Bioma Ekamo Holdings Ltd v Avai [2014] PGNC 15; N5561 (28 March 2014)

N5561

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 126 OF 2013

BETWEEN

BIOMA EKAMO HOLDINGS LIMITED
Plaintiff

AND

MARC ORISURU AVAI – ADMINISTRATOR, GULF PROVINCIAL ADMINISTRATION
First Defendant

AND

GULF PROVINCIAL GOVERNMENT
Second Defendant

AND

DR. PETER GA'ALLAH KORA (PhD) – SECRETARY, DEPARTMENT OF NATIONAL PLANNING & MONITORING AND CHAIRMAN OF THE ECONOMIC IMPLEMENTATION COMMITTEE
Third Defendant

AND

DEPARTMENT OF NATIONAL PLANNING & MONITORING
Fourth Defendant

AND

STEVEN GIBSON, DEPARTMENT OF FINANCE
Fifth Defendant

AND

DEPARTMENT OF FINANCE
Sixth Defendant

AND

RENDEL RIMUA – SECRETARY, DEPARTMENT OF PETROLUEM & ENERGY
Seventh Defendant

AND

DEPARTMENT OF PETROLUEM & ENERGY
Eighth Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Ninth Defendant

Waigani: Makail, J
2013: 11th October & 2014: 28th March

PRACTICE & PROCEDURE – Preliminary question raised by Court on its own motion – Question of appropriateness of proceedings – Mode of proceedings – Proceedings commenced by originating summons – Claim for money – Recovery of outstanding funds – Funds approved for payment by Expenditure Implementation Committee – Money paid for construction of office complex and water supply project – Money paid under Agreement – Withholding of funds – Authority of – Defence deny liability – Work incomplete and sub-standard – No acquittals of funds – No report provided on progress of projects – Construction of agreement – Identification of issues – Issues clear and straight forward – National Court Rules – O 4, r. 3.

Cases cited:

Mision Asiki v Manasupe Zurenuoc & Ors (2005) SC797
Telikom PNG Limited v Independent Consumer & Competition Commission (2008) SC906
Gabriel Yer v Peter Yama (2009) SC996
William Duma v Eric Meier (2007) SC898
Wahgi Mek Plantations Limited v Robert Mudiye & Ors (2011) N4383
Joseph Koroma v David Tigavu & Ors: OS No 252 of 2006 (Unnumbered and Reported Judgment of 16th August 2006
Tigam Malewo & Ors v Keith Faulkner & Ors (2007) N3357
NCDIC v Bogibada Holdings Pty Ltd [1987] PNGLR 135
TS Tan v Elcom (2002) SC683
Ok Tedi Mining Ltd v Niugini Insurance Corporation (No. 2) [1988-89] PNGLR 45
Telikom PNG Ltd v ICCC (2007) N3144
Kurubu Ipara & Anor v Daniel Yaluma (2010) N4277

Counsel:

Mr M Kombri, for Plaintiff
Mr B Ovia, for First & Second Defendants
Ms F Baton, for Fourth & Ninth Defendants

RULING

28th March, 2014

1. MAKAIL, J: This is a ruling on a preliminary question raised by the Court, on its own motion, before the hearing of the plaintiff's application for summary judgment. The question is the appropriateness of the proceedings. Its determination will determine whether or not these proceedings will continue.

2. The plaintiff is a company incorporated under the provisions of the Companies Act 1997. It claims to be a landowner company and commenced these proceedings by originating summons to seek declaratory relief to declare, among others, that a committee called the Expenditure Implementation Committee ("Committee") is the only authorised body to approve funds for infrastructure projects under clause 13.1(e) of the PNG LNG Pipeline Licence Benefit Sharing Agreement dated 26th November 2009 ("Benefit Sharing Agreement"), that the first and second defendants had no authority to approve or withhold funds, and an order for payment of a sum of K9,500,000.00.

3. This sum, it alleged, was part of K15,000,000.00 approved by the Committee and chaired by the third defendant, to fund the construction of an office complex for the Gulf Provincial Administration and Apeawa Water Supply in Kikori under the infrastructure projects programme within the pipeline areas where pipes for the Liquefied Natural Gas ("LNG") project will run. These funds are referred to as or called "Infrastructure Development Grants" and are catered for by the State under Benefit Sharing Agreement.

4. It further alleged that it submitted proposals to the Committee for these projects and the Committee approved them. In 2011, a sum of K6,000,000.00 was transferred to the first and second defendants to disperse to it and they paid K5,500,000.00 and K9,500,000.00 is outstanding. It alleged that the first and second defendants wrongfully withheld this sum.

