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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
OS NO. 144 OF 2025
BETWEEN:
DR. BENEDICT YARU in his capacity as Chairman for himself and the board of directors of KUMUL PETROLEUM HOLDINGS LIMITED named in
Schedule attached to Originating Summons
Plaintiff
AND:
HON. JAMES MARAPE, PRIME MINISTER AND TRUSTEE OF THE KUMUL PETROLEUM SHARE TRUST
Defendant
WAIGANI: BRE J
11, 13 AUGUST 2025
INTERLOCUTORY APPLICATION – summary dismissal – whether the plaintiff lacks standing and representational capacity – application of Kumul Petroleum Holdings Authorisation Act 2015 to the appointment and removal of its board of directors – plaintiff’s appointment expired by compulsion of the law - application granted.
PRACTICE AND PROCEDURE - whether the amended originating summons should be struck out – amendment to attach schedule of authority - requirements of Order 8 rule 55 NCR subject to Order 8 rule 56 – leave mandatorily required to amend Originating Summons – amended originating struck out – no representative capacity.
Counsel
Mr J Holingu appearing with Mr T Tuckayo for the plaintiff/respondent
Mr D Mel appearing with Mr C Yaga for the defendant/applicant
Mr G Akia with Mr T Mileng for the State as an interested party
Mr M Kambao for an interested party Mr Andy Hamaga Chairman of Kroton Laitepo Equities Limited
Mr S Jivati for an interested party Mr Stanley Piawi Chairman of Kroton Juha Equities Limited.
RULING
1. BRE J: On 6 August 2025, I fixed the defendants application for summary dismissal of this proceeding for hearing on 11 August 2025. On 6 August 2025, there were appearances by interested parties as was also done on the 11 August 2025. The hearing of the defendant’s application was specifically fixed so counsels appearing for the interested parties and their joinder application were not heard.
2. The plaintiff filed an application to adjourn on the morning of the hearing and sought to move its application on the basis that it required time to file evidence.
Upon consideration of both counsels’ preliminary submissions, it was my view that matters of law would be raised, there was objection to service, the motion was fixed for hearing. I refused to adjourn the hearing.
3. I proceeded to hear the defendant's summary dismissal application filed on 28 July 2025 where counsel moved the application for consideration of the following reliefs sought:
1) that the amended originating summons filed on 25 July 2025 be struck out for being defective for non-compliance of Order 8 rules
55 and 56 of the National Court Rules and the entire proceedings be dismissed,
2) that the entire proceedings be dismissed as the plaintiffs do not have locus standi to bring the current action,
3) that the entire proceeding be dismissed for not disclosing a reasonable cause of action and or being frivolous, vexatious or an abuse of process of the Court, and
4) that costs be awarded on a solicitor/client basis against Holingu Lawyers and/or the plaintiffs on a full indemnity basis.
4. The defendants did not move relieve 5 of its application which is to set aside the interim ex parte Orders of 22 July 2025.
5. The evidence of Caleb Yaga1 and Shayne Parra Tiki2 were relied on in support of the application.
A) Whether the amended originating summons filed on 25 July 2025 be struck out for non-compliance of Order 8 rules 55 and 56 of the National Court Rules.
6. Mr. Mel submitted that the jurisdictional basis of amending the originating summons required leave to be obtained before filing the amended originating summons and it was not properly before the Court and should be struck out as it adversely affected the nature of the initially filed originating summons which in turn requires the proceeding as to competency and to be summarily dismissed in its entirety.
7. In response, Mr. Holingu referred the Court to the background of the proceeding and clarified that this proceeding was filed as an urgent response to a media release by the Prime Minister the day before on 20 July 2025 announcing the appointment of a new board Chairman Mr. Gerea Aopi and he had applied by way of Order 4 rule 49(5) to obtain ex parte urgent restraining and stay orders which were granted on the 22 July 2025.
He submitted that the amendment was a simple amendment consistent with Order 8 rule 55 of the National Court Rules for attaching the schedule to indicate the plaintiff Dr Yaru's representational capacity on behalf of the other directors affected by the defendant's decision. That the initially filed originating summons referred to the schedule of plaintiffs being attached but the schedule due to an oversight was not attached that the amendment seeks only to attach the schedule and there are no other amendments to the substantive reliefs being sought.
