N10417
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA NO. 100 OF 2017

STEAMSHIPS LIMITED
Appellant

V
TIRI WANGA AS DELEGATE OF THE MINISTER FOR LANDS AND PHYSICAL PLANNING
First Respondent

And
HON. JUSTIN TKATCHENKO MINISTER FOR LANDS & PHYSICAL PLANNING
Second Respondent

And
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

Waigani: Miviri J
2023: 19th & 21st July

PRACTICE & PROCEDURE – Judicial Review & appeals – Notice of Appeal – Appeal Against Forfeiture of State Lease Section 122 Land Act – No Notice Show Cause Section 122 (2) (a) Land Act – No Notice Compliance of Covenants Section 122 (2) (b) Land Act – No Evidence Failure to Comply Section 122 (1) Land Act – No Evidence Service of Notices on Appellant  – Rental Paid – Covenant Satisfied Complied – No Procedural fairness – Section 122 Land Act breached – Forfeiture of State Lease Illegal – Natural Justice Not Accorded Lessee – Forfeiture Revoked – Appeal Upheld – Cost Follow the Event.

Cases Cited:
PNG Sustainable Development Program Ltd v Rosso [2022] PGSC 36; SC2230
Gumdale Limited v John Ofoi & 4 ors [2017] N6696. 
Nambawan Super Ltd v Kimas [2013] PGNC 23; N5062
Philip v National Education Board [2008] PGNC 248; N4024 
Kasieng v Baigry [2004] PGNC 207; N2562

Counsel:

J. Nigs, for Plaintiff
No Appearance for the Defendants

RULING
21st July 2023
1.	MIVIRI, J: This is the Ruling on the notice of appeal of the 22nd September 2017, where the appellant appeals against the decision of the First Respondent Mr. Tiri Wanga delegate of the Minister for Lands & Physical Planning, published in the National Gazette No. G665 dated the 28th August 2017, to forfeit the State Lease it held over Lot 3 Section 2 Matirogo, National Capital District on the grounds that:

(i)	The improvement conditions imposed by the Act have not been fulfilled in respect of the land; and
(ii)	The lease has failed to comply with the Notice to Show Cause under section 122 (2) (a) of the Land Act 1996.

2.	 The appellant argues:

(i)	That the delegate of the Minister for Lands and Physical Planning erred in law and fact when it forfeited the State Lease, because the Lessee had failed to comply with the Notice to Show Cause under section 122 (2) (a) of the Land Act 1996.

(ii)	The delegate of the Minister for Lands & Physical Planning erred in law and fact where improvements materially compliant with the Act had been constructed on the land; and

(iii)	The delegate of the Minister for Lands & Physical Planning erred in law and fact as no Notice to Show Cause was served on the Plaintiff in breach of section 122 (2) of the Land Act 1996; and

(iv)	The Appellant was not accorded the right to be heard prior to the decision to forfeit which is guaranteed under section 122 (2), (3) (4) of the Land Act 1996 and as such was a denial of natural Justice; and

(v)	To the extent that the Minister for Lands and Physical Planning had a legally valid discretion to forfeit the Appellant’s State Lease (which is denied) the exercise of that power in all the circumstances was an unlawful act pursuant to section 41 of the Constitution of Papua New Guinea as any decision to forfeit was harsh and unconscionable and unwarranted by the circumstances of the case.

3.	The appellant seeks the following orders: 

(i)	that the appeal be allowed. 
(ii)	That the decision of Mr. Tiri Wanga as delegate of the Minister for Lands & Physical Planning published in the National Gazette No. G665 of Monday 28th August 2017 to forfeit the State Lease held over Lot 3 Section 2 Matirogo, National Capital District be quashed. 
(iii)	The appellant be re-registered as the holder of the State Lease it held over lot 3 section 2 Matirogo, National Capital District.
(iv)	The respondents pay the cost of and incidental to the appeal.

4.	The Appellant relies on the appeal book filed of the 09th June 2023 with the affidavits compounded therein comprising:

(i)	Lawrie Foster-General Manager of Pacific Palms Property affidavit filed of the 11th April 2018, 
(ii)	Deborah Onga- Group Legal Counsel of Steamships affidavit filed 22nd July 2022,
(iii)	Gloria Lakati – Senior Lawyer at Steamships affidavit filed of the 04th October 2022 and secondly filed of 29th March 2023.	

5.	All deponents are employees of Steamships and Pacific Palm Properties (PPP) respectfully. And depose to the facts as they know as employees of the said company. Lawrie Foster deposes that since 1991 the appellant has held the subject State Lease named as New Guinea Motors (1988) Pty Ltd described as Lot 3 Section 2 Matirogo, National Capital District. The name was changed after the amalgamation into Steamships Ltd which lease, annexure “LF1” to the affidavit of this witness, was for 99 years expiring on the 27th April 2060. And the terms of the lease were that the Lessee pay land rental and improve the area to a minimum value of 3000 British Pound which is equivalent to about K12, 000.00.  

