THE COURT REPORT
Yet Another Duplicate State Lease
Officers within the Lands Department have an unfortunate knack for issuing fraudulent land titles. It is a problem that PNGi has repeatedly reported on and which continues to rot the nation.
A succession of Lands Minister’s have ably described the endemic corruption in the Department of Lands, and vowed to clean up their house; but Lands Officers seem to be immune from sanction, impossible to sack and never held criminally liable, even when charges are laid.
In 2014, Justice Kandakasi said the only way to stop the corruption is through criminal investigations and prosecutions:
Sitting in the National and Supreme Courts for a while now, I have come across more cases of possible fraud facilitated by the Registrar of Titles and other officers of the Department of Lands. This must stop and the only way to do that is to have proper investigations and those responsible being criminally charged and proceeded with. I would therefore strongly recommend (since I cannot direct the police) that the police take the relevant and necessary steps right away.
In today’s Court Report we highlight a case which was reported to the police, but only the leaseholder was criminally charged. And even then the case was ultimately thrown out by the District Court as a ‘civil matter’.
Margaret’s story
Section 4, Allotment 29 at Bomana in the National Capital District was an undeveloped and unregistered piece of State land managed by the National Housing Corporation, when Margaret Yuku applied for and was granted a rental lease.
Ironically, the Port Moresby suburb of Bomana is home to both the nation’s main prison and its police training college
A term of the lease was that Margaret had to make improvements on the undeveloped block of land. This she did, building a three bed-roomed house which, along with other improvements, valued at K250,000.
In June 2012, Margaret and her husband agreed to sub-lease a small part of the land to Lukom Trading Limited, which was owned by Luke Komean.
Komean wanted to build a canteen and small bakery business. Komean paid K40,000 to Margaret for the sub-lease which was to be for five-years. No periodic rent was to be charged. Instead it was agreed at the end of the sub-lease Komean would move-out and gift the canteen to Margaret and her family.
Unbeknown to Margaret and her family, Lukom Trading Limited applied to the Department of Lands for a State lease over the whole property. In August 2015, the then Minister for Lands, Benny Allen, granted a state lease over the property to Lukom Trading.
The National Housing Corporation says it was not aware of the State lease being issued and did not give its approval or make any recommendation that it be granted.
After Margaret Yoku became aware of the State lease granted to Lukom Trading, she applied for the dispute to be determined by arbitration. That seemed to lead to a successful resolution of the matter. Lukom Trading agreed to transfer the State lease to Margaret by 31 December 2018.
Luke Komean however defaulted on that agreement and failed to transfer the title by the due date. He also defaulted on a second mediated agreement to transfer the title.
At that point, Margaret reported the matter to the police. Luke Komean was arrested and charged with fraud. However, when the matter want to court, the District Court struck out the case, declaring it a civil matter.
Margaret Yuku was forced to issue proceedings in the National Court after both a police complaint and arbitration failed to deliver redress.
The National Court has now granted Margaret permission to challenge the issuing of the State lease to Lukom Trading Limited through a judicial review application:
It is obvious that the Plaintiff has not been consulted nor was she aware of any transactions relating to the granting of the State lease. Plaintiff might not have a legal title per se to the property but she does have an equitable interest for the improvements made and furthermore, that she still enjoys a current valid tenancy agreement with the Fourth Defendant which has not been discharged or terminated at the time the transfer was effected.
How did a State lease come to be issued by the Lands Department for a property managed by the National Housing Corporation, where there was already a sitting tenant with a valid tenancy agreement?
Margaret Yoku is alleging the process was flawed, irregular and unlawful and amounted to a constructive or equitable fraud.
Luke Komean and another State lease
Luke Komean is the owner of several companies and businesses. These include including Klkom Hire Cars, Kups Road Construction, Lukom Limited, Yawali Investments Limited and Lukom Trading Limited.
All these businesses, except Yawali Investments, were original registered under the name Luke Koma, but in 2016 Luke Koma changed his name to Luke Komean.
Lukom Trading Limited was not a registered company at the time Komean signed the lease agreement with Margaret Yoku, in June 2012. Lukom Trading Limited was only registered as a company in September 2012, yet its name was apparently used on the sub-lease agreement.
A ‘Lukom Trading’ did exist in June 2012, but it was merely a registered business name.
In 2016, Lukom Trading borrowed K400,000 from the National Development Bank
We do know though that in January 2016, after it had obtained what is alleged to be a fraudulent lease, Lukom Trading Limited and Luke Komean signed a loan agreement for K400,000 with the National Development Bank. That money was to be used to purchase bakery equipment.
