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Vanimo Jaya Ltd v Papua New Guinea Forest Authority [2022] PGNC 358; N9750 (23 June 2022)

N9750

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 443 OF 2019 (CC1)

BETWEEN:

VANIMO JAYA LIMITED

First Plaintiff

AND:

AITAPE WEST PALM OIL LIMITED

Second Plaintiff

AND:

PAPUA NEW GUINEA FOREST AUTHORITY

First Defendant

AND:

EMO HOLDINGS LIMITED

Second Defendant

AND:

MOILE RESOURCE OWNERS LTD

Third Defendant

Waigani: Tamade AJ

2022: 22^nd & 23^rd June

ATTORNEY GENERAL ACT 1989 – Section 7 – Duties, Functions, and Responsibilities of the Attorney-General to instruct lawyers within or outside the country to appear for the State in any matter.

FORESTRY ACT – section 5 – Papua New Guinea Forestry Authority is an autonomous corporation – has legal capacity – may sue or can be sued – it has the authority to brief out matters or engage lawyers to act for it.

Cases Cited:

The following cases are cited in the judgment:

PNG Power Ltd v Augerea [2013] PGSC 53; SC1245
Paliwa v Kombul [2008] PGNC 146; N3499
Dr Lawrence Kalinoe v Philip Kereme (2016) N6382
Yama Security Services Ltd v National Capital District Commission [2016] PGNC 270; N6469
National Agriculture Quarantine & Inspection & Inspection Authority v Tetaga [2009] PGNC 220; N4030
Bob Kaupa v Kala Aufa & Ors [2015] PGNC 262
Peter Bire & Ors v Philip Kereme and Ors [2016] PGNC 93
Singat v Commissioner of Police [2008] PGSC 10; SC910
O’Neil v Eliakim (2016) SC1522
Marape v O’Neil (2016) SC1487
Valu v Ngangan [2018] PGSC 62; SC1723

Counsel:

Mr Livingstone Baida, for the Plaintiff

Mr Emmanuel Isaac, for the First Defendant

23^rd June, 2022

1. TAMADE AJ: Before this Court is an application filed by the Plaintiffs seeking to remove Emmanuel Lawyers from representing the First Defendant, the PNG Forest Authority pursuant to Order 12 Rule 1 of the National Court Rules, Section 7(i) of the Attorney General Act 1989 and section 155(4) of the Constitution.

2. The application is defended by Mr. Isaac who is the Principal of Emmanuel Lawyers who acts for the PNGFA.

3. Essentially, the Plaintiffs are seeking that Emmanuel Lawyers have not sought a proper brief out from the Attorney General to represent PNGFA as the ‘State” in this matter. It is the Plaintiff’s submission that the PNGFA is a part of the State and therefore the Attorney General pursuant to section 7(1) of the Attorney General’s Act is tasked with the responsibility to instruct lawyers to represent the state and in the absence of such instruction from the Attorney General, Emmanuel Lawyers can not appear in this matter for PNGFA.

4. Mr. Isaac of Emmanuel Lawyers objects to the application and states in evidence with a letter from the Managing Director of PNGFA that his law firm had been instructed to appear for PNGFA and as PNGFA is a corporation pursuant to section 5 of the Forestry Act, PNGFA has the authority to brief out and or engage any law firm it wishes to represent, it does not have to seek the approval of the Attorney General to appear in cases for PNGFA.

5. When the matter was first mentioned in the morning, I enquired with counsels whether counsels have discussed this matter amongst themselves as it borders on professional courtesy as amongst lawyers whether a lawyer had proper instructions to act for his client. I, therefore, had the matter stood down to the afternoon and on the return of the matter, counsels sought to proceed with the application as there was no consensus to withdraw the application.

6. The submissions in this application are largely on the aspect of the law and therefore I address them in this ruling accordingly.

