Ihore v Sokepa [2016] PGNC 279; N6477 (27 September 2016)

N6477

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA No. 114 OF 2012
BETWEEN:

NAPHTALAI IHORE
First Appellant

AND:

THE MANAGER, FUDELI SAWMIL LIMITED
Second Appellant

AND:

HUDSON SOKEPA

First Respondent

AND:

LESLIE ASIMBA
Second Respondent

Popondetta: Toliken, J.
2016: 24^th March, 27^th September

INFERIOR COURTS – Appeal – District Court – Appeal from – Claim for damages for illegal entry into customary land – Inadequate facts pleaded in complaint – No reasonable cause of action shown - Un-liquidated damages – Claim unquantified - District Court lacks jurisdiction where amount claimed is not quantified – District exceeded jurisdiction – District Court Act Ch. 40, s 21(1)(3).

PRACTICE AND PROCEDURE – Parties to proceedings – Corporate entity - Non-existent entity wrongly named as party – Not a proper party – Judgment against – Clear error – Companies Act 1997, s 16.

APPEAL – Substantial miscarriage of justice – Appeal allowed – District orders quashed – Parties to meet owns costs.

Cases Cited:

Henry Aisi v Malaita Hoala [1981] PNGLR 199
Counsel:
A Asan, for the Appellants

M Geroro, for the Respondents

JUDGMENT ON APPEAL

27^th September, 2016:

1. TOLIKEN J: This an appeal against an order of his Worship Principal Magistrate William L Noki dated of 01^st May 2012. The order was as follows:

Judgment for Complainants in the sum of K10000.00 plus costs of K3.00 to settled by the second Defendant

The first defendant is an employee of the second Defendant and the holder of the Timber Permit
Settlement to take place within 30 days as of today.

2. The Appellants appealed against the decision on the 20^th of November 2012, initially without assistance from legal counsel on separate grounds, but under one Notice of Appeal on the following grounds:

1^st Defendant’s Grounds for Appeal:

• THAT THERE IS A BREACH OF AGREEMENT BETWEEN THE FIRST COMPLAINANT HUDSON SOKEPA AND THE PRINCIPLE LANDOWNER LAWRENCE ANDEBU
• THAT THERE IS AN INCONSISTENCY IN THE LAND MEDIATOR’S MEDIATION REPORTS AGAINST THEIR OWN FIELD INSPECTION REPORTS.
• THE GENERAL MANAGER. FUDELI INDUSTRIAL LTD. 2^ND APPLICANT/2^ND DEFENDANT (RAYMOND LIM). (Refer To Attachment)

2^nd Defendant’s Grounds for Appeal

• THAT FUDELI INDUSTRIAL LTD IS TOTALLY A WRONG COMPANY TO BE SUED. THAT THE COMPLAINANT SHOULD HAVE SUED ORO WOOD INDUSTRY LTD WHO IS THE APPLICANT AND LOGGER TO THIS FOREST PROJECT AREA.(Sic.)
  

3. The matter has a pretty long history to it, so it is appropriate to consider its background to fully appreciate not only the issues involved, but also what happened in the court below.
   
4. The respondents, Hudson Sokepa and Leslie Asimba of Ohombota Village, Popondetta, Oro Province lodged a complaint in the Popondetta District Court on 03^rd of May 2009. The Complaint was couched in the following terms:

...

“.. on the 20^th day of October 2009 at OHOMBOTA AND HIVIROTA NO. 2, POPONDETTA, O.P ... 1. NAPHTALI IHORE of POPONDETTA, ORO PROV. 2. GENERAL MANAGER of FUEDIL SAWMIL CO., POP

That you had each and severally breached a Land Agreement whereby illegally and unlawfully entered the traditional Land owned by the Complainants as UMBUHAPA Main clan and harvested logs without the knowledge and rights of the Complainants.

The Complainants therefore pray to this Court for an Order that the said payments to this harvest be paid into the main Umbuhapa clan and any other orders the said court deems fit.” (Sic.)

