SC2173

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 73 OF 2021 (IECMS)

BETWEEN:
NIUGINI STEEL
CORPORATION
Appellant

AND:
PAUL PONDO
Respondent

Waigani: Gavara Nanu J, Hartshorn J, Dowa J
2021: 14th, 21st December

Appeal

SUPREME COURT APPEAL – appeal based on part of the judgment which stated that the respondent was entitled to a reasonable compensation – respondent and his relatives had been living illegally on appellants property – whether trial judge was correct in ordering reasonable compensation to be paid to respondent – primary judge fell into error – appeal allowed – costs awarded to the appellant 

Cases Cited: 

Png Ready Mixed Concrete Pty Ltd v. PNG and Ors [1981] PNGLR 396
Tom Amaiu v. Thomas Yalbees (2020) SC2046 
Keam Investments Ltd v. Toyota Tsusho (PNG) Ltd (2021) SC2118

Counsel:

Mr. C. Joseph, for the Appellant

21st December,  2021

1. BY THE COURT: This is a decision on an appeal from part of a judgment of the National Court. In the judgment amongst others, an order was made for the vacant possession of a certain property, that the defendant now respondent, was entitled to reasonable compensation for occupying the property and that each party pay their own costs of the proceeding.

2. The appellant appeals the orders made that the respondent is entitled to reasonable compensation and that each party pay their own costs (part judgment appealed).

3. The appeal proceeded in the absence of representation of the respondent as the court was satisfied that the lawyers on record for the respondent were properly made aware of the hearing date and time of the appeal.

Background

4. The appellant is the registered proprietor of the certain property. The respondent, his family, relatives and associates have erected dwelling structures and have and continue to occupy a part of the property without the appellant’s consent. The appellant commenced a proceeding in the National Court seeking an order for vacant possession. Prior to issuing the proceeding the appellant had made numerous requests for the respondent to vacate the property and had issued a notice to quit.

5. The National Court proceeding did not proceed to trial. After the primary judge had heard parties on the outcome of a court ordered mediation of the proceeding, the primary judge delivered an ex tempore ruling which included the part judgment appealed.

Appeal

6. The appellant appeals the part judgment appealed on grounds which in essence are that:

a)	the appellant is the registered proprietor of the property and pursuant to 	s.33(1) Land Registration Act, holds the title absolutely free from all 	encumbrances except in the case of fraud and the other matters specifically 	set out in s.33(1);

b)	the respondent is a squatter and only has an equitable right to reasonable 	notice to vacate the property. The respondent does not have a legal right to 	compensation for being on the property. The primary judge fell into error in 	finding otherwise;

c)	the appellant as registered proprietor, is entitled to vacant possession of the 	property and is entitled to assert its rights to vacant possession at any time. 	The respondent failed to comply with a notice to quit the property and 	thereby brought on the National Court litigation for vacant possession to 	which he has no defence. The appellant unnecessarily incurred costs to 	obtain an order for vacant possession. The primary judge fell into error in 	the exercise of his discretion in not awarding the costs of the National Court 	proceeding to the appellant.

7. The appellant seeks costs of this appeal on a solicitor client basis as the respondent still occupies the property in defiance of the National Court judgment and has been given notice that such costs will be sought.

Consideration

8. The principle of law concerning the rights of a squatter who has occupied land over a period of time without authority but also without objection has recently been considered by this court in Tom Amaiu v. Thomas Yalbees (2020) SC2046 (Salika CJ, Makail and Berrigan JJ). After a detailed consideration of case authority, the Court at [62] said that such a person obtains a limited equitable interest in the land and is entitled to be given reasonable notice by the legal owner before being required to leave. The Court stated that the equitable interest is analogous to a licence and confirmed the statement of the law in png Ready Mixed Concrete Pty Ltd v. PNG and Ors [1981] PNGLR 396, upon which authority the appellant relies.

