|
|
Home
| Databases
| WorldLII
| Search
| Feedback
National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 128 OF 2023 (IECMS)
BETWEEN:
PORGERA GOLD MINES LIMITED
Plaintiff
V
KIMALEYA ONDALANE of Tieni Yangua Clan and Tiene Yangua Landowners Business Group Incorporated
First Defendant
AND
NELSON AKIKO of Tieni Waigolo Clan and Tieni Waigolo Landowners Business Group Incorporated
Second Defendant
AND
RUBEN NALEPE of Pulumaini Ambo Endeme Clan and Pulumaini Ambo Endeme Landowners Business Group Incorporated
Third Defendant
AND
JUSTIN HAIARA of HAIARA’S LEGAL PRACTICE
Fourth Defendant
AND
EVE INJIA of SLM LEGAL PRACTICE
Fifth Defendant
Waigani: Anis J
2023: 5th December
2024: 1st May
INTERLOCUTORY RULING – 2 notices of motion seeking dismissal of proceedings and alternative relief – Order 12 Rule 40(1) – National Court Rules – s155(4) – Constitution – allegation of want of authority to commence proceedings – director giving evidence in support of a defendant – whether issues had been raised and considered - ruling
PRACTICE AND PROCEDURES – whether motions properly before the Court where claim is premised on fraud – Order 12 Rules 37(b) and 40(1) – National Court Rules - whether Court can exercise jurisdiction under s.155(4) where there are available court rules – consideration - ruling
Cases Cited:
Sanu v Tuke (2020) N8187
Porgera Gold Mines Limited v. Kimaleya Ondalane and Ors (2023) N10274
Counsel:
J Nandape, for the Plaintiff
E Lako, for the First Defendant
P. Harry, for the Second and Third Defendants
RULING
1st May 2024
1. ANIS J: On 5 Decembr 2023, I heard 2 contested notices of motion filed by the first, second and third defendants. I reserved my ruling to a date to be advised.
2. This is my ruling.
BACKGROUND
3. The proceeding (WS 128 of 2023/this proceeding) concerns a consent order dated 3 March 2023 (Consent Order). The Consent Order was signed and endorsed by the Court in a separate National Court hearing, which was OS No. 25 of 2023 (OS 25). The plaintiff herein was the defendant and the defendants herein plaintiffs, in OS 25.
4. In this proceeding, the plaintiff, however, premised on its pleadings, denies its involvement in OS 25. It claims, amongst others, that persons that had engaged lawyers to represent it in OS 25 did not have its authority to do so. According to the pleadings and relief that are sought herein, the plaintiff is alleging, amongst others, illegality, fraud, deceit, and improper conduct and misrepresentation by the actions, inactions and conducts of the defendants and the lawyers that were involved at the material time. The plaintiff, by this proceeding, primarily intends to set aside the Consent Order.
MOTIONS
5. The first defendant’s notice of motion filed 21 June 2023 (1st NoM), and second and third defendants’ notice of motion filed 22 June 2023 (2nd NoM), seek similar primary relief which is to dismiss the proceeding.
6. The 1st NoM reads in part:
“1. Pursuant to Section 138 and Clause 2.2 and/or Clause 7.1 of Schedule 4 of the Companies Act 1997 and Order 12 Rule 40(1) of the National Court Rules the proceeding be dismissed for lack or want of Notice of Meeting of directors and/or a unanimous board resolution authorizing the institution of this proceeding, thus disclosing no reasonable cause of action; and
......”
7. The 2nd NoM reads in part:
......”
FIRST MOTION
8. Let me address the 1st NoM.
9. Ms Nandape, as a preliminary matter, challenged the jurisdictional basis of the application. She submits in summary first that s.138 and Clauses 2.2 and 7.1 of Schedule 4, of the Companies Act 1997 (CA) are not sources that may be relied upon to invoke the Court’s jurisdiction. In addition to the first argument, Ms Nandape also submits that there are no Clauses 2.2 and 7.1 under Schedule 4 as pleaded under relief 1 of the 1st NoM. Secondly, Ms Nandape submits that Order 12 Rule 40(1) of the National Court Rules (NCR) falls under Division 4 of Order 12 which precludes entry of summary judgment on claims that are based on fraud. The relevant provision is Order 12 Rule 37(b). Ms Nandape submits that since this proceeding is premised on allegation of fraud or fraudulent conducts, the Court is precluded, pursuant to Order 12 Rules 37(b), to summarily dispose of the matter.
