Osi v Sungi [2019] PGNC 255; N8058 (2 September 2019)

N8058

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1014 OF 2017

BETWEEN:
CHARLES OSI
for himself and on behalf of the fifty-three
(53) individual clan leaders whose consent and authority is
annexed as Schedule A to this Statement of Claim
Plaintiff

AND:
JOSEPH SUNGI
in his capacity as Custodian for Trust Land
First Defendant

AND:
BEWANI PALM OIL DEVELOPMENT
LIMITED
Second Defendant

AND:
BEWANI OIL PALM PLANTATIONS
LIMITED
Third Defendant/Cross Claimant

AND:
HON. DOUGLAS TOMURIESA, MP, in his
capacity as the MINISTER FOR FORESTS
Fourth Defendant

AND:
THE INDEPENDENT STATE
OF PAPUA NEW GUINEA
Fifth Defendant/First Cross Defendant

Waigani: Hartshorn J
2019:2^nd September

Application to dismiss the proceeding

Cases Cited:
Papua New Guinea Cases

Amos Ere v. NHC (2016) N6515
Andita Keko v. Barrick (Niugini) Ltd (2015) N7569
Bernard Kosie v. John Kapi Nato (2015) N6263
Bernard Kosie v. John Kapi Natto (2016) unreported SCA 55/15 delivered 6^th May 2016
CMSS (PNG) Ltd v. State (2014) N5717
Digicel (PNG) Ltd v. Tongayu (2018) N7237
Don Polye v. Jimson Papaki & Ors (2000) SC637
Kerry Lerro v. Stagg &Ors (2006) N3050
Mamun Investment v. Koim (2015) SC1409
Michael Gene v.Hamidian- Rad [1999] PNGLR 444
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
Obert Laka v. Stan Nekital (2016) N6557
Paul Eddie v. Bill Kirokim (2012) N4932
Paul Tohian v. Tau Liu (1998) SC566
PNG Forest Products Pty Ltd v. State [1992] PNGLR 85
Puri Ruing v. Allan Marat (2012) N4672
Rabaul Shipping Ltd v.Rupen (2008) N3289
Rimbao v. Pandan (2011) SC1098, Mendepo v. National Housing Corporation (2011) SC1169
Ronny Wabia v. BP Petroleum Development Ltd (2009) N4337
Siu v. Wasime Land Group Incorporated (2011) SC1107
Takori v.Yagari & Ors (2008) SC905
Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906
Timbers (PNG) Ltd v. Valentine Kambori & Ors (2010) N4282
Wan Global Ltd v. Luxurflex Ltd (2012) SC1199

Overseas Cases

H. Stanke& Sons Pty Ltd & Anor v. O’Meara [2007] SASC 246
Hubbuck& Sons, Ltd v. Wilkinson, Heywood & Clarke, Ltd [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86

Counsel:

Mr. J Holingu, for the Plaintiff
Mr. J. Brooks and Ms. E Heagi, for the Third Defendant/Cross Claimant

2^nd September, 2019

1. HARTSHORN J: This is a decision on a contested application to dismiss this proceeding.
   

Background

2. The plaintiff pleads that he represents himself and 53 others who own customary land contained within a State Lease described as Portion 160C Milinch Oeneka (SW) and (SE) Bewani (NW) & NE) Fourmil Vanimo and Aitape West Sepik Province now the subject of a Special Agriculture and Business Lease (SABL).
   
3. The plaintiff claims that the grant of the SABL to the second defendant Bewani Palm Oil Development (BPOD), the sub lease by BPOD to the third defendant Bewani Oil Palm Plantations Limited (BOPP), a Project Agreement between them, and a project agreement between the fifth Defendant the State and BOPP are all unlawful, invalid and of no force or effect.
   
4. The plaintiff seeks substantively, amongst others, a permanent injunction restraining BPOD and BOPP from being present on his customary land and from carrying out land clearing and logging activities on his customary land. He also seeks declaratory relief and that an account be taken. Damages are also sought.
   

