Ramu Nico Management Ltd (MCC) v Koroma [2009] PGSC 47; SC1046 (12 October 2009)

SC1046

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 85 OF 2009

BETWEEN:

RAMU NICO MANAGEMENT LIMITED (MCC)
First appellant

MINERAL RESOURCES AUTHORITY
Second appellant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third appellant

AND

JOE KOROMA
First Respondent

GUYEIBI NOGOI OMOWO LAND GROUP INC. ILG No. 12155
Second Respondent

PETER KOWANE
Third Respondent

TIGINA KWIANE LAND GROUP ILG No. 10244

Waigani: Injia, CJ
2009: 12th October

APPEAL – application for leave to appeal National Court decision refusing to dismiss proceedings – second application seeking leave to appeal against same interlocutory judgment also consolidated – main issue determined by trial judge was whether the National Court lacked jurisdiction to entertain claim, ie whether the case before the trial judge involved dispute as to ownership or customary land covered under SML 8 or tenement – Order 12 rule 40 National Court Rules, s.14 Supreme Court Act

APPEAL – grant or refusal of leave discretionary – main test is whether applicant has shown that there is a prima facie case or an arguable case that the decision was wrong and that substantial injustice will be done by leaving the erroneous decision un-revisited or unrevised on appeal – customary ownership is determined by Land Courts and Lands Title Commission – National Court does not have jurisdiction to determine ownership of tenement or SML – arguable case demonstrated where trial judge read s.155 of Mining Act in isolation to other provisions under Part VII – patent error by trial judge demonstrated – application for leave clearly arguable – leave granted in both applications – ss4,15, 60, 156, 157 Mining Act

Cases Cited

Breckwoldt v Groyke [1974] PNGLR 106.
Matiabe Oberia v Police and the State (2005) SC801, Sir Julius Chan v Ombudsman Commission of Papua New Guinea [1999] PNGLR 240, Rimbink Pato v Anthony Manjin [1999] PNGLR 6, Baing v PNG Stevedores Pty Ltd (2000) SC627, Boyepe Pere v Emmanuel Ningi (2003) SC711

Counsel

J. Kumura, for the First & Third Appellants
J Aisi, Jnr, for the Second Appellant
T Nonggorr, for the Respondents

12 October, 2009

1. INJIA CJ: This is an application for leave to appeal from a decision of the National Court refusing to dismiss the proceedings under O 12 r 40 of the National Court Rules. The application is made under s 14 of the Supreme Court Act.

2. In SCA No. 88 of 2009, Mineral Resources Authority (first appellant), Ramu Nickel Ltd (second appellant), Ramu Nico Management (MCC) Ltd (third appellant), The State (fourth appellant) v Joe Koroma (first respondent), Guyeibi Nogoi Yowa Omowo Land Group Inc. ILG No. 12155 (Second respondent), Peter Kowane (third respondent) and Tigina Kwiave Land Group ILG No. 10244 (fourth respondent), the appellants sought leave to appeal against the same interlocutory judgment. The two appeals were consolidated for purpose of hearing and were heard together.

3. The applications are contested. Both parties filed affidavits and relied on them. Counsel made their submissions and I reserved my ruling to consider them. I now deliver my ruling.

4. By way of background, in proceedings commenced in the National Court at Madang in proceedings OS No. 280 of 2009 Joe Koroma & others v Mineral Resources Authority & others, the plaintiffs sought declaratory orders, inter alia, that any agreement signed by persons other than the plaintiffs purporting to represent the landowners of Krumbukari Block 1 (hereinafter abbreviated KB 1) in respect of the Ramu Nickel Project, be declared void as having no authority and that any negotiations leading to determinations for compensation of use of land, etc be done with the plaintiffs and other disputing claimants.

5. There were no pleadings entered into between the parties on the claim even though provision is made for pleadings in proceedings commenced by Originating Summons: see O 4 r 35 of the National Court Rules. The nature of the claim and defences to the claim were deposed to in the affidavits filed by both parties in respect of interlocutory applications they each filed. The first interlocutory application filed by Notice of Motion was by the defendants seeking dismissal of the proceedings under O12 r 40. The plaintiffs responded by filing a Motion seeking orders inter alia disclosure of relevant documents. The trial judge heard both applications together. The judge dismissed the defendants’ motion saying the plaintiffs had a reasonable cause of action. The judge then granted the plaintiffs’ Motion. The defendants appeal from these decisions.

6. The main issue decided by the trial judge is whether the National Court lacked jurisdiction to entertain the claim by virtue of s 15 of the Land Titles Commission Act, ss 4, 157 & 160 of the Mining Act. The Judge ruled that the plaintiffs’ claim was about entitlement to compensation for use of customary land as claimants under s 155 of the Mining Act; it was not about interest in customary land. Therefore the Court had jurisdiction to determine the matter.