10. Mr Lako for the first defendant did not provide any direct response to the 2 submissions made by Ms Nandape. Mr Lako’s only relevant submission is reliance on s.155(4) of the Constitution where he argued that the Court had inherent jurisdiction to protect its process from being abused.
11. The relevant provisions for consideration are s.155(4) of the Constitution, s.138 of the CA, and Order 12 Rules 37 (b) and 40(1) of the NCR. I set them out herein:
155. THE NATIONAL JUDICIAL SYSTEM.
......
(4) Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.
......
138. PROCEEDINGS OF BOARD.
Subject to the constitution of the company, the provisions set out in Schedule 4 govern the proceedings of the board of a company.
......
37. Application of Division 4. (13/1)
This Division applies to all proceedings except proceedings which include
(a) a claim by the plaintiff for libel, slander, malicious prosecution, false imprisonment, seduction or breach of promise of marriage; or
(b) a claim by the plaintiff based on an allegation of fraud; or
(c) a claim for damages arising in respect of the death of any person or in respect of personal injuries to any person.
......
40. 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.
12. Having considered the submissions and arguments, I must say that I am minded to uphold the submissions of Ms Nandape. First, s.138 of the CA states, Subject to the constitution of the company, the provisions set out in Schedule 4 govern the proceedings of the board of a company. Schedule 4 applies to company board matters or processes. It does not provide a jurisdictional basis that may be invoked to dismiss a court proceeding. Secondly, I also uphold the submission of want of schedule 2.2 and 7.1 under Schedule 4 of the CA. The first defendant has lawyers drafting the documents so she should not have any excuse, in my view, for not citing the correct source. It, however, appears to show incompetence on the part of her lawyers. Thirdly, I note that Mr Lako has conceded that Order 12 Rule 40(1) may not be the relevant source in light of Order 12 Rule 37(b). However, counsel urged the Court to consider and apply s.155(4) of the Constitution as a relevant jurisdiction for the 1st NoM. I, however, reject this submission. I do so because s.155(4) is not pleaded in the 1st NoM, and I note that a fundamental duty of the Court is to observe fairness; that the other side is given sufficient notice of any intended change(s) that an applicant intends to make to his or her notice of motion. Again, the first defendant is represented by lawyers, and as such, the Court expects high standards to be displayed by her lawyers which include preparation of court documents. What is pleaded in the 1st NoM is what is properly before the Court for consideration. Parties that come before the Court to defend themselves must know what source(s) is invoked in a notice of motion so that they may come prepared to respond. If a party wishes to amend a source or relief that is pleaded in a notice of motion, then again, due process must be observed by counsel that is acting for the party concerned.
13. But that aside, I ask myself whether there are no provisions in the NCR thus may warrant this Court to exercise its inherent power if it is minded to, that is, under s.155(4) of the Constitution. Murray J in Sanu v Tuke (2020) N8187, stated at para. 39 of her decision, which I adopt here as follows:
39. Section 155 (4) of the Constitution vests in the Supreme and National Courts inherent powers to make such orders as are necessary to do justice in the circumstances of a particular case. It is available to fill in a gap in the law or to fashion a new remedy. It is used in aid of a primary right conferred by law and it cannot confer a new primary right and it does not give the "Court the power to do anything contrary to what the law says": SCR No 2 of 1981 [1982] PNGLR 15, 154; Uma More v UPNG [1985] PNGLR 401, 424.
[Underlining mine]
14. In the present matter, the applicable source is Order 12 Rule 40(1)(a), (b) and (c) of the NCR, that is, for dismissal of proceedings.
So, there is already a rule there which has been invoked by the first defendant. I also note that there are other provisions for
summary dismissal that are provided under the NCR, and one such provision that comes to mind is Order 10 Rule 9A(15).
,
15. Because the Court rules provide this process for dismissal, there is also no basis for this Court to invoke s.155(4) of the Constitution.
Section 155(4) is not intended to circumvent an existing law or rule. To do so, in my view, would amount to gross abuse of the
section, and Courts must not condone such practice but must instead protect its process from abuse. In the present matter, the first
defendant, in trying to rely on s.155(4), is attempting to bypass the exception that is provided under Order 12 Rule 37(b), to make
an application to dismiss the proceeding.
