Morauta v Pala [2016] PGSC 46; SC1529 (19 August 2016)

SC1529

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

S.C.A. No. 01 OF 2016

APPLICATION Pursuant to Constitution Section 18(1)

APPLICATION BY RT. HON. MEKERE MORAUTA KCMG

AND
HON. ANO PALA MP, MINISTER FOR JUSTICE AND ATTORNEY GENERAL

First Intervener

AND
THEODORE ZURENUOC MP
SPEAKER OF THE NATIONAL PARLIAMENT

Second Intervener

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Intervener

AND
HON PETER O’NEILL MP,
PRIME MINISTER

Fourth Intervener

AND
THE NATIONAL EXECUTIVE COUNCIL

Fifth Intervener

Wagani: Kandakasi, Yagi & Sawong JJ.

2016: 1^st July &19^th August

CONSTITUTIONAL LAW – Practice and procedure – Application under Constitution, Section 18(1) (original interpretative jurisdiction of the Supreme Court) – Declaration sought as to interpretation and application of provisions of the Constitution - Divestment of shares in a company held by a foreign company by an Act of Parliament – Application by chairman of foreign company and not the company - Question of standing - Whether applicant has standing to make application – Preferred interpretation and application of a Constitutional provision not specified – Competence of Application.

Cases cited:
Belden Norman Namah MP v. Rimbink Pato MP, National Executive Council & The State (2014) SC1304.
Chief Collector of Taxes v Bougainville Copper Ltd; Bougainville Copper Ltd v. Chief Collector of Taxes (2007) SC853
Eki Investments Limited v. Era Dorina Limited; Era Dorina Limited v. Eki Investments Limited (2006) N3176.
Eremas Wartoto v. The State (2015) SC1411.
Internal Revenue Commission v. Dr Pirouz Hamidian-Rad (2002) SC692./
Odata Ltd v. Ambusa Copra Oil Mill Ltd (2001) N2106.
Pinpar Developer Pty Ltd v. TL Timber Development Pty Ltd (2006) N3075.
Re Application by Ila Geno (2014) SC1313.
Re Election of Governor-General (No 1) (2003) SC721.
Re Election of Governor–General (No 1) (2003) SC721.
Re Petition of MT Somare [1981] PNGLR 265.
The State v. Graham Yotchi Wyborn (2005) N2847
Work Cover Authority of NSW v. Placer (PNG) Exploration Ltd (2006) N3003.

Counsel:
G. Egan & N. Yalo, for the Applicant
A. Manase & Kola, for the First and Third Intervenors
M. Boas, for the Second Intervenor
E. Asigau, for the Fourth and Fifth Intervenors

19^th August, 2016

1. BY THE COURT: This proceeding has been filed pursuant to s.18 (1) of the Constitution and under Part 2 of the Supreme Court Rules 2012. Under Order 4 Rule 16 and 17 of the Supreme Court Rules the substantive matter cannot be set down for hearing unless an applicant has been granted locus standi or standing to bring the application. The interveners argue that, the Applicant, Sir Mekere does not have such standing. They also argue that the application is incompetent because it fails to specify any Constitutional interpretation and or application question.

Issue for Determination

2. Hence the issues for consideration and determination are these:

(1) Does Sir Mekere as Chairman of PNG Sustainable Development Program Ltd (SDP) board of directors have the necessary locus standi to bring this proceeding? and

(2) Is the application incompetent for failure to specify any Constitutional interpretation and application question?

3. These questions can be dealt with together since, the issue of competence goes into the requirements the applicant must meet to enable the Court to determine the question of standing in his favour.

