Lihir Mining Area Landowners Association Inc v Newcrest Mining Ltd [2022] PGNC 57; N9477 (9 March 2022)

N9477

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (CC2) No. 198 of 2020

BETWEEN:
LIHIR MINING AREA LANDOWNERS ASSOCIATION INC
Plaintiff

V

NEWCREST MINING LIMTED
First Defendant

AND:
MINERAL RESOURCES AUTHORITY
Second Defendant

AND:
LIHIR GOLD LIMITED
Third Defendant

AND:
NEWMAN SANA AND MARTIN SIMOL (as representatives of the 15 Tenement Landholder Groups)
Fourth Defendant

Waigani: Anis J
2021: 17^th August
2022: 9^th March

NOTICE OF MOTION – application to dismiss the proceeding – Order 12 Rule 40(1)(a)(b) and (c) & Order 12 Rule 1 – National Court Rules – purported want of standing, purported want of mode of proceeding and purported abuse of process – consideration – exercise of discretion

Cases Cited:
Papua New Guinea Cases

Rus Mongogl v. MVIT [1985] PNGLR 300
Tigam Malewo v Keith Faulkner (2009) SC960
Kupai v. Million Plus Corporation Ltd (2017) N6669

Overseas Cases

Bowler v Mollem Co. Ltd [1954] 3 All ER at pg. 556

Counsel:

R William, for the Plaintiff
I Guba, for the First and Third Defendants
S Ranewa, for the Second Defendant
J Waka, for the Fourth Defendant

RULING

9^th March, 2022

1. ANIS J: I heard and reserved on a contested notice of motion moved by the 3^rd defendant on 17 August 2021. This is my ruling.

BACKGROUND

2. The plaintiff appears to be an established association. It was primarily set up to represent landholders and persons (members) who were directly affected or within the gold mine area of a mine known as Lihir Gold Mine (the mine). The mine is situated on Lihir Island in New Ireland Province. The dispute that is before this Court, based on the Originating Summons (filed on 11 December 2020), concerns an agreement called Integrated Benefits Package Revised Agreement (IBPRA/Agreement) which was signed in 2007. The dispute started when the members, whom the plaintiff claims to represent, had disassociated themselves from the plaintiff, and had gone ahead to review the IBPRA with the other defendants herein and other relevant stake holders within the Mining Department, that is, throughout the years between 2017 to 2020. The members or groups of persons involved were 15 in total, and they are represented in this proceeding by Newman Sana and Martin Simol herein as the 4^th defendants. The plaintiff claims that it was and still is the duly authorized authority, on behalf of its members, to re-negotiate or review the IBPRA. It raises serious allegations that the current re-negotiations directly between the 15 landholders and the other stake holders including the 1^st and 3^rd defendants had breached various provisions of the IBPRA. It also claims that the 1^st and 3^rd defendants had manipulated or re-negotiated terms that were not in the best interest or favour of its members or the landholders.

3. The undisputed facts show that the IBPRA was due for review and that between 2017 and 2020, the 4^th defendants or members of the plaintiff, had directly renegotiated the IBPRA with the tenement holder and that as a result, new agreements were purportedly signed on 20 December 2020. The plaintiff was aggrieved that it did not participate in the said review and has filed this proceeding, that is, to challenge the actions of the tenement holder, which is the first defendant, and the other defendants regarding the purported renegotiated IBPRA.

4. In the originating summons, the plaintiff claims the following main relief, and I quote in part:

1. A Declaratory Order that the first defendant has breached clause 43(b) of the Integrated Benefits Package 2007 (IBP2) by failing to conduct a review of the IBP 2 within the five year period agreed to;
   
2. An Order for Specific Performance by the first defendant, its servants and agents, assigns, to facilitate and commence the review of IBP2 to achieve IBP 3 pursuant to clause 43(b) of the IBP2.
   
3. A Permanent injunction against the first defendant from facilitating, concluding and signing of the current review process termed as Compensation and Relocation Agreements (CRA), including the structures and support required to maintain the process;
   
4. A Permanent injunction against any related agreements and/or formal arrangements between the first defendant, LMALA, the Nimamar Rural Local-Level Government, the New Ireland Provincial Government, and relevant agencies of the National Government seen by LMALA as a catalyst to sanction the current review process of the IBP2;
   
5. An order that any related agreements and/or formal arrangements between the first defendant, LMALA, the Nimamar Rural Local-Level Government, the New Ireland Provincial Government, and relevant agencies of the National Government seen by LMALA as a catalyst to sanctioning the current review process of the IBP2 are void and of no effect.
   
6. An order for the First Defendant and the Second Defendant to introduce an integrated, inclusive, transparent and all encompassing review process which will allow the plaintiff to have influence on the outcomes based on the ideals of the Lihir Destiny.
   