5. The court issued a Summons upon Complaint on the 05^th of May 2010. It was made returnable on 10^th of June 2010. The Appeal Book does not show what happened on this day. However, as far as it can be ascertained from the Appeal Book, the following succeeding events occurred:
   
   • On 28^th July 2010 - Naphtali Ihore filed an affidavit styled “AFFIDAVIT IN RESPONSE TO COMPLAINT”. (pp9 -14 Appeal Book)
   • 11/08/2011 - one John Javiripa of Hohourita village – a Land Mediator swore an Affidavit in Support presumably in support of the complainants (pp. 15 -16 of Appeal Book).
   • 11/08/2011 - one Timeaus Sorari of Hohorita village – a Land Mediator swore an Affidavit in Support presumably in support of the complainant (pp. 17,18 of Appeal Book).
   • 31^st October 2011 – First appellant swore an affidavit styled “AFFIDAVIT 1^ST DEFENDANT.” (pp.19 – 23 Appeal Book)
   • 13^th April 2011 - First Appellant swore and filed an affidavit styled “AFFIDAVIT 1^st DEFENDANT” (pp. 24, 25 Appeal Book).
   • 01^st May 2012 – His Worship Mr. William B Noki makes the order appealed against. (pp. 26, 27 Appeal Book)
   • 21/05/2012 – One Raymond Lim, ex General Manager of Fudeli Industrial Co. PNG Ltd swore and filed an Affidavit in support of what appears to be an Application to Set Aside the order of 1^st May 2012. (pp. 28 - 31 Appeal Book)
   • 28/05/12 – Raymond Lim applies by Notice of Motion to set aside the orders of 01/05/12 (pp. 32, 33 Appeal Book)
   • 28/05/12 – Raymond Lim swears and files Affidavit in support of Application to Set Aside. (pp. 34 – 37 Appeal Book)
   • 24/09/12 – Respondents filed an AFFIDAVIT IN SUPPORT OF UNSATISFIED JUDGMENT which itself is supported by a previous affidavit sworn on 18^th day of September 2012 by Hudson Sokepa. It appears from Mr. Sokepa’s affidavit that the Respondents did not prosecute their Motion to set aside hence the application for enforcement.(pp.38 -40 AB)
   • 24/09/12 – Warrant of Execution issued. (p. 41)
   • 20/11/12 – Appellants lodge Notice of Appeal, Recognizance on Appeal and Entry of Appeal to the National Court.
     
6. It appears, and it must be stated on record, that a lot more must have happened in the court below than what has been included in the Amended Appeal Book.
   
7. I do not believe that what transpired below has been fully put before this Court to assist it in deliberating on the issues and the grounds of appeal. For instance, where are the presiding magistrate’s minutes of proceedings for all those appearances before His Worship made his decision on 01^st May 2012? Did the magistrate give reasons for his decision? If he did, where are they?
   
8. This was a case that had been running for some two years after it was first filed. And certainly there would have been a fair bit of record for those appearances between 03^rd May 2010 when the Complaint was registered and the date of the decision on 01^st May 2012.
   
9. In my view the Amended Appeal Book is simply not complete, and should not have been certified and settled at all. This is an appeal, and as such, requires this Court to examine not only the presiding magistrate’s decision, but also his reasons for deciding as he did.
   
10. It is the duty of the Appellants and their Lawyers to prepare the Appeal Book and put before the Respondents and the Court all the relevant materials detailing what happened below. These include the originating process (complaint and summons), the transcripts of proceedings, copies of affidavits if the trial was by affidavit, or typed transcripts of oral evidence, or if these are legible from the magistrate’s notes, copies thereof and the magistrate’s reasons and his orders. These materials must be before this Court in order for it to fully understand what happened in the court below, so that it can properly consider the grounds of appeal. As a matter of fact these are matters which the appellant is required by Order 18 r 6(5) of the National Court Rules to include in the Appeal Book.
    
11. Save for the above stated documents, no transcripts of the proceedings are included in the Amended Appeal Book and the affidavits that have been included do not correspond to any specific event that happened below. In short the Court simply cannot tell from the Amended Appeal Book the true state of the proceedings in the court below.
    
12. Why is it important for me to raise this at this time? Well I am bound by the Appeal Book to start off with. And if I am to toss the decision of the court below (as is the petition of the Appellants) then I must do so on good ground and reason.
    
13. This Court being asked to examine the decision and reasons of the presiding magistrate, so it goes without saying that these be put fully before me. That seems to have not been done here. While the Court can settle the Appeal Book in court, it is not its duty to ensure the correctness of the Book itself. That is for the respondents to do. And in that regard, the respondents should only certify the correctness of the Book if it is satisfied that everything that needs to be included is in the Book. At the very least it is in their interest to do that because any adverse finding by the appellate court will definitely affect them. In other words they are entitled to fruits of their order and so must assist themselves and the appellate court by ensuring that the Book is not only correct, but also complete.
    
