N11203
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO 52 OF 2016

BETWEEN
MARK MOKONO  
Plaintiff

AND
MERIA KUNAKO  
First Defendant

AND
TAYAGO HAMONO 
Second Defendant

AND
WARALO BUSINESS GROUP INC  
Third Defendant

WAIGANI: MAKAIL J
25 MARCH, 19 JULY, 4 AUGUST 2022; 21 MARCH 2025 

LIABILITY – STATE LEASES – Fraud – Title to property – State Lease – Proof of – Land Registration Act – Section 33(1)(a)

Cases cited
Emas Estate Development Pty Limited v John Mea & Ors [1993] PNGLR 215 
Koitachi Limited v Walter Schnaubelt (2007) SC870
Mudge v Secretary for Lands [1985] PNGLR 387 

Counsel
Mr S Tolo for plaintiffs
Mr H Kevau for first, second and third defendants

JUDGMENT

1.	MAKAIL, J: The plaintiff sues the defendants for procuring title to a property by fraud and seeks an order to have the title set aside under Section 33(1)(a) of the Land Registration Act and restore the title to him.  He also seeks damages.  The property is described as Allotment 1 Section 26, Hohola, National Capital District and registered as State Lease (Residence Lease) Volume 83, Folio 173. 

Definition of Fraud

2.	The word “fraud” in Section 33(1)(a) of the Land Registration Act has been defined as actual fraud or constructive fraud:  Mudge v Secretary for Lands [1985] PNGLR 387, Emas Estate Development Pty Limited v John Mea & Ors [1993] PNGLR 215 and Koitachi Limited v Walter Schnaubelt (2007) SC870.

Grounds of Fraud

3.	The plaintiff relies on three grounds which he says collectively, constitute fraud.  

Incorporation of Waralo Business Group without the plaintiff’s consent and knowledge

•	first, he was the person instrumental in establishing the Waralo Business Group sometimes between 1976 and 1978 for the plaintiff’s clansman in be involved in business.  It was an unregistered body.  Subsequently, in 2004 without his consent and knowledge the first and second defendants registered Waralo Business Group Incorporation and made the plaintiff its secretary.  

Alteration of Original Transfer Instrument at Registrar of Title’s Office 

•	secondly, the defendants altered the original Transfer Instrument and caveat at Registrar of Title’s Office by inserting the name of the second defendant and applying the common seal of the recently incorporated Walaro Business Group Incorporation when the second defendant was not involved in the original transaction and Walaro Business Group Incorporation was unregistered and did not have a common seal at that time.

False Declaration (Perjury) 

•	thirdly, the defendants lodged an application for Replacement Title and made a false declaration in a Statutory Declaration form that original owners copy of the title of the property was destroyed in a house fire where the first and second defendants lived on 08th April 2004 when these defendants never owned and lived on that property.

Parties’ Evidence

4.	The plaintiff relies on the following:  

(a)	his affidavit sworn and filed on 13th September 2016 (Exhibit P1”),

(b)	affidavit of Elis Mokono sworn pn 7th September 2016 and filed on 13th September 2016 (Exhibit “P2”), and

(c)	affidavit of Michael Minape sworn on 19th December 2016 and filed on 21st December 2016 (Exhibit “P3”).

5.	The defendants rely on the following:

(a)	affidavit of second defendant sworn on 27th October 2016 and on filed 31st October 201 (Exhibit “D1”),

(b)	affidavit of second defendant sworn on 10th January 2017 and filed on 13th January 2017 (Exhibit “D2”), and

(c)	affidavit of first sworn on 30th November 2017 and filed on 1st December 2017 (Exhibit “D3”).

6.	Each deponent of the affidavit was cross-examined by counsel for each opposing party.

Analysis of Parties’ Evidence

7.	I have read the witnesses’ accounts in the affidavits of the parties and reviewed their oral account in cross-examination, and I accept the account of the plaintiff because it is direct and specific in relation to the establishment of the third defendant as an unregistered body in the late 1970s in Tari for the purpose of bringing the members of his clan together to engage in business enterprise.  The first and second defendants were part of this group.   Between 1979 and 1982 the plaintiff moved from Tari to Mt Hagen and to Port Moresby for work and left behind the responsibly in running the business group with the first and second defendants.  

8.	However, contrary to the plaintiff’s account that the third defendant was an unregistered body, I accept the account of the defendants based on the Certificate of Incorporation which may be found at Annexure “H” to Exhibit “D2” that the third defendant was incorporated and registered on 7th February 1984 when the plaintiff had already moved to Port Moresby.  His absence in Tari is the explanation for him been unaware of the third defendant’s incorporation and registration as a registered business entity and capable of holding and disposing of property real or otherwise.

9.	Pursuant to the Certificate of Incorporation of the third defendant, the second defendant was appointed the Chairman, Itabu Hulikiri the Secretary and first defendant the Treasurer.  

10.	I accept the plaintiff’s account and find that in 1985 he invited the first and second defendants to Port Moresby and they acquired a property in the newly built Islander Village.  In 1986 the plaintiff’s moved his family to Port Moresby and moved to the subject property in dispute and were renting it from one David Bizari whom he found out later was not the true landlord.

11.	As to the title of the property, there is no dispute that the certificate of title of the property shows that:
 
•	a Peter Tegelabe was the original title holder.

•	a mortgage No 46844 to ANZ Bank was entered on 24th June 1986.