In 2018, Luke Komean was granted a second State lease in Bomana
Further, at the Land Board Meeting No.5/2018, Luke Komean was granted a State lease over another lot of land in Section 4, Bomana, this time Allotment 23. The allocation of the lease was advertised in the National Gazette No.G50 in January 2019.
Conclusion
While the unusual circumstances surrounding the lease award to Lukom Trading Limited awaits the National Court’s scrutiny, this is just one of dozens of tenure cases clogging up the courts due to the mismanagement of the national estate by the Lands Department.
As long ago as 2006, the Public Accounts Committee published a damning set of conclusions on the corruption and mismanagement in the Department of Lands:
2.1 The Department of Lands and Physical Planning is incompetent and ineffective in carrying out its statutory obligations to manage land and fails to protect and further the fiscal interests of the State.
2.2 The Department of Lands and Physical Planning has failed to collect revenue in a timely manner or at all.
2.3 The Department of Lands and Physical Planning has failed to implement and maintain competent or adequate systems of accounting, control and accountability.
2.4 The Department of Lands and Physical Planning over many years has conducted itself illegally in the allocation of and registering of State Lease, granting of licenses, giving of Ministerial exemptions, dealing with Customary land and in its fiscal obligations to the State.
2.5 The Department of Lands and Physical Planning has, for many years, given priority to the interests of private enterprise and private speculators over the interests and lawful rights of the State.
2.6 The Department of Lands and Physical Planning requires urgent restructuring.
2.7 The Committee recommends the immediate removal of the Secretary and senior Management of the Department of Lands and Physical Planning and the recruitment by international advertisement of competent senior managers and executives to rebuild the Department.
2.8 The system of Land Registration and performance of the Department of Lands and Physical Planning is poorly regarded by the private sector. There is a clear lack of confidence in the Department and its management.
2.9 Illegalities and abuses by Management, Departmental Officers and certain members of the Land Board continue with immunity and impunity.
2.10 There is no will or ability in the current Management of the Department of Lands and Physical Planning to effect any change.
2.11 The Department of Lands and Physical Planning and, in particular, the Secretary and Deputy Secretary of that Department obstructed the Inquiry by the Public Accounts Committee by failing to produce documents when
ordered to do so.2.12 The Department of Lands and Physical Planning has failed in its duty to protect and secure public documents and State records.
2.13 The Department of Lands and Physical Planning has exposed the State to significant liability by reason of illegal practices, unlawful decisions and negligent actions of Departmental Officers.
2.14 The State has been deprived of very significant revenue by way of Land Rental and tender or reserve price which has either not been levied at all by the Department, or not collected.Levy
2.15 The Department has, in the last decade, engaged in the planned and deliberate granting of Reserved Land, National Park, or Open Space land into private hands for little or no recompense to the State – and in many cases, quite unlawfully.
2.16 The current Management of the Department of Lands and Physical Planning has taken no steps at all to rectify, or deal with abuses of past administrations, despite having detailed knowledge of those illegalities.
2.17 The Department of Lands and Physical Planning is a real impediment to National development and economic growth. It is a Department which needs to be brought immediately under control.
2.18 The Government must review the entire system of land allocation in Papua New Guinea. The current system requires a high degree of probity, honesty and competence – attributes lacking for a decade in the Department of Lands and Physical Planning and the Land Board.
2.19 The Committee recommends that the Government immediately appoint a Commission of Inquiry to review every Lease Grant made in the last decade – with a view to establishing which State leases have been illegally or unlawfully issued and to recover same to the benefit of the State.
2.20 That Commission of Inquiry should also be tasked with making recommendations for the rebuilding of the Department of Lands and Physical Planning and basic steps to be taken to restore confidence and credibility to the Department and the system of land registration and land security in Papua New Guinea.
2.21 The Committee has referred the Secretary and Deputy Secretary of the Department of Lands and Physical Planning for investigation and prosecution.
2.22 The Committee endorses and accepts the Reports of the Office of the Auditor General on the Department of Lands and Physical Planning for the years 2000 – 2004.
Almost 15-years later we ask has anything really changed?
Perhaps 2021 would be a good time for the government to follow the advice of the Public Accounts Committee and set up a Commission of Inquiry to review every lease to establish which have been unlawful issued and to refer those responsible for criminal prosecution.