Bougainville Copper Ltd v Masono [2018] PGNC 354; N7430 (22 August 2018)

N7430

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) No. 29 of 2018

BETWEEN
BOUGAINVILLE COPPER LIMITED
Plaintiff

AND
VICE MINISTER RAYMOND MASONO MHR, Minister for Mineral and Energy Resources of the Autonomous Region of Bougainville Government
First Defendant

AND
BOUGAINVILLE MINING ADVISORY COUNCIL
Second Defendant

AND
TIMOTHY KOTA, as Chief Mining Warden of the Autonomous Region of Bougainville
Third Defendant

AND
THE BOUGAINVILLE EXECUTIVE COUNCIL
Fourth Defendant

AND
KENTON SAMSON, as Mining Registrar of the Autonomous Region of Bougainville Government
Fifth Defendant

AND
THE AUTONOMOUS REGION OF BOUGAINVILLE GOVERNMENT
Sixth Defendant

Waigani: Gavara-Nanu J.
2018: 12 June & 22 August

JUDICIAL REVIEW – Application for a joinder – National Court Rules; Order 16 r 5 (2); Order 5 r 8 (1) – Constitution; s. 155(4) - Tests for a joinder – Bougainville Mining Act, 2015; ss. 33 and 96 – Principles regarding joinder discussed.

Cases cited:
Papua New Guinea Cases

AGC (Pacific) Ltd v. Kipalan [2000] PGNC4; N1944
Avia Aihi v. The State [1981] PNGLR 81
B Fortunaso Pty Ltd v. BSP [1992] PNGLR 275
CBS Inc, CBS Records Australia Ltd, Bali Merchants Pty Ltd v. Ranu Investments [1978] PNGLR 66
Dynasty Estates Limited v. Nambawan Super Limited (2015) SC1427
Innovest Limited v. Hon. Patrick Pruaitch, Miniter for Forests and Climate Change and Or (2014) N5949
Marie Iravela v. Banjamin Samson and Ors (2018) N7212
Jack Nou v. Richard Chirake (2004) N2539
Ken Norae Mondiai v. Wavoi Guavi Timber Company Limited (2006) N3061
Pinpar Development Corporation v. TL Timber Pty Limited [1999] PNGLR 139
PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC1126
PNG Printing Co. Ltd Thompson [1993] PNGLR 81
Steamships Trading Company Limited v. Garamut Enterprises Limited (2000) SC1959
Summit Development Ltd v. Byron Chan as Minister for Mining and Ors (2016)
N6390
Yanta Development Association Inc. v. Pui Land Group Inc. (2005) SC798

Overseas cases cited:

Re I G Farbenindustrie A G Agreement [1944] 1 Ch.41
Miguel Sanchez & Companies SL v. Owners of the Result [1968] P174

Counsel:

I. Molloy with E. Rere, for the Applicant
E. Anderson, for the Plaintiff
H. Masiria, for the Defendants

22^nd August, 2018

1. GAVARA-NANU J: In this proceeding the plaintiff is seeking review of the decision of the defendants made on 16 January, 2018, to refuse its application filed on 5 July, 2016 for an extension of its Exploration License No. EL01 which expired on 7 September, 2016. The El01 was granted on 8 September, 2014. The refusal was conveyed to the plaintiff in writing by the first defendant, it is “Annexure MH9” to Mark Hitchcock’s affidavit sworn on 25 January, 2018.
   
2. Before the Court is an application by Central Me’ekamui Exploration Limited (CMEL), (applicant) a company incorporated in PNG under the Companies Act, 1997 to be joined as the seventh defendant in this proceeding. The application is made pursuant to a notice of motion filed on 19 April, 2018, and an amended notice of motion filed on 20 June, 2018.
   
3. The applicant is fifty percent owned by a local Bougainvillean, Mr Philip Miriori (a landowner), and Special Mining Lease Osikayang Landowners Association Inc. (SMLOLA), each holding twenty five percent shares. The other fifty percent is owned by a foreign owned company called Central Exploration Ltd (CEL).
   
