Bagari v Marape [2016] PGNC 409; N6801 (11 November 2016)

N6801

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 14 OF 2014

BETWEEN:
PASTOR STEVEN BAGARI & six others whose
names appear in the schedule ‘A’ to this Writ
First Plaintiffs

AND:
GEDI DABU – President of Kiwai Local Level Government
Second Plaintiff

AND:
BENZES KUDI ALUSI – President of Oriomu Bituri Local Level Government
Third Plaintiff

AND:
HON. JAMES MARAPE, Minister for Finance
First Defendant

AND:
SCHADRACH HIMATA, Secretary for Mining
Second Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:
OK TEDI MINING LIMITED
Fourth Defendant

AND:
PNG SUSTAINABLE DEVELOPMENT LIMITED
Fifth Defendant

AND:
OK TEDI DEVELOPMENT FOUNDATION LIMITED
Sixth Defendant

AND:
BANK SOUTH PACIFIC
Seventh Defendant

AND:
ANZ BANK LIMITED
Eighth Defendant

Waigani: Hartshorn J.,
2016: 26^thJanuary,
: 11^th November

Whether interim injunctive relief already granted should continue

Cases cited:
Papua New Guinea Cases

Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853
Craftworks Nuigini Pty Ltd v. Allan Mott (1997) SC 525
Mamun Investment Ltd v. Nixon Koi (2015) SC1409
Markscal Ltd v. MRDC [1996] PNGLR 419
Ramu Nico Management (MCC) Limited and Ors v Tarsie and Ors [2010] SC 1075
Robinson v. National Airlines Commission [1983] PNGLR 478

Overseas Cases

American Cyanamid Company v. Ethicon Limited [1975] UKHL 1; (1975) AC 396
Donnelly v. Amalgamated Television Services Pty Ltd (1998) 45 NSWLR 570

Counsel:

Mr. A. Baniyami, for the Plaintiffs
Mr. A. Man, for the Second and Third Defendants
Ms. J. Nigs, for the Fifth Defendant

11^th November, 2016

1. HARTSHORN J: This is a decision on whether ex parte interim orders that amongst others, restrained the fourth defendant Ok Tedi Mining Ltd (OTML) from dumping waste into the Ok Tedi and Fly River Systems should be continued.
   

Background

2. The plaintiffs’ claim substantively, declaratory relief to the effect amongst others, that certain Community Mine Continuation Agreements (CMCA’s) are unenforceable, null and void and are of no effect, that the continuous dumping of mine waste and tailings into the Ok Tedi and Fly River systems is in breach of the Mining and Environment Acts and is unlawful, that certain trust deeds and trust bank accounts are null and void and that certain trust funds are payable to the plaintiffs and others. In addition, orders are sought that certain compensation funds are paid to the plaintiffs and that a permanent injunction issue against the fourth defendant Ok Tedi Mining Ltd (OTML) from operating the Ok Tedi mine until a proper waste dump or tailings dam is constructed and built to contain its waste and tailings.
   

Status of proceeding

3. This court granted the ex parte interim orders on 24^th January 2014. These orders were varied on 13^th February 2014. On 28^th February 2014 this court stayed the interim orders of 24^th January 2014 and amended paragraph 6(b) of those orders. The stay order was unsuccessfully appealed to the Supreme Court by the plaintiffs. The stay order remains in force. When the matter came before this court on 26^th January 2016 it was argued by counsel on the basis that it was an inter partes hearing for the determination of whether the ex parte orders made on 24^th January 2014 as varied should continue.
   

Position of parties

4. The plaintiffs only seek to extend the following paragraphs of the order of 24^th January 2014 as varied:
   

“2. The Fourth Defendant, Ok Tedi Mining Ltd (OTML) and its agents and employees are restrained from dumping anymore mine waste and tailings into the Ok Mani, Ok Tedi and Fly River and all its tributaries collectively the “Ok Tedi Fly River Systems” pending the substantive hearing or until further Orders of this Court and after inter parties hearing......