6.	That on Monday 28th August 2017 the First Respondent delegate to the Minister for Lands & Physical Planning published the Notice of Forfeiture in Gazette No. G665, annexure “LF2” whereby he forfeited the State Lease on the grounds set out above. It was never served on the appellant or (PPP) as property Managers of the property. And came to my knowledge through group Legal Counsel Mary Ann Hill on the 06th September 2017. The property contains substantial improvements to the value over GBP3000. And erected on the property is a large market building comprising a concrete slab with steel structural posts, supporting corrugated iron roofing sheeting all estimated to value K 200, 000.00. And there is also a caretaker’s house with Public Ablutions block. Which house is estimated to value K 190, 000.00 because it is built of timber with steel posts and the ablutions block estimated to value over K 150, 000.00 because it has slab on the ground with block work walls. Altogether there is K 540, 000.000 worth of buildings on the property. Annexure “LF3” are photographs of all depicted on the land. It is intended that the property will be leased back to the National Capital District Commission (NCDC) to manage the market and STC to collect the rentals from NCDC until it is intended for different purpose by the lessee. 

7.	Deborah Onga- Group Legal Counsel of Steamships deposes that this matter was the subject of internal appeal exhausted in its favour after the subject lease was issued by the Land Board to another, one Dixon Warako. The Minister reversed that by the appeal the appellant lodged in its favour.

8.	Gloria Lakati is a lawyer with Steamships Limited in house. She affirms the facts set out in the affidavit of Lawrie Foster-General Manager of PPP. And deposes further that Steamships has always and continues to comply with all the covenants of the State Lease. It holds the subject lease section 2 Allotment 3, Matirogo, National Capital District (State Lease). Because on “1st May 1991, a Steamship group Company than called New Guinea Motors (1988) Pty Ltd acquired the State Lease from a Company called Toyo Menka Kaisha Limited. New Guinea Motors (1988) Pty Ltd changed its name to Steamships Automotive Pty Limited and then to Steamships Automotive Limited when it was re-incorporated under the Companies Act 1997 on 2nd September 1998. Steamships Automotive Limited was then amalgamated with a number of other Steamships Companies into “Steamships Limited” on 28th December 2004. Annexure “GL2” is a true copy of the Company Extract of Steamships Automotive Limited dated 03rd October 2022. Annexure “GL2”is true copy of the Company Extract of Steamships Limited dated 03rd October 2022. Steamships has always and continues to comply with all the covenants on the State Lease. Annexure “GL3”is a true copy of the account statement from E-Lands at the Department of Lands and Physical Planning showing no Land Rents outstanding for payment regarding the State Lease from the date it was transferred to Steamships to present.”

9.	Essentially that is the evidence from all affidavits relied by the appellant. There is no evidence to the contrary from the defendants. The State the First, Second and third respondents have made no defence of the allegation raised. Which is despite the affidavit of service filed of the 11th July 2023 effecting service and notice fixing this matter for hearing on Wednesday 19th July 2023 at 9.30am.  The orders for parties to file and serve written submissions by or before Friday 14th July 2023, have not come with same from the defendants. It means for all intent and purposes the evidence is that by the appellant for the determination of this matter. In my view it is not a matter where the State has not been accorded the opportunity to defend its case. Here amply opportunity has been accorded because as far back as Monday 08th August 2022 there is no appearance by the State. On the 05th September 2022 when directions were issued to file and serve all affidavits compilation of the Appeal Book and service on the respondents as of the 24th October 2022 there was still no appearance by the Respondents. When the matter was fixed for directions on Monday 05th December 2022 there was no appearance by the Respondents. It was on that day fixed for motions hearing on 16th December 2022 at 9.30am. On the 13th February 2023 a Mr. N. Yano appeared for the Respondents. On that day the matter was adjourned to Wednesday 08th March 2023 for the hearing of the NOM seeking extension of time by the Appellants. On the 08th March 2023 there was no appearance by the Respondents. And Directions were issued to file and serve all affidavits intended to be relied on by the 29th March 2023. And similar reciprocal directions were made against the Respondents by the 19th April 2023. With the Appellant to file serve the draft to the Index to the appeal book on the respondents by the 28th April 2023. And the Respondents to respond to it by Friday 03rd May 2023. And for the preparation and service of the settled appeal book by the Appellant on Friday 12th May 2023 for signing by the respondents. And for filing of the settled appeal book by Wednesday 17th May 2023 and matter adjourned to Monday 05th June 2023 at 9.30am for directions. There was no appearance by the Respondents since and on Monday 05th June 13th June 23 and 19th June 2023. On the latter date matter was adjourned to 19th July 2023 at 9.30am for trial and parties were to file submissions by Friday 14th July 2023.

