Porgera Gold Mines Ltd v Ondalane [2023] PGNC 155; N10274 (30 May 2023)

N10274

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 128 OF 2023 (IECMS)

BETWEEN:
PORGERA GOLD MINES LIMITED
Plaintiff

V

KIMALEYA ONDALANE of Tieni Yangua Clan and Tiene Yangua Landowners Business Group Incorporated
First Defendant

AND
NELSON AKIKO of Tieni Waigolo Clan and Tieni Waigolo Landowners Business Group Incorporated
Second Defendant

AND
RUBEN NALEPE of Pulumaini Ambo Endeme Clan and Pulumaini Ambo Endeme Landowners Business Group Incorporated
Third Defendant

AND
JUSTIN HAIARA of HAIARA’S LEGAL PRACTISE
Fourth Defendant

AND
EVE INJIA of SLM LEGAL PRACTISE
Fifth Defendant

Waigani: Anis J
2023: 19^th, 23^rd & 30^th May

INTERIM INJUNCTION – whether interim injunctions that were granted ex parte should continue but subject to preliminary issue – preliminary issue - whether plaintiff’s lawyers Nandape & Associates are duly appointed – whether the purported lawyers Kandawalyn Lawyers should be regarded as lawyers on record for the plaintiff – consideration of the preliminary issue and ruling

PRACTICE AND PROCEDURE – exercise of judicial power by the Court on own volition – s. 155(4) – Constitution – whether Court should protect its process – whether there are sufficient causes or basis for exercise of power – evidence of possible interferences on the substantive matter on foot – whether order necessary to maintain status quo or ensure finality in litigation – evidence of possible harassment on lawyer acting for a party – evidence of intimidation of lawyer – involvement of policemen

Cases Cited:
Gladys Evelyn Kumar, Michael Ray Manning Joe Rokpa v Peter Wama, Paul Excell and Engineering Management Pty Ltd [1993] PNGLR 38
Sunset Rentals Ltd v Pacific View Apartments Ltd [2020] SC1994
Gadigi v Logae (2021) SC2102
Michael Newall Wilson v. Clement Kuburam (2016) SC1489
Application by Anderson Agiru (2002) SC686
William Lakain v. Senior Sergeant Andrew Wilfred and Ors (2023) N10270

Counsel:
Ms J Nandape, for the Plaintiff
Mr. E Lako, with leave to appear for the Plaintiff
Mr. J Yawale, for the First and Fourth Defendants
Mr. P. Harry, with leave for the Second and Third Defendants

RULING

30^th May, 2023

1. ANIS J: Ms Nandape of Nandape & Associates Lawyers, before 10 May 2023, was acting for the plaintiff (plaintiff/ the Company). On 23 March 2023, she filed this proceeding on behalf of the plaintiff. On the same day, the plaintiff applied for ex parte interim orders against the defendants. Its notice of motion was filed on 23 March 2023 (NoM).

2. On 24 March 2023, I granted ex parte interim injunctive orders which included the following:

“2. That until further orders of this Honourable Court, an interim injunctive order is granted;

(a) staying the consent order of the National Court made on 3^rd March 2023 in proceeding OS No. 25 of 2023 – Kimaleya Ondalane & 2 Ors v. Porgera Gold Mines Limited; and

(b) restraining BSP Financial Group Limited from conducting any further transactions on the Plaintiff’s bank account number 7004 996216 either in compliance with the consent order of 3^rd March 2023 referred to in clause 2(a) above or otherwise.”

3. The inter partes hearing of the NoM was adjourned on several occasions before it was heard on 19 and 23 May 2023. Before the hearings, I was asked to first consider this preliminary issue, that is, whether Ms Nandape is the duly appointed lawyer for the plaintiff. The issue arose after Kandawalyn Lawyers filed a Notice of Change of Lawyers on 10 May 2023 to ‘act’ for the plaintiff. I granted leave to Mr Lako of Kandawalyn Lawyers to make his appearance to argue the preliminary issue. Leave was granted to Mr Harry who had announced his appearances for the second and third defendants.

