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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 713 OF 2015
BETWEEN:
OTTO LOWA, Chairman of the Vuvuka Clan of the Makolkol Tribe, Open Bay Area, Pomio, East New Britain Province
First Plaintiff
AND:
HENRY KOINI, Chairman of the Haragon Clan of the Makolkol Tribe, Open Bay Area, Pomio, East New Britain Province
Second Plaintiff
AND:
PAUL SIWA, Chairman Clan of the Makolkol Tribe and the Clan of the Hailip Clan of the Makolkol Tribe, Open Bay Area, Pomio, East New
Britain Province
Third Plaintiff
AND:
SIMAKADE HOLDINGS LIMITED
Fourth Plaintiff
AND:
JOHN MORI, Monitoring Officer, PNG Forest Authority
First Defendant
AND:
AGATHA MORI, Wife of First Defendant
Second Defendant
AND:
CONRAD MAUMAU, Area Supervisor, Open Bay Area, PNG Forest Authority
Third Defendant
AND:
LUDWIG GUNA, Area Forest Manager New Guinea Islands Region, PNG Forest Authority
Fourth Defendant
AND:
MAKOLKOL DEVELOPMENT RESOURCE LIMITED
Fifth Defendant
AND:
EAST NEW BRITAIN PROVINCIAL FOREST MANAGEMENT COMMITEE
Sixth Defendant
AND:
PAPUA NEW GUINEA FOREST AUTHORITY
Seventh Defendant
AND:
PAPUA NEW GUINEA FOREST BOARD
Eight Defendant
Kokopo: Anis AJ
2016: 8th & 13th July
INTERIM INJUNCTION - two factions of landowners - first faction seeks declaratory orders that they were duly appointed by their people - it seeks to also declare actions taken by the second faction null and void - first faction claims they have taken steps to duly set themselves up in their pursuit to apply for a Forest Management Agreement under the Forestry Act 1991 - Second faction claim they were duly appointed - second faction applied for and were granted a Forest Clearance Authority under sections 90A and 90B of the Forestry Act 1991 - first faction seeks to restrain the second faction in relation to the activities and dealings concerning the Forest Clearance Authority
Case cited
Counsel:
Mr J Wohuinangu, for the Plaintiffs
Mr S Mitige, for the 1st, 3rd, 4th, 6th, 7th and 8th Defendants
Mr D Lidgett, for 2nd and 5th Defendants
13th July 2016
1. ANIS AJ: The plaintiffs moved the Court in regard to the outstanding relief that is relief 6, sought in their Notice of Motion filed on 7 June 2016.
2. The said relief 6 states and I read:
6. An order in the nature of an interim injunction pursuant to section 56 90B(21) of the Forestry Act 1991 Order 14 Rule 10, Order 12 Rule 1 of the National Court Rules and section 155(4) of the Constitution restraining the First, Second,
Third, Fourth, Fifth, Sixth and Seventh Defendants jointly or separately from relying upon the Forest Clearing Authority purportedly
granted in or around November 2015, by the Seventh Defendant purportedly in accordance with a recommendation from the Sixth Defendant
and therefore making any decision, taking any actions or otherwise acting in reliance of the said Forest Clearing Authority until
final determination of the substantive proceeding.
(Underlining is mine)
3. The application was contested. Parties presented their submissions on 8 July 2016. I reserved my ruling to 9:30am on 13 July 2016.
4. This is my ruling.
Preliminary matter
5. At the start of the hearing, the plaintiffs' counsel sought leave to amend section 56 and replace that with section 90B (21) of the Forestry Act 1991 (Forestry Act). The Court granted leave without objections from the defendants.
Evidence
6. In support, the Plaintiffs rely on the following evidence:
7. The Defendants rely on the following evidence:
(i) Affidavit of Agatha Mori sworn on 7 July 2016 and filed on 8 July 2016;
(ii) Affidavit of Agatha Mori sworn on 23 June 2016 and filed on 24 June 2016; and
(iii) Affidavit of Seri Mitige sworn and filed on 8 July 2016.