4. It should be noted that a number of applicant’s Directors are landowners who come from the area where Panguna mine is located.
   
5. Mr Miriori claims to be the Chairman of SMLOLA, which has interest in the same area of land over which the plaintiff had previous Special Mining Lease and now the subject of its application (the land).
   
6. On 16 November, 2017, the applicant submitted an application to the Bougainville Mining Registrar, Tenements for an Exploration License (EL), over the land.
   
7. Both Philip Miriori and SMLOLA have opposed the plaintiff’s application for an extension of its EL. They have attended Mining Warden’s hearing in which they strongly opposed the plaintiff’s extension application.
   
8. Mr Ian Molloy, counsel for the applicant submitted that the relevant tests for a joinder are;

(i) whether the applicant has sufficient interest in the proceeding; for which the applicant must show that it is a person directly affected by the proceeding; and

(ii) whether the joinder of the applicant is necessary; for which the applicant must show that its joinder will assist in the complete determination and adjudication of all the maters in dispute in the proceeding.

9. The above tests are essentially those the Supreme Court adopted in PNG Deep Sea Fishing Ltd v. Luke Critten (2010) SC1126. See also Yanta Development Association Inc. v. Pui Land Group Inc. (2005) SC798 and Jack Nou v. Richard Chirake N2539.
   
10. It was submitted that above tests should be given wide interpretation given that the decision the plaintiff is seeking to review concerns the rights and interests of the landowners.
    
11. Mr Molloy argued that the applicant is directly affected by the proceeding because it has already applied for an EL over the land. He submitted that the applicant ought to have been joined so that it could be heard on the matters in dispute. He told the Court that the plaintiff has also served the notice of motion filed under Order 16 r 5 (1) of the National Court Rules (NCR) on the applicant, which led to the applicant opting to apply to be joined as the seventh defendant in this proceeding.
    
12. Mr Erick Anderson, counsel for the plaintiff argued that the applicant has no legal right to be joined as a party in this proceeding because under the scheme of Bougainville Mining Act, 2015, (BMA) as an existing tenement holder, the plaintiff’s extension application has to be considered on its own by the relevant authorities. He argued that the plaintiff’s extension application cannot be compared with or weighed in anyway against any subsequent application for an EL, including the applicant’s application because such applications would be entirely independent of, and irrelevant to the plaintiff’s extension application. It was submitted that the applicant has no legal role whatsoever in the consideration, grant or refusal of the plaintiff’s extension application. It was further submitted that even if the applicant was joined as a party, it cannot contribute meaningfully towards full and effective determination and adjudication of the matters in dispute between the parties.
    
13. Mr Anderson argued that the applicant is a subsequent applicant for an EL whose application can only be considered by the relevant authorities after the plaintiff’s extension application has been considered and concluded and only if the plaintiff’s extension application is refused. The applicant’s application will in turn be considered independently of the plaintiff’s extension application.
    
14. It was submitted that the applicant only has a commercial interest or desire for a particular outcome in the proceeding, but that does not entitle it to be joined as a party. And although the applicant claims to represent landowners, which the plaintiff denies, it has no role to play in the extension of the plaintiff’s EL. Furthermore, the applicant cannot be involved in plaintiff’s extension application because it is half foreign owned, and is not an approved landowner organisation under the BMA.
    
15. It was also argued that any part already played by the applicant in being engaged in Warden’s hearing does not give the applicant sufficient interest in the proceeding as it is not an approved landowner organisation. Only approved landowner organisations which might be affected by the plaintiff’s activities can participate in the Warden’s hearing.
    
16. Reference was also made to the two tests adopted by the Supreme Court in PNG Deep Sea Fishing Ltd, which an applicant for a joinder must satisfy.
    
