East New Britain Provincial Government v Papua New Guinea Forest Authority [2020] PGNC 343; N8531 (18 May 2020)

N8531

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 285 OF 2018

BETWEEN
EAST NEW BRITAIN PROVINCIAL GOVERNMENT
First Plaintiff

AND
WILSON MATAVA in his capacity as Chairman of the East New Britain Provincial Forest Management Committee
Second Plaintiff

AND
PAPUA NEW GUINEA FOREST AUTHORITY
First Defendant

AND
DAVID DOTANOA in his capacity as Chairman of the NATIONAL FOREST BOARD
Second Defendant

AND
VANIMO JAYA LIMITED
Third Defendant

AND
LOBOT LOTU, HOSEA KUNAM, JOHNA SURUGA, KOPMAN ORIM and THOMAS TURANA as Customary Landowners of the Dengnenge and Loi Resources Areas, Open Bay, Lassul-Baining Local Government
East New Britain Province
Fourth Defendants

Kokopo: Suelip AJ
2020: 6^th March & 18^th May

CIVIL - Practice and procedure - Notice of Motion seeking leave to discontinue proceeding - Order 8 Rule 61 (2) - Costs on a solicitor-client basis - Order 12 Rule 1 - Order 22 rule 65 (2)(d) - Cost of the application - decision of earlier separate proceeding on the same Timber Permits in issue - other unresolved issues raised by this Court earlier in this proceeding - utility of proceeding after separate proceeding has decided on the validity of the same Timber Permits

Held:

1. Leave is granted to the plaintiffs to discontinue this proceeding.
   
2. No two courts of equal jurisdiction can decide on the same issues twice.
   
3. The judgment of 14 August 2019 in OS No. 997/17 was in favour of the plaintiff and held that Timber Permits TP 15-50 and Timber Permit 15-53 granted by the second defendant to the first defendant in 2017, were done so in breach of section 46, 78 and 137(1) &(JC) of the Act.
   
4. Timber Permits TP 15-50 and Timber Permit 15-53 in OS No. 997117 are the same timber permits that are in issue in this proceeding.
   
5. Although this proceeding was filed later in time but ran concurrently with OS No. 99 7117, it took issue on the same timber permits. As such, parties ought to have consented to consolidation of both proceedings as soon as it became aware of OS No. 997/17.
   
6. All parties are equally responsible for allowing this proceeding to continue to date even after they became aware of OS No. 997 of 2017 and its final judgment.
   
   7. Each party is to pay own costs of the proceeding and of the application.
      

Cases Cited

Papua New Guinea Cases

Polye v. Papaki (2000) SC637
POSF Board v. Sailas Imanakuan (2001) SC 677;
Pambuai v Benjamin [2005] PGNC 55; N2897
Island Helicopter Services Ltd ta Islands Nationair v. Sagati [2008] PGNC 49;
PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002
Tarsie v. Ramu Nico Management (MCC) Ltd (2010) N4142;
Deep Sea Fishing v. Critten [2014] N5702;
Kruse v Geita [2015] PGSC 92; SC1849

Luke Lupia v. Exxon Mobil PNG Ltd & Nabor Drilling Ltd [2016] N6484;
Dengnenge Resources Development & Anor v. Vanimo Jaya Limited & 2 Ors (2019) N9750;

Overseas Cases

Sirois v. Centennial Pontiac Buick GMC and Genera/Motors of Canada Ltd (1988), 89 NB.R. (2d) 244

References

Forestry Act 1991
National Court Rules Ch No. 38

Counsel

Jacqueline Marubu, for the Plaintiffs
Seri Mitige, for the First & Second Defendants
Nelson Saroa, for the Third Defendant
Florian Cherake, for the Fourth Defendant

DECISION

18^th May,2020

1. SUELIP AJ: I have two notice of motions, the first by the 3^rd defendant to dismiss the proceeding filed on 3 March 2020 and the second by the plaintiff for leave to discontinue the proceedings. They returned for arguments on 6 March 2020. After some discussions, it was conceded that the plaintiffs’ application for leave to discontinue the proceeding should be granted subject only to arguments on the issue of costs of the proceedings. I directed the parties to file submissions by 18 March 2020. I enquired if parties would prefer a hearing on costs but all agreed that a hearing was unnecessary and the Court can consider written submissions and make a ruling. See PNG Aviation Services Pty Ltd v Geob Karri (2009) SCI 002. This is my ruling.
   

