N11326
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

MP (COMM) NO. 3 OF 2024 (IECMS)

IN THE MATTER OF THE COMPANIES ACT 1997 – SECTION 152(1), (2), (3), (4)(c) & (f), SECTION 216, 2018, 219 & 2020, AND IN THE MATTER OF THE COMPANIES RULES 14(c)

IN THE MATTER OF LABA HOLDINGS LIMITED (1-68090)

PAPA RESOURCE DEVELOPMENT LIMITED (IN LIQUIDATION)
Petitioner

V

LABA HOLDINGS LIMITED
Respondent

WAIGANI: ANIS J
3 MARCH, 2 APRIL, 12 JUNE 2025

ACTION UNDER SECTION 152 - COMPANIES ACT 1997 – whether conducts or actions of the respondent company oppressive, unfairly discriminatory and unfairly prejudicial – ss.152(1), (2), (3), (4)(c) & (f), s.216, 2018, 219 & 2020 – Companies Act 1997 – s.14(c) – Companies Rules

PRACTICE & PROCEDURES – preliminary issue – whether facts based upon which the petition was filed under had been determined – principle of finality in litigation considered – whether proceeding also amounts to abuse of court process – consideration - ruling

Cases cited
Barry v. Luma (017) SC1639
Wallbank v State [1994] PNGLR 78
Michael Newall Wilson v. Clement Kuburam (2016) SC1489
Anderson Agiru v. The Electoral Commission (2002) SC687

Counsel
M Goodwin for the petitioner
E P Asigau for the respondent

JUDGMENT

1.	ANIS J:  This matter was trialed on 3 March 2025.  Presentation of closing submissions was heard on 2 April 2025.  I reserved my ruling thereafter to a date to be advised.

2.	Parties have been notified of today’s date so I will proceed to deliver my decision.

BACKGROUND

3.	The petitioner Papa Resource Development Limited (petitioner) is in liquidation.  Andrew Pini is its appointed liquidator (Liquidator).  The petitioner holds 25% of the shares in the respondent.  It commences this proceeding under s.152 of the Companies Act 1997 (CA).  In the Petition filed 28 February 2024 (Petition), the petitioner identifies alleged events and conducts of the respondent and asserts that they constitute or constituted (i), oppression, (ii), unfair discrimination, and (iii), unfair prejudice, towards it as a shareholder of the company.  And the petitioner seeks declaratory relief in that regard as well as other relief such as compensation and winding-up orders against the respondent.

4.	The respondent denies the allegations pleaded in the Petition.  Its main defence is that (and I will paraphrase) the requests and orders of the Court complained of by the petitioner have all been complied with.  It also claims that most of the events as alleged at paras. 16 to 53 in the Petition, are irrelevant or that they had been subjected to earlier proceedings and negotiations between the parties thus have no relevance for the purpose of this proceeding.

5.	The earlier proceedings concerned were MP No. 5 of 2021 and MP No. 32 of 2022 (2 earlier proceedings), which had involved the same parties.  MP No. 5 of 2021 was heard and final orders were made in favour of the petitioner against the respondent on 6 August 2021.  MP No. 32 of 2022 did not proceed to trial but was later discontinued by the petitioner.  The 2 earlier proceedings were similar to the present Petition.

EVIDENCE

6.	Evidence was adduced by both parties.  The plaintiff tendered a total of 3 affidavits which were deposed by Andrew Pini and filed on 28 February 2024.  They were marked as Exhibit P1, Exhibit P2 and Exhibit P3.  Mr. Pini was also subjected to cross-examination.

7.	The respondent also tendered a total of 3 affidavits.  They were affidavits of Sir Moi Ave filed 6 May 2024, Isikeli Reuben Taureka filed 6 May 2024 and Igo Rei filed 6 May 2024.  They were marked as Exhibit D1, Exhibit D2 and Exhibit D3 respectively.

ISSUES

8.	The main issues in my view are (i), determining the set of facts that the Court should consider as relevant to assess the claim of oppression, unfair discrimination and unfair prejudice under s.152 of the CA, (ii), whether, premised on these facts, and on the balance of probabilities, the plaintiff has established liability, and (iii), if liability is established, consider whether it is just and equitable that the Court should grant the relief prescribed under s.152(2) including an order that the respondent be liquidated, or otherwise (iv), what sort of relief should the Court order based the circumstances of the case?

LAW

9.	Sections 152, 216, 218, 219 and 220 state:

152.  PREJUDICED SHAREHOLDERS.

(1)  A shareholder or former shareholder of a company, or any other entitled person, who considers that the affairs of a company have been, or are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, or are likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity or in any other capacity, may apply to the Court for an order under this section.