7. An order that the First Defendant provides and/or allows for adequate technical expertise, including commercial advice and legal representation, and funding for the plaintiff to participate in the view process of IBP2.

.....

PRESENT APPLICATION

5. The 3^rd defendant (applicant) seeks to dismiss the proceeding. Its application is supported by the 2^nd and 4^th defendants. Its notice of motion is filed pursuant to Order 12 Rule 40(1)(a)(b) and (c) of the National Court Rules (NCR). The applicant claims the plaintiff has no proper standing, that its mode of proceeding is wrong, and thirdly, that it had abused the court process, as reasons to say why the proceeding should be dismissed.

6. The parties have referred the Court to various evidence that they have filed, and I have noted them all. I will make reference to them only where required.

ISSUES

7. The main issues, in my view, are, (i), whether the plaintiff has standing to commence this proceeding, and, subject to the first issue, (ii), whether the plaintiff should have commenced proceeding by way of pleadings, that is, by filing a writ of summons and statement of claim, and (iii), whether the claim is an abuse of the court process.

COMMON GROUND

8. The parties do not dispute the following: Firstly, that the 15 tenement holders, who are the 4^th defendants herein, are or were members of the plaintiff and that the plaintiff had represented them in the signing of the IBPRA when it was first reviewed 2007. Secondly, that the 15 tenement holders themselves or through their representatives, were in the process of or have already signed the second set of the revised agreements on 20 December 2020. The agreements are 5 in total including 2 called Compensation Agreement and Relocation and Resettlement Agreement. The agreements will or have replaced the 2007 IBPRA. Thirdly, the plaintiff was not involved in the negotiations and conclusions of these 5 agreements. Fourthly, I note that interim injunctive relief had been sought and were granted to the plaintiff by Shepherd J on 11 December 2020. His Honour later set them aside on 19 December 2020. A day after that and on 20 December 2020, the defendants and other stake holders concerned signed or concluded the 5 agreements. The plaintiff, however, takes issue with the negotiations, conclusions and signing of these agreements as well in regard to their validities or effects. However, that said and at this juncture, there is no restraining orders in the matter that is presently pending.

9. The 5 agreements or purported agreements that replaced or are to replace the 2007 IBPRA are:

(i) Compensation Agreement;

(ii) Relocation and Resettlement Agreement;

(iii) Lihir Benefits & Development Agreement;

(iv) Individual Agreement;

(v) Umbrella Transition Deed.

10. Evidence adduced shows that, except for the Umbrella Transition Deed which may still be pending, the other agreements have been executed or are undergoing the said process. The plaintiff, however, takes issue that the agreements are binding or valid. It claims that they have not yet been registered to come into effect thus upon learning of their purportedly concluded status, filed this proceeding.

STANDING

11. Let me address the issue of standing. The plaintiff through the affidavit of James Laketan filed on 11 December 2020, states in part, and I read from paragraphs 6, 7, 8, 9 and 10:

6. Our members are currently in the process of reviewing various agreements relating to an integrated, mine related benefits package for our members and the people of the Lihir Group of Islands (Lihir).
7. This process is being administered by the Lihir Agreements Review (LAR) team with support from a consulting firm and an independent advisory panel comprising of lawyers and representatives from relevant government agencies.
8. According to LMALA, this process is being dictated largely by the mine developer, the first defendant, whose focus is to restrict LMALA members’ direct access to and control of mine related benefits relating to compensation, relocation, rehabilitation, and sustainable and infrastructure development initiatives contemplated under the Lihir Sustainable Development Plan.
9. This approach, LMALA asserts, is contrary to the original intents and purposes of the integrated benefits sharing agreements envisioned in 1995 and at the subsequent 2007 Integrated Benefits Package agreements (IBP), LMALA is a signatory to the IBP. Being a fairly large document, I annex the cover page and the signatory page as Annexure “A” to this affidavit. A full copy of the IBP will be produced on or before the trial date.
10. LMALA has been insisting that the current review process be redirected to acknowledge these intents and the purposes on the following terms;

(a) a new review process premised on achieving the intents and purposes of the IBP, to be agreed to by all parties to the 2007 IBP agreements; and

(b) a synonymous integrated benefits package guaranteed by quantum which recognizes the mine developer and governments unfulfilled commitments under the IBP and acknowledges LMALA’s Financial Development Plan in the next five years. I provide background to some of these plans below.

......

(Underlining mine)

12. So, the plaintiff acknowledged the actions of the 4^th defendant, which included its members, and their involvement with the 1^st, 2^nd and 3^rd defendants with the other stake holders, in their review and finalization of the 5 agreements to replace the 2007 IBPRA.

