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Leases Obtained By Fraud in Efate Island, Vanuatu: Court

by mnews
The leases are situated on the hills of Llama area between Mele and Mangaliliu on Efate. Photo: Google

The leases are situated on the hills of Llama area between Mele and Mangaliliu on Efate. Photo: Google

The Supreme Court has handed down another landmark reserved judgment over land on Efate.
Justice Dudley Aru has ruled that two leases, known as lease numbers 12/0543/032 (032) and 12/0542/001 (001), on the hills of Llama area between Mele village and Mangaliliu village overlooking the Roimata Domain, be cancelled through rectification of the land leases register by the Director of Lands.
The 032 lease covered 485 hectares and 001 lease was 1,805 hectares of land.

The court found that the two leases “were obtained by fraud and/or mistake and must therefore be set aside”.
The First Claimants in the case are late Chief Kalkot Mormor and Richard Matanik from Mangaliliu village, Second Claimant is Kalchirau Thersa Anatu.
The First Defendant is The Republic of Vanuatu, Second Defendant Kalorib Poilapa of Mele and Third Defendants are Michel Monvoisin and Ludovic Bolliet.
The claim was started by the first defendants applying for restraining orders, which were issued on February 15, 2013 by consent. The orders restrained the second and third defendants from dealing with both leases.
And secondly, it restrained the first defendant from registering any dealings with the two concern leases.
The claimants and the second and third defendants also agreed to restrain themselves from developing the areas covered by the two leases pending a decision on the claim.
Both claims were filed seeking remedy under the Land Leases Act [CAP 163] section 100, for rectification of both leases on the basis of fraud and/or mistake.
Both leases were registered in 2012 with the Minister of Lands as lessor according to the Land Reform Act and Article 78(1) of the Constitution.
The lessee was Kalorib Poilapa. The first claimants had initiated a land use project in 2010 and the plan was to obtain leases over the area concerned to protect and retain it for the future of their communities.
These lands were within the same area covered by the 001 and 032 leases.
From 2010 to 2012 the first claimants held various meetings with Lands Department over their intended project.
They then submitted their applications for lease on July 9, 2012 to the Land Management Planning Committee for consideration.
On August 22, 2012 and August 29 leases 032 and 001 were registered with the minister of lands, without the knowledge of the first and second claimants.
On December 20, 2012 the transfer of 032 lease was made from second defendant Mr Kalorib Poilapa as transferor to Michel Monvoisin and Ludovic Boillet as transferees for a consideration of Vt2 million.
It was after this that the first defendant became aware and applied to refrain any further dealings with the two leases pending their claim for rectification.
Both claimants sought an order to cancel registration of transfer of the 032 lease in favour of Monvoisin and Boillet.
While the first claimant sought an order to cancel both leases, the second claimant sought cancellation of only 032 lease.
The first claimant claims that the minister was wrong to issue leases on behalf of custom owners when no lease existed; that the minister failed to take into account the interests of claimants; that the minister failed to consult undisputed custom owners; and the first defendant was aware of the claimants’ intention to protect their lands; that the minister failed to apply fair and proper processes of the registration of the two leases; and there were irregularities in the process of the registration of the leases.
Daily Post understands that the two ministers of land that were reportedly involved in these land registration and transfer were Steven Kalsakau and James Bule.
The second claimant based his claim on the Efate Island Court declaration of him as custom owner of Llama custom land, which is covered by the 032 lease.
This decision was appealed to the Supreme Court and is pending a final determination.
The second claimant says the second defendant as a chief of Mele village knew that an appeal was still pending in the Supreme Court.
In defence, the first defendant said it acted in good faith based on the information supplied to it, stating the minister acted on behalf of custom owners in issuing both leases but admitted that the application for the two leases did not go through the department of lands but Mr Poilapa went directly to the Minister of Lands; and it was admitted that the minister of lands did not consult disputing custom owners as well as there was not checklist for the two leases. The first defendant also admitted the two leases did not go through the lease execution officer at the Lands Department.
The second defendant said both leases are within Mele land boundary and that the claimants had no standing to make the claim.
The third defendants’ defence to both claims was that they are bona fide purchasers of the 032 lease for valuable consideration. They lodged a counterclaim seeking permanent restraining order against the claimants from interfering with their enjoyment and use of lease 032.

The court relied on submissions based on Vanuatu’s land laws and precedents set in Naflak Teufi Ltd v Kalsakau and Joe Roqara & Ors vs Noel Takau & Ors.
On the issue of mistake the court found that the minister conceded that the proper administrative procedures and processes of the Department of Lands were not followed in obtaining registration for both leases.
The minister also never consulted custom owners, in this case declared custom owner of Llama land was never consulted by the Minister before the 032 lease was issued.
On the issue of premium, the 032 lease of 485 hectares was paid a premium of Vt500,000 and the 001 lease of 1,805 hectares was paid a premium of Vt2 million.
But Jimmy Sano from the Valuer General’s Office said a realistic assessment of premium for the 001 lease would be Vt171 million and the 032 lease would be Vt80.2 million, an assessment that was accepted by the court as proper.
The court said the evidence from the Valuer General’s Office shows there was serious undervalue of the two leases and the leases were not granted in the interest of custom owners.
On the issue of fraud, the court stated that in the view of the Valuer General’s Office evidence, the Government was defrauded of the proper fees that would have been paid on the correct premium including stamp duties.
Similarly the court said custom owners were defrauded in that monies paid into the Customer Owners Trust Account held by government until ownership is resolved, is not based on proper assessment of premium.
The court said in regards to the transfer of the 032 lease, the Government was also defrauded of registration fees and stamp duty.
The court found that while the consideration stated on the transfer document was Vt2 million, the actual premium paid was around Vt20 million.
“The third defendants perpetrated or contributed to the fraud regarding the transfer of the 032 lease by paying for all the fees for the registration of the said lease…and paid Vt19,305,369 to the credit of Kalorib Poilapa at the Bred Bank,” the judge stated in the reserved judgment.
Mr Poilapa confirmed to the court under cross examination that he did receive the funds and instructed Franco Zuchetto to do withdrawals on his behalf until the funds were exhausted.
The court said the third defendants were therefore not bona fide purchasers for the value as they contributed to the fraud and had knowledge that the land covered by the 032 lease was in dispute, because they were informed at different times about the dispute.
The court was then satisfied that the two leases were obtained by fraud and/or mistake.
It dismissed the third defendant’s counter claim and ordered rectification in the form of cancellation of both leases.


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