N8303

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS No. 184 of 2016 (CC1)

BETWEEN:

YAFERAKA INCORPORATED LAND GROUP
1st Plaintiff

AND:
APORO IWA GAS ASSOCIATION INC.
2nd Plaintiff

AND:
FUGIKI LANDOWNERS ASSOCIATION INC.
3rd Plaintiff

AND:
FOE PDL 2 RESOURCES OWNERS ASSOCIATION
4th Plaintiff

AND:
NAMO’APORO LANDOWNERS ASSOCIATION INCORPORATED
1st Defendant

AND:
FOE LANDOWNERS ASSOCIATION INCORPORATED
2nd Defendant

AND:
SOUTHERN HIGHLANDS PROVICIAL GOVERNMENT
3rd Defendant

AND:
MINERAL RESOURCES DEVELOPMENT COMPANY LIMITED
4th Defendant

AND:
DAVID MANAU, ACTING SECRETARY, DEPARTMENT OF PETROLEUM & ENERGY
5th Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
6th Defendant

Waigani: Anis J
2020: 4 March & 18 May

NOTICE OF MOTION – dismissal of proceeding – Order 12 Rule 40 – National Court Rules - jurisdictional challenges – want of section 5 notice – whether notice given was outside of the 6 months period as required under section 5(2) - Claims By and Against the State Act 1996 – time-bar claim – whether cause of action arose outside the 6 years limitation period – section 16(1)(a) – Frauds and Limitations Act 1988

PRACTICE AND PROCEDURES – challenge on source of the application – Order 12 Rule 40 - whether there was breach of Order 4 Rule 49(8) – National Court Rules – procedures and court’s discretion discussed

PRACTICE AND PROCEDURES – whether Solicitor General or State has exclusive jurisdiction to enquire whether section 5 notice has been given in a court proceeding

Cases cited:

Davidwestern Advertising Ltd v. Hiri 152 Developments Ltd (2019) N7951
Eddie v. Kirokim (2012) N4932
Habolo Building and Maintenance Ltd v. Hela Provincial Government (2016) SC1549
Muriso Pokia v. Mendwn Yallon (2014) SC1336
Marago Pate v. Hon Nixon Duban and Ors (2020) N8277
Paul Tohian v. Tau Liu (1998) SC 566

Counsel:

Mr F Alua, for the 1st Plaintiff
Mr Awalua, for the 3rd Plaintiff
Mr L Kandi, for the 4th Plaintiff
Mr E Waifaf, for the 1st Defendant/Applicant
Ms J Nandape, for the 2nd Defendant
Mr A Baniyamai, for the 3rd Defendant
Mr Tefuarani, for the 4th Defendant

RULING

18th May, 2020

1.	ANIS J:	This matter was heard on 3 March 2020.  I reserved my ruling to a date to be advised.

2.	Parties have been notified so I will rule on it now.

BACKGROUND

3.	This claim was originally commenced by the first plaintiff.  The first plaintiff may be described as a clan or sub-clan and it is said to be part of one of the two major tribes in Kutubu where the current Kutubu Petroleum Project is situated, that is, in the Southern Highlands Province.  The first major tribe is said to be called the Fasu tribe or landowners.  It is said to be represented by the first defendant.  The second major tribe is said to be called the Foe tribe or landowners, and it is said to be represented by the second defendant.  The 2 tribes are said to come from the area where the Petroleum Development License 2 (PDL 2) is said to cover.  The first plaintiff is said to be part of the Fasu tribe or landowners.

