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New Guinea Gold Ltd v Chan [2022] PGNC 172; N9599 (5 May 2022)

N9599

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS(JR) NO. 829 OF 2016

BETWEEN:
NEW GUINEA GOLD LIMITED
First Plaintiff

AND:
GOLD MINES OF NIUGINI HOLDINGS LIMITED
Second Plaintiff

AND:
HON. BYRON CHAN – Mining Minister
First Defendant

AND:
STANLEY NEKITEL as the Registrar of Tenement
Second Defendant

AND:
MINERAL RESOURCES AUTHORITY
Third Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Dingake J
2022: 7^th & 14^th February, 14^th March & 5^th April, 5^th May

PRACTICE AND PROCEDURE – application to dismiss proceedings summarily – whether application for leave for judicial review or substantive review can only be summarily dismissed under Order 16 rules or any other rules of the court – whether Order 4 Rule 49(17) can be invoked to dismiss defendants summary dismissal application – Order 16 Rules are exclusive to Judicial Review applications and the Plaintiff can therefore not invoke Order 4 Rule 49(17) of NCR - Plaintiffs did not prosecute the proceedings with due diligence and offered no valid reasons for the inordinate delay - In the absence of valid reasons, the delay intentional and contumelious and stands dismissed - proceedings are also liable to be dismissed for breach of the Companies Act.
Cases Cited:

Ace Guard Dog Security Services Ltd & Yama Security services Ltd v Lindsay Lailai & Telikom PNG Ltd (2004) SC757
Peter Norr v Dominic Ikamata [2005] SC815
Task Guard Ltd v Paul Foulton (2016) SC1560

Counsel:

Mr. Noel Ako, for the Plaintiff
Ms. Wilma Mai, for the Second & Third Defendants

05^th May, 2022

1. DINGAKE J: By way of a Notice of Motion filed on the 13^th of September, 2021, the Second and Third Defendants have approached this Court for the following relief:
   • (a) Pursuant to Order 16 Rule 13(13) (1) and (2) (a) and (b) of the National Court Rules and the inherent jurisdiction of the Court, the proceedings be determined summarily by the Court and dismissed:
     1. in their entirety; or alternatively;
     2. in respect of the proceedings by the First Plaintiff.
   • (b) The Plaintiffs pay the Second and Third Defendants costs of and incidental to this proceeding, including this application, to be taxed if not agreed.
   • (c) The time for entry of these orders be abridged to date of settlement by the Registrar which shall take place forthwith.
   • (d) Such further or other orders as the Honourable Court deems fit.
     
2. The application is brought in terms of Order 16 Rule 13(13) (1) and 2 (a) and (b) of the National Court Rules
3. Order 16 Rule 13(13) (1) and 2 provides that:

“13. Other matters.

(1) Motions.

All interlocutory applications shall be made by Notice of Motion. The practice and procedure shall be those prescribed by the National Court Rules from time to time.

(2) Summary disposal.

1. Any application for judicial review may be determined summarily for failing to comply with directions or orders issued under the Order 16 of the National Court Rules or under these Rules or on any other competency grounds.
2. The Court may summarily determine a matter:

(a) on application by a party; or

(b) on the Court’s own initiative; or

(c) upon referral by the Registrar in accordance with the procedure set out in (3) below.

4. Preliminarily, the Plaintiff raised the point that the Second and Third Respondents’ Notice of Motion filed on the 13^th September, 2021 was incompetent in that it has taken about seven months to move it and offends Order 4 Rule 49(17) of the NCR.
   
5. Order 4 Rule 49(17) provides that:

“17. Dismissal /Striking out of Motions.

The Court may of its own motion or upon application strike out or dismiss a Motion which is not prosecuted within one (1) month after it is filed or if it is adjourned twice.”

6. In my view, the invocation of Order 4 Rule 49(17) in judicial review proceedings is misplaced in that Order 16 Rules are exclusive to Judicial Review applications and the Plaintiff can therefore not invoke Order 4 Rule 49(17) of NCR.
7. In the case of Alex Timothy, the Supreme Court held that dismissal or striking out of Judicial Review proceedings is governed by Order 16 of the National Court Rules. The Court stated the position as follows:

“22. Additionally, Order 16 does contain its own provisions for summary disposal of an application for leave for review or the substantive application for judicial review for reasons of want of prosecution, want of competence or for any other reason. The Court may summarily dispose of a proceeding on application by a party, of the Court’s own motion or on referral by the Registrar: Order 16 Rule 13 (2). The application must be made by Notice of Motion: Order 16 Rule 13 (1). Clearly, there is no room for a party to invoke Order 4 Rule 36 or any other similar provision found elsewhere in the National Court Rules.”

