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Karridale Ltd v Kulawood Ltd [2023] PGNC 269; N10465 (6 September 2023)

N10465

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 288 OF 2013

KARRIDALE LIMITED
Plaintiff

V

KULAWOOD LIMITED
First Defendant

JOHN MOSORO, MANAGING DIRECTOR,
NATIONAL FOREST SERVICE
Second Defendant

NATIONAL FOREST SERVICE
Third Defendant

FAITH BARTON, CHAIRMAN, NATIONAL FOREST BOARD
Fourth Defendant

PAPUA NEW GUINEA FOREST AUTHORITY
Fifth Defendant

Waigani: Cannings J
2023: 1^st & 6^th September

PRACTICE AND PROCEDURE – motion for summary dismissal of proceedings on ground of abuse of process – National Court Rules, Order 8 rule 27(1), Order 12, rule 40(1) – whether statement of claim is so embarrassing it is an abuse of process – whether plaintiff has sufficient standing to warrant continuation of proceedings – whether proceedings ought to have been commenced as judicial review proceedings under National Court Rules, Order 16 – whether statement of claim discloses reasonable cause of action.

INJUNCTIONS – whether interim injunction granted ex parte should continue – whether relevant facts were not disclosed to the Court prior to granting interim injunction – whether injunction granted on erroneous legal basis – whether damages a sufficient remedy.

The plaintiff is a registered forest industry participant which has held since 2013 a series of 12-month timber authorities granted under the Forestry Act authorising harvesting of timber and other forest operations in specified parts of a province. The first defendant is also a registered forest industry participant which in 2018 was granted a forest clearing authority of 20 years duration under the Forestry Act authorising large scale forest clearing for agricultural purposes in specified parts of the same province. The plaintiff in 2023 commenced proceedings by writ of summons against the first defendant and four other defendants; those other four defendants being so closely connected that they can be regarded as the Papua New Guinea Forest Authority (PNGFA) defendants. The plaintiff sought declarations that the forest clearing authority is null and void and that the first defendant has been conducting forest industry activities unlawfully and orders that income earned by the first defendant from timber exports be paid to the plaintiff and that the first defendant cease all its operations relying on the unlawful forest clearing authority and that its assets be frozen. The plaintiff also claims general and special damages. The first defendant filed a notice of motion seeking summary dismissal of the proceedings for being an abuse of process. The first defendant claimed that in the event its motion for summary dismissal failed, an interim injunction granted ex parte by the Court should not be continued. The Court heard the motion for summary dismissal and the application to set aside the interim injunction.

Held:

(1) The statement of claim was confusing and convoluted but not so embarrassing that it ought to be struck out; and, though defective, was not so deficient as to fail to disclose a reasonable cause of action.

(2) It is not so clear at this stage of the proceedings that the plaintiff lacks standing to maintain the proceedings.

(3) The proceedings include a claim for damages for the tort of negligence and therefore was properly commenced by writ of summons.

(4) It was not proven that the proceedings are an abuse of process to the extent warranting the exercise of discretion to summarily dismiss the proceedings.

(5) As to the interim injunction, it was the case that material facts were not disclosed by the plaintiff in applying for the injunction, so it was appropriate to set aside the injunction and replace it with another injunction which maintains the status quo and allows both the plaintiff and the first defendant to continue forest industry operations in accordance with the authorities granted to them under the Forestry Act.

Cases Cited

The following case is cited in the judgment:

Takori v Yagari (2007) SC905

Counsel

A Kimbu, for the Plaintiff
C Joseph, for the First Defendant
F Pailaea, for the Second to Fifth Defendants

6^th September 2023

1. CANNINGS J: The plaintiff, Karridale Ltd, is a registered forest industry participant which has held since 2013 a series of 12-month timber authorities granted under the Forestry Act authorising harvesting of timber and other forest operations in specified parts of Woodlark Island, Milne Bay Province.

2. The first defendant, Kulawood Ltd, is also a registered forest industry participant which in 2018 was granted a forest clearing authority of 20 years duration under the Forestry Act authorising large scale forest clearing for agricultural purposes in specified parts of Woodlark Island, Milne Bay Province.

3. The plaintiff on 12 July 2023 commenced proceedings by writ of summons against the first defendant and four other defendants; those other four defendants being so closely connected that they can be regarded as “the Papua New Guinea Forest Authority (PNGFA) defendants”. The main grievances agitated in the statement of claim are that the PNGFA negligently and unlawfully granted the first defendant’s forest clearing authority and allowed the first defendant to trespass into areas of land in which the plaintiff has lawfully harvested timber and established bases and infrastructure for its forest operations.