4.	I refer to the originating summons.  It was filed on 7 April 2016.  It seeks the following main relief,

1.	A declaration that in the absence of a proper Social Mapping and Landowners Identification Studies conducted by the Fourth and Fifth Defendants, the Plaintiff is the most impacted and affected ILG in the whole of Kutubu PDL 2 Petroleum Project within the meaning 169A of the Oil & Gas Act, and Section 155(4) of the Constitution of Papua New Guinea as its land is host to over eight (80%) of all petroleum installations.
2.	A declaration pursuant to Section 53 of the Constitution that the Plaintiff has been unjustly deprived of its rights as the most impacted and affected ILG in the whole of Kutubu PDL 2 project, when benefits (equity/royalty) derived from its land for the oil project and now the PNG LNG project are allowed to be apportioned between the First, Second and Third Defendants without their consent and/or approval.
3.	An order directing the Fourth and Fifth Defendants to forthwith commence and conduct proper Incorporated Land Group maintenance and/or Social Mapping and Landowner Identification Studies pursuant to section 47 of Oil and Gas Act so as to ascertain proper and rightful beneficiaries of the PNG LNG project of Kutubu PDL 2 Project.
……

APPLICATION

5.	It was agreed during presentation of submissions that the way forward should be for the Court to firstly consider the first defendant’s notice motion (application).  The application was filed on 1 July 2019 and it seeks to, amongst others, dismiss the proceeding.  I note also that directions had been obtained earlier for the application to be heard.  I will proceed in that manner, and subject to my ruling, determine whether the ex-parte interim orders of 15 April 2016 should remain or whether they should be lifted.  

6.	The main relief sought in the application, are, and I quote,

1.	Pursuant to Order 12 Rule 1, Order 12 Rule 8(3) and (4) of the National Court Rules, and Section 155(4) of the PNG Constitution, the Court Orders of 15th April 2016 be discharged forthwith or be varied as a result of changes in circumstances and the royalties and equities payable to the members of the First Defendant at PDL 02 Kutubu Project area and the other landowners, from other tribes including the 2nd defendant are entitled to benefit from PDL 02 Kutubu Project area be paid forthwith.
2.	Pursuant to Order 12 Rule 40 of the National Court Rules, the proceedings be dismissed.

PRELIMINARY ARGUMENTS

7.	I think the best place to begin is to address the objections raised by the fourth plaintiff.  The fourth plaintiff challenges the source of the application to dismiss.  Counsel submits that the pleaded source, namely, Order 12 Rule 40 of the National Court Rules, is vague or that it lacks compliance with Order 4 Rule 49(8) of the National Court Rules, and as such, counsel submits that the relief sought therein is incompetent and must be dismissed.  

8.	Order 4 Rule 49(8) and Order 12 Rule 40, read, and I quote,

8.	Form of Motions.
All Motions must contain a concise reference to the Court’s jurisdiction to grant the orders being sought. Motions not containing such reference will not be accepted for filing. If accepted by the Registry staff without such reference, and it goes before the motions judge, the Court may strike out the motion for being incompetent and for lack of form.
The motion must state the following;
"...move the Court for Order pursuant to (e.g. section 5 of the Claims By and Against the State Act...) ...".

(Underlining mine)
……
40.	Frivolity, etc. (13/5)
(1)	Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings —
(a)	no reasonable cause of action is disclosed; or
(b)	the proceedings are frivolous or vexatious; or
(c)	the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

9.	It is obvious at the outset that the first defendant has pleaded Order 12 Rule 40 without also pleading sub-rule (1)(a)(b) or (c) and the grounds why it says the proceeding should be dismissed, for example, grounds such as pursuant to section 5 of the Claims By and Against the State Act 1996 (CBAS Act).  Such pleadings, as done in this case, may be regarded as vague.  In past judgments, I have expressed the necessity for correctly pleading sources for relief sought in notice of motions.  In a recent decision, that is, Davidwestern Advertising Ltd v. Hiri 152 Developments Ltd (2019) N7951, I made the following remarks at paragraphs 6 and 7,

6.	I note that rule 40 of the National Court Rules has sub-rule (1) therein which has not been pleaded in the application.  I will assume that to be an oversight by the 2 defendants.  I will proceed on that basis; that the application is made pursuant to Order 12 Rule 40(1).  I also note this.  Despite pleading sub-rules (a), (b) and (c), the 2 defendants specifically state in their application that the proceeding should be dismissed based on abuse of the court process.  Abuse of court process is contained under Order 12 Rule 40(1)(c) of the National Court Rules.  I will therefore proceed on that basis, that is, that proceeding should be dismissed pursuant to Order 12 Rule 40(1)(c) of the National Court Rules.  