The relevant factual background

4. The relevant factual background to this proceeding is this. Sir Mekere is a prominent distinguished senior citizen of Papua New Guinea (PNG). In 1972, he has been the Economist with the Office of the Economic Advisor. Later in the period 1973 – 1982 he was the Secretary for the Department of Finance. Thereafter, from the period 1983 – 1992, he was the Managing Director of the then Papua New Guinea Banking Corporation. In the period 1993 – 1994, he was the Governor of Bank of PNG before entering politics and becoming a Member of Parliament for the period 1997 – 2012. In his political life, he held the positions of Minister for Planning and Implementation from 1997 – 1998; Minister for Fisheries from 1998 – 1999; Minister for Public Enterprises from 2011 – 2012. He also held the position of Leader of the Opposition in the period 2002 – 2004 and 2007 – 2011. The highest position he held was the position of the Prime Minister of Papua New Guinea for the period 1999 – 2002.

5. Sir Mekere has since left politics and took up the position of the Chairman of board of SDP, a position he still holds today. The SDP is a company limited by guarantee and is incorporated in the Republic of Singapore, by reason of which it is a foreign company. The company held 122, 200,000 shares in Ok Tedi Mining Limited (OTML). In September 2013, the PNG National Parliament enacted the Mining (Ok Tedi Tenth Supplemental Agreement) Act 2013 (“TSA Act”). Following the enactment and coming into operation of the TSA Act, the SDP’s shares in OTML were cancelled and transferred to the Independent State of Papua New Guinea. The Constitution by s. 53 and s. 5 of the TSA Act provide for compensation to be paid for acquisition of property by the State. It is not clear if compensation has been claimed and the relevant process exhausted in this case. The main relief sought by the SDP through Sir Mekere is to have its shares returned and in the alternative, it be paid a fair and reasonable compensation reflective of the value of the shares.

6. Since leaving politics and the public service and later the divestment of the SDP’s shares in OTML, Sir Mekere has been occasionally making media releases in relation to public interests matters. The media release are assumed to have been read widely by the members of the public.

7. Being aggrieved by the enactment of the TSA Act and its application against SDP’s interest, SDP commenced proceedings in the International Centre for the Settlement of Investment Disputes Tribunal (ICSID). On 5^th May 2015, the ICSID Tribunal handed down its decision dismissing SDP’s claim on the basis of the Tribunal lacking jurisdiction. The matter is now pending in the High Court of Singapore on SDP’s application.

8. In this proceeding, Sir Mekere is asking the Court to declare that on a proper interpretation, construction or application of the provisions of Sections 32, 33, 34, 38, 39, 41 and 53 of the Constitution, the TSA Act is unconstitutional, invalid, and of no force or effect. He then requests the Court to grant orders, among others, that the TSA Act in its entirety is unconstitutional and is therefore null and void and of no force or effect. He is also seeking other remedies that are set out in the application.

Relevant principles on locus standi or standing

9. Turning firstly to the question of locus standi or standing, we note there are number of Supreme Court authorities dealing with the subject. These include: Re Petition of MT Somare;^[1] Re Election of Governor-General (No 1);^[2] Belden Norman Namah MP v Rimbink Pato MP, National Executive Council & The State^[3] and In re Application by Ila Geno.^[4]

10. The decision in Re Somare, first dealt with the question of locus standi or standing in the Supreme Court in respect Constitutional references and is the leading authority on that question. The decision in the Application by Ila Geno, succinctly summed up the relevant principles enunciated by the decision in Re Somare which appear in the head note to that decision as follows:

“The Somare rules as to standing may be described as:

(a) The applicant will have standing if he or she has a sufficient interest in the matter, which will be demonstrated if the applicant:

· has personal interests or rights that are directly affected by the subject matter of the application; or

· is a citizen who has a genuine concern for the subject matter of the application; or

· is the holder of a public office, the functions of which relate to the subject matter of the application.

(b) The application must raise significant (not trivial, vexatious, hypothetical or irrelevant) constitutional issues.

(c) The applicant must not be a mere busybody meddling in other people’s affairs and must not be engaged in litigation for some improper motive, eg as a tactic of delay.

(d) The fact that there are other ways of having the constitutional issues determined by the Supreme Court does not mean that a person should be denied standing.”