4. The plaintiff appears to plead a cause of action in the tort of negligence against the PNGFA defendants. It seeks the following relief:

• declarations that the forest clearing authority granted to the first defendant is null and void and that the first defendant has been conducting forest industry activities unlawfully;
  
• orders that income earned by the first defendant from timber exports be paid to the plaintiff and that the first defendant cease all its operations relying on the unlawful forest clearing authority;
  
• orders that the first defendant’s assets be frozen; and
  
• general and special damages, apparently against all defendants.
  

5. The first defendant on 28 July 2023 filed a notice of motion seeking summary dismissal of the proceedings under Order 8 rule 27(1) and Order 12 rule 40(1) of the
National Court Rules for being an abuse of process in that:

• the statement of claim contains so many vague and unsupported allegations of a confusing and convoluted nature, it is embarrassing and ought to be struck out;
  
• the plaintiff lacks standing to maintain the proceedings; and
  
• the proceedings ought to have been commenced by judicial review under Order 16 of the National Court Rules.
  

6. In the event its motion for summary dismissal fails, the first defendant seeks an order that the interim injunction granted ex parte by the Court on 13 July 2023 should not be continued.

7. This is my ruling on the first defendant’s motion for summary dismissal and its oral application to set aside the interim injunction.

SHOULD THE PROCEEDINGS BE DISMISSED AS AN ABUSE OF PROCESS?

8. I agree that the statement of claim is confusing and convoluted in large parts and that it contains a lot of opinion and is drafted in emotive terms and contains too much evidence without clearly pleading facts on which the causes of action and the prayer for relief are based.

9. However, I have seen much worse and more loosely drafted statements of claim that have survived and been able to provide a proper platform for trial. I consider this statement of claim is not so embarrassing that it ought to be struck out; and, though it is defective, it is not so deficient as to fail to disclose a reasonable cause of action.

10. I appreciate the first defendant’s argument that the plaintiff’s claim is misconceived and that the plaintiff presently has an interest in a relatively small area of land and that its interests are not affected by the first defendant’s forestry operations and therefore it lacks a sufficient interest in the legality of the first defendant’s forest clearance authority.

11. However, I consider that it is not so clear at this stage of the proceedings that the plaintiff lacks standing to maintain the proceedings.

12. Because so much of the statement of claim is focussed on the legality of the first defendant’s forest clearing authority and the decisions of the PNGFA defendants to grant that authority, it was open to the plaintiff to commence the proceedings by judicial review. However, the proceedings include a claim for damages for the tort of negligence and are therefore properly commenced by writ of summons in accordance with Order 4 rule 2(1)(a) of the National Court Rules.

13. The discretion to summarily dismiss proceedings must be exercised sparingly and with an abundance of caution (Takori v Yagari (2007) SC905).

14. I am not satisfied that the proceedings are an abuse of process to the extent warranting the exercise of discretion to summarily dismiss the proceedings. I refuse to dismiss the proceedings.

INJUNCTION

15. I am satisfied that some material facts were not disclosed to the Court by the plaintiff in applying for the interim injunction (in particular, the effect of the first defendant’s forest operations on the plaintiff’s forest operations). It is appropriate to set aside the injunction and replace it with another injunction which maintains the status quo and allows both the plaintiff and the first defendant to continue their forest industry operations in accordance with the authorities granted to them under the Forestry Act.

CONCLUSION

16. The motion for dismissal of the proceedings will be refused. The application to set aside the interim injunction is granted, subject to another injunction in more limited terms being granted. None of the parties have entirely succeeded so they will bear their own costs.

ORDER

(1) The first defendant’s application by notice of motion filed 28 July 2023 for dismissal of the proceedings is refused.

(2) The first defendant’s oral application, made at the inter partes hearing on 1 September 2023, to set aside the order of 13 July 2023 is granted in that the order of 13 July 2023 is set aside and replaced by the following, made on the own motion of the Court pursuant to s 155(4) of the Constitution:

The first defendant is restrained from undertaking any forest industry activities pursuant to its forest clearing authority No 4-01 or any other authority, licence or permit issued to it under the Forestry Act or in any way to the extent that such forest industry activities are undertaken on, or have the effect of interfering with the plaintiff’s enjoyment of, the area of land covered by timber authority 04-105 issued to the plaintiff on 29 May 2023.

(3) This proceeding will return for mention on 13 September 2023 at 1.30 pm, which shall be the return date for any notice of motion filed by any of the parties on or before 13 September 2023.

(4) The parties will bear their own costs of and incidental to the hearing of 1 September 2023

__________________________________________________________________
Kimbu & Associates Lawyers: Lawyers for the Plaintiff
Ashurst Lawyers: Lawyers for the First Defendant
Chillions Lawyers: Lawyers for the Second to Fifth Defendants