17. It is common ground that the relevant tests for a joinder have been laid down by the Supreme Court in PNG Deep Sea Fishing Ltd. Mr Anderson submitted that the applicant has failed to satisfy those tests.
    
18. Mr Anderson expanded the plaintiff’s grounds of argument by submitting that the application should be refused because the applicant has no cause of action or a claim against the plaintiff and vice versa, the plaintiff relied on AGC (Pacific) Ltd. v. Kipalan [2000] PGNC4; N1944 for this argument. It was also argued that the plaintiff has no remedy against the applicant and vice versa, nor has the applicant any claim against the defendants and vice versa, thus also relying on CBS Inc. CBS Records Australia Ltd, Bali Merchants Pty Ltd v. Ranu Investments [1978] PNGLR 66, and Pinpar Development Corporation v. TL Timber Pty Limited [1999] PNGLR 139.
    
19. Reference was also made to the case of B Fortunaso Pty Ltd v. BSP [1992] PNGLR275, which adopted an observation by Lord Green MR in the case of Re I G Farbenindustrie A G Agreement [1944] 1 Ch.41. That case differentiated legal or commercial interest from sufficient interest. These cases were cited in support of plaintiff’s contention that the fact that the applicant has commercial interest in the land does not satisfy the tests for a joinder.
    
20. The defendants also opposed the application. Ms Masiria, counsel for the defendants gave a brief summary of the relevant laws and tests for a joinder application. She relied on PNG Deep Sea Mining Ltd and Summit Development Ltd v. Byron Chan as Minister for Mining & Ors (2016) N6390. She however submitted that the applicant has failed to satisfy the tests for a joinder. She argued that the applicant’s only purported interest in the proceeding is limited to its involvement as an applicant for an EL over the land. She also argued that the plaintiff does not seek any relief against the applicant in its substantive application, which would warrant the applicant being joined as a party to the proceeding. She argued further that the relief sought by the plaintiff in the proceeding relate to the refusal of its extension application, therefore the matters in dispute can only be effectively addressed by the plaintiff.
    
21. In Summit Development Ltd, I expressed a view that to satisfy the first test viz; sufficient interest, the applicant must show that its interests are directly affected by the proceeding. This is a requirement stipulated under Order 16 r 5 (2) of the NCR which an applicant for a joinder should satisfy. See, Ken Norae Mondiai v. Wavoi Guavi Timber Company Limited (2006) N3061. This is a threshold issue in a joinder application. In Summit Development Ltd it was held that satisfying the requirement under Order 16 r 5 (2) will also satisfy the requirements for the second test for a joinder. In other words, upon an applicant showing that his interests are directly affected by the proceeding will make it necessary for the applicant to be joined as a party in the proceeding for the matters in dispute between the parties to be fully determined and adjudicated upon. In Summit Development Ltd in stating this point the Court said:-
    

“With respect, apart from its bending (sic.) effect, I consider the approach taken by the Supreme Court in PNG Deep Sea Fishing Limited v. Hon. Luke Critten, Governor for Milne Bay (supra) to be the proper and appropriate way to apply Order 16 r 5 (2) in a joinder application. Application of Order 5 r 8 (1) is in my view imperative in joinder applications once the requirement under Order 16 r 5 (2) is satisfied...”.

22. Ultimately an applicant for a joinder should show that it ought to have been joined in the proceeding in the first place and that its joinder was necessary. See, Dynasty Estates Limited v. Nambawan Super Limited (2015) SC1427 and Steamships Trading Company Limited v. Garamut Enterprises Limited (2000) SC1959.

23. PART 4 of the BMA deals with “LANDOWNER MATTERS”. Division 1 of this PART deals with “Landowner permissions”. This division relates to landowner groups being given permission to become “approved landowner organisations” to represent landowners. Division 2 deals with “approved landowner organisations”. Section 33 falls under this Division, it is a definition section which defines ”owners” as - the owners of customary land that is, or is likely to be the subject of, among other things, an application for the grant of a tenement. Section 34 sets out the procedure by which a group of landowners may seek approval to become an approved landowner organisation and s. 35 stipulates the rights of the landowners. The plaintiff argued that the applicant is not an approved landowner organisation within the meaning of these provisions.

