3A Composites (PNG) Ltd v Saru [2020] PGNC 348; N8563 (7 October 2020)

N8563

PAPUA NEW GUINEA

[IN THE NATlONAL COURT OF JUSTICE]

OS NO. 33 OF 2020

BETWEEN:

3A COMPOSITES (PNG) LIMITED

Plaintiff

AND:

SAMSON SARU

First Defendant

AND:

VITO SANTIAGO

Second Defendant

AND:

MALI IMMER KILIGA ILG

Third Defendant

AND:

STEVEN TALIU, CHAIRMAN RAUTAUBAR BUTAM ILG

Fourth Defendant

Kokopo: Suelip AJ

2020: 7^th, 14^th August & 7^th October

CIVIL - Practice and procedure - application by first, second and third defendants to dismiss proceedings - alternatively, to stay proceedings - Order 12 rule 40 (1) of the National Court Rules-titles of Portions 435C, 580, 806 and 807C in the third defendant's name since early 2018 - fourth defendant supports application - plaintiff opposes application - plaintiff's interest on subject portions of land is economical - Court to exercise discretion properly in fairness - plaintiff has existing lease agreement with the Roman Catholic Archdioceses of Rabaul (RCAR) since 1 June 2013 -RCAR held titles in the 1930s to 1950s under the Territory of New Guinea - RCAR challenging issuance of titles to third defendant by Land Titles Commission in another proceeding- interim injunctions granted earlier continue until further orders - proceeding is stayed pending determination of other proceeding : monthly rent from lease be paid into Koko po National Court trust account as security for costs pending determination of other proceeding

Cases Cited

OS (JR) No. 269 of 2018) Roman Catholic Archdiocese of Rabaul & Anor -v- Benjamin Samson & 3 Ors (2019) N8145

Tigam Malewo & Ors v Keith Faulkner & 4 Ors (2009) SC960

Kiee Toap v The State & ors (2004) N2766

Mai Corp Ltd v NAC (2015) N6031

OS No. 948 of 20 I 7 - 3A Composites PNG Ltd & Anor v. Samson Saru NKW Holdings Ltdv. Paladin Solutions PNG Ltd [2019] N8135

References

Land Registration Act

Counsel

Natasha Rainol, for the Plaintiff

Paul Yange, for the First, Second and Third Defendants Edward Komia, for the Fourth Defendant

RULING

7^th October, 2020

1. SUELIP AJ: In the Notice of Motion filed 6 March 2020, the first, second and third defendants seek dismissal and/or stay of the proceedings pursuant to Order 12 Rule 40 (I) of the National Court Rules, and alternatively, to set aside the interim orders issued by the Court on 11 February 2020.

2. Each party filed an Extract of Submission and presented oral submissions in Court on 14 August 2020. I had reserved my ruling. This is now my ruling on the plaintiffs' application.

Facts

3. The Roman Catholic Archdiocese of Rabaul ('RCAR") claimed to have a provisional title over a purported State Lease described as Portion 580 (Volume 8 Fo1io 47), Portion 807 (Volume 21 Folio 47), Portion 806 (Volume 21 Folio 59) and Portion 435 (Volume 8 Folio 47), of Kokopo, Rabaul, East New Britain Province. On 1 June 2013, an Agricultural Sub-Lease ("lease") was entered into between the RCAR and PNG Balsa Company Limited for a period of 27 years. The lease will expire on 1 June 2040. In 2015, the plaintiff acquired the lease and has since carried on its agricultural activities on the lease known as Putput Freehold Lease or Putput Mills Sites.

4. The lease was duty stamped by IRC and received ministerial approval on the 11 April 2014. Since the plaintiff's acquisition of the lease, there has been no challenge made to the contracting parties until early this year. In early January 2020, the defendants were alleged to have interfered with the harvest of balsa trees by the plaintiff and thus, interfering with the plaintiff's obligations under the lease as a forestry participant, developer, and investor in the province. The plaintiff sought interim injunctions and was granted interim orders on 11 February 2020.

Issues

5. Whether these proceedings should be stayed or dismissed for being

frivolous and vexatious, and for being an abuse of process?

