelters for these children.  

16.	The Plaintiffs’ evidence to prove fraud is circumstantial. However, it does not necessarily mean that circumstantial evidence is not good evidence to prove fraud.  As far as I can see the Plaintiff has followed due process to obtain title to the property.  In essence, she paid all appliable fees including the purchase price and signed not one, but two contracts of sale and all that was outstanding and required the NHC to complete is the issuance of the title to her.

17.	There is a discrepancy in the grant of State lease to the First Defendant.  It is a grant of a Residential Lease under Section 92 of the Land Act, 1996.

18.	Section 92 of the Land Act, 1996 states:

	“92.	Grant of Business and Residence Leases.

Subject to this Act, the Minister may grant leases of Government land for business or residence purposes, or for both business and residence purposes.”

19.	The correct State lease would be a Mission Lease granted under Section 96 of the Land Act, 1996.  It states:

	“96.	Grant of Mission Lease.

(1)	The Minister may grant a lease of Government land to—

(a)	a corporation having for its object the establishment or conduct, in the country, of a Christian mission; or

(b)	a person in trust for an institution or body having any such object.

(2)	A lease under Subsection (1) may be granted for such term, not exceeding 99 years, as to the Minister seems proper”.

20.	Section 97 of the Land Act, 1996 states:

“97.	Purpose of Mission Lease.

A mission lease may be granted for—

(a)	the purpose of—

(i)	a church; or

(ii)	a dwelling-house or houses for members or persons employed by or working in connection with the mission; or

(iii)	a school; or

(iv)	a hospital; or

(v)	a building for any other charitable, educational or religious purpose; or

(vi)	gardens or pastures for purposes ancillary to any of the purposes specified in Subparagraphs (i) to (v) inclusive; and

(b)	the construction or operation, for the purposes of the establishment or conduct in the country of a Christian mission, of an aerodrome, and the erection or maintenance of hangars and other buildings required for the operation of an aerodrome”.

21.	If the First and Second Defendants wanted to use the land to extend the church building or build a house for the Pastor or church staff, then a Mission Lease should be the appropriate type of lease to be granted.  This is because the property is located in a Residential zone and it explains why there are residential properties (houses) in that area where the property is located.  A church like the Second Defendant must apply for a Mission Lease and a Mission Lease will certainly not be located in a Residential area.  The grant of a Residential Lease to a Church in this case is suspicious.

22.	Next, the speed at which the First and Second Defendants were able to start and complete the transaction for the sale and purchase of the property with the Third Defendant and finally, have the title registered with the Fourth defendant is quiet extraordinary and remarkable.  It started on 20th June 2001 when the First and Second Defendants applied for the property to the Third Defendant and by 31st October 2001, the title was transferred from the Third Defendant to the First Defendant.  This was in a space of four months compared to the time the plaintiff spent in trying to complete the sale and purchase and transfer of title to her.  It is not hard to infer then that the conduct of the First and Second Defendants are suspicious: see Mapai Transport Limited v. Romilly Kila-Pat & Ors (2017) N6850.

23.	Even of it was the case where the Third Defendant was a holder of a Certificate Authorizing Occupancy and did not have good title (State Lease) to pass to the Plaintiff prior to 11th October 2001 as contended by the First and Second Defendants, it does not detract from the fact that the Plaintiff applied for the property to the Third Defendant and it was the Third Defendant’s responsibility to advise her if it has title to the property, just like what it did to the First and Second Defendants.  

24.	In fact, the issue of proper title of the Third Defendant should never be relied on by the First, Second and Third Defendants to oppose the action for fraud because a gazettal notice No. G140 dated 22nd September 2005 was published confirming that the property was granted to the Third Defendant pending persons to purchase it when and truly after the First Defendant obtained title to it.  It should be the other way around and it goes to highlight another discrepancy in the evidence of the First and Second Defendants.

25.	In furtherance to that and contrary to the First and Second Defendants’ submission that the Plaintiff’s cause of action is in misrepresentation and negligence against the Third Defendant, it will be noted that the Plaintiff is suing for fraud, a cause of action, recognised by common law and seeks by way of relief, an order to quash the title of the property of the First Defendant.

26.	A pivotal factor in the whole controversy is the First and Second Defendants’ admission of being aware and cognizant of the Plaintiff’s use of the land on which the property is located by her planting of fruit trees and garden with building of dwelling houses over a long period of time since 1990.  If there is any truth in the First and Second Defendants’ claim that the sale and purchase of the property between them and the Third Defendant was clean, they should have informed the Plaintiff of their interest in the property and expression of interest to purchase it.  It would dispel any further doubts in relation to their conduct.  

27.	Finally, as counsel for the First and Second Defendants accurately summarised in his written submissions, this was a case where the Plaintiff, First and Second Defendants had competing interests in the property and each expressed their interest in purchasing it from the Third Defendant.  As the Plaintiff’s interest in terms of use of the property and her expression of interest to purchase the property was first in time, it was prudent for the First and Second Defendants to inform her of their intention to purchase the property prior to proceeding with it.  Not to do that supports the plaintiff’s case that it was deliberately done to by-pass her and get to the property before her.

28.	Under Section 33(1)(a) of the Land Registration Act, a registered proprietor of an estate or interest holds it absolutely free from all encumbrances except in the case of fraud. 

29.	Having regard to all the circumstances as described above, I am satisfied that fraud may be inferred and I so find.  Whether the Plaintiff will be granted the relief sought, it remains discretionary.  In this case, as fraud has been proven, the title of the property of the First Defendant will be quashed.  Secondly, having found the Plaintiff’s interest as the person first in time to use the land on which the property is located must favour a further order for specific performance to have the title transferred to her.

Order 

30.	The orders of the Court are:

1.	The title of the Second Defendant granted pursuant to a State Lease Allotment 13 Section 10, Wapenamanda, Enga Volume 11 Folio 105 and registered by an entry on 5th November 2001 is quashed forthwith.

2.	An order for specific performance that the Fourth Defendant cancel the entry on the State Lease in favour of the First Defendant dated 5th November 2001 forthwith.

3.	An order for specific performance that based on the second contract signed between the Plaintiff and Third Defendant dated 3rd December 1998, the Third Defendant facilitate the transfer and registration of title of the property Allotment 13 Section 10, Wapenamanda, Emga Province to the Plaintiff, with the Fourth Defendant forthwith.

4.	The First, Second and Third Defendants pay the Plaintiff’s costs of the proceedings, to be taxed, if not agreed.

5.	Time for entry of these orders shall be abridged to the date of settlement by the Registrar, which shall, take place forthwith.

________________________________________________________________
Tamutai Lawyers:	Lawyers for Plaintiff
Dowa & Piam Lawyers:	Lawyers for First & Second Defendants