Order 8 rule 56 of the National Court Rules (NCR) states:
"56. Mode of amendment: Simple Amendments "
(1) Where the amendments authorized under this Division to be made to a document are not so numerous or lengthy or otherwise of such nature as to render the document difficult or inconvenient to read, the amendments may be made by—
(a) filing a notice in Form 23 specifying the amendments and the matters mentioned in Sub-rule (2); and
(b) where the document to be amended has been filed, writing the alterations in the document.
(2) A filed document amended under this Rule shall be marked with a statement specifying the date of the amendment and also, if made pursuant to an order, the date of the order or, if not made pursuant to an order, a reference to the Rule authorizing the amendment”
8. Order 8 rule 56 NCR provides clarification about the process to take for simple amendments authorised under Division 4. Division 4 contains rules 50 to 59. Order 8 rule 50 NCR provides for leave to be obtained first before amending any document, while Order 8 rule 51 NCR provides one opportunity only to amend any pleading before it is closed. Order 8 rule 51 NCR does not apply here as there are no pleadings in this proceeding.
This then leaves only the requirement for leave under Order 8 rule 50 NCR. This means that the plaintiff was required to obtain leave before filing the amended Originating Summons. The process in Order 8 rule 55 NCR for simple amendments would be the process to apply to seek leave.
9. Order 8 rule 55 NCR provides a further process to the procedure in Order 8 rule 56 NCR for the Court to in its discretion, issue directions as to the mode of the amendment and its service.
10. Further I consider that the urgent application under Order 4rule49(5) of the National Court Rules does not excuse the requirement for leave under Order 8 rule 50 NCR.
11. I therefore accept Mr. Mel's submission and agree that Mr. Holingu should have sought and obtained leave before filing the plaintiff's amended originating summons.
However, I do not consider that I should summarily dismiss the entire proceedings pursuant to Order 10 Rule 9A(15)(1)(a) and (2) (e) NCR because Dr Yaru has capacity in his own right as a legal person to bring proceedings and I consider it just to proceed to determine the substantive submissions on locus standi.
12. Does this then mean that Dr Yaru lacks representational capacity to commence the proceeding for and on behalf of the affected directors?
13. Mr Holingu urges the Court to consider Dr Yaru's evidence of a special board meeting where the board authorised him to commence proceedings against the defendant’s decision as the lead plaintiff.
There is no evidence of a board resolution. While Dr Yaru has filed sworn evidence, the details of the meeting as to the composition
of the directors present, would assist his case by indicating if all of the directors he purports to represent where present and
if to indicate they signed the board resolution to that effect.
Mr Holingu submits that the plaintiff will be prejudiced for not having sufficient time to file evidence in support.
However, he ought to have ensured that the signed board resolution was attached to Dr Yaru's affidavit before it was filed, as there was a specific reference to the special board meeting in the affidavit. It is also of significance as it goes to Dr Yaru's authority to represent the other affected directors.
14. It is therefore my ruling that the amended originating summons filed on 25 July 2025 is defective and improperly filed for abuse of the Court's process in not seeking leave to file the originating summons contrary to Order 8 rule 50 of the National Court Rules.
As a consequence, Dr Yaru was not duly authorised to file this proceeding on behalf of the other directors.
15. Given my views, the only matter that remains to be deliberated is Dr Yaru's standing to commence this proceeding and for that I refer to the initially filed originating summons of 21 July 2025 with Dr Yaru as the sole plaintiff.
C) Whether the plaintiff has sufficient locus standi to commence this proceeding?
16. The defendant takes issue with the plaintiff's standing in commencing this proceeding as a chairman and director of the board of the Kumul Petroleum Holdings Limited because he asserts that Dr Yaru's term expired on 2 September 2023.
17. Mr Holingu submits Dr Yaru had standing at the time of filing the proceeding and continues to have standing because he is recognised as a director with the Kumul Petroleum Holdings Limited's current record with the Companies Registrar.
He refers to the Certificate of Good Standing annexed to Caleb Yaga's affidavit3 which was obtained on 24 July 2025 and still showed Dr Yaru as a Director.
18. Mr Mel referred to this same Certificate of Good Standing and pointed out that Dr Yaru's term as a Director expired by compulsion of the law on 2 September 2023 pursuant to section 10(6)(a)(iii) of the Kumul Petroleum Holdings Limited Authorisation Act 2015 as he had served a total of nine years by 2 September 2023 which is nine (9) years from his appointment dated 2 September 2014.
Mr. Mel also submitted that the Kumul Petroleum Holdings Limited Authorisation Act 2015 is the governing legislation of the directors and chairman of the board of the Kumul Petroleum Holdings Limited and it should take precedence over the Companies Act 1997.