11. Subsequent decisions of this Court^[5] have confirm the soundness of these principles and have adopted and applied them. Counsel for the applicant in the Re Application by Ila Geno, Mr Nemo Yalo who is also Sir Mekere’s lawyer here sought to add two new principles. The Court noted and dealt with that submission in the following terms:

“Mr Yalo submitted that we should take the opportunity presented by the unusual circumstances of this case to invoke Schedule 2.3 (development of an underlying law for Papua New Guinea) of the Constitution and formulate two new rules of the underlying law, additional to the Somare rules. He posited them in the following terms:

· a citizen who once occupied public office and performed public functions and who in his post-public service life continues to promote or protect the principles, rules and values that relate to the office(s) he previously held should have “automatic standing” to bring public interest actions relating to the interpretation or application of Constitutional Laws;

· a citizen who is a leader of a registered political party whose constitution and policies relate to the protection and preservation of democratic values, ideals and principles entrenched in the Constitution should have “automatic standing” to bring public interest actions relating to the interpretation or application of Constitutional Laws.

17. We are not persuaded that such additional rules are necessary or desirable.”

12. The Court referred to the decision in Namah v. Pato (supra) and noted the Court in that case, declared that the then Leader of the Opposition, Honourable Belden Namah had:

“the standing after looking at the history and background of the Somare rules, and how those rules had been fine-tuned, developed and applied in numerous cases over a period of 32 years.”

13. The Court also concluded that;

“Somare was a seminal decision of the Supreme Court, eminently sound in principle, which has stood the test of time and remains the leading case, which lays down fundamental rules for determining whether an applicant for relief under Section 18(1) of the Constitution has standing. Why would we want to amend the Somare rules, or add two new ones, only a month later?”

14. Accordingly, the Court was of the view that if the two proposed new rules were added that:

“would unnecessarily complicate the determination of requests for declarations as to standing to introduce the concept of “automatic standing” in certain cases. It would only invite argument as to whether an applicant has “automatic” standing, and if not, whether he can still be granted standing at the discretion of the Court.”

15. Further the Court noted:

“The Somare rules are of general application and are sufficiently flexible to deal with the current request. We cannot foresee any difficulty in applying them to different scenarios, for example the applicant might be a non-citizen or a corporation (a governmental body or a private company) or a prisoner.”

16. That being the case, the Court was of the view that, the fact that an applicant was “a person who has previously occupied public office or the leader of a political party that has “constitutional” aims could be “relevant considerations to take into account when applying the existing Somare rules.” Consequently, they did not warrant a separate rule to cater for them.

17. This Court in most of the cases on standing had no difficulty in deciding in favour of the applicants, starting with the decision in Re Somare and the most recent one in Namah v. Pato (supra) cases because amongst others they held important public offices like the Leader of the Opposition or the Chief Ombudsman in Re Election of Governor–General (No 1).^[6] In Re Application by Ila Geno, the Court decided in favour of the applicant having the necessary standing despite him at the relevant time holding no public office. In so doing, the Court noted that might be the first time for a “person who is not a public office-holder being found to have sufficient interest in an application of this nature and went on to say:

“If an applicant holds public office then that fact will be relevant – and may enhance the prospect of his being declared to have standing – if the functions of his office relate to the subject matter of the application. But, we reiterate, it is not necessary for an applicant to be a public office-holder, provided that he satisfies two criteria: he is a citizen and he has a genuine concern for the subject matter of the application.”

18. Further, in arriving at that decision, the Court found firstly that the applicant meet the first requirement for standing. The Court came to that decision because it found that the applicant had a genuine concern especially in the various Constitutional questions presented and in particular there was evidence of him being:

(1) a prominent and well known person in the community, having been recently conferred the title “Grand Chief”;

(2) in the public service, extending to about 50 years, including holding four leadership offices in the period from 1990 to his retirement in 2008: Commissioner of Police, Chairman of the Public Services Commission, Ombudsman and Chief Ombudsman, three of which gave him status as a constitutional office-holder;

(3) a member of the Ombudsman Commission (from 1998 to 2008) he was at the forefront of a team of citizens addressing leadership and governance and other constitutional issues;

(4) a person who on a previous occasion acknowledged by the Supreme Court as having standing in a constitutional case, which concerned the appointment of the Governor-General: Re Election of Governor-General (No 1) (2003) SC721;

(5) a co-founder of a political party called Papua New Guinea Constitutional Democratic Party, which was registered, with aims and objectives including preservation and promotion of the ideals, values and principles of the Constitution and promotion of strong leadership and good governance as enshrined in the Constitution.

