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Hegele v Kila [2019] PGNC 412; N8119 (31 July 2019)

N8119


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO. 459 OF 2008


TALIBE HEGELE for himself and on behalf of the Yumbi Clan
Plaintiff


-V-


TONY KILA for himself and on behalf of the Nano Webo Clan
First Defendant


ANDREW ELABE
Second Defendant


Waigani: Kariko, J


2014: 23rd - 27th June, 10th -13th November & 17th - 19th November,
2015: 18th February
2019: 31stJuly


CIVIL PRACTICE & PROCEDURE–consent order–setting aside of – application by non-party– fraud– deceit –lack of authority– irregularities – abuse of process


Cases Cited:


Harry Tovon v Carl Malpo (2016) N6240
Joseph Kupo v Stephen Raphael (2004) SC751
Papua New Guinea International Hotels Pty Ltd v The Registrar of Land Titles (2007) N3207
Paul Torato v Sir Tei Abel [1987] PNGLR 403
Simon Mali v. The State (2002) SC690


Reference Books:


Halsbury’s Laws of England 4th Edition


Legislation:


Land Groups Incorporation Act (Chapter 147)
Land Disputes Settlement Act (Chapter 45)


Counsel:


Mr M Nasil, for the plaintiff
Mr S Soi, for the first defendant
Mr N Kubak, for the second defendant


JUDGEMENT


31stJuly, 2019


  1. KARIKO, J: This proceeding relates to a dispute between two clans, the Yumbi Clan (Yumbi) and the Nano Webo Clan (Nano Webo) regarding the ownership of customary land affected by the Moran Oil project in the Mt Palana Range of the Hela Province (the Land), and the monetary entitlements/royalties due to the appropriate landowners from the project (the Dispute).
  2. The plaintiff seeks:

Background facts


  1. This matter has a long history of litigation. Many of the relevant facts in this case are not in controversy. I find from the evidence and note from the Statement of Agreed and Disputed Facts and Legal Issues for Determination filed 30th July 2009, the following:

(a) the Deed is valid and enforceable;

(b) the Deed nullifies the PLC decision;and

(c) the Deed nullifies the application for judicial review in the National Court.

Issues


  1. In the Statement of Agreed and Disputed Facts and Legal Issues, the parties agree these as the issues for determination:
  2. It is my view however that the crucial issue is whether or not the Consent Order should be set aside. If judgement favours the plaintiff, the PLC decision remains in force unless and until set aside by a court of competent jurisdiction.

Pleadings


  1. The first defendant has challenged the Statement of Claim arguing that it does not properly plead the allegation of misrepresentation (deceit) and that no cause of action is disclosed. The second defendant also raised a similar argument, but I reject that submission. While the Statement of Claim is prolix and in parts repetitious, it is clear that the plaintiff seeks to set aside the Consent Order claiming it a result of misrepresentation (deceit) and fraud, particulars of which are set out in paragraphs 26 and 27 of the Statement of Claim as follows:

“26. The Second Defendant in consenting to the declaratory orders giving effect to the Deed of Release of 1st October 2002 without the Plaintiffs consent and authority has misrepresented the Plaintiff when he claims to have represented and therefore is guilty of fraudulent misrepresentation.

PARTICULARS OF FRAUDULENT MISREPRESENTATION

  1. The Second Defendant has been voted out as Chairman and he has no authority to represent the Plaintiff in consenting to the Consent Order of 27th December 2007.
  2. The Yumbi Clan members and the Nano Webo Clan members did not have a meeting agreeing to the terms of the said Consent Order upon which the Second Defendant signed for.
  1. The Second Defendant signed for the Consent Order using the name of the Plaintiff without their proper consent and authority.
  1. The Second Defendant who is also a member of the NANO Webo Clan through the Mandali /Godai sub-clans was led to agree to the said Consent Orders by the First Defendant without the consent and authority of the members of the Yumbi Clan.
  1. The Second Defendant in misrepresenting the Plaintiff in consenting to the declaratory orders giving effect to the Deed of Release with the First Defendant defrauded the Plaintiff and therefore is guilty of fraud.

PARTICULARS OF FRAUD


The Defendants after being fully aware of the existence of the Provincial Land Court Decision awarding the ownership of the Mt. Palana Range to the Plaintiff with the benefits therein they collaborated to defeat the cause of justice and defraud the Plaintiff by obtaining the said Consent Orders on the 27th of December 2007 with the following effect to the detriment of and prejudicing the Plaintiff.