24. The plaintiff has also in his written submission and the grounds for review in the Statement in Support relied upon ss. 246 and 250 of the BMA which relate to objections and hearing before the Mining Warden, to challenge the right of the applicant to object to the plaintiff’s extension application. The plaintiff essentially claims the applicant not being an approved landowner organisation had no right to object to the plaintiff’s extension application at the Warden hearing. For that reason the plaintiff also argues that the applicant has no right to be joined as a party to this proceeding.

25. In my view, question of whether the applicant or SMLOLA is an approved landowner organisation under the BMA is a legal issue which should be litigated by the parties at the substantive hearing. This issue does not arise for consideration in this application because it is not a test or a requirement which the applicant should satisfy for its joinder.

26. The relevant tests for a joinder are now settled in this jurisdiction in a series of binding decisions of the Supreme Court, including PNG Deep Sea Fishing Ltd. Going by those decisions, the principal laws establishing and regulating the tests for joinder applications are Order 16 r 5 (2); r 13 (6) (4) (c) and Order 5 r 8 of the NCR. See Summit Development Ltd.

27. Having regard to these principles, I find that the applicant has sufficient interest in the proceeding because the issues in the proceeding in my view directly affect its interests, thus satisfying the requirement under Order 16 r 5 (2) of the NCR. As I alluded to earlier, satisfying this requirement also satisfies the second test in PNG Deep Sea Fishing Ltd. See also PNG Printing Co. Pty Ltd v. Thompson [1993] PNGLR 81; and Miguel Sanchez & Companies SL v. Owners of the Result [1968] P174. The second test in PNG Deep Sea Fishing Ltd in fact harmonises with Order 5 r 8 (1) (b) of the NCR. I adopted this approach in Summit Development Ltd.

28. The question then is how is the applicant affected directly by the proceeding? Section 96 of the BMA, prescribes persons who may qualify to apply for an EL. One such person is a corporate body incorporated under the Companies Act, 1997. In this instance, there is no dispute that the applicant as a company incorporated under the Companies Act, qualified to apply for an EL. The application is pending determination.

29. When one looks at the Statement in Support, there are notable grounds of review which also directly challenge the decisions of the Warden which the plaintiff alleges favoured Philip Miriori and officers of SMLOLA who raised objections to the plaintiff’s extension application at the Warden’s hearing. These grounds also challenge the rights and or authority of Philip Miriori and SMLOLA officers to raise those objections. The pertinent grounds are:- Ground 1 (e) (i) and Ground 3 (a) (vii); (c) and (e), in these grounds the plaintiff makes following claims:-

(i) the second defendant acted unreasonably or was biased or gave the appearance of bias in among other things, preferring views of the “disputed officers” of SMLOLA;

(ii) the third defendant breached s. 250 (2) (b) (i) of the BMA, in among other things; allowing Philip Miriori as the asserted Chairman of SMLOLA to object or address the Warden’s hearing in opposition to the plaintiff’s application for extension of its EL01 and giving weight to Philip Miriori’s view as the representative of SMLOLA, which was not an approved landowner organisation; and

(iii) the third defendant breached ss. 246 (2) (e) (v); 250 (2) (b); 250 (3) (a) (i) and s.250 (3) (c) of the Act, in dealing with SMLOLA and persons claiming to be officers of SMLOLA, when SMLOLA was not an approved landowner organisation.

30. The plaintiff among others relies on above grounds for the relief it is seeking in paragraph 3 of the Statement in Support, which includes an order for certiorari to quash the decision.

31. These grounds raise questions of law, naturally SMLOLA and its officers, including Philip Miriori cannot defend the plaintiff’s claims unless they are joined through the applicant as a defendant in the proceeding, thus giving them an opportunity to defend the allegations made against them. The issues raised in these grounds affect the applicant directly because of its competing application for an EL over the land. The joinder of the applicant in the proceeding is therefore necessary as it will assist and contribute towards full determination and adjudication of the matters in dispute.

