National Court of Papua New Guinea

Articles cited:
.
World Intellectual Property Organization publication. http://www.wipo.int/wipo_magazine/en/2006/02/article_0010.html.
Legal Pitfalls in Taking or Using Photographs of Copyright Material, Trademarks and People" by Lien Verbauwhede, Consultant, SMEs Division, of the World Intellectual Property Organization, found at ww.wipo.int/sme/en/documents/pdf/ip_photography.pdf

Counsel:

J. Apo, for the Plaintiff.
S. Nutley, for the Defendant.

17th September, 2014

1. KANDAKASI J: An important question has arisen possibly for the first time in the country under the Copyright and Neighbouring Rights Act 2000. This follows a capturing and depicting of photographic images of two unique clay pots (the Pottery). The pictures were taken by Tony Sipa, the the second defendant, on instructions of Post PNG Limited which used them in postal stamps and a brochure entitled "PNG Clay Pots".

2. Joel Aundambui and his people claim copyright over the Pottery because they claim they are the creators of those work, who have been exclusively making and selling them as a business. They claim Post PNG breached their copyright by its failure to seek and secure their authorization or approval before taking and using the pictures of the Pottery. Post PNG claims a number of defences. Firstly, it claims Joel lacks the authority to represent the members of the Aundambui sub-clan but more so other persons named in the writ. Secondly, it questions the whole claim and in particular, questions the Aundambuis creatorship and ownership of the Pottery. Thirdly, it claims this proceeding is statutory time barred under s. 23 (1) of Postal Services Act 1996 (PSA) and s.16 of the Frauds and Limitations Act 1988 (FLA). Fourthly, it claims this proceeding is incompetent because the Aundambuis did not give notice of their intention to make a claim under s. 23 (2) of the PSA and s. 5 of the Claims By and Against the State Act (CBASA) and in any case, it is immune from prosecution under s. 24 of the PSA. Fifthly, it claims, since the photographic images were taken by Tony, he should be liable if indeed the Aundambuis' copyrights have been breached. Sixthly, it claims, the Aundambuis, failed to take appropriate steps to protect against a breach of their copy right so they are guilty of contributory negligence. Finally, it claims a fair use of the photographic images. Of course, the Aundambuis take the opposite view and challenge these claims and say Post PNG conducted negligently overall and is therefore, ultimately liable in damages to them.

Relevant Issues

3. The main issues then for this Court to consider and determine as identified with the assistance of the parties per their "Statement of Agreed & Disputed Facts & Legal Issues" are as follows:

(1) Is this proceeding incompetent by reason of:

• (a) Statutory time bar under 23 (1) of the PSA and s.16 of the FLA; or
  
• (b) Lack of prior notice of intention to make a claim under s. 23 (2) of the PSA and s. 5 of the CBASA; or
  
• (c) Immunity granted by s. 24 of the PSA.
  

(2) Does Joel have the necessary power and authority to represent the members of his sub-clan of Aundambui and in particular the persons named in the writ?

(3) Do the Aundambui people have copyrights in the Pottery?

(4) If the answer to question (3) is "Yes" did Post PNG infringe the copyrights of the Aundambui people by using photographic images of the pottery in its stamps and publishing a brochure entitled "PNG Clay Pots"?

(5) If the answer to question (4) is "Yes", could Post PNG be excused of any liability on the bases that the photographic images were taken by Tony Sipa, the Second Defendant and immunity granted by s. 24 of the PSA?

(6) Is Post PNG guilty of negligence in not first ascertaining the creators and owners of the copyright in the Pottery and then seek and secure their consent before using the images of the Pottery?

(7) Are the Aundambuis guilty of contributory negligence in failing to taking appropriate steps to protect against any infringement of their rights?

(8) If the answer to questions (4) and (5) is both "Yes", and subject to the answers to questions (5) and (7), what is or are the Aundambui people's damages?

(9) Has Post PNG made out a case for Tony Sipa to have it fully indemnified of any liability and damages established against it on the basis of its contract with him?

4. I propose to deal with question number 2 first as it is not the subject of any involved argument between the parties. I will then turn to a consideration of questions 3 - 7. Thereafter I will turn to question 1. If the Aundambuis' claim survives after a consideration and determination of questions 3 - 7, I will finally deal with questions 8 and 9.

Relevant Facts

5. Since all of the above questions arise from and can properly be answered by reference to the relevant facts and chronology of events, apart from the relevant law, I will turn to a statement and consideration of the relevant factual background to these questions first. Most of these are not in dispute, even though Post PNG sets out some of them as disputed facts in paragraphs 13 – 27 of its submissions, which are in effect a restatement of the pleadings and not the facts as outlined in the statement of agreed and disputed facts.

6. The relevant factual background to this case start with what could be considered lead up work in 1999, including a week long workshop on the new legislation on copyrights and related matters, Parliament passed the Copyright and Neighbouring Rights Act 2000 (Copyright Act). Joel attended that workshop and was given a copyright law book.

7. On 22nd January 2003, almost three years after the passage of the Copyright Act, Post PNG released a series of postal stamps featuring clay pots. These stamps were also featured in a brochure entitled "PNG CLAY POTS 2003". The brochure contained two (2) particular stamps featuring images of the ornamented Clay Pot and Clay Sculptures respectively. The stamps were being sold at 65t and K4.00 respectively. The sculpture was and is an adaptation of a spirit figure known as "Sengi" which the Bowi main clan in the Chambri Lakes area of the East Sepik Province associates itself with. The spirit figure has its origin and is usually depicted in many forms such as masks and wood carvings that are unique and peculiar to Joel and his Aundambui sub-clan of the main clan of Bowi clan, living in Imbon village, who are the masters of the Pottery. They therefore claim authorship and ownership both in the art and design and its construction and hence copy right in them. Post PNG says it does not know who are the creators and the owners of this work and takes issue with the Aundambuis' claims.

8. Post PNG sought no permission, authority or consent from anyone including the Aundambuis for the use of the images or pictures of the Pottery. There is no evidence of any other step taken by Post PNG to publicise its intention to use the images before commissioning and release of the stamps depicting the Pottery to avoid any possible violation of the rights of the owners of any copyright in them. Further, there is no evidence of Post PNG seeking the relevant and necessary information from the National Museum & Art Gallery or any other person or authority that might have specialist knowledge and information about PNG pottery, and in particular the Pottery, the subject, of these proceedings.

9. In his affidavit filed on 12th February 2010, Joel deposes that, he saw the stamps depicting the pottery on 22nd January 2003. Following that, by letter dated 26th February, 2003 to the Manager, Sales & Marketing of Post PNG, Joel complained about the stamps and sought compensation. Post PNG responded to that letter by letter dated 26th March, 2003. These correspondence or communication between the parties did not result in any resolution of the dispute between them. That led to proceeding referenced W.S. 584 of 2004 being issued by the Aundambuis against Post PNG. However, on 14th July 2009, the Aundambuis withdrew that proceeding. Then on 27th August 2009, they issued this current proceeding.

10. Other relevant facts not stated in the foregoing will be referred to and added under the relevant issues upon their consideration. But the above statement of the facts is sufficient for us to now turn to a consideration of each of the issues presented here.

