Vanimo Forest Products Ltd v Airo [2005] PGDC 78; DC477 (16 May 2005)

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KORONAI, PM: This is an action by the Complainant against the Defendant for which it is seeking reimbursement of K5, 145.00, being advance payment made by it to the Defendant, for expenses connected with land investigations and mediation over customary land boundary disputes involving Leitre/Poko and Leitre/Puare and Poko/Puare Villages, which the complainant alleged was used for purposes other than the one it was advanced for.

The Complainant is a Company duly incorporated under the appropriate laws of Papua New Guinea and carries on logging operations in Vanimo and the Defendant is employed by the State through the Sandaun Provincial Administration, as a District Co-ordinator for local level Governments in the Vanimo/Green District of Sandaun Province.

Towards the end of October, 2003 the Complainant through its Project Co-ordinator requested the Defendant to provide costs estimates for the purpose of resolving land disputes amongst Leitre, Rawo, Puare and Poko Villages, over the area of Land in which it had rights to harvest logs. So on the 18th of November, 2003, the Defendant supplied the Complainant the costs estimate of K29, 700.00 which was reduced by Mr. Tiong to K14, 257.50 toea by his letter of 24th November, 2003. There were delays due to Christmas period, PTB vehicle problems and Mr. Tiong's absence from Vanimo on business trip.

But on the 2nd of December, 2003, an initial cheque for K5, 145.00 was raised and handed over to the Defendant who went to BSP Bank and had a cheque for K1, 644.50 toea, made out to Department of Works for thirteen days hire of a Toyota Hilux from PTB but there was no vehicle available for hire then. By then the villagers affected became frustrated and reported their concerns to the Complainant. Chairman Bonny Ando headed a meeting, which decided to give the Defendant another chance at resolving these disputes, and if it failed the Defendant was to be held responsible. Another meeting was chaired by the Vanimo Green River District Administrator at Onip Village, with all disputing parties and which laid down the ground rules for resolving these boundaries disputes amongst these villages and it was agreed that mediation attempt at settlement of these disputes will commence on the 5th of April, 2004.

Then on the 31st of March, 2004 PTB made available to the Defendant and his team, a Mazda Double Cabin vehicle registered number ZGA-162 without the necessary accessories, which had to be borrowed and Defendant kept this vehicle for six days spending K30.00 out of this allocated of K5, 145.50 toea on fuel and purchased further fuel at K50.00 on 1st of April, 2004, despite the fact that he was authorized by Mr. Tiong to receive fuel for this purpose from the Complainant's fuel bowser. Then on 2nd April, 2004, the vehicle was refilled at Complainant's fuel bowser and everything was now ready for them to begin the process of mediation on 5th April, 2004. Then on Sunday 4th April, 2004 when Defendant went to refill the vehicle to enable them to travel out to the disputed areas on 5th April, 2005, he was refused. The second attempt by the Defendant in securing further funding from the Complainant failed and he was requested to refund the K5, 145.00 toea. He failed to do so and a complaint was lodged with the Provincial Administrator who laid a disciplinary charge against him under the Public Service (Management) Act, which was sustained, and he was ordered by way of punishment, to refund the above sum of money. He failed to do so and as a result this complaint was taken out against him to recoup it.

Whether the Defendant is liable and should repay this K5, 145.00 toea to the Complainant.

Evidence from both the Complainant and the Defendant was that there was a dispute involving people of Leitre, Puare, Poko and Rawo villages over boundaries of customary lands in which the Complainant has a permit to do logging and this dispute prevented it from doing so. It then requested the defendant to submit costs estimates it would take for him to settle these disputes, which he did, at K29, 700.00 toea. He accepted a lesser amount of K14, 257.50 and proceeded to do all that he thought was necessary in trying to resolve those disputes but there were other factors such as late payment of advance of K5, 145.00 toea and lack of reliable transport from PTB that affected his performance.

Out of this K5, 145.00 toea, he managed to spent K1, 644.50 toea on PTB hire, K80.00 on fuel, totalling K1,724.50 toea leaving a balance of K3,421.00 unaccounted for. The defendant failed to acquit this or show how it was used before he approached the complainant for more funds in carrying out his second phase of this proposed land disputes settlement. This total sum of K5,145.00 toea included allowances for two Mediators and three Policemen who accompanied him on this attempt at mediation settlement and which he did not pay to them. Therefore his request for the release of more funds was refused by the complainant who demanded that he repay this previous advance of K5, 145.50 toea which he failed resulting in disciplinary and this action against him.