6. Whether the interim orders of 11 February 2020 should be set aside?

The law

7. Order 12 Rule 40 (1) of the National Court Rules provides: -

40. (1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings -

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous and vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

First, second and third defendants' arguments

8. In essence, the arguments to support the first three defendants'

application for stay or dismissal are twofold. The first argument is that the plaintiff lacks the right to take such action. The defendants' say that the declarations and/or orders sought by the plaintiff in its Originating Summons are frivolous and vexatious, and also an abuse of process. The second argument is that there have been multiplicity of proceedings and therefore, this claim is an abuse of the Court's process.

9. As regards the first argument, the defendants' say that from evidence in

the affidavit of the first defendant sworn 3 March 2020 and filed 6 March 2020, the third defendant holds title to Portions 435C, 580, 806 and 807C. The defendants say further that the one (1) declaration sought by the plaintiff in the Originating Summons does not establish a 'right of action' as against the defendants, in order to be entitled to the consequential orders sought.

10. The defendants further argue that the lease was not registered with the Office of the Registrar of Titles to comply with Section 49 (1) & (4) of the Land Registration Act. They say the five (5) titles including Portion 808C for the 5 properties should have been lodged with the Registrar of Titles together with the lease for registration. The defendants allege that since RCAR does not have these titles, it did not deliver the titles to the Registrar of Titles for registration.

11. The defendants argue further that prior to seeking declaratory orders confirming the existence of the lease between the plaintiff and RCAR, no declaratory order was being sought as to the ownership of the subject properties by RCAR in order to establish a 'right of action' to give rise to a dispute or controversy with the defendants as to ownership of the properties. The defendants say RCAR has not claimed ownership of the properties in question nor does it hold titles to the five (5) properties comprising "Putput Freehold". It is argued that the third defendant has titles over all these portions of land including Portion 808C which was confirmed in the judicial review proceedings titled as OS (JR) No. 269 of2018) Roman Catholic Archdiocese of Rabaul & Anor v Benjamin Samson & 3 Ors (2019) N8145, wherein His Honour Justice Dingake held the third defendant held indefeasible title to Portion 808C and therefore dismissed that proceeding.

12. The defendants rely on the Supreme Court case of Tigam Malewo & Ors v Keith Faulkner, Ok Tedi Mining Ltd & 3 Ors (2009) SC960 where it affirmed the lower Court's decision to dismiss an Originating Summons based on considerations among others for disclosing no cause of action in which Cannings J's decision in Kiee Toap v The State & Ors (2004) N2766 was affirmed where his Honor held that:-

"Whenever a person brings a case to court, the originating document must demonstrate that the plaintiff has a cause of action. The document must clearly set out:

- the legal ingredients or the elements of the claim; and
- the facts that support each element of the claim."

13. The defendants say that in this case, it has not being made clear as to the grounds upon which the lease signed between the plaintiff and the RCAR is legal and binding as evidence shows that the RCAR does not have titles to the properties covered in the subject leases and the Archbishop himself confirmed that RCAR does not have titles. Further, the defendants' say that if the RCAR has title, there would be evidence of the lease being registered on the titles as prescribed by and as agreed in Clause 13.2 of the lease.

14. The defendants submit that the plaintiff is merely a "tenant at will" whose interest is equal to an illegal squatter on the third defendant's property and the right of a tenant at will is one of equitable interest as described by Justice Makail neatly in Mai Corp Ltd v NAC (2015) N6031.

15. The second argument advanced by the first 3 defendants is that there were a few proceedings already determined which are similar to this proceeding. These proceedings are: -

(i) OS No. 948 of2017-3A Composites PNG Ltd & Anor v. Samson Saru (Chairman of Immer Kiligia JLG);
(ii) OS (JR) 269 of2018- Roman Catholic Archdiocese of Rabaul v. Benjamin Samson & 3 Ors

16. The defendants argue that the multiplicity of proceedings in respect of the same matter by the unsuccessful litigant can result in the litigant being declared a vexatious litigant. See Smugglers Inn Resort Hotel Ltd v PNGBC (2006) N3062.