Background

2. The plaintiffs filed an originating summons on 7 May 2018 seeking declaratory orders to nullify the extension and/or renewal of timber permit No. 15-53 of Project Area Dengnenge and Simbali Timber Rights Purchase (TRP) area, which extension/renewal was made by the first and second defendants on 29 August 2017 in favour of the first defendant. The plaintiffs say the extension/renewal was contrary to section 78(3) and (4) of the Forestry Act 1991 (the Act).
   
3. The originating summons was amended on 6 June 2018 to include, seeking a declaration that the extension/renewal did not follow the process under section 70 and 73(1), and that it also contradicted section 71 of the Act.

4. The originating summons was again amended on 24 September 2018 where the plaintiffs sought further declarations that the extension/renewals superseded the variations provided under section 137 of the Act, and further that the extension/renewals contradicted section 73, 78 and 137(1B) of the Act. The plaintiffs also sought an order that the Timber permit variations/extensions granted to the third defendant by the first and second defendants are illegal.
   
5. On 14 August 2019, the Court in OS No. 997 of 2017 - Dengnenge Resources Development & Dengnenge Land Group Incorporated v. Vanimo Jaya Limited & Papua New Guinea Forest Authority & Lobot Lotu, Hosea Kunam, Johna Suruga, Kopman Orim and Thomas Turana as customary landowners of the Dengnenge and Loi Resources Areas, Open Bay, Lassul-Baining Local Government, East New Britain Province (hereafter "OS No. 997 n 7'') declared .that the Timber Permits 15-50 and I5-53 granted to the first defendant by the second defendant contradicted the Act and are therefore nullified. The Court also held that TP 15-50 was changed and renumbered to TP 15-53 and an extension of this permit was granted to the second defendant on 29 August 2017. The Court further found that when the initial permits expired in 2007 and 2008, no extension was given to anyone else until 29 August 2017.
   

Motion for discontinuance

6. The Plaintiffs are seeking leave to discontinue the proceedings pursuant to Order 8 rule 6 I (2) of the National Court Rules (NCR) which provide:
   

'161. Discontinuance.

(l) A party making a claim for relief may discontinue proceedings so far as concerns the whole or any part of any claim for relief-by him--

(a) where the pleadings are not closed-without leave or consent; and

(b) where judgment has not been entered-with the consent of all other parties; and (c) at any time--with the leave of the Court.

7. The third and fourth defendants took issue on the plaintiffs' application. They argue that there are outstanding issues to be determined by the Court and unless those issues are resolved, this proceeding must continue. The fourth defendant relies on the case of Tarsie v. Ramu Nico Management (MCC) Ltd (2010) N4142 where the Court held the view that only in extreme circumstances leave should not be granted to the plaintiff to discontinue a proceeding.
   
8. I disagree with this argument in that the main issues are the same timber permits which have been resolved in an earlier proceeding. The same would apply to this proceeding. There is nothing left to resolve. Hence, there is no existence of an extreme circumstance in this proceeding.

Issue

9. The issue of course is whether cost of the proceeding should be awarded following the event where the plaintiff would be expected to pay the defendants' costs, or whether costs should be awarded against the defendants in favor of the plaintiff, or whether I should order each party to bear their own cost.

Discretion

10. An order for an award of cost is discretionary. See Kruse v Geita (2015) PGSC 92; SCJ849 (27 February 2015)
    

Burden of proof

11. The plaintiff should have the burden to show why costs should not be awarded against it since it is the plaintiff that is seeking leave to withdraw, and as such and in the usual manner, cost would be awa11ded in favor of the defendants. The rationale behind this is that it is a plaintiff that has committed or dragged a defendant into the proceeding in the first place. In this case, 1 note that the plaintiff is also asking for cost to be awarded in its favor therefore, it also has the burden to show the exceptional circumstance or reason. If lam convinced or if there is prima facie evidence supporting the plaintiff's contentions, the burden will of course shift and the defendants would have to prove otherwise including their argument that each party should bear their own costs, If the ,plaintiff is unable to provide a valid or exceptional reason then the burden of proof shall remain un-shifted and ] may at this juncture consider whether to order cost to follow the event or otherwise order each party to bear their own costs.