Consideration of Issues and decisions

(i) Authority and representative action (issue (2))

11. As indicated, I turn to a consideration of the second issue of Joel's authority to represent and issue this proceeding first. In respect of that issue, I note that, apart from referring to the issue of authority in paragraph 16 of Post PNG's main submissions, there is nothing further to warrant any further consideration. It is settled law that, he who alleges must prove it.[1] Here, Post PNG has raised the issue but has not adduced any evidence to establish its claim. Joel has issued this proceeding for and on his own behalf and that of 6 other members of his sub-clan, Aundambui. He has deposed to an affidavit on 5th November 2009, which clearly shows he has the authority and the power to represent himself and his sub-clan's men and issue this proceeding. Post PNG has not rebutted this evidence in any manner or form. Clearly therefore, Post PNG's claim has no foundation. Accordingly, I order a dismissal of this part of Post PNG's defence.

Aundambui people's copyright in the Pottery?

12. This leaves me to consider the other issues, which I do starting with question 3. The question again is: do the Aundambui people have any copyright in the Pottery?

13. The Copyright Act, governs copyrights and related issues in PNG. This Act has traces of its origin from the first ever copyright legislation which was passed by the Parliament of the United Kingdom (UK) in 1710[2] and reformed and or updated from time to time to the current one being the UK's Copyright Designs and Patents Act 1988. The first ever legislation was also called the Statute of Anne since it was enacted during the reign of Her Majesty Queen Anne. The Statute removed the regulation and use of copyrights from private hands and placed it in the hands of government and the courts. It then for the first time enabled the authors and the printers they chose to license their works to, could have copyright for 14 years which was renewable for another 14 years. At the end of that period, the work would fall into public domain and no longer copyright protected. Despite a period of instability following the lapse of the first 14 years of protection which was called the Battle of Booksellers, the Statute continued to remain in force until the passage of the Copyright Act 1842.

14. Many considered the Statute of Anne as a "watershed event in Anglo-American copyright history ..nsforming what had been teen the publishers' private law copyright into a public law grant." As noted, the legislation, for the first time vested copyrightsuthors rather than publishers. Additionally, it included pred provisions for the public interest, such as a legal deposit scheme. Eventually, the Statute was an influence on copyright law for many other nations, including the United States. This influence remains current even in the 21st century with judges and academics frequently invoked it as an embodiment of the utilitarian underpinnings of copyright law. The legislation has since gone through a number of changes with the latest version now being the Copyright Designs and Patents Act 1988.

15. The UK Copyright Designs and Patents Act, gives rights of protection and controls of the way in which materials of their creator and or workmanship could be used. In PNG, s.4 of the Copyright Act identifies and provides copyright protection for a list of works. The provision reads:

"4. Works protected.

(1) Subject to this Act, the following works are protected works and are eligible for copyright under this Act:—

(a) literary and artistic works of original intellectual creations in the literary and artistic domain, including in particular—

(i) books, pamphlets, articles, computer programs and other writings; and

(ii) speeches, lectures, addresses, sermons and other oral works; and

(iii) dramatic, dramatic-musical works, pantomimes, choreographic works and other works created for stage productions; and

(iv) musical works, with or without accompanying words; and

(v) audiovisual works; and

(vi) works of architecture; and

(vii) works of drawing, painting, sculpture, engraving, lithography, tapestry and other works of fine art; and

(viii) photographic works; and

(ix) works of applied art; and

(x) illustrations, maps, plans, sketches and three-dimensional works relative to geography, topography, architecture or science; and

(b) derivative works including in particular—

(i) translations, adaptations, arrangements and other transformations or modifications of works; and

(ii) collections of works and databases, whether in machine, readable or other forms; and

(iii) collections of expressions of folklore provided that such collections are original by reason of the selection or arrangement of their contents.

(2) Works eligible for copyright under this section are protected by the sole fact of their creation irrespective of the mode or form of expression, content, quality or purpose.

(3) The protection of any work referred to in this section shall be without prejudice to any protection of a pre-existing work or expression of folklore incorporated in or utilized for the making of such a work."

16. Thus the protection provided under the Copyright Act could be classified as follows:

(a) Literary – covering song lyrics, manuscripts, manuals, computer programs, commercial documents, leaflets, newsletters and articles and so on;

(b) Dramatic - covering plays, dance and the like;

(c) Musical – covering musical recordings and scores;

(d) Artistic – covering photography, painting, sculptures, architecture, technical drawings or diagrams, maps and logos;

(e) Typographical arrangement of published editions – covering magazines, periodicals and so on;

(f) Sound Recording – Covering recordings of sounds not covered in the musicals category;

(g) Film – covering video footages, films, broadcasts and cable programmes.

17. As is the case under the UK legislation, under the PNG Copyrights Act, creation of copyrights is automatic. Copyright comes into existence, the moment an individual or a group of individuals or an incorporated entity like a company, creates any material falling under any of the above list.[3] A creation that is considered original and exhibiting a degree of labour, skill or judgment would qualify to be copyright protected. There is no dispute between the parties[4] that the Pottery in this case are covered under s. 4 (1) of the Copyright Act. Consequently, copyright over them is vested in their original creators or producers.

18. The Aundambuis through the evidence in the form of affidavits they have filed including that of Joel sworn on 12th February 2010, clearly claim:

(a) their sub-clan which hails from Aibom Village in the Chambri Lakes who are of Wasera-Gawi District in the East Sepik Province are the masters of pottery;

(b) Joel was specialized in wood carving but in 1986 with the assistance of his wife, switched to pottery making;

(c) since switching, Joel became known as the finest in the area and so has his wife, Agnes Aundambui;

(d) Joel and Agnes have been in the business of pottery making and selling, which includes the Pottery the subject of these proceeding;

(e) Joel and Agnes' products range from cooking to sago storage pots to souvenirs for tourists;

(f) Joel and Agnes participated in various cultural shows and have won various major awards and sold a good number of their pottery;

(g) many people both locally and abroad became interested in their products, which included an anthropologist, Helen Dennett from 1985-1986 who took a lot of photographs of the Pottery with their permission and free of charge for anthropological purposes;

(h) In 1996, Joel and Agnes handed over to the National Cultural Commission and the National Museum & Arts Gallery a collection of their products;

(i) In 1998, Joel registered a business entity under the name "Kolimang Clay Products" to assist in the commercial production and sale of the Pottery.

19. Post PNG has not called any evidence rebutting these evidence. They stand without any contradiction from anybody else despite the proceeding being the subject of media coverage. In these circumstances, I find the copyright in the Pottery is vested in the Aundambui sub-clansmen but more particularly Joel and Agnes Aundambui.

Did Post PNG infringe the copyrights of the Aundambui people?

20. This leads us to the next question of, did Post PNG infringe the copyrights of the Aundambuis by using photographic images of the Pottery in its stamps and brochure entitled "PNG Clay Pots"? Section 6 of the Copyright Act provides us with some guidance on how to answer this question. The provision reads:

"6. Economic rights.

(1) Subject to this Act, the author or other owner of copyright shall have the exclusive right to carry out or to authorize the following acts in relation to the work:–

(a) the reproduction of the work; and

(b) the translation of the work; and

(c) the adaptation, arrangement or other transformation of the work; and

(d) the distribution to the public by sale, rental, public lending or otherwise of the original or a copy of the work that has not already been subject to a distribution authorized by the owner of the copyright; and

(e) the rental or public lending of the original or a copy of an audiovisual work, a work embodied in a sound recording, a computer program, a database or a musical work in the form of notation, irrespective of the ownership of the original or copy concerned; and

(f) the importation of copies of the work; and

(g) the public display of the original or a copy of the work; and

(h) the public performance of the work; and

(i) the broadcasting of the work; and

(j) other communication of the work to the public.