•	a discharge No 65481 of the mortgage No 46844 to ANZ Bank was entered on 6th March 1989.

•	a transfer No 65482 to Waralo Business Group (Inc) was entered on 6th March 1989.

•	a mortgage No 66352 to ANZ Bank was entered on 6th March 1989.

•	a discharge No 35027 of the mortgage No 66352 to ANZ Bank was entered on 30th June 2004.

•	entry of first defendant and second defendant as joint tenants on 8th October 2015.

12.	It is noted that the first transfer of title is the one to Waralo Business Group Inc on 6th March 1989.  The question is, who paid for the purchase price and/or discharge of the mortgage to ANZ Bank?   I accept the plaintiff’s assertion and find that he paid the purchase price in total sum of K26,000.00 for the property comprising of cash of K16,000.00 to the ANZ Bank to settle Peter Tegelabe’s debt to the bank in the mortgage and cash of K10,000.00 to Peter Tegelabe which was received by his nephew Nelson Hengen.  Parties also signed the Transfer Instrument.  The transaction was also witnessed by Nelson Hengene: see Exhibit “P2”.

13.	As to the source of the purchase price of K26,000.00, I am not satisfied that this sum of money came out of the pocket of the plaintiff because there is counter evidence from the first and second defendants that Waralo Business Group Inc paid the purchase price.  This is reinforced by the fact that the title was transferred and registered from Peter Tegelabe to Waralo Business Group Inc.  While I note the plaintiff’s explanation that he wanted the title of the property to be in the name of the said business group for the members of his clan back home in Tari, I think this is over generous of him especially if it is true that he used a significant sum of money (K26,000.00) out of his own pocket to pay the purchase price of the property.  Why would he do that?

16.	The first and second defendants’ answers during cross-examination in relation to this sale and purchase transaction were vague and unimpressive.  However, there is an explanation for it.  The plaintiff carried the cash money and was the person who initiated the sale and purchase of the property with Peter Tegelabe.  Nonetheless, it was the money of Waralo Business Group Inc that was used to purchase the property.  By that time, Waralo Business Group was incorporated and registered as a business entity and capable of acquiring, holding and disposing of property under Section 18(1)(c) of the Business Group Incorporation Act 1974.

17.	By the time the second transfer of title of property was registered from Waralo Business Group Inc to the first and second defendants on 8th October 2015, there is no question about the Waralo Business Group Inc’s capacity to acquire, hold and dispose of property under Section 18(1)(c) (supra).  Further, contrary to the plaintiff’s account that he is a leader of the Waralo Business Group Inc and should have been consulted about the sale of the property, I accept the account of the defendants that the executives of Waralo Business Group Inc were the first and second defendants.  Furthermore, I accept their evidence that due to down-turn in the business of the business group, a decision was made to sell the property to the first and second defendants.  All the necessary documents for the sale and purchase of the property were prepared and presented by the lawyers of the parties including the contract of sale and purchase price of K20,000.00 on 4th August 2004.

18.	Prior to that the original owner’s copy of the title was destroyed in a house fire where the first and second defendants lived at Tete settlement in Gerehu and an application for replacement title was made and one was issued on 5th May 2004.  The was a delay of about 11 years following the sale of the property from Waralo Business Group Inc to the first and second defendants and finally the transfer and registration of title took place on 6th October 2015 after all outstanding State Lease Rentals were settled.  I accept the defendants’ explanation and find that these were the reasons for the long delay in processing the transfer and registration of title from Waralo Business Group Inc to the first and second defendants.

19.	The plaintiff relies on the Transfer Instrument which may be found at Annexure “D” to Exhibit “P1” which shows that it has been tampered with because the plaintiff’s name has been printed where the Transferee or Transferee’s solicitor should sign.  That is where his name was printed when the transaction occurred.  The second defendant’s signature is above the plaintiff’s name and in a different ink and goes to show that it was recently inserted. 

20.	However, this ground is inconsequential because accepting that the plaintiff signed the Transfer Instrument at ANZ Bank for the first sale and purchase of the property from Peter Tegalabe to Waralo Business Group Inc on 13th April 1988, that transfer, and registration is in order.  The addition of the name of the second defendant on the Transfer Instrument is a reminder to the plaintiff that he was not the Chairman of the business group, but the second defendant according to the Certificate of Incorporation found at Annexure “H” to Exhibit “D2”.

21.	Finally, while the plaintiff relies on the ground that the defendants made a false statutory declaration that the owner’s copy of the title was destroyed in a house fire where they were living, the plaintiff did not adduce any evidence to refute the defendants’ account and I will accept their account and find that the owner’s copy of the title of the property was destroyed in a house fire.  Consequently, the defendants made an application for a replacement title by following the process under Section 161 of the Land Registration Act.   Eventually, a replacement copy was issued on 5th May 2004.

Conclusion

22.	I am not satisfied that the plaintiff has established the three grounds he alleges collectively, constitutes fraud within the meaning of fraud under Section 33(1)(a) of the Land Registration Act such that the first and second defendants’ title should be set aside.  I dismiss the proceedings with costs to the defendants’ to be taxed if not agreed.

Order
23.	The orders of the Court are:

1.	The proceedings are dismissed.

2.	The plaintiff shall pay the defendant’s costs of the proceedings, to be taxed, if not agreed.
	
3.	Time shall be abridged.

Lawyers for plaintiff: Jerewai Lawyers
Lawyers for defendants: Kevau Legal