10.	This is a chronology of the file and it is clear that the State has been accorded all opportunity to defend itself against the appeal that has been lodged. It cannot be argued that no opportunity has been given to the State to air its views on the matter. It simply shows a no care attitude, and the Court will not continue to lean back and wait for the State where there are serious allegations breaching the law by its servants and agents in the duties, they are called upon to discharge. And that is the allegation against the respondents named here. It is apt to hear the matter and to give the determination in law called. Because service affidavit of Tau Uamaki Taxation clerk/Para-legal Dentons dated 12th June 2023 deposes that he served the appeal book on the office of the Solicitor General received by Carmeline Tauwaole Executive Assistant of that Office evidenced by annexure “TU1” true copy of the backing sheet of the said Appeal Book. And “TU2” is true copy of the Dentons Process Service Form. Which is coupled later with the service affidavit of the 11th July 2023 by Moha Opa Para Legal of Dentons who on Friday 07th July 2023 at 1.30pm attended at the Office of the Solicitor General Level 6 of the West New Britain Haus Waigani and served the seal copy of the Court Order ordered 19th June 2023 entered 07th July 2023, “MO1” and “MO2” Denton’s Process Service Form. The Order fixes the matter for hearing on the appeal on 19th July 2023 at 9.30am. Coupled with order for parties to file and serve their written Submissions by Friday 14th July 2023. Again, Carmeline Tauwaole Executive Assistant of that Office receives the subject documents.  

11.	I hold that the proceedings have been duly served and the State has been given all opportunity to defend itself in law. The evidence of this appeal is by far all that was filed by the appellant. And they alone will be considered as there is nothing in rebuttal or reply by the State despite the opportunity accorded. It is clear from all this evidence that the subject State Lease was forfeited which lease Lot 3 Section 2 Matirogo National Capital District was held in the name of New Guinea Motors (1988) Pty Ltd changed its name after amalgamation into Steamships Limited. And that the lease was for 99 years expiring on the 27th April 2060. And that the appellant complied with the covenants of that lease:

(a)	The improvement conditions imposed by the Act have not been fulfilled in respect of the land; and
(b)	There is no rent outstanding and due from it; and 
(c)	The lessee has not failed to comply with a Notice under section 122 (2) of the Act.

12.	Therefore, the forfeiture under section 122 of the Land Act 1996 carried out by the notice of forfeiture published in Gazette No. G665 of 2017 “LF2” affidavit of Lawrie Foster set out above, cannot stand in law. Together with “LF4” publication of Gazette No. G767 of the 28th September 2017 tender of the subject property without service of the Notice to show cause. The simple reason being that service of the Notice to Show Cause pursuant to section 122 (2) of the Land Act was not affected duly in law upon the appellant so that he was given notice in law. Allowing him the right to reply as to the cause that was taken by the State. And to defend its case on the forfeiture. This is essentially the evidence of the witnesses’ deponents Lawrie Foster, Deborah Onga and Gloria Lakati particulars set out above. 

13.	The name of the lease holder was changed from the original of New Guinea Motors (1988) Pty Ltd after amalgamation into Steamships Ltd. And service of the Notice to Show Cause was not served Steamships Limited as the holder in Law of the subject lease. Because of that primary fact there was no service in law. And what followed pursuant to gazette the tender was in breach of the law and did not stand. Because section 122 of the land Act was not heeded and complied to give effect to the law. As the lease was current up to 27th April 2060. There was no evidence of outstanding rental or that the covenants imposed by law under that lease were not executed or implemented. Quite the contrary by the evidence set out above. More than K 540, 000.000 worth of buildings on the property. Annexure “LF3” photographs depicting that execution so it could not be the subject of a notice of forfeiture pursuant to section 122 of the Land Act. Nor could it amount to forfeiture for the cause that development covenants were not implemented.

14.	The evidence in all material particulars seal the arguments that have been raised addressing the issues on appeal are: 

(1)	Whether the Appellant complied with the Lease covenants in the State Lease? 
(2)	Whether the Notice to Show Cause was valid?
(3)	Whether the forfeiture of the State Lease was proper?

