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Losa v Simberi Mining Area Association [2025] PGNC 140; N11266 (5 May 2025)

N11266

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS NO. 228 OF 2024

SATAREK LOSA
First Plaintiff

PETER IGUA
Second Plaintiff

-V-

SIMBERI MINING AREA ASSOCIATION
First Defendant

MINERAL RESOURCES AUTHORITY
Second Defendant

SIMBERI GOLD COMPANY LIMITED
Third Defendant

WAIGANI: KARIKO J
19 MARCH, 5 MAY 2025

PRACTICE & PROCEDURE – application to dismiss proceedings – failure to comply with court directions - considerations

By consent, the court endorsed orders for the progress of a representative action, including a direction allowing the plaintiff 21 days to obtain the necessary consents of all claimants. When the consents were finally obtained, the 21 days had lapsed. Some three months later, one of the defendants filed to dismiss the proceedings for failure to comply with a court direction, while the plaintiff filed for a variation of the order extending time to comply with the direction.

Held

1. Relevant considerations in dealing with applications for extension of time are:

• whether the applicant has been made promptly,
• whether the applicant had sought an extension by consent,
• whether the applicant has provided a good explanation for non- compliance,
• whether there was any serious prejudice caused.

Pacific Energy Aviation (PNG) Limited v PNG Air Limited (2018) N8196 referred to.

2. Íf the Court allows a plaintiff time to correct the non-compliance, but the plaintiff does not rectify the default and without good reason, the Court should then dismiss the proceeding.

Philip v Tiliyago (2019) SC1783 referred to.

Cases cited
Pacific Energy Aviation (PNG) Limited v PNG Air Limited (2018) N8196
Philip v Tiliyago (2019) SC1783
Simon Mali v The State (2002) SC690
Siune v Rimua (2013) N5281

Counsel
S Fungke for the plaintiff
R Habuka for the first defendant
L Baida for the second defendant
L Evore for the third defendant

1. KARIKO, J: Two motions were argued before me. The first by the plaintiffs filed 18 March 2025 seeking to vary a court order, and the second by the first defendant filed 6 March 2025 seeking to have the proceedings dismissed for non-compliance with a court order.
   

BACKGROUND

2. These proceedings relate to a dispute regarding the elections of directors and committee members of the Simberi Mining Area Association (the Association).
   
3. Pursuant to a mediated agreement in related proceedings OS No. 11 of 2023: Simberi Mining Area Association v Mineral Resources Authority & Ors (OS 11), orders were obtained by consent in those proceedings on 7 October 2024 for the conduct of the relevant elections.
   
4. The plaintiffs disputed the election process proposed by the mediated agreement and the Order of 7 October 2024 and filed these proceedings.
   
5. On 16 October 2024, the first defendant filed a motion seeking to dismiss these proceedings for not complying with the requirement for authorities and consents from the individual plaintiffs in a representative action which these proceedings are.
   
6. The parties agreed to a compromise for the first defendant to withdraw its motion and allow time for the necessary authorities and consents to be obtained.
   
7. This resulted in orders and directions being agreed to and endorsed by the Court on 28 October 2024 as consent orders (the Consent Order). Relevantly, the first two terms of the Consent Order state:
   
   1. The First Defendant’s Notice of Motion filed 16 October 2024 be withdrawn.
      
   2. The Plaintiffs shall comply with all requirements of representative cases within 21 days from the date of this order.
      
8. The 21 days referred to in term 2 of the Consent Order lapsed on 18 November 2024.
   
9. By 5 March 2025, the plaintiff had not complied with the direction prompting the first defendant to file its motion to dismiss. On the same day, the plaintiffs filed their motion, which was subsequently amended to correct the jurisdictional basis for their motion to O12 r8(4) and O12 r 1 of the National Court Rules and s 155(4) of the Constitution.
   
10. I heard the plaintiff’s application noting that the first defendant’s response would in effect be its arguments in support of its own motion.
    

PLAINTIFF’S ARGUMENT

11. The plaintiffs presented arguments largely based on Simon Mali v The State (2002) SC690, relying on the principle that a consent order may be challenged in circumstances including fraud, mistake or procedural irregularity.
    
12. In this case, the plaintiffs are asking for a variation of term 2 of the Consent Order (Term 2) to extend the time for complying with a court direction agreed to by the parties in order to progress the case.
    
13. While none of the circumstances described above in Simon Mali were said to apply to the present case, the plaintiffs nevertheless urged the court to vary term 2 of the Consent Order (Term 2) and extend time for compliance, based on these reasons:
    
    • That the plaintiffs tried their best to obtain the required consents in time but that proved difficult to meet as the individuals being represented live on outer islands, and that involved difficulties in making contact and communication.
    • That the plaintiffs did not file the application to extend time earlier because they believed the issues between the parties would be resolved out of court from ongoing negotiations.
      
    • That Term 2 is ambiguous in that it does not state the consequence of it not being complied with.
      

CONSIDERATION

14. Order 1 Rule 15 of the National Court Rules is the relevant jurisdictional basis which allows the Court discretion to extend time before or after time expires.
    