Now the question is what is the intention of the parties? Here we have the Complainant a private firm dealing in logging on customary lands who was facing difficulties in moving onto and harvesting logs from customary land it had permit to operate in due to these land boundaries disputes involving these villages referred to earlier it could not. 50 it turned to the Government, through its Department, the Sandaun Provincial Administration, for help when it requested the Defendant to submit estimates of costs for which it would put up the money to help settle these land boundaries disputes, so that it could move in and harvest logs. The defendant, an officer of the Government, agreed to do this as the Government has a Policy and Mechanism in place, under the Land Disputes Settlement Act, to deal with these types of Disputes, so that logging operations under the Forestry Act in the country and in these disputed areas could proceed peacefully to generate revenue for the Government and royalties for the landowners. Based on this, the defendant and the complainant's Project Co-ordinator struck up this arrangement, which would look like a contractual arrangement but it is not. In THE ADMINISTRATION OF THE TERRITORY OF PAPUA AND NEW GUINEA v LEAHY [1960-61] 105 CLR 60 in the High Court of Australia, Dixon CJ in a similar case said:

"I am clearly of opinion that the administration of the Territory by it's officers did not contract with the plaintiff, there was no intention on their part to enter into any contract, to undertake contractual obligations or to do or undertake more than was considered naturally and properly incident to carrying out their Governmental or Departmental function in the conditions prevailing. They were merely pursuing the Policy adopted for eradication of tick."

Justice McTierman, in this same case, went further and said: "The work done by the Administration was analogous to a social service which generally does not have as its basis a legal relationship of a contractual nature and from which no right of action would arise of the citizen who is receiving the services if the Government acts inefficiently in performing them" The whole atmosphere of the correspondences and discussions that took place between the Complainant's Project Co-ordinator and the defendant, on behalf of the Government, was different from that which exists between contracting parties.

But as the defendant is a public servant, he should be well versed with Government financial procedures in the acquittal of monies advanced for these types of purposes and should at the completion of this job and if for some reasons, cannot complete this job, acquit the monies or the sum of K5, 145.50 toea advance given to him to carry out this mediation process over these customary land boundaries disputes. For if he fails, he must refund or repay the money from his own pocket or have them deducted from his salaries by the Government, irrespective of whatever source this advance of monies came from. He could only account for K1, 724.50 toea out of this K5, 145.50 toea, leaving a balance of K3, 421.00 unaccounted for and he has not explained how he used it. As there is no evidence from PTB Officers concerning their appropriate vehicle hire rates, I would take what was provided by them in their invoice number 37203 of 13th December, 2003 as correct hire rate of K115.00 per day for thirteen days hire including value added tax, a sum of K1, 644.50 toea.

From the above reasoning it is clear that there was no contractual obligations between the complainant and the defendant on behalf of the Government, but defendant is personally liable for not acquitting or accounting for the K3, 421.00, being the balance of this total amount of K5, 145.00 toea, advanced to him, to carry out this mediation exercise over this customary land boundaries disputes amongst Leitre, Rawo, Poko and Puare villages. He should also pay interests and complainant's costs.

Before making formal orders I wish to stress here that, in future when individuals or Companies wishing to provide financial assistance to the Government and its Officers, to enable them to carry out their duties, such as in this case, they should pay their monies into the Government's Treasury Offices and so becomes monies subject to the Public Finances (Control and Audit) Act Chapter 36. These monies would then be drawn following normal Government financial procedures and paid as advance to officers tasked to do the required job and who must acquit it whether the job is completed or not, after the time period given to do the job expires. This would cut out the problem seen in this case and avoid claims of bias by the general public. In other words, transparency is of paramount importance, when dealing with matters the public has an interest in, such as in this case.

SO THAT FORMAL ORDERS OF THIS COURT ARE THAT THE DEFENDANT IS ORDERED TO PAY TO THE COMPLAINANT THE FOLLOWING:-

1. PRINCIPAL SUM	K3, 421.00
2. INTERESTS FROM DATE OF SUMMONS TILL JUDGMENT I.E. 251 DAYS AT @ 8%	K 294.00
3. COSTS TO BE TAXED AND ADDED LATER
4. SUB TOTAL	K3, 715.00
5. SUCH AMOUNTS IS TO BE PAID BY OR BEFORE 30TH OF JUNE, 2005.

PARTIES HAVE 30 DAYS FROM 17/05/2005 IN WHICH TO APPEAL AGAINST THIS DECISION TO THE NATIONAL COURT OF JUSTICE, IF THEY'RE AGGRIEVED BY IT.

Papua New Guinea District Court

Vanimo Forest Products Ltd v Airo [2005] PGDC 78; DC477 (16 May 2005)