(6) a person who before Parliament made Constitutional Amendment No 34, made public comments, which were reported in the media, expressing concern as to the constitutionality of the Amendment and other constitutional issues. He has been known to publicly air his views on constitutional issues on a number of occasions.

19. Turning then to the second requirement of demonstrating significant Constitutional issues being raised in an application, the Court found that requirement was met. This was because, in the application, the applicant sought to argue that two Constitutional amendments passed by Parliament were unconstitutional and in particular they raised amongst others the following questions as to whether the amendments:

(a) are inconsistent with a number of other provisions of the Constitution (especially Sections 141(b) and (c)) which entrench the principle of responsible government and the principle of separation of powers;

(b) allow the Executive arm of the National Government to dominate the National Parliament;

(c) diminish the authority of the Parliament and enable the political interests of members of Parliament who are in government to be advanced;

(d) restrict for long periods the right of members of the Parliament under Section 50 of the Constitution to be eligible to hold office as Prime Minister;

(e) create inequality amongst the members of Parliament, contrary to Section 55 of the Constitution;

(f) restrict the rights of members of Parliament under Section 111 of the Constitution to introduce a petition, question, bill, resolution or motion;

(g) fail to satisfy the manner and form requirement of Section 38 of the Constitution; and

(h) pave the way for minimal or no accountability by the Executive to the Parliament.

20. The Court was of the view that:

“30. None of these arguments or the issues that they give rise to can be objectively regarded as trivial, vexatious, hypothetical or irrelevant. The fundamental proposition that the applicant wishes to put to the Court is that the system of democratic, constitutional government that Papua New Guinea has, is built on the foundation of responsible government: the Executive arm of government is responsible and accountable to the Parliament. To ensure that, that system operates effectively the Prime Minister and the Government of the day must be responsible to the Parliament (Section 19 of the Constitution by the Ombudsman Commission re Sitting Days of the National Parliament (1999) SC628).

31. If, however, the Prime Minister is immune from motions of no confidence for lengthy periods, the Government of the day is, according to the arguments the applicant wants to prosecute, also immune from review. Even a bad government will survive, according to the applicant’s argument.

33. Our assessment is that there are significant and legitimate constitutional issues raised by the application. The second requirement is satisfied.”

21. The Court went on to give consideration to the next requirement of whether the applicant is a mere busybody meddling in other people’s affairs. The Court found for the applicant in these terms:

“...the applicant cannot be labelled a busybody. He is not someone meddling in other people’s affairs that should be of no concern to him. He is a citizen with a genuine concern for constitutional issues and the issues he wants raised are significant. He is not acting for any improper motive. The third requirement is satisfied.”

22. Finally, the Court turned to the other requirement of whether there are other ways of determining the issues presented. The Court found there was at least one other way, which is by way of Special Constitutional Reference under s. 19 of the Constitution. That provision by subsection (3) prescribes the persons who have the necessary standing to bring proceedings under s. 19. The applicant produced evidence of him approaching five different authorities, each of which would be entitled to take up the Constitutional issues by way of a Special Reference under Section 19(1). However, each of them expressed no interest in taking up the issues. In these circumstances, the Court noted:

“This is disappointing but perhaps it is not surprising. It is a reflection of a certain degree of ‘constitutional apathy’ that has been developing for some time. The authorities that would be expected to take a great deal of interest in constitutional issues appear to be sleeping at the wheel. That this phenomenon is being observed by the Court and that the applicant appears willing and able to agitate these significant issues are factors that support the exercise of the Court’s discretion in his favour.”