5. It submitted that under O 4, r. 3 of the National Court Rules, it had a choice to commence proceedings by originating summons or by writ of summons. It decided to use an originating summons because it was a quicker and easier way to determine the dispute. Further, it took this course because in a related matter, the plaintiffs used an originating summons to commence proceedings and successfully obtained summary judgment against the same defendants. That was in the case of Mrs Edau Gibere & Ors v The State and Gulf Provincial Government: OS No 125 of 2013. The evidence of the Originating Summons and Court Order may be found at annexure "A" and annexure "B" of the affidavit of Mr Bomsy Boviro filed on 13th June 2013.

6. It further submitted that the dispute is primarily over the authority of the first and second defendants to withhold funds and will involve the construction of the Benefit Sharing Agreement as to whether these defendants had authority to approve or withhold funds. It submitted that, it will submit at trial, that they had no authority and that they were obliged to release the funds to it in accordance with the decision of the Committee.

7. Finally, it relied on the decisions of the Supreme Court in Mision Asiki v Manasupe Zurenuoc & Ors (2005) SC797; Telikom PNG Limited v Independent Consumer & Competition Commission (2008) SC906; Gabriel Yer v Peter Yama (2009) SC996 and William Duma v Eric Meier (2007) SC898 and submitted that these cases held that a plaintiff has a choice of mode of proceedings and have refused to struck out proceedings commenced by originating summons where facts are not substantially disputed.

8. For these reasons, it submitted that the proceedings are not an abuse of process, should not be struck out and that it proceeds to move its application for summary judgment.

9. The first, second, fifth and ninth defendants were represented at the hearing. Relying on two affidavits by Mr Christopher Uari Haro and one by Ms Monica Lopyui, they denied liability and argued in their defence that the plaintiff has commenced a wrong mode of proceedings. They argued that the plaintiff's purported cause of action is one of breach of contract as it is a claim for money. A claim for money should be commenced by writ of summons endorsed with a statement of claim.

10. The statement of claim, they argued, will set out the facts, particulars of the terms of the contract, particulars of breach and relief. The pleading of these matters will enable them to respond to the claim by way of a defence. From the statement of claim and the defence, they further argued, will enable the parties to identify the issues for trial. In this case, most of the facts are disputed because they alleged, among others, that:

• Firstly, while the Committee is the authorised body to approved funding, and the funds are paid under the Benefit Sharing Agreement, there is no contract between the plaintiff and the defendants stipulating the rights and obligations of the parties as to who is responsible for managing the funds after approval by the Committee, how the funds are to be accessed by the successful applicant (contractor), acquittal of the funds and reporting conditions of the progress of the projects. In the event of a breach, there is no contract in place to enforce.
  
• Secondly, the work is incomplete and sub-standard.
  
• Thirdly, the plaintiff failed to acquit the funds and provide a report on the progress of the projects.
  
• Fourthly, the plaintiff is not a landowner company, as it claims. The company records from the Companies Office showed that it is owned by a family, the shareholders being Mr Bomsy Boviro and his wife Helen Boviro and they are the only signatories to its account held at BSP Bank, Port Moresby.
  
• Fifthly, the National Executive Council decided and directed that upon approval of projects for funding by the Committee, the funds will be transferred to trust accounts for Provincial Governments where the projects will be undertaken and that the Provincial Administrators will be the signatories to the accounts.
  
• Sixthly, the contracts will be tendered and awarded in compliance with the Public Finance (Management) Act, 1995.
  

11. I accept the plaintiff's submission that it had a choice of mode of proceedings. O 4, r. 3 of the National Court Rules states:

"3 Where the plaintiff may choose (4/3)

(1) Except in the case of proceedings which by the Rules or by or under any Act are required to be commenced by writ of summons, the proceedings may be commenced either by writ of Summons or by originating Summons as the plaintiff considers appropriate.

(2) Proceedings –

(a) In which sole or principal questions at issue is, or is likely to be, one of construction of an Act or of any instrument made under an Act, or of any deed, will, contract or other document or some other questions of law;

(b) In which there is unlikely to be a substantial dispute of facts; or

(c) In which the person is authorized by an Act, regulation or by these Rules to make an application to the court or a Judge with respect to a matter that is not already the subject matter of a pending cause or matter and no other mode of making the application is prescribed by that Act, or Regulation or by these Rules,

are amongst those which are appropriate to be commenced by originating summons unless the plaintiff considers the proceedings more appropriate to be commenced by writ of summons."