(2)  Where, on an application under this section, the Court considers that it is just and equitable to do so, it may make such order as it thinks fit including, without limiting the generality of this subsection, an order–

(a)	requiring the company or any other person to acquire the shareholder’s shares; or
(b)	requiring the company or any other person to pay compensation to a person; or
(c)	regulating the future conduct of the company’s affairs; or
(d)	altering or adding to the company’s constitution; or
(e)	appointing a receiver of the company; or
(f)	directing the rectification of the records of the company; or
(g)	putting the company into liquidation; or
(h)	setting aside action taken by the company or the board in breach of this Act or the constitution of the company.

(3)  No order may be made against the company or any other person under Subsection (2) unless the company or that person is a party to the proceedings in which the application is made.

(4)  ailure to comply with any of the following sections is conduct which is unfairly prejudicial for the purposes of this section:–

(a) Section 45;
(b) Section 47;
(c) Section 51;
(d) Section 57;
(e) Section 63;
(f) Section 98;
(g) Section 110.

(5)  The signing by the directors of a company of a certificate required by this Act without reasonable grounds existing for an opinion set out in it is conduct that is unfairly prejudicial for the purposes of this section.
……

216.  INSPECTION OF COMPANY RECORDS BY SHAREHOLDERS.

(1)  A company shall keep the following records available for inspection in the manner prescribed in Section 217, by a shareholder of the company, or by a person authorized in writing for the purpose by a shareholder, who serves written notice of intention to inspect on the company and on payment of a fee prescribed by Regulation:–

(a)	the certificate of incorporation or registration of the company;
(b)	the constitution of the company, if it has one;
(c)	the share register;
(d)	the full names, addresses and postal addresses of the directors and secretary;
(e)	details of the registered office and address for service of the company;
(f)	minutes of all meetings and resolutions of shareholders within the last seven years;
(g)	copies of written communications to all shareholders or to all holders of a class of shares during the preceding seven years, including annual reports, financial statements, and group financial statements;
(h)	certificates given by directors under this Act;
(i)	the interests register of the company.

(2)  Where a company fails to comply with Subsection (1)–

(a)	the company commits an offence and is liable on conviction to the penalty set out in Section 413(2); and
(b)	every director of the company commits an offence and is liable on conviction to the penalty set out in Section 414(2).
......

218.  COPIES OF DOCUMENTS.

(1)  A person may require a copy of, or extract from, a document which is available for inspection by him under Section 216 to be sent to him–

(a)	within five days after he has made a request in writing for the copy or extract; and
(b)	if he has paid a reasonable copying and administration fee prescribed by the company.

(2)  Where a company fails to provide a copy of, or extract from, a document in accordance with a request under Subsection (1)–

(a)	the company commits an offence and is liable on conviction to the penalty set out in Section 413(1); and
(b)	every director of the company commits an offence and is liable on conviction to the penalty set out in Section 414(1).

219.  INFORMATION FOR SHAREHOLDERS.

(1)  A shareholder may at any time make a written request to a company for information held by the company.

(2)  A request under Subsection (1) shall specify the information sought in sufficient detail to enable it to be identified.

(3)  Within one month of receiving a request under Subsection (1), the company shall–

(a)	provide the information; or
(b)	agree to provide the information within a specified period; or
(c)	agree to provide the information within a specified period where the shareholder pays a reasonable charge to the company (which shall be specified and explained) to meet the cost of providing the information; or
(d)	refuse to provide the information specifying the reasons for the refusal.

(4)  Without limiting the reasons for which a company may refuse to provide information under this section, a company may refuse to provide information where–

(a)	the disclosure of the information would or would be likely to prejudice the commercial position of the company; or
(b)	the disclosure of the information would or would be likely to prejudice the commercial position of any other person, whether or not that person supplied the information to the company; or
(c)	the request for the information is frivolous or vexatious.

(5)  Where the company requires the shareholder to pay a charge for the information, the shareholder may withdraw the request, and is deemed to have done so unless, within one month of receiving notification of the charge, the shareholder pays the charge.

(6)  The Court may, on the application of a shareholder who has made a request for information, where it is satisfied that–

(a)	the period specified for providing the information is unreasonable; or
(b)	the charge set by the company is unreasonable,
as the case may be, make an order requiring the company to supply the information within such time or on payment of such charge as the Court thinks fit.

(7)  The Court may, on the application of a shareholder who has made a request for information, where it is satisfied that–

(a)	the company does not have sufficient reason to refuse to supply the information; or
(b)	the company has sufficient reason to refuse to supply the information but that other reasons exist that outweigh the refusal,
make an order requiring the company to supply the information.

(8)  Where the Court makes an order under Subsection (7), it may specify the use that may be made of the information and the persons to whom it may be disclosed.