17. Apart from the 2 primary arguments, the defendants argue that the interim injunctions should not continue for 2 reasons. Firstly, they say the Undertaking as to Damages filed by the plaintiff on 11 February 2020 was not signed by a named Director of the plaintiff and without the 'Common Seal' of the plaintiff. Secondly, they say that the interim orders obtained by the plaintiff pursuant to Order 14 Rule 9 of National Court Rules is misconceived. They submit that the plaintiff had sought and obtained orders to protect the lease it signed with the RCAR and such agreements cannot be protected by Order 14 Rule IO as held in NKW Holding Ltd v Paladin Solutions PNG Ltd [2019] N8135.

18. Finally, the defendants ask if the Court is mindful to grant a stay of the proceeding, there must be some security for costs parked in a trust account as the future is unsure because of the RCAR challenge in WS No. 292 of 2020.

Fourth defendant's arguments

19. The fourth defendant supports the other defendants' submission even though his written submission did not address the other defendants' dismissal application but rather the return of the interim orders granted by Justice Kassman on 11 February 2020. Nevertheless, the fourth defendant was given opportunity to make oral submissions in support of the stay or dismissal application. He maintains that all along, he has been challenging the plaintiff and the RCAR's occupation and purported ownership over the various portions of land. The fourth defendant claims it has a customary land title over the land described as Portion 435 and RCAR has never refuted that claim, neither have they objected to the ILG Certification and registration of the Customary Land Boundaries for purposes of Customary Land Registration and obtaining Customary Land Title.

20. The fourth defendant says there were disagreements between them and the plaintiff and on various occasions, parties met and tried to discuss the issue surrounding the plaintiff's occupation of Portion 435, during which time the plaintiff had already filed these proceedings but never advised or served on him, despite them already in discussions. The fourth defendant also does not want the interim injunctions to continue.

The plaintiff's response

21. The plaintiff opposes the defendants' application and, in its evidence, produces copies of Certificates of Titles from the old Territory of New Guinea issued on various dates between 1930s to 1950s to RCAR.

22. Counsel for the plaintiff argues that her client has a reasonable cause of action and it has legal rights to protect its economic interest and that is its balsa trees. It is evident that the plaintiff stands to lose substantial amount of investment on its asset should the Court dismiss this proceeding. She says it is only fair that this Court in fairness and in the best interest of justice use its discretion to refuse the defendant's application and order the matter to proceed to trial proper for substantive hearing.

23. Counsel submits that the Court has discretionary powers to refuse such applications filed by the defendant to summarily dismiss the plaintiff's claim and drive it away from the seat of judgement. She says the Court must seriously consider the facts and merits of the matter and the evidence presented in Court. Counsel argues that the plaintiff is a business investor and a legitimate party to a contract signed with RCAR, which lease is current and signed between the parties since 2013. She further submits that without formal challenge to the lease, the defendants are estopped from imposing any objection to a valid contract. Counsel argues that the plaintiff has a reasonable and valid cause of action and should have its right to be heard in Court.

24. In addition, counsel for the plaintiff says that there is another proceeding titled as WS No. 29 2 of 2020 - Roman Catholic Archdiocese of Rabaul v. Kutt Paonga & 6 ors where RCAR is challenging the issuance of the all 5 titles now held by the third defendant by the Lands Titles Commission.

Analysis of arguments

25. Initially, the defendants focus was to seek dismissal of this proceeding. However, during the course of the hearing, it was made known to the Court and parties that there is another proceeding filed by the RCAR on 25 May 2020 which seeks, inter alia, declarations and orders that the Land Titles Commission recalls the titles issued to the third defendant and declare RCAR as the registered proprietor of Portions 808C, 435C, 580, 806 and 807C.

26. As the new proceeding challenges the titles of the portions of land which are being leased to the plaintiff herein, it was put to the parties that the titles of the portions of land should be determined first before this matter can be decided as it is unknown at this stage if the RCAR owned these portions of land and possessed that right to sub lease it to a third party.

27. Parties were given a week to reach a consensus as to the progress of this matter in view of the new proceeding and although it was generally agreed that this matter ought to be stayed pending the determination of WS No. 292 of 2020, parties could not reach an agreement on whether some funds should be parked in a trust account in the meantime, as security for costs.

28. Order 12 rule 40(1) provides that the proceedings may be stayed or dismissed if the Court sees that there is no reasonable cause of action is disclosed; or the proceedings are frivolous or vexatious; or the proceedings are an abuse of the process of the Court (my underline).