This application

5. BOPP submits that the proceeding should be dismissed pursuant to Order 12 Rule 40(1)(a),(b) and (c) National Court Rules, amongst others, as:
   
   1. it is an abuse of process as it is one of a multiplicity of proceedings involving the same subject matter;
      
   2. it is an abuse of process as the relief sought requires a proceeding being brought by way of judicial review pursuant to Order 16 National Court Rules;
      
   100. it is an abuse of process as the requisite requirements for representative proceedings have not been complied with;
        
   4. the pleadings have a tendency to cause prejudice, embarrassment and delay and will prejudice the fair and just hearing and determination of the proceeding;
      

5. the proceeding is statute barred;
   
   6. it is an abuse of process as s. 5 Claims By and Against the State Act (Claims Act) has not been complied with.
      

6. The plaintiff submits that the application for dismissal should be refused as:
   
   1. the pleading in the statement of claim discloses a reasonable cause of action;
      
   2. despite this proceeding arising out of the same set of facts as proceeding WS603/17, this proceeding is different, and should not be dismissed as one of a multiplicity of proceedings;
      
   100. the requisite representative requirements have been complied with;
        
   4. this proceeding is not statute barred as declaratory relief is sought and so s. 18 Frauds and Limitations Act applies;
      
   5. a prerogative writ is not being sought;
      
   6. only the State is able to raise the s. 5Claims Act issue.
      

Law

Order 12 Rule 40 National Court Rules

7. In regard to Order 12 Rule 40 National Court Rules upon which the BOPP relies, there are numerous authorities in respect of the principles to be considered. I make reference to the following cases: Kerry Lerro v. Stagg &Ors (2006) N3050, Takori v.Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows:
   

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel ApioIrafawe v. YauweRiyong (1996) N1915; EliakimLaki and 167 Others v. Maurice Alulaku and Others (2002) N2001; KieeToap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori& The State (2006) N3050; Philip Takori& Others v. Simon Yagari& 2 Others (2008) SC 905. These cases say the same thing.

28. The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra).

29. The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii) The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v) A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30. In an application under O.12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.”

8. Further, notwithstanding all of the various judicial pronouncements since, the position is succinctly summarised in Hubbuck& Sons, Ltd v. Wilkinson, Heywood & Clarke, Ltd [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86. At 90-91 the Court of Appeal said:

“The second and more summary procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands, is insufficient, even if proved, to entitle the plaintiff to what he asks.”
Whether the proceeding should have been commenced by way of judicial review

9. I consider this issue first. The BOPP submits that notwithstanding that the plaintiff seeks various orders of declaratory relief and injunctive relief, the true nature and effect of the orders sought is that the plaintiff seeks to quash the SABL granted in 2008, the Forest Clearing Authority (FCA) granted in 2009, the Project Agreement signed in 2010 and a sub-lease granted in 2010. The true nature of the relief sought is in the nature of a prerogative writ - specifically orders in the nature of certiorari - as in respect of the SABL the FCA and the Project Agreement, the relief seeks to quash the decisions of statutory office holders exercising statutory duties. BOPP submits therefore that the plaintiff should have commenced proceedings by way of judicial review as is required by Order 16(1) National Court Rules.
   
10. The plaintiff submits that as declarations and injunctive relief are being sought and not orders in the nature of a prerogative writ, the plaintiff is entitled to bring this proceeding by writ of summons and statement of claim.
    

Consideration

11. To determine whether the SABL is unlawful, invalid and of no force or effect and whether it should be quashed - similarly the FCA and Project Agreement, they must be reviewed by the court. Notwithstanding that it is not specified in the statement of claim that the declaratory relief sought is in the nature of a prerogative writ, such as certiorari, when the purpose and substance of the proposed relief are considered, in addition to the description of the proposed relief, it is submitted that orders in the nature of a prerogative writ are sought. As such orders are being sought, BOPP submits that Order 16(1) National Court Rules requires that this relief be sought by way of judicial review. This proceeding was not commenced pursuant to Order 16(1) National Court Rules and so it is an abuse of process, BOPP submits.
    
12. I concur with the submissions of BOPP. I refer in this regard to Michael Gene v. Hamidian Rad [1999] PNGLR 444, Telikom (PNG) Ltd v. ICCC and Digicel (2008) SC906, the decision of Lay, J in Rabaul Shipping Ltd v.Rupen (2008) N3289 and my decisions in Wan Global Ltd v.Luxurflex Ltd (2012) SC1199 and Puri Ruing v. Allan Marat (2012) N4672, Bernard Kosie v. John Kapi Nato (2015) N6263 (an appeal from which was refused in Bernard Kosie v. John Kapi Natto (2016) unreported SCA 55/15 delivered 6^th May 2016); Andita Keko v. Barrick (Niugini) Ltd (2015) N7569;Obert Laka v. Stan Nekital (2016) N6557; Amos Ere v. NHC (2016) N6515 and Digicel (PNG) Ltd v. Tongayu (2018) N7237.
    
