SC1223

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 80 OF 2012

BETWEEN:

JACKSON LAKA alias JOHN LAKA
Appellant

AND:

PIUS NUI
Respondent

Waigani: Salika, DCJ; Hartshorn, J; Kariko, J
2013: 25th February and 1st March

PROPERTY- appeal against refusal to award special damages for improvements – doctrine of acquiescence and 'quicquid plantatur solo solo cedit' considered

Facts:

This is an appeal against a part of the decision of the National Court whereby the primary judge granted a number of declaratory orders sought by the respondent and dismissed a cross-claim filed by the appellant. The proceeding in the National Court was in relation to an eviction order obtained by the respondent evicting the appellant from his land after he had allowed the appellant to settle on his land with conditions. The appellant now appeals against the decision of the primary Judge for not granting him special damages for the improvements he erected on the land.

Held:

There are no proper grounds to disturb the primary judge's decision and the appeal is dismissed.

Cases cited:

Papua New Guinea Cases:

PNG Ready Mixed Concrete Pty Ltd v The State of Papua New Guinea & Ors [1981] PNGLR 396 
Maip Pty Ltd v Ambra Coffee Estates Pty Ltd [1995] PNGLR 25
Tony Yagon for himself & on behalf of Settlers of Dylup Plantation v Noura No. 59 Ltd trading as Dylup Plantation (2008) N3375
Pius Koroguen v Christine Wagen (2008) N3422

Overseas Cases:

Plimmer v Wellington Corpn (1884) 9App Cas 699 
Inwards v Baker [1965] 1 All E R 446 

Text: 

Halsbury's Laws of England, 4th Edition, Volume 16

Counsel:

Mr L Ako, for the appellant
Mr K Peri, for the respondent

1st March 2013

1.	BY THE COURT: This is an appeal against a part of the decision of the National Court given on 31st May 2012 at Mount Hagen in the proceeding O.S. No. 645 of 2009 ("the Proceeding") whereby the primary judge granted a number of declaratory orders sought by Mr Pius Nui who was then the plaintiff in the Proceeding, and dismissed a cross-claim filed by the defendant Mr Jackson Laka alias John Laka. 

Brief Background 

2.	Mr Nui is the registered title holder of an area of land described as Portion 1232 Milinch of Mt Hagen, Fourmil of Ramu, Western Highlands Province and contained in State Lease Volume 102 Folio 198 ("the Land"). About four years before the issue of the State Lease in 1987, Mr Laka and some of his tribesmen moved onto the land and settled on it. Mr Nui allowed these people to remain on the Land after the State Lease was issued on the condition that they did not cause any trouble. 

3.	Mr Laka built a permanent house, a kunai house and made food gardens on the part of the Land he occupied. In 2009, the relationship between the parties soured as a result of which Mr Nui commenced the Proceeding.

4.	The orders of the primary judge issued on 31st May 2012 included declarations that:

(1)	Mr Nui is the registered proprietor of the Land; and

(2)	Mr Laka deliver up possession of the Land. 

5.	In the dismissed cross-claim Mr Laka amongst other orders sought special damages (compensation) for improvements he caused to the Land. 

Ground of appeal

6.	This appeal is against the refusal by the primary judge to award the special damages. The ground of appeal reads:

That the National Court erred in fact and in law when it failed to award any damages to the Appellant for the structural improvements on the land namely, Portion 1232 Milinch of Mt Hagen, Fourmil of Ramu, Western Highlands Province contained in State Lease Volume 102 Folio 198.

Appellant's arguments

7.	Mr Laka's case is that he must be compensated for the structural improvements in particular the permanent house he built on the Land. This claim is based on the proposition that he expended money to improve the Land with the knowledge of and without any objection from Mr Nui, and therefore he has an equitable interest in the Land and should be compensated by Mr Nui for the improvements. 

8.	The appellant also argued that the primary judge erred in law in his decision in that:

(1)	He misinterpreted the Latin maxim "quicquid plantatur solo solo cedit" by accepting Mr Nui did not have to take the improvements (the house) which by law are a part of the Land.

(2)	He held that any compensation to Mr Laka would amount to unjust enrichment.

