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Twinza Oil (PNG) Ltd v Manau [2023] PGNC 189; N10236 (17 April 2023)

N10236

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS (JR) NO. 41 OF 2022


TWINZA OIL (PNG) LTD
Plaintiff


V
DAVID MANAU IN HIS CAPACITYAS DIRECTOR UNDER OIL & GAS ACT 1998
First Defendant


AND
HON. KERENGA KUA IN HIS CAPACITY AS MINISTER FOR PETROLEUM
Second Defendant


AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant


Waigani: Miviri J
2023: 13th & 17th April


PRACTICE & PROCEDURE – Judicial Review & appeals – Substantive Notice of Motion – Whether Director Exceeded Authority Under Section 54 (2) Oil & Gas Act 1998– Whether in asking for Additional Information Required of Plaintiff by Instrument pursuant to Section 54 (2) Oil & Gas Act 1998 Acted Ultra Vires – Whether Instrument issued pursuant to Section 54 (2) Exceeded Authority thereunder – Whether Judicial Review Lies – Evidence Process In Grant of Petroleum Development License – Process Started & In complete – No Decision – No Ultra Vires – No Excess of Authority – No Declaration – No Certiorari – No Judicial Review – Motion Refused – Cost Follow Event.


PRACTICE & PROCEDURE – Judicial Review & appeals – Plaintiff Supplied Response to Instrument – Whether Section 54 (2) Oil & Gas Act 1998 Satisfied –Part of Process in Grant of Petroleum Development Licence Sections 53 (1), 54 (2), 56C – Whether Judicial Review Lies – Whether abuse of process – Notice of Motion First Defendant – Order 16 rule 13 (13) (2) (a) & Order 12 Rule 40 (1) (a) & (c) NCR – Whether Reasonable Cause of Action Disclosed – Abuse of Process – Balance discharged – Motion Granted – Proceedings Dismissed as abuse of Process – Costs Follow Event against the Plaintiff in Favour of Defendants.


Cases Cited:
Bluewater International Limited v Mumu [2019] PGSC 41; SC1798
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223
Elema v Pacific MMI Insurance Ltd [2011] PGSC 9; SC1114
Kilepak v Kaivovo, Secretary Department of East New Britain [2003] PGNC 91; N2402
Kapal, The State v [1987] PNGLR 417
Makeng v Timbers (PNG) Limited [2008] PGNC 78; N3317
Kekedo v Burns Philip (PNG) Ltd [1988-89] PNGLR 122
Wolutou Land Group Incorporated v Pok [2021] PGNC 290; N8998
Kimas v Boera Development Corporation Ltd [2012] PGSC 8; SC1172
Innovest Ltd v Pruaitch [2014] PGNC 288; N5949
Wartoto v State [2015] PGSC 1; SC1411
Pruaitch v Manek [2011] PGSC 67; SC1093
Telikom (PNG) Ltd v Rava [2018] PGSC 39; SC1694
Takori v Yagari [2007] PGSC 48; SC905


Counsel:
A. Mana & J. Mesa, for Plaintiff
J. Holingu, for First Defendants
S. Tongela, for Second Defendant
R. Uware, for Third Defendant


