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Macwilliam v Nobiam [2023] PGNC 148; N10344 (21 June 2023)

N10344

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA No. 22 OF 2022

BETWEEN:
Ruari MacWilliam as the General Manager for Ramu Agri Industries Ltd
First Appellant

AND:
Ramu Agri Industries Ltd
Second Appellant

AND:
SAILAS NOBIAM for himself and on behalf of Kaigulan Incorporates Land Group Inc
First Respondent

AND:
Kaigulan Incorporated Land Group Inc.
Second Respondent

Madang: Narokobi, J
2023: 21^st June

DISTRICT COURT APPEAL – Competency of Appeal – Leave Obtained to File Appeal Out of Time and Dispense with other Requirements of the District Court Act – Appeal Competent.

DISTRICT COURT APPEAL – errors of law – substantive orders made in interlocutory manner – proceedings and orders in the District Court breach s59 of the Constitution and an abuse of process.

DISTRICT COURT APPEAL – errors of law – National Court Order in conflict with District Court Orders – District Court orders an abuse of process.

This is an appeal against a decision of the District Court in Ramu, Madang Province, where the District Court ordered the Appellants to pay compensation for the use of the land which houses the business operations of the Second Appellant.

Held:

(1) Leave was sought to file Appeal out of time and dispense with other requirements of the District Court Act in relation to the appeal and therefore the Appeal was competent.

(2) Substantive orders were made on the day the proceedings were filed. Proceedings were determined without giving an opportunity to the other side to be heard. Section 59 of the Constitution obliges courts and bodies deciding on the rights and interests of persons to observe the principles of natural justice. On the face of the proceedings itself, the learned magistrate erred in law. He did not afford the Appellants an opportunity to be heard.

(3) Substantive orders cannot be made in an interlocutory manner (Momis v Attorney-General [2000] PNGLR 109). The fact that this was what happened in this case was an abuse of court process, and therefore the orders made should be set aside.

(4) The effect of the District Court order was contrary to the National Court order on the same subject matter and therefore compromised the due administration of justice, and goes against a foundational principle of justice in this country, that is the finality of litigation.

(5) Appeal was upheld, the proceedings in the District Court were dismissed and the Respondents and their lawyer in the District Court ordered to pay the Appellants costs on a full indemnity basis.

Cases Cited

Momis v Attorney-General [2000] PNGLR 109

Statutes Cited
Constitution
District Court Act

Counsel
Mr. E. Isaac, for the Appellants
Mr. S. Togo, for the Respondents

DECISION

21^st June, 2023

1. NAROKOBI J: This is an appeal against a decision of the District Court in Ramu, Madang Province, where the District Court ordered the Appellants to pay compensation for the use of the land which houses the business operations of the Second Appellant.
   

Introduction

2. The Respondents are complainants in the District Court proceedings subject of appeal (DC No. 1 of 2022) and the Appellants herein are the Defendants in the proceedings.
   
3. The Respondents claimed in the District Court that they are the lawful landowners of the customary land over which the Second Appellant grows and harvests sugarcanes and should be paid all the benefits arising from the land subject of dispute.
   
4. The benefits arising from the customary land subject of dispute is held by the Second Appellant in trust for all the customary landowners of the land because different landowning groups have claimed interest in the subject land which has resulted in numerous lengthy litigation.
   
5. The Respondents claimed in the District Court that they are the entity who should be paid all the money to the exclusion of all other competing interests.
   

Background

6. There are three large groups of claimants to the royalties which is currently held in trust by the Second Appellant. They are the Mari People’s Group, Kafe People’s Clan and Rai Coast People’s representatives.
   
7. The Respondents interest is part of a larger interests in which various bigger landowning groups have been recognized. The Respondents claim to represent Bopirumpun, Bumbu and Sangkian villages in their complaint. These are villages in the Mari People’s group.
   
8. Opposing landowning groups and factions took each other to Court for interests relating to the subject customary land for some 20 odd years. This includes litigation in the Local-Land Courts and Provincial Land Court under the Land Dispute Settlement Act since the lands the subject of dispute are customary land.
   
9. The disputes relating to the customary land the subject of the present proceedings came to the National Court through its review jurisdiction in an application for review from a decision of the Provincial Land Court. The judicial review proceeding was styled OS JR No. 694 of 2013.
   
