Esso P'nyang Ltd v Bernard [2017] PGSC 62; SC2001 (8 September 2017)

SC2001

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 85 OF 2016
BETWEEN:
ESSO P’NYANG LIMITED
Appellant

AND:
ALEX BERNARD FOR HIMSELF AS P’NYANG LNG PROJECT AREA LANDOWNER AND ON BEHALF OF HIS WOKFIYAK CLAN OF KAYANGABIP VILLAGE
First Respondent

AND:
HON. NIXON DUBAM, MP, MINISTER FOR DEPARTMENT OF PETROLEUM AND ENERGY
Second Respondent

AND:
MR RENDLE RIMUA, SECRETARY FOR DEPARTMENT OF PETROLEUM AND ENERGY
Third Respondent

AND:
THE CHAIRMAN (MR RENDLE RIMAU) PETROLEUM ADVISORY BOARD
Fourth Respondent

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Respondent

Waigani: Logan, Toliken & Higgins JJ
2016: 24^th October
2017: 8^th September

PETROLEUM AND ENERGY AND MINING – NATURAL RESOURCES – Oil and Gas Act 1998; ss. 47, 48(1), 129 – conversion of petroleum retention licenses into petroleum development licenses – requirement of s 47 for social mapping and landowner identification studies – meaning of this requirement – respective roles of Minister and National Court in relation to such studies and identification of landowners – proceeding by judicial review not merits review as the means prescribed by s169(10) to challenge a ministerial determination under s 169(2) of project landowners – application for declaratory relief an abuse of process – interim injunction restraining holding of development forum under s 48 and conversion or issuing of licences dissolved

PRACTICE & PROCEDURE – Oil and Gas Act 1998; ss. 47, 48(1), 129 – Supreme Court Act 1975; s. 14(3) – Claims by and against the State Act 1996; s. 8 – conversion of petroleum retention licenses into petroleum development licenses – where Oil and Gas Act provides for holding of development forum as a sequel to ministerial determination under s 169(2) of project landowners – where originating summons seeking declaratory and injunctive relief with respect to holding of development forums and converting or issuing of licences – whether National Court below erred in granting interim injunctive relief – where s169(10) expressly provided for review of ministerial determination – where clan of which first respondent purported to represent named in ministerial determination of project landowners – HELD first respondent lacked standing and proceeding by originating summons an abuse of process

PRACTICE & PROCEDURE – Supreme Court Act 1975; s. 14(3) – objection to competency – originating summons – continuation of interim injunction in substance a grant of future injunctive relief – therefore by s 14(3)(b) of Supreme Court Act within exception for requirement to grant leave to appeal

Cases Cited:
Papua New Guinea Cases

Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853
Coca Cola Amatil (PNG) Ltd v Yanda (2010) SC1221
Gelu v Secretary, Department of Justice and Attorney General [2004] PGNC 23; N2762
Rabaul Shipping Ltd v Rupen (2008) N3289
Ramu Nico Management (MCC) Ltd v Tarsie [2010] PNGSC 5; SC1056
Ruing v Murat (2012) N462
Telikom PNG Ltd v Independent Consumer and Competition Commission [2008] PGSC 5; SC 906

Overseas Cases

O’Reilly v Mackman [1983] UKHL 1; [1983] 2 AC 237

Counsel

Mr I Molloy with Mr A Mana, for the Appellant
Mr J Kolo, for the First Respondent
Ms F Barton, for the Second, Third, Fourth and Fifth Respondents

8^th September, 2017

1. BY THE COURT: By a determination made on 29 October 2015 pursuant to s 169 of the Oil and Gas Act 1998 (PNG) (the Act), the Minister for Petroleum and Energy (the Minister), who is the second respondent, having received and considered results of social mapping and landowner identification studies carried out under s 47 of the Act, identified particular landowner beneficiaries in respect of land the subject of applications under the Act by Esso PNG P’nyang Limited (the appellant) for the conversion of its existing petroleum retention license into a petroleum development license and for related pipeline licenses. The petroleum retention license is held by the appellant over what is known as the P’nyang gas fields in Western Province. The pipeline licenses relate to the intended conveyance of gas and oil hydrocarbons from the P’nyang gas fields to existing infrastructure in Southern Highlands Province. The ministerial determination was published the following day in the National Gazette (No G 709 of Friday, 30 October 2015) and on 17 November 2015 its making was notified by a newspaper advertisement in the Post Courier.
   