7.	May I remind counsel for the 2 defendants that it is important to plead the correct source in a notice of motion otherwise the notice of motion will face the risk of being struck out or that it will be strictly interpreted in the manner as it is pleaded.  See case, Simakade Holdings Ltd and Or v. Dengnenge Resources Development Ltd and 3 Ors (2019) N7901.  I note that in this case, no objection was taken by the plaintiff, so I have made findings as stated above.

10.	Having said these, I note that the Court’s power remains discretionary. I make reference to the use of the word “may” as underlined above under Order 4 Rule 49(8).  The rule provides that the filing clerk may refuse to accept a notice of motion that is filed that fails to state the concise reference to the Court’s jurisdiction to grant the order that is being sought.  If the clerk overlooks that and accepts the motion and the motion returns before a judge, the judge would then have the discretion to decide whether to accept the motion or to reject it.  The discretion was also acknowledged by the Supreme Court in the case of Muriso Pokia v. Mendwn Yallon (2014) SC1336.  On point and at paragraphs 11, 12 and 13, the Supreme Court said,

11.	We agree with the appellant that the notice of motion failed to meet the requirements of Order 4, Rule 49(8), in that:
·	The laws referred to were not the correct source of jurisdiction to be relied on in a motion to set aside a default judgment. Such a motion should contain a concise reference to the relevant provisions of the National Court Rules: Order 12, Rule 8 and/or Order 12, Rule 35.
·	The references to the two Supreme Court decisions were irrelevant and improper.
·	The reference to Section 155(4) of the Constitution was largely irrelevant.
·	The reference to Order 12, Rule 40 of the National Court Rules was vague and imprecise.

12.	We do not agree, however, that the notice of motion was necessarily incompetent or that the primary Judge erred in hearing the motion. Order 4, Rule 49(8) vests a judge with a discretion to hear a motion that is non-complaint with this rule. Provided that the Judge is satisfied that the party responding to the motion (the appellant in this case) has been put on notice as to the case to be met and that no unfairness to that party will arise from hearing such a non-compliant motion, it is proper to hear the motion.

13.	We consider that the primary Judge was so satisfied here and decided to hear the motion despite its non-compliance with the Rule. No error of law was involved in the primary Judge deciding to hear and determine the motion. Grounds of appeal 1 and 2 are dismissed.

11.	I would also refer to my recent decision in Marago Pate v. Hon. Nixon Duban (2020) N8277 where I also addressed the same issue and followed Muriso Pokia v. Mendwn Yallon (supra).

12.	Let me now address the matter.  Firstly, I note that the application was filed some 11 months ago.  All the parties have been made aware of it and it had been adjourned on various occasions.  As such, it is reasonable, in my view, to assume that the parties would have had ample time to prepare, inquire or conduct necessary searches, before coming to the Court to argue.  This is not similar to a case where for example the application is filed just several days or weeks before it is heard.  The fourth plaintiff has handed up to the Court its extract of argument.  I note that the preliminary issues are not raised therein.  It seems that the fourth plaintiff is belatedly raising the preliminary arguments.  And that is not all.  The first defendant’s intention to raise section 5 notice and time bar arguments, have been conveyed to the plaintiffs.  Counsel for the first defendants has mentioned them in Court on various occasions when the matter was called to relist the application for hearing.  And there is also evidence of various correspondence exchanges between the parties.  As submitted to by counsel for the first defendant, I refer to the affidavits of John Kapi Nato filed on 1 July, 12 and 26 November, 2019.  The 3 affidavits show correspondences and depositions concerning the jurisdictional arguments.  It is also, in my view, disingenuous for the fourth plaintiff to raise such arguments on the 11th hour.  It may also suggest that the fourth plaintiff is perhaps trying too hard to be technical when the facts on point are obvious and prove otherwise.  Therefore and in my view, the fourth plaintiff’s argument concerning defective pleading of the source for the 2nd relief in the application must fail, and I find that to be the case.