7. The following matters are not in dispute. On 12th June 2009, Special Mining Lease No. 8 (SML 8) for a term of 40 years was issued to Ramu Nickel Ltd by the Head of State. Since 2001, a dispute over the land covered in SML 8 between customary landowners, the plaintiff included, was registered with the Land Courts established under the Land Dispute Settlement Act and the Land Titles Commission (LTC) and was pending determination. In respect of proceedings before the (LTC), there has been a delay in the LTC hearing due to a number of factors the more recent one being the death of the newly appointed Commissioner the late Patric Nasa.

8. In essence then the LTC has assumed jurisdiction to hear and determine the dispute as to who are the customary owners of the land on which SML No. 8 has been issued, for purpose of determining eligibility to compensation under the Mining Act. The grant of SML 8 was not affected by any dispute amongst customary landowners as to ownership. Section 4 of the Mining Act is clear on this point when it states:

(1 Where a dispute arises as to interests in customary land or the position of boundaries of customary land such dispute shall not affect-

(a) The of a person to make application for and be granted a tenement under this Act: or

(b) The validity of a tenement granted under this Act.

(2) A dispute referred to in Subsection (1) shall be settled as provided for by the land Disputes Settlement Act (Chapter 45).

9. The respondents main contention is that the negotiations for compensation agreements and agreements reached under ss 154, 155 & 156 of the Mining Act involved KBK Landowner Association but did not involve the respondents who were disputing claimants. The disputing claimants were not consulted and their attempts to get involved were refused by MRA because it chose to deal with landowner associations only. Only four clans represented by KBK Landowner Associations receive benefits under the benefit sharing agreement or MOA to the exclusion of the disputing claimants.

10. The trial judge described the respondents’ case before him in these words:

"The plaintiffs are asserting through the originating summons that all documents and agreements regarding the Ramu Nickel Project purporting to be signed on behalf of the customary landholders are void, on t he ground that the provisions of part VII of the Mining Act have not been complied with. This is not a speculative claim. T he plaintiffs are asserting that the breaches of the Act have already been committed. They are claiming, like a number of other clans including members of the Kurumbrukari Landowners Association, to have an interest in land. They are disputing claimants. They say they had a right to be heard and consulted on all things included in the compensation agreement and other agreements and documents that have been signed on behalf of the Kurumburkari Landowners Association."

11. The trial judge then dealt with the appellants’ main point as follows:

"However, this is not a case in which the plaintiffs are asking the court to determine that they own customary land. They are not asking the Court to determine which clan owns which parts of the SML. Those are issues that are before the Special Land Titles Commission".

12. The disputing claimants’ argument arises from the wording of ss 155, 156 & 157 of the Mining Act. The reference to disputing claimants first appear in s 157 (1) which states:

"157. Determination of compensation by the Warden.

(1) The –

• (a) Holder of a tenement; or
  
• (b) Landholders claiming an entitlement to compensation, including the claimants to disputed land,
  

May, where they are unable to agree on the amount of compensation to be paid, by notice to the Chief Warden, request a Warden to determine the amount payable." My emphasis)."

13. Part VII of the Mining Act sets out the procedure for determining compensation to customary landholders in respect of land covered in a tenement or SML. The Mining Warden has power to determine the amount of compensation to be paid to landholders. The amount may be determined by agreement of the landholders: If an agreement is reached, it is registered with and endorsed by the Mining Warden and upon registration, it is binding and enforceable: s 156 of Mining Act. If the landholders or disputing claimants are unable to reach an agreement on the amount of compensation, the landholders or disputing claimants may request the Warden to determine the amount in which case the Warden conducts a hearing and determines the amount of compensation: The Warden conducts a hearing and determines the compensation amount under s 157 of the Mining Act. A person dissatisfied with the Warden’s decision may appeal the decision to the National Court: s 158 of Mining Act.

14. Part VII does not provide for determination by the Warden of a dispute amongst persons or groups of persons claiming ownership of the land on which the tenement is issued. That dispute is determined by the land courts under the Land Dispute Settlement Act and the Land Titles Commission. If a dispute arises at a hearing before the Warden as to persons’ entitlement to compensation and that is connected with customary ownership rights over the tenement land, the Warden has no jurisdiction to determine the land ownership issue. He should defer the hearing until the ownership issue is determined by the Land Courts or LTC.

15. The main issue before the trial Judge was whether the case before him involved dispute as to ownership of customary land covered under SML 8 or tenement. The judge decided the dispute did not involve issues of ownership. Was the trial judge wrong in reaching this conclusion?

16. I remind my self of the principles on grant of leave. The grant or refusal of leave to appeal is of course discretionary. The main test is whether the applicant has shown that there is a prima facie case or an arguable case that the decision was wrong and that substantial injustice will be done by leaving the erroneous decision un-revisited or unrevised on appeal. The Court is not determining the merits of the appeal itself. It will suffice if the Court is persuaded that the proposed appeal raises issues of law or mixed fact and law which are fairly arguable and require judicial review: Matiabe Oberia v Police and the State (2005) SC 801, Sir Julius Chan v Ombudsman Commission of Papua New Guinea [1999] PNGLR 240, Rimbink Pato v Anthony Manjin [1999] PNGLR 6, Baing v PNG Stevedores Pty Ltd (2000) SC 627, Boyepe Pere v Emmanuel Ningi (2003) SC 711, Breckwoldt v Groyke [1974] PNGLR 106.