2. The Act envisages that, after the making of such a ministerial determination and prior to the issuing of a licence, what is known as a development forum will be convened by the Minister at a place close to the proposed licence area: see s 48 of the Act. Section 48(1) of the Act envisages that persons who, in the view of the Minister, will be affected by the petroleum project will be invited to attend such a meeting. Materially, such invitees are expressly to include, “the project area land owners determined under s 169(2) or the duly appointed or elected representatives”: s 48(1)(b) of the Act. The purpose of a development forum is to endeavour to reach agreement on matters on which agreement amongst those present is desirable; including the matters referred to in Part IV of the Act (which is directed to the subject of State Equity Entitlement and Project Benefits).
   
3. As it happened, the envisaged development forum was not held and has still not been held. Initially, that was because, upon an application made ex parte and following the institution by originating summons filed in the National Court on 25 November 2015 by Alex Bernard for himself as an asserted P’nyang gas field landowner and on behalf of his Wokfiyak Clan of Kayangabip Village (the first respondent), the Minister and the other respondents (the State or named agencies or officials thereof) were restrained until the return of the originating summons or further order from conducting any such development forum and, further, from issuing any further extension of the petroleum retention license or a petroleum development licence. The present appellant came to be joined to the National Court proceeding as an affected party as that ex parte order also envisaged might occur. After the return of the originating summons and following some adjournments which saw corresponding extensions of the injunction, the National Court heard submissions on 8 April 2016 as to whether there should be any further continuance of the injunction.
   
4. On 27 May 2016, for reasons published that day, the National Court determined that the injunction should be continued until the determination of the originating summons proceeding. It is against that order that the appellant appeals, or at least purports to appeal.
   
5. It is necessary to add the qualification “purports”, because the respondents have objected to the competency of the appeal. As is not infrequently the case, it was convenient to hear that objection together with submissions in respect of the substantive appeal.
   
6. One ground for the objection was the contention that the appellant ought to have, but had not, secured a prior grant of leave to appeal. This was because, so it was submitted, the order made on 27 May 2016 was interlocutory and did not fall within any of the exceptions listed in s 14(3)(b) of the Supreme Court Act 1975. In particular, it was put by the respondents that the order did not amount to an order “granting ... an injunction” in terms of s 14(3)(b)(ii) of that Act. There is no merit in this ground. It is settled that a purposive approach to the interpretation of this provision should be adopted: Ramu Nico Management (MCC) Ltd v Tarsie [2010] PNGSC 5; SC1056. Adopting such an approach, it is patent that the continuance ordered on 27 May 2016 constituted, in substance, the granting of an interlocutory injunction. The order granted a continuance of the injunction originally granted ex parte.
   
7. As to the other grounds in the objection to competency, it was common ground between the parties, and rightly so, that, if at least one ground in the notice of appeal validly invoked this Court’s jurisdiction, the appeal was competent and that was so irrespective of whatever inadequacies there were in other grounds of appeal: Coca Cola Amatil (PNG) Ltd v Yanda (2010) SC1221. Quite apart from challenging whether there was an absence of evidence before the National Court to ground a conclusion that the first respondent had an arguable case, the notice of appeal raises questions of law as to the impact upon the first respondent’s ability to claim the declaratory relief sought in light of the express provision for judicial review of a ministerial determination found in s 169(10) of the Act and with respect to whether the first respondent had lawful authority to institute the proceeding. These grounds entail questions of law. That being so, it is unnecessary, for the purpose of resolving the objection, further to analyse the other grounds of appeal so as to determine whether or not they, too, plead either a question of law or a mixed question of law and fact. The appeal is competent.
   