16. In summary, I find the 1st NoM incompetent and dismiss it accordingly.
SECOND MOTION
17. I turn to the 2nd NoM. The source, based upon which the primary relief is sought, is Order 12 Rules 1 and 40(1) of the NCR.
18. The plaintiff raised similar jurisdictional challenge.
19. I observe that Order 12 Rule 1 is a general rule. In the present matter, Order 12 Rule 40(1) is the correct or appropriate rule which is pleaded. The correct rule for assessment therefore is Order 12 Rule 40(1) of the NCR.
20. Mr Harry raised similar arguments as those raised by Mr Lako.
21. I note the submissions of the parties.
22. For the same stated reasons given above in my decision in regard to the 1st NoM, I find the 2nd NoM generally incompetent. I am minded to dismiss it. However, I note that the second and third defendants have also sought alternative relief.
23. Ms Nandape submits that since Mr Harry did not pursue the 2 alternative relief, that she would not address them. In the alternative, counsel submits that the issues had been addressed and that they are now being reagitated or rehearsed before the Court. Mr Harry submits in response that he did address the alternative relief. Counsel also denies that the issues had been dealt with earlier. Counsel also submits that the plaintiff had failed to fully disclose relevant facts to the Court earlier which is why the second and third defendants are now bringing them to the attention of the Court, and thus, urges the Court to consider and make a ruling. Facts, counsel submits, includes those contained in an affidavit filed by the Acting Registrar of Companies Ms Kokiva.
24. I note the submissions of the parties.
25. The first question I ask is this. Whether the 2 alternative relief sought in the 2nd NoM were addressed by Mr Harry in his submissions. I will answer in favour of Mr Harry. The alternative relief were sought in the written submission of the second and third defendants that was handed up to the Court by counsel. I also note that Mr Harry appeared to cover them all in his submissions although he may not have clearly addressed them separately in his oral submissions. Further, I recall that I was restrictive with timing, where counsels were asked to summarise the main points of their submissions.
26. The next question I have is this. Whether the matters raised in the 2 alternative relief had been argued earlier and determined by this Court on 30 May 2023, that is, in Porgera Gold Mines Limited v. Kimaleya Ondalane and Ors (2023) N10274.
27. I have had the benefit of perusing the said decision.
28. The main contentions raised by Mr Harry may be summarized as follows:
29. The orders the second and third defendants seek to set-aside are as follows:
(i) There shall be no further appointments or changes made to directors or shareholders of the plaintiff until the final determination of this matter or until further order of the Court.
(ii) the plaintiff shall not pass any more board resolutions to appoint any more lawyers to act for it in this matter until the final determination of the matter or until further order of this Court.
(iii) Members of the Police Constabulary shall not, without lawful cause, harass, intimidate, or prevent Ms Nandape or lawyers within her firm or otherwise, from acting for the plaintiff in the matter until further orders of the Court.
(iv) Parties are at liberty to apply to set-aside Order 3(i)(ii) and (iii) above herein upon filing a notice of motion and giving each party 3 clear days’ notice.
30. I make this observation as a preliminary matter. The hearings on 19 and 23 May 2023, which led to the above decision, did not concern, or involve the second and third defendants. The disputing parties and the issues raised concerned the plaintiff and the first defendant, that is, primarily on the question of whether Nandape & Associates Lawyers or Kandawalyn Lawyers were the duly appointed lawyers of the plaintiff. And the primary orders that were made on 30 May 2023, namely, terms 1 and 2, were premised on submissions made by the parties in that regard. Orders made under term 3 were consequential.
31. As such, I find no basis that would allow the second and third defendants to seek any of the relief that are sought in the 2nd NoM including the 2 alternative relief. I am therefore minded to dismiss the 2 alternative relief for this reason. I will remark that it appears that the second and third defendants had intended, by these alternative relief, to support similar relief that had been sought by the first defendant in the 1st NoM. However, the 1st NoM has been dismissed, thus, there is no basis for the second and third defendants to advance any arguments in that regard.