(2) The rights of rental and lending under Subsection (1)(e) does not apply to rental or lending of a computing program where the program itself is not the essential object of the rental or lending."

21. Learned counsel for the Aundambuis argues that, his clients did not authorize Post PNG to "translate", "adapt" or "arrange" the Pottery in the way Post PNG did in its stamps and its brochure. The suggestion therefore, is that, Post PNG infringed his client's copyright in the Pottery by such acts. On the other hand, learned counsel for Post PNG argues that, his client did not engage in any conduct of the type complained of by the Aundambuis. He also argues that, the kind of protection provided under s. 4 (1) and the rights vested by s.6 (1) does not operate against the taking of photographic images of copyrighted work and using them in the way Post PNG did.

22. It is clear to me that, the owner of a copyrighted work as protected by s. 4(1) of the Copyright Act is exclusively empowered to authorise the use of his or her work in any of the manner listed in s.6. Most of the ways in which a copyrighted work can be used under this section is clear, and they seem to exclude at first glance, the use Post PNG made of the Pottery. I have come to that conclusion because taking a photographic image of an object is not the same as reproducing, translating, adapting, rearranging or transforming the object as is argued for by the parties in the ordinary sense of the meaning of these words. However, a careful consideration of the other provisions of s.6 (1) as against what Post PNG did here, brings Post PNG's actions within the coverage of s.6 (1). There are two reasons for this view.

23. The first reason is based on the provisions of s. 6 (1) (j), particularly the phrase "other communication of the work to the public". This phrase is defined by s.2 of the Act which is in the following terms:

"'communication to the public' means the transmission by wire or without wire of the images or sounds, or both, of a work, performance, sound recording or broadcast in such a way that the images or sounds can be perceived by persons outside the normal circle of a family and its closest social acquaintances at a place or places distant from the place where the transmission originates that, without the transmission, the images or sounds would not be perceivable and irrespective of whether the persons can receive the images or sounds at the same place and time, or at different places or times individually chosen by them;"

(Underlining mine)

24. This provision does not appear anywhere in either of the parties and in particular, their respective learned counsel's submissions. I am thus, left with no assistance from them. In my view, this provision clearly covers any broadcast, show, spread or communication either with or without wire any image in such a way that enables "persons outside the normal circle of a family" or the "closest social acquaintances" of the owner of a copyrighted work to see the copyrighted work.

25. Second reason is this. My reading around the question of whether there could be an infringement of copyright by taking photographic images of a copyrighted work leads to an affirmative answer to the question.[5] An article headed "Legal Pitfalls in Taking or Using Photographs of Copyright Material, Trademarks and People"[6] by Lien Verbauwhede, Consultant, SMEs Division, of the World Intellectual Property Organization is instructive. Lien advocates that, taking photographs of copyrighted work could amount to an infringement of copyright by reproduction. The author then goes on to suggest:

"Therefore, before you take a photo of any copyright work, you need the prior permission of the copyright owner. Photographers who infringe a copyright may be required to compensate for the economic loss, that is, to pay the damages they have caused and sometimes also other expenses, such as legal costs."

26. The same author in the same article goes on to say, much is dependent on the local legislation in any jurisdiction and what use is to be made of the photograph. Leaving the legislative issue aside, the author points out that:

"In general, you need permission if the part of a copyright work so used is considered to be a "substantial part" of that copyright work. A substantial part is an important, essential or distinct part. However, there is (and can be) no general rule on how much of a work may be used without prior permission. Often, the quality of what is used may be more important than how much is used. The determination of a "substantial part" is done on a case-by-case basis, depending on the particular facts and circumstances."

27. In my view, a combined reading of s. 6(1) (a) and (j) and s. 2 as to the meaning of the phrase "communication to the public" is clear. The position under the PNG Copyright Act is one that requires the prior approval or authorization of the workers before the taking of and making use of photographs of copyrighted work. It would follow therefore that, Post PNG was obliged to seek and secure the permission or approval of the Aundambui's before taking and making use of the photographs or pictures of the Pottery in the stamps and the brochure. There is no evidence of Post doing that. Consequently, it would be liable in damages to the Aundambuis.

28. In a bid to avoid liability and by way of a cross-claim against the second defendant, Tony Sipa, trading as Grafox Studios, Post PNG argues two points. First it argues that, it engaged, Tony to take the photographs. Hence, it goes on to argue that, if Tony did not first seek and secure the required authorization, he should be responsible and not Post PNG. Secondly, Post PNG claims the defence of "fair use".

29. The position thus taken by Post PNG are the subject of questions 5 and 6. Question 5 asks, could Post PNG be excused of any liability on the basis that the photographic images were taken by Tony. Then question 6 asks, is Post PNG guilty of negligence in not first ascertaining the creators and owners of the copyright in the pottery and then seek and secure the consent of the owners before using the images of the Pottery. I will deal with these issues in the order they are presented.

Is Post PNG excused of any liability since Tony Sipa took the pictures?

30. The relationship between Post PNG and Tony was one based on contract. That contract appears to be mainly an oral one, by reason of which, a copy of the contract is not in evidence. Post PNG says, it was a term of the contract that Tony would seek and secure the consent or approval of the owners of the copyright in the Pottery and would be personally liable for any infringement of copyrights. It also claims that, when it proceeded to use the images of the pottery in the stamps and the brochure, it assumed that Tony had sought and secured the necessary consent or approval of the owners of the copyright in the Pottery. Tony has not meaningfully participated in this proceeding in any manner or form. Consequently, there is not from him.

31. Clearly, Tony was a contracted agent of Post PNG to take the pictures of the Pottery. There is no evidence of him having any relationship with the Aundambuis. The contract between him and Post PNG is a matter between him and Post PNG. If either of them breached any terms of the contract, only the other innocent party to that contract would be entitled to sue, with the party at fault bearing responsibility to make good the breach. The Aundambuis are not parties to that contract. Hence the principle of privity of contract[7] would operate against the Aundambuis if somehow they opted to sue Tony. Hence, Post PNG cannot escape the consequences of its failure to seek and secure the Andambuis' authorization for the use of the images of their copyrighted work. If indeed it was a term of its agreement with Tony for him to secure the necessary authorization and he did not, Post PNG can seek to recover from him after meeting the Andambuis' claims.

32. The question under consideration can however, be determine by reference to and in accordance with the law on agents and principals. A recent statement of parts of the principle by the Supreme Court is in the case of Hilary Singat v. Commissioner of Police.[8]

"It is well settled law that, an agent as the ostensible authority to bind his principal. An agent can bind his or her principal by entering into a contract on behalf of the principal, provided the agent acts within the scope of his or her apparent or ostensible authority, even if the agent lacks actual authority and the fact of any lack in authority not being communicated to the third or other parties. The Supreme Court in Rainbow Holdings Pty Ltd v. Central Province Forest Industries Pty Ltd... adopted into our jurisdiction and applied these principles."

