|
|
Home
| Databases
| WorldLII
| Search
| Feedback
National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 651 OF 2017
BETWEEN:
MANGAL LIMITED
First Plaintiff
AND
KK CONNECTIONS LIMITED
Second Plaintiff
AND
TZEN NIUGINI LIMITED
First Defendant
AND
PAPUA NEW GUINEA FOREST AUTHORITY
Second Defendant
Kokopo: Anis AJ
2017: 23 & 31 October
PRACTICE AND PROCEDURE - motion for summary judgment & motion to dismiss – Order 12 Rule 38(1) and Order 12 rule 1 of the National Court Rules - summary judgment based on mediation and court order of 1 September 2017 - declaration of void mediation based on improper voting - dismissal of proceeding based on a deed of assignment
Case cited:
Ted Taru v. Pacific MMI Insurance Ltd (2016) N6305
Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112
Counsel:
Mr T. Tape, for the Plaintiffs
Mr E Wamp, for the 1st Defendant
Mr S Mitige, for the 2nd Defendant
Ruling
31st October, 2017
1. ANIS AJ: On 23 October 2017, I heard two (2) notices of motion from the plaintiffs and the first defendant. In the first motion, the plaintiffs seek summary judgment. As for the latter motion, the first defendant seeks to declare an election result null and void, and an order for the proceeding to be dismissed.
2. I heard both motions and reserved my decision to today at 9:30am.
3. This is my ruling.
Sources - Motions
4. The parties did not challenge the sources of their motions. For the record, I find them to be in order. Let me begin by setting out the terms of the relief in the two (2) motions. For the plaintiffs, their motion was filed on 6 October 2017. At the start of the hearing, counsel informed the Court that for the main relief, the plaintiffs would only seek the first relief (1). Let me quote it here as follows:
(a) It be declared that, pursuant to Court Orders of 1st September 2017 and the election results of 06th October 2017, the Second Plaintiff is the Contractor appointed by the Resource Owners on the 06th of October 2017 to undertake logging project on Seraji and Seraji Extension, Timber Permit No. 15-58, Lasul Baining LLG, Gazelle District, East New Britain Province.
(b) Terms 1 and 2 of the orders sought in the Originating Summons filed on the 11th of August 2017 be granted.
(c) Term 3 of the orders sought in the Originating Summons filed on the 11th of August 2017 be granted with necessary changes as follows:
5. The first defendant's motion was filed on 20 October 2017. The main relief sought are and I quote:
Background
6. This is a dispute between landowners over two (2) logging and marking agreements in relation to logging activities on their traditional land. The land area concerned is situated at the Lasul-Baining Local Level Government area in the Gazelle District of East New Britain Province. The first plaintiff, which is a landowner company, holds a timber permit to harvest logs in the area. It describes itself as the Timber Permit Holder of Seraji and Seraji Extension TP No. 15-58 (TP). The second plaintiff is a contractor that is engaged by the first plaintiff under the TP. The first plaintiff says that on 14 July 2017, it signed a Logging and Marketing Agreement (first LMA) with the second plaintiff. For compliances under the provisions of the Forestry Act 1991, the plaintiffs submitted the first LMA to the second Defendant for approval. They say that there was delay by the second defendant in approving the first LMA. When they enquired, they were advised that there was also another Logging and Marking Agreement (second LMA) over the same area that had been submitted by first defendant for approval. The second defendant to date has these two LMAs pending before it.
7. The plaintiffs filed this proceeding on 11 August 2017 after it had learnt of the situation. The plaintiffs had also filed a notice of motion seeking restraining orders against the first defendant. The motion returned to Court on 18 August 2017. It was adjourned to 1 September 2017. On 1 September 2017, the parties entered into a consent order. Essentially, the parties had decided that since there were two purported legal LMAs in existence, the landowners should go back to their area and they should vote amongst themselves as to which contractor they would prefer to work with.
8. The Court Order was endorsed by this Court in the following terms:
9. Following the order, the parties appointed an independent accredited mediator Mark Pupaka. The mediator took charge and conducted the voting as per the Court Order of 1 September 2017. The voting was held on the site on 1 October 2017. The mediator later that day declared the result, which was that the landowners have voted the second plaintiff as their preferred contractor.