  1. declaring that the Deed of Release executed by the Defendants on the 1st of October 2002 is legally binding on the Plaintiff.
  2. declaring that the Deed of Release executed by the Defendants on the 1st of October 2002 nullifies the Provincial Land Court Appeal and its decision in favour of the Plaintiff on the 8th of March 2006.
  1. declaring that the settlement or compromise through Deed of Release of 1st of October 2002 gave rise to a new agreement between the Plaintiff and the Defendants and as such constitutes a fresh cause of action superseding the landownership dispute between the Plaintiff and the Defendants when in fact the ownership issue had already been resolved by the Provincial Land Court superseding the Deed of Release.
  1. declaring that the settlement or compromise through Deed of Release of 1st of October 2002, prevents either the Plaintiff or the Defendant from proceeding further on the original action of land ownership dispute between the Plaintiff and the Defendant after the Local Land Court decision of 2nd May 2002 when in fact the ownership issue has already been resolved by the Provincial Land Court superseding the Deed of Release.
  2. the Defendants share benefits and/or entitlements due to them under the Deed of Release of 1st of October 2002 contrary to the Provincial Land Court decision in favour of the Plaintiff and to the exclusion of the rest of the members of the Yumbi Clan.
  3. The Department of Petroleum and Energy and Oil Search (PNG) Limited process the benefits and/or entitlements due to the defendants under the Deed of Release of 1st of October 2002 to the exclusion of the ret of the members of the Yumbi Clan contrary to the Provincial Land Court Decision in favour of the Plaintiff.”
  1. Those claims are restated in the subsequent paragraphs of the Statement of Claim, whereby the plaintiff suggests irregularities concerning the Consent Order:
  2. The alleged irregularities are part and partial of the plaintiff’s allegation of misrepresentation and fraud. It is quite apparent that the crux of the plaintiff’s claim is that the second defendant (Andrew Elabe) did not have the authority of the members of Yumbi to enter into both the Deed and the Consent Order, and that those documents are for the benefit of Nano Webo and Andrew Elabe, rather than for Yumbi.
  3. In his Defence, Tony Kila pleaded judgement in rem, res judicata and issue estoppel but he offered no submissions advancing these doctrines.
  4. On the other hand, Andrew Elabe’s Defence mainly contains general denials of the allegations of lack of consent and authority.

Evidence


  1. Most of the evidence presented on behalf of the parties was by way of sworn affidavits tendered by consent, while a number of deponents were examined on their affidavits.The evidence clearly highlights the issues.

The Deed


  1. The plaintiff’s witnesses say that while it is true that Andrew Elabe was the Chairman (or the principal representative) of Yumbi at the time the Dispute was decided in the LLC and the appeal then filed in the PLC, they as members of Yumbi did not authorise Andrew Elabe to sign the Deed and they would never have agreed to forego their ownership rights over the Land. For that reason, they resolved at the meeting of Yumbi on 15th October 2002 to replace Andrew Elabe with Talibe Hegele as their Chairman and they then pursued the appeal in the PLC.
  2. Evidence from the Defence is that at the relevant time, Andrew Elabe was Chairman of Yumbi and was duly authorized to lead and act on behalf of the clan in relation to the Dispute. Witnesses from Yumbi who support Andrew Elabe gave evidence that while the Dispute was subject to mediation, then heard by the LLC, and later compromised by the Deed, Andrew Elabe was the Chairman of Yumbi. The evidence refers to meetings of the members of the sub-clans of Yumbi (Andapane, Andayago, Angoea, Dabara and Igibu) at the “Water Source” of Mt Palana where the members approved the compromise of the Dispute through the Deed.

The Consent Order


  1. The plaintiff’s witnesses say that when the Consent Order was executed, Andrew Elabe was no longer the Chairman of Yumbi, and the members of Yumbi did not authorise him to have the Consent Order executed on their behalf and approved by the Court. They say that at that point in time, the judicial review of the PLC decision was pending and their clan (through Talibe Hegele) was defending the PLC decision that recognized the clan as the customary owners of the Land.
  2. The evidence for the defendants is that Andrew Elabe was the appropriate person to endorse the enforcement of the Deed on behalf of Yumbi, for reasons that:

Defendants’ submissions


  1. Tony Kila argued in submissions that he was entitled to seek enforcement of the Deed by the Court and so he filed proceeding OS 687/07, naming as parties the same representatives of the disputing clans who signed the Deed. The parties agreed to have the Court enforce the Deed and they therebysettled the terms of the Consent Order, and followed proper procedure to have it endorsed by Hartshorn J.
  2. Andrew Elabe submitted that he was and is the Chairman of Yumbi and was duly authorised by the meeting of Yumbi at Paua on 16th October, 2007 to negotiate with Nano Webo and take necessary steps to end further litigation of the Dispute. Pursuant to that authority, he agreed to the terms of the Consent Order. He denied the allegations of fraud and deceit.