5. Pending the substantive hearing or further orders of the Court, ‘all funds/monies’ held in the following Bank Accounts be paid by the Seventh and Eight Defendants into the National Court Registrar’s Trust Account forthwith:-
   

a) The Western Province Community Mine Continuation Agreement (CMCA) Region Peoples Dividend Trust Account No. 12767475 with the Australia and New Zealand Banking Group (PNG) Limited (ANZ Bank).

b) Pending the inter partes hearing on a date to be allocated or further orders of the Court, all funds/monies that are held in the Western Province Non Community Mine Continuation Agreement (WPPDTA-Non CMCA) Regions Peoples Dividend Trust Account No. 1001310415 with the Bank South Pacific Ltd or have been transferred to the National Court Registrar’s Trust Account are injuncted.....

6. The following Accounts namely Suki Fly Gogo BSP acc #1000752596, Suki Fly Gogo BSP acc # 1000752596, Manawete Investment Fund BSP acc 1000752595, Manawete Investment Fund BSP acc 1000752596, Kiwaba Development Trust BSP acc #1000752598, Kiwaba Development trust BSP acc #1000752599, Dudi Development Trust account no 1000752600 are frozen pending further Orders of the Court;......
   
7. Pending further Orders of the Court and pending the substantive hearing, all outstanding and/or future compensation dividend funds payable by Ok Tedi Mining Limited and/or the State to the Western Province Community Mine Continuation Agreement (CMCA) Region Peoples Dividend Trust Account No. 12767475 with ANZ Bank be paid into the National Court Registrar’s Trust Account..........

8. Pending further Orders of the Court and pending the substantive hearing, all outstanding and/or future compensation dividend funds payable by Ok Tedi Mining Limited and/or the State to the Western Province Non Community Mine Continuation Agreement (WPPDTA-NON CMCA) Region Peoples Dividend Trust Account No. 1001310415 with the Bank of South Pacific Limited forthwith be paid into the National Court Registrar’s Trust Account.”
   
9. Further, as to paragraph 9 of the said orders, which is as follows:
   

“Pending the substantive hearing or further orders of the Court, and Order that the sum of K45 million promised as a one off payment from the 2006 dividend payment held in the Western Province Peoples Trust Funds, to the South Fly Region, for Projects be paid to the National Court Trust account or such other nominated person or entity of their choice, by the Registrar of the National Court, immediately after receipt of the funds referred to in paragraph 7(a) and (b) of the Notice of Motion, (Order (6)) above and to pay the costs of the scientific and health studies referred to under paragraph 8 (a) and (b) of the Notice of Motion (Order 7), and to cover reasonable legal costs.”,

The plaintiffs seek to vary or amend this paragraph to allow the payment of the K45 million in the National Court Registrar’s Trust Account to remain there until further orders or until the hearing of the substantive issues.

10. The second and third defendants seek the dissolution of the interim orders that the plaintiffs seek to extend and the fifth defendant adopts the submissions of the second and third defendants.
    

Plaintiffs’ submissions

11. The plaintiffs’ submit that the interim orders they seek to extend should be extended as:
    

a) the plaintiffs’ have locus standi to bring this proceeding as they are beneficiaries under the CMCA which is part of the Eighth Ok Tedi Mining Supplemental Agreement;

b) the plaintiffs’ are residents of the South Fly area which is located hundreds of kilometres downstream from the mine. Whilst OTML is not required to comply with the Environment Act 2000 within a 60 km area of the mine and hence is allowed to dump its waste within the mining lease area, the impact of this is felt along the Fly River, hundreds of kilometres downstream. It is submitted therefore that OTML is required to have the necessary approvals under the Environment Act 2000 to cover areas outside of the mining lease area before it can dump its waste at the source of the river system;