29. There is merit in some of the arguments by the first 3 defendants as they are able to show in evidence titles to Portions 435C, 580, 806 and 807C. These are indefeasible titles and there is no allegation of fraud or other grounds made against these titles in this proceeding as contemplated by section 33(1) of the Land Registration Act to defeat the indefeasibility of these titles. However, this is the subject of a challenge in another proceeding where the RCAR is now seeking declarations against the authorities who issued the titles to the third defendant herein.

30. I accept in part the defendants second argument that there were multiple proceedings filed by the plaintiff with similar facts and reliefs sought. OS No. 948 of 2017- 3A Composites PNG Ltd & Anor v. Samson Saru (Chairman of Immer Kiligia ILG) and OS (JR) 269 of 2018 -Roman Catholic Archdiocese of Rabaul. Benjamin Samson & 3 Ors dealt with Portions 807 and 808C respectively. Only Portion 807 is included in this matter. Portion 808C has already been determined in OS (JR) 269 of 2018.

31. The other arguments by the defendants may not be necessary to discuss any further subject to the determination of the primary arguments.

32. The plaintiff's interest is purely economical. It sought the interim injunctions to protect its economic interest and that is its primary interest, nothing else. The main dispute is between RCAR and the defendants herein. Interestingly, WS No. 292 of 2020 is between RCAR and the decision-making authority for determination and issuance of land titles. The first and third defendants are also named in that proceeding.

33. The facts remain as these: RCAR initially held titles under the Territory of New Guinea in the 1930s to 1950s. In 2013, the plaintiff entered into a sub- agriculture lease with RCAR and although the lease received ministerial approval, it was not registered with the Registrar of Titles. Then in early 2018, the Lands Titles Commission issued all 5 titles to the third defendant.

34. Titles to Portions 435C, 580, 806 and 807C are currently with the third defendant. Any aggrieved party ought to challenge the third defendant in a separate proceeding. As it is, RCAR has now filed WS No. 292 of2020 to challenge the issuance of the titles to the third defendant. This proceeding must take precedence in my view. Once a proprietor is named, all other issues including this one can be determined.

35. There is one other matter raised by the defendants and that is if the Court is mindful to grant a stay of the proceeding, that there must some security for costs parked in a trust account. There is no formal application for such relief before me but given the circumstances of this matter and how it has progressed thus far and the uncertainty ahead, I think it is only fair that some monies are set aside for security purposes. Once the Court decides who is the rightful title holder in WS No. 292 of 2020, the monies held in trust can go to the correct party or parties.

36. There is evidence that the plaintiff pays Kl 0,006.90 each month as rent to RCAR pursuant to the lease. There is also evidence that the plaintiff will lose millions of kin a should they not continue with their operations under the lease. As this matter concerns the continuation or otherwise of the plaintiffs operations, I am of the view that it is only fair that the KI0,006.90 monthly rent be put aside from now and onwards as security.

Conclusion

37. There are 2 sets of Titles for Portions 435C, 580, 806 and 807C of Kokopo, Fourmil, Rabaul, East New Britain Province as copies of these titles are produced in evidence by both the plaintiff and the third defendant. The first set of titles is held by RCAR since the 1930s to 1950s under the Territory of New Guinea. The second set of Titles is produced by the third defendant dated early 2018. There is a current challenge on the issuance of these titles in WS No. 292 of 2020.

38. Until the rightful proprietor is determined in that proceeding, this matter cannot be progressed any further.

39. The parties should consider including RCAR as a party to this proceeding notwithstanding other proceedings before the court. By including RCAR, any delay or otherwise in concluding other related matters will not affect the rights of all parties involved herein.

40. The Orders of the Court are:-

(i) the entire proceeding is stayed.

(ii) the interim injunctions of 11 February 2020 are to continue until further orders.

(iii) the plaintiff is to pay into the Kokopo National Court Trust Account the sum of Kl0,006.90 each month as rent from the lease between RCAR and the plaintiff.
(iv) Costs is in the cause of the proceeding.

(v) time is abridged until date of settlement by the Assistant Registrar which will take place forthwith.

_______________________________________________________________

NatPhil & Associate Lawyers: Lawyers for the Plaintiff

Islands Legal Services: Lawyers for the First, Second and Third Defendants

Ona Lawyers: Lawyers for the Fourth Defendants