Kapal v Perdacher; Evara, Minister for Agriculture and Livestock; and Kewa, Chairman, Coffee Industry Corp [1994] PGLawRp 645; [1994] PNGLR 470 (22 July 1994)

PNG Law Reports 1994

[1994] PNGLR 470 - Philip Kapal v Wally Perdacher; Roy Evara, Minister for Agriculture and Livestock; and Peter Kewa, Chairman, Coffee Industry Corp 

[1994] PNGLR 470

N1249

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

PHILIP KAPAL, FOR AND ON BEHALF OF THE PLANTATION COFFEE GROWERS OF PNG

V

WALLY PERDACHER; ROY EVARA, MINISTER FOR AGRICULTURE AND LIVESTOCK;

AND PETER KEWA, CHAIRMAN OF THE COFFEE INDUSTRY CORPORATION

Mount Hagen

Woods J

8 July 1994

22 July 1994

PRACTICE AND PROCEDURE - Locus standi - Sufficiency of interest - Not a member of the corporation - No right to interfere in internal affairs of corporation.

Facts

The plaintiff sought a declaration that the appointment of the defendant by the relevant Minister as a director of the Coffee Industry Corporation was void. as it contravened provisions of the constitution of the corporation and the governing legislation. The corporation was established to oversee the interests of persons who are concerned with growing, processing, and marketing coffee. Membership of the corporation, by art 5 of the Articles of Association, comprised a number of associations which were representative of persons and bodies interested in the coffee industry.

Held

N1>1.       The plaintiff was not a member of any of the member associations listed in art 5.

N1>2.       Not being a member of an association, the plaintiff had no standing to challenge any internal decision of the corporation.

Cases Cited

Donigi v PNG [1991] PNGLR 376.

SCR No 4 of 1980; Re Petition of Somare (No 1) [1981] PNGLR 265.

Counsel

P Kunai, for the plaintiff.

D L O’Connor, for the first defendant.

C R Hudson, for the second and third defendants.

22 July 1994

WOODS J: The plaintiff commenced these proceedings claiming to be acting for and on behalf of the smallholder coffee growers and plantation coffee growers in Papua New Guinea. He sought a declaration that the appointment of the first defendant by the second defendant as a director of the Coffee Industry Corporation (the Corporation) be declared null and void, as it contravened the provisions of the Coffee Industry Corporation (Statutory Functions and Powers) Act 1991 (No 28 of 1991) and the memorandum and articles of the corporation.

The defendants applied to the Court for the proceedings to be dismissed and originating summons to be struck out.

The main point raised in this application is that, as the plaintiff is not prescribed as a member in the Articles of Association of the Corporation and he in no other way can be said to be a member, he has no right or standing to challenge any appointments that may be made in the Corporation. The plaintiff seems to be bringing a representative action involving a corporation in which he has no status.

The Coffee Industry Corporation was set up as a corporation in accordance with the Companies Act Ch 146, by way of a memorandum and articles of association, subscribed to in September 1991. It has further powers and functions under the Coffee Industry Corporation (Statutory Functions and Powers) Act 1991.

The membership of the Corporation is set out in art 5 of the Articles of Association and appears to be expressed to cover all persons or bodies that may be interested in the coffee industry. Thus, the membership comprises, firstly, grower associations which are representative of smallholder coffee growers by regions throughout the country. Then there are, a coffee exporter association, a plantation processor association, a block development association, and then various national departmental heads.

All the different associations are to be properly incorporated. This careful detailing of the membership would seem to be to ensure a practical and manageable representation of the many people who may be concerned in the growing and processing and marketing of coffee. The argument presented to this Court is that the plaintiff does not come within any of the memberships provided for. He is not a member of one of the regional associations nor any of the other associations. He suggests that he is acting for and on behalf of the smallholder growers and plantation coffee growers in PNG. However, surely all the smallholder growers and plantation growers who are really interested in the operation of the corporation would be members of the regional associations or other associations, and could and should take any complaints to the corporation through that membership. The plaintiff should be pressing his complaints through his member regional association.