33. Then specifically on the issue of ostensible authority and more so the reasons for it, the Supreme Court went on to say:

"The law or the doctrine of ostensible authority has developed in the way it has for good reason. One good reason is that, a third party or the other contracting parties or parties to Court proceedings would not be parties or privy to any contract or relationship between a lawyer and his client or an agent and his principle and communication taking place between them. It is entirely a matter between, the agent and his principal or a lawyer and his client except as the law may otherwise permit. Another good reason is that, a client in the case of a lawyer or a principal in the case of an agent acting without the appropriate and necessary instructions has recourse against his lawyer, servant or agent. The lawyer, servant and or agents can be terminated and a cause of action would accrue to the client or the principal to sue the lawyer or the servant or agent who acts without instructions. The third party, with whom the lawyer, servant and or agent may have negotiated with and entered into any agreement, would have no such recourse. A further, reason would be that, the general business efficacy including the orderly and timely handling and dispositions of cases in Court and business generally would be adversely affected by the ready undoing of contracts or steps taken on the representation of a party through his lawyer, servant or agent, and there would be no finality in sight for any litigation."

34. Earlier statement of the law on agents and principals brings more understanding of the law. A good example of such a statement is in the decision of Wood AJ (as he then was) in Toplis & Harding Pty Ltd v. Dadi Toka & Grandsen (Third Party)[9]. There His Honour, in relevant parts said:

"How far an agent can commit his principal forms the essential core of the whole law of agency in contract. Most of the law centres around whether the principal has actually been committed by the agent. In the case of Pole v. Leask (1863) 33 L.J. Ch. 155, the House of Lords unanimously laid down that if a person deals with another as agent and seeks to charge a third person as principal, the onus is on him to show that the agency exists, that the agent has the authority he assumes to exercise, or that the principal is estopped from disputing it.

It is then a fundamental concept of the law of contractual agency that once an agent brings his principal into contact with the third party, he himself normally drops out and retains neither the right to sue nor the liability to be sued. The converse of that would be that where he does not bring forward his principal or conceals his existence, he must therefore be liable."

35. In the present case, there is no evidence of Post PNG or anyone informing the Aundambui's that Tony was a principal acting on his own behalf and not on behalf of Post PNG. Then as to what he did, there is no evidence of when and how Tony went about getting the pictures of the Pottery. There is also, no evidence of any communication between Tony and the Aundambuis or the latter with Post PNG. This is confirmed by the fact that no expressed authorization or approval was sought and obtained from the Aundambuis before the pictures were taken and thereafter, their use. The evidence from the Aundambuis is that, they knew nothing about the taking of pictures of their Pottery until the stamps and brochure came out on 22nd January 2003, which were put out by Post PNG. There is no evidence, particularly, from Post PNG in terms of the Aundambuis knowledge of the contractual relationship between Tony and Post PNG and his workings and what that entailed and meant for the Aundambuis.

36. Further, there is no direct evidence from Tony on how he went about his work to capture in picture the Pottery. There is however a reference to how he captured the pictures in the affidavit of Brandon Thomas for Post PNG sworn on 12th April 2010. Paragraphs 21 - 22 but, particularly, paragraph 22 is relevant. This paragraph appears to be a recollection of what Tony allegedly informed someone. But when, where, how and to whom that was done is not disclosed in the affidavit. This evidence is clearly hearsay and hence, inadmissible. Nevertheless to know what is being said, I note that Tony took the pictures from a magazine entitled "The Artefacts and Crafts of Papua New Guinea – A Guide for Buyers". Whether that is how Tony got the pictures is unknown in the absence of any evidence from him or anyone else in possession of direction evidence on point.

37. The end result of all of the foregoing on the question under consideration is this. Post PNG was and is at all relevant times the principal. Accordingly, I have no hesitation in finding that, the Aundambuis have correctly issued this proceeding against Post PNG and that Post PNG is primarily responsible. Ultimately, I find that Post PNG is not and cannot be excused from its liability for the infringement of the Aundambuis' copyright in the Pottery.

38. Of course, if the allegations of Post PNG against Tony have any found and are sustainable; Post PNG would have a cause of action against him. That is the subject of the last and final question. We will get to that if need be after a determination of the remaining questions. It would also be necessary to consider Post PNG's specific defences to the question. For now, I will turn to the question that concerns the exercise of care. The question reads in terms of, is Post PNG guilty of negligence in not first ascertaining the creators and owners of the copyright in the Pottery and then seek and secure their consent before using the images of the Pottery.

Was Post PNG or the Aundambui's guilty of negligence?

39. As noted, the Aundambui's argue that Post PNG failed to carry out due search and enquiry to establish the owners of the Pottery. Post PNG's response is that, it is carrying out a public function and duty which is statute based. That function and duty is to provide postal services which it does in a self-financing and self-sustaining manner without any support from the government. Hence, except only to discharge their statutory duties and responsibilities, it says it was and is not obliged to carry out the kind of search and inquiry the Aundambuis submit it should have carried out. Finally, Post PNG claims protection by way of immunity under s.24 of the PSA.

Immunity under s. 24 of PSA

40. I think it is a good idea to start with an examination of what duties and responsibilities Post PNG has in relation to the production, sale and use of postal stamps and other material. A good starting point in that regard should be Post PNG's claim of immunity under s.24 of the PSA. The provision reads:

"24. Immunity from actions.

An action or other proceeding shall not be maintainable against Post PNG, the Board, the Managing Director or any officer of Post PNG, in relation to any loss or damage suffered, or that may be suffered, by a person by reason of any act, default, delay, error, omission or loss (whether negligent or otherwise) by or on behalf of Post PNG in the carriage or delivery of, or otherwise in relation to, a postal article by means of the letter service."

41. This provision in my humble view is self-explanatory so much so that there is no need for any art of interpretation to apply. As far as I can see, this provision is saying Post PNG from its managing director to any officer in its employ is immune from any action or proceeding. However, in my respectful view, this is not a general provision applying to all situations. Instead, there is an important qualification. The qualification is in the words "in the carriage or delivery of, or otherwise in relation to, a postal article by means of the letter service" (underlining mine). This renders the immunity provided by s. 24 restricted to any damage or loss arising out from the "carriage or delivery or otherwise" of a "postal article by means of letter services". This is easily understandable. Some aspects of the postal service trade are beyond the control of Post PNG and its servants and agents, such as the carriage of postal material by air or boat or land and their handling. The way in which mail could be handled with those involved in the mailing system like, airlines, shipping lines and land transport companies may be beyond the control of Post PNG staff. There could also be instances in which mail could be lost due, to rain, fire or such like, including any acts of God. In such circumstances, it would not make any sense to hold Post PNG liable.

42. Interestingly, s. 10 of the PSA reserves certain kinds of services. Apart from strictly speaking, postal services which are the subject of subsections (1) and (2), subsection (3), lists additional services. Included in that list are items listed as (b) and (c) which are in these terms:

"b) to manufacture and issue postage stamps and philatelic products within Papua New Guinea; and

(c) to market, including the sale of postage stamps and philatelic products in Papua New Guinea and elsewhere;"

43. The wording in these provisions and that of s.24 are very clear. The immunity provided under s. 24 is only in respect of "the carriage or delivery of, or otherwise in relation to, a postal article by means of the letter service". Manufacturing and issuing of postal stamps and philatelic products do not in my view, fall under the description of "the carriage or delivery of, or otherwise in relation to, a postal article by means of the letter service". Similarly, marketing, including the sale of postage stamps and Philatelic products do not fall under the description of "the carriage or delivery of, or otherwise in relation to, a postal article by means of the letter service". I am thus not persuaded that Post PNG is entitled to claim immunity under s.24. Instead, I find that, it is open to face this claim as the claim concerns the manufacture, issuance and sale of postal stamps and philatelic products.

