Most lessees who get into trouble with a State lease know only about forfeiture. Far fewer know about section 118(2) of the Land Act 1996, which is the provision designed for exactly their situation.
The provision
The covenants and conditions of a State lease may be relaxed or modified or, if the lessee agrees, varied, by the Minister, after considering a report of the Land Board, where it seems to him that special hardship would otherwise be caused.
Relaxed, modified — or varied
The subsection distinguishes three things, and the distinction is a protection for the lessee.
| Action | Effect | Lessee's agreement needed? |
|---|---|---|
| Relaxed | The condition is eased — more time, a lower standard, a reduced requirement | No |
| Modified | The condition is altered in form while remaining a condition | No |
| Varied | The condition is changed, potentially to something different in substance | Yes |
Relaxation and modification can only work in the lessee’s favour in practice — they respond to hardship. Variation, which could impose something new, requires the lessee’s consent. So a lessee applying for relief cannot have fresh obligations imposed on them without agreeing to them.
The trigger: “special hardship”
The threshold is special hardship that would be caused if the condition were left as it is. Two features of the wording:
- “Special” — more than the ordinary commercial difficulty of performing a bargain. Something particular to this lessee, this land or these events.
- “Where it seems to him” — the judgement is the Minister’s, which makes the quality of the evidence you put in decisive.
Circumstances that typically support an application:
- Access blocked by a land dispute, a customary claim, or the closure of a road;
- Natural events — drought, flood, landslide, earthquake, volcanic activity;
- Collapse of the market for the crop or commodity the improvement conditions assumed;
- Failure of a service the State controls — power, water, survey, or a planning approval that has not issued;
- Death or incapacity of the lessee, or a disputed estate;
- Delay in the issue of title where the improvement clock has been running since gazettal under section 81.
Section 118(2) or section 118(1)?
They solve different problems, and applicants often ask for the wrong one.
- Section 118(2) — you still intend the same use, but you cannot meet a condition on time or to the stated standard. Ask for relaxation.
- Section 118(1) — the intended use itself has changed. Ask to vary the purpose, subject to the two limits: not converting the lease into a type that could not be granted under the same Division, and not reaching a purpose for which the lease could never have been granted.
Where both apply — the use has changed and the improvement conditions cannot be met — apply under both subsections in the one application, and say so expressly.
Rent relief is a separate application
Section 118(2) deals with covenants and conditions. Rent has its own provision. Under section 83(5), subject to section 116, the Minister may — on the application of the lessee, for any special reason he thinks fit, and after considering a Land Board report — remit or postpone, in whole or in part, for such period and on such terms as he thinks proper, payment of rent.
A lessee in difficulty usually needs both: relaxation of the improvement conditions under section 118(2), and remission or postponement of rent under section 83(5). Make both applications, because neither is granted on the Minister’s own motion.
How to make the application
- Identify the lease — volume and folio, allotment and section or portion, registered proprietor.
- Quote the exact condition you cannot meet, and the deadline calculated from the section 81 date.
- State precisely what relief you seek — how much extra time, or what reduced standard. A vague request is hard to grant.
- Evidence the special hardship with documents: correspondence, weather records, contracts terminated, invoices, photographs, medical or probate material.
- Show what you have already done and spent. A lessee who has performed most of the conditions is in a far stronger position than one who has done nothing.
- Propose a timetable for completing the work.
- Apply early. An application made before the deadline is relief; one made after a notice to show cause is damage control.
Respond to the notice within the time it allows — that is a separate and strict deadline — and make the section 118(2) application at the same time, referring to it in the response. Do not let the show-cause period lapse while an application sits unanswered. Consider also whether a fine instead of forfeiture is available.
If relief is refused
The decision is an exercise of statutory power and is amenable to judicial review in the National Court under section 155(3) and (4) of the Constitution — including on the ground that the Minister did not consider the Land Board report the subsection requires, or breached the principles of natural justice under section 59. Section 41 may apply where the result is harsh or oppressive in the particular case.
Sources
- Land Act 1996 — ss 81, 83(5), 88, 90, 116, 118; Parts XII and XV
- Constitution — ss 41, 59, 155
- Church of Jesus Christ of Latter-Day Saints Inc v Kimas [2022] PGSC 96; SC2280
Before relying on anything here, read the current text of the Land Act 1996 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.