By not being a member of a regional association or plantation association, how can he claim to be genuinely interested in the operation and running of the Corporation.

The matter that the plaintiff is complaining about is the appointment by the Minister of a director to the board of directors of the Corporation. Whilst this may appear initially to be a matter of public law, a perusal of the Act shows that appointments to the board start with the Corporation and not with the Minister.

RULES FOR APPOINTMENT

Section 5 of the Act provides:

“Appointment of Directors of the Coffee Industry Corporation

N2>(1)      The Coffee Industry Corporation shall recommend to the Minister its nominees to the Board of the Corporation, which number of nominees recommended shall exceed the number of vacancies on the Board.

N2>(2)      The Minister shall approve the appointment of such of those nominees as he considers most suitable unless the appointment is:

(a)      in breach of the provision of the Memorandum and Articles of Association of the Coffee Industry Corporation; or

(b)      in conflict with the interests of the members of the coffee industry.”

So what standing can the plaintiff have to challenge such internal decisions of the Corporation for recommendation for appointments to the board. This would be different from other cases which have come before the courts. For example, in SCR No 4 of 1980; Re Petition of Somare (No 1) [1981] PNGLR 265, the Supreme Court said that it was not possible to lay down a workable definition for all cases because each case is different. However, it then found that the plaintiff, as a member of Parliament, belongs to the governmental body which has been invested with the power of law-making by the Constitution, and he had raised a point that the law-making body had not complied with certain provisions of the Constitution in passing the Defence Force (Presence Abroad) Act 1980.

That case can be contrasted with the case Donigi v PNG [1991] PNGLR 376, where the National Court found that the plaintiff’s claim was hypothetical and not founded on property rights actually affected and that the plaintiff’s interest as a citizen, landowner, and President of the Papua New Guinea Law Society were objectively not sufficient to found the particular claim.

The above two cases cover some of the principles of representative actions. but each case is different and at the end of the day the question is asked, what are the plaintiff’s interests? In Somare’s case, the plaintiff was a member of the law-making body responsible for the matter complained of and he had already made his complaint known at the start. However, in Donigi’s case, the plaintiff was far too remote and was claiming to represent such a wide-ranging. indeterminate class.

In the case before me, now the plaintiff has not even shown enough interest to affiliate himself with one of the representative bodies for whom the Corporation was formed. The representative bodies were created to enable him to join other parties who have an interest in the industry and, through the appropriate means under the Companies Act, make his views known.

Whilst the plaintiff may say that the activities of the Corporation have a public nature by virtue of the fact that it has been given powers and functions under the Coffee Industry Corporation (Statutory Functions and Powers) Act and such powers and functions can impinge on the financial livelihood and operation of coffee growers, the Act clearly allows the Corporation to carry on its business without prejudice.

Section 4 of the Act provides:

"Status of Coffee Industry Corporation

N2>(1)      The Coffee Industry Corporation:

(a)      is not the State and does not represent the State except by express agreement; and

(b)      except as provided by this Act, is not exempt from any rate, tax, duty or other impost imposed by or under any law; and

(c)      cannot render the State liable for any debts, liabilities or obligations,

unless this Act or any other law expressly so provides.

N2>(2)      Nothing in this Act shall prejudice the powers of the Coffee Industry Corporation to alter its Memorandum and Articles of Association or to dispose of, or deal with, its assets or to carry on or discontinue any part of its business, but any alteration to its Memorandum and Articles of Association shall be consistent with the paramount interest of the coffee industry.”

Before the plaintiff can complain about the internal management and appointments of the Corporation, he must show his genuine interest and become an interested member by joining one of the regional associations, an avenue which has always been open to him.

I find that the plaintiff has no standing or status to challenge the internal decisions or recommendations of the Corporation. I, therefore, dismiss the proceedings and strike out the originating summons.

Lawyer for the plaintiff: P Kunai.

Lawyer for the first defendant: D L O’Connor.

Lawyer for the second and third defendants: Gadens Ridgeway.