The Papua Club wanted to keep the top floor of a Port Moresby office tower forever. It lost, and in losing produced the rule on new arguments in the Supreme Court.
The Papua Club Inc v Nusaum Holdings Ltd, Investment Corporation of PNG, Registrar of Titles, the State and the Minister for Lands [2005] PGSC 15; SC812
Supreme Court, Waigani — Los, Davani and Cannings JJ, 2 December 2005. SCA 142 of 2004.
What happened
In 1939 the Club was granted a 66-year State Lease over land in Port Moresby. In 1978 it agreed by deed to transfer the lease to the Investment Corporation on condition that the Corporation build a high-rise on the site and grant the Club a sublease of the top floor at a peppercorn rent. The building went up and the Club moved in in 1980. In 1998 the Corporation transferred the lease to Nusaum Holdings.
The State Lease was due to expire on 19 December 2005. Nusaum told the Club its occupation would end with it. The Club sued for a declaration that the deed and sublease entitled it to stay on.
What the National Court held
After a nine-day trial in 2002, Gavara-Nanu J gave judgment on 3 September 2004 against the Club. Under the scheme of the Land Act, ownership of land reverts to the State when a State Lease expires, so a lessee or sublessee can have no perpetual rights in leasehold land. A lease whose term is uncertain creates no lease at all, and one that fetters the landlord’s right to determine it is contrary to public policy. His Honour also held that a plaintiff alleging fraud against a registered proprietor must plead its particulars and prove it strictly.
What the Supreme Court decided
1. A lease or sublease is void and unenforceable if it is uncertain as to its period or its description of the property.
2. A lease must clearly identify its start and end. One that purports to operate in perpetuity is contrary to public policy and void.
3. Under the Land Act, no one other than the State can have any interest in land subject to a State Lease after it expires, unless and until a new interest is granted.
4. An outgoing lessee’s interests are extinguished on expiry, so a sublessee has no right to renewal or a new sublease.
5. An appellant can raise an issue of law not raised at trial provided it is set out in the notice of appeal, it does not concern a question of fact only, and the leave of the Court is obtained to argue it.
6. The trial judge properly declared the sublease void. Appeal dismissed.
Did it make new law?
On the land points the Supreme Court affirmed and applied Gavara-Nanu J’s analysis of the Land Act and of certainty of term. On appellate procedure it drew together earlier authority, including Tsang v Credit Corporation [1993] PNGLR 112 and Van Der Kreek v Van Der Kreek [1979] PNGLR 185, into a single three-part test for new points, and considered whether an appellant can seek orders never sought at trial or beyond the notice of appeal. Holding (5) is the part now cited most often.
Why it matters
A party is generally bound by the case it ran below. An argument that depends on facts never found cannot be raised for the first time in the Supreme Court. A pure point of law can be, but only if it is pleaded in the notice of appeal and leave is obtained. Courts have described a party that ignores this as estopped by its own conduct of the trial.
Whatever a lessee promises a sublessee, the promise cannot outlive the State Lease. Anyone buying or financing a leasehold interest must look at the head lease’s expiry date, because every derivative interest ends with it.
What it does not decide
Papua Club does not decide whether the State must or should grant a new lease to the outgoing lessee, or on what terms; that is a matter for the Land Act procedures. Nor does it deal with fraud and indefeasibility of title in any depth, although the trial judgment does. The leading authorities on those questions remain Mudge v Secretary for Lands [1985] PNGLR 387 and the cases that followed it.
Recent cases applying it
- Agwi v Kallon [2025] PGSC 1; SC2678 — the Defence Force and the State were held effectively estopped from relying on grounds of review not run in the National Court, citing Papua Club.
- Vanuga v Dopsie [2022] PGSC 117; SC2317 — three grounds not argued below were summarily dismissed because leave had not been sought.
- Tasion v National Broadcasting Corporation [2021] PGSC 91; SC2164 — the Court confined itself to the grounds and relief pleaded, citing Papua Club.
- Agen v Dege [2020] PGSC 100; SC2020 — cited in an appeal concerning a State Lease.
Sources
- Papua Club Inc v Nusaum Holdings Ltd [2005] PGSC 15; SC812 (Los, Davani and Cannings JJ, 2 December 2005)
- Papua Club Inc v Nusaum Holdings Ltd (No 2) [2004] PGNC 178; N2603 (Gavara-Nanu J)
- Land Act 1996; Land Registration Act (Chapter 191) — s 33
- Tsang v Credit Corporation (PNG) Ltd [1993] PGSC 18; [1993] PNGLR 112; Mudge v Secretary for Lands [1985] PGSC 13; [1985] PNGLR 387
- Agwi v Kallon [2025] PGSC 1; SC2678; Vanuga v Dopsie [2022] PGSC 117; SC2317; Tasion v National Broadcasting Corporation [2021] PGSC 91; SC2164; Agen v Dege [2020] PGSC 100; SC2020
The trial concerned the Land Act 1962 and the Land Registration Act 1981 as they stood at the time. The Land Act 1996 now contains the equivalent provisions.
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