c) even if the plaintiffs’ had agreed to have the waste dumped into the Fly River Systems, such agreements have in essence been abrogated by the effect of the Mining (Ok Tedi Tenth Supplemental Agreement) Act 2013;

d) there is evidence to the effect that there is massive pollution in the Fly River as a result of dumping of waste from the Ok Tedi mine upstream;

e) there is evidence of massive corruption and misapplication of trust funds belonging to persons covered by the CMCA, and that those persons have not been benefiting from the Trust Funds;

f) the management of some Trust Funds is contrary to s. 15 Public Finances (Management) Act 1995;

g) as the PNG Government has purportedly taken over the Ok Tedi mine through the Mining (Ok Tedi Tenth Supplemental Agreement) Act 2013 and there are disputes concerning shares in the fifth defendant and as to the benefits from the mine, the injunctive orders pertaining to the Trust Funds must be extended to preserve them;

h) damages are not an adequate remedy. The evidence of Dr. Allan Tingay shows that there is massive environmental damage to the Fly River which will take years to restore;

i) the balance of convenience favours the extension of the injunctive orders in relation to the Trust Funds.

Second and third defendants’ submissions

12. The second and third defendants submit that the interim orders sought to be extended by the plaintiffs’ should not be as amongst others:
    

a) the plaintiffs’ comprise 9 individuals who reside in the South Fly area. They do not have standing to bring the proceeding as they do not represent any other persons in the proceeding and have no legitimate interest to pursue litigation in regard to agreements with, or funds in accounts held solely for, the advancement of persons who are resident elsewhere than in the South Fly Area;

b) the plaintiffs’ claim in this case is legally hopeless as the CMCA’s have the force of statute, the Mining (Ok Tedi Tenth Supplemental Agreement) Act 2013 does not affect the statutory force or effect of the CMCA’s, the continuous dumping of tailings and mine waste is not in breach of any sections of the Mining Act 1992, is expressly authorised under the Mining (Ok Tedi Agreement) Act 1976 (as amended and supplemented) and has been since at least 1985;

c) Clause 29 of the Principle Agreement deals with payment of annual compensation by OTML to the trustee of the Western Province General Compensation Trust, the Environment Act 2000 does not apply to OTML or the Ok Tedi Mine;

d) the communities who executed the CMCA’s gave their consent to the continuation of the operations of the Ok Tedi mine, including the continuous discharge of tailings and waste rock; the exclusive statutory environmental regime for the Ok Tedi mine has since about 1985, suspended the obligation to build a permanent tailings dam and permanent waste dumps for so long as OTML complies with that environmental regime, which it has done; there are no trust deeds or trust instruments that are contrary to s. 15 Public Finances (Management) Act 1995 and the money in the State’s Trust accounts is paid by OTML and is not compensation;

e) all of the substantive relief sought is time barred pursuant to s. 16 Frauds and Limitations Act, pursuant to the principles enunciated in Mamun Investment Ltd v. Nixon Koi (2015) SC1409;

f) the interim relief sought in the Originating Summons is an abuse of process as it is sought in an originating process.

Consideration

13. The principles upon which the court can grant an interlocutory injunction are well settled. The leading authority is a decision of the House of Lords in American Cyanamid Company v. Ethicon Limited [1975] UKHL 1; (1975) AC 396. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Nuigini Pty Ltd v. Allan Mott (1997) SC 525. These principles have been reaffirmed by the Supreme Court in Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853.
    
14. In Chief Collector of Taxes v. Bougainville Copper Limited [2007] SC 853, the Supreme Court said at 31:

“In our jurisdiction the principles relevant to injunctive reliefs (sic) are well settled. In Golobadana No. 35 v. Bank of South Pacific, Kandakasi J. ... concluded as follows:

“A reading of these authorities shows consistency or agreement in all of the authorities that the grant of an injunctive relief is an equitable remedy and it is a discretionary matter. The authorities also agree that before there can be a grant of such a relief, the Court must be satisfied that there is a serious question to be determined on the substantive proceedings. This is to ensure that such a relief is granted only in cases where the Court is satisfied that there is a serious question of law or fact raised in the substantive claim. The authorities also agree that the balance of convenience must favour a grant or continuity of such a relief to maintain the status quo. Further, the authorities agree that, if damages could adequately compensate the applicant then an injunctive order should not be granted”.”

