Girire v Registrar of Companies [2020] PGNC 417; N8687 (7 December 2020)

N8687

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 503 OF 2019

BETWEEN:
PETER TERRY GIRIRE
Plaintiff

AND:
REGISTRAR OF COMPANIES
First Defendant

AND:
KALIP SALO, SANTEE MARGIS, JONATHAN SALO, LUKE FREEMAN. GILIS TOM, WILLIAM TAMARU. LINDSAY MANOAH, KURU PESI, ISMAEL KAEL & NATHANIEL BELO
Second Defendant

AND:
MUSSAU TIMBER DEVELOPMENT LIMITED
Third Defendant

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Miviri J
2020: 20^th October, 7^th December

PRACTICE & PROCEDURE – Judicial Review & appeals – Substantive Notice of Motion – Certiorari – Administrative duties of Acting Registrar of Companies – No control of internal Company administration – Change in Company official – Duty to Register Lawfully – No error in discharge of duties – No reasonable cause of action – abuse of process – dismissal appropriate – balance discharged – proceedings dismissed – cost follow event.

Cases Cited:

Totona v Registrar of Companies [2012] PGSC 14; SC1182

Review Pursuant to Constitution Section 155(2)(b); Kopaol v Embel [2003] PGSC 23; SC727

Opi v Telikom PNG Limited [2020] PGNC 168; N8290
Counsel:

H. Wally, for Plaintiff
F. Alua, for Second & Third Defendants

RULING

07^th December 2020

1. MIVIRI, J: This is the ruling on the notice of motion of the second and third defendant’s filed the 27^th August 2020 pursuant to Order 16 Rule 13 (13)(2) of the National Court Rules (“the Rules”) for summary dismissal of the proceedings.
   
2. It is supported by the affidavit of Kalip Salo sworn the 27^th August 2020 filed of that day. He is a director of the third defendant company and also of the second defendant. That this proceeding was filed to challenge an administrative decision made by the Registrar of Companies rejecting documents lodged by the plaintiff purporting to exercise authority over the plaintiff company. Plaintiff has in the course changed Lawyers from Ama Wali Lawyers to Hbest Wally Lawyers who are his lawyers on record.
   
3. He refers to the affidavit of his lawyer on record Francis Alua filed the 03^rd of August 2020 reminding the plaintiff to take steps to progress by letter dated the 30^th June 2020, again on the 16^th July 2020. And in yet another letter dated the 25^th August 2020, annexure “A” to his affidavit, requested the plaintiff to prepare the draft directions as required by the National Court Rules and have it circulated amongst the parties to expedite the matter. To which the plaintiff has not responded, nor has he circulated any draft directions as requested of him. This neglect and lack of interest by the plaintiff to progress the case is occasioning unnecessary costs to the defendants. It demonstrates bad faith on his part, and it is upon the defendants to move for dismissal of the proceedings by the National Court Rules.
   
4. That affidavit is supported with that of Lawyer Francis Alua deposed of the 3^rd August 2020. He has fore warned with two letters one of the annexure “A” and “B” to his affidavit. The former is dated the 30^th June 2020 whilst the latter is dated the 16^th July 2020 materially asking the plaintiff to prepare draft proposed directions in the terms of the requirements of the National Court Rules circulate for the parties so that it is endorsed and filed. Notable to mind is Order 16 Rule 4 that calls that the matter if certiorari is sought is to be commenced within 4 months.
   
5. The plaintiff commenced the proceedings by originating summons on the 26^th July 2019 seeking to challenge an administrative decision of the First Defendant as Registrar of Companies to refuse the acceptance of lodgements by the plaintiff purporting to exercise powers of directors and shareholders of the Third defendant Company. Leave was granted for Judicial review on the 19^th May 2020. And a Substantive notice of motion was filed for judicial review on the 29^th June 2020.
   
