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Ching v Mainland Holdings Ltd [2023] PGNC 99; N10145 (3 March 2023)

N10145

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 189 OF 2020

BETWEEN:
ERIC CHING for himself and on behalf of MONTAL CLAN of TARARAN VILLAGE
Plaintiff

AND
MAINLAND HOLDINGS LIMITED
Defendant

Lae: Dowa J
2022: 15^th July
2023: 03^rd March

PRACTICE ND PROCEDURE-proceedings incompetent for lack of representative capacity – need for potential plaintiffs be named in originating process-Order 5 Rules 3 and 13 of the National Court Rules-- application for dismissal of proceedings for disclosing no reasonable cause of action- Order 12 Rule 40 of the National Court Rules-pleadings disclose no cause action, confusion, and embarrassment -application refused for being premature.

PRACTICE AND PROCEDUR-application for leave to amend defence under Order 8 Rule 50 of the NCR-amendment necessary to determine the issues-application granted.

PRACTICE AND PROCEDURE-application to be joined as a party under Order 5 Rule 8 of the NCRs-application granted as applicant demonstrated sufficient interest in the proceedings.

Cases Cited:
Kimas v Oala (2015) SC1475
Simon Mali -v- The State (2002) SC690
Tigam Malevo v Keith Faulkner (2009) SC960
Jackson Tuwi -v- Goodman Fielder International Limited (2016) SC1500.
Katumani & Ors v Elijah Yawing & Ors (2020) N8481
Tarsie v Ramu Nico Management (MCC) Ltd (2010) N4141.

Counsel
E. Mambei, for the Plaintiff
C. Joseph, for the Defendant
E. Tienare, for Michael Steven Goecka-Applicant

RULING

03^rd March, 2023

1. DOWA J. This is the Courts ruling on two applications. The first is by one Michael Steven Geocka. The Second is by the Defendant. I will deal with the Defendant’s Motion first. The Defendant applies for leave to amend its defence and or alternatively for the dismissal of the proceedings for various reasons.
   

Defendant’ Notice of Motion

2. By Notice of Motion filed 6^th July 2022 the Defendant seeks the following orders:
   

“1. Pursuant to Order 1 Rule 7 and/or Order 4 Rule 38(1)(2) and (3) and/or Order 12 Rule 1 of the National Court Rules, the requirement for three clear days’ service of this application be dispensed with.

2. Pursuant to order 8 Rule 50 of the National Court Rules, the Defendant be granted leave to amend its Defence filed 22 February 2020 by filing an Amended Defence, a copy of which of which is attached to the affidavit of Brian Fraser sworn on 4 July 2022.
   
3. Further and/or in the alternative, pursuant to Order 12 Rule 1, Order 10 Rule 9A(15)(1)(a) and (2)(d), Order 12 Rule 40(1)(a),(b) or (c) and/or Order 8 Rule 27(1)(a), (b) or (c) and/or Order 5 Rule 3(1), Rule 8(2) and Rule 13(1) of the National Court Rules and the inherent jurisdiction of the National Court under section 155(4) of the Constitution, the Plaintiff’s Statement of Claim be struck out and the entire proceedings be dismissed.
   
4. The Plaintiff shall pay the Defendant’s costs of the incidental to the proceeding and the application, subject to previous orders for costs, on a solicitor and client basis.
   
5. Further or other orders as the Court deems appropriate.”
   

Background Facts

3. The Plaintiff is a clan leader of Montal Clan, Tararan Village, Wampar LLG, Huon District, Morobe Province. The Defendant owns and operates a poultry farm at Sasiang, adjacent to the Plaintiffs village. Since the establishment of the farm, the Defendant has in place agreement to source water from the Plaintiffs land known as Mpowai for its water needs. The Plaintiff alleges after paying rent for the years 2004 and 2005, the Defendant withheld further payments when one Geocka Steven challenged the Plaintiffs ownership of the land. The Plaintiff alleges the dispute over customary ownership was resolved by the Local Land Court in 2019. The Plaintiffs have since requested payments of the outstanding rents, but the Defendant failed and or refused to settle, resulting in the current proceedings.

Issues

4. The main issues for consideration are:
   
   1. Whether the proceedings be dismissed for various grounds set out in relief No. 3 of the Notice of Motion.
   2. Whether leave be granted to the Plaintiff to amend its Defence.
      

Law

5. Order 12 Rule 40(1) of the National Court Rules reads:

“Frivolity, etc. (13/5)

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-

• (a) No reasonable cause of action is disclosed; or
• (b) The proceedings are frivolous or vexatious; or
• (c) The proceedings are an abuse of the process of the Court,

The Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

6. The law on applications under Order 12 Rule 40(1) of the National Court Rules is settled. In the case, PNG Forest Products v State (1992) PNG LR84-85 the Court adopting some English Court phrases stated that a Court be slow and cautious in entertaining applications for dismissal of proceedings on the grounds of a party disclosing no reasonable cause of action. A Plaintiff should not be driven from the judgment seat unless the case is “unarguable” or the cause of action is “obviously and almost incontestably bad, or plainly untenable. In that case, the Court also said the Court has a discretionary power to dismiss if the proceedings are an abuse of the Court process.
   