Law on setting aside consent orders


  1. In hearing an application to set aside a consent order, the Court must not readily grant the application but must exercise caution; Paul Torato v Sir Tei Abel [1997] PNGLR 403, Joseph Kupo v Stephen Raphael (2004) SC 751.
  2. The Supreme Court in Simon Mali v. The State (2002) SC690 held that the National Court has inherent powers to set aside a consent order under section 155 (4) Constitution in at least two situations:
  3. The approach in England to setting aside a consent order is stated in Halsbury’s Laws of England4th Edition, Vol 3 [522]:

“[A] consent order or compromise may be set aside on a ground which would invalidate any other agreement between the parties including mistake, illegality, duress or misrepresentation”.


and later in Vol 26 [562]:


“A judgment given or an order made by consent may be set aside in a fresh action brought for the purpose on any ground which would invalidate a compromise not contained in a judgment or order. Compromises have been set aside on the ground that the agreement was illegal as against public policy, or was obtained by fraud or misrepresentation, or non-disclosure of a material fact where there was an obligation to disclose, or by duress, or was concluded under a mutual mistake of fact, ignorance of a material fact, or without authority (My underlining)


  1. That position is endorsed by Kandakasi J in Harry Tovon v Carl Malpo (2016) N6240 in his discussion of relevant case authorities including the Simon Mali case. At paragraph [36(a)],his Honour affirmed that a party affected by a consent order may apply to have the order set aside if it resulted from misrepresentation or fraud, as is the case with any other agreement.
  2. In Papua New Guinea International Hotels Pty Ltd v The Registrar of Land Titles (2007) N3207, Davani J suggested that a non-party to a consent order that adversely affects that party (that is, its legal rights and interests), is entitled to apply for the orders to be set aside.
  3. I adopt and apply the legal principles stated by those authorities.

Consideration


  1. Contrary to Andrew Elabe’s claim that he was the Chairman of Yumbi at the relevant times, I find on the evidence that when OS 687/07 was filed, it was known and accepted by both he and Tony Kila that Talibe Hegele was Chairman and had represented Yumbi first in the PLC, then in the judicial review proceeding OS 185/06 in the National Court, and in the appeal therefrom to the Supreme Court. Talibe Hegele’s standing was never challenged in those proceedings. They both accepted in the PLC appeal that Talibe Hegele had taken over from Andrew Elabe as Chairman of Yumbi. Tony Kila as plaintiff representing Nano Webo named Talibe Hegele as lead defendant on behalf of Yumbi in OS 185/06. Tony Kila did not seek to join Andrew Elabe nor did Andrew Elabe apply to join, those proceedings. In the appeal to the Supreme Court (SCM 8/06),Tony Kila again named Talibe Hegele as the lead respondent representing Yumbi.
  2. I am satisfied on the evidence that Talibe Hegele is a member of Yumbi, and that he represents members of Yumbi who vehemently maintain that they are the lawfully recognized customary owners of the Land and refuse to forego that right in exchange for only a share of the monetary benefits from the oil project. On their behalf, Talibe Hegele vigorously and successfully pursued their interest in the PLC and subsequent related litigation, and they have never surrendered that interest.
  3. In his affidavit filed 12th May 2008 (Exhibit D1-2) Tony Kila annexes his affidavit filed earlier on 30th November 2007 in proceeding OS 687/07. That earlier affidavit contains copies of the following documents filed with the PLC:
  4. The Notice of Appeal is signed for Yumbi by Andrew Elabe. The Application however, is signed by Andrew Elabe as former Chairman of Yumbi. In the Affidavit in Support, he confirms that he was voted out as Chairman of Yumbi.
  5. At paragraphs 20 and 21 of his affidavit filed 30th November 2007, Tony Kila acknowledges that after the Deed was signed, the chairmanship of Yumbi changed.
  6. It seems to me that OS 687/07 was filed to thwart the interest pursued by Talibe Hegele. I find no reasonable basis upon which it was considered, after the litigation in the PLC and then the National and Supreme Courts, that Talibe Hegele was no longer a relevant party representing the interest of Yumbi. It is curious that TonyKila decided not to name Talibe Hegele as defendant even though orders were being sought to annul the PLC decision and the judicial review proceeding OS 185/06, both cases that Talibe Hegele was actively involved with as the Chairman and representative of Yumbi.
  7. The argument that the Consent Order was necessary to avoid protracted litigation simply makes no sense. The Consent Order was in direct conflict with the interest of Yumbi pursued by Talibe Hegele. Therefore, Tony Kila and Andrew Elabe must have realized and should have anticipated that Talibe Hegele was bound to file a challenge in response that would trigger further litigation. That is precisely what has occurred.
  8. There has been no proper explanation as to why Talibe Hegele was not named as a party (defendant) in OS 687/07 nor why he was not made aware of the proceeding. It is rather curious that Tony Kila and Andrew Elabe saw fit to pursue the Consent Order without notice to Talibe Hegele, who was not even advised of the Order. He found that out for himself and by then, the judicial review proceedings OS 185/06 had been discontinued ex parte and without notice.
  9. In Andrew Elabe’s affidavit filed 21st May 2008 (Exhibit D2-1) he says that his position as Chairman was confirmed by a meeting of the Executive of Yumbi Land Group on 6th January 2003. A copy of the meeting Minutes signed by the Executive is annexed. The signatures include the purported signature of Talibe Hegele as Deputy Treasurer. This meeting allegedly occurred three months after Talibe Hegele replaced Andrew Elabe as Chairman of Yumbi. However, Talibe Hegele claims his purported signature is a forgery. I consider it important to note that despite Andrew Elabe’s assertion, neither he nor Tony Kila ever challenged Talibe Hegele’s standing as Chairman of Yumbi during the PLC appeal, the National Court judicial review and the Supreme Court appeal.
  10. Interestingly, the parties agree in the filed Statement of Agreed and Disputed Facts and Legal Issues in the current proceeding, that:

“1. The Plaintiff is the current Chairman of the Yumbi Clan representing the Yumbi Clan.

.......................

  1. The Second Defendant is the former and ousted Chairman of the Yumbi Clan.” (My emphasis)
  2. Andrew Elabe’s case is also that by a written agreement signed with “a majority of leaders” of Yumbi on 16th October, 2007 at Paua Village, Moro, he was authorized to act on behalf of Yumbi in court and instruct lawyers to give effect to the Deed. A copy of that Agreement is Annexure B to his affidavit sworn 20th May 2008 filed in the current proceedings (Exhibit D2-1).
  3. Nine persons purportedly signed the Agreement with Andrew Elabe, and while they are named, the document does not properly identify them as members of Yumbi nor does it disclose the status/position each of them hold within the clan. Three of those persons, Ibanda Andapame, HimubeTamu and Ibago Andapame confirmed their affidavit evidence (Exhibits P61, P62 and P63) that they were not party to the Agreement and denied their supposed signatures on the document. Their respective signatures contained in their affidavits clearly contrast with those corresponding in the Agreement.
  4. It is also significant to point out that the Agreement does not refer to Andrew Elabe as Chairman but as “Principal” of Yumbi.
  5. In the circumstances, I am not satisfied that the Agreement is a proper authority by members of Yumbi for Andrew Elabe to consent (through lawyers) to the orders proposed by Tony Kila for Nano Webo in proceedings OS 687/07.

Conclusion


  1. I find that when proceeding OS 687/07 was filed and the Consent Order obtained, Talibe Hegele was Chairman of Yumbi who was claiming the Land for Yumbi, and both Tony Kila and Andrew Elabe were well aware of this. It is apparent to me that the Court was misled into assuming that Andrew Elabe was the proper representative of Yumbi. The defendants obtained the Consent Order by fraud through misrepresentation or deceit. While this is not the usual case of one party being misrepresented to by the other, I consider that deceit or misrepresentation to the Court is good ground to set aside a consent order, particularly when the orders are to the detriment of a non-party’s legal rights. In fact, I consider such conduct to be an abuse of the Court’s process.
  2. The Consent Order must be set aside for the main reason that at the relevant time, Andrew Elabe was not the Chairman or lead representative of Yumbi, and he was not properly authorized by Yumbi to have the Consent Order endorsed. I find it a fraud that Tony Kila and Andrew Elabe misrepresented to Hartshorn J that Andrew Elabe was the Chairman of Yumbi and was duly authorised by members of Yumbi to settle the proceeding. I find that their conduct was deceitful and dishonest. I would also propose that the Consent Orders were an abuse of process when there was a pending related action regarding the Dispute.
  3. In my view, the evidence discloses the following irregularities that also warrant the Consent Order being set aside:
  4. To my mind,it is unnecessary to determine whether or not Andrew Elabe was properly authorised to execute the Deed, and I also consider it irrelevant that the Deed had not been “nullified” in court. The Deed effectively lapsed when the PLC appeal was not withdrawn. The withdrawal of litigation relating to the Dispute was a fundamental term of the compromise intended by the Deed.The defendants suggested that somehow Talibe Hegele had an obligation to inform the PLC of the Deed. I reject that submission. If Tony Kila seriously believed that the Deed had compromised the Dispute and hence the appeal, it was in his clan’s interest for him to have raised thiswith the PLC. Not only did he not argue the Deed before that court, but he did not refer to it in the grounds of the application for judicial review.
  5. Summarized, it is my concluding opinion that the consent order was obtained by fraud (deceit), involved irregularities, and constituted an abuse of process.

Order


  1. The Court therefore orders that:

_____________________________________________________________

Nasil Lawyers: Lawyer for the Plaintiff

Soi & Associates: Lawyer for the First Defendant

Kubak &Kubak: Lawyer for the Second Defendant



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