Relevant Back-ground
8. The land area concerned is called Makolkol Timber Area which is located at Open Bay in Lassul Baining LLG, Gazelle District in East New Britain Province. As of 1967, a company called Open Bay Timber Limited held two (2) timber permits over the Open Bay area within the region. These permits expired in 2007 and 2008. Following that, landowners within the area decided to continue to develop the area and harvest logs. The tribes involved are (i) the Makolkol tribe, (ii) the Simbali tribe, the Kaboku tribe and (iv) the Denagi tribe. The idea it seems was to set up incorporated land groups, and divide the four clans into two and apply for two timber permits under the Forestry Act. Evidence tends to suggest that the Simbali and Denagi Clans have already established their incorporated land groups and they have signed a Forest Management Agreement (FMA) with the seventh (7) defendants the Papua New Guinea Forest Authority.
9. The real issue here it seems is with the Makolkol and Kaboku tribes. Evidence suggests that they still have not established an incorporated land group nor have they entered into a FMA with the seventh (7) defendants. But upon close examination, it seems that the Makolkol tribe is the one faced with serious in-house or internal issues concerning its tribe members and in particular, those that claim to represent the said tribe under various capacities.
Issues
10. The issues are:
(i) Whether there is a serious question to be determined;
(ii) Whether damages would be an inadequate remedy if the interim order is not granted;
(iii) Whether the balance of convenience favours the granting of the interim order;
(iv) Whether an adequate undertaking as to damages has been given.
Law
11. The case law for obtaining interim injunctions appears settled in this jurisdiction.
12. For this purpose, I will refer to only one case to assist me herein. This is the case of Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers and Seaman’s Union and Arbitration Tribunal (1982) N393. The late former Chief Justice Sir Mari Kapi held when he was then the Deputy Chief Justice and I read:
“However, the House of Lords had the opportunity to reconsider this principle in the case of American Cynamid Company v. Ethicon Limited [1975] UKHL 1; [1975] 1 All E.R. 504. The House of Lords laid down the following principles in this case.
1. Is there action not frivolous or vexatious?
Is there a serious question to be tried?
Is there a real prospect that the applicant will succeed in the claim for an injunction at the trial?
All these questions laid down the same test... See Smith v. Inner London Education Authority [1978] 1 All ER. 411 at 419.
Simakade Holdings Limited
13. The first, second and third plaintiffs claim to hold or serve the interest of the Makolkol tribe. They also allege that Simakade Holdings Limited (SHL) was created and they allege that the said company holds the interests or shares of all the four tribes namely Makolkol, Simbali, Kaboku and Denagi. I find two problems to these contentions. Firstly, I ask myself this: "Where is the evidence from the Investment Promotion Authority or company records of SHL?" The plaintiffs did not provide any records or documents to prove that SHL actually represents the interests of the four (4) tribes. In my opinion, there is no prima facie evidence on point other than just what is deposed to in the affidavit of Paul Siwa. I also note from the Court file that no such evidence was disclosed in the earlier interlocutory process in the proceeding. I find that the plaintiffs herein have not disclosed sufficient evidence on the said point. Company records should be easily obtained and I fail to see why the plaintiffs have not provided these. Without the evidence herein, in my opinion, it weakens the plaintiffs' claim that they have a serious case or question to be tried.
14. Secondly, I note that Chairmanship of the Makolkol tribe would be a central issue in the proceeding. That is part of the main reason why the Makolkol tribe has come to this Court that is, to settle this dispute once and for all. I note that the second defendant Agatha Mori gave evidence that she was duly elected as the Chairlady for the Makolkol tribe. Ms Mori attaches a minute of the meeting of the tribe, to her affidavit filed on 24 June 2016, that is, annexure C. On the contrary, the third plaintiff Paul Siwa attaches no such evidence to support what he has deposed to in his affidavit filed on 7 June 2016. He attaches nothing to show how he was elected as Chairman of the Makolkol tribe. That being so, and as far as this Court is concerned, there appears to be good evidence at this stage or so far, favouring Ms Mori as the duly elected Chairlady for the Makolkol tribe. This is of course not the time to determine the issue but in my opinion, if the plaintiffs intend to allege the point at this stage of the proceedings, they should provide prima facie evidence to prove or support their claim. Without these, in my opinion, it brings into doubt whether there is a serious issue to be tried on the question of Chairmanship of the Makolkol tribe as alleged by the plaintiffs.