4. I then heard submissions from the parties on the preliminary issue. Ms Nandape maintained that she was duly appointed to act for the plaintiff. The defendants supported submissions made by Mr Lako regarding the plaintiff’s representation. Ms Injia, however, did not appear in Court on 23 May 2023 to state her formal position when the defendants were asked to respond on the preliminary issue. After the hearing, I reserved my decision to a date to be advised.

5. This is my ruling.

BACKGROUND

6. The proceeding (i.e., WS 128 of 2023/this proceeding) concerns a consent order dated 3 March 2023 (Consent Order). The Consent Order was signed and endorsed by the Court in proceeding OS No. 25 of 2023 (OS 25). The plaintiff herein was the defendant in OS 25 and the defendants herein plaintiffs.

7. In this proceeding, however, the plaintiff, premised on its pleadings, denies its involvement in OS 25. It claims, amongst others, that the persons that had engaged lawyers to represent it in OS 25 did not have its authority. According to the pleadings and relief that are sought herein, the plaintiff is alleging, amongst others, illegality, fraud, deceitful and improper conduct and misrepresentation by the actions, inactions, and conducts of the defendants and the lawyers that were involved. The plaintiff, by this proceeding, primarily intends to set aside the Consent Order.

ISSUE

8. The issue that I will decide on is who, based on evidence that is adduced and in accordance with law, is the legitimate or duly appointed lawyer for the plaintiff in this proceeding. In my view, all I will require for this issue is to receive prima facie or sufficient evidence from the 2 contesting law firms to assist me make a ruling.

STATUS QUO

9. I have considered the evidence filed by Ms Nandape and Mr Lako in support of their contentions. I have also considered their submissions as well as submissions made by Mr Harry.

10. I observe that most of the submissions and case law relied upon by the parties are irrelevant to the central issue.

11. In my view, the issue is not a difficult one. Evidence adduced by both parties shows that there were and are issues that surrounds the legitimacies in the appointments of some of the board members to the plaintiff at the time when the Consent Order was granted in OS 25. This was also acknowledged by both Ms Nandape and Mr Lako. In my view, this uncertainty itself puts into question whether those that had given instructions, by way of a board resolution to settle OS 25, had the authority to do so which had caused the plaintiff to commit millions of kina to pay the defendants as well as parties that were not named in the proceeding. And I also note that the Consent Order sum that was awarded was much higher then the sum that was sought in the Originating Summons (in OS 25); and it also brings into question whether a company board resolution was ever passed for these to occur, and if so, the legitimacy of the resolution if one was passed; and whether the relevant provisions of the Companies Act 1997 (the Companies Act) were observed.

12. If I can perhaps summarise the internal dispute of the plaintiff, which is not the subject of this proceeding, this way. The first faction of directors claim that they were duly appointed and have authorities to make decisions for the plaintiff (first faction). For this purpose, I will assume that the first faction is led by or includes Mr Jonathan Paraia. Ms Injia acted for the first faction in OS 25. Mr Lako is now making a claim, impliedly, that he acts for the first faction. Ms Nandape acts for the plaintiff in this proceeding. She impliedly acts for the second faction (second faction). For this purpose, the second faction is led by or includes Henry Lara who is a director of the plaintiff.

13. So, in summary, we now have a new law firm Kandawalyn Lawyers who claim to act for the plaintiff thus this preliminary issue. It appears from the evidence adduced by both parties and as stated above, that the said firm was instructed by the first faction of directors of the plaintiff who had been involved in OS 25. These faction of directors intend to replace Ms Nanadape, who represents the second faction, and in so doing, to put an end to this proceeding.

EVIDENCE

14. In addressing the issue of instructions to act, I make these observations. First, I note that Ms Nandape was instructed to act for the plaintiff herein and filed this proceeding. The status quo upon filing the proceeding on this issue is this. The plaintiff’s purported former lawyers, Ms Injia of SLM Legal Practice have now been sued by the plaintiff. They, with the other defendants, are expected to provide their defence or answers to the serious allegations made against them.

15. The plaintiff, however, pursuant to section 16 of the Companies Act, is a legal person. See cases: Gladys Evelyn Kumar, Michael Ray Manning, and Joe Rokpa v Peter Wama, Paul Excell and Engineering Management Pty Ltd [1993] PNGLR 38 and Sunset Rentals Ltd v Pacific View Apartments Ltd [2020] SC1994. It may choose lawyers to act for it as to pleases.