6. The plaintiff has argued that the need for a draft direction has now lapsed since the filing of review books five volumes in all. They are dated 05^th October 2020 but are not certified by the Baka Bina Assistant Registrar of the National Court as to their correctness not by the parties to the proceedings who will be the immediate players to the matter and from which if a decision is made by the Court will affect them not the Assistant Registrar. This is not the correct way in accordance with the rules in particular Order 16 Rule 13 (7) because the records challenged here of the Companies Registrar in the register there. It is He now the first defendant whose certification is called for not the assistant Registrar of the National Court Baka Bina. Clearly there is a breach of the Order and Rules of Court. And the reasons are clear which are set out above for that need.
   
7. It would be now over four months and with this haste by the plaintiff is clearly half-hearted assertions to draw the defendants and time of this court on a matter in this regard. Even as accepted by the Plaintiff culminating with the remarks of this court that the plaintiff was naked before the court with the review book and its endorsement thereof.
   
8. The refusal of the acceptance of lodgement is within the discretion of the Registrar by reference to sections 395, 395A and 396. It is within his discretion to ensure that a register of Companies registered both within and without the Country is maintained either of those under Part II or Part XX of the Act. And he is charged to ensure that the Register is kept in such manner as his discretions fit. And this includes either wholly or partially by means of a devise or facility that records or stores information electronically or by other means that permits the information so recorded or stored to be readily inspected or reproduced in useable form.
   
9. By this section, his duties are nothing less than to maintain as necessary the records of the registration of companies either internally within the country, or of companies that originate from overseas. This is clear that he is not interested in what happens internally within the Company either in the operations of the Company, or how it is managed including the setting up of its officers, including directors and Shareholders and the like. He is just a manager of the records created by the Companies Act to ensure that is what happens by his responsibility, that they produce which are necessary to fulfilling the Companies Act 1997.
   
10. Because the Registrar has no part in the operations or administration of the Company, “11. While we accept that the question of legitimacy of the second respondents' appointment as directors and shareholders remains to be determined, based on the decision of the shareholders in the meeting of 03rd July 2010, as directors, they are expected to fairly represent the interest of the people at the board of the third respondent company. That can only be achieved if they are allowed to take office without further delay. As shareholders, they represent the interest of landowners in Rearea village. Monetary benefits derived from the LNG project must be fairly distributed to all landowners. If there is continuous interference with the management and operation of the third respondent company at the board and shareholders' level, there is real likelihood of the landowners missing out on monetary benefits from the LNG project.
    
    12. The respondents jointly through their counsel submitted that the appeal should be dismissed. They referred to section 409 of the Companies Act, 1997 and submitted this provision authorises the first respondent as the Registrar of Companies or a person authorised by him to deal with the affairs of a company notwithstanding an appeal to the National Court against his decision. They further submitted that the primary judge was directed to this provision and after considering it, he lifted the interim injunction. That may be so, but in our view, the overall consideration was the delay in resolving the dispute in relation to the legitimacy of the directors and shareholders of the third respondent company. Although attempts were made to mediate, they failed. As a result, his Honour found that the delay did not favour the continuation of the interim injunction. That is why he lifted it. Further, and contrary to the submissions of the first respondents, section 409 is something of a distraction in any event, as it applies only to the narrow class of the Registrar of Companies and persons authorised by him for the purposes of Division 2, not to third parties generally, Totona v Registrar of Companies [2012] PGSC 14; SC1182 (4 May 2012)
    
11. This clearer by the operation of section 396 “Registration of Documents,

(1) On receipt of a document for registration under this Act, the Registrar shall, subject to Subsection (2), register the document in the register.

(2) Where a document submitted to the Registrar for registration under this Act–

(a) is not in the prescribed form, if any; or
(b) does not comply with this Act; or
(c) contains any matter contrary to law; or
(d) where the register is kept wholly or partly by means of a device or facility referred to in Section 395(2), is not in a form that enables particulars to be entered directly by electronic or other means in the device or facility; or
(e) has not been properly completed; or
(f) contains an error, alteration, or erasure; or
(g) contains material that is not clearly legible; or
(h) is not accompanied by the prescribed fee,

the Registrar may refuse to register the document, and in that event, shall request either–

(i) that the document be appropriately amended or completed and submitted for registration again; or
(j) that a fresh document be submitted in its place.

(3) For the purposes of this Act, a document is registered when–

(a) the document complies with all the requirements of this Act; and
(b) the document itself is constituted part of the register; and
(c) particulars of the document are entered in any device or facility referred to in Section 395(2).