Submissions
The Plaintiff

12. The plaintiffs filed their application seeking leave to discontinue this proceeding on 6 March 2020. They submit the following: -

(i) On l '8 August 2018, the plaintiffs caused a letter to the defendants requesting each of them to consent to the orders sought in the originating summons, failing which the plaintiffs would ask for costs on an indemnity basis, as the defendants did not seem to have a valid defence. This letter was sent three months after the proceedings were filed in May 20 I 8, and four days after the Court pronounced its judgment in OS No. 997 of 2017.

(ii) A second letter was sent to the defendants on 9 April 2019 advising the first and second defendants that the extension/renewal of the Timber Permits was done without foHowing the proper procedures. The plaintiffs also indicated then that it would ask for costs on indemnity basis. The plaintiffs' lawyer presented as evidence in her affidavit several "without prejudice" letters to prove its attempts to resolve the issue already determined in the other proceeding.

(ii) The plaintiffs say that the first and second defendants agreed that all defendants pay the plaintiffs" costs on a party/party basis in equal portions.

{iv) During the course of the proceeding, the third defendant filed an appeal and 3 Notices of Motion to dismiss this proceeding, all of which were dismissed. The fourth application filed by the third defendant to dismiss for want of prosecution is pending.

(v) There is no defence. The plaintiffs' continuous attempts for the defendants to sign consent orders to discontinue the proceedings for lack of a defence and in view of the earlier proceedings over the same timber permits were unsuccessful.

(vi) The continuous delay by the defendants, especially the third defendant when he filed an appeal and four Notices of Motion to dismiss the proceedings showed the defendants Jacked any defence.

(vii) The plaintiffs seek discontinuance due to the judgement of the other proceeding as the issues concern the exact same timber permits.

(viii) the plaintiffs therefore asks for costs on a solicitor/client basis against all the defendants.

The first and 'second defendants

13. The first and second submit the following:
    
    • (i) TP l 5-50 was renewed to TP l 5-53 and granted to Open Bay Limited which TP expired in 2007 and 2008.
      

(ii) The second defendant, in his wisdom varied the terms of the subject timber permits and Timber Rights Purchase (TRP) agreement to expire in 2019.

(m) No parties in this proceeding sought to join or consolidate this proceeding with the other proceeding.

(iv) The first and second defendant did not cause any delay in defending this proceeding.

(iv) The third defendant filed a Supreme Court appeal which was dismissed and caused delay.

(v) By a letter to the plaintiffs dated 10 February 2020, the first and second defendants agreed for the plaintiffs to discontinue the proceedings and for all defendants to pay costs equally. However, if the third defendant insists that only the first and second defendants pay the plaintiffs' costs then the third and fourth defendant should pay the plaintiffs' costs because the third defendant was not the original timber permit holder, and the fourth defendant supported the third defendant's application when they knew that the permits and TRP agreements have expired.

The third defendant

14. The third defendant filed an Extract of Submission, but it did not address the issue of costs and so the Court cannot consider the submission. However, during Court, the third defendant's counsel made oral submissions that his client will not pursue costs if the plaintiffs do not ask for costs but if they do, then his client will seek costs against the plaintiffs because they initiated the proceedings and should they be granted leave to discontinue, they should ordinarily meet the costs, otherwise, all parties should pay for their own costs. Therefore, consideration was given to the third defendant in respect of their submissions on costs in the absence of a written submission.
    

Thee fourth defendant

15. The fourth defendants advance the following submissions:
    

(i) They were joined as the fourth defendant on 8 March 2019.