13. The practical effect of the declarations, if they are granted, is that the SABL, FCA and Project Agreement would be quashed. I am satisfied that the declarations sought by the plaintiff are in substance or in effect achieving what should be achieved pursuant to Order 16 National Court Rules. That is that orders in the nature of certiorari should have been sought. To apply for such orders, Order 16 Rule 1(1) National Court Rules makes it mandatory for an order in the nature of amongst others, certiorari to be made by an application for judicial review. This could only occur if an application for leave for judicial review has been successful. As this proceeding should have been commenced pursuant to Order 16 National Court Rules but was not, and as commencement of such a proceeding is mandatory, the proceeding is an abuse of the process of this court and should be dismissed.
    

Whether the declarations sought are statute barred

14. Notwithstanding the above, I also give consideration to whether the declarations sought are statute barred.
    
15. BOPP submits that although declarations are sought in the statement of claim, the plaintiff’s claims are founded on or based upon contracts. If there were no SABL, FCA, Project Agreement or sub-lease, there would not be any action. As they were all entered into between 2008 and 2010, the plaintiff’s action is founded on simple contracts, brought after the expiration of six years commencing on the date on which the causes of action arose: s. 16 (1) Frauds and Limitations Act (Limitations Act).
    
16. The plaintiff submits that the relief claimed, being declarations and injunctions, fall within s. 18 Limitations Act and therefore s. 16 Limitations Act does not apply.
    

Consideration

17. Section 16 (1) and (2) Limitations Act are as follows:
    

“16. Limitation of actions in contract, tort, etc.

(1) Subject to Sections 17 and 18, an action—

(a) that is founded on simple contract or on tort; or

(b) to enforce a recognisance; or

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

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

(2) An action for an account shall not be brought in respect of any matter which arose more than six years before the commencement of the action.”

18. Section 18 Limitations Act is:
    

“18. Claims for specific performance, etc.

Section 16 does not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief.”

19. The relief claimed in the statement of claim are declarations, injunctions and an account of profits. The claims for an account of profits and injunctions are dependent upon the declarations being granted.
20. As to whether a claim for declaratory relief is itself a claim for equitable relief, in Mamun Investment v. Koim (2015) SC1409, the Supreme Court, of which I was a member, considered various authorities and applied the principles stated in H. Stanke & Sons Pty Ltd & Anor v. O’Meara [2007] SASC 246, a judgment of the Full Court of the Supreme Court of South Australia. The Supreme Court, after embarking upon a detailed consideration of authority on whether by seeking declaratory relief, an applicant was seeking equitable relief, said:

“There are other cases.... where the plaintiff’s case is founded upon equitable principles and the declaration is simply the device which gives effect to those principles.”

and then:

“Whilst it may be accepted that applications for mere declaratory relief cannot be regarded as seeking equitable relief, it is necessary to examine the pleadings in each case in order to determine the true nature of the relief sought.”

21. In Mamun Investment v. Koim (supra), the Supreme Court held that:

“8. In this instance the underlying basis for the declaratory relief claimed is not in equity. It is based upon a breach of a contract of sale and upon the tort of fraud. After giving consideration to the above authority, in our view the relief claimed in the Originating Summons cannot be categorised as “other equitable relief” in s. 18 Frauds and Limitations Act and so the respondents’ claims do not come within the wording of s. 18 Frauds and Limitations Act.”

22. In this instance when the declarations sought are considered, it is clear that they are founded on or based upon contracts, the SABL, FCA, Project Agreement and sub-lease. It is the case that if there were no such contracts, there would be no action. I am satisfied that the underlying basis for the declaratory relief claimed is not in equity and so s.18 Limitations Act does not apply.
23. In regard to the application of s. 16 (1) Limitations Act, I am satisfied that s. 16(1)(a) applies as the SABL, FCA, Project Agreement and sub-lease are simple contracts. As to the date on which the plaintiff’s purported cause of action accrued, the plaintiff’s take issue with the validity of the various contracts from when they came into existence.
24. This occurred between 2008 and 2010. The dates that the purported causes of action of the plaintiff accrued are within these years. This proceeding has not been brought within six years of the plaintiff’s causes of action accruing. The plaintiff’s action therefore has no prospects of success as it is statute barred.
25. As the declarations sought would not be granted, the relief sought for an account and for injunctions, being dependent upon whether the declarations are granted, also fail.
    