14. The parties in this Appeal are both represented by counsel and there should not be any excuse for the way the Appeal Book in this case has been prepared and settled. There are consequences and somebody has to bear and assume the responsibility for these. And I think the buck starts and stops with the Appellants.
    
15. It must also be noted – and this is an important observation – that it is not clear from the Amended Appeal Book if the matter was heard inter parte or ex parte by the District Court. It would seem, judging by the filing of the Notice of Motion to Set Aside, that the orders were granted ex parte, but without the benefit of the full transcript or minutes of the proceedings in the District Court, it is hard to tell.
    
16. Be that as it may, had this matter not been prolonged and protracted long enough already, I would have no option, but to return it to the registry or strike it out. However, the matter has been on the books for over three years after the appeal was lodged, and the interest of justice demands that it should be finalized so that the parties can get on with their lives.
    
17. I will therefore proceed to consider the appeal, but must place on record at the outset that consequences will flow from the way the parties have conducted this appeal.
    
18. At this juncture it must be noted that the appellants are seeking to dismiss the appeal for being incompetent because it was filed without leave outside of the stipulated period of three months.
    
19. This application is made at the twelfth hour and only in their submission, hence, it is not properly before the Court. They did not object at the beginning, but even if they did, they have not prosecuted any motion to that effect with due diligence. It is a little too late now to raise objection to competency of the appeal and in any case, they would, by their inaction be deemed to have consented to this appeal proceeding as it did to this point.
    
20. I now turn to the different grounds of appeal by the Appellants. The grounds of Appeal were drafted by the appellants’ themselves and may not seem that crystal clear, but the following issues (as identified by their Lawyers) can be deduced:
    
    1. Whether the Respondents’ claim in the District Court was properly pleaded to warrant judgment in the sum of K10,000.00;
       
    2. Whether the Second Appellant was properly named as a proper party;
       
    3. If the Second respondent is a proper party, whether it is the holder of the Timber Authority over Hirovita Forest Resource Area, which area is the subject of the Respondent’s claim;
       

ISSUE 1:

Whether the Respondents’ claim in the District Court was properly pleaded to warrant judgment in the sum of K10,000.00.

21. I wish to address this issue first because it touches on the jurisdictional basis of the Respondents’ claim in the District Court and the presiding Magistrate’s power to make the orders appealed against. The Respondents’ claim in the District Court was –

That you had each and severally breached a Land Agreement whereby illegally and unlawfully entered the traditional Land owned by the Complainants as UMBUHAPA Main clan and harvested logs without the knowledge and rights of the Complainants.

The Complainants therefore Pray to this Court for an Order that the said payments to this harvest be paid into the main Umbuhapa clan and any other orders the said court deems fit.”(Sic.)

22. It is trite that for a party to mount a legal case he must at the very outset have a reasonable cause of action – that is an action known to law. In our jurisdiction it must be a cause of action founded on Constitutional Law, statute, custom or customary law, the underlying law, or common law.
    
23. Section 21 of the District Courts Act Ch. 40 (Civil jurisdiction), provides that a District Court “has jurisdiction in all personal actions at law or in equity” subject to the Act generally and to the financial limitations provided therein. Actions “at law” have been held to include actions based on customary law (Henry Aisi v Malaita Hoala [1981] PNGLR 199).
    
24. The District Court is, however, a creature of statute. As such its jurisdictions are prescribed firstly by its enabling Act, the District Courts Act itself, and secondly by other legislation.
    
25. Section 21 (1) and (3) are relevant for our current purposes. They provide –
    21. CIVIL JURISDICTION.

(1) Subject to this Act, in addition to any jurisdiction conferred by any other law, a Court has jurisdiction in all personal actions at law or in equity where the amount of the claim or the amount or value of the subject matter of the claim does not exceed–

(a) where the Court consists of one or more Principal Magistrates.–K10,000.00; and

(b) where the Court consists of one or more Magistrates.–K8,000.00.

...

...

(3) Subsection (1) shall not be taken to limit the jurisdiction of Courts in cases where, by any law, money, irrespective of amount, may be recovered before a Court.

(4) ...