13.	The second competency argument raised is this.  The fourth plaintiff argues the defence of res judicata.  It claims that a similar application under Order 12 Rule 40(1) of the National Court Rules had been filed by the second defendant and was dismissed.  It submits that an appeal was lodged and the Supreme Court refused the leave application.  As such, it claims that the issue is res judicata.  The facts, in terms of the second defendant’s application, its dismissal at the National Court and also the dismissal of the appeal by the appeal Court, are not disputed.  I note that there are also written judgments in evidence, both by Justice Polume who heard the second defendant’s application and Justice Dingake who heard the Supreme Court leave application.

14.	I have perused and considered the decisions, the evidence adduced and the submissions of the parties.  I must say that I will uphold the defendants’ submissions.  I note that the jurisdictional issues, namely, want of section 5 notice and time bar, were not issues that had been raised in the notice of motion of the second defendant.  I note that they were not addressed or determined as evident in Her Honour’s decision of 14 December 2017.  I therefore reject the fourth plaintiff’s defence of res judicata.   I find that the 2 jurisdictional issues have not been determined by a court of competent jurisdiction, and as such, the first defendant may raise them.

JURISDICTIONAL ISSUES

15.	The first defendant’s argument is in two folds.  Firstly, it argues that no notice was given in compliance with section 5 of the CBAS Act.  It argues that the notice that had been given by the first plaintiff was given well outside the required 6 month’s period; that no extension had been sought prior to the said notice being given, therefore it argues that the notice is void or that it cannot be a valid notice within the meaning of section 5.  Secondly, it argues that the cause of action is in contract and tort, and as such, is time barred, that is, contrary to section 16(1)(a) of the Frauds and Limitations Act 1988 (F&L Act).  

16.	Section 5 subsections (1) and (2)(a)(b) of the CBAS Act state, and I quote in part,

5.	Notice of claims against the State.
(1)	No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this Section by the claimant to—
(a)	the Departmental Head of the Department responsible for justice matters; or
(b)	the Solicitor-General.
(2)	A notice under this Section shall be given—
(a)	within a period of six months after the occurrence out of which the claim arose; or
(b)	where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or
.....

17.	But before I begin with the first issue, I note a further preliminary issue raised by the first and fourth plaintiffs.  They submit that only the State or the Solicitor General is designated or authorised by law to raise arguments concerning want of section 5 notice.  I refer to the written submissions of the first plaintiff.  Counsel makes no reference to the law or case authorities to support his contention.  I also refer to the written submissions of the fourth plaintiff.  Again, counsel makes no submissions and provides no case law to support his contention.  I recall that I had asked both counsel in Court whether they have case authorities to support their submissions on point.  Counsel, as I recall, were unable to assist.

18.	I dismiss the arguments of the first and fourth plaintiffs.  In my view, there is no law that says that only the State or the Solicitor General can enquire in a Court proceeding of whether or not a party has given a section 5 notice as required under the CBAS Act.  Any person having an interest in a matter that is before the Court including a judge, can, in my view, enquire and find out whether a plaintiff has given such a notice.  See case:  Eddie v. Kirokim (2012) N4932.  The reasons for that are obvious and they are also settled by case law.  Firstly, section 5 of the CBAS Act is express.  It requires notice to be given to the State before a person could sue the State.  The case law is also settled on this point.  It states that it is a pre-condition that any person or entity that wishes to make a claim against the State, other than in a judicial review proceeding, must give notice of his, her or its intention to the State pursuant to section 5 of the CBAS Act.  In Paul Tohian v. Tau Liu (1998) SC 566, the Supreme Court stated at page 2 of its judgment, 

In our view the trial judge was correct in holding that the provision under consideration is similar to s.54 of the MVIT Act.   However, he fell into error when he did not follow the reasoning in (Randall v MVIT).   The purpose of the requirement to give notice remains the same whether or not the notice is required to be given within 6 months or within such period as may be granted by the Principle Legal Advisor or the Court.   It is clear to us that the Notice of Intention to make a Claim is a condition precedent to issuing a Writ of Summons in all circumstances.” (My emphasis).

