Papua New Guinean land instruments are often short, because the Land Registration Act supplies a great deal of the content. Part X governs how those implied terms work.
Section 99 — implied covenants operate as if set out fully
(1) A covenant implied by this Act has the same force and effect and may be enforced in the same manner as if it had been set out fully in the instrument.
(2) Notwithstanding any law or practice to the contrary, in an action for breach of an implied covenant it may be alleged that the party covenanted precisely in the same manner as if the covenant had been set out fully.
Subsection (2) is a pleading provision, and a useful one. You plead the covenant as though it were written in the document. There is no need to plead the statute as a separate step.
Which covenants are implied
| Instrument | Implied against | Substance | Section |
|---|---|---|---|
| Lease | The lessor (powers) | Entry to view the state of repair; notice to repair; re-entry after six calendar months’ arrears or continuing breach, or failure to repair | 50 |
| Lease | The lessee | Pay the rent at the times specified and pay rates and taxes; keep and yield up in repair | 51 |
| Sub-lease | The sub-lessor | Pay the rent under, and perform the covenants of, the original lease — binding on executors, administrators and trustees | 54(4), (5) |
| Mortgage | The mortgagor | Pay principal and interest at the rate and times specified without deduction; repair and keep in repair, with the mortgagee free to enter and inspect until redemption | 64 |
| Transfer or creation of an interest for valuable consideration | The transferor | Do all acts and execute all instruments necessary to give effect to the covenants, conditions and purposes of the instrument — at the cost of the person requiring them | 102 |
It is the answer when a transferor will not sign a document needed to complete what was agreed — a consent, a correction, a plan. Note the cost rule: the person requiring the act bears the cost.
The Schedule short forms
Beyond the implied covenants, the Act lets a long covenant be imported by a short phrase:
- Section 52 — a covenant in a lease expressed in a short form from Column 2 of Schedule 3 implies against the lessee the covenant in Column 3, as fully as if set out in the lease.
- Section 65 — the same for a mortgage, using Schedule 4.
- Sections 43, 53 and 96 — the words “together with a right of carriage-way over the road delineated and coloured brown on the said map” import the full words of Schedule 2 into a transfer of freehold, a lease, or a certificate of title.
A two-line covenant in a lease or mortgage may be carrying a page of obligations from Schedule 3 or 4. Anyone advising on a registered instrument must check the Schedules before saying what it requires.
Section 100 — negativing or modifying
A covenant or power implied by this Act may be negatived or modified by express declaration contained in the instrument or endorsed on the instrument.
Two consequences:
- The implied terms are defaults, not mandatory rules. Parties can contract out.
- But only expressly. An express declaration, in or endorsed on the instrument, is required. A side letter, an oral understanding, or a general inconsistency will not do it.
So when reading an instrument, look for what has been excluded as carefully as for what has been included. A lease that quietly negatives the lessee’s repair covenant, or a mortgage that modifies the inspection power, is doing something significant in a single line.
Section 101 — parties bound severally
Where an instrument is executed by more than one party, the covenants implied by this Act against those parties (a) bind the parties severally; and (b) do not bind the parties jointly.
This is a significant default and it is easy to miss. Two co-lessees or two co-mortgagors are each liable severally under the implied covenants — not jointly.
If you want to be able to pursue either party for the whole obligation, say so expressly in the instrument. Section 100 permits it, and section 101 is the default if you do not.
Conversely, a co-borrower or co-tenant should understand what the document actually says: an express joint and several clause displaces the section 101 default.
Reading a registered instrument properly
- Read the document — the express terms.
- Check the Schedules for any short-form covenants (Schedules 2, 3, 4).
- Add the implied covenants — sections 50, 51, 54(4), 64, 102 as applicable.
- Look for express declarations negativing or modifying them under section 100.
- Check whether liability is several or joint — section 101 is the default.
- Then check the Land Act layer — for a State lease, the section 82 implied reservations and the bona fide purpose condition apply as well, and are not in this Act at all.
Sources
- Land Registration Act (Chapter 191) — ss 43, 50–55, 64, 65, 96, 99–102; Schedules 2, 3 and 4; Part X
- Land Act 1996 — s 82
- Landlord and Tenant (Miscellaneous Provisions) Act (Chapter 189)
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.