Section 90B & 90B (21)
15. Firstly, I find the plaintiffs' submissions under this sub-heading misconceived. I accept Mr Mitige's submission that the provisions have been repealed, that is, sections 90B or 90B (21) have been repealed and replaced by Forestry (Amendment) Act 2007 (No. 19 of 2007). It appears that the plaintiffs were looking at the repealed provisions when they prepared their submissions on point.
16. Currently, the fifth (5th) defendant Makolkol Development Resource Limited (MDRL) holds a current Forest Clearance Authority or licence (FCA). MDRL obtained the FCA by applying under section 90A of the Forestry Act and obtaining approval under section 90B (7) and (8) of the said Act. Evidence of that is contained in the defendants' evidence.
The 6 steps argument
17. The plaintiffs submit and set out six (6) stages under the Forestry Act and claim that these must be complied with before a timber permit can be issued. These steps are and I read:
(1) Registration as a Forest Industry Participant (Phase 1);
(2) Entry into a Forest Management Agreement (FMA) (Phase 2);
(3) Carrying out of Development Options Studies (Phase 3);
(4) Creation of Project Guidelines (Phase 4);
(5) Submission of Project Proposals and Finalizing of Agreement (Phase 5); and
(6) Issue of a Timber Permit (Phase 6).
18. The plaintiffs' submission is based on the original idea of the four tribes, which is that SHL would be granted the timber permit and would serve their interests. I fail to follow this line of argument. This is because MDRL who also claims to represent the Makolkol tribe has obtained a current FCA and has commenced work on the ground. Counsel for the second and fifth defendants Mr Lidgett submitted that work on the ground has commenced early this year and the project was at an advanced stage. All these coupled with my earlier findings concerning insufficiency of evidence on the appointment of the third plaintiff as the Chairman of the Makolkol tribe and the insufficiency of evidence regarding shareholding interests in SHL, in my opinion, all go to show lack of serious issues to be tried.
19. And I note that I have already ruled that I did not find sufficient or prima facie evidence regarding (i) the so called Chairmanship title held by Paul Siwa the third plaintiff and (ii) the interests SHL has claimed to have held for the four (4) tribes. I note that I have found evidence on both points lacking in sufficiency.
FCA not subject to grant of FMA
20. Under relief 7 in the amended summons, the plaintiffs seek and I read:
7. An order in the nature of a declaration under section 56 of the Forestry Act 1991 and section 155(4) of the Constitution that the Forest Clearing Authority purportedly granted in or around November 2015 by the Seventh Defendant purportedly in accordance with a recommendation from the Six Defendant is null and void because it was not granted under and in terms of a valid Forest Management Agreement for and in respect of each of the Plaintiff’s Forest Project Area pursuant to section 56 of the Forestry Act.
21. Section 56 of the Forestry Act states and I read:
56. Acquisition of timber rights, etc, by the Authority.
(1) Subject to this Division, the Authority may acquire timber rights from customary owners pursuant to a Forestry Management Agreement between the customary owners and the Authority.
(2) An acquisition under Subsection (1) is not valid, and no forest Management Agreement is valid, unless it is approved by the Minister.
(3) No acquisition under this section shall affect the customary rights of ownership of the land.
22. Again, in my opinion, the plaintiffs are using the 6 steps argument to pursue the said relief. I repeat what I have already stated above herein.
23. But the key point I wish to make and draw my attention to under this sub-heading is sections 90A and 90B of the Forestry Act. I ask myself this: "Is granting of a FMA a pre-condition for issuance of a FCA?"
24. My answer to that is "no". I refer to the sections herein
90A. A large scale conversion of forest to agricultural or other land use.
(1) A person may make application in the prescribed form and accompanied by the prescribed application fee for a forest clearing authority for the purpose of clearance of natural forest on areas designated for agriculture or other land use development (other than roadline clearing on an existing forested area) designated by the relevant authorities where the size of the area proposed for the natural forest clearance for the project is greater than 50 hectares.
(2) An application under Subsection (1) shall not be made where the proposed project is within a Forest Management Agreement Area, Timber Rights Purchase Agreement Area or Local Forest Area except with the approval of the Board and, where applicable, the holder of any relevant Timber Permit.