(5) ...

(6) ...

(7) ...

(8) ...

26. It is clear that unless specific legislation so provides, a District Court magistrate cannot exceed these financial limits, not even where the parties agree to have their matter dealt with in the District Court, because there is simply no power in the parties to grant jurisdiction to the court where none otherwise exists in the first place.

27. Now going back to the issue at hand, did the respondents plead a reasonable cause of action and if they did, did they plead it properly and with sufficient clarity?

28. As is the case in a Statement of Claim in a Writ of Summons in the National Court, a complaint in the District Court must also set out, in a concise form, the material facts (but not the evidence to support those facts). This is to inform the defendant what he is to meet, so that he is not taken by surprise. As the first document in the pleadings that will often follow, the complaint is the basis upon which a cause of action will be identified and from which issues of fact or law can initially be drawn out. It is also from the complaint that jurisdiction of the court can be ascertained, and the very foundation of jurisdiction itself. And to that end, the complainant must plead a cause of action, provide particulars and plead the remedy he seeks.

29. Another important and material fact that must be pleaded is the relationship of the parties named in the suit. Where there are multiple complainants and defendants their relationship must be sufficiently pleaded. The relationship between the complainants as amongst themselves and the relationship between the defendants as amongst themselves must also be clearly and sufficiently pleaded. A connection or nexus must be established because this will tell us where liability (if any) will ultimately fall.

30. In this case the Respondents merely pleaded that the Appellants breached a Land Agreement and illegally entered customary land owned by them and their Umbuhapa Main Clan and harvested logs there without their knowledge and permission.
    
31. The Respondent’s complaint appears to be grounded in contract and trespass to land, but as it is, it is entirely inadequate. If this were a breach of an agreement, the particulars of the agreement and its terms, and the particulars of the breach ought to have been concisely pleaded. If it was trespass to land, the particulars of the land and the nature of the trespass ought to have similarly been pleaded. The complaint does neither of these.
    
32. It seems to have been based on the assumption that the defendants knew what the claim was all about, but even if they did, the claim ought to have been pleaded sufficiently to also appraise the court of what the matter was all about so issues can be easily drawn out and identified, and for the court to ascertain whether it had the jurisdiction to deal with it in the first place.
    
33. So what was the agreement that the defendants breached? What land belonging to the complainant and his Umbuhapa clan did the defendants illegally enter and log timber from, and on what date and time? What was the Timber Forest Area the Respondent referring to? What was the value of the logs felled from the area? These are basic material facts that ought to have been pleaded in the complaint, but were not. These defects cannot be cured by evidence for the simple reason that the purpose of evidence is to support matters pleaded in the complaint.
    
34. It is also remarkable that the order appealed against declared that the First Appellant was an employee of the Second Appellant. That finding seems to be without basis as there is nothing in the Appeal Book to show that evidence was led to that effect. But even if evidence was led, the court would have acted beyond its powers because it was clearly precluded from admitting evidence on this matter because the nature of the relationship between the First Appellant and the Second Appellant was not pleaded at all in the summons. (Section 137 of the District Courts Act -EVIDENCE OF MATTERS NOT IN SUMMONS). The learned magistrate thus clearly erred in this regard.
    
35. But that is not the end of the matter. There is the relief sought by the Respondents. They craved “for an Order that the said payments to this harvest be paid into the main Umbuhapa clan...” How much money are we talking about here? Is it important that the value of the timber allegedly logged by the defendants be pleaded?
    
36. Of course it is. Quite apart from the fact that the defendants must know the amount claimed against them, the District Court is a court of limited jurisdiction. Its financial powers are prescribed by its enabling Act and any other law that grants it jurisdiction.
    
37. The presiding Magistrate was a Principal Magistrate, but he did not have unlimited financial jurisdiction. He can only award damages of up to K10000.00 unless of course some other laws grant him jurisdiction to award damages beyond that.
    
38. And to that end it is important to note that a magistrate’s power to award damages, for personal actions at law or in equity is limited by the “the amount of claim or the amount or value of the subject matter of the claim” subject to the financial limits set by Section 21 (1)(a)(b) of the District Courts Act. What does this mean? In my view this means that whatever the amount of claim or the amount or value of the subject matter is, it must fall within the prescribed limits, and it must be pleaded in the complainant.
    