15. Similarly, in Ramu Nico Management (MCC) Limited and Ors v Tarsie and Ors [2010] SC 1075 at 53, in a decision in which I dissented on matters not currently relevant, I said:
    

“The law on injunctions is settled in this jurisdiction. Injunction is an equitable remedy. It is a matter for the discretion of the Court to refuse or grant the relief sought. In order for an injunction to be granted, the applicant must demonstrate to the Court that there is a serious case to be tried on the substantive proceedings. The leading authority is a decision of the House of Lords in “American Cyanamid Company v Ethicon Limited (1975) 1 All ER 594. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Niugini Pty Ltd v Allan Mott (1997) SC525 and Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853.”

16. The first consideration is whether the plaintiffs’ have a serious question to be tried. A serious question to be tried has been interpreted to mean:

“What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success....”:Robinson v. National Airlines Commission [1983] PNGLR 478 and

“..... a strong case which, on the evidence presented would support a permanent injunction” :Markscal Ltd v. MRDC [1996] PNGLR 419.

17. The parties have filed affidavits in support of their respective positions. As to the court's consideration of that evidence at this stage, I am mindful of the words of Lord Diplock in American Cyanamid (supra):

“It is not part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations.”

Serious question to be tried

18. As to the substantive relief that the plaintiffs’ seek in their statement of claim:
    

a) (i) An order in the nature of a declaration that certain CMCA’s have been frustrated by the 10^th Supplemental Act to the extent that the CMCA’s are unenforceable, null and void, and of no effect.

(ii) the second and third defendants submit that the certain CMCA’s have the force of statute by virtue of s. 4(2) Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement) Act 2001, and so this relief sought is not able to be obtained by the plaintiffs.

(iii) From a perusal of s. 4(2), I am satisfied that there is merit in the submissions of the second and third defendants.

(iv) Further, the Mining (Ok Tedi Tenth Supplemental Agreement) Act 2013 concerns the acquisition of the fifth defendant’s shareholding in OTML. It does not concern the CMCA’s and does not affect their statutory force and effect. From a perusal of the said Act, there is merit in this submission.

b) (i) An order in the nature of a declaration that the continuous dumping of mine waste and tailings into the Ok Manu, Ok Tedi and Fly River System, by OTML is in breach of section the Mining Act (sic)

(ii) the second and third defendants submit that the dumping of tailings and mine waste is not in breach of any section of the Mining Act and is expressly authorised under the Mining (Ok Tedi Agreement) Act 1976 (as amended and supplemented) and has been so authorised since at least 1985. There is evidence as to the historic and current authorisation for such discharges.

(iii) From a perusal of this legislation, I am satisfied that there is merit in the second and third defendants’ submissions.

c) (i) An order in the nature of a declaration that the continuous dumping is in breach of the Environment Act 2000.

(ii) the second and third defendants submit that from a perusal of the relevant legislation, s. 3(2) Environment Act 2000, Mining (Ok Tedi Agreement) Act 1976 (as amended and supplemented) and s. 5 Mining (Ok Tedi Restated Eighth Supplemental Agreement) Act 1995, it is clear that the Environment Act 2000 does not apply.

(iii) From a perusal of this legislation, there is merit in this submission.

d) (i) An order in the nature of a declaration that the dumping is without consent and authority of the plaintiffs and the affected CMCA Region people and is unlawful.