7. It is the Plaintiffs’ submission that the PNGFA falls under the definition of the State pursuant to section 1 of the Attorney General (Amendment) Act 2013 which defines State as:

"State" in relation to the functions and powers of the State Solicitor, means government Departments, Provincial and Local-Level Governments, and an arm, department, agency, or instrumentality of the National Government or a Provincial Government and includes a body set up by statute or administrative act for government or official purposes;

8. The Plaintiff also submits that pursuant to sections 1(2), 10(1) and (2), section 34, section 44, and section 45 under the enabling legislation which is the Forestry Act, the functions of the Authority relate to matters of national interest, members of the board of directors of PNGFA are government departmental heads including the Provincial Administrator and the Minister for Forest’s Nominee, etc, the members of the board including the Managing Director are appointed pursuant to the Regulatory Statutory Authorities (Appointment to Certain Offices) Act 2004, the Authority is subject to Part VIII of the Public Finances (Management) Act 1995 and the PNGFA is also subject to Part VIII of the Audit Act 1989.

9. The Plaintiff also relies on Schedule 1.2(1) of the Constitution of the Independent State of PNG which defines “government body” to include a body set up by statute or administrative act for governmental or official purpose.

10. The Plaintiff relies on the case of PNG Power Ltd v Augerea [2013] PGSC 53; SC1245 (7 August 2013) where the Supreme Court said that:

“...Given these, an important and determinative test in our view to determine whether an entity is part of the State or not is the nature or kind of service and or duties and responsibilities the entity under consideration has or owes to a particular part of the country or the whole country. If the kind of service or duties and responsibilities the entity has, falls into one of the traditional critical functions and or duties and responsibilities of the State, and that entity is not operating as a private enterprise purely for profit, with all of the features of a private enterprise present, such an entity should easily qualify to be part of the State.”

11. The Plaintiffs refer the Court to the National Court case of Paliwa v Kombul [2008] PGNC 146; N3499 (26 September 2008) where Acting Justice Makail (as he then was) expressed the point that the Solicitor General is the primary advocate for the State.

12. The case of Dr Lawrence Kalinoe v Philip Kereme (2016) N6382, Justice Makail considered the point that the Attorney General has the mandate pursuant to section 7(1) of the Attorney General’s Act to approve payments as to legal costs of lawyers within or outside the country and may instruct or brief out matters to lawyers outside the office of the Solicitor General.

13. It is the Plaintiff’s submission that taking into account the case of Yama Security Services Ltd v National Capital District Commission [2016] PGNC 270; N6469 (2 March 2016) where the Court found that the Solicitor General is the official lawyer of the State and that he ought to include or incorporate all statutory agencies and instrumentalities of the State, the engagement of law firms outside the office of the Solicitor General should be the subject of approval from the Attorney General pursuant to section 7(1) of the Attorney General’s Act. The Plaintiff claims therefore that the PNGFA is a body which is the State and therefore that brief out instructions to Emmanuel Lawyers should be through the Attorney General’s office.

14. Mr. Isaac of Emmanuel Lawyers has raised the issue that the Plaintiffs do not have standing to question whether they have instructions from the Attorney General to represent PNGFA in these proceedings.

Do the Plaintiff’s have standing to challenge whether Emmanuel Lawyers have instructions from the Attorney General to act for PNGFA in this matter?

15. Mr. Isaac relies on section 5 of the Forestry Act which gives PNGFA a corporate status having the capacity to sue and be sued as a corporation. As a corporation and or an Authority, PNGFA is autonomous as far as how it carries on business and manages its affairs and therefore it should not be subject to the Attorney General’s Act to seek it’s approval to represent the PNGFA and instructions from the PNFA to his law firm is sufficient for him to represent PNGFA.

16. There is evidence of a letter from the Managing Director of PNGFA Mr. John Mosoro to Emmanuel Lawyers instructing them to appear in this matter and various other matters named involving PNGFA. It is on the basis of those instructions that Emmanuel Lawyers have filed appearances and have acted for PNGFA in this proceeding.

17. It is Mr. Isaacs’s submission that the Forestry Act does not make reference to the Attorney General’s Act in a similar vein that it makes reference to the Public Finance Management Act in section 44 and therefore, as the Forestry Act sits in the same hierarchy as the Attorney General’s Act as they are both statutes under section 9( c) of the Constitution, the approval of the Attorney General is not required for Emmanuel Lawyers to act for PNGFA.

18. Mr. Isaac has referred the Court to several cases such as National Agriculture Quarantine & Inspection & Inspection Authority v Tetaga [2009] PGNC 220; N4030, Bob Kaupa v Kala Aufa & Ors (2015) PGNC 262, and the case of Peter Bire & Ors v Philip Kereme and Ors (2016) PGNC 93 on whether employees of an Authority being the NAQIA and staff of the National Parliament, etc, whether they were subject to the powers of the Public Service Commission in reviewing their employment wherein the Court has said that the Public Service Commission had no power to review their employments as the governing legislation on these entities did not give powers to the Public Service Commission.