19. Mr Holingu submitted that Kumul Petroleum Holdings Limited is a commercial entity and the Kumul Petroleum Holdings Limited Authorisation Act sections 7 and 8 regards it as a private commercial entity not subject to the rules of the State for a public entity and Dr Yaru should be regarded as a director within section 108 of the Companies Act.
20. Section 10(6)(a)(iii) of the Kumul Petroleum Holdings Limited Authorisation Act 2015 clearly provides that:-
" no person shall be appointed to, or remain on the Board" if he has "been a director of Kumul Petroleum Holdings for a maximum period of nine years in aggregate; provided that nothing in Subparagraph (iii) shall apply to a Managing Director".
[emphasis added]
21. It is clear that no Kumul Petroleum Holdings Limited director of nine years in aggregate can serve a maximum term of nine years by law; with the only exception being the Managing Director.
22. Section 108 of the Companies Act 1997 defines a director for the purposes of the Companies Act to mean:
"(a) a person occupying the position of a director of the company by whatever name called".
[emphasis added]
23. Section 108 refers to occupation to the position of director, meaning the director must have been appointed.
That manner of appointment for directors of the Kumul Petroleum Holdings Limited is through the section 10(6) process. Section 108 of the Companies Act cannot be read in isolation of the Kumul Petroleum Holdings Authority Act 2015.
24. It is apparent that Dr Yaru cannot lawfully remain as a director of the Kumul Petroleum Holdings Limited because nine years have passed since his initial appointment on 2 September 2014. By compulsion of the law, he is no longer a director and has no legal standing to challenge defendant's decision nor commence this proceeding to challenge the defendant’s decision.
25. I accept Mr. Mel's submissions that it is a procedural matter for the change in the names of the directors on the IPA's records of the Kumul Petroleum Holdings Limited, which it will eventuate after the outcome of this proceeding.
26. Further, the nature of the relief sought depend on legal standing as they rely on the appointment and removal procedure under section 10 of the Kumul Petroleum Holdings Limited Authorisation Act 2015
27. Relief 1 of the originating summons seeks a relief to declare that any appointment or removal of a director outside section 10 of the Kumul Petroleum Holdings Limited Authorisation Act 2015 is defective and be declared void, unlawful and invalid.
28. Relief 3 seeks an order to declare the defendant’s decision to appoint a new chairman and new directors on 10 and 26 June 2025 on the basis of Dr Yaru and others term been expired by reasons of the law and assuming there was no functioning board be declared as defective and void.
29. Relief 6 seeks an order that the defendant comply with section 10 of the Kumul Petroleum Holdings Limited Authorisation Act 2015.
30. These reliefs are tied to Dr Yaru having legal standing on the board from his continuing appointment which initially was from 2 September 2014. The ninth year clearly lapsed from 3 September 2023.
Relief 1 seeks to uphold the terms of section 10 of the Kumul Petroleum Holdings Limited Authorisation Act 2015. These terms provide the nine-year maximum aggregate term for any director.
31. By virtue of section 10(6)(iii) of the Kumul Petroleum Holdings Limited Authorisation Act 2015, I find that Dr Yaru's term as a director of Kumul Petroleum Holdings Limited expired. He has no legal standing to challenge the defendant's decision as the Trustee and appointing authority of the Kumul Petroleum Holdings Limited.
32. I therefore exercise my discretion pursuant to either or both Order 10 Rule 9A(15)(1)(a) and (2) (e) and Order 12 rule 40(1) (c) of the National Court Rules to summarily dismiss the proceeding for being incompetent and for being an abuse of process.
33. In terms of costs, Mr. Mel submitted for costs on an indemnity basis. Costs are a discretionary remedy. This proceeding was filed on 21 July 2025 and is expeditiously summarily dismissed. I do not consider an award for costs on an indemnity basis is just given the short nature of the proceeding. But, I will order costs be paid by the plaintiff on a party/party basis for commencing the proceeding improperly and without standing.
34. On the interim restraining orders, Mr. Mel did not pursue this relief, but given my ruling, it follows that the interim restraining orders are not viable and are accordingly dispensed.
35. Additionally, the joinder applications are not required.
ORDERS
36. The formal orders of the Court are:
Ruling and Orders accordingly;.
________________________________________________________________
Lawyers for the plaintiff: Holingu Lawyers
Lawyers for the defendant: Mel & Hennry Lawyers
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