10. The National Court consisting of His Honour Cannings J, noting the lengthy litigation history of the disputed lands and the need to resolving the issues expeditiously in the interests of all parties, ordered the parties to go to mediation and the parties mediated the matter, facilitated by the Appellants. His Honour Kandakasi DCJ was the mediator.
    
11. On 11 September 2016, a mediation agreement was signed by all parties through a mediation chaired by the Deputy Chief Justice Kandakasi (See Mediation Agreement on pg. 98-132 of the Appeal Book (AB)).
    
12. All interested parties attended and executed that mediation agreement except the Respondents. The mediation agreement was challenged by a party who did not sign the mediation agreement. The ground of challenge was that they did not consent to the mediated agreement.
    
13. The National Court however refused the application and endorsed the mediated agreement converting the agreement into a Court Order (See Order and Judgement of the National Court at p134 to p147 of AB).
    
14. The decision of the National Court was challenged in the Supreme Court in proceedings styled SCR No. 71 of 2018 by way of an application for review. That application for review was dismissed by the Supreme Court on 25 January 2022 (See Supreme Court decision at pgs. 149-158 of AB).
    
15. While the above Supreme Court review was on foot, the Respondents instituted proceedings OS No. 389 of 2020 against the Appellants (See the Originating Summons at pgs. 202-206 AB which was dismissed on 17 December 2020). The Court ordered that the Respondents were not to commence any further proceedings until they paid the Appellant’s costs.
    
16. After the above proceeding was dismissed, the Respondents commenced the proceeding the subject of the Appeal in the District Court, in an ex parte hearing. Orders sought by the Respondents directing the Appellants herein to pay all the monies (proceeds of the customary land) to them was then made by the District Court.
    

District Court Proceedings

17. The nature of the proceedings in the District Court is seen from the Complaint, filed on 11 February 2022. It states:
    

Kaigulan Incorporated Land Group is the holder or is in possession of a Certificate of Recognition No. 1402 comprises of Bopirumpun, Bumbu and Sangkian villages in Usino/Budi/Gama Local Level Government is customary owner of 15,450 hectares of land referred to by Ramu Agri Industries Ltd as Outlying Areas.

THEREFORE, THE COMPLAINANT SEEKS THE FOLLOWING ORDERS,

1. That pursuant to s.155(4) of the Constitution of PNG and s.2 of the Land Groups Incorporation (Amendment) Act and Customs & Recognition Act the Complainant is and a landowner and represents the legitimate owner who transferred the native land to Colonial Administration pursuant to Transfer Instrument dated 26^th June 1956 are customary owners of outlying arears to date under the customary land known as Gusap Surinam land Gusap-Surinam Milinch of Dumpu Fourmil of Madang Sketch Plan No: DMP 139in total of 15,450ha.
   
2. And the Mediation between Kaigulan Tribes and Markham Tribes is evidence in the Report of the Investigation by Patrol Officer namely Haviland of Kaiapit Patrol Post and A.D. O Douglas Parish of Madang in May/June period of 1957.
   
3. Including those said portions, sections and allotment transferred to Colonial Administration pending expiration of the lease agreement to be converted into State Lease pursuant to the Land Registration Act 1996.
   
4. However, prior to renewal or conversation to state Lease proper land conveyance processes, procedures and laws in relation compliance including contempt of court orders pursuant to s.155(4) of the Constitution of PNG and s.22 of the District Court Act.
   
5. Any and further Orders this Courts deems fit.
   
18. There were two orders made by the District Court in Ramu which the aggrieves the appellants. The first order made on 11 February 2022 ex parte, which is also the date the proceedings were filed in the District Court is in the following terms:
    
    1. The Leave is granted to disperse with services of the complainant, Summons To A Person Upon Complaint, Under Taking As To Damages, Notice of Motion and Affidavit in Support of 13^th January 2022 Pursuant to Section 155 (4) of the Constitution of PNG and Section 22 of the District Courts Act.
       
    2. That the Application be heard ex parte Pursuant o Section 155 (4) of the Constitution of PNG and Section 22 of the District Court Act.
       
