Can Customary Land Be Bought or Sold?

This is the most expensive mistake made in Papua New Guinean land dealings, and it is made constantly. Money changes hands, a “sale agreement” is signed, buildings go up — and years later the arrangement turns out to have been void from the beginning.

Section 132 — the prohibition

Take the sentence apart:

• “No power” — not a prohibition on exercising a power, but an absence of the power altogether. Nothing the parties do can supply it.
• “Sell, lease or otherwise dispose of” — the section is not confined to sales. Leases, licences and other dispositions are caught.
• “Customary land or customary rights” — disposing of a right over the land is caught as well as the land.
• “Otherwise than to citizens in accordance with custom” — two conditions, both required. The transferee must be a citizen, and the dealing must accord with custom.
• “Is void” — not voidable, not unenforceable. Void.

Who counts as a “citizen” here

Section 2 of the Act defines “citizen” broadly for its own purposes, including a business group, a land group, a customary kinship group, a customary descent group, and a customary local group or community.

Note what is not there: a company is not a citizen merely because its shareholders are. And a non-citizen cannot take customary land at all. This works with section 56(1)(b) of the Constitution, under which only citizens who do not hold dual citizenship may acquire freehold land.

One person cannot sell what a group holds

Even a dealing between citizens must be in accordance with custom. Customary land is generally held by a group, and an individual member — however senior, however genuinely he believes he is entitled — usually has no authority to dispose of the group’s land by himself.

This is why a payment made to one man, with a signed receipt and witnesses, is so often worth nothing. The question is not whether he took the money. It is whether he had the authority under the custom of that place to give what he purported to give.

The lawful routes for dealing with customary land

1. Acquisition by the State by agreement — section 10. The State acquires from the customary landowners, then grants a State lease. Section 132 is expressly subject to this.
2. Lease-leaseback — section 11. The State leases customary land from the landowners for the purpose of granting a special agricultural and business lease back over it. Section 132 is expressly subject to this too.
3. Incorporated land groups — a group incorporated under the Land Groups Incorporation Act can hold and deal with customary land as a legal entity. See incorporated land groups.
4. Voluntary customary land registration — under Part IIIA of the Land Registration Act. See registering customary land.
5. Tenure conversion — under the Land (Tenure Conversion) Act 1963, converting customary tenure to a registrable title. See tenure conversion.
6. Dealings between citizens in accordance with custom — permitted by section 132 itself, and governed by the custom of the place.

Section 133 — land can be made customary again

The Minister may, by notice in the National Gazette, declare any Government land or trust land to be customary land, whereupon it is deemed customary land for all purposes — and, for determining ownership, is deemed always to have been customary land. Where trust land is so declared, the trust is determined and the Custodian for Trust Land is divested of it and is not liable in compensation or damages.