19. What comes to mind is the full extent of what state entity which has been created by statute as giving it corporate status is whether it has full autonomy to manage its’ own affairs not only the capacity to be sued but autonomy in the full sense from management decision making to autonomy be it in the acquisition of assets and financial decision-making powers which includes the autonomy to engage legal representation outside of the authority of the Attorney General.

20. Mr. Isaac has referred the Court to the Supreme Court case of Singat v Commissioner of Police [2008] PGSC 10; SC910 (2 May 2008) wherein the Supreme Court held that the Solicitor General has the ostensible authority to act for the State and that the only party who can question such an authority is the Attorney General and not a third party as it draws the connection as between a solicitor and his client as principal and agent and therefore any other third parties should be excluded to raise issues of representation. This case points to the duty of lawyers under the Lawyers Act and the Professional Conduct Rules for the duty of lawyers to act with instructions. The Supreme Court, therefore, ruled that the Solicitor General was obliged to accept instructions from the Attorney General and that the Attorney General had the prerogative to issue proceedings in the name of the State.

21. Mr. Isaac makes reference to the cases of Oneil v Eliakim (2016) SC 1522, Marape v O’Neil (2016) SC 1487 for the authority that all public servants in their official capacities cannot engage private lawyers without instructions from the Attorney General.

22. The Supreme Court in Valu v Ngangan [2018] PGSC 62; SC1723 (30 October 2018) considered a matter involving the Konebada Petroleum Park Authority who had instructed a law firm to act for them and whether it should have sought the approval of the Attorney General being that it was an Authority pursuant to the designated legislation that created the Authority. The Supreme Court considered section 10 of the Public Money Management Regularisation Act, 2017 (“PMMR Act”) and held that the law firm concerned did not have the approval of the Attorney General to act for the Authority.

23. Section 10 of the Public Money Management Regularisation Act, 2017 (“PMMR Act”) is in the following terms:

“10. Legal representation of public and statutory bodies.

(1) For the purposes of this Act, a public or statutory body shall not engage legal representation, commence any action or other proceeding in any court or tribunal or procure or contract for legal representation for any purpose other than in compliance with the Attorney-General Act 1989.

(2) Prior to the Attorney-General exercising his powers pursuant to Section 7 of the Attorney-General Act 1989 —

(a) the State Solicitor shall certify to the Attorney-General whether the lawyers to be appointed are, in the opinion of the State Solicitor, experienced and with sufficient professional competence in the area of law to represent a public or statutory body; and

(b) the Attorney-General shall satisfy himself that all procurement laws in Papua New Guinea have been complied with to the extent necessary for him to exercise his powers.

(3) Legal representatives of public and statutory bodies shall not receive or charge for any fees or disbursements other than taxed party-party or solicitor-client costs on the scale of fees of the appropriate Court.

(4) For the purposes of this section and Section 11 —

"public body" means an agency which is part of the State Services established under Part VII of the Constitution and includes a Provincial Government or Local-level Government established under the Organic Law on Provincial Governments and Local-level Government; and

"statutory body" means a body, authority or instrumentality (incorporated or unincorporated) established under an Act of the Parliament or howsoever otherwise for governmental or official purposes, including a subsidiary statutory body that is not a public body, and includes a body, authority or instrumentality (incorporated or unincorporated) established by a Provincial Government or Local-level Government or their subsidiary statutory bodies that are not public bodies.”

24. Mr. Isaac has drawn the Court’s attention to the case of Reference by the Ombudsman Commission Pursuant to Constitution, Section 19(1), Re Public Money Management Regularisation Act 2017 [2020] PGSC 43; SC1944 (27 May 2020) where the Supreme Court has held that the Public Money Management Regularisation Act is unconstitutional, invalid and ineffective in its entirety.

25. It, therefore, renders that the decision in Valu v Ngangan is void as it was based on section 10 of the Public Money Management Regularisation Act.