    3. That Pursuant to Section 2 of the Land Group Incorporation (Amended) Act section 155 (4) of the Constitution of the Independent State of Papua New Guinea and Section 22 of the District Court Act all cane monies due to the land owners from Gusap to Surinam, Milinch of Dumpu and Fourmil of Madang ILG Sketch Plan No. MDP/139 which are held by the second defendant be now released and paid to the complainant forthwith.
       
    4. Incidental costs such as airplane tickets, hire of car and accommodation be awarded to the complainants Pursuant to Section 155 (4) of the Constitution of PNG and Section 24 of the District Court Act.
       
19. After the entry of these orders, the appellants attempted to set aside the order. They went to the same court. After hearing both sides the learned District Court magistrate refused the application, and ordered on 20 May 2022, that:
    
    1. The defendants Notice of Motion filed 25/02/2022 seeking to set aside ex parte orders this court issued on the 11/02/2022 in favour of the complainants is hereby refused.
    2. In the end, orders this court made on the 11/02/2022 are hereby affirmed.
    3. Defendants shall pay the cost of the proceedings, if not agreed, to be taxed.
    4. Time for the entry of these orders are abridged to the date of settlement of the orders which shall eventuate forthwith.
       

The Appeal

20. The Appellants now appeal the orders of 20 May 2022. An appeal was filed on 22 June 2022. The following orders were obtained in relation to the Appeal:
    
    1. Pursuant to section 231 of the District Court Act, Order 18 Rule 5 (5) (c) of the National Court Rules and section 155 (4) of the Constitution:
       
       1. The requirements for the Appellants to deliver a copy of the Notice of Appeal to the Registrar of the National Court and then Respondents within a month from the date of decision, subject to appeal, pursuant to section 221 (2) of the District Court Act is dispensed with or waived and the copies filed with the National Court Registry are deemed to be properly filed.
          
       2. Any condition precedent of the Appellant’s right to appeal, if not complied with, are dispensed with or waived; and
          
       3. The appeal is deemed to be properly before this Honourable Court for its determination.
          
    2. Pursuant to sections 224 (1) and 225 (1) of the District Court Act, the Clerk of the District Court forthwith undertake the duties required of him/her under these provisions and file an affidavit to that effect within 7 days.
       
    3. If the Clerk had complied with his duties under section 225 (1) of the District Court, the Magistrate is hereby directed to comply with his duties under section 225 (2) of the District Court Act.
       
    4. Pursuant to the Court’s inherent jurisdiction to control its proceedings under section 155(4) of the Constitution, the District Court Orders of 20 May 2022 (subject to appeal) are stayed from enforcement until this appeal is determined.
       
    5. The matter will be listed for Directions Hearing after terms 2 and 3 of this order are complied with.
       
    6. No orders as to costs.
       
    7. Time for the entry of this order is abridged.
       
21. These orders were obtained as the Appellants had trouble receiving cooperation from the District Court clerk in Ramu to lodge their appeal.
    
22. The Appeal grounds filed by the Appellants are as follows:
    
    1. The Learned Magistrate erred in Law in not dismissing the entire proceedings as the proceedings was clearly an abuse of Court process as can be noted from the Complaint, Summons To A Person Upon Complaint and Supporting Affidavits filed by the Respondents and the Appellants herein in that:
       
       1. The proceedings concerned interests in and over customary land over which the District Court has no jurisdiction;
          
       2. The subject matter of litigation by the Respondents, was with respect to customary land and interests over that customary land which was already covered by a decision/order of the National Court in proceedings OS JR No.694 of 2013 whereby the National Court sanctioned the Mediation Agreement reached by customary landowning groups regarding the land subject of litigation herein which have been converted into an order of the National Court which sets out how the benefits from the subject customary land should be distributed between all landowning parties.
          
       3. The Respondents did not obtain leave of the National Court prior to commencing the proceedings at the District Court as the National Court in proceedings OS No. 389 of 2020 had restricted the Respondents from filing proceedings regarding the same issue unless the Appellants’ costs were paid by them.
          
       4. The orders sought and granted by the District Court are in conflict with the existing orders made by the National Court in proceedings OS JR No. 694 of 2013.
          