13. The next evidence to consider on the issue is Mr Laketan’s second affidavit filed on 16^th February 2021. At paragraph 6, he attaches as annexure A, a meeting minute of the Board of Executives dated 26 January 2021. Mr Laketan then states that “LMALA has the authority of the majority of the Board of Executives to sustain this proceeding on behalf of the mine affected landowners”.

14. It is not disputed that the plaintiff is a legal person, namely, an association, created under the Associations Incorporation Act Chapter No. 142 (AI Act). However, I observe that that is about the only thing or plus for the plaintiff. From the 3 evidence of Mr Laketan relied upon by the plaintiff to oppose this application, he does not attach a copy of the Articles of Association (Constitution) of the plaintiff. Mr Laketan gives evidence that the resolution passed, as attached to his affidavit, is the authority which he received from its members, to maintain the proceeding that he (Mr Laketan) filed on 11 December 2020, and that it was carried out in accordance with the plaintiff’s Constitution. The applicant has adduced evidence to say that, according to its searches carried out at the Investment Promotion Authority (IPA), the plaintiff has no recorded Constitution. Mr Laketan in response in his evidence deposes that the Constitution has been amended from time to time and that at this time, they are putting together a new one which will be recorded in due course. I must add that despite the denial by the applicant of an existing or valid Constitution of the plaintiff, it has adduced evidence through the affidavit of David Hill filed on 26 April 2021 where it attaches at annexure G, a copy of what appears to be Articles of Association or Constitution of the plaintiff. Mr Hill, however, deposes at paragraph 26 in his affidavit that he was provided with a copy of the document but does not know if the constitution is authentic, current or whether it has been amended.

15. When I consider the evidence in totality, I am left with an uncertainty which I must say is crucial to the issue at hand. But I will say this. In a case where a person is suing in a representative capacity, it should always be mandatory (as well as good practice) that the person have or file the legal documentations, to show or justify the person’s capacity or basis for bringing an action for or on behalf of that other person or persons. The requirement should not be left until much later for the trial Court to decide. Such requirements are necessary to form the foundation of a claim or cause of action. Case law is settled on this point. I refer to what Lord Denning has said in the case Bowler v Mollem Co. Ltd [1954] 3 All ER at pg. 556, which was also cited by Pratt J in Rus Mongogl v. MVIT [1985] PNGLR 300. He said, the thing which cannot be cured is the bringing of an action in a representative capacity when that capacity does not exist. I also refer to the Supreme Court case of Tigam Malewo v Keith Faulkner (2009) SC960 which sets the 3 fundamental requirements. Firstly, all the intended plaintiffs must be named in the originating process. Secondly, every intended plaintiff must give specific instructions (evidence in writing) to his or her lawyer to act for him or her. And thirdly, persons who claim to represent others, must produce an authority or authorities to the Court to show that they were duly authorised by these intended plaintiffs to file proceedings as a class or representative action.

16. When I consider the present matter, I note the following: Firstly, there is no evidence at all of the current or updated sealed/authorised list of members of the plaintiff. I do not have this information to verify the plaintiff’s contention regarding its members. The 4^th defendant has raised serious allegations of mismanagement and maladministration by the association over the years. It has also stated that all of the landholders of the mine area who were members of the association have since withdrawn as members, and that they have since 2017 been negotiating directly with the tenement holder and the State in regard to their interests, namely, Compensation, Relocation and other benefits, as per their entitlements under the Mining Act. These could be resolved had the plaintiff produced documents or its authenticated records to show the number of its recorded members, and also evidence of the members giving their authorities the plaintiff, following the due processes under its Constitution, to act for them in the 2017 to 2020 reviews that had been underway. It appears and I find that no such authority was given to the plaintiff. I say this because the plaintiff itself has admitted that by its own evidence, that is, as revealed at paragraph 6 to Mr Laketan’s affidavit of 11 December 2020 (see above). I also make this finding despite contrary depositions also adduced by Mr Laketan in his evidence. In my view, mere depositions into an affidavit by a chairman or president of an association to say that the association has a constitution and that its members are those as he lists in his affidavit, are in themselves, insufficient. The evidence, in my view, has or ought to come from verified records and information that are duly kept by the plaintiff, by the IPA, or by any designated bodies responsible for such records or information.

17. The second difficulty I see is this. Without the Constitution and evidence to support the plaintiff’s position or standing in the matter, the purported resolution that is attached as annexure A to Mr Laketan’s affidavit of 16 February 2021 cannot, in my view, be regarded as good evidence. Two other problems with the said resolution I see are as follows. Firstly, the common seal of the plaintiff that is stamped onto the document is not legible or clear. The second issue which appears serious if the resolution is to be regarded as valid, is that it was passed well after this proceeding was commenced and it was purported to support the stand taken by Mr Laketan in filing the proceeding. That, in my view is not the same as evidence of the association receiving the instructions, authority or resolution from its members before filing this Court proceeding. To me, the evidence in fact proves the applicant’s argument that the plaintiff lacks standing. It shows that Mr Laketan has filed the proceeding on behalf of the plaintiff without proper authority to do so in the first place.