(ii) the second and third defendants submit that the said dumping is authorised by statute and does not require consent other than from the State. The various communities who executed the CMCA’s have given their consent. That consent and the CMCA’s generally have been given statutory effect.

(iv) From a perusal of this legislation, there is merit in this submission.

e) (i) An order in the nature of a declaration that the plaintiffs are entitled to the Funds and Assets listed in the Table under paragraph 49 of the statement of claim and the Defendants be ordered to compensate them.

(ii) the second and third defendants submit that the plaintiffs being 9 individuals resident in the South Fly area have no personal entitlement to the said funds and assets. Further, the monies in WPPDTA-CMCA and the WPPDTA-Non CMCA accounts hold public monies of the State. Pursuant to the Public Finances (Management) Act 1995, they form part of the Public Account and are the property of the State. Again, from a perusal of the legislation, there is merit in the submissions of the second and third defendants.

f) (i) A permanent injunction be issued until a proper waste dump or tailings dam is constructed.

(ii) the second and third defendants submit that the exclusive statutory environmental regime applicable to the Ok Tedi mine has since 1985, suspended the obligation to build a permanent tailings dam and permanent waste dumps for so long as OTML complies with that environmental regime.

(iii) from a perusal of clause 7 of the agreement scheduled to the Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement) Act 2001 and s. 4 of that Act, and the affidavit evidence of Nigel Parker, I am satisfied that there is merit in these submissions.

g), h) and i) (i) An order in the nature of a declaration that all certain Trust Deeds created by the First Defendant, and a certain Trust account are contrary to section 15 Public Finances Management Act and are null and void and of no effect.

(ii) The second and third defendants submit that there are no such trust deeds. There are trust instruments signed by a Minister under Part III of the Public Finances (Management) Act 1995 in respect of public monies forming part of the Public Account of the State under the Act. The trust instruments are not contrary to s. 15 of the Act. But, if they were, the funds would remain public money and revert as unallocated money to the Consolidated Revenue Fund of the State under the Act. I am satisfied that these submissions have merit.

j) and k) (i) An order in the nature of a declaration that funds contained in certain Trust accounts are compensation payments and are payable to the plaintiffs and others.

(ii) The second and third defendants submit that the CMCA’s are agreements made between OTML and the residents of the various village communities named in them. The monies in the WPPDTA-CMCA are public monies and belong to the State. These monies have nothing to do with compensation money agreed to be paid by OTML under the CMCA’s.

(iii) I am satisfied that these submissions have merit.

l) (i) An order that all compensation funds paid by OTML to certain Trust accounts be reimbursed to the plaintiffs by OTML and the State.

(ii) The second and third defendants submit that the money in the State’s trust accounts is public money and the property of the State. It is paid by OTML to the State as dividends on the State’s 10% shareholding in OTML held by Mineral Resources Ok Tedi No. 2 Limited. It is not compensation. Again I am satisfied that these submissions have merit.

m) As to the remaining relief sought in paragraphs M to S in the substantive prayer for relief in the statement of claim, the second and third defendants submit that it is an abuse of process as it seeks interim relief in the substantive proceedings.

19. Otherwise, the second and third defendants submit that all the relief sought is time barred in the context of s. 16 Frauds and Limitations Act and the principles enunciated in Mamun Investment Ltd v. Nixon Koi (2015) SC1409.
    
20. After a consideration of the substantive relief sought by the plaintiffs, their submissions and those of the second and third defendants, I am not satisfied that the plaintiffs’ have proved to the requisite standard that they have a serious, and not a speculative case which has a real possibility of ultimate success, or a strong case which, on the evidence presented, would support a permanent injunction. Consequently, the interim relief sought to be continued should be refused.
    