Public Policy

44. As noted, Post PNG also argues that, public policy dictates no liability against it. This is premised on its argument that it is providing a public service, namely postal services. That service is not profit driven but a public service promoting the various cultures of the country. Parts of this arguments are based on the various provisions of the PSA, namely, 1 (1), (2), 2 and 9 (1).

45. A close look at the provisions referred to by Post PNG renders the legislative provisions clearer. Section 1(1) and (2) confirm that for the purposes of s. 35 of the Constitution, postal service is a public purpose. The reference to s.2 is only in respect of the definition of the phrase "postal" and "postage stamp". The definition of these phrases are relevant only as to what these terms mean within the context of their respective uses and could assist in a proper understanding of what postal services entails. Finally, s. 9(1) merely empowers Post PNG to "cause postage stamps to be issued and sold at such amounts as determined by the Board."

46. There are three problems with Post PNG's argument. First, as far as I could see, none of the provisions referred to by Post PNG, either on their own or on a combined reading of them, grants any immunity from prosecution because Post PNG is providing a public service, which is in addition to and or different to that granted by s. 24 of the PSA. Secondly, there is already an immunity provision which is specific as already noted and is not a "catch all" immunity from any suit or action provision. Thirdly, Post PNG is not the only entity that is providing a public service. Others such as all of the disciplined forces, public hospitals and government medical doctors and medical workers, PNG Power, Air Niugini, educational facilities from universities to colleges and elementary schools, PNG Water Board, Telikom (PNG) Limited and many more are doing the same. None of these institutions are immune from any action or suit. A quick look up of the PNG Law Reports clearly reveals many of these institutions, including, Post PNG itself have been taken to Court in some cases successfully. Upholding Post PNG's argument comes with the grave risk of such institutions being license to get away with negligence or any act not properly protected by immunity to escape liability and responsibility. Giving credence to such an argument would lay the foundation for poor goods and services delivery and consequently a lack of confidence in our country. Clearly, Post PNG's argument here is itself against public policy and hence public interest.

Post PNG's Negligence?

47. This now clears the way for us to consider if Post PNG was negligent in its manufacture, issuance and sale of the stamps and brochure carrying the Pottery. In order to determine that question, I note, Post PNG's only other argument remaining here is its claim that, it contracted to Tony for valuable consideration of K5,000, amongst others, the need to ensure compliance of copyright laws. As such, Tony had the obligation to take care and in particular ascertain ownership in the copyrighted work and seek any required approval, consent or authorization before their use. Given that position, Post PNG argues, it is not able to directly answer the claims of negligence.

48. As already noted, there is no direct evidence from Tony himself or anybody for Post PNG of Tony exercising care and caution in the need to seek out the owners or creators of the Pottery and securing their authorization before taking pictures of the pottery. Other evidence adduced for Post PNG in the form of affidavits from Peter Maden, its managing director and Brendon Thomas, its financial controller reveal that, Tony took the pictures from a book entitled "Artefacts and Crafts of Papua New Guinea – A Guide for Buyers". The deponents to these affidavits and Greglyne Park who has also filed an affidavit for Post PNG, then go into what is in essence, submissions trying to make the case that, this book did not acknowledge or subscribed creatorship or workmanship to the Aundambuis or any other person. They then make reference to the existence of other publications and photographs which are available to the public, without clearly stating how widely circulated or published these sources are. There is also some reference to finding some pottery product similar to the ones appearing in the stamps and brochure, on display for sale by PNG Art, which is a dealer or trader in PNG art products. Proceeding on the basis of that, Post PNG through these deponents claim that, it had no obligation to seek and secure the approval or authority of the Aundambuis to take pictures of the pottery and make use of them in the stamps and in the brochure.

49. If these claims of Post PNG are true, they cannot, in my view, excuse Post PNG or its agent Tony from first seeking and securing the copy right of the owners of the copyrighted works. The following passage from the WIPO per Lien's article supports this view:

"Advertising, fashion, interior design and lifestyle photographers frequently include paintings, sculptures, craft items, architectural works, jewelry, clothing, toys or other artistic works in their photographs. Often, such items are protected by copyright. Only the owner of a copyright has the exclusive right to reproduce the copyright work. Photographing a copyright work amounts to reproducing it. Therefore, before you take a photo of any copyright work, you need the prior permission of the copyright owner.

...

As indicated earlier, photographing a copyright work is considered a way of reproducing the work, and this is an act which the copyright owner has the exclusive right to do. This is why you may need to get prior permission to include a copyright work in your shot.

Some other activities that only the copyright owner has the exclusive right to do (and for which you may need permission) are:

- Making prints of a work, scanning it into digital form, photocopying it, copying digital works, etc.;

- Making a collage from several different photographs or images;

- Adding new artistic elements to an existing work (e.g., colorizing a black and white picture);

- Photographing someone's work and then displaying the photo to the public (e.g., exhibiting the photo in a gallery, supplying copies to the public in postcard form, putting it on a website, sending it to customers via e-mail, etc.)."

50. Speaking then in terms of exceptions to the above restrictions, Lien goes on to point out that, there are exceptions but these are dependent on local legislation. Then subject to any local legislation, the learned author goes on to indicate that, taking pictures of copyrighted work in the following circumstances are generally accepted exceptions:

(a) buildings in public places;

(b) artistic works that are permanently displayed in a public place as in a park or on the street but not paintings and murals;

(c) for the purposes of news reporting about the work in the picture taken, provided the copyrighted work is identified and the artist or its creator is named;

(d) for a review or critique of the copyrighted work as the critique of a cartoon in a book which reviews and critiques or analyses works provided the copyright is identified and the creator or artist is named;

(e) for advertising a sale of the work;

(f) background or incidental to a principle object but need to be aware that there could be problems with determining the photographs as such; and

(g) for private use only.

51. Turning specifically to the requirement or need to identify the author, Lien then describes the rights involved, cautions and advises in these terms:

"Copyright law provides some additional legal rights to the authors to protect their reputation and their works against certain abuses. These are called 'moral rights.' One of the key moral rights is the 'authorship right' or 'paternity right', which is the right to be named as the author of the work.

If your photos include paintings, buildings, sculptures or other copyright works, and you or your client will be exposing them to the public (publishing, using on websites, exhibiting, etc.), then you and your client must make sure that the author's name appears on or in relation to the work, whenever feasible and considered reasonable. If you don't want to give an attribution, it would be prudent to get the prior permission of the author or artist."

52. Under the PNG Copyright Act, the position as will be shortly seen, affirms Lien's work. Commencing the consideration, s.5 and ss.8 – 16 are relevant. Section 15 provides in clear terms that "the importation of a copy of a work by a person for his own personal purposes" is possible "without the authorization of the author or other owner of copyright." Similarly, s.8 stipulates that:

"the private reproduction of a published work in a single copy may be made without the authorization of the author or owner of copyright where the reproduction is made by a person exclusively for his own personal purposes."