Present status
10. The plaintiffs then filed their present motion. They argue that the Court Order of 1 September 2017 had been complied with; the landowners have chosen the second plaintiff so they request that the Court should grant them summary judgment. The first defendant on the other hand filed the counter motion. Its first primary argument relates to term two (2) of the Court Order of 1 September 2017. It argues that term two (2) of the Court Order had not been complied with. Therefore, it says that the Court cannot, pursuant to term three (3) of the Court Order, confirm the first LMA and allow it to be endorsed by the second defendant.
11. The second defendant supports the plaintiffs' position. It says that the voting was duly conducted and the landowners have chosen the second plaintiff to be their contractor. It says that the first LMA should be endorsed and summary judgment should be entered in favour of the plaintiffs.
Issues
12. The main issue in my view are as follows:
(i) Whether term two (2) of the Court Order of 1 September 2017 had been met;
(ii) If so, whether summary judgment should be entered;
(iii) Regardless of above, how should this Court treat the purported Deed of Assignment dated 26 May 2017 and the recent related proceeding that was filed in relation to the said deed, that is, OS No. 819 of 2017?
Mediation - Evidence
13. I note that the parties have filed many affidavits regarding the outcome of the mediation and the voting that had taken place. The best place to begin, in my view, would be to follow what I had ordered on 1 September 2017, which was a consent order. Let me begin with term five (5). It states that An independent mediator shall be agreed and appointed by the parties by or before 25th September 2017 to conduct the election of the developer. It is not disputed that the said order had been complied with. Mr Pupaka was appointed as the independent mediator to conduct and supervise the voting. Secondly, I refer to term four (4) of Court Order. It says, The election for the developer stated in term 2 of this Order shall be conducted on the 1st of October 2017 at Lassul Government Station, Lassul Local-Level Government, Gazelle District, East New Britain Province. Again, there is no issue taken and evidence disclosed shows that the voting exercise took place at the said location and on the date as ordered by the Court.
14. I move on to the next relevant term, which is term two (2) of the Court Order of 1 September 2017. It reads, Only clans which own land within the Seraji and Seraji Extension TP 15-58 project area shall vote on which developer to develop the project. Counsel for the first defendant submits that his client challenges compliances of the said order. I note that evidence has been filed by both parties in regard to the conduct of the mediation and the vote that had taken place on the site on 1 October 2017. I also note that the mediator has filed a Form 2 Certificate or report (Form 2 Certificate) as required under Order 9(5) of the ADR Rules.
15. This now brings me to the next subject, that is, evidence. The question I have is this. Can I accept the evidence of facts filed by the parties in regard to the mediation exercise that had been conducted at the site? What does the law say? My answer to the first question is, "no I cannot", and my answer to the second question is, "the applicable law or rule is Rule 13 of the ADR Rules." Rules 13 and 9 ( see case: Ted Taru v. Pacific MMI Insurance Ltd (2016) N6305) read and I quote:
13. Admissibility.
Where a mediation has been conducted:
(a) in accordance with Rule 9, or
(b) in accordance with an agreement between the parties including a provision to a like effect to Rule 11, no evidence shall be admitted in the proceedings or any other proceedings of anything said or done by any person at the mediation.
9. Mediation Process.
(1) Rules 8 -10 inclusive apply to mediations where the mediator is appointed in accordance with Rule 6.
(2) Within seven days of receiving notification of appointment pursuant to Rule 6, the mediator must either decline the appointment, or accept the appointment and notify the parties in writing of the time and place for the conduct of the mediation.
(3) Unless the Court otherwise directs, the parties and the mediator must conduct the mediation with the object, so far as practicable, of completing the mediation within 2 calendar months of appointment of the mediator.
(4) The mediation shall commence with the first contact between the mediator and any one of the parties, and shall include all communications between the mediator and any of the participants in the mediation.
(5) The mediator shall file in the Court a certificate in Form 2 of Schedule 2 to these Rules within seven business days of the completion of the mediation.
16. This was a Court sanctioned mediation which had been conducted in accordance with Rule 9 (and Rule 6) of the ADR Rules. The mediator has duly filled in and filed the Form 2 Certificate. In my view, the mediation herein has been conducted in accordance with Rule 9 and also as per this Court's Order of 1 September 2017. Therefore, the mediation exercise conducted by Mr Pupaka has in my view, met the requirements of Rule 13(a) of the ADR Rules, which means therefore that this Court cannot admit and consider evidence filed by the parties herein concerning the mediation process or what had transpired at that time.
