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Dynasty Estates Ltd v Nambawan Super Ltd [2015] PGSC 20; SC1427 (6 May 2015)

SC1427

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCM NO. 12 OF 2011

BETWEEN

DYNASTY ESTATES LIMITED
Appellant

AND
NAMBAWAN SUPER LIMITED
First Respondent

AND

SIR PUKA TEMU, MINISTER FOR LANDS & PHYSICAL PLANNING
Second Respondent

AND

DEPARTMENT OF LANDS & PHYSICAL PLANNING
Third Respondent

AND

FRIEND KINI, SAM TASION & ORS
Fourth Respondent

AND

JOHN OFIO, CHIEF PHYSICAL PLANNER & OTHERS
Fifth Respondent

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Respondent

Waigani: Kirriwom, Makail, & Ipang, JJ
2015: 28th April & 06th May

SUPREME COURT – Appeal from grant of application for judicial review – Decision of National Court to quash decision of Land Board – Decision to subdivide land and award Urban Development Lease

LAND LAW – Urban Development Lease - Expiration of – Effect of – Land reverts to State – Application for renewal – Grant of – Land Act, 1996 – Section 104.

JUDICIAL REVIEW – Notice of Motion – Service of – Must be served on all persons directly affected – Mandatory – Breach of – Effect of – Denial of opportunity to be heard – National Court Rules – Order 16, rule 5(2).

Cases cited:

Kitogara Holdings Pty Ltd v. National Capital District Interim Commissions & The State [1988-89] PNGLR 346
Yanta Development Association v. Piu Land Group Inc. [2005] 24, SC798

Counsel:

Mr. B. Frizzell, for Appellant
Mr. G. Geroro, for First Respondent
No appearance, for Second, Third, Fourth, Fifth & Sixth Respondents

JUDGMENT
06th May, 2015

1. BY THE COURT: A company called Pea Chester Pty Ltd was granted an Urban Development Lease ("UDL") for five years under section 104 of the Land Act 1996 from 10th August 1998 for Portion 1539 ("the land") and the first respondent POSF Ltd (now Nambawan Super Limited) acquired all the shares in Pea Chester Ltd in October 1998. The land was said to be zoned "residential". The UDL expired on 25th February, 2003. Despite this, the first respondent continued paying annual land rent right through to 2009 when proceedings were issued.

2. In 2005, the National Capital District Commission ("NCDC") proposed a Port Moresby Town Local Development Plan, which included rezoning of Portion 1539 as "Environment Protection". On or about 23rd August, 2007 the third respondent and the other respondents subdivided the land into Portions 2602, 2607 and 2608 and published a notice in the National Gazette inviting tenders for them. In the National Gazette of 17th September, 2009, the Land Board published additional items for its meeting No. 05/09 in respect of the tenders for these portions each of which included the appellant and the first respondent, amongst, respectively, other applicants.

3. On 23rd September, 2009 the NCDC wrote to the Land Board requesting those items concerning Portions 2606, 2607 and 2608 be removed. On 24th September, 2009 the first respondent withdrew its tender for Portions 2606, 2607 and 2608 and the Land Board considered tenders from 28th to 30th September, 2009. On 08th October, 2009 lawyers for the first respondent wrote to the Chairman of the Land Board referring to an article in the Post Courier newspaper reporting, inter alia, that the appellant was the successful applicant and had been granted UDL's for these portions.

4. In the National Court proceedings OS No (JR) 562 of 2009, the first respondent sought leave to apply for judicial review concerning, inter alia, the decision by the Papua New Guinea Land Board ("Land Board") to subdivide Portion 1539 Granville into three separate Portions 2606, 2607 and 2608 and putting them out for public tender and related matters. Leave was granted on 20th October, 2009.

National Court Decision

5. On 01st June 2011, the National Court upheld the application for judicial review and ordered:

"1 The application for a declaration that the land is zoned "Environment Protection Zoning is refused.