15. In Pacific Energy Aviation (PNG) Limited v PNG Air Limited (2018) N8196, Anis J listed these as relevant considerations in dealing with applications for extension of time:
    
    • whether the application has been made promptly
    • whether the applicant had sought an extension by consent
    • whether the applicant has provided a good explanation for non- compliance
    • whether there was any serious prejudice caused
      
16. I first address the last point argued by the plaintiffs alleging ambiguity of Term 2. For that submission, the plaintiffs relied on Siune v Rimua (2013) N5281. With respect, that case deals with contempt proceedings and is therefore distinguishable. In any case, there is no ambiguity in the reading of Term 2. The plaintiffs have admitted as much - they knew they had 21 days to obtain the necessary authorities and consents for its representative action.
    
17. As to the other arguments by the plaintiff, I consider the principles highlighted in the following passage at [29]-[33] from Philip v Tiliyago (2019) SC1783 to be relevant:
    
    29. The Courts have expressed the view that failure to meet the procedural requirements of a representative action under Order 5 Rule 13 means the plaintiff lacks standing and therefore no reasonable cause of action is disclosed, and it also amounts to an abuse of process. Recent cases reflecting this position include Huriba Andago v Andy Hamaga (2018) N7332, Dingake, J; Ben Kwayok v Jeremy Singomat (2017) N7097, Nablu, J; Amos Ere v National Housing Corporation (2016) N6515, Hartshorn, J.
        
    30. The Supreme Court in Jackson Tuwi v Goodman Fielder International Ltd (2016) SC1500, decided that the National Court properly exercised its discretion in dismissing a proceeding for failing to comply with a Court direction to conform with the procedural requirements of a representative action in accordance with Order 5 Rule 13 National Court Rules.
        
    31. In PNG Communication Workers Union v Telikom PNG Ltd (2018) N7322 Cannings, J dismissed the proceeding as an abuse of process under Order 12, Rule 40(1)(c) National Court Rules when the plaintiffs failed to rectify the deficiencies in the representative action although they were given ample opportunity to correct them, and no reasonable explanation was offered for the failure.
        
    32. We approve of the approach by Cannings, J and endorse the proposition that non-compliance with the procedural requirements of a representative action under Order 5 Rule 13 National Court Rules should normally attract dismissal of a proceeding. However, if the Court allows a plaintiff time to correct the non-compliance but the plaintiff does not rectify the default and without good reason, the Court should then dismiss the proceeding.
        
    33. We also regard the following principles to be relevant in deciding this appeal:
        
        • (1) Court orders and directions must be complied with, and non-compliance shows disrespect to the Court and is at the peril of the defaulting party; and
          
        • (2) the defaulting party must provide a reasonable explanation for the default.

(Korak Yasona v Casten Maibawa & Electoral (1998) SC552; Hami Yawari v Anderson Agiru & Electoral Commission (2008) N3983).

(Emphasis added)

18. Have the plaintiffs provided a reasonable explanation for not complying with Term 2? I am not persuaded they have. By the time the necessary authorities and consents were obtained, 24 days had lapsed since the deadline imposed by Term 2. No action was taken to remedy the default before the deadline and for another three and half months after then. The plaintiffs say that they took this position as they believed their dispute would be settled through negotiations then transpiring between the parties. While it may be true that negotiations took place, there is no evidence of the progress or extent of the negotiations upon which the plaintiffs based their belief. What is clear is that negotiations for settlement failed. Importantly however, the negotiations did not stop the plaintiffs from seeking the variation order promptly and earlier. It would have been a prudent thing to do.
    
19. PNG Communication Workers Union v Telikom PNG Ltd (supra) is an appropriate case authority to apply as precedent. As in that case, I would exercise my discretion to dismiss these proceedings as an abuse of process on grounds that the plaintiffs failed to rectify the deficiencies in the representative action despite being allowed ample opportunity to correct them, and the plaintiffs have not provided reasonable explanation for their failure.
    
20. I add that the members of the Association have been prejudiced by the delay in the elections of directors and committee of the Association, which is crucial for the proper administration of, among others, the benefits due to members as landowners related to the Simberi Gold project.
    
21. For the foregoing reasons, the plaintiffs’ application for variation of Term 2 of the Consent Order by extending the time for compliance, is refused. The effect of this is that the first defendant’s application for dismissal of the proceedings is successful. The plaintiffs have failed to comply with a court direction without a reasonable explanation. This representative action, which is defective, is therefore dismissed with costs in favour of the defendants.
    

ORDER

22. I order that:
    
    • (1) The plaintiffs’ application for variation of a court order is dismissed.
    • (2) The first defendant’s application for dismissal of the proceedings is upheld.
    • (3) The proceedings are hereby dismissed.
    • (4) The plaintiffs shall pay the defendants’ costs of and incidental to this proceeding.
    • (5) The time for entry of these orders is abridged to the time of settlement before the Registrar which shall take place forthwith.

_______________________________________________________________
Lawyers for the plaintiff: Gor Lawyers as town agents for Warner Shand Lawyers
Lawyers for the first defendant: Pacific Horizons Legal Services
Lawyers for the second defendant: Saroa Lawyers
Lawyers for the third defendant: Young & Williams Lawyers