Leda v Stettin Bay Lumber Company [2011] PGNC 194; N4542 (4 May 2011)

N4542

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 662 OF 2007

BETWEEN:

STANIS LEDA for himself and on behalf of
the Uguge clan of Buluma and Mai villages
Plaintiffs

AND:

STETTIN BAY LUMBER COMPANY LIMTIED
First Defendant

AND:

ACTIVE FOREST LIMITED
Second Defendant

Kimbe: Kawi, J
2010: 6th August
2011: 4th May

CIVIL PRACTICE AND PROCEDURE – Claim for damages based on alleged negligence resulting in continuing pollution of a creek – plaintiff purportedly suing in a representative capacity – Legal requirements for suing in a representative capacity – Plaintiff failed to satisfy the requirements of suing in a representative capacity – plaintiff can only represent himself and not his clan members – Claim for cause of action being time barred – cause of action not time barred – Alleged pollution is continuously occurring and continuing claim is therefore not time barred – State Lease – creek located and flows through a property owned and registered to the defendant – Ownership of the creek now vested in the defendants – plaintiff has lost all rights over the creek including so-called riparian rights over the use of the creek - Former customary rights which were once vested in the plaintiff are now converted to a right to receive monetary compensation – As plaintiff has no more rights over Nalu Putu, the claim for damages is hereby dismissed.

Brief Facts

The plaintiff purporting to represent members of his clan instituted legal action against the defendants claiming damages for pollution to a creek. The plaintiff claimed that the creek was once used for washing, cooking, fishing and contained magical herbs and customary rituals were held in the creek. However the defendants 'logging operations have polluted the creek to such an extent that the creek is no longer being used as it once was. In an action for damages for pollution caused to the creek by the operations of the defendants:

HELD

(1) The legal requirements for suing in a representative capacity are set out in Order 5 rule 3 of the National Court Rules. It requires the plaintiff to:

1. name all plaintiffs and have them duly identified in the Writ of Summons;
   
2. Each and every intending plaintiff must have their written consent, by way of an Authority to Act Form, duly filed in court.
   

(3) Furthermore the plaintiff has not shown by relevant pleadings and evidence in support, that his Uguge clan members are numerous such as to warrant a representative action. He has not even shown by relevant pleadings and evidence that the relief claimed is in its nature beneficial to them all or that the Uguge clan members have a "common Interest". Neither has Stanis Leda produced evidence to show that all the numerous people he purportedly represents have a common grievance. In summary than, the requirements for suing in a representative capacity are these:

(a) All interested persons intending to be plaintiffs must be duly identified and have their names included in a schedule attached to the Writ of Summons or the Originating Summons as the case may be.

(b) The written consent of the interested persons intending to be plaintiffs must be filed in Court by way of an Authority To Act Form.

(c) The parties to be represented must be numerous.

(d) They must all have the same interest in the proceedings.

(f) They all have a common grievance.

(g) The relief (s) sought is in its nature beneficial to them all.

(3) As the plaintiff failed to satisfy the legal requirements for acting in a representative capacity, he cannot represent his Clan Members. He can only represent himself in the proceedings.

(4) The alleged pollution of the creek is not a one-off incident. It is a continuing pollution. Damage for alleged negligence resulting in the pollution of the creek is not time barred under Section 16 of the Fraud and Limitations Act.

(5) The said creek allegedly polluted is located in the land owned by the defendant. This land is a registered State lease identified as Portion 1668, Fourmil Megigi, Talasea, West New Britain. Upon registration the defendant has acquired an indefeasible title to the property. The creek Nalu Putu is now owned by the defendants.

(6) The defendants have now acquired exclusive rights and possession of the creek to the exclusion of everyone including the plaintiff.

(7) The plaintiff has now lost all rights to use the creek for washing, fishing, drinking and other uses including the right to use creek for customary performance of magical rituals. These rights which were once vested in the plaintiff are now converted into a right to receive compensation, compensation either in monetary terms or compensation in kind.

(8) The claim for damages arising from the alleged pollution to the creek is hereby dismissed with costs to the defendants.

