N11676        
  PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS NO. 336 OF 2023

BETWEEN:
JOEL KOLAM AS THE ACTING CITY MANAGER OF LAE URBAN LOCAL LEVEL GOVERNMENT
First Plaintiff

AND
PAUL WIWI & 94 OTHERS employees of LAE URBAN LOCAL LEVEL GOVERNMENT (Names appear in Schedule “A” attached)
Second Plaintiff

AND
HON. SOROI MAREPO EOE, MP AS MINISTER FOR PROVINCIAL & LOCAL LEVEL GOVERNMENT AFFAIRS
First Defendant

AND
DEPARTMENT OF PROVINCIAL & LOCAL LEVEL GOVERNMENT AFFAIRS
                                                    Second Defendant

AND
ROBIN CALISTUS ACTING CHIEF EXECUTIVE OFFICER OF LAE CITY AUTHORITY
Third Defendant

AND
LAE CITY AUTHORITY
Fourth Defendant

AND
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

LAE: DOWA J
19, 26 MARCH, 26 APRIL 2024; 20 JANUARY 2026

CIVIL ACTION-Plaintiff seeking declaration of rights -proceedings incompetent for lack of representative capacity – Order 5 Rules 3 and 13 of the National Court Rules-and for lack of privy of contract.
Held: 
Proceedings incompetent for lack of representative capacity and for lack of privity of contract. Proceedings dismissed.

Cases cited

PNGBC v Barna Amevo and Bari Investments (1998) N1726
Christian Life Centre v Associated Mission Churches of PNG (2002) N2261
Beno Maoko v Kevin Ling & Ors (2017) N6976
Komit Kunai & Sunam Komit v Finance Corporation Ltd (2016) N6581 
Simon Mali v The State (2002) SC690
Tigam Malevo v Keith Faulkner (2009) SC960 
Jackson Tuwi v Goodman Fielder International Limited (2016) SC1500

Counsel

  J. Alu for plaintiffs
 N. David for the fourth & fifth defendants
N Kibikibi for the first, second and third Defendants

                                                          DECISION

1.	DOWA J: This is a decision on Plaintiff’s application seeking various declarations and consequential orders.

Background 

2.	By Originating Summons, the Plaintiffs seek the following declaratory orders: 
a.	A declaration that Provincial and LLG Affairs Minister’s decision to make redundant and terminate the second Plaintiffs’ employment with Lae Urban LLG is null and void.
b.	A declaration that the Plaintiffs’ status, terms and conditions of employment are subject to the Public Service (Management) Act 1995.
c.	A declaration that the redundancy and termination of employment exercise conducted by the Defendants is null and void.
d.	A declaration the Lae City Authority has no power to terminate the Plaintiff.
e.	A declaration that the MOU signed between the fourth Defendant and Lae Urban LLG is unconstitutional, null and void.

f.	An order that the Defendants be restrained from interfering with the management of Lae Urban LLG by the first Plaintiff.

Background Facts 

3.	This is a class action. The Plaintiffs numbering up to 96 are employees of Lae Urban Local Level Government. A Ministerial Direction has been issued under Section 20 of the Lae City Authority Act by the first Defendant, the Minister for Provincial and Local Level Government, to the Lae City Authority and the City Manager to process and complete a redundancy and termination of the Plaintiffs. The Plaintiffs contend that the Ministerial decision is flawed as their employment terms are governed by the Public Service General Orders and the Public Service (Management) Act. The Plaintiffs are seeking various declaratory reliefs basically to nullify the decisions and actions taken by the Defendants.
 
Hearing 

4.	The matter was heard on 19th March 2024. At the hearing all parties were represented by counsel. The trial proceeded in this manner. The parties agreed to use their respective Affidavits, followed by submissions. The Parties relied on their respective written submissions which have been filed as per earlier directions of the Court. During the hearing, the Plaintiff relied on three affidavits. The first and second Defendants relied on one Affidavit while the third and fourth Defendants relied on six (6). 