16. For this case, all I need to be satisfied of is evidence of appointment of either Ms Nandape or Mr Lako by the plaintiff as a legal person. Mr Lako claims that his firm is the duly appointed lawyer for the plaintiff. The crucial evidence he gives is a copy of a Circular Resolution of the plaintiff dated 5 May 2023. It is marked as JP3 to the affidavit of Jonathan Paraia filed on 10 May 2023. It reads in part:

“......

(1) The Board members unanimously resolved that the purported representation by Ms Judy Nandape of Nandape & Associates Lawyers in the National Court matter involving Porgera Gold Mines Limited (PGML) in proceedings namely; WS NO. 128 of 2023 (IECM-CC2) was not approved by PGML board thus the legal representation is void.

......

(1) The board members unanimously resolved that Mr Edwin Lako of Kandawal Lawyers to represent PGML in the WS NO. 128 of 2023 (IECMS – CC2) (referred to above).

(2) The PGML Board further resolved that Kandawal Lawyers to file necessary application to discontinue the above court proceeding (WS NO. 128 of 2023) immediately.

......”

17. What this means on the face of it (face value) is that Kandawalyn Lawyers have established sufficient cause, and the burden of proof now shifts to Ms Nandape to disprove this claim and evidence.

18. I turn to Ms Nandape’s evidence. Of direct relevance to the issue is Henry Lara’s affidavit filed on 17 May 2023. Annexure HL1 is a copy of a recent Circular Resolution of the plaintiff. It is dated 16 May 2023. It reads in part:

“......

1. That our verbal instructions to Nandape & Associates Lawyers to commence the proceeding which is now registered as WS No. 128 of 2023 is confirmed;
   
2. That Nandape & Associates Lawyers shall continue to act for PGML in this proceeding until final determination but subject to further instructions from the Board of PGML.

......”

19. Evidence adduced shows that Ms Nandape had been verbally instructed by the plaintiff to file this proceeding. The plaintiff confirms its verbal instructions to engage Nandape & Associates by its recent board resolution.

20. When I take all these into account, I make this finding on the preliminary issue as follows. I accept the plaintiff’s recent board resolution as the one that is binding and sufficient for this purpose. The plaintiff’s earlier board resolution dated 5 May 2023, which is relied upon by Kandawalyn Lawyers to claim that is its duly appointed lawyers, was superseded by the plaintiff’s subsequent board resolution dated 16 May 2023. I am satisfied that Ms Nandape and her firm are duly appointed to act for the plaintiff in this matter.

21. With this finding, Kandawalyn Lawyers now have no authority to represent the plaintiff. They therefore have no authority to make any further submissions on behalf of the plaintiff, and consequently, I decline to rule on other preliminary matters raised by Mr Lako against Ms Nandape. To proceed further and hear other arguments would be to proceed contrary to my own ruling. Any further submissions for and on behalf of the plaintiff must come from Ms Nanadape.

22. I note that a considerable amount of time was spent by both counsel including Mr Harry, explaining the status or background of the directors of the plaintiff, and challenging their legitimacies as directors; arguments concerning the 2 factions. In my view, these arguments are irrelevant for this purpose. The plaintiff has not invoked this Court’s jurisdiction to find out about the status quo of each of its directors. Rather, it is seeking to set aside the Consent Order which is the main dispute to be argued at trial. And as stated, what will be relevant at trial is whether the plaintiff or directors, had followed due process to appoint its then lawyer Ms Injia of SML Legal Practise to act for it to sign the Consent Order; whether the Consent Order was obtained irregularly; also, whether fraud or deceit or fraudulent conduct had occurred at the material time. What may also be relevant is the status quo of the directorship of the plaintiff at the material time (i.e., material time being before and at the time when the Consent Order was signed). It is unlikely that the trial Court will concern itself on which directors were appointed after the material time.