Cases cited;
Papua New Guinea Cases
Simon Mali & Ors –v– The State, SC 690
Tau Gumu –v– PNG Banking Corporation (2001) N288
Makt & Co. Ltd –v- Knight SS Co. Ltd [1910] UKLawRpKQB 126; [1910] 2 KB 1021
Smith –v- Cardiff Corporation [1954] 1QB 210
Mudge and Mudge –v- Secretary for Lands [1985] PNGLR 387

Overseas Cases

Counsel

Mr Robert Awalua, for the Plaintiff
Mr Kenneth Imako, for the Defendants

4th May, 2011

1. KAWI J: The plaintiff instituted legal proceedings against the defendants claiming damages for alleged negligence resulting in pollution and environmental damage caused to a creek traditionally known as "Nalu Putu".

1. AGREED FACTS
   
2. From the Statement of Agreed and disputed Facts and Issues for trial filed by the plaintiff on the 22nd September 2009, I gather the following undisputed facts as well as disputed facts:
   
   1. The defendants are logging companies who are engaged in logging operations. They are based at Buluma along the Hoskins Highway.
      
   2. A creek traditionally known as "Nalu Putu" flows through the area in which the defendants carry on their logging operations. The head waters of Nalu Putu is located right in the middle of the area of operations of the defendants.
      
   100. The defendants came into operations on the land and established its business in 1976. As part of its business operations it built six fuel depots in the sea and these fuel depots are connected to the storage tanks on the land.
        
   4. To enable the refuelling, hoses are then connected with pins to the main tunnel to the storage tanks and the ships use those hoses to refuel from them.
      
3. DISPUTED FACTS
   
4. The following facts are disputed by the defendants and they form the basis of a number of issues which I will refer to later. These facts are:-
   
   1. The lead plaintiff Mr Stanis Leda is a member of the Uguge Clan of Buluma and Mai villages. He instituted these proceedings on his own behalf and behalf of members of his Uguge Clan of Buluma and Mai villages.
      
   2. The area which the defendants operate on to carry on their logging operations as well as store their logs is a State lease.
   3. The defendants are continuing to dump industrial waste into Nalu Putu.
      
   4. Nalu Putu is polluted and unfit for human consumption or for any other human use.
      
   5. The defendants took advantage of the plaintiff's illiteracy and started dumping industrial waste into Nalu Putu.
      
   6. The defendants allow leakage from the storage tanks and refuelling hoses into Nalu Putu.
      
   7. The Second defendant has been negligent in allowing chemical from the log treatment to flow into Nalu Putu.
      

ISSUES

5. A number of issues arise for consideration and these are:
   
   1. Whether the lead plaintiff Mr Stanis Leda has been properly authorised by the members of his Uguge clan of Buluma and Mai villages to represent them in this action?
      
   2. Whether or not the land on which the river is located and flows – through is a State lease?
      
   3. Whether or not the cause of action is time barred pursuant to Section 16 of the Fraud and Limitations Act?
      
   4. Whether or not the creek Nalu Putu is in a polluted state?
      
   5. Whether or not Nalu Putu has been polluted by the negligent actions of the defendant companies?
      
6. DETERMINATION OF ISSUES
   
1. Whether the lead plaintiff Mr Stanis Leda has been properly authorised by members of his Uguge clan of Buluma and Mai villages to represent them in this proceedings.

7. There is no doubt that this appears to be a class action in which Stanis Leda purports to represent members of his Uguge Clan. In a representative action the parties to be represented must be numerous and they must have the same interests in the proceedings. As to what number of persons will be regarded as numerous will depend on all the circumstances of the particular case. What is meant by having the "same interests" in the proceedings is that "the persons who are to be represented have the same interests as the plaintiff in one and the same cause or matter. There must therefore be a common interests alike in the sense that its subject and its relations to that subject must be the same". See Makt & Co. Ltd –v- Knight SS Co. Ltd [1910] UKLawRpKQB 126; [1910] 2 KB 1021

7. In Smith –v- Cardiff Corporation [1954] 1QB 210, Evershed MR expressed this requirement by saying that the necessary qualifications for bringing a representative action were that " all the members of the alleged class have a common interests, that all have a common grievance and that the relief is in its nature beneficial to them all."
   