19.	The Supreme Court has also, in the case, Habolo Building and Maintenance Ltd v. Hela Provincial Government (2016) SC1549, held, amongst others, and I quote, It is a condition precedent to commencement of proceedings against the State that the plaintiff give notice, prior to commencement of the proceedings, of the intention to make a claim in accordance with Section 5 of the Claims By and Against the State Act. 

20.	And if I may add that recently in the case, Marago Pate v. Hon Nixon Duban and Ors (supra), I stated, and I quote at page 21 of the judgment,

21.	Section 5, under the CBASA and in this instance, is a superior provision, and it imposes a statutory condition precedent for commencing an action against the State.  It expressly requires a person that wishes to sue the State, to give written notice of his, her or its intention to sue, within 6 months after the occurrence out of which the claim arose, or in the case of a contract, within 6 months after the person becomes aware of the alleged breach.  See section 5(1) and (2) of the CBASA.  The present action is founded in (i), contract, (ii), in tort, that is, for alleged breach of provisions of the Oil and Gas Act 1998, and also (iii), for alleged breach of constitutional provisions and rights.  There is a long list of case authorities from both the Supreme and National Court, which have addressed section 5 of the CBASA.  The case law on this point is settled.  It states that compliance with a section 5 notice is mandatory beforehand or before one could commence an action against the State.  A more recent case is the Supreme Court’s decision in Brian Josiah v. Steven Raphael (2018) SC1665.  The Supreme Court stated, and I quote, 

23.	Section 5 of the Claims Act makes it a mandatory legal obligation or condition precedent on a plaintiff commencing a claim against the State to give notice of his intention to make a claim against the State and a failure to comply with that obligation is fatal: Paul Tohian, Minister for Police and the State v. Tau Liu (1998) SC566 and Daniel Hewali v. Papua New Guinea Police Force & The State (2002) N2233. Therefore it follows that commencement of court proceedings against the State pre-supposes that due compliance with s. 5 was achieved.

21.	I adopt the above as my own herein.

22.	Having dismissed the first and fourth plaintiffs’ argument (i.e., their claim that the Solicitor General or the State are the only persons who may query compliance of section 5), let me now consider the evidence, that is, to determine whether section 5 had been observed by the plaintiffs.  The first defendant submits that the cause of action arose in 1990 or 1991, that is, in regard to distribution or apportionment of benefits/royalties for the Kutubu Project, as alleged in the originating summons.  It also submits that if the Court is to also consider the plaintiffs’ complaint concerning their claim of alleged unequal distribution of the benefits for the LNG project, then that agreement was entered into in 2009.  The first defendant submits that the first plaintiff gave its section 5 notice to the State, on 30 March 2016.  The notice, I note, is contained at annexure A to the affidavit of Francis Alua which was filed on 14 April 2016.  Evidence of the notice is not disputed.  The first defendant submits that the other plaintiffs have not each given their section 5 notices, and that they are “riding” on the first plaintiff’s notice. 

23.	I note that the second, third and fourth plaintiffs are separate legal persons or entities.  And after having considered the evidence, I also note that they have not disclosed any evidence to show that they each had given their notices to the State under section 5 of the CBAS Act.  Without these evidence, I find, as a matter of fact, that the second, third and fourth plaintiffs have not given notices under section 5 of the CBAS Act.  For this reason alone, I intend to dismiss their claims.  But that aside, I note that there are other matters that also require considerations, so I will proceed to address them as well.

24.	I turn back to the first plaintiff’s notice and its claim.  In view of the originating summons and evidence that have been adduced, it seems quite clear that the first plaintiff is unhappy with the royalty distribution and benefits that had been entered into for the Kutubu Oil Project.  It is obvious and also undisputed that the said agreement was entered into in 1990.  So from 1991 to 2016, the latter which was the year when the first plaintiff gave its section 5 notice to the State, would be a period of about 25 years.  The plaintiffs do not dispute this fact.  And when I consider section 5 sub-section (2)(a) and (b), it is clear, for this purpose, that the first plaintiff’s section 5 notice was given well outside the 6 months period, that is, from the date when the cause of action arose or when the alleged breach of contract or tort was said to have occurred, or was committed.  Again, the plaintiffs have not addressed the Court on this nor have they challenged the defendants’ claim on the matter.