32. Also when one looks at the relief sought in the Statement in Support there cannot be any doubt that they provide even stronger and compelling reasons for the Court to reject the claims by the plaintiff and the defendants that the relief sought will not affect the rights and interests of the applicant. Almost all the relief sought either directly or indirectly challenge the applicant’s right to hold an EL. The pertinent paragraphs of the Relief Sought are 1, 2, 3, 4 and 5, in which the plaintiff seeks following orders and declarations:-

(i) certiorari to quash the decisions sought for review;

(ii) prohibition to prohibit the defendants and others from giving effect to or relying on the decisions;

(iii) declaration that the decisions are void, invalid and of no effect;

(iv) an injunction restraining the defendants from granting or giving effect to any form of license, right or interest whatsoever to any person other than the plaintiff over the land the subject of EL01 and

(v) mandamus directing the first defendant to grant the extension application. (my underlining).

33. The above relief are based on the grounds for review to which I have referred, which if granted will prevent or deny the applicant from being granted its application for an EL over the land.

34. The applicant has exercised the right conferred on it by s. 96 of the BMA, to apply for an EL over the land. That is a primary right which requires protection, thus the applicant is entitled to invoke the inherent powers of the Court under s. 1554 (4) of the Constitution to grant appropriate orders to do justice in the case, including orders for the applicant to be joined as a party so that it can be heard and be able to defend the allegations made against it by the plaintiff. Similar observation was made in Summit Development Ltd, in which the Court said:

“Apart from the above mentioned Rules as a source of Court’s jurisdiction or power to grant the relief sought in this application, this is an appropriate case in which the applicant can also invoke the inherent power of the Court. There are valid grounds for the Court to exercise its inherent power and order joinder, pursuant to Orders 5 r 8 (1) and 16 r 5 (2), of the applicant as a party to the proceeding and be heard on the motion which is challenging the legality of its Exploration License”.

35. See, also Avia Aihi v. The State [1981] PNGLR 81; Innovest Limited v. Hon. Patrick Pruaitch, Minister for Forests and Climate Change and Independent State of Papua New Guinea (2014) N5949 and Marie Iravela v. Benjamin Samson and Ors (2018) N7212.

36. I appreciate that no direct reference is made to the applicant in the grounds for review I referred to, but the relief sought as highlighted make it very plain that the challenges or allegations are essentially made against the applicant. This view is strengthened by the fact that the applicant has already applied for an EL over the land, which is pending determination by the relevant authorities. Therefore, the issues raised in the proceeding can only be addressed fully with the full involvement of the applicant by being joined as a party.

37. The applicant is permitted by law to apply for an EL, thus having applied for an EL over the land, it has the right to be heard on all the matters in dispute, which I have found affect it directly.

38. It was strongly argued by Mr Anderson that the applicant’s application for an EL, can be heard after the plaintiff’s extension application has been fully determined, and only if the plaintiff’s application was refused. This argument cannot be sustained for three reasons. First, it denies the applicant’s right to be heard on matters, which directly affect its interests. Second, the applicant has the right to be joined as a party because it has satisfied the requirements for a joinder. Third, the applicant has been served with the notice of motion filed under Order 16 r 5 (1), as required under Order 16 r 5 (2) as a person directly affected by the proceeding. Thus the applicant had the right to decide whether it should apply and be joined as a party in this proceeding and be heard on matters which affect him directly. In this application, the applicant is exercising that right.