39. It follows therefore that every financial claim in the District Court, whether liquidated or un-liquidated, must be quantified to bring them within the financial jurisdiction of the two classes of magistrates who sit in that court.
    
40. The District Court in my opinion will lack jurisdiction in personal actions at law or equity where damages are not quantified in the complaint. A complainant in the District Court must quantify his claim to bring it within the financial jurisdiction of the District Court.
    
41. In the matter at hand, the complaint was not quantified and therefore the presiding Magistrate did not have the jurisdiction to deal with the matter.
    
42. It did not matter that he did award a sum within his financial limit of K10,000.00 because he lacked jurisdiction from the beginning. In other words His Worship acted without jurisdiction. So any orders he made are void and of no effect from beginning.
    
43. A further matter that should have set bells ringing is the fact that there obviously was dispute as to the customary ownership of the subject land on which the timber was said to have been harvested. This is evident from the affidavit of the First Appellant dated 28^th July 2010 where he deposed to a dispute over land named as PAINGO over which the First Respondent (Hudson Sokepa) and one Lawrence Andembu had been disputing and reached an agreement over, which appears to have been subsequently approved by the Local Land Court, though no copy of the Agreement was annexed to the affidavit, nor is any to be sighted in the Appeal Book. (pp. 9 – 14 AB)
    
44. The First Appellant further deposed that the Second Appellant was wrongly named in the suit and that the correct party ought to have been ORO WOOD Limited. This was obviously not heeded by the presiding magistrate and as it turned out, judgment was entered against them. That there was some dispute over the land on which the timber was logged is further supported by a further affidavit of the First Appellant dated 31^st October 2011. (see pp. 19 – 23 AB) The District Court has no jurisdiction to deal with disputes involving ownership or other interests in customary land. That jurisdiction lies in the Land Courts under the Land Disputes Settlements Act Ch 45.
    
45. All in all, in proceeding to hear the matter and enter judgment against the Appellants in the face of jurisdictional issues and the naming of a wrong party as a defendant in the suit, the learned magistrate fell into further error and further acted without jurisdiction.
    
46. The appeal should therefore be allowed on this ground and in particular on the basis that the complaint was not properly pleaded and most importantly on the ground that the District Court acted without jurisdiction.
    
47. This should dispose of the appeal itself, but I think that it is appropriate to say something very briefly about the second issue brought about by this appeal which is - Whether the Second Appellant was properly named as a proper party.
    
48. The Second Appellant in this matter is “The Manager - FUEDIL SAWMIL CO.” as named in the original complaint. The company named as FUEDIL SAWMILL CO. is not named as defendant at all, only its manager was sued.
    
49. Now assuming for a moment that the company was indeed sued, was it sued in its proper name? If it was a company that was registered under the Companies Act 1997, then it would be clothed with separate legal personality.
    
50. Section 16 of the Companies Act 1997 provides that –

A company is a legal entity in its own right separate from its shareholders and continues in existence until it is removed from the register.

51. This means, as submitted by Mr. Asan for the Second Appellant, that for a company to be sued or to sue for that matter, it can only be sued or sue in its registered name and style.
    
52. It is clear to me that FUEDIL SAWMILL CO. is a non-existent entity. Hence, it was not a proper party in the proceedings before the District Court.
    
53. It is also clear to me that even if there was a typographical error in describing the entity, it ought to have become clear very early in the proceeding to the learned magistrate that the Second Defendant in the suit was the wrong party before the his court. As we have seen the First Defendant (Appellant) clearly deposed that the correct party to those proceedings should have been ORO WOOD LIMITED. In failing to address his mind to that issue, and ultimately making an order against the Second Appellant, the learned magistrate fell into clear error as I have already said above.
    
54. So having answered the second issue there is no need to address the third issue, which, basically depended upon my finding on the second issue.
    
55. For the foregoing reasons it is clear to me that there had been a substantial miscarriage of justice and the appeal should therefore be allowed. On the question of costs, on the basis of what I have said above regarding the manner in which the parties have conducted themselves in this appeal, I think that they should meet their own costs. I make the following orders –
    
    1. The appeal is allowed.
    2. The decision of District Court dated the 12^th of May 2012 and subsequent orders for enforcement are quashed in their entity.
    3. The parties shall meet their own costs.

_______________________________________________________________
Raurela Lawyers : Lawyer for the Appellants

Western Pacific Lawyers : Lawyers for the Respondents