8. Under the National Court Rules the requirements of suing in a representative capacity is set out in Order 5 Division 1, rule 3. It is stated in these terms:-
   

"3-Joint Right

(1) Where, in any proceedings, the plaintiff claims relief to which any other person is entitled jointly with him –

• (a) All persons so entitled shall be parties to the actions;
  
• (b) Any of them who does not consent to being joined as a plaintiff shall be made a defendant.
  
• (c) Sub-rule 1 applies subject to any Act and applies unless the court gives leave to the contrary.
  

9. The plaintiffs rely on Order 4 rule 20(1)(a) of the National Court Rules and submit that they have fulfilled the requirements of that rule, in that in a class action, the Writ of Summons must be endorsed with a statement of the capacity in which he sues. The plaintiff points to his pleading in paragraph 1 of the Statement of Claim which reads:
   

"The plaintiff Stanis Leda brings this action on behalf of himself and as representing members of the Uguge clan of Buluma and Mai villages".

10. No other statement of bringing an action in a representative capacity is pleaded anywhere else in the statement of claim.
    
11. Order 4 rule 20(1)(a) is stated in these terms:
    

"20 Endorsement as to capacity

(1) Before a Write of Summons is issued it must be endorsed –

(a) Where the plaintiff sues in a representative capacity – with a statement of the capacity in which he sues".

12. The plaintiff points out that his pleading in paragraph 1 of the Statement of Claim satisfies the requirement that there be a statement of the capacity in which he sues and his pleading in paragraph 1 is satisfactory and fulfil this requirement of Order 4 rule 20(1)(a).
    
13. In so far as bringing in an action in a representative capacity is concerned, the law was settled by the Supreme Court in Simon Mali & Ors –v– The State SC 690. The Supreme Court settled the law as follows:
    

"Contrary to what learned Counsel for the appellants asserts, the legal representatives of the unnamed plaintiffs in all the five (5) proceedings were required by law to "have their names included in a schedule to the writs or for their written consents to be filed". And these written consents would have to come by way of an Authority to Act Form."

14. Furthermore the Supreme Court stated: "We accept the State's Submission that in all actions or proceedings of a representative nature, all the interested plaintiffs must be named and duly identified in the originating process, be it a Writ of Summons, Originating Summons or statement of claim endorsed on a writ. In this respect, pursuant to the Rules (supra) each and every intending plaintiff must give specific instructions (evidenced in writing) to their lawyers to act for them. There are good reasons for this, one being where costs of the litigation are concerned, if awarded against the plaintiffs. Some of the problems or consequences in the representative action are anticipated in the various sub-rules under Order 5 rule 13 NCR".
    
15. In summary then the requirements of suing in a representative capacity are these:
    

(a) All interested persons intending to be plaintiffs must be duly identified and have their names included in a schedule attached to the Writ of Summons or the Originating Summons as the case may be.

(b) The written consent of the interested persons intending to be plaintiffs must be filed in Court by way of an Authority To Act Form.

(c) The parties to be represented must be numerous.

(d) They must all have the same interests in the proceedings.

(f) They all have a common grievance.

(g) The relief (s) sought is in its nature beneficial to them all.

16. In this case it is the finding of this court that the alleged representative plaintiff, Stanis Leda has not satisfied and fulfilled all the requirements of acting and suing in a representative capacity. Therefore he cannot purport to represent members of the Uguge clan of Buluma and Mai villages whom he has not even identified. The Court finds and I so rule that Stanis Leda can only represent himself. He has no capacity to represent other unidentified members of his Uguge Clan of Buluma and Mai villages. The effect of this finding is that Stanis Leda will from now onwards represent himself in this entire proceedings, but the cause of action is not terminated as yet or the cause of action still survives and accrues.
    

Issue 2 - Is the cause of action time barred by virtue of the Fraud and Limitations Act?