DECISION

17th April, 2023

  1. MIVIRI, J: This is the ruling on the Plaintiff’s substantive notice of motion of the 09th May 2022 pursuant to Order 16 Rule 1 and Order 16 Rule 5 of the National Court Rules, and the inherent jurisdiction of the Court pursuant to section 155 (4) of the Constitution praying for:
  2. Declaration that the decision of the First Defendant of the 07th April 2022 published under cover of letter dated 07th April 2022, issuing a purported Instrument under section 54 (2) of the Oil and Gas Act 1998, by the Director requiring Twinza Oil (PNG) Limited to furnish additional information and such proposals (in addition to or by way of Alteration to furnished proposals) in connection with application for petroleum Development License No. (APDL 14) (the decision) is null and void ab initio, and of no effect.
  3. Further, pursuant to Order 16 Rules 1, 5, 9 (3) of the National Court Rules and also section 155 (4) of the Constitution that an order in the nature of certiorari be granted to remove into Court and quash that decision.
  4. Yet Further, pursuant to Order 16 Rules 1, & 5, of the National Court Rules and the inherent powers of the Court pursuant to Section 155 (4) of the Constitution that it be declared that the subject Instrument is null and void ab initio and of no effect.
  5. Yet further, pursuant to Order 16 Rules 13 (14) and Order 12 Rule 1 of the National Court Rules, and the inherent powers of the Court pursuant to section 155 (4) of the Constitution, that the Instrument purportedly given by the Director on the 07th April 2022 and its operation pursuant to section 54 of the Oil and Gas Act 1998 are permanently stayed.
  6. And that the Defendants pay the Plaintiff’s costs of and incidental to the proceedings. Any other orders as discretion by the Court. And that time be abridged to the date of the Settlement by the Registrar which shall take place forthwith.
  7. The terms of pray number two of the motion pleads “to furnish additional Information and such proposals (in addition to or by way of Alteration to furnished proposals) in connection with Application for Petroleum Development License No. 14 (APDL 14) the decision is null and void ab initio and of no effect.” It is accepted by this pleading in the way it is set out that the plaintiff accepts that he is furnishing additional information to what that has been presented already. It is in addition to, or by way of alteration to what has been furnished, which is in connection with the Application for Petroleum Development License No. 14 (APDL 14). This pleadings accepts that a process has started and as part of that process additional information is required to support the furnished proposal in connection with the Application for Petroleum Development License No. 14 (APDL 14). It will lay the foundation for what remedy will flow. The pleading lays out the foundation for the cause of action: Bluewater International Limited v Mumu [2019] PGSC 41; SC1798.
  8. That is the general theme of section 54 (2) of the Oil & Gas Act 1998 amended by which is in the following:

“Section 54. FORM OF APPLICATION FOR PETROLEUM DEVELOPMENT LICENCE.

(1) An application under Section 53–

(a) shall be in an approved form; and
(b) shall be made in an approved manner; and
(c) shall be accompanied by detailed proposals by the applicant for the construction, establishment and operation of all facilities and services for and incidental to the recovery, processing, storage and transportation of petroleum from the licence area; and
(d) may set out any other matters that the applicant wishes the Minister to consider; and
(e) shall be accompanied by the fee prescribed by Section 157.

(2) The Director may, by instrument served on the applicant, require him to furnish, within a period specified in the instrument–

(a) such further written information in connection with his application as the Director specifies in the instrument; and
(b) such proposals, in addition to or by way of alteration to any proposals that have already been furnished under Subsection (1) as the Director specifies in the instrument, including proposals relating to any of the matters referred to in Section 35(2); and
(c) such information and proposals, or information and proposals in addition to or by way of alteration to information and proposals already supplied, relating to–

(i) the acquisition by the State or its nominee of a participating interest in the petroleum project in respect of which the application is made; and
(ii) the transfer of some or all of the participating interest in an Orogen option project to the Company in accordance with the option agreement and other matters and transactions contemplated by the option agreement.”

  1. Firstly, it is an application for petroleum development license and the instrument is in addition to the application lodged, which is the accepted fact in the pleading in the way it is set out above. It is if you like more information additional to what has already been provided to help the Director prepare. And this is clear from the amendment to section 54 by Oil & Gas (Amendment) Act 2020 which reads:

“I. FORM OF APPLICATION FOR PETROLEUM DEVELOPMENT LICENCE (AMENDMENT OF SECTION 54).