(4) Neither registration, nor refusal of registration, of a document by the Registrar affects, or creates a presumption as to, the validity or invalidity of the document or the correctness or otherwise of the information contained in it.

(5) The Registrar may destroy or give to the National Archivist the following documents, where in the Registrar’s opinion it is no longer necessary or desirable to retain those documents:–

(a) in the case of any company–

(i) any notice of issue of shares that has been registered for not less than two years;
(ii) any annual return or financial statements that have been registered for not less than seven years;
(iii) any document creating or evidencing a charge, or the complete or partial satisfaction of a charge, where a memorandum of satisfaction of the charge has been registered for not less than seven years;
(iv) any other document that has been registered for not less than 10 years, other than the constitution or any other document affecting the constitution;

(b) in the case of a company that has been removed from the register for not less than 10 years, any document registered;
(c) in the case of any documents that are entered on the register in electronic form, any hard copy of any such document that has been registered for not less than six months.”

12. The management of the Company the election of office bearers including directors board officials that is matter not of the Registrar which is set out very clearly above. The primary concern of the Registrar is that documents evidencing setting up of the Company is in order, because from it will derive revenue to the Public purse in company tax returns that the company lodges, to show a basis from which revenue in the form of taxes are paid to the State, and of maintaining accounts because a company is a corporate being whose survival is by compliance of that Act. It is therefore important for the Registrar to ensure documents filed, are in order to enhance this purpose fully according to the law. The Registrar is not interested in whether the plaintiff becomes the Chairman of the Board or is a director or a shareholder with voting rights or not. That is a matter within those who are in that position within the company. His decision therefore as to whether certain forms are in order or not is giving effect to the Companies Act. That is not participating in the running of the Company, or of placing on record certain details and not the rest as settled in a company shareholders meeting. That is a matter which rests with the officers of the Company intending to register itself not the registrar.
    
13. So, if it is the contention of the Plaintiff that certain forms lodged did not depict what was displayed within the company shareholders meeting or what transpired there in the Board leading eventually to the compilation of those forms and lodging to the Registrar for the purposes of the Companies Act. That matter must be raised internally within the Company Management and administration not against the Registrar. Here within the third defendant by the second defendants and any other similar. To cite relevant provisions of the Companies Act in this regard will be writing this whole judgement into volumes not pages. It is intricate and detailed within the Companies Act from sections 1 to 457 including the Regulations and related laws and rules and the amendments pursuant.
    
14. And it begs whether a genuine cause of action is instituted when a motion as here reads that by Order 16 Rule 1 (1) and section 155 (4) of the Constitution to remove into Court and quash the decision of the Acting Registrar of Companies Ms Harriet Kokiva and Deputy Registrar of Companies Malis Miningi of the 30^th May 2019 to allow the second defendants to lodge documents and investment Promotion Authority Forms to change the Directors and Shareholders of the Third Defendant when the changes were unauthorized and illegal effectively altering and removing the original directors and shareholders. As a result of this action the Plaintiff was removed as Chairman of the Third Defendant. That the First Defendant is a public Official who has not discharged his discretion justly and reasonably in compliance of a process of law hence the position of the Plaintiff in the Third defendant has been affected.
    
15. For one the court will not step into the shoes of a public Official to do the duties of that official as here of the Registrar of Companies. And secondly it is not of the Registrar to dictate what is within the Company that is a matter of the Company with its members as set out above. What has happened within there leading to the forms as filled out not by the Registrar but by the person who are lodging with his office in alter of the records therein is not at the hands of the Registrar. She cannot be held responsible for that fact. She is not the author of the forms that come to her for registration. She is not the primary and therefore would not be answerable in law. Unless fraud is alleged, and a conspiracy between and some benefits due to the Registrar, because of that discharge can it be drawn to her. If she has merely brought into the records of that office details of the company, the third defendant authored by the members of the company, including the second defendants, in whatever capacity they are pleaded in the cause of the action, it rarely substantially stands that the first defendant is in anyway in law responsible for that Act.
    