53. However, this is not an open license. Subsection (2) stipulates that such reproduction is not permitted in respect of:

"(a) a work of architecture in the form of building or other construction; or

(b) in the form of reprography of the whole or a substantial part of a book or of a musical work in the form of notation; or

(c) of the whole or a substantial part of a database in digital form; or

(d) of a computer program except as provided in Section 13; or

(e) of any work in cases where reproduction would conflict with a normal exploitation of the work or would otherwise unreasonably prejudice the legitimate interests of the author or other owner of the copyright."

54. Then, when considering any exclusion from copyright protection, s.5 is relevant. This provision excludes the protection provided under s. 4 in respect of the following matters:

"(a) any idea, procedure, system, method of operation, concept, principle, discovery or mere date, whether expressed, described, explained, illustrated or embodied in a work; and

(b) any official text of a legislative, administrative or legal nature or any official translation thereof."

55. In my view, this provision would at first glance, bring into play the well accepted principle of statutory interpretation, usually summed up in the expression "expression unius personae velrei est exclusion alterius". What this means is that, by expressly choosing to exclude the kinds of work mentioned in s. 5, the legislature excluded from that list the matters that are not included. This means anything not included in s.5 is protected by copyright. However, that is not the end of the matter. Sections 9 – 14 and s.16 of the Act have some say on the exclusion list.

56. Section, 9 permits the use of copyrighted work if it is temporary. Nevertheless, this is dependent on such reproduction being:

"(a)...made in the process of a digital transmission of the work or an act of making a digitally stored work perceptible; and

(b) ...caused by a person or entity that, [is with the] ...authorization [of] ... the owner of copyright or by operation of law, is entitled to make that transmission or making perceptible of the work; and

(c) ... an accessory to a transmission or making perceptible during the normal operation of the equipment used and entails the automatic deletion of the copy without enabling the retrieval of the work for any other purpose than referred to in Paragraphs (a) and (b)."

57. Section 10 adds to the list of exclusion from the need to seek and secure authorization from owners of copyright for quotations from copyrighted work. This provision permits short parts of "published work" to be reproduced without the need for the owner's authorization. This is conditional on two requirements being met. First, the reproduction must be "compatible with fair practice" and must be within the "extent justified by the purpose." Secondly, the quotation must also "be accompanied by an indication of the source and the name of the author" if that is disclosed "in the work from which the quotation is taken."

58. Provided conditions similar to those stipulated under s. 10 are met, s. 11 permits the reproduction of copyrighted work for teaching purposes. Proceeding almost along the same lines, s.12 with an additional condition that the reproduction will "not serve direct or indirect commercial gain" permits the reproduction of "published article, other short work or short extract of a work" for the following purposes by public authorities:

"(a) satisfy the request of a person, provided that:

(i) the public institution is satisfied that the copy shall be used solely for the purposes of study, scholarship or private research; and

(ii) the act of reproduction is an isolated case occurring, where repeated, on separate and unrelated occasions; and

(iii) there is no license or other authority available under which approval for such copies can be made; or

(b) where the copy is made in order to preserve and, where necessary, replace a copy or to replace a copy which has been lost, destroyed or rendered unusable in the permanent collection of another public institution provided that it is impossible to obtain such a copy under reasonable conditions and that the act of reprographic reproduction is an isolated case occurring, where repeated, on separate and unrelated occasions."

59. Again provided conditions similar to the ones stipulated under ss. 10, 11 and 12 are met, s.13 permits the reproduction of copyrighted work in other works namely:

"(a) newspaper or periodical or the broadcasting or other communication to the public of an article published in a:

(1) a newspaper; or
(2) periodical on current economic, political or religious topics; or
(3) a broadcast work of the same character,

provided the right to authorize such reproduction is not expressly reserved in the author or another person; or

(b) other communication to the public of a:

• (1) political speech; or
• (2) lecture; or
• (3) address; or
• (4) sermon; or
• (5) other work of a similar nature delivered in public; or
• (6) a speech delivered during legal proceedings,
  

to the extent justified by the purpose of providing current information; or

(c) reporting current events, which require the reproduction and the broadcasting or other communication to the public of short excerpts of a work seen or heard in the course of such events, to the extent justified by the purpose."

60. Section 14 adds computer programs to the list of exclusions by allowing for "a single copy, or the adaptation" of such a program. This can be done "by the lawful owner of a copy of that computer program." This is conditional on the copy or adaptation being necessary:

"(a) for use of the computer program with a computer for the purpose and extent for which the computer program has been obtained; or

(b) for archival purposes and for the replacement of the lawfully owned copy of the computer program in the event that the said copy of the computer program is lost, destroyed or rendered unusable", and

(c) "such copy or adaptation shall be destroyed in the event that the continued possession of the copy of the computer program ceases to be lawful."

61. Finally s.16 addresses the question of public display of originals or copies of copyrighted work. This provision permits the public display of original or copies of copyrighted works provided:

"(a) ...the display is made other than by means of a film, slide, television image or otherwise on screen or by means of any other device or process; and

(b) ...the work has been published or the original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title."

62. The total effect of all of these is this. The copyright of the owners of copyrighted work is recognized. This in turn means that, unless the owner of a copyrighted work's authority has been sought and secured, no one has any right to reproduce or make use of a copyrighted work, especially for commercial purposes, except only for the purposes and circumstances specified by the Copyright Act as noted. It should follow therefore that, unless one is absolutely clear, extreme caution and care should be exercise before using the work or creation of other people.

63. What does this mean for the case at hand? Post PNG was required to exercise care and caution before proceeding to use the pictures of the Pottery in the way it did. It had the primary duty and responsibility to ensure that the copyrights of the owners of the copyrighted works were first obtained before proceeding to take the pictures and or use them in the way it did. It is not good enough for Post PNG to say it contracted out the work to Tony. As Lien's article concludes:

"businesses that use images created by photographers need to know about potential legal liabilities. It is a good practice to require a warrant from the photographer that they own or have permission to use any material that they provide to you and that the contents do not violate any law or regulation."

64. Other than the mere claims in Peter Maden and Brendon Thomas' affidavits, there is no evidence of the precise terms on which Post PNG engaged Tony. Both Tony and Post PNG are in their respective businesses. Most businesses would have some paper record of their transactions. There is no explanation offered by Post PNG as to why there is no documentation. Such documentation could amongst others, show the relevant terms on the subject of searching for and securing the authorization of the authors of the work in the pottery or if they were to come from the pictures taken of them from someone else, the authorization for the use of the pictures from the owners of the pictures as well. There is also, no evidence of what if any warranty and in what terms Post PNG has required of Tony and the terms on which he may have given the warranty, if Post PNG's suggestion has any foundation. It is clear to me from all of the affidavit evidence filed for Post PNG that, there was no meaningful search for the owners of the copyrights in the Pottery and or the pictures prior to the use of the pictures of them. Given that lack of search, Post PNG did not also, seek and secure the required authorization from the owners of the copyright in the Pottery prior to the manufacture, launch and sale of the postal stamps and the release of the brochure.