WAY FORWARD

23. The way forward for this matter is this. Any person who wishes to oppose the plaintiff’s proceeding filed herein, may apply to join as a defendant. The allegations raised herein are serious so if there are other persons that had involved themselves in OS 25 who wish to contest the matter (i.e., to oppose setting aside of the Consent Order) should be heard, and if permitted by this Court, be added as defendants to this proceeding.

CONSEQUENTIAL ORDERS

24. Based on my findings and the circumstances of the case, and also based on the evidence adduced by Ms Nandape of possible harassment on her by policemen in regard to this matter, I am minded to issue other orders or consequential orders as well, that is, upon my own volition in the exercise of my powers under s 155(4) of the Constitution. Orders I will make are those that I consider relevant to control this proceeding towards reaching a finality. Courts have used their inherent powers to protect its process from being abused or to make appropriate orders under relevant or appropriate circumstances of a case. See cases: Gadigi v Logae (2021) SC 2102, Michael Newall Wilson v. Clement Kuburam (2016) SC 1489 and Application by Anderson Agiru (2002) SC686.

25. Granting additional orders as I will explain below, in my view, are necessary. First, I take into account the dispute between the 2 factions. As such, I am minded to issue a temporary order that there shall be no changes made to the company records of the plaintiff that is kept at the office of Investment Promotion Authority (IPA) until further orders of the Court or until final determination of the matter. I will also make an order that the plaintiff shall, in the interim, not to pass any resolution on appointment of any more lawyers to act on its behalf in this matter, that is, until further orders of the Court or until final determination of the matter. I will not allow the Court process to be abused or to be used like a football field for the 2 factions to quarrel in or take steps to try to score points or outsmart each other whilst the matter or the issue is now formally before the Court to adjudicate.

26. Any party or persons that breaches this order may be severely punished or be dealt with by this Court.

27. The next consequential order I propose to make is to protect the safety and well-being of counsel Ms Nandape. I refer to counsel’s affidavit filed on 19 May 2023. The evidence is properly before me, and therefore I accept it as her evidence. In summary, on 18 May 2023, Ms Nandape was confronted by armed policemen from the fraud squad office at the National Court precinct (car park). She was forced to follow the armed policemen to the fraud office for an interview based on a complaint that was laid against her in relation to the present matter. Ms Nandape was forced against her will, although not physically, to leave the Court precinct, that is, despite her explanation to the police that she was coming to Court in relation to this matter to argue the very issue that was the subject of the complaint that was laid against her. There at the fraud’s office counsel was interviewed and later charged with false assumption of authority under s96(b) of the Criminal Code Act. Counsel was kept there till 8pm in the evening where she was later taken to the Boroko Police cell. She was later granted police bail at K1,000, and she was released late that night at around 10pm.

28. To my mind, Ms Nandape had been prevented from attending to her case when she was already at the Court precinct and was getting robed and ready to enter the Court. The police could have easily allowed counsel to attend to her scheduled matter and later taken her to the police fraud office for the interview. They have not done that. And they kept her there in police custody until about 10pm that evening.

29. All lawyers who are admitted to practice law are officers of the Court. They have sworn that oath or affirmation at the time of their admissions, to be officers of the National and Supreme Courts of Papua New Guinea. As officers of the Court, the Court, in my view, has a duty to protect them from any harm that may come in their way without lawful cause. Lawyers, like Magistrates, Judges, and other judicial officers within the Judiciary, are part of the third arm of the government. They perform a pivotal role in the enforcement and development of the law or the rule of law in the country.

30. As such, any form of threat or intimidation against Court officers or officials including lawyers, whether it be at a court precincts or otherwise, must and shall not be tolerated by the courts. Very recently, in William Lakain v. Senior Sergeant Andrew Wilfred and Ors (2023) N10270, I made critical remarks on the role of policemen (within the fraud squad) in society at large. I stated the following at paras 22 to 25:

“22. Instead of taking the legal options available to him, evidence adduced shows that the second defendant had, amongst others, engaged assistance of police personnel to pursue his private matter, and in that regard, I must expressly state here with concern the involvement of the first defendant Senior Sergeant Andrew Wilfred. It was the actions of the second defendant and these policemen including Sergeant Andrew Wilfred, that had prompted the plaintiff to file the proceeding in the first place and to obtain interim restraining orders against the defendants. Such actions by policemen must not be tolerated. At the hearing, I had put to counsel for the second defendant that it was not the primary role of policemen to pursue personal interest for or on behalf of persons to resolve personal matters, or to intimate or harass persons without lawful cause.

