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Double Field (PNG) Ltd v Mirisim [2021] PGNC 502; N9274 (8 November 2021)

N9274

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 449 OF 2019


BETWEEN:
DOUBLE FIELD (PNG) LIMITED
Plaintiff


AND:
HONOURABLE SOLAN MIRISIM, MINISTER FOR FORESTS
First Defendant


AND:
PAUL SAI’I as Chairman of National Forest Board
Second Defendant


AND:
PAPUA NEW GUINEA FOREST AUTHORITY
Third Defendant


Waigani: Miviri J
2021 : 04th November


PRACTISE & PROCEEDURE – Judicial Review & appeals – Trial – Whether Cancellation of FCA lawful – Ultra Vires – Denial of Natural Justice – Sections 90A, 90B, 90E, 97 Forestry Act 1991 – No Adherence to Process Procedure Forestry Act 1991 – Judicial Review granted –Certiorari lies – Decision to Revoke FCA Quashed – Costs Follow Event.


Cases Cited:


Tzen Pacific Ltd v Pouru [2013] PGNC 307; N5156

Dondonald Ltd v Pok [2019] PGNC 279; N7998

Nambawan Super Ltd v Kimas [2013] PGNC 23; N5062

Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122

Waulas v Jigede [2009] PGNC 171; N3781

Kilepak v Kaivovo, Secretary Department of East New Britain [2003] PGNC 91; N2402

Monouluk v Pala [2020] PGSC 119; SC2031


Counsel:


I. Sheppard, for Plaintiff /Applicant
S. Sakarias, for Defendants


RULING

08th November, 2021

  1. MIVIRI, J: This is the decision on the substantive Notice of Motion of the Plaintiff of the 13th April 2021 seeking orders pursuant to Order 16 Rule 5 (1) and Order 16 Rule 1 (1) and (2) of the National Court Rules. Firstly, for certiorari to quash the decision of the First Defendant and/or the Second Defendant made in February 2020 to cancel Forest Clearing Authority 10-14 issued to the Plaintiff on 27th September 2019 with respect to the Maimai Large Scale Integrated Agro Forestry Project.
  2. And Secondly for an injunction permanent and interim to restrain the Defendants, their servants, or agents from granting or attempting to grant a Forest Clearing Authority, timber permit or licence with respect to Maimai Large Scale Integrated Agro Forestry Project to any other party apart from the Plaintiff pending the determination of the within proceedings.
  3. The Statement of Agreed and Disputed Facts and Issues for Trial filed on 08th June 2021 in the review book page 451, settles that the Plaintiff is registered as a Company under the Investment Promotion Authority Act 1992, as a Foreign Enterprise engaged in logging and related activities. And as such it is registered as a Forestry Industry Participant by section 111 of Forestry Act.
  4. On the 05th November 2013 the project area namely Maimai Large Scale Integrated Agro Forestry Project, was awarded to Skywalker Global Resources Company (PNG) Ltd (Sky Walker) FCA 10-06. Skywalker failed to comply with the terms of that FCA resulting in its cancellation on the 23rd May 2019.
  5. This prompted the plaintiff to lodge its application for FCA over that project area on or about the 30th May 2019 with the payment of K 55, 000.00 the requisite fees.
  6. On or about 31st May 2019 the Government through Gazette G457 the First Defendant was given responsibility of inter alia Minister for Forests.
  7. On 20th June 2019 at the Board Meeting 220 the Second Defendant approved the issue of an FCA for the project to the Plaintiff subject to two conditions that is, it must within six months amend the Environment Permit which had been issued to Skywalker to its own name and that the plaintiff was required to enter into a full project agreement with Nuku Resources Limited, a company which is representative of the Landowners from the Project area.
  8. Nuku Resources Limited was fully supportive of the Plaintiff’s application for an FCA and when on or about 20th June 2019 its chairman became aware that the First Defendant had directed the Second and Third Defendants not to issue the FCA to the Plaintiff despite the Second Defendant’s resolution it wrote a letter to the First Defendant confirming its support for the Plaintiff.
  9. The law is also clear by the Forestry Act 1991 that pursuant to section 90A of the Act, a person may make an application in the prescribed form and accompanied by the prescribed fee for a Forest Clearing Authority for the purpose of conversion of Forests to Agricultural or other land use. That application is to contain all of the particulars referred to in section 90A (3).
  10. And further pursuant to section 90B of the Act if the Second Defendant determines that an application under section 90A is in the prescribed form and contains all of the Provincial Forest Management Committee who is to consider and evaluate the application and make a recommendation to the second Defendant.
  11. Further pursuant to section 90B (7) if the Second Defendant is satisfied with a recommendation made by the Provincial Forest Management Committee, it shall approve the application and advise the applicant accordingly.
  12. Which is sealed pursuant to section 90B (8) in that the Second Defendant shall upon approval of the application grant the applicant an FCA in the prescribed form and on such other conditions set out in this subsection of the Act including the provision of the performance bond.
  13. The First defendant has no role or function to carry out with respect to the granting of FCA’s under the Act and in fact has had no role to play since the passing of the Forestry (Amendment) Act 2007. That is, there is no requirement for the Second Defendant to make any recommendation to the First Defendant or for the First Defendant to make any recommendation to the National Executive Council with respect to the granting of an FCA as there was, prior to the amendments in 2007.
  14. On 28th August 2019 the Plaintiff was advised by the Second Defendant that Forest Clearing Authority 10-06 had been issued in its favour over the Maimai Large Scale Integrated Agro Forestry Project on 25th June 2019. In the same Letter the Plaintiff was advised that it was a condition of the grant of the Forest Clearing Authority that the Plaintiff would amend the Environment Permit and enter into a project agreement with Nuku Resources Limited within six (6) months of the 28th August 2019. The Plaintiff was also required to lodge a performance bond with a commercial bank in Papua New Guinea. That was done on the 02nd September 2019 by the Plaintiff.
  15. On or about the 04th September 2019 the Plaintiff was advised by the Director Project Allocation Directorate of the Third Defendant that the Forest Clearing Authority would have to be amended from 10-06 to 10-14 due to a pending claim by the previous holder of the Forest Clearing Authority, Skywalker Global Resources Company (PNG) Limited.
  16. On 27th September 2019 the Second Defendant issued Forest Clearing Authority 10-14 in favour of the Plaintiff over the Maimai Large Scale Integrated Agro Forestry Project and on 16 December 2019 the Plaintiff lodged an amended Bank Guarantee.
  17. On a date unknown to the Plaintiff, it is understood that the Second Defendant resolved to cancel the Plaintiff’s Forest Clearing Authority 10-14 and that a recommendation may have been made to the First Defendant for cancellation and for grant of the Forest Clearing Authority 10-14 over the same project area to Green Horizon Limited.
  18. These raise the issue for determination, whether the Plaintiff is entitled to the relief sought in paragraphs 1 and 2 of the Notice of Motion of the 13th April 2021 set out above.
  19. Further facts that are relevant in the submission of the Defendants is that the Judicial review was filed 03rd July 2019. And on the 11th July 2019, an interim injunction order was granted by this Court in the matter. And on the 04th August 2021, the Defendants filed an application to summarily determine the matter for want of prosecution which was refused. On the 28th August 2019 the Plaintiff received the FCA from the Second Defendant. Reliance is placed on the affidavit of Magdalene Maihua filed the 2nd July 2021 and the 03rd September 2021.
  20. She deposes 02nd July 2021 that she is the Acting Chief Operations Officer for the PNG Forest Authority and former director in charge of the Projects and Allocations directorate. That the subject project area is located in the Central Nuku LLG, Nuku District Sandaun Province. Materially she confirms that the Plaintiff was granted the FCA on condition that Plaintiff conduct a public hearing, engage in landowner agreement and to amend the environment permit upon which the FCA would be approved. This was not done by the 21st December 2019 and so the conditional approval cancelled automatically as a result of non-compliance. And that the defendants are at liberty to cancel the FCA for non-compliance of the Conditions.