220.  INVESTIGATION OF RECORDS.

(1)  The Court may, on the application of a shareholder or creditor of a company, make an order authorizing a person named in the order at a time specified in the order, to inspect and to make copies of, or take extracts from, the records or other documents of the company, or such of the records or documents of the company as are specified in the order, and may make such ancillary orders as it thinks fit, including an order that the accounts of the company be audited by that person.

(2)  The Court may make an order under Subsection (1) only where it is satisfied that–

(a)	in making the application, the shareholder or creditor is acting in good faith and that the inspection is proposed to be made for a proper purpose; and
(b)	the person to be appointed is qualified in accordance with Section 193.

(3)  A person appointed by the Court under Subsection (1) shall diligently carry out the inspection and, having done so, shall make a full report to the Court.

(4)  On receiving the report of a person appointed by the Court under Subsection (1), the Court may make such order in relation to the disclosure and use that may be made of records and information obtained as it thinks fit.

(5)  An order made under Subsection (4) may be varied from time to time.

(6)  The reasonable costs of the inspection shall be met by the company unless the Court orders otherwise.

(7)  A person may only disclose or make use of information or records obtained under this section in accordance with an order made under Subsection (4) or (5).

(8)  A person who discloses or makes use of information or records obtained under this section other than in accordance with an order made under Subsection (4) or (5) commits an offence, and is liable on conviction to the penalty set out in Section 413(2).
......

RELEVANT FACTS

10.	Having perused the pleaded facts in the Petition, I observe, which is also confirmed by the respondent in its submission, that the petitioner is relying on facts going back to 2021.  With that premise, I make the following preliminary observations based on facts that are not in dispute:

•	On 6 November 2020, in MP No. 3 of 2020, the National Court, amongst others, ordered the petitioner to be liquidated and appointed Andrew Pini as its Liquidator;
•	As part and parcel of his role, the Liquidator made inquiries to identify the assets of the petitioner;
•	It was discovered that the petitioner held 25% of the shares in the respondent company;
•	The Liquidator wrote various letters to the respondent requesting documents and information premised on the petitioner’s capacity as a shareholder under ss. 216, 218, 219 and 220 of the CA;
•	When he received no response, he filed proceeding MP No. 5 of 2021; a copy of the petition is marked as Annexure E to Exhibit P2;
•	In MP No. 5 of 2021, the Liquidator sought relief under s.152(1)(2)(3)(4)(c) & (f) of the CA.  The breaches alleged were premised on ss.216, 218, 219 and 220 of the Act;
•	On 6 August 2021, His Honour Kandakasi DCJ, granted the petition in favour of the Liquidator.  A sealed copy of the Court Order is marked as Annexure F to Exhibit P2.  The Court found the respondent’s actions unlawful as well as in breach of ss.152(1)(2)(3)(4)(c) & (f), 216, 218, 219 and 220 of the CA.  The Court ordered the respondent to disclose the documents and information that had been requested by the Liquidator in his letters dated 26 November 2020, 20 January 2021, 29 January 2021, and 17 February 2021 (4 Letters).  The information and documents ordered by the Court under term B of the Court Order of 6 August were as follows:

1)	Copies of audited financial statements for the Respondent for the last three years ended 31st December 2019, 2018 and 2017.  In the absence of audited financial statements for any of these years, the Respondent shall provide copies of the management financial statements for those years;

2)	Copies of financial statements for the year ended 31st December 2020, including interim /management financial statements for any month ending during the year 2020;

3)	Copies of board meetings minutes for all meetings held during 2019 and 2020;

4)	Copies of monthly management financial statements for the months of January, February and March 2021;

5)	List of investments by the Respondent on other companies or organizations both in Papua New Guinea and overseas, if any; and
 
6)	Provide any other information to which the Petitioner is entitled as a shareholder in the Respondent company.

•	The Liquidator was dissatisfied that the respondent had fully complied with the Court Order of 6 August, so, on 13 December 2022, the Liquidator filed proceeding MP No. 32 of 2022 against the respondent.  A sealed copy of the petition is marked as Annexure “I” to Exhibit P2.  The Liquidator relied on the same background facts with the additional background facts where he made references to the earlier proceeding, the orders of 6 August, and claimed that the respondent had not fully complied with the said Court Order.  The petition was drafted in similar fashion as MP. No. 5 of 2021.  The Liquidator invoked s.152 and sought damages premised on alleged breaches of ss.216, 218, 219 and 220 of the CA;
•	Whilst MP No. 32 of 2022 was still on foot, the Liquidator filed the present Petition;
•	The Liquidator later discontinued MP No. 32 of 2022 to maintain or preserve the present Petition;
•	With the current Petition, the Liquidator again relies on the same background facts where he relies and refers to his initial requests in his 4 Letters where he had requested the respondent to provide documents and information in his capacity as a shareholder.  He also refers to MP No. 5 of 2021 and the final orders of the Court of 6 August.  He purports to exercise the petitioner’s rights under s.152 and again alleges breaches under ss.216, 218, 219 and 220, and in so doing, seeks various relief that are similar as well as new compared to those sought in MP No. 5 of 2021.