(3) An application under Subsection (1) shall contain—
(a) a detailed development plan, evaluation report and certificate of approval from the Secretary of the Department responsible for agriculture and livestock matters or the Secretary of any relevant Government Department or such other evaluation reports and certificates as the Board considers necessary; and
(b) a copy of the relevant State Lease or other documentation relating to other type of land tenure appropriate for the project; and
(c) an implementation schedule for the complete agricultural or other land use project showing the precise areas and proposed rate of harvesting to be carried out and successive land use development approved in writing by the Departmental Head of the Department responsible for agriculture and livestock matters or the Secretary of the relevant Government Department or, where relevant, the Provincial Government including detailed start and completion dates of all activities associated with the project; and
(d) details of costs of the agricultural or other land use project and a certificate from a bank or financial institution which is satisfactory to the Managing Director certifying that the full costs of funding the project will be available to the applicant; and
(e) a map and description of the project area in respect of which the application is made showing any areas of slope in excess of 30o or any other areas which are unsuitable for agricultural or other land use development and any areas important for conservation; and
(f) a verification of ownership and the consent of each resource owning clan agent (or incorporated Land Groups if they have been formed) within the project area, which has been signed in the presence of a Village Court Magistrate or land mediator in the prescribed form in relation to customary land, and otherwise the consent in writing of the Board, lessee or owner of the land, as the case may be; and
(g) supporting letters from any other relevant Department authorities or relevant industry body regarding the appropriateness of the design and implementation of the proposed project; and
(h) an approval in writing from the office or Department responsible for environment and conservation matters of the environment impact statement submitted by the applicant to that office or Department; and
(i) details of equipment and manpower suitable for the development of the proposed project and evidence of past experience in such developments; and
(j) a report by the Department responsible for agriculture and livestock matters or other relevant Government Department on a public hearing conducted by it at or near as practicable to the proposed agriculture or other land use site at which government bodies landowners and the private sector were heard on the proposed project; and
(k) an agreement or agreements between the landowners and the proposed development of the agriculture or other land use project; and
(l) the prescribed form signed by the Secretary of the Department responsible for agriculture and livestock matters or the Secretary of the relevant Government Department certifying that the matters set out in the preceding paragraphs are satisfactory; and
(m) the prescribed sales and purchase agreement with the customary owners in relation to customary land, and in relation to other land with the Board, lessee or owner of the land as the case may be, which agreement shall provide for the purchase, harvesting, processing or marketing of timber and other forest produce and which agreement shall be subject to the grant of a forest clearing authority by the Board; and
(n) such other particulars as are prescribed.
90B. Dealing with applications for a forest clearing authority for agriculture or other land use.
(1) If the Board determines that an application under Section 90A is in the prescribed form and contains all relevant particulars it shall prepare a report of the application and refer the application and report to the Provincial Forest Management Committee who shall consider and evaluate the application and make recommendations to the Board.
(2) An evaluation of an application by the Provincial Forest Management Committee under Subsection (1) shall be made taking into account—
(a) the National Forest Policy and National Forest Plan; and
(b) any relevant Provincial Government policies provided they are not inconsistent with the National Forest Policy; and
(c) any relevant National and Provincial Government policies relating to agriculture or the proposed land use; and
(d) the financial resources of the applicant to undertake the forest clearance, the past performance of the applicant in forest industry, analysis of the projected cash flows and the anticipated net benefit to the resource owners and the State; and
(e) any other matters that the Provincial Forest Management Committee considers relevant.
(3) In making an evaluation under Subsection (2), the Provincial Forest Management Committee shall request the assistance of the National Forest Service and of any relevant Department.
(4) Where the Provincial Forest Management Committee, after having considered and evaluated an application, is of the opinion that it is satisfactory, it shall recommend to the Board to approve the application for a forest clearing authority for agriculture or other land use.
(5) If the Provincial Forest Management Committee is not satisfied with the application, it shall inform the Board accordingly together with reasons for its decision and the application shall be rejected.
(6) The Board shall in form the applicant of the rejection of the application and the reasons thereof.
(7) If the Board is satisfied with the recommendation under Subsection (4) it shall approve the application and advise the applicant accordingly.