5.	After the conclusion of the hearing, Mr. Alu, counsel for the Plaintiffs, applied for the adjournment of the hearing so he could cross examine some of the deponents to the affidavits relied on by the Defendants. Alu submitted that the affidavits were served very late, and his clients did not have the opportunity to respond and that there was a need to cross-examine the witnesses. The application was opposed by counsel for the Defendants. 

6.	The Court reserved its ruling on the application until 26th March 2024. On 26th March 2024, the Court delivered its decision refusing the application. The Court reasoned that the hearing was concluded, and the matter was to be reserved for decision and that the application came very late procedurally.

7.	After the ruling, the Plaintiff proceeded with an application to reopen the case. That application was also refused in a decision delivered on 26th April 2024 and the matter has been reserved for decision which I now deliver.

Issues 

8.	Based on the pleadings, evidence and submissions, the following issues are raised for consideration: 

a.	Whether the Plaintiffs have standing to institute the proceedings.

b.	Whether the Plaintiffs are at liberty to challenge the MOU between the Lae City Authority and Lae Urban LLG when the Plaintiff’s are not privy to the MOU.

c.	Whether the Plaintiff’s chose the correct mode of proceedings

d.	Whether the Plaintiffs are entitled to reliefs sought in the proceedings

a.	Whether the Plaintiffs have standing to institute the proceedings

9.	Counsel for the third and the fourth Defendants submitted that this is a class action. The 94 Plaintiffs have not been named in the Originating Summons, and they have not given authority in writing to the representative to act on their behalf.

10.	 The relevant rules dealing with representative capacity is Order 5 Rules 3 and 13 of the National Court Rules.  Rules 5 and 13 read:
“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.	This is a class action as the Plaintiffs have a common interest. Order 5 Rule 13 of the National Court Rules is clear that where numerous persons have the same interest in any proceeding, the proceedings may be commenced by or against one or more of them as representing all or some specifically named.

12.	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:

a)	All intended Plaintiffs be named in the originating process.
b)	Each intended Plaintiffs must give specific instructions evidenced in writing to the lawyers to act for them.
c)	The principal or lead Plaintiff must produce an authority to the Court to show that he is authorized by them.		

13.	In the present case, the Originating Summons states that Paul Wiwi and 94 persons whose names appear in Schedule “A”. The names of the 94 Plaintiffs are in the Schedule which is attached to and form part of the Originating Summons. 

14.	There is no evidence of each Plaintiff giving specific instructions in writing to the lead Plaintiff.

15.	There is no specific authority given by the 94 Plaintiffs to the lead Plaintiff, Paul Wiwi. In an Affidavit filed 14th December 2023 Paul Wiwi deposed that he has authority to represent the 94 Plaintiffs and annexed to the affidavit is a sheet containing the names of the 94 Plaintiffs and their signatures. The sheet, however, does not contain any statement authorising Paul Wiwi to represent them. It is just a bare list. It is also important to note that, Wiwi’s Affidavit was filed 14th December 2023, three days after the filing of the Originating Summons, (filed on 11th December 2023) and after initial Court sessions were conducted on 12th December 2023. 

16.	I find the second Plaintiffs did not meet the requirements of instituting a class action in accordance with the prevailing judicial authority settled by the Supreme Court. I therefore find the Paul Wiwi does not have standing to represent the 94 Plaintiffs. 

Joe Kolam-First Plaintiff

17.	Joe Kolam is the first Plaintiff. He is the acting City Manager of Lae Urban LLG. He is employed by Morobe Provincial Government. He deposes he is acting for himself and on behalf of Lae Urban LLG. He challenges the actions of the Lae City Authority taking over the functions of Lae Urban LLG. He is also challenging the legality of the MOU executed between Lae Urban LLG and Lae City Authority. He also questions the decision of the Minister for Provincial and LLG Affairs directing the completion of the redundancy and termination of the 95 Plaintiffs currently employed by Lae Urban LLG.