    2. The Court erred in Law in failing to hold that the Ex Parte order issued by the Court on 11 February 2022 was made irregularly and in breach of principles of law in that:
       
       1. The Notice of Motion filed by the Respondents on 11th February 2022 sought orders which were substantive in nature and also in terms of mandatory injunction order which the Court therefore ought not to have granted on 11th Fbruary7 2022;
          
       2. The evidence revealed that in applying for the ex parte orders on 11 February 2022, the Respondents failed to disclose all material facts of the case to the Court when the law required them to make full disclosure of same to the Court;
          
       3. There was no urgency demonstrated by the Affidavits filed by the Respondents in support of the Notice of Motion filed 11 February 2022 and therefore service ought not to have been dispensed with.
          
       4. Given that the ex parte order was made irregularly the Appellants were not required to satisfy the requirements of law with respect to setting aside of regular ex parte orders.
          
    3. The Learned Magistrate erred in Law in misapplying the principles of law with relation to setting aside of irregularly entered ex parte orders in the circumstances of the case in that:
       
       1. The application made by Appellants was to set aside an ex parte order that was made by the Court clearly irregularly;
          
       2. There is no requirement at law for the Appellants to attach a draft Defence to their Affidavits in Support to demonstrate a Defence on merits.
          
       3. The Court confused itself with the principles with relation to an application to file Defence out of time and an application to set aside an ex parte order made irregularly.
          
    4. The Learned Magistrate erred in Law, particularly, failing to take into account the principles of natural justice in its ruling of 20 May 2022 in that:
       
       1. The Learnt Magistrate did not address the submissions by the Appellants in their oral and written submission for dismissal of the entire proceedings and the grounds for same founded on Court having no jurisdiction and the proceedings being an abuse of Court process.
          
       2. The Learnt Magistrate did not address all other submissions made by the Appellants however concentrated entirely on the Appellants’ application to set aside the Order although that submission was made as an alternative should the matter survive the dismissal application which went were jurisdiction issues that went to the heart of the proceedings.
          

Submissions

23. The Appellants submissions centered around three main areas – dismissal of proceedings, breach of natural justice and set aside of the ex parte orders.
    
24. On dismissal of proceedings the Appellants submits as follows:
    

i. The National Court decision and orders in OS JR No. 694 of 2013 already sets out how the benefits should be shared between the parties. The District Court order of 11 February 2022 is contrary to the orders of the National Court in that it directs the Appellants to pay all the monies to the Respondents thus there being a conflict of orders in which case the National Court order should prevail.

ii. The Respondents were barred from commencing proceedings against the Appellants by the orders of the Court in proceedings OS No.389 of 2020.

iii. The interests of the Respondents subject to this litigation involves interests in customary land over which the District Court have no jurisdiction; and

iv. The subject matter of dispute exceeds the civil jurisdiction of the District Court.

25. As to breach of natural justice, the appellant submits that in the District Court their application to dismiss was refused without any proper reasons provided and this is a clear breach of the principles of natural justice under s 59 of the Constitution.
    
26. For set aside of the ex parte orders, the Appellants submits that pursuant to section 25 of the District Courts Act, the ex parte orders of this Court dates 11 February 2022 and should have been set aside and in failing to do so the District Court erred because:
    
    1. There was no urgency for dispensation of service with respect to the service of that application and even summons and complaints in so far as the Affidavits filed in support are concerned.
       
    2. The Respondents failed to disclose all material facts of the case to the Court with respect to the matters OS JR No. 694 of 2013, OS No. 389 of 2020 and SCR No. 71 of 2018.
       
    3. The Notice of Motion sought orders which were substantive in nature.
       
    4. The Appellants have good defence in the merits including that the Respondents were barred from taking any action against the Appellants by an order of the Court in proceedings OS No. 389 of 2020 which would require the Respondents to seek leave of Court in the National Court prior to commencing this proceeding. And also that the proceedings concern customary land interests arising from the same.
       
27. On the other hand, the Respondents made the following submissions.
    
28. The Appeal was lodged at the National Court when it should have been lodged with the clerk of court by which the order was made – Clerk of Madang District Court. The Appeal is incompetent for that reason.
    
29. The Appeal should have been filed within one month – being 20 June 2022. It appears that the appeal was filed 7 days out of time. The Appeal is incompetent for that reason as well.
    
30. The learned magistrate did not err in law when he refused to dismiss the entire proceedings and the order of 11 February 2022 was not irregularly entered. Further that the learned magistrate did not misapply the law when he refused to set aside the previous orders nor did he breach the principles of natural justice.
    