17. In civil appeals which involved trial Judge’s exercise of discretion on a procedural matter within the Court’s jurisdiction, such as the order made in this case, the test is much higher than in appeals against other types of interlocutory judgments. A passage from the majority view in Chan v Ombudsman Commission is pertinent. I quote from page 258:

"So obtain leave to appeal an interlocutory judgment, it is not simply a matter (of) asserting there is an arguable case; that there has been some error. It is not the case that every error will effect the outcome of the substantive proceedings. What must be shown is, not only that there is patent error, but that the error effects a party’s substantive rights or will prevent the proper determination of issues."

18. Counsel for the appellants submit that the validity of the compensation agreements reached between KBK and the tenement holders was registered with and endorsed by the Warden. It is binding on the parties and it should not be questioned. The respondents raise question challenging the capacity of the KBK to enter into those negotiations as landholders and the issue of land ownership arises but that issue was before the LTC and the Land Courts. The respondents were not parties to the agreements reached because they do not represent landowners. If they claim to be so, that should be determined by the LTC or the Land Courts. The National Court lacked jurisdiction to deal with these ownership issues.

19. Mrs Nonggor contends that the respondents’ action before the National Court was by disputing claimants who were left out of the agreement negotiation process even though they had registered claims before the Land Courts and the LTC. This is provided for in s 155 and s 157. They had every right to challenge the agreement process used to their exclusion in Court of law. The trial judge was correct in coming to the conclusion that he did. The appeal is misconceived and clearly not arguable and it should be dismissed.

20. In my view, the phrase "including the claimants to dispute land" in s 157(1) of the Mining Act has to be understood in its proper context. The provisions of s 157 apply when the landholders or persons/groups of persons claiming ownership of disputed land are unable to reach an agreement on the amount of compensation. If an agreement has already been reached and it is endorsed and registered by the Mining Warden, that agreement is binding and enforceable under s 156 of Mining Act. In the present case the Agreements with KBK Association and the tenement holder had already been reached and registered with the Mining Warden. In my view the trial judge appears to have overlooked the binding nature of the compensation agreements.

21. The nature of the respondents claim was not pleaded and so it is difficult to ascertain the precise nature of the respondents’ case. Going by the principal relief sought in the Originating process, they were claiming a right to be included in the MOA. They sought to invalidate the MOA and in its place replace themselves as the rightful landholders. Therefore the plaintiffs/respondents’ claim before the National Court was a direct challenge to the validity of MOA which was approved and registered by the warden under s 156 of the Mining Act. This necessarily raises issues of ownership of customary land covered in the tenement which should be resolved by the Land Courts established under the Land Disputes Settlement Act and the LTC. Issues of entitlement to compensation for customary land is inseparable from issues of customary land ownership rights. The National Court lacks jurisdiction to determine customary ownership issues: The State v Lohia Sisa[1987] PNGLR 102.

22. It is apparent from the scheme of Part VII of the Mining Act that this part is a complete Code for determining compensation to be paid to landholders or claims or disputing claimants for land covered in a mining tenement or SML. The provisions are linked to each other and cannot be read in isolation and out of context. It contains provisions for appeal from Warden’s determinations under s 157 and other avenues for relief even in cases where the payment of compensation under the compensations agreements becomes impractical: s 60. I am satisfied that an arguable case has been demonstrated that the trial judge read s 155 in isolation to other provisions under Part VII and also to other relevant provisions such as s 4 & 15 of the Mining Act and Section 15 of the Land Titles Commission Act which give exclusive jurisdiction to the Land Courts and LTC to determine customary land ownership issues. I am also satisfied that an arguable case as been demonstrated that the trial judge read the phrase "claimants to disputed land" out of context in which that phrase is used in s 157 and in the result erred in law. I accept appellants’ submissions on these points. I am satisfied that the issues raised in the application for leave are clearly arguable.

23. I am satisfied a patent error has been demonstrated and that these prevents the parties, particularly the appellants from having the issue of customary ownership of the tenement land raised in the proceedings determined by courts of competent jurisdiction, namely the Land Courts and LTC as required by ss 4 and 15 of the Mining Act. If the proceedings were to continue the Court stands to determine issues of customary ownership issues of the tenement land or SML and as a result cause prejudice to the rights of the parties to have those issues determined at the correct forum.

24. I am satisfied that the issues raised in the application for leave are clearly arguable and grant leave to appeal in both SCA No. 85 of 2009 and SCA No. 88 of 2009.

25. Costs shall be in the cause in each matter.

______________________________________
Posman Kua & Aisi Lawyers: Lawyer for the first and Third Appellants
Allens Arthur Robinson Lawyers: Lawyers for the second Appellant
Tiffany Nonggorr Lawyers: Lawyer for the Respondents