Section 54 of the Principal Act is amended by -

(a) deleting the heading and replacing it with the following new heading:

"54. FORM OF APPLICATION FOR PETROLEUM DEVELOPMENT LICENCE AND PROVISION OF INFORMATION BY DIRECTOR OR MINISTER."; and

(b) repealing Subsections (2) and (3) and replacing them with the following new subsections:

"(2) The Director or the Minister may, by instrument served on the

applicant, require the applicant to furnish, within a period, or by a date, specified in the instrument -

(a) such further written information in connection with the application as the Director or the Minister specifies in the instrument; and

(b) such proposals, in addition to or by way of alteration to any proposals that have already been furnished under Subsection (1) as the Director or the Minister specifies in the instrument, including proposals relating to any of the matters referred to in Section 35(2); and

(c) such information and proposals, or information and proposals in addition to or by way of alteration to information and proposals already supplied, relating to any other matter specified by the Minister.

(3) For the purposes of this division, an application made under Section

53 will lapse if an applicant fails to comply with any instrument served on the applicant under Subsection (2) or any further instrument served on the applicant under Subsection (2) as allowed by Subsection 56(1)(b) by the date which –

(a) is the last day of the period specified in the instrument served on the applicant under Subsection (2); or

(b) if before the expiration of the period specified in the instrument served on the applicant under Subsection (2), the Minister consents in writing to any longer period, the date which is the last day of such period.".