(8) The Board shall, on approval of the application, grant to the applicant a forest clearing authority to carry out a agriculture or other land use development which authority shall—
(a) be in the prescribed form; and
(b) require a performance bond in accordance with Section 98 for an amount specified in the authority; and
(c) specify such other conditions as are determined by the Board.
(9) A forest clearing authority shall—
(a) in order to ensure that the planned agriculture or other land use actually takes place, provide that any forest clearing operation shall be authorized in four phases, each phase—
(i) shall represent approximately one quarter of the total area to be cleared under the forest clearing authority; and
(ii) contain such conditions as are determined by the Board; and
(iii) shall be subdivided into blocks for clearing of a maximum 500 hectares unless the Board considers that the maximum of 500 hectares is inappropriate in the circumstances in which case it may increase or decrease the maximum clearance figure; and
(b) provide that the holder of a forest clearing authority shall comply with the implementation schedule under Section 90A(3)(c); and
(c) provide that a further phase under the same forest clearing authority may only be granted for the same purposes of forest clearance for agriculture or other land use where all conditions relating to the development plan under Section 90A(3)(a) and implementation schedule under Section 90A(3)(c) have been satisfied; and
(d) provide that the rights under the forest clearing authority may be suspended—
(i) where the planned land use by the applicant for which a forest clearing authority is granted is not progressing according to, or meeting the set standards of the Department responsible for agriculture and livestock matters or other relevant Government Department agency or instrumentality, or the development plan under Section 90A (3) (a) or the implementation schedule under Section 90A (3) (c); or
(ii) where any condition of the forest clearing authority or a provision of the Act is breached.(Underlining is mine)
25. Section 90B (2) is express. The provision actually speaks contrary to submissions on point put forward by the Plaintiffs. The plaintiffs' submission on point is therefore baseless.
Mode of proceeding
26. Let me consider further relief 7 in the amended summons herein. I note that I had raised the point in Court during the hearing whether the correct mode of proceeding should have been by way of a judicial review. Counsel for the plaintiffs argued that as of right, the plaintiffs may choose and in this case, they have opted to file an originating summons which he submitted was sufficient.
27. I firstly agree in regard to the right of the plaintiff to choose the mode of proceeding. However, I do not believe that a normal originating summons would sufficiently cover the material issues that may arise at trial if the matter is pursued in this manner. For example, the plaintiffs did not properly name the sixth and eight defendants herein. Names of committee members or its Chairman should have been put down in regard to the sixth defendant. The name of the Chairman of the eight defendant is also not stated in the amended summons. If the plaintiffs are serious of challenging the granting of the FCA to MDRL, they have to firstly properly plead the names of the correct legal parties concerned. Secondly, let me restate the main reliefs sought in the amended summons herein:
28. I note that reliefs 7 and 8 were recently included with the leave of this Court through consent of the parties.
29. In my opinion, these two new reliefs do not fit in with the original claim. The main challenge by the plaintiffs relate to whether the faction of landowners led by the first, second and third plaintiffs herein were duly authorised to be their Chairman or appointed representatives to represent the Makolkol tribe in matters relating to developments or dealings in regard to land in the Open Bay area. This is not the same with what is being sought under relief 7. In my opinion, relief 7 should be sought separately or distinctively under judicial review proceedings [see the case: Telikom PNG Limited v. ICCC (2007) N3144].
30. Let me also say this: Relief 7 does not, in my opinion, raise a valid issue or serious question for trial. This is because of the fact that an applicant for a FCA under section 90A of the Forestry Act is not required under law to first of all apply for and be granted a FMA. I note that I have already addressed that point above in my judgment. I find no serious issues raised under relief 7 which may require it to be properly tried.
Invalid Undertaking
31. The plaintiffs filed an Undertaking as to Damages on 30 June 2016. It was signed by the first, second and third plaintiffs. Under the name of SHL, I note a signature therein. I note that Mr Lidgett took issues with the said undertaking. His concern was whether the said undertaking was a valuable one in terms of the financial capacities of the plaintiffs to pay damages in the event that they do not succeed at trial and I was to grant them the interim injunction. The plaintiffs' counsel did not submit anything valuable on point and in fact that was all they had to offer or guarantee to the Court, that is, the said piece of paper titled Undertaking as to Damages.