Present case – Parties Arguments

23. In the present case, Sir Mekere argues through his learned counsel that his personal rights and freedoms guaranteed by the Constitution do not have to be infringed in order for him, or any other publicly-spirited citizen who demonstrates having sufficient interest in the subject matter of a proceeding to bring an application under Section 18(1) of the Constitution. In his case, he argues he has “sufficient interest” and meets the other requirements to bring this proceeding under s. 18 (1) because:

(1) he is, and at all material times has been, the Chairman of SDP, which was at all material times up until the coming into operation of the TSA Act, was the owner of a capital of 122,200,000 shares, or 63.4146% of shares in OTML which were divested unlawfully and without fair compensation by the TSA Act;

(2) As Chairman of SDP, he has the responsibility of taking all such action on behalf of and in the name of SDP, so as to enforce SDP’s rights for either a return of its said share capital, or the payment of fair and reasonable compensation for cancellation and divestment of its shares;

(3) On 2 March 2013 Prime Minister Peter O’Neill expressed the Government’s interest to purchase SDP’s shares in OTML, and he tried to have a meaningful dialogue with the Prime Minister to negotiate and reach a mutually acceptable agreement on terms including the sale of SDP’s shares at fair value assed by independent experts to ensure a transparent transaction;

(4) Given (1) to (3) above he is not a mere busy body meddling in the affairs of the Government or other people;

(5) He is a distinguished citizen who has a genuine concern and who is being directly affected by the subject matter of the application who pursuant to s. 57(1) of the Constitution has an interest in the protection and enforcement of rights granted under Division 3 of the Constitution. Being such a person, he strongly feels that it is his Constitutional duty to keep the actions of the Government accountable, in particular the Executive and the Legislative arms of government, by the institution of this proceedings. This demonstrates his genuine concern for the subject matter and the substantive issues arising in this proceeding; and

(6) he relates to broader sovereign risk considerations in circumstances where a non-citizen’s right to ownership of property or control over interests in or over property situated in, or otherwise held in, PNG, is cancelled or otherwise expropriated by legislative enactment undertaken by the Government of the day.

24. As for the next important requirement of the applicant being required to demonstrate the application raising significant Constitutional issues, the applicant’s argument is this. From the actions of the Executive and Legislative arms of government which this Court must consider centers around the question of; can the Government by legislative act expropriate a non-citizen’s property and the rights and interests in property without fair compensation on just terms. This, the applicant argues presents a significant Constitutional issue. He argues further that, this Court may not have determined this kind of questions on a previous occasion and is not a hypothetical or vexatious or trivial issue. The decisions already referred to in this judgment namely, Re Petition of MT Somare, Belden Norman Namah MP v. Rimbink Pato MP and re Application by Ila Geno are cited in support of this argument.

25. Turning than to the final requirement of an applicant needing to show if there are other ways of having the Constitutional issues determined, he points to s.19 of the Constitution. Without more, he argues that the existence of that avenue does not mean that he should be denied locus standi.

26. On the other hand, the intervenors oppose Sir Mekere’s application and argue effectively that he has failed to meet the requirements for a decision in favor of him having the necessary standing to bring this proceeding. In so arguing, the intervenors point out the following:

(1) No significant Constitutional question is identified in the application and is presented for the Supreme Court to consider and determine. They point to Form 1 under the first schedule to the Supreme Court Rules and point out that item 3 in the form which is in the following terms has not been met in this application:

“3. The applicant requests the Court to declare that the proper interpretation or application of Section... of... (Insert the Constitution and relevant Section or name of a constitutional law and Section) is:”;

(2) The applicant does not have sufficient interest because:

(a) he is not the holder of a public office whose functions relate to the subject matter of the Application;

(b) his personal rights and interests are not directly affected by the subject matter of the Application;

(c) he is the Chairman of PNG SDP and whilst he is a citizen of Papua New Guinea, he is representing the interests of SDP which is a foreign company. The orders sought are for the sole benefit of SDP and is acting solely for foreign interests;

(3) SDP is the entity that is directly affected by the TSA Act and if it is aggrieved by the provisions of the Act or its effect, SDP alone has the necessary standing to commence proceedings in its own name seeking appropriate orders from the Courts;

(4) SDP has refused to submit to the jurisdiction of the Courts in PNG, preferring instead to go to the Courts in Singapore where court proceedings are pending in that country’s High Court;

(5) The factors outlined in (2), (3) and (4) above renders this application being brought for an improper motive for the private benefit of a non-citizen and does not raise any public interest question;

(6) The SDP is entitled to fair compensation for the shares it previously held in OTML. Adequate provision is made for the ascertainment and payment of such compensation in the TSA Act and Constitution s. 53 which remain to be exhausted.