65. According to Post PNG's hearsay evidence on how Tony carried out his work, there is the suggestion that, because the photographs of the Pottery appearing in the book on "Artefacts and Crafts of Papua New Guinea – A Guide for Buyers" did not disclose the names of the authors, Tony and hence Post PNG did not see the need to search for and secure the required authorization. Further, Post PNG claims that because there were pictures of the pottery on other publications that were accessible by the public, including displays of replicas in PNG Art's shop for sale, there was no need for approval from the owners of the copyright in the Pottery. Post PNG has not drawn the Court to any authority, be it a statutory provision or case law, recognising such responses as valid defences against the clear obligation to be diligent in their search and their observance of an author's copyright.

66. My own searches failed to produce any statutory or other publication that recognizes and supports the position Tony and hence Post PNG are taking here. The evidence adduced by Post PNG clearly discloses no specific conversation by reference to dates, time and place as well as the form any such conversations may have taken place with Tony about copyright until after the issuance of this proceeding. Post PNG is the author and or the source of the stamps and brochure by reason of which it needed to observe the requirements of the copyright laws and take the appropriate steps. Until after this claim, Post PNG appears to have paid no attention to the need to seek and secure the approval of the owners of the copyrighted work, the Pottery. This finding is obvious from the lack of any mention in the various affidavits filed for Post PNG of any such prior conversations and searches with their specifics as to time, date, venue and the manner and with whom such conversations took place, when, where and how the searches were carried out. In these circumstances, I find both Post PNG and Tony were negligent.

67. Post PNG's arguments that pictures and even replicas of the Pottery were in the public domain cannot operate in its favour. There are two reasons for this view. First, Post PNG did not draw my attention to any provision in the Copyright Act that lays the foundation for this argument. In the foregoing, I discussed most of the relevant provisions of the Act. None of these provisions or any other provision in the Copyright Act provides for such a defence. In other words, the Act does not dispense with the need to seek and secure the authorization of an author of a copyrighted work, due to public display for sale or pictures of a copyrighted work being published. This is legislative position is consistent with worldwide acceptance of the fact that even if a copyrighted work is on public display or widely published and circulated, the copyright protection vested in their authors or owners remain intact.

68. Secondly, as noted above, except as provided for by the Act, copyright in a copyrighted work is not lost by its publication or display. Instead, they remain intact until they have entered the public domain. A copyrighted work does not enter the public domain, until the period of the respective protections under s. 17 of the Act has expired. This is again consistent with the position worldwide.[10] To have a complete understanding of the various periods of protection, it is necessary to quote the provision, which reads:

"17. Duration of copyright.

(1) Subject to this section, the economic and moral rights in respect of a copyright work shall be protected during the life of the author and for a period of 50 years of the date of his death.

(2) In the case of a work of joint authorship, the economic and moral rights of the author shall protected during the life of the author and for a period of 50 years from the date of his death.

(3) In the case of a collective work, other than a work of applied art, and in the case of an audiovisual work, the economic and moral rights shall be protected for a period of 50 years from the date on which the work was made, first made available to the public or first published, whichever occurs last.

(4) In the case of a work published anonymously or under a pseudonym, the economic and moral rights shall be protected for a period of 50 years from the date on which the work was made, first made available to the public or first published, whichever occurs last, provided that where the author's identity is revealed or is no longer in doubt before the expiration of the said period, the provisions of Subsection (1) or Subsection (2), as the case may be, shall apply.

(5) In the case of a work of applied art, the economic and moral rights shall be protected for a period of 25 years from the making of the work."

(Underlining mine)

69. What this means is this. It was incumbent upon Post PNG and Tony to demonstrate by appropriate evidence which of these provisions applies in their favour. This should have included evidence of when the Pottery were first created or entered the public arena and which of the time periods under s. 17 applies in this case. In the present case, the evidence demonstrates the Aundambuis are the authors of the Pottery. This in my view brings into play s.17 (1) or if not, (2). The creators and hence the owners of the work are still alive. Their copyright is still current and will be current up to a further 50 years until the last of the owners pass away.

Contributory Negligence

70. Another of Post PNG's argument in a bid to either, avoid liability altogether or, minimize its liability, is its claims that, the Aundambuis are guilty of contributory negligence. That claim is premised on, the Audambuis not putting out publications or taking any such steps to let the public know that they were the owners of the copyright and that their work was protected under the Copyright Act. This argument is flawed and cannot be sustained. The reason for that is simple. As Post PNG's learned counsel acknowledges in his submissions, copyright is automatic upon the creation and bringing into existence of an original work of art, music or photography or other work as is outlined in s. 4 of the Act.

71. There is no requirement for registration of copyrightable work by their authors. Similarly, there is no requirement for the owners of copyrighted work to do anything to protect their right save only to take appropriate actions when their copyright is breached. The onus is however, on people who wish to use other people's work, to seek the permission or approval or the authorization of the owner. Most publications on the subject of copyright or intellectual property such as Lien's article, suggest that, it is more advisable to search for and secure an author of a copyrighted work's permission before proceeding to use it in any manner or form, even in cases where it is not clear whether a work is copyright protected or not. This brings home the cliché, "it is better to err on the side of caution rather that assumes that all will be okay." As noted in this case, the onus was on Post PNG or its agent, Tony to exercise all care and caution to search for and secure the approval or authorization of the owners of the Pottery and or their picture before using them. The evidence clearly shows that, they both failed to seek and secure the authorization of the Aundambuis. In these circumstances, there is no basis to find the Aundambuis guilty of contributory negligence particularly, when they are not required to do anything to protect their copyright expect to sue for any infringement. Given the arguments here, however, I venture to say it would be advisable for owners of copyrighted work to take all reasonable steps or action to have their copyrights protected as a further protection against any possible infringement of their copyrights.

72. In short I have already found Post PNG was negligent in failing to seek and secure the prior approval, consent or authorization of the Aundambuis, who are the owners of the copyright in the Pottery before using the pictures of the Pottery. I have also found that, the Aundambuis are not guilty of any contributory negligence. Hence, I find Post PNG is fully liable to the Aundambuis for the infringement of their copyright in the Pottery. This should naturally lead to a consideration of the question, how much is their loss or damages. Before we get to that question however, we need to first deal with the remaining statutory defences of the claim being statutory time barred under s. 23 (1) of the PSA and s. 16 of the FLA and a failure to give prior notice before the claim and or action, under s. 23(2) of the PSA and s. 5 CBASA.

Notice of the claim

73. I will first deal with the arguments around the lack of notice under s.5 of the CBASA first and thereafter notice requirements under s.23 (2) of the PSA.

Notice under s. 5 of CBASA

74. In respect of the arguments around s. 5 of the CBASA, Post PNG argues that the Aundambuis were required to give notice of their intention to make a claim against the State within 6 months from 22nd January 2003, as it is part of the State. In so arguing, Post PNG relies on the decision of the Supreme Court in Mineral Resources Development Company Ltd v Mathew Sisimolu.[11] On the other hand, the Aundambuis argue that, Post PNG is a separate corporate entity and is therefore not part of the State to require notice under s.5 of the CBASA. In support of their argument they refer to the Supreme Court decision in SCR No 1 of 1998; Reservation Pursuant to Section 15 of the Supreme Court Act[12] to argue that it was not intended that the requirement for notice under s.5 should apply to State owned enterprises incorporated under the Companies Act because of the separate corporate personality.