  1. So, for all intent and purposes the Director has implemented section 54 (2) in the instrument furnished to the Plaintiff. He has called for such further information in connection with the application. Here it is APDL 14 and in so doing the language of section 54 (2) is not restrictive and the reasons are clearly set out which I detail out in the evidence for and against excerpts that I will detail out here.
  2. Firstly, in pursuing its course, the plaintiff has the following affidavits tendered into Court and relies upon them;
  3. And from these evidence relevantly the following facts are settled. That the plaintiff was granted leave for Judicial Review on the 25th April 2022, including Stay which is current at the hearing of this motion. Effectively the discretion of the Director pursuant to section 54 (2) of the Oil & Gas Act 1998 has been put on hold. And this is since that day up to the present. So, the effect is that nothing has happened to the prejudice of the plaintiff. Or against the plaintiff as a result of the operation of section 54 (2) on the part of the Director. In this regard it is important to set out the facts that will distil whether or not there is life and blood to this application for Judicial review.
  4. At the outset on the 31st October 2011, the plaintiff was granted Petroleum Prospecting License No. 328 (PPL 328) over Block 515 on Port Moresby Map Sheer SC 55 for a period of 6 years. And PPL 328 contains an area PASCA a gas condensate field (Pasca A field), approximately 95 kilometres offshore in the Gulf of Papua. And on the 30th June 2015, He lodged the application for Petroleum Development License No. 14 (APDL 14), over blocks 515 and 516, pursuant to section 53 of the Oil & Gas Act. On the 1st April 2022, the First Defendant as Director under the Oil and Gas Act 1998 served upon his Country Manager Mr. Roppe Uyassi, the Instrument dated the 1st April 2022 under a covering letter. And on the 07th April 2022 the Plaintiff received by registered post a second instrument with a covering letter from the first Defendant. This instrument superseded the earlier instrument of the 1st April 2022 and again was served in accordance with the Oil & Gas Act 1998. And was issued pursuant to section 54 (2) of the Oil & Gas Act 1998. And questions and requests within concerned a large range of matters including but not limited to:
  5. In the statement filed 21st April 2022 pursuant to Order 16 Rule 3 (3) (2) (a) Twinza says that Twinza Aussie, McRae Investments and Kerogen Capital and the Shareholders of Twinza Aussie for whom McRae Investments and Kerogen Capital hold and manage Shares:
  6. It remains fundamental that on the 1st April 2022 as part of the process, the First Defendant, being the director whose service of the Instrument in that instance was disputed because it was not affected in accordance with section 156 of that Act. And it was the plaintiff’s argument that the second instrument was invalid because the information and the proposal requested do not have any relevance to its PDL Application therefore it refused to provide the information requested.
  7. Also fundamental is the fact that on the 28th April 2022, the Plaintiff provided the information that were requested by the First Defendant via the Instrument. This is in the light of the fact that they had a stay in their favour not to divulge or heed section 54 (2) of the Act at the discretion of the Director. Here they have opted to heed and volunteer that information even in the face of a Stay they had obtained against the Director. It was in their hands to simply ignore the dictate of section 54 (2) in the discretion of the Director and await this cause of action that they had instituted. But no, they have volunteered that information by that Instrument. Particularly with the backdrop, why institute a Judicial review proceedings to declare that very instrument null and void, arguing primarily that what came out of the Instrument did not originate from the dictate of section 54 (2) of the Oil and Gas Act 1998. What the Director did was ultra vires section 54 (2). He exceeded his authority as what he did by the Instrument was not provided within the ambit of section 54 (2).
  8. Where would the hands of Justice be in the light of these facts? Is the Plaintiff prejudiced and suffers injustice given these facts? Particularly with the backdrop of the following facts undisputed by the evidence relied. In particular the affidavits of Roppe Uyassi sworn of the 13th April 2022 and 20th April 2022. The affidavit of Allan Mana of the 08th February 2023 supplements. And for our purposes here in August 2014, the Plaintiff notified the Director under the Oil & Gas Act of petroleum discovery in the Pasca A Field. To which the Minister declared on the 24th April 2015 block 515 and its adjoining block 516 to be location for the purposes of the Oil & Gas Act 1998. Following which on the 30th June 2015, the Plaintiff made the application APDL-14 over blocks 515 and 516 in heed of section 53 of the subject Act. And at that time, it made APDL-14, block 516 was the subject of a third-party Petroleum Prospecting License. That Petroleum Prospecting license lapsed, and in 2016 the Plaintiff lodged an application for its own Petroleum Prospecting License over Block 516 and other adjoining and proximate blocks. On the 09th August 2017, the plaintiff lodged an application to extend PPL 328. On 14th February 2020, the plaintiff was granted Petroleum Prospecting License No. 584 (PPL 584) over block 516 and seven other adjoining and proximate blocks.
  9. Importantly the Minister is yet to determine:
  10. And this is in light of the fact that pursuant to section 57 (9) of the Oil & Gas Act 1998, PPL 328 continues in force in respect of Block 515 until the determination of APDL-14, despite the date for the expiry of PPL 328 having now passed. And assurance was made when the plaintiff received a letter dated the 30th October 2017 from one Ms Joy Mataenge, Acting Registrar and Delegate of the Director under the Act assuring the plaintiff that PPL 328 would continue in force until the determination of APDL-14. On the 05th March 2019 the plaintiff received a letter from one Mr Lohial Nuau, Acting Secretary of the Department of Petroleum stating that the application for Petroleum Development License review process faced, “no further compliance issues”. It acknowledged that the Plaintiff’s efforts and consistency in submitting all necessary documentation required in the APDL-14 review process and stated that the Department was “ in the process of scheduling a Petroleum Advisory Board Meeting to deliberate on the APDL-14 PAB technical Brief.”
  11. On or about 12th June 2020 the plaintiff entered into negotiations with the State who were represented by the State Negotiating Team established by the National Executive Council and the Minister in relation to a Gas Agreement, by which the State would take an interest in PPL 328 and Pasca A field project. And this followed with on or about the 14th September 2020, representatives of the Plaintiff and the State executed a term sheet produced through the negotiations between the Plaintiff and the State Negotiating team. Which was subsequently revised and amended first in late 2020 and secondly on or about 06th July 2021 following further direct negotiations between both parties, state, and the plaintiff. And following the term sheet was amended on the 06th July 2021 executed by representatives of both parties. And on that day the plaintiff provided the State a revised draft Gas Agreement reflecting the terms of the executed term sheet. To date the negotiations have not resulted in a signed Gas Agreement.
  12. The converse of this evidence is that provided by David Manau firstly in the affidavit dated the 17th June 2022. He is the Secretary of the Department of Petroleum and Energy and was appointed by the Minister of Petroleum and Energy as Director under section 11 of the Oil & Gas Act 1998. He is responsible for the administration of the Act to ensure compliance with the anticipated processes under the Act. He details that process as:
  13. And that is the role detailed out that he discharges in the process. Including ensuring that all other relevant laws are complied with in the process by the applicant. These include Environmental Act 2000, Resource Contracts Fiscal Stabilization Act 2000, and the Organic Law on Provincial Governments and Local Level Governments. In his affidavit of the 3rd March 2023, he states; “To the Best of my knowledge and belief, due process has not been denied to the Plaintiff. Indeed, I made no final determination as to whether the Plaintiff had failed to comply with the Instrument.
  14. The Pasca project, which the plaintiff seeks a development license over sits 95 kilometres off the coast of Kerema in the Gulf of Papua and 93 meters below the surface of the ocean. It will be the country’s first offshore extractive resource project. It is a project of significant investment value to PNG.
  15. It is critical and in the best interest of the Country that the statutory process for the issuance of any petroleum license under the Oil and Gas Act be completed before a license is issued. I have therefore issued the Instrument consistent with the Oil and Gas Act and acted in a manner in which I believe to be in the best interest of PNG.”
  16. In his affidavit of the 30th November 2022, he states; “I am aware that the process for determining the Plaintiff's application for Petroleum Development License No. 14 (APDL 14) has yet to be completed. The Instrument, which forms the basis of the decision challenged by the Plaintiff, does not seek to reject the APDL 14 nor was it a final determination of that application.”
  17. In my view it is clearly a process designated in the grant or rejection of an application for Petroleum Development License, initiated by the director that would eventually lead to the Petroleum Advisory Board (PAB), from whom it will go to the Minister for Petroleum and Energy to make the final determination whether to grant or not of the Petroleum Development License. That has not happened and the plaintiff is still there within the process awaiting that final decision by the Minister. The Challenged instrument issued by the Director gathers the information in fulfilment of Section 54 (2) which will be compiled. After which it will be forwarded to the PAB who will make recommendation based on the material prepared by the director incorporating what has been gathered in it. That recommendation will go to the Minister who will make the ultimate decision in the matter whether a Petroleum Development License is given the applicant or not.
  18. The evidence both for and against establish that the issuing of the instrument was a part of the process to successfully get the Petroleum Development License or not for the applicant plaintiff. The decision to issue the instrument made by the director was part of that process. The decision was pending yet to be made because what the Director compiled would go to the PAB who will in turn make recommendations to the Minister who will determine ultimately whether or not a Petroleum Development License was issued to the Plaintiff or another. This acknowledgement is in the pleading of the motion which I have set out above. Clearly the plaintiff is bound by that fact and his acceding to detailing response despite the Stay he has obtained acknowledges that fact. He has not waited out the action that he has instituted. This is not saying that the director has acted in excess of his authority. Nor is it a case where he is considering irrelevant matters. That is not the pleading of the plaintiff. So Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223 would not be applicable given the facts here.