(ii) There are unresolved issues for the Court to determine and these issues are:

(a) Whether the Provincial Forest Management Committee has an important role to play for extension or renewal of timber permits,

(b) If so, whether the plaintiffs· had their input in providing the necessary report to the PNG Forest Authority Board as required in Section 78(3) of the Act.

(iii) That the "without prejudice" correspondence annexed in the plaintiffs' lawyers affidavit sworn and filed on 26 February 2020 are privileged and should not be admitted as evidence to support their application for leave to discontinue.

(iv) The first and second defendants are the regulators of the forest ministry in Papua New Guinea and ought to perform their functions and responsibilities in accordance with the requirements and procedures of the Act, failing which they must be held responsible for their actions or inactions.

(v) By granting the extension/renewal to the third defendant without administering some of the mandatory steps pursuant to the Act, the · first and second defendants' should meet the costs of the proceedings for the plaintiffs and the third and fourth defendants'.

Consideration

16. Parties come to Court each with some degree of responsibility towards the expeditious conduct of' this proceeding. It is evident that all the parties have contributed to the delay in finalising this matter.
    
17. For the plaintiffs, they showed their intention to discontinue this proceeding as soon as they became award of the ruling in OS No. 997 of 2017. However, instead of filing an application to discontinue. they sought the defendants' consent to discontinue the claim, which ultimately caused delay from August 2019 to date. Further, the plaintiffs' amended its originating summons three times. This shows the plaintiffs' uncertainties as to what specific declaratory orders it seeks from the Court and the relevant provisions it relies on to obtain those declaratory orders.
    
18. For the first and second defendants, they bear slightly more responsibility as they a:re the regulator of the forestry management. Since they failed to follow the correct procedure in considering applications for timber permits, and granting permits to the correct entity, they should be more willing to consent, and they did, to the discontinuance of the proceeding in view of the ruling in the related proceeding. Further, the first defendant is a party in both proceedings and it should have asked to consolidate both proceedings as early as possible.
    
19. As regards the third defendant, it cannot blame the first and second defendants entirely for its misfortune because it is in the business of forestry and is aware that any renewal or extension of timber permits can only be granted to the original holder. Besides, it was not the original holder. Further, it was also involved in the related proceeding and should have readily consented to the discontinuance of the proceeding to save time and costs. By filing numerous applications to seek dismissal of this proceeding including its appeal to the Supreme Court shows its desperate desire to maintain what it does not legally own.
    
20. For the fourth defendant, it was also a party in the related proceeding and was fully aware of the ruling made in that proceeding and ought to have readily consented to the discontinuance of the proceedings. Further, it supported the application by the third defendant to apply for the extension/renewal of the timber permits when they knew the third defendant was not the original holder.
    
21. In relation to the two unresolved issues in the Court ruling of 11 November 2019, if leave is given to the plaintiffs to discontinue, then there is no proceeding on which these issues can survive on. More so. these issues will not affect or alter the decision in OS No. 997 /17 nor this proceeding.
    

Other matters of consideration

22. This Court also considered other matters as follows:
    

(i) The judgment of OS No. 997/17 delivered on 14 August 2019,

(ii) The delay in listing this matter for hearing, taking into account the vacation period,

(iii) The two unresolved issues in the ruling by Susame AJ on 11 November 2019, and whether these issues will affect or alter the decision of OS No. 997/17 regarding the same timber permits in issue,
(iv) Whether the "without prejudice" correspondence are inadmissible.

(v) The party responsible for all the decision making of granting or refusing to grant Timber permits.
(vi) Prejudice to each party, and

(vii) Each parties attitude and conduct to progressing the proceeding to finality.

Summary

24. The issues regarding the timber permits have been resolved in the related proceeding. In consideration of all submissions by parties on the issue of costs. I make the following orders:
    

(i) Leave is granted to the plaintiffs to discontinue this proceeding.

(ii)Each party is to pay its own costs of the proceeding and cost of the application.
________________________________________________________________
Marubu Lawyers: Lawyers for the Plaintiffs
PNGFA In-house Lawyers: Lawyers for First and Second Defendants
Saroa Lawyers: Lawyers for Third Defendant
Cherake Lawyers: Lawyers for the Fourth Defendant