Consideration

7. The Defendant applies for summary dismissal of the proceedings for the following reasons:
   
   1. The lack of representative capacity – pursuant to Order 5 Rules 3, 8 and 13 of the National Court Rules.
   2. Lack of jurisdiction dealing with customary land interest. Order 12 Rule 40 of the National Court Rules.
   100. Water source within boundary of Defendants Property, Portion 12, thus disclosing no reasonable cause of action – Order 12 Rule 40 of the National Court Rules.
        

Lack of Representative Capacity

8. Mr. Joseph, counsel for the defendant, submits that the Plaintiff, Eric Ching, lacks legal capacity to represent his clan in this class action. He submits that in any class action it is a requirement for a legal representative to include the names of all persons he represents to have their consent endorsed on the statement of claim and that the Plaintiff has not done that.

9. The Plaintiff opposed the application and submitted that he is the leader of the Montal clan and has the capacity to represent his clan.

10. The relevant rules dealing with representative capacity is Order 5 Rules 3 and 13 of the National Court Rules. Rules 3 and 13 read:

”3. Joint right. (8/3)

(1) Where, in any proceedings, the plaintiff claims relief to which any other person is entitled jointly with him.

(a) all persons so entitled shall be parties to the action; and

(b) any of them who do not consent to being joined as a plaintiff shall be made a defendant.

(2) Sub-rule (1) applies subject to any Act and applies unless the Court gives leave to the contrary.”

“13. Representation; Current interests. (8/13)

(1) Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them.

(2) At any stage of proceedings pursuant to this Rule the Court, on the application of the plaintiff, may, on terms, appoint any one or more of the defendants or other persons (as representing whom the defendants are sued) to represent all, or all except one or more, of those persons in the proceedings.

(3) Where, under Sub-rule (2), the Court appoints a person who is not a defendant, the Court shall make an order under Rule 8 adding him as a defendant.

(4) A judgement entered, or order made in proceedings pursuant to this Rule shall be binding on all the persons as representing whom the plaintiffs sue or the defendants are sued, as the case may be, but shall not be enforced against any person not a party to the proceedings except with the leave of the Court.

(5) An application for leave under Sub-rule (4) shall be made by motion, notice of which shall be served personally on the person against whom it is sought to enforce the judgement or order.

(6) Notwithstanding that a judgement or order to which an application under Sub-rule (5) relates is binding on the person against whom the application is made, that person may dispute liability to have the judgement or order enforced against him on the ground that by reason of facts and matters particular to his case he is entitled to be exempted from the liability........”

11. The law on representative capacity is settled in the cases, Simon Mali -v- The State (2002 SC690), Tigam Malevo v Keith Faulkner (2009) SC960 and Jackson Tuwi -v- Goodman Fielder International Limited (2016 SC1500. The basic elements of instituting class action are:
    
    1. All intended Plaintiffs be named in the originating process.
    2. Each intended Plaintiffs must give specific instructions evidenced in writing to the lawyers to act for them.
    100. The principal or lead Plaintiff must produce an authority to the Court to show that he is authorized by them.
         
12. In the present case, the representative capacity of the lead Plaintiff is not clearly pleaded. The Plaintiff, Eric Ching, pleads in paragraph (1) of the statement of claim that he is the Plaintiff.In paragraph 2 he pleads that he is suing for himself and on behalf of his Montal clan. The statement of claim is in respect of water source at his Montal clan land. The substantial claim sought is compensation for outstanding rental payments. The Plaintiff has deposed in his affidavits that he is the leader of the Montal clan, and he represents his clan in these proceedings. However, it is not pleaded clearly that it is a class action with a schedule of co-Plaintiffs. The members of the Montal clan have not been specifically named in the Writ of Summons.
    
13. Is this sufficient compliance of Order 5 Rules 3 and 13 of the National Court Rules? In my view, the pleading is not sufficient in meeting the requirements of the National Court Rules. This is because the co-Plaintiffs have not been properly identified and named in the Writ of Summons. They should have been clearly named in the Writ of Summons or endorsed on the statement of claim. It does not cure the necessity of having their names on the originating process as parties to the proceedings. This is because the claim for rent on the water source is a customary land interest for the entire customary landowners. A claim can not be made by just one person.
    
14. Although, the Plaintiff, Eric Ching, cannot represent his clan without their consent, he has capacity and standing sue own his own. I will allow the Plaintiff to continue for now and respond to the position taken by the Defendant. The Plaintiff be allowed to consider his options after the filing of the defendant’s proposed amended defence. I am reluctant to dismiss the proceedings at this early stage.
    

Lack of Jurisdiction

15. The second leg of the application is that the National Court lacks jurisdiction to deal with customary land issues on alienated land.

16. It is settled law that where customary land is alienated, the process of determining customary ownership and land rights is now vested with the Land Titles Commission under section 15 of the Land Titles Commission Act.