2. The purported decision to subdivide the land referred to in the Proposed Subdivision Zone of Portion 1539, Granville, National Capital District of 23rd August 2007, is brought into this Court by way of certiorari, and is quashed.

3. The decision to invite tenders published in Gazette no. G158 of 20th August 2009, and the decision to publish details of tenders in Gazette no. G177 of 17th September 2009, for leases over the land described as portion 2606, 2607 and 2608 volume 20 folio 110 and/or Portion 1539 Milinch Granville, Fourmil Moresby, are brought into this Court by way of certiorari, and are quashed.

4. An order by way of mandamus is granted against the Defendants whereby they are to consider and determine the Plaintiff's application made on 21st November 2007 for renewal of the UDL issued on 10th August 1998 for the land described as Portion 1539 Milinch Granville Fourmil Moresby.

5. ........."

6. The appellant was not a party nor was it served or informed of the proceedings or the decision of the National Court until two weeks after the decision was made. The findings of the Court indicate that the case proceeded on the basis that the Land Board had not made any decision concerning the tenders lodged for Portion 1539. In relation to alternative remedies, if the land was subsequently subdivided and tenders lodged, there was no evidence that the Land Board subsequently considered tenders or made a decision to award leases. For this reason, the first respondent's right of appeal under section 62 of the Land Act could not be exercised. The Court also held that there was no evidence of any challenge by the other company who may have been the successful applicant and no evidence of development had taken place.

7. Although the appellant was not a party in the National Court proceedings, it filed this appeal as a "person aggrieved" by the order of the National Court: see Kitogara Holdings Pty Ltd v. National Capital District Interim Commissions & The State [1988-89] PNGLR 346 per Kapi DCJ & Woods J and sections 14(2) and 17 of the Supreme Court Act. It seeks to set aside the order of 01st June 2011.

Appeal Hearing

8. At the hearing of the appeal, the appellant sought and was granted leave to adduce fresh evidence. The fresh evidence was the notification of successful tender application for Portions 2606, 2607 and 2608 from the Land Board to the appellant. This evidence was not before the National Court proceedings at the time of trial.

9. The main ground of appeal is that the appellant was not served the National Court proceedings when it had an interest in the same portion of land and ought to have been served. Basing its case on the fresh evidence, the appellant submits that this evidence shows that it had an interest in the same land but was not served. As a result, it was denied an opportunity to be heard and the National Court did not have the benefit of its response to the first respondent's claim over the same portion of land. It further submits that while the Department of Lands and Physical Planning, its officers and the State were named as defendants in the National Court proceedings, it was an interested party and should have been given an opportunity to be heard. The National Court erred when it proceeded in its absence.

10. In refuting any suggestion that the first respondent was entitled to a decision from the Land Board with respect to its application for renewal of the UDL for the land, it submits that this suggestion must be rejected because the UDL had expired. Parties accept that when a term of a UDL expires, the land reverts to the State. On this basis, the appellant contends that the State (Fifth Respondent) was entitled to subdivide it into three portions and put them up for tender. It tendered for them and was successful and should have been granted leases.

11. The first respondent accepts that the appellant was not served or heard in the National Court proceedings but disputes the appellant's claim that it was entitled to the land for two main reasons. First, the National Court found that the land was not subdivided. The Court reached that conclusion because there was no evidence from the defence to show that the rezoning requirements under the Land Act had been complied with. It further submits the appellant does not appeal against this finding and it must stand. On this basis, the appellant is precluded from contending that the land was subdivided and subsequently awarded to it by the Land Board.

12. If this Court were to accept the proposition that land was subdivided, it submits the decision of the Land Board does not grant a legal right to the appellant as a lessee of these portions of land. It is merely a confirmation of the appellant's successful tender for each portion. The decision is subject to the Minister for Lands and Physical Planning (Second Respondent) to grant lease. This can only occur when the appellant complies with the conditions of the tender which are stated in the notification letter. There is no evidence of a lease being issued for each portion and the appellant meeting those conditions. Its' claim to these portions of land must, therefore, fail.