11.	When I take these considerations into account, I note that the primary facts and complaints as pleaded and relied upon by the Liquidator in the 3 proceedings (i.e., MP No. 5 of 2021, MP. No. 32 of 2022 and MP. No. 3 of 2024) are the same or very similar.  The Liquidator was dissatisfied with the responses to his various demands in his 4 Letters that he had sent to the respondent in 2020 and 2021 to comply with under ss. 216, 218, 219 and 220 of the CA.

12.	As a preliminary matter, the respondent submits, and I will paraphrase, that the facts and cause of action raised in Petition, had been raised and dealt with in the earlier proceedings.

13.	I note the submissions of the parties in this regard.

14.	The crucial fact to state to commence my opinion on the preliminary issue is this.  His Honour Kandakasi DCJ has determined the matter, which is the subject of this Petition, on 6 August 2021.  A copy of the Court’s final order is marked as Annexure F to Exhibit P2.   And I will say this, that the option or opportunity to seek the relief in the present Petition (i.e., MP No. 3 of 2024) had existed at the material time immediately before the Liquidator filed MP No. 5 of 2021.  The Liquidator decided then that that was how he would pursue the petitioner’s claim under s.152.  He also chose the various relief that he wanted the Court to grant.  The matter was trialed, and the His Honour Kandakasi DCJ handed down his final decision.  

15.	I find various substantive flaws in the actions or conduct of the Liquidator.  After the final decision of the National Court in MP No. 5 of 2021, Liquidator continued to file fresh MP proceedings under s.152 of the CA where he had or has relied on the same background information and facts:

•	to assert the petitioner’s right as a shareholder of the respondent; and
•	to allege how the conducts of the respondent had or has infringed ss. 216, 218, 219 and 220 of the CA; and
•	to alleged breaches of the Court Order of 6 August 2021; and
•	to seek relief that are similar or different to what he had originally sought in MP No. 5 of 2021; and
•	to amend the facts in latter proceedings including this Petition, to include alleged non-compliance of court orders in order to seek similar or additional relief from the Court under s.152 of the CA.

16.	The first reason I refer to concerning the flawed actions or conduct of the petitioner is the doctrine of finality in litigation or the public policy consideration, which dictates or requires finality in litigation.  See cases: Barry v. Luma (2017) SC1639 and Wallbank v State [1994] PNGLR 78.  The substantive matter has been decided by a court of competent jurisdiction in MP No. 5 of 2021, on 6 August 2021.  So, unless there has been a successful appeal filed challenging the final decision, the decision remains final and immutable. 

17.	The option available to the petitioner on allegation of non-compliance with court orders may be in enforcement such as contempt proceedings.  It is not open for a petitioner, like the Liquidator in the present case, to file a same or repeated cause of action against a respondent to address non-compliance of orders that have already been made by an earlier National Court on the same matter(s) against the same respondent.  Thus, the action of the Liquidator in filing this Petition, in my view, also constitutes an abuse of the Court process.  The Court must also protect its process from abuse by litigants.  The Court’s power in that regard is inherent.  See cases: Anderson Agiru v. The Electoral Commission (2002) SC687, Michael Newall Wilson v. Clement Kuburam (2016) SC1489 and Application by Pastor Hanua Gadiki v Gaudi Logae and Ors (2021) SC2102.

18.	With that, I summarise my findings as follows.  The approach taken by the petitioner in filing similar petitions, including the present Petition after the conclusion of proceedings in MP No. 5 of 2021, has breached the principle - finality in litigation.  The present Petition, in my view, is an attempt by the Liquidator to essentially ‘resuscitate MP No. 5 of 2021 only to seek or add additional relief where he may seek against the respondent.  The actions of the Liquidator also amount to abuse of the Cour process. 

SUMMARY

19.	In my view, the Petition must therefore be dismissed on the preliminary findings of this Court.

COST

20.	An order for cost remains discretionary.  In this case, I will order cost to follow the event, that is, in favour of the respondent on a party/party basis to be taxed if not agreed.

ORDERS

21.	I make the following orders:

1.	The proceeding is dismissed in its entirety.

2.	The petitioner shall pay the respondent’s cost 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 of the National Court which shall take place forthwith.

The Court orders accordingly
_______________________________________________________________
Lawyers for the petitioner: Goodwin Bidar Nutley
Lawyers for the respondent: Pacific Legal Group