  21. But in the affidavit filed of the 03rd of September 2021 she annexed a copy of the FCA No. 10-14 dated 27th September 2019 which is not conditional upon any conditions other than lodgement of a bank guarantee which as the above agreed facts reveal was lodged on the 16th December 2019 which was after the defendants changed the number of the FCA.
  22. But on the 13th June 2019 the Sandaun Provincial Forest Management Committee met, deliberated, and resolved in its meeting No. 2/2019 that the FCA be rejected for the reasons that there was no public hearing conducted and there was no environment permit by the Plaintiff.
  23. Here also there is no evidence that the FCA held by the plaintiff was cancelled in accordance with procedure set out above and in particular section 97 of the Act. There was no assertion that the Plaintiff was guilty of an offence or failed to comply with conditions under the FCA and of which notice was already given it. Its failure to comply resulting in what was accorded it. That is not the evidence prima facie.
  24. The defendants contend that there was no FCA issued to the Plaintiff. He cannot argue that process was followed in the issue, because he does not hold a licence. There is no decision made by the defendants in the matter. There is no decision to be reviewed as such. The Notice of Motion filed should be dismissed with costs.
  25. But this argument fails in the light of the affidavit of Magdalene Maihua particulars set out above. That evidence accepts the fact that the plaintiff was issued an FCA with conditions that were to be fulfilled. The law set out above relating is very clear that the FCA will not be cancelled without adherence, compliance with it. In particular to cancel an FCA as held by the Plaintiff issued under section 90B of the Act on the 27th September 2019 could only be cancelled pursuant to section 90E under section 97 as if that authority is a licence. The words of this section are specific the principals include the director, manager, secretary and other similar officer or any person who is purporting to act in that capacity holding office in the plaintiff.
  26. The evidence must show this official as been convicted of an offence against the Forestry Act, or relating to Forestry Matters against any other law, or for failing to comply with any of the conditions of the licence. The Minister may, given cancel the licence. But the Managing Director is required given to serve a notice on the holder, in this case the Plaintiff advising him of the intention to cancel the licence and of the reason for the intended cancellation. And giving him 14 days from the date of service of the notice to make representations as to why the licence should not be cancelled. The managing director will make and forward to the Board a written report on the hearing which will be considered by the board who will consider it, and together with its recommendation forward to the Minister who will consider the report and the recommendations from the board and where appropriate and warranting cancel the licence.
  27. There is no evidence that there was compliance of section 97 (3) clear by the evidence of Hii Yii Luk at page 340 of review book, including the affidavit of Maihua on page 436 of the Review Book. Therefore, the purported cancellation deposed to in the affidavit of Maihua of the 21st December 2019, page 393 of the Review Book is not there. There are mandatory requirements that must be met before the FCA can be cancelled settled by, and these are clearly set out in the law above. That is the only way in which the cancellation of the FCA would stand in law against the contention raised by the Plaintiff. The evidence is clear, that was not the procedure exercised in the cancellation of the FCA here for the plaintiff. And this Court has observed that in Tzen Pacific Ltd v Pouru [2013] PGNC 307; N5156 (25 April 2013), which is applicable here given the facts set out above. This is similar observation made in licences under the Oil and Gas Act 1998 seen out in Dondonald Ltd v Pok [2019] PGNC 279; N7998 (3 September 2019). And is firm in State Lease under section 122 of the Land Act demonstrated by Nambawan Super Ltd v Kimas [2013] PGNC 23; N5062 (27 February 2013). The procedure by the respective laws must be mandatorily observed and complied with. Non-adherence and compliance will ordinarily be the basis for certiorari to be granted to quash.
  28. What is firmed out by this law is that judicial review is not about the substance of the matter. It is not concerned with the reasoning of the decision of the second defendant but the procedure taken to arrive at that decision: Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122. And pertinent are the following, whether in the decision that was made by the defendants they exceeded their power or authority? And in so doing committed an error of Law; including breaching natural justice in that the plaintiff is not given a right of hearing before the action taken to cancel the FCA. And as a result, the decision taken is such that no reasonable tribunal given would make such decision. In so doing abusing its power and authority: Waulas v Jigede [2009] PGNC 171; N3781 (19 October 2009).
  29. What is evident here consistent with the law set out above is that the Plaintiff’s lodgement of its performance bond on the 2nd September 2019 and then on the 16th December 2019. He refutes any argument advanced here against. It is also clear that under section 97 (1) none of the officials of the plaintiff were convicted, nor is there evidence relied to that effect here. Further there is no evidence of section 97 (3) being applied. The aggregate is that no notices were given and there is non-compliance with the mandatory provisions of section 97 of the Act. The cancellation of the FCA cannot stand in law. It is ultra vires and clearly exceeds the authority of the First and Second Defendants. There is clear error of law committed because the Plaintiff is not accorded natural justice under section 59 of the Constitution. The decision taken cannot stand as no reasonable tribunal given would have made the decision it made: Kilepak v Kaivovo, Secretary Department of East New Britain [2003] PGNC 91; N2402 (2 May 2003).
  30. Judicial Review lies and has been made out by the plaintiff given all set out above. Accordingly, certiorari lies against the decision of the First and Second Defendants made in February 2020 to cancel Forest Clearing Authority 10-14 issued to the Plaintiff on 27th September 2019 with respect to the Maimai Large Scale Integrated Agro Forestry Project. That decision is brought into Court and quashed forthwith: Monouluk v Pala [2020] PGSC 119; SC2031 (24 November 2020).
  31. The second part of the Notice of motion for the injunction has not been established by the material relied here. Further it was pending determination of this matter. Now that it has been determined it serves no utility to consider it here. It is not granted to the plaintiff.
  32. The orders of the Court are:

Orders accordingly.
_________________________________________________________________

Ashurst Lawyers: Lawyer for the Plaintiff/Applicant

Leo Lawyers: Lawyer for the Defendant

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