17. In Kimas v Oala (2015) SC1475, the Supreme Court settled the law. At paragraphs 6 and 7 of its judgment the Court said, and I quote:

“6. It is settled law that the National Court has no jurisdiction to hear and determine disputes concerning ownership by custom of any land, including a dispute as to whether any land is or is not customary land. Such disputes fall within the exclusive jurisdiction of the Land Titles Commission under section 15 (determination of Disputes) of the Land Titles Commission Act, which states:

The Commission has, subject to this Act, exclusive jurisdiction to hear and determine all disputes concerning and claims to the ownership by custom of, or the right by custom to use, any land, water or reef, including a dispute as to whether any land is or is not customary land and may make all such preliminary inquiries and investigations as it deems necessary for the purpose of hearing and determining the disputes and claims.

Section 15 has been given full effect by the courts over many years. As soon as it becomes apparent that a case involves a dispute about whether a land is or is not a customary land, the court should divest itself of jurisdiction. Such disputes fall within the exclusive domain of the Land Titles Commission.”

18. Applying the reasonings in Kimas v Oala, I have expressed a similar view in Katumani & Ors v Elijah Yawing & Ors (2020) N8481. At paragraph 28 of my judgment, I said:

“28. Since the Defendants have raised substantial dispute over ownership, I will address them as well, so the parties have proper and informed understanding of the process involved in furthering their interests. It is trite law that both the district and National Courts have no jurisdiction to deal with disputes over customary land. Such disputes can be dealt with in the first instance by following the procedures and processes in the Land Dispute Settlement Act. Where a title is issued over customary land as in the present case, a disputing party can mount a case with the Land Titles Commission pursuant to section 15 of the Land Titles Commission Act”.
19. In the present case, there is evidence of dispute of ownership of the subject water source by Steven Michael Geocka. Steven Geocka has applied to be joined as a party in these proceedings which will be considered shortly in this ruling. For now, it is too early to make a finding until Michael Steven’s joinder application is determined, and pleadings are closed.

Water Source within Portion 12

20. The defendants third argument is that the water source, the subject matter of the proceedings, is within the boundary of the State Lease, Portion 12. This renders the proceedings frivolous and should be dismissed under Order 12 Rule 40 (1) of the National Court Rules.
    
21. The Plaintiff alleges the water sources is on customary land. Mr Michael Steven Geocka who applied to be joined as a party says his clan is the legitimate owner of the customary land on which Mainland Holdings draws water for its farm.
    
22. The issue of whether the water source is within the boundary of Portion 12 can be resolved after the close of pleadings and by proper examination of evidence at a trial. The defendant has not yet pleaded this fact and proposes to include same in an amended Defence it proposes to file. By then the Plaintiff may consider the viability of his case and consider his options. It is therefore too early to strike out the proceedings at this stage.
    
23. For the forgoing reasons, I will refuse the Defendant’s application at this stage of proceedings.
    

Application for leave to Amend the Defendants Defence

24. The Defendant applies for leave to amend its defence. The Defendant proposes to plead the matters raised in the interlocutory application, that; i) the source of water is within the boundary of Portion 12, ii) the National Court does not have jurisdiction to hear and determine customary land interest and iii) the Plaintiff lacks representative capacity.
    
25. The proposed amendments are necessary to determine the real issues in controversy between the parties, and the Court will grant the amendments.
    

Joinder Application by Michael Steven Geocka

26. The applicant comes from Oroganchom clan of Huon Gulf District, Morobe Province. He claims he is the owner of Saisiang land where the water source, the subject of the proceedings is located. He says he has an interest in the proceedings and applies to be joined as a second defendant. The law on joinder application under Order 5, Rule 8 of the National Court Rules is settled. The Court has a discretion to grant a person to be joined as a party where the Court is satisfied that: a) he ought to have been joined as party and b) he is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be completely resolved. Refer: Tarsie v Ramu Nico Management (MCC) Ltd (2010) N4141. In the present case, Michael Steven Geocka has demonstrated for now he has a genuine interest. He be allowed to join as a Defendant in the proceedings.
    

Orders

27. The Court orders that:

1. The Defendants application for summary dismissal is refused.
2. Michael Steven Geocka be joined as second Defendant in the proceedings.
3. Leave is granted to the Defendant Mainland Holdings Ltd, to file an Amended Defence within 14 days.
4. The second Defendant Michael Steven Geocka shall file its Defence within 14 days from date hereof.
5. The Plaintiff shall file a Reply within 7 days after receipt of the Amended Defence.
6. The Plaintiff and the second Defendant, Michael Steven Geocka, shall file affidavits by 31^st March 2023 disclosing evidentiary facts that the water source is outside of the Defendant’s land, Portion 12.
7. The matter returns to Court for directions on the 11^th of April 2023
   

Solwai Lawyers: Lawyers for the Plaintiffs
Ashurst PNG Lawyers: Lawyers for the First Defendants

Public Solicitor: Lawyers for the Second Defendant