23. As I had indicated to counsel, such actions, if true, would not only be illegal but dangerous to society at large and to the rule of law. Imagine a society where policemen are used to resolve personal issues or agendas. For example, if a public or a private person is terminated from employment, why bother with the rule of law when he or she could simply use the policemen to order or demand the employer to reinstate him or her with actual or implied threat of reprisals or arrests if the demand is not met. When such actions or practices are permitted in any democratic society, it can only lead to one outcome, tyranny.

24. I have not heard and decided on the substantive matter. As such, the first defendant and the policemen allegedly involved are not found liable in the matter in any way whatsoever. But the remark is made given the serious nature of the allegations that have been raised by the plaintiff which will now not be heard on their merits.

25. And with that, let me send out a stern warning to the defendants, and this is made as a remark, to observe the rule of law.”

31. Let me send out this stern warning again to policemen who intend to interfere with this proceeding to take note, which is, to follow or observe the rule of law. I understand that Ms Nandape has been charged premised on a complaint laid by the first faction or its members, to the police. That is now a police matter, and this Court cannot prevent police from carrying out their official duties under the Constitution.

32. However, I will issue an order that prevents any policemen or women from harassing, intimidating or hindering Ms Nandape and in her ability to represent the plaintiff in this matter without lawful cause.

SUMMARY

33. In summary, I find that Ms Nandape is duly appointed by the plaintiff to act for it. She had been verbally instructed to act for the plaintiff where she filed this proceeding. On 5 May 2023, the plaintiff, in a board resolution rejected her appointment and appointed Kandawalyn Lawyers to act for it. Premised on that, Mr Lako filed a notice of change of lawyers on 10 May 2023. However, on 16 May 2023, the plaintiff, again in a board resolution appointed or confirmed Ms Nandape’s appointment. There is no formal challenge to the legality of the 2 board resolutions. This proceeding is certainly not tasked to determine that nor on whether any of the directors of the plaintiff are validly appointed etc. As such, this was a case where I had to decide, based on what is presented, which law firm was duly appointed to act for the plaintiff as a legal person, in this matter. In this case, I chose Nandape & Associates as the plaintiff’s duly appointed lawyers, that is, based on the plaintiff’s recently passed board resolution of 16 May 2023 which had superseded its earlier resolution of 5 May 2023.

34. I will also issue consequential orders as proposed herein. Given that I have exercised powers upon my own volition, it is only fair that provisions are made as well for parties to be at liberty to apply to set aside the consequential orders if they so wish before the final determination of the matter.

ORDERS OF THE COURT

35. I make the following orders:

1. In regard to the preliminary issue of who is the duly appointed lawyer for the plaintiff, I rule that Nandape & Associates Lawyers were duly appointed to act for the plaintiff in this matter.
   
2. I strike out the Notice of Change of Lawyers filed by Kandawalyn Lawyers on 10 May 2023, Document No. 12 in the Court file.
   
3. Consequently, or in addition, I make the following orders:
   

(i) There shall be no further appointments or changes made to directors or shareholders of the plaintiff until the final determination of this matter or until further order of the Court.

(ii) the plaintiff shall not pass any more board resolutions to appoint any more lawyers to act for it in this matter until the final determination of the matter or until further order of this Court.

(iii) Members of the Police Constabulary shall not, without lawful cause, harass, intimidate, or prevent Ms Nandape or lawyers within her firm or otherwise, from acting for the plaintiff in the matter until further orders of the Court.

(iv) Parties are at liberty to apply to set-aside Order 3(i)(ii) and (iii) above herein upon filing a notice of motion and giving each party 3 clear days’ notice.

4. Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.
   

The Court orders accordingly
________________________________________________________________
Nandape & Associates: Lawyers for the Plaintiff
Haiara’s Legal Practice: Lawyers for the First & Fourth Defendant
Harry: Lawyers for the Second & Third Defendant
E Injia In person (5^th Defendant)