32. In my opinion, the concern raised by the second (2rd) and fifth (5th) Defendants is a valid one. Firstly, I note that I have ruled earlier that the capacity of Paul Siva as the Chairman of the Makolkol tribe was in issue before this Court. I note that I have already ruled that the plaintiffs have not disclosed sufficient evidence, like the second defendant herein, as to how Paul Siva was appointed as the Chairman by the Makolkol tribe. I had considered that merely stating in an affidavit that you were duly appointed was insufficient. That being the case, this Court cannot be entirely confident that Mr Siva and the two other plaintiffs' undertaking can be regarded as valid. I also say the same for SHL. The plaintiffs have not disclosed evidence as to who owns what shares in the said company. Without these in evidence and to claim in an affidavit that the company is owned by the four (4) tribes is insufficient and I note that I have already stated that above in my judgment.
33. I also note that SHL is a company and the law is settled on point as to how a company is required to give an undertaking to the Court. That is, the person authorised to give an undertaking for a company must be the company's secretary or director. Secondly, the company must affix its common seal to the document. The Supreme Court has stated for example in the cases of Bougainville Copper Ltd v. Chief Collector of Taxes (2007) SC853 and PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC 1126, that “... before there can be any grant of an interim injunction, there must be an undertaking as to damages given by the applicant. Where it is a company, that undertaking must be given under seal of the company by the managing director.”
34. I find that the plaintiffs have failed in this regard.
Other matter
35. I wish to draw my attention to a point which I have observed in the evidence. I ask myself this: When did the plaintiffs first became aware of the fact that MDRL was issued with a FCA?
36. I firstly look at the supporting affidavit of Paul Siva filed on 7 June 2016 herein. At paragraph 13 of his affidavit he deposes and I read:
"As soon as we became aware that other development options such as Forest Clearing Authority or Special Agriculture Business lease was mooted and this was affecting our unity as a Tribe I quickly called a meeting of our tribe and obtained necessary consents and authorities to engage the services of Posman Kua Aisi Lawyers in dealing with this matter."
37. The said evidence in my opinion, confirms that the plaintiffs were very well aware of the intentions of the other factions that is the second defendant and her group since November of 2015. I say this because that was the time they had engaged their lawyers to file and obtain urgent interim injunctions in the matter. But this is not all. I refer to annexure A and B to the affidavit of Seri Mitige sworn and filed on 8 July 2016. The plaintiffs had filed almost identical proceedings earlier on 18 June 2014 by their same lawyers. That proceeding was struck out, and according to Mr Mitige, for want of prosecution. It seems to me clearly that the plaintiffs may be abusing the Court process herein. It also suggests to me that they are not serious. Evidence therefore showed that the plaintiffs knew of the actions of the defendants well before hand and perhaps even before the FCA was issued but they took no steps to prevent that. They seem to have waited until when it was too late to only rush back to the Court to make their repeated sets of requests.
Summary
38. In regard to the first issue that is Whether there is a serious question to be determined my answer is "no". In regard the second issue that is Whether damages would be an inadequate remedy if the interim order is not granted I say "damages would be an adequate remedy if the interim order is refused." Let me clarify this finding. The plaintiffs also intend to essentially do what the defendants are doing which is to firstly clear the area concerned. I think the answer to this issue could also be regarded as inapplicable for this purpose if this Court is to consider the possibility that the plaintiffs may not have the authority of the Makolkol tribe and the fact that it is possible the second and fifth defendants, may be acting for and on behalf of the Makolkol tribe.
39. In regard to the third issue which is Whether the balance of convenience favours the granting of the interim order my answer is "no". And finally, in regard to the fourth issue which is Whether an adequate undertaking as to damages has been given my answer is "no".
Discretion
40. I will exercise my discretion and refuse to grant the relief sought by the Plaintiffs herein with costs.
THE ORDERS OF THE COURT
I make the following orders:
1. Term 6 of the plaintiffs' Notice of Motion filed on 7 June 2016 is refused.
3. The matter is adjourned to August call-over for listings.
The Court orders accordingly.
________________________________________________________
Posman Kua Aisi Lawyers: Lawyers for the Plaintiffs
PNG Forest Authority: Lawyers for the 1st, 3rd, 4th, 6th, 7th and 8th Defendants
Warner Shand Lawyers: Lawyers for the 2nd and 5th Defendants
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