8. Significantly, for the purposes of this case, the Court, in holding that Order 4 Rule 36 was not applicable in judicial review proceedings held that “any other similar provisions” found elsewhere in the National Court Rules is not applicable. It seems to me Order 4 Rule 49(17) is such similar provision in so far as it deals with dismissal/striking out a motion.
9. Based on the above authority, I am not persuaded to exercise my discretion to invoke Order 4 Rule 49(17) and the Plaintiff’s prayer in that regard is refused.
10. The facts that underpin this litigation and are relevant for deciding the issues in the Notice of Motion, are not in dispute. They may be stated briefly.
11. These proceedings were commenced by Originating Summons filed on 2^nd December, 2016. The Plaintiff was granted leave by this Court on 20^th of April, 2017 to apply for Judicial Review of the decisions of the then Minister for Mining dated 15^th of November, 2016 refusing the Plaintiff’s applications for renewal of Exploration License 1140 (EL1140) and Mining Lease 122 (ML122).
12. It is common cause that both the EL1140 and ML122 were jointly held by the Plaintiffs, with the First Plaintiff holding a 90% ownership and the Second Plaintiff holding a 10% ownership.
13. At the time leave was granted an Order was made on the 20^th of April, 2017, that the grant of leave operate as a stay of relevant decisions, until further notice.
14. It is common cause that as at the 20^th of April, 2017, when the Plaintiffs were granted leave to apply for judicial review that the First Plaintiff was in liquidation, having been placed in liquidation by this Court on the 7^th of July 2015.
15. It is also not in dispute that since the 12^th of December, 2017, the Plaintiffs have taken no steps to progress this matter, and that at the time these proceedings were filed the Plaintiff was in liquidation and that no consent of the liquidator had been obtained or order of the Court authorising the commencement of the proceedings.
16. The Plaintiff offered no valid reason for failure to take steps to progress this matter since December, 2017. In the absence of a satisfactory explanation for the delay, this Court is compelled to conclude that the delay was intentional and contumelious.
17. It follows in my view, that the Plaintiff’s proceedings are liable to be dismissed for want of prosecution, as I shall in due course do.
18. Additionally, these proceedings are also not sustainable as they breach critical provisions of the Companies Act.
19. The commencement and or continuation of these proceedings without the consent of the liquidator or Order of the Court is a violation of Section 298 of the Companies Act.
20. Section 298 of the Companies Act provides that:

“Effect of Commencement of Liquidation

(1) With effect from the commencement of the liquidation of a company –

• (a) the liquidator has custody and control of the company’s assets; and
• (b) the directors remain in office but cease to have powers, functions, or duties other than those required or permitted to be exercised by this Part;
• (c) unless the liquidator agrees or the Court orders otherwise, a person shall not –
  • (i) commence or continue legal proceedings against the company or in relation to its property; or
  • (ii) exercise or enforce, or continue to exercise or enforce, a right or remedy over or against property of the company.”

21. It must be noted that Order 16 Rule 13(13) (2) gives the Court discretion to dismiss a matter on a number of the listed grounds including “any competency ground”. In my view, proceedings brought in violation of statute would be such a competent ground.
22. In the case of Ace Guard Dog Security Services Ltd & Yama Security services Ltd v Lindsay Lailai & Telikom PNG Ltd 2004 SC757, the Supreme Court held that companies in liquidation shall only act through a duly appointed liquidator.
23. In this case, the Plaintiff whilst conceding that the absence of consent by the liquidator with respect to the First Plaintiff, which is the company in liquidation, may be fatal, argued that the Second Plaintiff, which is not in liquidation, but has 10% of ownership of both EL1140 and ML112, can still hold or and sustain the proceedings of the First Plaintiff.
24. I do not agree.
25. In this matter given that the interests of First Plaintiff and that of Second Plaintiff are intrinsically intertwined with respect to Ownership of EL1140 and ML122, I do not consider that once the First Plaintiff falls, the Second Plaintiff can hold on to sustain the proceedings. In any event, even if I am wrong, in holding that once the First Plaintiff falls the Second Plaintiff cannot sustain the action, these proceedings are still liable to be dismissed for want of prosecution as earlier discussed.
26. Having regard to all the above, I find that the Plaintiffs did not prosecute the proceedings with due diligence and offered no valid reasons for the inordinate delay of about two (2) years, if not more. In the absence of valid reasons, the delay was intentional and contumelious. The proceedings are also liable to be dismissed for breach of the Companies Act.
27. In the result, the Court orders as follows:
    • (a) The proceedings are dismissed for any or all of the following grounds:
      1. want of prosecution; and or
      2. incompetency occasioned by violation of s.298 of the Companies Act.

(b) The Plaintiff shall pay the Respondents costs, to be agreed or taxed.

_______________________________________________________________
Napu & Company Lawyers: Lawyers for the Plaintiff
Manase & Co. Lawyers: Lawyers for the Second Defendant