  19. By his own action he shows and accepts he has no cause of action in the motion pleaded for Judicial review. The legislative intent of section 54 (2) is express by these facts. They are clear and unambiguous and their ordinary and plain meaning is given effect to. And construing it in this regard is the fair and liberal meaning giving all the facts set out above. And in so doing I am conscious of Elema v Pacific MMI Insurance Ltd [2011] PGSC 9; SC1114. This is not the observation made nor the facts as in Kilepak v Kaivovo, Secretary Department of East New Britain [2003] PGNC 91; N2402.
  20. Because judicial review is not about the substance of the matter but the decision-making process, Kapal, The State v [1987] PNGLR 417 (21 December 1987). There is no evidence of the circumventing of the process here in the issuing of a Petroleum Development License Makeng v Timbers (PNG) Limited [2008] PGNC 78; N3317 (23rd April 2008). The plaintiff has not been affected by the decision to issue an instrument. He has been accorded the right to be heard in the process eventually to issue a Petroleum Development License. And this is given his history which I set out above in the Petroleum and Gas Development Industry. He is in the process to eventually come out to the Petroleum Development License. A decision is yet to be made and that is when the jurisdiction of the Court is invoked. Because there is no illegality, or irrationality, or procedural impropriety, or the considering of irrelevant considerations here: Kekedo v Burns Philip (PNG) Ltd [1988-89] PNGLR 122 at page 124, justifying this Court the Jurisdictional basis to accede to the motion by the Plaintiff. It is a similar situation arising out of the Oil and Gas Act that was observed by this Court in Wolutou Land Group Incorporated v Pok [2021] PGNC 290; N8998 (6 August 2021) where the Minister’s discretion under sections 169 and 170 of the Oil and Gas Act 1998 as amended, was challenged. No cause on the basis of the grounds set out above was made out and the action was dismissed.
  21. The pleadings here are not in the same as observed in Kimas v Boera Development Corporation Ltd [2012] PGSC 8; SC1172 (12 March 2012) and in what is set out in Innovest Ltd v Pruaitch [2014] PGNC 288; N5949 (17 March 2014) to warrant the hand of Justice in favour of the Plaintiff. This is not an erroneous administrative order because the Plaintiff has conceded this fact and supplied material in response to the instrument even in the face of the Stay it has obtained current pending. That to my mind shows propriety as opposed to impropriety, irrationality, or illegality on the part of the first Defendant. And the excerpts of the evidence by the First Defendant that I set out above do not see what the Plaintiff pleads.
  22. To be gauged another way this is not a case of using the process or procedure provided for by law contrary to its intended purpose, objective or proper or intended purpose or use: Wartoto v State [2015] PGSC 1; SC1411 (27 January 2015). Rather it is in my view analogous with the motion of the First Defendant of the 30th of November 2022 seeking dismissal of the proceedings pursuant to Order 16 Rule 13 (13) (2) (a) and (b), and Order 12 Rule 40 (1) (a) and (c) of the National Court Rules. The former is invoking the Judicial Review Rules to summarily dispose off the matter. The latter is using frivolity and vexatiousness where no reasonable cause of action is disclosed, and the proceedings are generally an abuse of the process of court, it may apply in any proceedings to summarily dispose of the matter as is the case here.
  23. In my view there is no impropriety in the way the motion has been pleaded by the First Defendant. He has pleaded a general provision of the rules whose application is clear; it is applied in any proceedings as it appears to the Court generally in relation to any claim for relief. And it has been refined further with the invocation of Order 16 Rule 13 (13) (2) (a) and (b) relevantly to Judicial review. The pleadings fit the evidence that is relied on here. There is in my view no error in the way that the First Defendant has pleaded here. And it is evidence that the plaintiff has conceded by his conduct set out above entailing. And in my view would be abuse of process as seen out in Pruaitch v Manek [2011] PGSC 67; SC1093 (31 March 2011). It is an abuse because the Plaintiff has obtained a Stay against the discretion of the first defendant pursuant to section 54 (2) of the Act. By that fact he has invoked the process of this Court, and now again unnecessarily. Because rather than wait out that process in court, he has supplied to the First Defendant in defiance of the Stay he has obtained, particulars relating to the discretion of Section 54 (2) to the First Defendant. It would be consistent with Telikom (PNG) Ltd v Rava [2018] PGSC 39; SC1694 (13 July 2018) as an abuse of process defined there.
  24. In my view consequently there is nothing apparent or identifiable other than to dismiss the proceedings here for Judicial review. The plaintiff has not discharged the balance to accord that. And in so doing I am conscious of Takori v Yagari [2007] PGSC 48; SC905 (28 February 2007) that no litigant should be summarily dismissed from the seat of Judgement sought without being given the right to be heard. Here by his own conduct the plaintiff has demonstrated that there is no cause for alarm to maintain the process still in Court. And the particulars of his conduct are set out above. For these reasons the motion of the first defendant is granted as pleaded.
  25. Accordingly, the formal orders of the court are:

Orders Accordingly.

__________________________________________________________________
Corr Chambers Westgarth : Lawyer for the Plaintiff/Applicant
Holingu Lawyers : Lawyer for the First Defendants.
Jema Lawyers : Lawyer for the Second Defendants
Office of the Solicitor General : Lawyer for the Third Defendants

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