12. I consider that where a plaintiff is deciding which mode of proceedings is appropriate, it must consider three matters. First, whether the dispute involves construction of an Act, instrument, deed, contract or other document or some other questions of law. Secondly, whether there is unlikely to be a substantial dispute of facts and finally, whether the person is authorised by an Act, Regulation or by the National Court Rules to make an application to the Court or Judge concerning a matter which is not subject to a pending Court proceedings and that there is no other mode of proceedings prescribed by the Act, Regulation or the National Court Rules.

13. Where the dispute involves construction of an Act, instrument, deed, contract or other document or some other questions of law and there is unlikely to be a substantial dispute of facts, an originating summons is appropriate. It is also useful to consider the nature of the relief sought and where it is a declaratory relief, it has been held that such a relief is discretionary and is granted by the Court in cases where there is a real and not a hypothetical question between the parties and that it should be refused, where its granting would not settle the dispute between the parties.

14. There is a host of case authority on these principles, some of which are Wahgi Mek Plantations Limited v Robert Mudiye & Ors (2011) N4383; Joseph Koroma v David Tigavu & Ors: OS No 252 of 2006 (Unnumbered and Reported Judgment of 16th August 2006); Tigam Malewo & Ors v Keith Faulkner & Ors (2007) N3357; NCDIC v Bogibada Holdings Pty Ltd [1987] PNGLR 135; TS Tan v Elcom (2002) SC683; Ok Tedi Mining Ltd v Niugini Insurance Corporation (No. 2) [1988-89] PNGLR 45; Telikom PNG Ltd v ICCC (2007) N3144; and Kurubu Ipara & Anor v Daniel Yaluma (2010) N4277.

15. From my perusal of the originating summons, the affidavits of the plaintiff's Managing Director Mr Bomsy Boviro, the second defendant's Deputy Administrator Mr Haro, and the fourth defendant's Assistant Secretary Ms Lopyui, there appears to be no dispute that the Committee is the authorised body to approve funds for infrastructure projects in the pipeline areas pursuant to clause 13.1(e) of the Benefit Sharing Agreement. In my view, therefore, there is not much controversy between the parties over this issue and a grant of a declaration will not make any difference.

16. But the real controversy is the first and second defendants' decision to withhold the balance of the funds. The issues that arise from this controversy are whether the first and second defendants had the authority and if so, whether they had valid reasons for doing so. I also accept the defence submission that this is not the only controversy. There are others, and they are whether the plaintiff complied with the contract tender and award procedure under the Public Finance (Management) Act, 1995 and whether there is a contract between the parties. If there is, what are the terms, who manage the funds, whether the plaintiff completed the projects, whether the work was sub-standard, whether the plaintiff is required to acquit the funds and whether it is required to provide reports on the progress of these projects?

17. In my view an appropriate mode of proceedings which would throw up these issues is a writ of summons endorsed with a statement of claim. If the plaintiff had done that, the defence would have been obliged by the National Court Rules, to file a defence. This would have enabled parties to identify these issues for trial. Nonetheless, to my mind, where proceedings are commenced by originating summons and parties are able to identify the issues for trial without much inconvenience, the proceedings should not be dismissed.

18. In this case, I am of the view that the facts are not substantially disputed. The facts are set out in the various affidavits which I have briefly referred to and they throw up these issues which the parties have identified. At the centre of the dispute is the issue of whether the first and second defendants had authority to approve or withhold funds under the Benefit Sharing Agreement. This issue will require a construction of the Agreement including the issues raised by the defendants in relation to the reasons for withholding the funds.

19. I am also satisfied that the parties have identified them without much inconvenience and they are the issues for trial. I am further satisfied that these issues are clear and straight forward and it would not be necessary for practical reasons, to require the plaintiff to commence further proceedings by writ with a statement of claim or order the proceedings to continue on pleadings: O 4, rr. 2 & 35 of the National Court Rules.

20. For these brief reasons, I am satisfied that the proceedings should not be dismissed. As there is no prohibition against a summary judgment in proceedings commenced by originating summons, I will allow the plaintiff to move its application for summary judgment: see O 12, r. 37 of the National Court Rules and also Gabriel Yer v Peter Yama and William Duma v Eric Meier.

Ruling and orders accordingly.
______________________________________________________________

Kombri & Associates: Lawyers for Plaintiff
Ketan Lawyers: Lawyers for First & Second Defendants
Acting Solicitor-General: Lawyers for Fourth & Ninth Defendants