Acquiescence

9.	The appellant mainly relied on the doctrine of acquiescence in support of the first argument. In particular, reference was made to Halsbury's Laws of England, 4th Edition, Volume 16, paragraph 1475:

The Court will also protect a person who takes possession of land or exercises an easement over it under an expectation, created or encouraged by the owner, that he is to have an interest in it, and with the owner's knowledge and without objection by him expends money on the land. The protection may take the form of requiring repayment of the money (compensation), or the refusal to the true owner of an order for possession, or of holding the person expending the money to be entitled to a charge or lien, or of finding a constructive trust. (Our underlining)

10.	The doctrine simply means that where a person having a right, stands by and does nothing to stop another from infringing that right, he cannot later complain of that infringement, and in the appropriate case, compensation may be ordered for money spent on the land. For example where a person wrongly believes he has title and takes possession of the land and the rightful owner lets him think he has title and does nothing to stop him spending money to improve the land, when the owner later asserts his right, he may be required to pay compensation. 

11.	That is not the situation here. There was no infringement of Mr Laka's rights in the present case nor was there an encouragement by Mr Nui of Mr Laka to believe he had a right which did not exist. Mr Nui as proprietor of the Land merely allowed Mr Laka to reside on the Land which amounted to a lease which was subject to condition, a condition that he Mr Laka did not cause any trouble while living on the Land. As a tenant at will he assumed the risks of any person coming on to land without legal title who spends money and effort improving the land (Maip Pty Ltd v Ambra Coffee Estates Pty Ltd [1995] PNGLR 25).

12.	The appellant also relied on the remarks of Cannings, J in Tony Yagon for himself & on behalf of Settlers of Dylup Plantation v Noura No. 59. Ltd trading as Dylup Plantation (2008) N3375, where His Honour first observed that settlers on land, that is those persons invited or allowed to stay on the land by its owner, have an equitable interest in the land, akin to a license to occupy it. After citing a number of case authorities (including the leading case of PNG Ready Mixed Concrete Pty Ltd v The State of Papua New Guinea & Ors [1981] PNGLR 396) that have established that settlers do not have the right to live on the land for as long as they like, but are entitled to be given reasonable notice to leave, His Honour then suggested that perhaps the settlers might also be entitled to compensation for leaving. This question does not appear to have been for determination or argued before His Honour and His Honour did not express a definite view on it.

13.	The cases cited in the notes to the above extract from Halsbury's Laws of England, 4th Edition, Volume 16, state that compensation may be appropriate where the improvements have been caused with the approval of the owner for the benefit of the owner; see for example Plimmer v Wellington Corpn (1884) 9App Cas 699 and Inwards v Baker [1965] 1 All E R 446. Applying those cases, we do not find this as an appropriate case to award damages for the improvements and therefore find no error on the part of the primary judge finding that "the plaintiff would be under no obligation to compensate the defendant for the time and effort he has put into effecting the improvements and also the expenses he has incurred in the course".

 Quicquid plantatur solo solo cedit

14.	The appellant also submitted that the primary judge misinterpreted the legal maxim "quicquid plantatur solo solo cedit" because after finding that the permanent house was a part of the Land, His Honour held it was in order for Mr Nui to decide he did not want the house. The maxim means that what is affixed to the soil becomes a part of the soil. There is nothing in His Honour's decision which suggests that he did not find the house to be part of the Land. His Honour relevantly said:

In applying the maxim to the present case, all the structural improvements effected by the defendant on the land, apart from the furniture and the beddings, belong to the plaintiff. The furniture and beddings will be treated as chattels. 

15.	He clearly acknowledged that Mr Nui could claim the house as being part of the Land but also noted that Mr Nui was not interested in the house and was happy for Mr Laka to take it down and remove it. The submission by the appellant is therefore misconceived.

Unjust enrichment

16.	The third argument advanced by the appellant was that His Honour erred in holding that any compensation would amount to unjust enrichment. We accept the law is that a plaintiff suing for unjust enrichment must prove:

•	that the defendant has been enriched by the receipt of a benefit; and 

•	that the defendant has been enriched at the plaintiff's expense; and 

•	that it would be unjust to allow the defendant to retain that benefit.

(Pius Koroguen v Christine Wagen (2008) N3422)

17.	And although we agree that the requisite elements were not proved in the present case, His Honour merely noted that any compensation payment "could amount to unjust enrichment". However this was not the main reason for his rejection of Mr Laka's claim for special damages.

Conclusion

18.	We do not find any proper grounds to disturb the primary judge's decision and would dismiss the appeal.

Orders

19.	 The formal Orders of this court are:

(1)	The appeal is dismissed.

(2)	The appellant shall pay the respondent's costs of this appeal, to be taxed if not agreed.

________________________________________________________________

Mirupasi Lawyers: Lawyer for the appellant
Warner Shand Lawyers: Lawyer for the respondent