16. And in that way can she be the subject of a prerogative writ of certiorari it is not her doing that the form is filled in the way it is for lodgement with her office. That is a matter within the company the third defendant with its members within its set up not of the doing of the first defendant. Unless there is evidence drawn that details in the forms were authored by the first defendant and her officers can it be unlawful within the law. That is not the pleading before this court by the originating documents the notice of motion set out above which the court is entitled to view in the light of the fact that a dismissal is sought on it.
    
17. What is asserted to starts out within the Company the third defendant and the material relied do not show that leading eventually into the domain of the duties of the first defendant. The application relied of section 395A of the Companies Act as amended 2014 "395A. RECTIFICATION OR CORRECTION OF PAPUA NEW GUINEA REGISTER AND OVERSEAS REGISTER.

(1) The Registrar may –

(a) on the application of any person, rectify the register if the Registrar is satisfied that any information has been wrongly entered in or omitted from the register; or

(b) if it appears to the Registrar that any particulars have been incorrectly entered in the register due to a clerical error by the Registrar, correct those particulars.
(2) Before the Registrar rectifies the register under Subsection (1)(a), the Registrar shall -

(a) give written notice to the company or overseas company that an application has been made to rectify the register in relation to that company or overseas company (including details of that application); and
(b) give public notice setting out –

(i) the name of the applicant; and

(ii) the name of the company or overseas company; and

(iii) the reasons for and details of the changes sought to be made to the register or the overseas register; and

(iv) the date by which a written objection to the proposed rectification must be delivered to the Registrar, being a date not less than 20 working days after the date of the notice.
(3) Any person may deliver to the Registrar, not later than the date specified in accordance with Subsection (2)(b)(iv), a written objection to a proposed rectification of the register or the overseas register, and the Registrar shall give a copy of the objection to the applicant.
(4) The Registrar shall not rectify the register or the overseas register if the Registrar receives a written objection to the proposed rectification by the date specified unless the Registrar is satisfied that the objection has been withdrawn.

18. What has come by this section originated from the application by the Company including those who are within that company including the plaintiff and the second and third defendants. It really has got nothing to do with the first defendant in her capacity as pleaded. That is not the same as the sole responsibility as to the way the records have been altered is of the first defendant registrar. The evidence relied on to show the initial steps authored is not there before me. There is no continuity to advance the cause of the plaintiff. When there is no evidence linking the elements there is obviously no case made out if the pleadings do not fit the evidence the proceedings must be dismissed: Review Pursuant to Constitution Section 155(2)(b); Kopaol v Embel [2003] PGSC 23; SC727 (17 December 2003).
    
19. These substantiate in aggregate that these proceedings do not meet the test to continue as pleaded, because the balance has not been discharged in the various ways set out above. There is no cause of action by the evidence and the law. It leaves no other determination in law except the dismissal of this proceedings forthwith pursuant to the powers of the court by Order 16 rule 13 (13) (2) (a) (b). In this regard the application of the second and third defendants is granted forthwith for the dismissal of the entire proceedings as pleaded.
    
20. In the light of all I order that costs will be on an indemnity basis given all set out above. Because the actions of the conduct by the party and of its lawyer is so unreasonable, or blameworthy that punishment is warranted: Opi v Telikom PNG Limited [2020] PGNC 168; N8290 (29 April 2020). Here that is the facts because despite clear dictate of law the matter was unnecessarily dragged into court invoking upon the scare time of the court and the plaintiff. It was a matter within the Company to settle before it came into court. And even when it came into court there was no evidence drawing the balance to seal the pleadings. For these reasons it is proper to impose professionalism and compliance of the law clear by costs against those offending. Costs will therefore be on indemnity basis following the event hence upon the plaintiff in favour of the defendants if not agreed to be taxed.
    
21. The formal orders of the court are:
    
    • (1) The application of the second and third defendants is upheld.
      
    • (2) The proceedings are dismissed in its entirety for disclosing no reasonable cause of action
      
    • (3) Costs will follow the event forthwith on an indemnity basis if not agreed to be taxed.
      

Orders Accordingly.

__________________________________________________________________

HBest Wally Lawyers: Lawyer for the Plaintiff/Applicant

Alua Lawyers: Lawyer for Defendants