75. Until the Supreme Court decisions in Mineral Resources Development Company Ltd v. Mathew Sisimolu (supra) and PNG Power v. Ian Augerea & Ors,[13] there has been some confusion over the application of the notice requirements under s.5 of the CBASA. This confusion came about because of two different views taken by Judges in the National Court. One line of cases favoured the argument that the notice requirement applies to State owned or public enterprises. The other line of cases took the contrary view. The decisions of the Supreme Court in the two matters cited, put an end to the confusion and determined that, the requirements for notice under s.5 applies. In the first case, the Supreme Court found that MRDC was part of the State for the purposes of s. 5 of the CBASA because it was:

1. an entity created under the Mineral Resources Development Company Limited (Privatization) Act 1996 and a corporate entity under the Companies Act 1997;
   
2. set up for governmental or official purposes and carries out decisions or directions of the National Executive Council pursuant to its Constitution which sets out its objects and functions; and
   
3. by its Constitution required the involvement of the State agencies and departments, in the transfer of shares, appointment and removal of directors and conduct of meetings.
   

76. In the second case, the Supreme Court gave a serious and detailed consideration to the two opposing lines of authorities in the National Court and pointed out the correct test to apply to determine whether a corporate entity was part of the state for the purposes of s. 5 notice. In the process of doing that, the Court noted that the Court in the Reservation Pursuant to Section 15 of the Supreme Court Act, found provincial governments where part of the state because of the following factors:

(1) They are established by the Constitution;

(2) They are part of the three tier structure of government enshrined in the Constitution;

(3) Like the other tiers of government they are constituted by elected representatives;

(4) The National Government exercises some control over provincial governments in political, administrative and financial matters;

(5) They fall within the definition of "governmental body" contained in the Constitution; and

(6) Judgment debts are recoverable from monies allocated in the budgetary process of provincial governments..."

77. The Court endorsed this as correct for the purposes of determining if a form or level of government was part of the State for the purposes of s. 5 of the CBASA. Then more importantly, the Court went on to hold that:

"Taking these factors into account without any careful consideration as did Lay J., in Naomi Vicky John v. National Housing Corporation... and followed by Hartshorn J., in Konze Kara v. Public Curator of PNG... to determine whether entities other than a form of government is a State for the purpose of the requirements under s. 5 and the protection provided to the State under s. 13 of the CBASA can easily be misguided and erroneous for one serious but simple reason. The very nature of most governmental bodies or entities other than the national government, provincial governments and local level governments established by the State or a provincial government would not easily meet all of the above factors, especially the first three factors. Yet they would be charged with a duty and or responsibility of providing an important and critical service such as the provision of water, electricity, public housing, telecommunications, public transport, public banking, public health, public educational services and or the control over the production, importation and use of narcotics and other drugs, or dissemination of governmental and or public information as in the case of national broadcasting, or medical services. Given the essential nature of these kinds of services, they could simply not be left to the free market forces in a welfare State as developed in England and spread internationally, including our country. Traditionally, with origins mainly in England, such essential services formed the core function of the State. Later government leadership and thinking changed and they moved to the idea of service specialized organizations which saw the corporatization and privatization of some of these services. All of this was done in the hope of bringing greater efficiency in the management and delivery of these services at affordable prices. It is therefore normal to see such entities charging and receiving nominal fees as opposed to the prevailing commercial rate which are determined by the free market forces."

78. The Court then proceed to identify and state the correct test to apply to determine if a public authority or institution is part of the State in the following terms:

"In our country, we started off as a nation with most of these key service areas remaining as key government departments. Later without much careful consideration and debate, the government moved to corporatization and privatization. Except for the cases in which there has been full privatization as in the case of the former Papua New Guinea Banking Corporation being sold to the Bank South Pacific, most of the other key service areas remain in government owned and controlled entities. This is necessary and important to maintain so the people of Papua New Guinea are well served rather than being driven by profit and they are charged with all sorts of outrageous fees and charges only seen in our country as is done by Bank South Pacific Limited and the other banks operating in our country. For instances, despite declarations of substantial profits each year, fees and charges even for deposits and customers withdrawing their own funds and a clearing of cheques issued by that bank are being charged. Given these, an important and determinative test in our view to determine whether an entity is part of the State or not is the nature or kind of service and or duties and responsibilities the entity under consideration has or owes to a particular part of the country or the whole country. If the kind of service or duties and responsibilities the entity has, falls into one of the traditional critical functions and or duties and responsibilities of the State, and that entity is not operating as a private enterprise purely for profit, with all of the features of a private enterprise present, such an entity should easily qualify to be part of the State. Accordingly, we endorse Sawong J.'s view in Sengus Investment Ltd v National Broadcasting Corporation,... that it would be necessary to consider, amongst others, "the corporate structure and purpose of the organization as set out in its enabling legislation" as well as in the way it carries on its business."

79. Applying the test it identified, the Court took the following factors into account to come to the conclusion that, PNG Power was part of the State for the purposes of s. 5 of the CBASA:

"(1) it is an entity establish pursuant to a statute, namely the Electricity Commission (Privatization) Act 2002, and the Electricity Industry Act ((Chp. 78) consolidated to No 10 of 2002);

(2) its employees are deemed employees in the public service and to whom the Public Services (Management) Act 1995 applies as to their rights duties and obligations according to s.10 (3) – (6) of the Electricity Commission (Privatization) Act 2002;

(3) its Board and its chief executive officer are appointed by the government of the day;

(4) it is obliged to give effect to the policies of the government and not to pursue its own corporate will and desire and is accountable to the people of Papua New Guinea through the relevant government minister as its political head; and

(5) it was not established to make profits for the government but rather the need to provide quality, reliable and affordable electricity to the people of Papua New Guinea, which includes natural persons and corporate entities alike, which is a traditional function of a welfare State."

80. In the present case, I note that Post PNG:

(1) is an entity establish pursuant to a statute, namely the Postal Services Act 1996 for a public purpose identified in terms of postal services;

(2) Every officer employed by PPL is required to take an oath of office in a prescribed form;

(3) its Board and its chief executive officer are appointed by the government of the day;

(4) it is obliged to give effect to the policies of the government and not to pursue its own corporate will and desire and is accountable to the people of Papua New Guinea through the relevant government minister as its political head; and

(5) it is was not established to make profits for the government but rather the need to provide quality, reliable and affordable postal service for the people of Papua New Guinea, which includes natural persons and corporate entities alike, which is a traditional function of a welfare State.

81. Given these factors and on the basis of the Supreme Court decisions, I have no difficulty in finding that Post PNG is part of the State. This means that, the Aundambuis were required to give notice of their intention to make their claim against the State within 6 months from 22nd January or 26th February 2003 or within such further time as may have been allowed in accordance with the CBASA. Despite that, the Aundambuis made no attempt or effort at giving the required notice. That effectively renders this proceeding incompetent by reason of which it cannot be allowed to proceed any further. That is however, not the end of the matter.

82. Post PNG did not raise the issue of notice under s. 5 of the CBASA in its defence or its main submissions. This argument is thus raised for the first time in its reply to the Aundambuis' submissions. In The State v. Brian J & Ors[14] the Supreme Court held that, the defence of lack of any notice under s. 5 of the CBASA is a stat defence. Such a defence requires specific pleading. A fail failure to do so precludes the State or anyone seeking to benefit from such a defence from raising it belatedly.[15] That being the case, the State or a defendant seeking to dismiss any proceeding for lack of s.5 notice can do so only after pleading it in its defence and not otherwise.