Legal Index: I
Indefeasibility of title, interests in land short of title, and interim injunctions — including a genuine and unresolved division in the Supreme Court over what registration protects.
Indefeasibility of title
Whether registration under the Land Registration Act (Chapter 191) gives the registered proprietor a title that cannot be disturbed, and what the fraud exception in section 33(1)(a) means.
Mudge and Mudge v Secretary for Lands, The State and Delta Developments Pty Ltd [1985] PGSC 13; [1985] PNGLR 387 (Supreme Court)
The Court held that registration of a lease under the Land Registration Act is effective to vest an indefeasible title in the registered proprietor, subject only to the exceptions listed in section 33. It followed from this that even where a State lease had been issued irregularly and in breach of the Land Act, registration under the Land Registration Act would still confer an indefeasible title.
The Court adopted and applied the Torrens system authorities Frazer v Walker [1967] 1 AC 569 and Breskvar v Wall (1971) 126 CLR 376, settling that the Torrens principle of title by registration operates in Papua New Guinea.
Papua Club Inc v Nusaum Holdings Ltd (No 2) [2004] PGNC 178; N2603 (National Court, Gavara-Nanu J) — examined what “fraud” in section 33(1)(a) means. Reading section 33 with sections 45(1) and 146, his Honour concluded that fraud in this context means actual fraud committed by the registered proprietor in acquiring the title, and not merely constructive or equitable fraud. That is the only basis on which a registered proprietor’s title can be set aside.
Koitachi Ltd v Zhang [2007] PGSC 11; SC870 (Supreme Court) — adopted the reasoning in Papua Club (No 2) as “particularly apposite” and applied the actual-fraud test. The Court dealt directly with the argument that a lesser standard applied, and distinguished the contrary authorities on their facts rather than following them.
Emas Estate Development Pty Ltd v Mea, Swokin and The State [1993] PGSC 7; [1993] PNGLR 215 (Supreme Court)
A State lease was forfeited and the land reallocated and registered in the name of a third party. The majority found the forfeiture irregular and invalid, and went further: registration in those circumstances could not vest an indefeasible title in the new proprietor. Amet CJ took the view that the doctrine of indefeasibility had been applied in Papua New Guinea without any real examination of whether it suited the country’s circumstances, and should not be applied in that case. As later summarised in Koitachi, the effect of the majority reasoning was that irregularities amounting to fraud could suffice to overturn a registered title.
Brown J dissented on both points.
The tension between Mudge and Emas Estate has not been resolved by a decision overruling either. Koitachi distinguished Emas Estate on its facts rather than departing from it, so both remain Supreme Court authority. A practitioner arguing either side should read both, and should note that Emas Estate is strongest where the registration followed an invalid administrative act such as a defective forfeiture.
The exceptions to indefeasibility are set out in section 33(1) of the Land Registration Act. Fraud is only one of them. On the broader subject, see Land and property and what indefeasibility of title means.
Interests in land short of registered title
Indefeasibility protects the registered proprietor. It does not follow that everyone else on the land is a trespasser, or that a registered owner can always obtain possession summarily.
Ready Mixed Concrete Pty Ltd v The State, Samana and Kiamba [1981] PNGLR 396 (National Court)
The holder of a State lease sought vacant possession against people occupying the land. The Court held that, the State having raised no objection to the presence of the occupants, they were to be regarded as having acquired an equitable interest analogous to a licence, adopting and applying Crabb v Arun District Council [1975] 3 All ER 865.
In consequence the applicant, though holder of the legal estate, was estopped from insisting on its full legal title, and the just and equitable course was to declare its right to possession subject to the occupants’ equitable right to remain for periods of one year or six months as appropriate.
The Court also held that an order having the effect of depriving occupants of possession does not amount to a compulsory taking of property under section 53 of the Constitution, and is not prohibited by it.
Gawi v PNG Ready Mixed Concrete Pty Ltd [1984] PGSC 3; [1984] PNGLR 74 (Supreme Court) — cites the 1981 decision and settles the procedural point that follows from it.
Proceedings for recovery of possession under the Summary Ejectment Act (Chapter 202) are intended to give a quick remedy to people who have a clear title to land or premises. They are not available where title to land is in dispute or unclear.
The Court added that a judicial assumption made for the purposes of a hearing — that a party “had a legal estate in the leasehold … but without making a positive decision to that effect” — is not declaratory of that party’s rights and is not evidence of clear title sufficient to found summary ejectment proceedings.
There is no conflict with Mudge, but the two lines answer different questions.
Mudge answers who holds the title: registration settles that, subject to section 33. Ready Mixed Concrete and Gawi answer what the title holder can do summarily: an equitable interest may have arisen in an occupier, and where title or the right to possession is genuinely in dispute the summary procedure is the wrong vehicle.
A registered proprietor facing occupiers should therefore expect to proceed by writ in the National Court rather than by summary ejectment wherever the occupiers assert any interest — and should be alive to the possibility that acquiescence has created one.
Disputes over customary land are a different jurisdiction again: they go to mediation and the Local Land Court under the Land Disputes Settlement Act (Chapter 45), not to the National Court.
Injunctions — interim and interlocutory
The principles the National Court applies when asked to grant, or to continue, an interlocutory injunction.
Golobadana No 35 Ltd v Bank of South Pacific Ltd [2002] PGNC 36; N2309 (National Court, Kandakasi J)
An injunction obtained without notice came back before the Court for continuation. The Court reviewed the principles governing the grant and continuity of an interim injunction and refused to continue it, on three grounds that recur in later applications:
(1) it was not certain that a serious question of law or fact to be determined had been raised in the proceedings; (2) the balance of convenience did not favour continuing the orders; and (3) there had been a failure to disclose all relevant facts, which the Court treated as telling against continuity.
The third point is the practical one. An injunction sought without notice carries a duty of full disclosure, and a failure to meet it can cost the applicant the order regardless of the merits.
The framework applied in Papua New Guinea derives from American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] 1 All ER 504, which Golobadana cites, together with a line of local decisions including Mt Hagen Airport v Gibbs [1976] PNGLR 216 and Public Employees Association v Public Service Commission [1988-89] PNGLR 585.
An applicant should also expect to give the undertaking as to damages required by Order 14 Rule 10 of the National Court Rules 1983.
Golobadana is principally a mortgage decision. Much of the judgment concerns a mortgagee’s right of possession under section 74 of the Land Registration Act, the mortgagor’s equity of redemption, and whether a mortgagee may release possession before the secured debt is fully recovered.
It is cited for the injunction principles, but the ratio on the mortgage points is at least as significant, and the injunction discussion should be read in the context of the commercial dispute that produced it.
A related National Court decision, Steamships Trading Co Ltd v Garamut Enterprises Ltd (2002) N1959, is discussed in Koitachi as taking a broader view of “fraud” under section 33. It could not be located on PacLII and so is not linked here; the account of it above is drawn from the way the Supreme Court described it in Koitachi.