18. The third difficulty I see is this. I note that the plaintiff is merely claiming these relief or has commenced this proceeding, in its capacity as the agent, conduit or representative of the 15 or so landholders of the mine. The landholders’ interests are legislated under s. 154 of the Mining Act. According to the said provision, the holder of a tenement which in this case is the 1^st defendant, is liable to pay compensation, amongst others, to these landholders of the mine. Therefore, and in my view, the plaintiff ought to have stated these in the heading of the filed originating summons and also state the names of these landholders or otherwise provide a schedule which should have their written names and consent or authority for the plaintiff to act for them. The plaintiff of course is a legal person with rights to sue or be sued under s. 10 of the AI Act. However, like any person of legal standing or capacity, if it is to represent another legal person or persons, it has to set that out clearly in the origination summons, the capacity in which it is suing under and the names or a schedule of those that it represents. See cases: Kupai v. Million Plus Corporation Ltd (2017) N6669, Tigam Malewo v Keith Faulkner (supra). It cannot name itself as a party as if it has any direct interest in the matter. So, by only naming itself as the plaintiff herein, in my view, is fatal and therefore makes the claim flawed at the outset.

19. Let me also say this. The plaintiff is an association governed by the AI Act. For the purpose of the plaintiff acting for the landholders, any resolution that is passed by its members regarding this matter or dispute would, in my view, be limited to grant of permission to act as the agent, conduit or representative for the 15 landholders. I note that the 15 or so landholders only, and not the plaintiff, are the persons who have actual interest under the provisions of the Mining Act including s. 154. The next crucial evidence (i.e., in addition to consent by the association to act as an agent which is to come from its members) would be the express permission by each of the 15 or so landholders for the association to act for them as their agent in the matter including appointment of law firms. Again, these evidence or permissions must be in writing and must be signed by these landholders or their representatives. The plaintiff or the association again would have no say on this. It must be made clear here that even if some or all of the landholders are members of the association, their interest therein would be limited to the legal entity which is the association (the plaintiff) and its purpose. And the association, as a legal person recognised under law, does not consist of its members, but rather, is itself a legal person which could engage in dealings, agreements, or acquire rights or properties.

20. In the end, I am not satisfied that the plaintiff has standing to bring this proceeding. There is no proper evidence to support its argument that it has standing or authority to file or commence this proceeding in the first place. I also find the proceeding futile and an abuse of the Court process. The plaintiff has no actual or direct interest in the matter and to the relief that it seeks. I also find that it has failed to correctly state its representative capacity in the originating summons; it should have correctly described itself as acting as an agent or representative on behalf of the 15 or so landholders. And also, that it has failed to fully set out the names of these landholders together with a schedule bearing their written authorities for it to act for them.

SUMMARY

21. I therefore uphold the first ground of argument by the applicant.

22. It is therefore not necessary for me to consider the other grounds or issues.

REMARKS

23. I will make this remark. Evidence adduced shows that the review and renegotiation exercise between the tenement holder, the 4^th defendants and other stake holders including the relevant state agencies, over the 2008 IBPRA, had been ongoing for about 3 years with the full knowledge of the plaintiff. If the plaintiff had issues with its members or the landholders disassociating themselves from it and from directly negotiating with the defendants, it should have acted back then. Evidence adduced shows that it was very well aware of the actions of the landholders and the tenement holder and others as far back as 2017.

24. I observed that to do nothing all this time and just when the new agreements were about to or have concluded, to run to Court, in my view, shows or implies disingenuity on the part of the plaintiff over the matter as a whole. It also questions its integrity as an association and, with respect, of those that are running it. I make this remark because evidence adduced by the applicant also strongly suggests lack of co-operation and attention by the plaintiff to its members, the tenement holder and to the other stakeholders of the mine.

COST

25. A cost order is discretionary. I do not see any reason why I should not order cost to follow the event on the standard cost scale.

ORDERS OF THE COURT

26. I make the following orders:

1. The proceeding is dismissed in its entirety.
   
2. The plaintiff shall pay the defendants’ costs of the proceeding on a party/party basis to be taxed if not agreed.
   
3. Time for entry of these orders is abridged to the date and time of settlement by the Registrar which shall take place forthwith.
   

The Court orders accordingly.

________________________________________________________________
Nuigini Legal Practice: Lawyers for the Plaintiff
Allens – Port Moresby: Lawyers for the First and Third Defendants
Kawat Lawyers: Lawyers for the Second Defendant
Namanei Lawyers: Lawyers for the Fourth Defendant