18. The relevant legislation is the Fraud and Limitations Act.

19. Specifically Section 16(1) is stated in this terms:

(1) Subject to Section 17 and 18, an action –

• (a) that is founded on simple contract or tort; or
• (b) to enforce a recognizance; or
• (c) to enforce an award, where the submission is not by and the instruments under seal;
• (d) to recover any sum recoverably by virtue of any enactment other than a penalty forfeiture or sum by way of penalty or forfeiture,
  

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

20. In Tau Gumu –v– PNG Banking Corporation (2001) N288, the court held that time from which the cause of action accrued is when the plaintiff became aware of the breach of his right.

21. The defendants submit that the plaintiff first became aware of this alleged pollution when he was still an employee of SBLC some 30 or so years ago. He chose not to do anything about this alleged pollution of Nalu Putu until very recently. On the basis of the Tau Gumu case his cause of action is now time barred.

22. The plaintiff on the other hand argues that this is a case of continuing breach of his right and so the cause of action has not expired as yet.

23. In my view this is not a case of a one off pollution. It is a case of a continuing act of alleged pollution of Nalu Putu by the defendants such that the cause of action is still continuing despite the plaintiff having knowledge of the earlier pollution. As the alleged pollution of the creek is an ongoing event, the court finds that the cause of action is still accruing and has not been extinguished by effluxion of time.

Issue 3 – Is the creek Nalu Putu located on land which is subject of a

State Lease?

24. The defendants submit that Nalu Putu is located and flows through a land over which the first defendant SBLC has a State Lease. The State Lease is identified as Portion 1668 Milinch Megigi, Talasea, West New Britain Province. The evidence of the defendant's title to this property was tendered into court without objections from the plaintiffs. The plaintiff did not make any submissions on this issue. Notwithstanding that, Section 33 of the Land Registration Act deals with the issue of indefeasibility of title. The general rule is that once a property is registered, then the registered proprietor has exclusive and irrevocable rights to use the property as he/she pleases to the exclusion of the whole world. There are exceptions to this rule, one of which is fraud, however in my view none of the exceptions would apply here.

25. The court finds that Nalu Putu is located in and flows through the land described as Portion 1668, Milinch, Megigi, Talasea, West New Britian Province. Being located in the land owned by the defendants, they (i.e. the plaintiff) has lost all the rights to use and deal with Nalu Putu as he pleases. In my view the plaintiff Stanis Leda has lost all and any rights including his so-called riparian rights over the creek Nalu Putu. Ownership of the creek Nalu Putu is now vested in the defendants. Under section 33 of the Land Registration Act, once the said land is registered as a State lease under the name of Stettin Bay Lumber Company Limited they (ie SBLC) have acquired an indefeasible (ie unforfeitable) title over the land, to the exclusion of everyone in the whole world. See Mudge and Mudge –v- Secretary for Lands [1985] PNGLR 387, the Supreme Court in that case held that registration of leases under the provisions of the Land Registration Act is effective to vest an indefeasible title in the registered proprietor subject only to the exceptions enumerated in section 33.

26. The plaintiff Stanis Leda once had customary rights over the creek Nalu Putu. However he has now lost all those rights when the land was acquired by the State in 1975, and then registered as a State Lease.

27. By operation of the law, the plaintiff, Stanis Leda's former customary right over the creek, Nalu Putu were then converted into a right to receive compensation, either in monetary terms or compensation in kind. – See Sections 12 and 14 of the Land Act 1996. If Mr Leda has not been compensated when his land was acquired in 1976, then he is at liberty to commence and pursue those negotiations administratively with the relevant government agencies with a view to being adequately compensated.

28. I would therefore dismiss the entire proceedings on this basis alone. The formal Orders of this court are:-

1. Stanis Leda has no capacity to represent members of his Uguge Clan of Mai and Buluma villages. He has the capacity to represent himself as an individual person.
   
2. The entire proceedings are hereby dismissed.
   
3. If Stanis Leda was not compensated either in cash or in kind when his land was not acquired in 1976, then he is at liberty to commence and pursue those negotiations administratively with the relevant government agencies with a view to being adequately compensated.
   
4. Costs is awarded to the defendant.
   

_________________________

Paraka Lawyers: Lawyer for the plaintiff
Regeau Manua & Kikira Lawyers: Lawyer for the Defendant