21. If however, I assume for present purposes only, that the plaintiffs have established that they have a serious question to be tried, the next consideration is whether damages would be an adequate remedy. The plaintiffs’ submit that damages are not an adequate remedy in the circumstances of this case. They rely upon the affidavit evidence of Dr. Allan Tingay which the plaintiffs’ submit shows massive environmental damage to the Fly River which will take years to restore. Further, it is submitted that it is in the interests of the parties that the trust funds the subject of this litigation be preserved until the substantive issues are resolved. The plaintiffs’ submit that the balance of convenience favours the extension of the orders that they seek to extend.
    
22. The second and third defendants made submissions in this regard primarily on the question of the balance of convenience. They referred to the affidavit evidence of Nigel Parker. Mr. Parker deposes to the enormity of the detrimental consequences to the State if the injunction that has the effect of requiring OTML to cease operating was granted. It is submitted that there is no evidence of the corresponding benefit of the injunction to the plaintiffs apart from a few unsupported anecdotes from plaintiffs who live hundreds of kilometres away from the mine. As far as the injunctions that are sought in respect of bank accounts that hold CMCA and other funds are concerned, the second and third defendants submit that the plaintiffs do not have any legitimate interest in litigating in respect of accounts that are intended for the advancement of people resident elsewhere. Any such interim injunctions concerning those accounts would be detrimental to those people while providing no legitimate benefit to the plaintiffs. Further, in respect of the South Fly region, the plaintiffs have no right, title or interest in the WPPDTA-CMCA account as this consists of money belonging to the State.
    
23. Further, the second and third defendants submit that the plaintiffs have not shown any financial capacity to compensate the defendants for the damage that would result from stopping the operation of the mine unnecessarily and the plaintiffs, as has been the case for many years during the operation of the mine, are unlikely to be harmed if no injunction is granted. Conversely, the State will be greatly harmed. Taking all of these considerations into account submit the second and third defendants, the balance of convenience weighs heavily in favour of the defendants and does not favour the maintaining of the injunctions.
    
24. As to the undertaking of damages given by the plaintiffs, the second and third defendants submit that there is no evidence to show that the plaintiffs have the financial ability to meet any orders for damages in the event of their claim failing. However, the evidence of the defendants is that OTML and the State will lose substantial sums if the injunctions continue. Reference was made to the following statement of Hodgson J. in Donnelly v. Amalgamated Television Services Pty Ltd (1998) 45 NSWLR 570 at 575:
    

“On the balance of convenience, the fact that the applicant’s undertaking as to damages is probably of little or no value is a powerful discretionary factor against the grant of an interlocutory injunction.”

25. The second and third defendants submit that the fact that the plaintiffs have not given any evidence of an ability to meet an order for damages pursuant to their undertaking should, together with the other considerations in respect of which submissions have been made, be a further basis for not extending the injunctive relief in this present case.
    
26. Having considered the submissions of the plaintiffs and the defendants as to the questions of damages being an adequate remedy and the balance of convenience, I am of the view that the balance of convenience clearly favours the injunctive relief not being continued and I accept the submissions of the second and third defendants in this regard. I also refer to my reasons for decision in Stephen Bagari v. James Marape (2014) N5897 [13] – [20].
    
27. Consequently, as I am of the view that the plaintiffs’ have not proved to the requisite standard that they have a serious, and not a speculative case which has a real possibility of ultimate success, or a strong case which, on the evidence presented, would support a permanent injunction; and even if it is assumed for present purposes only that they have, the balance of convenience clearly favours the injunctive relief not being continued; all of the orders of this court made on 24^th January 2014 as varied should be dissolved.
    

Orders

31. The Orders of the Court are:

a) The orders of this Court made on 24^th January 2014 as varied are dissolved;

b) The plaintiffs shall pay the costs of the second, third and fifth defendants of and incidental to the hearing of this matter on 26^th January 2016;

c) Time is abridged.
_____________________________________________________________
Baniyamai Lawyers: Lawyers for the Plaintiffs
Allens Lawyers: Lawyers for the Second and Third Defendants
Gadens Lawyers : Lawyers for the Fifth Defendant