32. Even if I may be wrong with the above finding (which I say I am not), I would have nevertheless answered the query (of whether the issued had been raised earlier) in the affirmative. Having perused the written decision, I note that the issue was addressed by the parties. For example at para. 22 of the decision, this Court stated and I quote:
22. I note that a considerable amount of time was spent by both counsel including Mr Harry, explaining the status or background of the directors of the plaintiff, and challenging their legitimacies as directors; arguments concerning the 2 factions. In my view, these arguments are irrelevant for this purpose. The plaintiff has not invoked this Court’s jurisdiction to find out about the status quo of each of its directors. Rather, it is seeking to set aside the Consent Order which is the main dispute to be argued at trial. And as stated, what will be relevant at trial is whether the plaintiff or directors, had followed due process to appoint its then lawyer Ms Injia of SML Legal Practise to act for it to sign the Consent Order; whether the Consent Order was obtained irregularly; also, whether fraud or deceit or fraudulent conduct had occurred at the material time. What may also be relevant is the status quo of the directorship of the plaintiff at the material time (i.e., material time being before and at the time when the Consent Order was signed). It is unlikely that the trial Court will concern itself on which directors were appointed after the material time.
33. And what about the evidence of Ms Kokiva? Ms Kokiva’s affidavit is annexed as Annexure RN1 to the affidavit of Ruben Nalepe filed 7 July 2023. Should I accept this evidence which seeks to addresses the question of validity of appointment of the directors of the plaintiff at the material time or at the time when the restraining orders were obtained? I will answer that in the negative. The first reason is because and as stated, I have already addressed the matter in my decision of 30 May 2023. The second reason is premised on my ruling above which is that the orders of 30 May 2023 concerned a specific issue of contention between the plaintiff and the first defendant only or the plaintiff only, on which lawyer was duly appointed to act for the plaintiff. The third reason is this. Ms Kokiva’s evidence is not conclusive proof that those persons shown on the plaintiff’s IPA record are those that were duly appointed. My decision on this issue on 30 May 2023 was premised on a recent board resolution which would not be reflected in the company’s record that is kept by the Registrar of Companies as deposed to in Ms Kokiva’s affidavit. And Ms Kokiva herself has stated that these were mere records that do not necessarily reflect the correct status of the board of directors of the plaintiff. Ms Kokiva states at para. 7 of her affidavit as follows:
34. Ms Kokiva’s affidavit does not at all address the recent board resolution of the plaintiff dated 16 May 2023 which had constituted the basis of my decision regarding who the legitimate directors of the plaintiff were at the material time when they instructed counsel Ms Nandape to act for the plaintiff. As such, I do not see the relevance of Ms Kokiva’s evidence at this interlocutory stage of the proceeding. The evidence may or may not be relevant for reliance by the defendants at the trial proper. However, this is not the trial proper so until then, this evidence will have to wait.
35. This leaves me with the 3rd alternative relief which is whether I should stay the proceeding. I note that I have already refused this relief together with the 2nd alternative relief. However, for completeness, I will state the following: The first query would be whether the matters raised herein had been addressed by the Court earlier on 19 and 23 May 2023. I would answer that in the affirmative. The 3rd alternative relief is actually sought as a further alternative to relief 2 in the 2nd NoM, that is, premised on the same arguments concerning the appointment of directors. Further emphasis was placed on the earlier decisions of Kandakasi DCJ and Wurr AJ, where they had made findings in regard to an earlier board resolution where the Courts have nullified the appointment of directors whom or some of whom are represented by Ms Nundape for the plaintiff. I will firstly remark that it appears that the events have overtaken these earlier orders of the Court. But the other further reason why I will reject the relief is this. The present challenge by the plaintiff does not concern the validity of appointment of directors but rather the validity or legitimacy of the Consent Order which was granted on 3 March 2023 in proceeding OS No. 25 of 2023. This is also captured in my decision of 30 May 2023.
36. In the end, the 2nd NoM shall also fail.
SUMMARY
37. In summary, I dismiss both notices of motion filed by the first, second and third defendants herein.
38. I will order cost to follow the event on a party/party basis to be taxed if not agreed.
AND THE COURT ORDERS
39. I make the following orders:
The Court orders accordingly
________________________________________________________________
Nandape & Associates: Lawyers for the Plaintiff
Kandawalyn: Lawyers for the First Defendant
Harry: Lawyers for the Second & Third Defendants
Haiara’s Legal Practice: In person (Fourth Defendant)
E Injia In person (Fifth Defendant)
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2024/107.html