17. For this purpose, the only evidence I may have regard to, is the Form 2 Certificate and any evidence that is filed other than what had transpired during mediation.
Form 2 Certificate (report)
18. I have considered the report of the mediator. I note that the primary purpose noted before I had endorsed order of 1 September 2017 was to enable the landowners of the TP area, those that have caused the existence of the two (2) LMAs, to decide by ballot which developer they would prefer as their contractor to operate under the TP.
19. In my view, the Form 2 Certificate is express. I accept the report in the Form 2 Certificate as good evidence. In summary, the mediator has successfully conducted the voting exercise. I am satisfied that the process has been duly followed and completed by the respective parties before, during and after 1 October 2017. I note that the intended agreement was not signed by all the parties. This requirement, in my view, is optional. It is not mandatory. I note that a Court sanctioned mediation would return back to the Court and the Court would normally have the final discretion to consider the final outcome that is reached. If an agreement is reached, then it may also be certified by the Court. I find this case to be no exception.
20. So in the present case, the relevant terms of the Court Order of 1 September 2017, following completion of the mediation, would be terms two (2) and three (3). They read:
21. I have ruled above that I have accepted the Form 2 Certificate. The said report by the mediator has shown that Only the clans which own land within the Seraji and Seraji Extension TP 15-58 project area have voted. And they have voted and chosen the second plaintiff to be their duly appointed contractor to operate within the TP area. I therefore find that term two (2) of the Court Order of 1 September 2017 has been duly complied with.
22. Having made the finding, term three (3) may then apply. I am in a position now to consider giving effect to or confirm the first LMA of the second plaintiff, to the second defendant for approval.
23. However, before I consider doing so, let me address the rest of the issues.
Summary judgment
24. I refer to the plaintiffs' motion for summary judgment. The principles are settled and I think they are well covered in the plaintiffs' written submission. For this purpose, I will refer to the Supreme Court case of Bruce Tsang v. Credit Corporation (PNG) Ltd [1993] PNGLR 112. The Supreme Court refers Order 12 Rule 38(3) of the National Court Rules and says at page 117 and I quote:
There are two elements involved in this rule:
(a) evidence of the facts proving the essential elements of the claim; and
(b) that the plaintiff or some responsible person gives evidence that in his belief there is no defence
25. I note that the National Court's power to grant or refuse summary judgment remains discretionary. In this case, the plaintiffs' motion was triggered based on two (2) things. Firstly, it was based on the election result of 1 October 2017. Secondly, it was based on term three (3) of the Court's Order of 1 September 2017. Term three (3) enables the National Court to, after being satisfied with term two (2), confirm which LMA should be regarded by the second defendant. Let me remind myself that the terms of the Court Order of 1 September were drafted by the parties and these orders were agreed to by the parties in the first place. And essentially the parties had agreed to let the landowners themselves decide whom they would choose as their contractor. The landowners have voted and I have already found above that term two (2) of the Court Order of 1 September has been complied with.
26. So should I enter summary judgment? Is this a clear case where the plaintiffs have established all the evidence of the facts proving the essential elements of the claim? Is there no valid defence or arguments by the first defendant? This of course brings me to the next issue.
Deed of assignment
27. The second part of the first defendant's claim in its motion is to dismiss the proceeding on the basis of the existence of a deed. The deed is called Deed of Assignment and it is dated 26 May 2017 (the deed). It is in evidence under Annexure B to the affidavit of Carl Taparau filed on 20 October 2017. The parties to the deed are two (2) landowner companies, the first is the first plaintiff and the second is another landowner company called Dilini Investment Ltd. The first plaintiff was purported to have assigned all its interest in the TP to Dilini Investment Ltd.
28. Dilini Investment Ltd has just recently as of 20 October 2017 commenced an action to assert its rights in the purported deed. The proceeding number is OS No. 819 of 2017. I used the term 'purported' when referring to the deed because the plaintiffs have alleged amongst other things that some of the signatures in the deed were purportedly forged. I follow, based on the plaintiffs' counsel's submission during the hearing, that the plaintiffs will challenge the deed in proceeding OS No. 819 of 2017.