31. The Respondents concludes by submitting that leave was not granted to file appeal out of time and that the Appeal book was not settled and signed by the Clerk of Court.
    

Considerations

32. When deliberating on appeals from the District Courts, the National Court is guided by s 230 of the District Court Act which states:
    

230. Power of National Court on Appeal.

(1) On the hearing of an appeal, the National Court shall inquire into the matter, and may–

(a) adjourn the hearing from time to time; and

(b) mitigate or increase a penalty or fine; and

(c) affirm, quash or vary the conviction, order or adjudication appealed from, or substitute or make a conviction, order or adjudication which ought, on the evidence before the National Court, to have been made by a District Court; and

(d) remit the case for hearing or for further hearing before the Court which made the conviction, order or adjudication or any other competent court; and

(e) exercise a power that the Court that made the conviction, order or adjudication might have exercised; and

(f) make such further or other order as to costs or otherwise as the case requires.

(2) An appeal shall be allowed only if it appears to the National Court that there has been a substantial miscarriage of justice.

33. Let me deal with the submissions of the Respondents first as they touch on the competency of the appeal. In my view the orders that the Appellants obtained on 22 June 2022 deals with the objections. It granted leave to the Appellants to file the appeal out of time and dispensed with the conditions attending to the appeal under relevant provisions of the District Court Act. Whilst it would have been desirable to have that order in the Appeal Book, it is an order of the Court, and I take judicial notice of it. I therefore reject the competency challenge of the Respondents.
    
34. I have had the opportunity to read the Appeal Book, and I note with concern that the learned magistrate made substantive orders on the day the proceedings were filed on 11 February 2022. It concluded the proceedings without giving an opportunity to the other side to be heard. Section 59 of the Constitution obliges courts and bodies deciding on the rights and interests of persons to observe the principles of natural justice. On the face of the proceedings itself, the learned magistrate erred in law. He did not afford the Appellants an opportunity to be heard, nor did he provide reasons for his decision.
    
35. Following from this finding, it is now a well-established principle of law in Papua New Guinea, that substantive proceedings cannot be made in an interlocutory manner (Momis v Attorney-General [2000] PNGLR 109). The fact that this was what happened in this case was an abuse of court process, and therefore the orders made should be set aside.
    
36. In my view the Appellants’ application to dismiss should have been entertained, and upheld. Clearly the proceedings filed were an abuse of process for the reasons that the Appellants submits. The mediation agreement, the National Court decision that converted the mediated agreement to a court order, and the dismissal of the Supreme Court appeal in the form of a review, meant that the proceedings instituted by the Respondents resulting in the District Court order of 11 February 2022 were in conflict with the decision of the National Court. The District Court should never have entertained the claim of the Respondents and dismissed it outright. The District Court erred in law, and committed a miscarriage of justice when it failed to take into account these relevant facts before it refused the orders sought by the Appellants in their application to set aside and dismiss the proceedings.
    
37. The effect of the District Court order compromised the due administration of justice, and goes against a foundational principle of justice in this country, that is the finality of litigation. I do not know whether the Respondents were assisted by lawyers or not, but this kind of practice should never be entertained by our courts. The parties were duty bound to bring to the attention of the court all relevant and related proceedings to the attention of the District Court, as to the current state of the legal proceedings relating to the claims for benefits, so that confusion is avoided. Parties who stand to benefit from the fruits of their judgement have been unnecessarily affected by this proceeding which they are not a party to.
    

Orders

38. Taking all these factors into account, I am persuaded by the Appellants that I should make the orders they seek. The orders I make are therefore as follows:
    
    1. The ex parte order dated 11 February 2022 issued by the District Court and confirmed on 20 May 2022 is dissolved forthwith.
    2. The entire proceedings before the District Court is dismissed for being an abuse of Court process.
    3. The Respondents and their lawyer Mr. Glen Jerry be ordered to pay the costs of the District Court proceedings and this appeal on full indemnity basis.
    4. Matter is determined and the file is closed.
    5. Time for the entry of these orders is abridged.
       

Judgment and orders accordingly.

Emmanuel Lawyers: Lawyers for the Appellants
Daniels and Associate Lawyers: Lawyers for the Respondents