15.	All three issues are addressed in the affirmative for the cause that the appellant has raised in his favour. The respondents have breached the law in the particulars raised in the appeal grounds set out above. The covenants were complied with given heed to by the appellant as the lessee. The Notice to Show Cause was never served the lessee Steamships Limited. There was no service in law fulfilling satisfying the requirements of section 122 of the Land Act in the forfeiture of the subject state Lease. The forfeiture was not proper within the dictate of section 122 of the land Act: PNG Sustainable Development Program Ltd v Rosso [2022] PGSC 36; SC2230 (29 April 2022). There was no forfeiture because the words of section 122 are specific as follows: 
PART XV. – FORFEITURE OF STATE LEASE AND FINES.
Division 1.
Forfeiture of State Lease.
122. FORFEITURE OF STATE LEASE.
(1) The Minister may, by notice in the National Gazette, forfeit a state lease–
(a) if rent on the lease remains due and unpaid for a period of six months; or
(b) if fees are not paid in accordance with this Act; or
(c) if the amount payable in respect of improvements is not paid in accordance with this Act; or
(d) if–
(i) a covenant or condition of the lease; or
(ii) a provision of this Act relating to the lease; or
(iii) a requirement of a notice under Section 91 relating to the lease,
is not complied with; or
(e) if the granting of the lease has been obtained, in the opinion of the Minister, wholly or partly as a result of statements that were, to the knowledge of the lessee, false or misleading.
(2) Before forfeiting a State lease under Subsection (1), the Minister–
(a) shall serve notice on the lessee calling on him to show cause, within a period specified in the notice, why the lease should not be forfeited on the ground or grounds specified in the notice; and
(b) may, whether or not cause has been shown in accordance with a notice under Paragraph (a), serve on the lessee a notice requiring him, within a period specified in the notice, to comply with the covenants or conditions of the lease or the provisions of this Act.
(3) The Minister shall not forfeit a lease under this Section unless–
(a) the lessee has failed to comply with a notice under Subsection (2)(a) or (b); or
(b) the lessee has failed to show good cause why the lease should not be forfeited.
(4) Copies of a notice of forfeiture and a notice under Subsection (2)(a) or (b) shall be served on all persons who, to the knowledge of the Departmental Head, have or claim to have a right, title, estate, or interest in, to or in relation to the land, or such of them as can with reasonable diligence be ascertained and found.
(5) No acceptance of rent by the State waives a right to forfeit a lease under this Act.
(6) For the purposes of this Section the grant of an application for a State lease shall be deemed to be the grant of the lease.”

16.	Applying the law to the facts, there is clearly very strong evidence here that 
the Defendants have not fulfilled fully Section 122 of for that matter in particular section 122 (1)(a). What evidence has been led favours the assertions of and sustains in favour of the Appellant because all allegations raised to the covenants Section 122 (1) (d) are not made out. Nor is there rent outstanding or any other reasons within that section. The lease is current up to 27th April 2060 and its forfeiture was illegal and unlawful as contended by the appellant.

17.	This is clear evidence that the Appellant was not given notice in compliance of section 122 of the Act. Because notices to show cause sent to the wrong postal address but received out of time was said not to constitute proper service on the appellant: Gumdale Limited v John Ofoi & 4 ors [2017] N6696. Conforming with the process and procedure under section 122 (2) (a), (3) and (4) of the Act will legitimatize forfeiture as without will be illegal to forfeit, Nambawan Super Ltd v Kimas [2013] PGNC 23; N5062 (27 February 2013). Because the evidence here is that section 122 (2) (a) and (b) of the Act were complied with. There was no notice served on the Appellant prior to forfeiture of the Lease he having changed his name. The effect in law is that the forfeiture cannot stand against the Appellant.

18.	There is fundamental and mandatory fulfillment of the requirement of section 122 (1) (2) (3) & (4) of the Land Act, that the Minister must satisfy before a forfeiture is proper and discharges the requirements of that section. Here it is evident there were no notices in compliance of section 122 (1) (2) (3) & (4) of the Act. The decision to forfeit of the delegate of the Minister could not stand because the Appellant had not been given an opportunity to be heard in his defence: Philip v National Education Board [2008] PGNC 248; N4024 (27 June 2008). There was therefore noncompliance of section 122 by the respondents. And the decision that followed to forfeit was ultra vires and illegal. There was no compliance with the enabling Legislation: Kasieng v Baigry [2004] PGNC 207; N2562 (23 June 2004). 

19.	The formal orders of the Court are that:

(i)	The appeal is allowed.
(ii)	It is Declared that the Notices of Forfeiture of the First and Second Respondents all issued the Appellant are invalid, unlawful and of no legal effect.
(iii)	That the decision of Mr. Tiri Wanga as delegate of the Minister for Lands & Physical Planning published in the National Gazette No. G665 of Monday 28th August 2017 to forfeit the State Lease held over Lot 3 Section 2 Matirogo, National Capital District is quashed forthwith. 
(iv)	The appellant is re-registered as the holder of the State Lease it held over lot 3 section 2 Matirogo, National Capital District.
(v)	Cost follows the event in favour of the Appellants.

Orders Accordingly.
__________________________________________________________________
Denton PNG: Lawyers for the Plaintiff/Applicant		
Office of the Solicitor General: Lawyers for the Defendant