Reasons for decision

27. This case is similar in some respects with the one that was before the Supreme decision in re Application by Ila Geno. In both cases, both applicants were former holders of important public offices. The applicant in the re Application by Ila Geno case held appointed positions while the applicant in the present case held both appointed and elected offices with the ultimate being the Prime Minister of Papua New Guinea. They both made public and media statements concerning the Constitutional changes that were taking place at the relevant times in Papua New Guinea. These factors operate in favour of Sir Mekere, the applicant in this case.

28. However, this and the previous case in Re Application by Ila Geno are miles apart in a number of important respects. Firstly, the nature of the case and questions presented in the Re Application by Ila Geno, was a public interest case which clearly presented a number of very significant Constitutional questions, which were clearly spelt out in the application. Here, going by the kinds of relief sought, they are clearly for the private commercial interest of SDP. If however, there is a public interest question, the duty was on the applicant to bring out the question clearly in accordance with Form 1 item 3 as was done by the applicant in Re Application by Ila Geno. This provision in the form requires an applicant to make it clear that:

“The applicant requests the Court to declare that the proper interpretation or application of Section... of... (Insert the Constitution and relevant Section or name of a constitutional law and Section) is:”

29. By this prescription, an applicant in our view is required to specify the Constitutional provision and in particular state the kind of declaration as to “the proper interpretation or application of” a specific Constitutional provision that is being sought in the application. In other words, the Rules of the Court require an applicant under s. 18 (1) of the Constitution to not only state the Constitutional provision that requires interpretation and or application but also and more importantly state the way in which it should be properly interpreted and or applied. If more than one Constitutional provision requires proper interpretation and or application, each of them have to be clearly set out in the application itself first. In this case, the application in relevant parts reads:

“The Applicant requests the Court to declare that on proper interpretation, construction or application of the provisions of Sections 32, 33, 34, 38, 39, 41 and 53 of the Constitution, the TSA Act is unconstitutional, invalid, and no force or effect.”

30. Paragraph 3.1 of the Application sets out the reliefs the applicant is seeking. Other than that, there is nothing more. Nowhere is there in any of these paragraphs or elsewhere in the application, a clear statement of the kind of proper interpretation and or application of any of the Constitutional provisions that may be required is specifically mentioned or set out. This is very critical from three perspectives. Firstly, clarity in a statement of the issues presented will help enable the Court and the parties to know if the matter before the Supreme Court is a matter in which the Supreme Court has the necessary jurisdiction to consider and deal with. Without any such clear statement, the Court cannot be expected to assume any jurisdiction and deal with the matter. Secondly, such a clear statement will help enable the Court and all parties to know what Constitutional law provision is required to be interpreted and or applied and in what particular way. This will enable the opposing party to know the case they may have to meet and enable them to properly prepare and present their arguments. Finally, such a clear statement would enable the Court and the parties to ascertain if the issue has been raised before or the issue is one only of application of a Constitutional provision without the need for any interpretation. For if the provisions have been already considered in earlier proceedings or they are very clear, there would be no reason to re-agitate the same issues again or ask for any interpretation.