25.	I find that the first plaintiff’s notice was issued well outside the 6 month’s period required under section 5(2)(a) and (b) of the CBAS Act.  Because the notice had been issued well outside the period when the cause of action arose or accrued, the claim by the first plaintiff or by the plaintiffs in general, shall fail.

26.	Now, assuming that I am wrong with my above findings, there is also another reason why this claim cannot succeed, and I refer to the second jurisdictional argument of the first defendant, that is, time-bar.  Given my above findings, it is obvious that the cause of action arose in 1990 or 1991.  Claims that are based on contracts or tort as in the present case, have time limitations of 6 years which shall commence from the time the cause of action arose or accrued.

27.	Section 16 of the F&L Act is relevant.  It states, and I quote,

16.	Limitation of actions in contract, tort, etc.
(1)	Subject to Sections 17 and 18, an action—
(a)	that is founded on simple contract or on tort; or
(b)	to enforce a recognisance; or
(c)	to enforce an award, where the submission is not by an instrument under seal; or
(d)	to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,
shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.
(Underlining mine)

28.	The first plaintiff’s challenge on the apportionment and distribution of benefits and royalty payments, is based on what had been agreed upon from the Kutubu Oil Project.  These events have occurred decades back to as far as 1990.  I note that the Kutubu Agreement is in evidence.  It was entered into on 10 December of 1990 and was later revised in 1996.  The LNG Umbrella Benefit Sharing Agreement is also in evidence and it was entered into on 23 May 2009.  If we compute time as of 1990, 1996 or 2009, to the date when the originating summons was filed which was on 7 April 2016, the first plaintiff or the plaintiffs will still be out of time of over 6 years before they commenced the proceeding.  In conclusion, I find that the plaintiffs’ action is also statute or time-barred, that is, pursuant to section 16(1)(a) of the F&L Act.

SUMMARY

29.	For these reasons, I will dismiss the proceeding.  I firstly dismiss the claims of the second, third and fourth plaintiffs on the basis that they each had not given section 5 notices to the State under the CBAS Act before they commenced or joined in the proceeding.  Secondly, I dismiss the claim of the first plaintiff as well as the plaintiffs’ claim in general, on the basis that the section 5 notice that had been given by the first plaintiff to the State, which is dated 30 March 2016, was given outside the 6 months period as required by section 5(2)(a)(b) of the CBAS Act.  I find that given its belatedness, it therefore did not amount to a valid notice or that it is void, that is, within the meaning of section 5 the CBAS Act.  And thirdly, I dismiss the plaintiffs’ claim on the basis that it is time-bared under section 16(1)(a) of the F&L Act.

COST

30.	An award of cost is discretionary.  I will award cost to follow the event using the normal party/party costs scale.  I note that the third plaintiff supported the jurisdictional arguments of the first defendant.  As such, and in the exercise of my discretion, I will refrain from ordering the third plaintiff to pay the defendants’ costs.

ORDERS OF THE COURT

31.	I make the following orders:

1.	The proceeding is dismissed.

2.	For clarity, any interim injunctions that are in place are uplifted forthwith.

3.	The first, second and fourth plaintiffs shall pay the defendants’ costs of the proceeding on a party/party basis which may be taxed if not agreed.

4.	Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

The Court orders accordingly.
________________________________________________________________
Alua Lawyers:	Lawyers for the First Plaintiff
Awalua & Associates Lawyers:	Lawyers for the Third Plaintiff
M S Wagambie Lawyers:	Lawyers for the Fourth Plaintiff
Edward M Waifaf Lawyers:	Lawyers for the First Defendant
Nandape & Associates Lawyers:	Lawyers for the Second Defendant
Baniyamai Lawyers:	Lawyers for the Third Defendant
In-House Counsel - Mineral 
Resources Development
Company Limited:	Lawyers for the Fourth Defendant