39. The right of a person served with a notice of motion filed under Order 16 r 5 of the NCR was discussed in Summit Development Ltd, the Court said:

“Turning now to Order 16 r 5, giving the Rule its plain and ordinary meaning, I find that the Rule merely provides for a person who is directly affected by a proceeding under Sub-rule (2), to be served with the Sub-rule (1) notice of motion. The clear legislative intention and purpose deriving from the terms of Sub rules (2), (5) and (6) is to ensure that those persons who are directly affected by the proceedings are duly notified of the proceedings and are given an opportunity to be heard on the motion, if they so desired. The terms of Sub-rule (5) make it mandatory for affidavits stating the names of persons served and not served, but should have been served with the notice of motion; the fact(s) and reason(s) for the persons who should have been served with the notice of motion but had not been served, to be filed before the hearing of the motion. Under the terms of Sub-rule (6), it is also plain that, if on the hearing of the motion, the Court found from the affidavits filed under Sub-rule (5) that the persons who should have been served with the notice of motion had not been served, the Court may adjourn the hearing of the motion and direct that the notice of motion be served on such persons. The notable aspect of this procedure is that the requirement of service only relates to the notice of motion and not in respect of other court documents. To me, this requirement confirms the view I expressed above that the persons served with the notice of motion have an option to decide whether to be heard on the motion or not”.

40. The plaintiff’s argument that the applicant’s application is a subsequent application and it should be heard after its extension application is determined and concluded and only if its application is refused does not appear to have any basis even under the BMA. The scheme of the BMA allows anyone meeting the requirements under s. 96 to apply for an EL given that there is no existing EL held over the land. The plaintiff’s EL01 having expired, it has no existing EL over the land. Its extension application is therefore no bar to anyone meeting the requirements of s. 96 to apply for an EL over the land. The plaintiff’s argument also runs contrary to the established principles relating to joinder applications. The applicant has an existing application for an EL over the land and it has the right to defend it. The plaintiff’s extension application no doubt affects the applicant’s application for an EL over the land, thus it gives the applicant right to be heard on the matters in dispute in the proceeding.

41. The plaintiff’s argument appears to have been based on its argument that the applicant is not an approved landowner organisation under the BMA. That is an irrelevant consideration for the purposes of this application because it is not a requirement for a joinder.

42. Even if the applicant had not been served with the Order 16 r 5 (1) notice of motion, it would still be entitled to be heard in opposition to the motion as a “proper person” under Order 16 r 9 (1) of the NCR. This point was canvassed in Summit Development Ltd, where the Court said:

“As to Order 16 r 9 (1), it is important to appreciate that the procedure under this Rule follows on from the procedure set out under Order 16 r 5. It is equally important to appreciate that the intention and purpose of Order 16 r 9 (1) is to give to a person who had not been served with the Order 16 r 5 (1) notice of motion, as provided under Sub-rules (2), (3), (5) and (6) but wished to be heard in opposition to the motion, a right to be heard. Such person has to apply to the Court and prove that he is a proper person who should be heard in opposition to the motion. This requirement is plain from the use of the following terms in the Sub-rule - “...and appears to the Court to be a proper person to be heard, shall be heard....” Then the Court has to determine whether the person is a proper person who should be so heard. Again this is plain from the above terms of the Sub-rule. A similar view was held in Ken Norae Mondiai v. Wavoi Guavi Timber Company Limited (2006) N3061. Thus, Order 16 r 9 (1) essentially provides an avenue for a person who had not been served with the notice of motion but desires to be heard in opposition to the notice of motion, to be heard...”.

43. The applicant is therefore entitled to be joined as a party to the proceeding so that it can be heard on the matters in dispute.

44. For the foregoing reasons, the applicant’s application to be joined as the seventh defendant in this proceeding is granted.

45. The plaintiff is directed to serve all the Court documents relating to the proceeding on the applicant forthwith.

46. The plaintiff and the defendants will pay the applicant’s costs on 50/50 basis.

Orders accordingly
____________________________________________________________
Dentons Lawyers: Lawyers for the Plaintiff
Corrs Chambers Westgarth Lawyers: Lawyers for the Applicant
Fairfax Legal PLN Lawyers: Lawyers for the Defendants