29. I note that the deed was actually filed in evidence earlier by the first defendant. I refer to the affidavit of Alois Gilucham filed on 29 August 2017. I had thought during the hearing that the deed was recently filed by the first defendant. But that is not the case and it seems that the parties are set now to challenge its validity. It is now a matter that is already before the Court for determination in proceeding OS No. 819 of 2017.
30. Let me refer to the fist defendant's motion. I note that given my findings above in regard to the conduct of the election and voting of the preferred contractor, the first relief obviously cannot succeed and must fail. I must also add that the relief appears substantive in nature and had the first defendant intend to claim it, it should file a cross-claim or file a separate proceeding rather than to seek it under a notice of motion. The same could also be said in regard to the second relief. Well, the first defendant has filed a separate proceeding, which is OS No. 819 of 2017. How then could I describe the actions of the first defendant here, that is, reference to the deed, mentioning of proceeding OS No. 819 of 2017 and in seeking the two (2) relief in its current motion? In my view, the first defendant attempts to assert its right in this proceeding. This is obviously not the correct approach but I think that its real intention is perhaps not to deliberately abuse the Court process but to inform the Court of the existence of the deed and of its plan to assert its rights in a separate proceeding, which it has recently commenced.
31. Should this Court ignore the deed and proceeding OS No. 819 of 2017? Would this Court do justice by granting summary judgment without regard to all the facts and legal issues that still subsist at this point in time? What would be the just thing for the Court to do under the circumstances? These are the questions I now ask myself. In my view, the existence of the deed is real and to simply ignore it now would be wrong for various reasons. Firstly, it would mean that this Court may be regarded as not taking into account a relevant consideration in the exercise of its discretion. Secondly, I note that even if I were to go ahead and grant summary judgment, it will not cure the dispute between the parties. I say this because the deed exists and its validity is now pending determination in OS No, 819 of 2017. Granting summary judgment at this stage is likely to complicate or prolong further proceedings, which will no doubt delay the finality of the matter. Thirdly, I would imagine that it would be in the interest of both parties but perhaps most importantly for the developers (i.e., the two contractors) to want to know whether the deed is valid. Investors obviously have committed a lot of time and money to invest. Public policy in my view would demand the Court to give due considerations to investors who come to invest in this country; that the Court should not hastily exercise its discretion without proper regard to all the interests that may be at stake.
My findings
32. In principle, I will decline both motions.
33. In so far as the Court Order of 1 September 2017 is concerned, I have made my findings above, which is that term two (2) has been complied with. That is, I have found that clans which own land within the Seraji and Seraji Extension TP 15-58 project area have duly voted the second plaintiff to be their contractor. In regard to term (3) of the Order, I will, at this stage refrain from making any confirmation pending or subject to the Court's determination or findings in relation to the deed in the related proceeding.
34. I will direct that the matter return to the Court at 9:30am on 17 November 2017 for Directions at which time I will hear submissions from the parties on how this matter as well as proceeding OS 819 of 2017 will proceed.
35. I note that the plaintiffs have raised the principle of promissory estoppel in its written submission. I find that inapplicable
for two (2) reasons. Firstly, this Court has found that voting had been duly conducted at the site and that the second plaintiff
has been voted as the preferred contractor. Secondly, the first defendant's claim over the deed had been disclosed as evidence to
this Court earlier before the Court Order of 1 September 2017. I have already stated that above in my judgment.
COST
36. Cost is discretionary. I will order cost to be to the proceeding.
THE ORDERS OF THE COURT
37. I make the following orders:
1. I refuse both motions.
2. Following the Court sanctioned mediation, I find that term two (2) of the Court Order of 1 September 2017 has been duly complied with.
3. I will delay my consideration of granting term (3) of the Court Order of 1 September 2017 pending the outcome of the findings in relation to the purported Deed of Assignment dated 26 May 2017.
4. The matter shall return back to the Court for Directions at 9:30am on 17 November 2017 at which time the Court will hear submissions from the parties on how this matter as well as proceeding OS 819 of 2017 will proceed.
5. Cost of the motions shall be to the proceeding.
6. Time for entry of these orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith
The Court orders accordingly.
_________________________________________________________
Kandawalyn Lawyers: Lawyers for the Plaintiffs
Edward Wamp Lawyers: Lawyers for First Defendant
PNG Forest Authority Lawyer : Lawyers for the Second Defendant
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2017/279.html