9. There is however, no Supreme Court authority or indeed, any National Court authority of which we are aware which has held that a squatter such as the respondent is entitled to compensation for occupying a property. We note that the primary judge did not rely on any authority when in his reasons for decision he stated that subsequent cases since ‘png Ready Mix’ recognized “….  a squatter’s right to reasonable compensation for being on the property ….”. To the extent therefore, that the primary judge found that a squatter is entitled to reasonable compensation, the primary judge fell into error and was with respect, wrong. 

10. As to the order that each party pay their own costs, the primary judge stated that although the respondent was not entitled to be on the property and the appellant was so entitled, the appellant did not assert his right quickly enough and fairness and reasonableness dictated that each party bear their own costs.

11. The awarding of costs is discretionary, but the discretion must be exercised judicially. The usual position is that costs follow the event: Order 22 Rule 12 National Court Rules. In this instance the appellant’s application for vacant possession was granted. The appellant was successful. The usual position then is that costs should have followed the event and been awarded to the appellant.

12. The appellant submits that it had no option but to commence the National Court proceeding to assert its right to vacant possession because the respondent had refused to comply with a notice to quit. The respondent had not complained that he had not been given reasonable notice to quit and the respondent had no valid defence to the application for vacant possession. The respondent had caused the litigation to be brought because of his failure to comply with the notice to quit. Further, the appellant as registered proprietor of the property was entitled to assert its right to vacant possession of the property at any time.

13. Order 22 Rule 12 National Court Rules does not create an entitlement on the part of a successful party to an order for costs in its favour but it does create a reasonable expectation as to how, unless there is good reason to the contrary, the discretion as to the awarding of costs will be exercised: Keam Investments Ltd v. Toyota Tsusho (PNG) Ltd (2021) SC2118 (Gavara Nanu J, Cannings J, Logan J) at [37].

14. The Court in Keam Investments v. Toyota Tsusho (supra) further commented at [40] as to costs not being made in favour of a successful party:

“Although the occasion for not making an order for costs in favour of a successful party is inherently case specific, there are certain well-recognised bases upon which a successful party might be deprived of an order for costs. For example, disentitling conduct where the successful party effectively invited the litigation: Ritter v. Godfrey [1920] 2 KB 47; where the successful party unnecessarily protracted the proceedings: Lollis v. Loulatzis (No. 2) [2008] VSC 3 at [29], and where the successful party pursued the matter solely for the purpose of increasing the costs recoverable; late amendment of pleadings so as to raise the point on which the party succeeds; where the successful party is only nominally successful and, related to that, quantum and proportionality of success; public interest grounds; where the successful party was seeking an indulgence; imprudent refusal of an offer of compromise or contribution. This list is of course not exhaustive.”

15. We respectfully agree with these comments. None of the above circumstances referred to above apply in this instance. By making the statement that the appellant had not asserted its rights quickly enough, particularly in circumstances where the appellant as registered proprietor is entitled to assert its rights to vacant possession at any time and where the respondent had been given reasonable notice to vacate but had refused to comply with a notice to quit thus causing the commencement of the National Court proceeding, then relying upon that statement to find that it was fair and reasonable for each party to bear their own costs, we are respectfully of the view that the primary judge fell into error in the exercise of the court’s discretion. 

16. Consequently, for the above reasons the appeal should be upheld and the orders sought by the appellant granted. As to the costs of this appeal, we note that the respondent has not vacated the property notwithstanding the order of the National Court and has been given notice that costs of this appeal would be sought on a solicitor client basis. In the circumstances, we are satisfied that the appellant is entitled to such an order.

Orders

17.   The Court orders as follows:

a)	The appeal is allowed.

b)	It is declared that the respondent is not entitled to compensation for 	occupying the appellant’s State Lease Volume 84, Folio 198 in respect of the 	land known as Allotment 28 Section 341, Port Moresby, National Capital 	District.

c)	The respondent shall pay the appellant’s costs of the National Court 	proceeding OS No. 46 of 2020 (IECMS) to be taxed if not agreed otherwise.

d)	The respondent shall pay the appellant’s costs of this appeal herein on a 	solicitor client basis to be taxed if not agreed otherwise.
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Ashurst Lawyers: Lawyers for the Appellant                          
Kipes Law: Lawyers for the Respondent