31. Secondly, flowing on from the first major point of difference between this case and the Re Application by Ila Geno, it is clear that a well-known Papua New Guinean is being used or is coming to this Court in this case for the benefit of a foreign registered company, namely the SDP which has clearly made a choice to submit to a foreign jurisdiction and not the jurisdiction of the PNG Courts. Clearly, the foreign company SDP, alone stands to be affected by the TSA Act as opposed to the whole of Papua New Guinea being affected by the serious questions that were raised in Re Application by Ila Geno case, where the whole of the parliamentary system of government and hence the people stood to be affected. Sir Mekere may be affected in his personal capacity in terms of his personal interest and position in SDP. But none of that is clear and before the Court and in any case, how that could give him standing to bring this application is not clear.

32. Thirdly, following on from the first two factors, in the present case, the person most affected being SDP alone as the legal capacity and standing to bring proceedings and seek appropriate remedies. It is a well settled company law principle that, once a company is incorporated, the company takes separate legal personality from its promoters, shareholders, and officers. In Eki Investments Limited v Era Dorina Limited; Era Dorina Limited v. Eki Investments Limited,^[7] Kandakasi J, who is a member of this Court, discussed and stated the legal position in the following terms:

“One of the essential attributes of a company is the separate legal or corporate personality a company acquires upon registration. This dates back to the often cited case of Salomon v. Salomon & Co. Limited ...According to that authority a company is distinct and separate from its shareholders, unless the corporate veil can be lifted. In Odata v. Ambusa Copra Oil Mill and National Provident Fund Board. I outlined the circumstances in which the corporate veil can be lifted, which I need not reiterate particularly when the plaintiff is not arguing that one or more of the basis for a lifting of the corporate veil exists and applies in this case.”

33. In Odata Ltd v. Ambusa Copra Oil Mill Ltd,^[8] Kandakasi J., accepted Mr. Mills of counsel for the Defendants submission on the issue of lifting the corporate veil and pointed out that the following factors should guide whether or not the corporate veil should be lifted in appropriate cases:

(1) The fundamental starting point is the importance of the doctrine of corporate personality and any suggestion to depart from it should be treated with caution.

(2) The doctrine is to be applied unless the result is so unsatisfactory that it warrants a departure from it.

(3) It is not possible and is undesirable to categorise the kind of circumstances in which there can be a departure.

(4) It is appropriate to depart from the doctrine if a company or its personality is being used as a façade, stratagem or simulacrum in an attempt to circumvent the reality of the situation. There is some difficulty with this because there is some difficulty in determining the true meaning of the word "façade" and determining whether there was an intention to conceal the true facts which was a test developed by the decision in Chen v. Butterfield (1996) & NZCLC 261,086.

(5) In a contractual context there is a need for some element of fraud or sharp practice in that party's conduct, or it must otherwise be unconscionable in the sense of equitable fraud to adhere to the doctrine.

(6) The veil will not be lifted to allow for the application of the unanimous assent rule to hold a company liable by the actions of the shareholders acting unanimously.

(7) It is not sufficient that the mere presence of the corporate veil leads to an inequitable or generally unfair result. The interests of commercial certainty dictate that a strong case is needed to lift the corporate veil.

(8) The corporate veil may be lifted if a doing so is justified in all the circumstances of the case.

(9) Where a statute provides either expressly or by implication for a lifting of the corporate veil, it may be lifted.

34. A number of National and Supreme Court decisions have adopted and applied these principles. Sitting in the Supreme Court with the then Chief Justice, Sir Arnold Amet and the late, Sevua J, Kandakasi J., added with the latter’s agreement one more factor for the lifting of the corporate veil in the case of Internal Revenue Commission v. Dr Pirouz Hamidian-Rad,^[9] in the following terms:

“I have fully discussed the principles on the lifting of the corporate veil in Odata v. Ambusa and National Provident Fund Board N2106. To those, I add that, if a corporate veil is raised for the purposes of avoid (sic “ing”) legal obligations, such as is the case here, the corporate veil should be readily lifted to make those responsible to meet their legal obligations.”

35. It follows therefore that, the correct party that should be in a court of law seeking the kinds of relief sought in this application should be the company SDP and not its Chairman, Sir Mekere. If there is a reason in this case which warrants a lifting of the corporate veil to allow for Sir Mekere to bring this application, the obligation was on him to make a case for that to happen. He has failed to even attempt to do that.