Consideration

13. The critical issue in this case is whether the appellant should have been served the Notice of Motion for the application for judicial review. All the other issues are secondary. After grant of leave, Order 16, rule 5(2) of the National Court Rules states that the "Notice of Motion (for the application for judicial review) must be served on all persons directly affected....." This rule is couched in a way that it makes it mandatory for an applicant for judicial review to serve the Notice of Motion on all persons directly affected. Order 16, rule 5(6) provide the Court discretion to adjourn the hearing until persons who ought, in its opinion to have been served, to be served before the hearing.

14. We consider that the rationale behind these rules is to accord all persons directly affected by the exercise of power by a quasi judicial authority or administrative body an opportunity to be heard. Where a person directly affected is served the Notice of Motion, two things may occur; first, that person may choose against being heard or secondly, may choose to be heard. In the latter case, that person may neither apply to join in the proceedings or appear and be heard without being formally joined.

15. The evidence before the National Court showing the interest of the appellant was firstly, the National Gazette of 17th September, 2009. This document lists the names of the applicants for tender. The appellant and the first respondent were amongst other applicants who lodged tenders for these portions of land. Secondly, a letter from the lawyers for the first respondent to the Chairman of the Land Board on 08th October, 2009 referring to an article published on the Post Courier newspaper reporting, inter alia, that the appellant was the successful applicant and had been granted UDL's for the portions of land. We are satisfied this evidence points the Court and the first respondent to the appellant's interest in the subject land and should have put them on notice of the first respondent's obligation to comply with Order 16, rule 5(2) before the hearing. In any case, the appellant should have been named as a party at the commencement of the proceedings.

16. The right to be given notice of hearing under Order 16, rule 5(2) of the National Court Rules to anyone with direct interest in the subject proceedings or as someone directly affected by the proceedings or the subject matter in the proceedings was described as mandatory in Yanta Development Association v. Piu Land Group Inc. [2005] 24, SC798.

17. On the evidence before the National Court and before us, we are satisfied that the appellant is a person "directly affected" by the decision of the Land Board and should have been served the Notice of Motion. We are further satisfied that the first respondent failed to serve the notice of motion on the appellant. In our view, this is a serious breach of the appellant's right to be heard. It is clear to us that there are two competing interests over the same portion of land. The first respondent's claim for renewal of the UDL for Portion 1539 prior to its expiry, and the appellant's claim for UDL's for Portions 2606, 2607 and 2608 after the expiry of the UDL for Portion 1539. While the first respondent and the other respondents were heard, the appellant was not accorded that opportunity. We consider that in all fairness to the appellant and in the interests of justice, the appellant should be given the opportunity to be heard before a final decision is made.

18. Finally, our short response to the first respondent's submission that the appellant does not appeal the Court's finding that the land was not subdivided and it is precluded from contending otherwise is this, this issue and other issues relating to the compliance with the physical planning requirements under the Land Act are secondary to the right to be heard. The Court's findings were made without hearing the appellant. The issues raised must be properly ventilated and to do that, the matter must be remitted to the National Court for retrial.

19. We uphold the appeal, quash the decision of the National Court and remit the matter to the National Court for retrial. In the exercise of our discretion under section 16(c) of the Supreme Court Act, we also order that the appellant be joined as seventh defendant in the National Court proceedings.

Order

20. The orders are:

1. The appeal is upheld.
2. The decision of the National Court of 01st June 2011 is set aside.
3. The matter is remitted to the National Court for retrial.
4. The appellant be joined as seventh defendant in the National Court proceedings.
5. The first respondent shall pay the costs of the appeal, to be taxed, if not agreed.
________________________________________________________________
Warner Shand Lawyers: Lawyers for the Appellant
Leahy Lewin Lowing Sullivan Lawyers: Lawyers for the First Respondent