26. The question of whether a third party has standing to raise the issue of legal representation by law firms for State entities other than the Attorney General and or the Solicitor General as principal and agent as submitted by Mr. Baida of the Plaintiffs is that Mr. Baida relied on the Valu v Ngangan case that the question was raised by a party to the proceeding being the Respondent as the Secretary for Finance. Mr. Baida’s clients are not an agent of the State, the Secretary of Finance is an official capacity of someone employed by the State whose interest is vested in the Attorney General, and therefore to my mind, the Secretary of Finance is allowed to raise the question as to representation and whether it was approved by the Attorney General though that was not an issue before the Supreme Court.

27. I am of the view that the Plaintiffs have no standing to raise the question of whether Emmanuel Lawyers sought approval from the Attorney General before acting for PNGFA as in the relationship of a lawyer and client as is akin to principal and agent, the Plaintiffs are third parties and are strangers to such a relationship. Similar to a judicial review application that concerns standing, whether or not Emmanuel Lawyers seek approval from the Attorney General or not does not affect the Plaintiffs in any way. The objection delays the Plaintiff’s case and impedes or handicaps PNGFA to stand on their feet to defend the claim however it does nothing to improve the Plaintiff’s case. As counsels in the profession of law, clients come and go, the courtesy lawyers show to themselves in their due diligence to be slow to attack another lawyer whether they have instructions or not to act for their various clients be it the State and or any other entity or legal person should be taken seriously. The business of litigation is to ensure litigants are adequately represented by lawyers who can assist them in their case and lawyers are therefore obliged to act only upon instructions. Emmanuel Lawyers have produced evidence that they were instructed by the Managing Director of the PNGFA. That to my mind says that the Managing Director of PNGFA pursuant to section 35 of the Forestry Act has ostensible authority to act on behalf of the board of directors and his conduct to instruct Emmanuel Lawyers, therefore, binds the board of PNGFA.

28. Does the Court have to go any further to look at whether the PNGFA is the State? To my mind, the PNGFA as a creature of the Forestry Act maybe subject to the control of the State where the Forestry Act expressly provides for in terms of its functions, the composition of its board, and that it is subjected to the Public Finances (Management) Act and the Audit Act, however, it is given autonomy in the very nature of it being a corporation. Legal fees incurred by the PNGFA are the responsibility of the Authority or the entity managed by a board. The question a third party raises as to the power of a board to appoint and engage its’ own lawyers unless expressly prohibited by a provision in the Forestry Act goes against the recognition of that Authority as being autonomous and being a corporation having a legal persona to stand on its’ own and defend itself, to engage the lawyer to its’ own choosing in the conduct of its’ business that the price for such a decision is on the shoulders of that entity squarely again, unless, there is express provision in the governing legislation that controls exclusive engagement of the Attorney General over PNGFA or such an entity.

29. To my mind, the PNGFA can be the State, an organization of the state, an extension of the State for the purpose of section 1 of the Attorney General (Amendment) Act 2013, it is the State Solicitor who is the lawyer for the government Departments, Provincial and Local-level Governments and an arm, department, agency or instrumentality of the National Government or a Provincial Government and includes a body set up by statute or administrative act for government or official purposes however when it comes to legal representation of an Authority which has a corporate nature and has a certain level of autonomy to run and manage its’ own affairs as a corporation albeit for the benefit of the State for the purpose of carrying out a function of the State, that entity as a corporation to my mind has the autonomy to manage its’ affairs including decisions as to legal representation unless it is expressly precluded in the enabling legislation which is the Forestry Act. In the absence of that, the PNGFA as a State corporation with autonomy as to the management of its’ affairs and subject to express control by the State through express provisions in the law, the PNGFA to my mind is at liberty to engage its’ own lawyers unless they have been instructed to otherwise from the Attorney General. There is no evidence that they are prevented by the Attorney General’s office and to ensure the swift management of their affairs, I am of the view that the PNGFA is allowed to engage its’ own lawyers without an approval from the Attorney General as a corporation having a legal persona in law.

30. I, therefore, make the following orders:

1. The Plaintiffs’ Notice of Motion seeking to remove Emmanuel Lawyers from representing PNGFA is refused.
2. The Plaintiffs shall meet the First Defendant’s costs of the application to be taxed if not agreed.
   

Orders accordingly.
_____________________________________________________________
Nelson Lawyers: Lawyers for the Plaintiff
Emmanuel Lawyers: Lawyers for the First Defendant