36. Fourthly, s. 53 of the Constitution and s. 5 of the TSA Act provide for acquisition of property by the State and payment of compensation. The applicant has not provided any evidence of these provisions being exhausted particularly when one of the relief sought is for the payment of reasonable compensation failing a reversal of the enactment of the TSA Act and its effect. Even then, such an action can only be taken by SDP which has the proper legal standing and not Sir Mekere. Such proceedings could be instituted by SDP and should a need for any interpretation of any relevant and applicable Constitutional law provision arise, the Court in which the issue arises could refer the issue to the Supreme Court under s. 18 (2) using Form 2.

37. Fifthly, as was the case in the re Application by Ila Geno case, the Special Constitutional reference process under s. 19 of the Constitution is available. However, unlike the applicant in re Application by Ila Geno case, there is no evidence of Sir Mekere in this case, approaching any of the authorized persons under s. 19 of the Constitution seeking to interest them to take up such a course. Also unlike the positon in Re Application by Ila Geno, in this case, the kinds of relief or remedy sought by Sir Mekere are not available to him as a matter of law but are available to SDP and only SDP can pursue them. On the limited available information before the Court, it is clear SDP has taken out proceedings in the ICSID Tribunal and failing there it has gone to the Singapore High Court. Whilst we accept that, the existence of such a process cannot operate as a bar to an action under s. 18 (2) of the Constitution, in the particular circumstances of this case, the applicant is precluded from coming to this Court in the way he has.

38. Finally, unlike the case in Re Application by Ila Geno and many others, there is a subsisting Court proceeding concerning the same subject matter in a foreign Court after failing in arbitration again before a foreign tribunal. These proceedings are therefore a duplication and an attempt to have a second bite at the cheery which has the effect of treating the Courts of PNG as the second best or where failures from elsewhere go to for an attempt at get a relief denied by a foreign tribunal or are pending before a foreign court. This no doubt amounts to a serious abuse of this Court’s process.

39. To date, this Court has been vigilant in guarding against abuse of its process. In many instances, where an abuse of its process as occurred the Court has swiftly dealt with it resulting in dismissal of proceedings. Although, the factual backgrounds are different, the five member decision of the Supreme Court in Eremas Wartoto v The State,^[10] is one of the latest cases on point. There the appellant sought to prevent a criminal process that had already commenced against him. He used separate civil proceedings to seek the relief he was seeking. The Court found that was an abuse of the Courts process and dismissed the proceeding. In Chief Collector of Taxes v Bougainville Copper Ltd; Bougainville Copper Ltd v Chief Collector of Taxes,^[11] the Court found it was an abuse of the Court’s process for the Respondent to commence tax review proceedings and at the same time issue National Court proceedings.

Decision on the Question

40. Based on the foregoing reasons, we find Sir Mekere does not have the standing to bring this proceeding; his application is incompetent and an abuse of the process of the Court. Accordingly, we order a dismissal of the proceedings with costs against Sir Mekere with such costs to be taxed if not agreed.

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Nemo Yalo Lawyers: Lawyers for the Applicant:
Manase & Co Lawyers: Lawyers for the First & Third Interveners:
Kuman Lawyers: Lawyers for the Second Intervener
Pacific Legal Group Lawyers: Lawyers for the Fourth & Fifth Interveners:

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^[1] [1981] PNGLR 265.
^[2] (2003) SC721.
^[3] (2014)SC1304.
^[4] (2014) SC1313.
^[5] (differently constituted).
^[6] (2003) SC721.
^[7] (2006) N3176.
^[8] (2001) N2106.
^[9] (2002) SC692. For other cases on point see for example The State v. Graham Yotchi Wyborn (2005) N2847 (per Salika J as he then was); WorkCover Authority of NSW v Placer (PNG) Exploration Ltd (2006) N3003 (per Lay J as he then was); Pinpar Developer Pty Ltd v TL Timber Development Pty Ltd (2006) N3075 (per Gavara-Nanu).
^[10] (2015) SC1411.
^[11] (2007) SC853.