Claims By and Against the State Act – s. 5

26. Notwithstanding the above, I also consider whether s. 5 Claims By and Against the State Act (Claims Act) should have been complied with.
27. BOPP submits that the statement of claim pleads that the fifth defendant, the State, is capable of being sued pursuant to the Claims Act; the grant of the SABL is alleged to have been fraudulent; the occurrence out of which the claim arose, the grant of the SABL occurred on 17^th July 2008; the evidence is to the effect that the plaintiff knew of the grant of the SABL at or about the time it was granted; the time for giving a notice pursuant to s. 5 Claims Act expired almost 10 years ago and there is no evidence of an extension of time being applied for or granted; compliance with s. 5 is required in this instance, it is mandatory and non-compliance is an abuse of process.
28. The plaintiff submits that BOPP should not be permitted to raise the s. 5 Claims Act issue. Only the State is permitted to raise it.

Consideration

29. In regard to the plaintiffs submission that BOPP should not raise the s. 5 Claims Act issue, it is settled law that this court has the inherent power to dismiss proceedings which are an abuse of process: PNG Forest Products Pty Ltd v. State [1992] PNGLR 85, Ronny Wabia v. BP Petroleum Development Ltd (2009) N4337, Timbers (PNG) Ltd v. Valentine Kambori & Ors (2010) N4282 and can do so of its own motion similar to the Supreme Court: Don Polye v. Jimson Papaki &Ors (2000) SC637, Rimbao v. Pandan(2011) SC1098, Mendepo v. National Housing Corporation (2011) SC1169. I consider the s. 5 Claims Act issue on the above basis.
30. The Supreme Court case of Paul Tohian v. Tau Liu (1998) SC566 held that the requirement to comply with s. 5 Claims Act is a condition precedent that must be complied with before a proceeding is issued. The relief sought in this proceeding is amongst others, against the State and as previously referred to, is founded in contract. Thus, a s. 5 notice is required to have been given.
31. As it has not been pleaded that such a notice has been given and there is no evidence that such a notice has been given, the proceeding is an abuse of process as to the claims against the State and the first defendant, the Custodian for Trust Land (on the same basis as held in Public Curator v. Kara (2014) SC1420); as a condition precedent to the commencement of this proceeding has not been complied with: Paul Tohian v. Tau Liu (supra).
    
32. As to whether the claims against BOPP are similarly affected, a defendant to a proceeding that is incompetent is entitled to question the competency of such a proceeding against it on the ground that it is affected by the bringing of an incompetent proceeding in which it is named as a defendant and which it is obliged to defend: Paul Eddie v. Bill Kirokim(2012) N4932, CMSS (PNG) Ltd v. State (2014) N5717.
    
33. Consequently, the whole proceeding should be dismissed as an abuse of process for the reasons given.
    

Conclusion

34. As I have found that the proceeding is an abuse of process and the claim is statute barred, the plaintiff’s claim is not sustainable at law. No reasonable cause of action is disclosed and it may be categorized as frivolous and vexatious. Given this, it is not necessary to consider the other submissions of counsel apart from as to costs.
35. As to costs, BOPP seeks its costs on an indemnity basis as it submits that there are at least six grounds upon which the proceeding should be dismissed. The issuing of such a proceeding in such circumstances is manifestly unfair to the parties named as defendants and such a proceeding should never have been instituted as it brings the administration of justice into disrepute.
36. I have considered and determined that this proceeding should be dismissed on three grounds. It is not necessary to consider other grounds. Given that I have so determined, I am satisfied that this court should exercise its discretion as to costs for the reasons submitted and in the manner sought.

Orders

37. The Court orders that:
    1. This proceeding is dismissed and the cross claimant is granted leave to withdraw its cross claim with no order as to terms;
    2. The plaintiff shall pay the third defendant’s costs of and incidental to this entire proceeding and including the notice of motion filed 7^th December 2017 on an indemnity basis;
    100. Time is abridged.

_______________________________________________________________________
Holingu Lawyers: Lawyers for the Plaintiff
Ashurst: Lawyers for the Third Defendant