18.	 In all these allegations, the Plaintiff has not demonstrated that the various decisions and actions taken by the Defendants have injured or affected his personal or business interest for which he is seeking redress. Although he argues he is acting for Lae Urban LLG, Lae Urban LLG is a legal entity. Lae Urban LLG is not a party to the proceedings. For Lae Urban LLG to be involved, they require a Council resolution. The first Defendant is an employee of Lae Urban LLG and Morobe Provincial Governments, both not parties to the proceedings. There is no evidence of Lae Urban LLG authorising the Plaintiffs to bring this action. On the contrary, Mr. James Khay, President of Lae Urban LLG and Mr. Max Bruton, the Provincial Administrator of Morobe Provincial Government, deposed in their respective Affidavits that the Plaintiffs were not authorised to bring this action.

19.	It is noted that first Plaintiff is supporting the 95 Plaintiffs whose jobs have been affected by the decision and actions of the Defendants. The 95 Plaintiff’s claims are governed by employment contract law whether private or public. The first Plaintiff is not affected by the decision of the Defendants.

20.	What then is the consequence of someone who is not a party to a contract seeking to enforce or rely on it. There is a string of cases that settled the law in this jurisdiction in respect of privy of contract; that a person who is not a party to a contract which he seeks to enforce, is precluded from enforcing it by the doctrine of Privy of Contract.  See PNGBC v Barna Amevo and Bari Investments (1998) N1726; Christian Life Centre v Associated Mission Churches of PNG (2002) N2261, Beno Maoko v Kevin Ling & Ors (2017) N6976, Komit Kunai & Sunam Komit v Finance Corporation Ltd (2016) N6581; and others.

21.	In PNGBC v Amevo (supra), Sevua J, said this at page 3 of his judgment.

“The Second Defendant is not a party to that contract.  The doctrine of privity of contract is that, as a general rule, a contract cannot confer rights or impose obligations arising under it on any person except the parties to it.  The scope of the doctrine means only that a person cannot acquire rights, or be subjected to liabilities, arising under a contract to which he is not a party.”

22.	In Christina Life Centre v Associated Missions Churches, His Honour, Lenalia J said this at page 8 of his Judgment:

“In the law of contract, a contract creates rights and obligations only between the parties to it.  A contract does not confer rights on a stranger nor does it impose any obligations on the same.  It is a fundamental principle of common law, that no person can sue or be sued on a contract unless he or she is a party to it:  Dunlop Pneumatic Tyre Co. Lt.  v Selfridge & Co. Ltd [1915] A.C 847.  The doctrine of privity means a contract cannot as a general rule confer rights or impose obligations arising under it on any person except the parties.”

23.	Applying the above principles, I find the first Plaintiff, Joe Kolam, is a stranger and has no standing to bring this action.

b.	Whether the Plaintiffs are at liberty to challenge the MOU between the Lae City Authority and Lae Urban LLG when the Plaintiffs are not privy to the MOU.

24.	There is no dispute that the Plaintiffs are not privy to the decision and agreements reached between Lae Urban LLG and Lae City Authority. For the reasons given above, the Plaintiffs have no standing to challenge the legality of the MOU.

Conclusion

25.	I have reached a conclusion that the Plaintiffs have no standing to commence these proceedings. I will therefore dismiss the proceedings.

26.	Having reached this conclusion, it is not necessary to consider the other issues and the merits of the claim.

Observations

27.	For the record it is made plain that the merits of the claim are not determined. The Plaintiffs are at liberty to institute fresh proceedings either together or individually, if they so desire, by following the correct process as the law allows.

28.	When considering the options available it is prudent to identify the cause of action first, then choose the mode of proceedings that is compatible with the reliefs sought.

Costs

29.	The Defendants have claimed costs of the proceedings. The Defendants have succeeded in defending the proceedings and therefore are entitled to the costs.
Orders

30.     The Court orders that:

1.	The Plaintiffs’ proceeding is dismissed. 

2.	The Plaintiffs will pay the Defendants’ cost of the proceeding. 
3.	The Second Plaintiffs are at liberty to bring recovery action on their redundancy/termination if they desire either individually or individually.  
4.	Time is abridged.

________________________________________________________________
Lawyers for the plaintiffs: Supersonixs & Alu Lawyers
Lawyer for the first, second and fifth defendants: Solicitor General	
Lawyers for the third & fourth defendants: David & David Co Lawyers