8. It follows that the respondents’ objection to competency is itself incompetent.
   
9. We turn then to a consideration of the appeal on its merits.
   
10. As a matter of general principle, in order to continue the injunction until the hearing and determination of the substantive proceeding, the National Court had to be satisfied by the first respondent that:
    
    • (a) there was a serious question to be tried (or, as put by the primary judge, an “arguable case”);
      
    • (b) the balance of convenience favoured the continuance of the injunction, including in that regard whether damages would be an adequate remedy, the effects of the continuance on the appellant and the other respondents and whether an undertaking as to damages had been given and it’s worth; and
      
    • (c) generally, the interests of justice favoured the continuance of the injunction: see Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853.
      
11. These considerations interplay, according to the circumstances of a given case. For example, in a case where it is moot that there exists a serious question to be tried but great, if not irretrievable harm for which damages could not adequately or at all compensate would result if an injunction were not granted, the interests of justice may dictate, as a matter of evaluative judgment, that an applicant be granted an interlocutory injunction.
    
12. In the circumstances of this particular case and having regard to the submissions made on behalf of the appellant in the National Court, that court also had to address the aptness of the originating summons proceeding in the face of express statutory provision in s 169 for judicial review, the standing of the first respondent and whether there was any properly constituted representative proceeding.
    
13. As the originating summons came to be amended, the first respondent sought, apart from permanent injunctive relief of the kind granted on an interlocutory basis, a number of declarations. Of the latter, it is sufficient for present purposes to refer to three of the claimed declarations:
    1. a declaration that the [appellant] and its representatives, agents and or associates have neglected and or failed to carry out a full scale social mapping study and landowner identification study of customary land owners in respect of the [P’nyang gas project] as compulsorily required under [ss 47 and 169 of the Act] (see para 1 of the Amended Originating Application);
       
    2. a declaration that the social mapping study and landowner identification study of customary land owners in respect of the [P’nyang gas project] that have been purportedly carried out by [the appellant] through its representatives, agents and or associates are incomplete, fraught with inconsistencies and insufficient to attain the required full-scale standard as required by [the Act] (see para 2 of the Amended Originating Application);
       
    100. a declaration that the results of the social mapping and landowner identification study report ... in respect of the [P’nyang gas project] submitted by the [appellant] to the Minister [and the other respondents, save the first respondent] are, to the extent of their incompleteness, insufficiency and inconsistencies, invalid and null and void (see para 3 of the Amended Originating Application).
         
14. In respect of the United Kingdom, the House of Lords held in O’Reilly v Mackman [1983] UKHL 1; [1983] 2 AC 237 that it is an abuse of process for a party alleging public law rights to proceed by way of an action under general civil law procedure rather than judicial review, because otherwise procedural safeguards granted to public authorities by judicial review procedure, for example, standing, absence of delay and a need for leave would be subverted. This principle has been applied in the National Court on a number of occasions so as to dismiss proceedings asserting particular public law rights other than by way of judicial review: Gelu v Secretary, Department of Justice and Attorney General [2004] PGNC 23; N2762 (Davani J), Rabaul Shipping Ltd v Rupen (2008) N3289 (Lay J); Ruing v Murat (2012) N462 (Hartshorn J). It has also been established that, in considering whether the procedural requirement, found in O 16, r 1(1) of the National Court Rules, that an application for an order in the nature of mandamus, prohibition, certiorari or quo warranto be made in accordance with the requirements of that order, the court should look at the substance, as well is the wording, of the relief being sought: Telikom PNG Ltd v Independent Consumer and Competition Commission [2008] PGSC 5; SC 906 at [131] per Kirriwom and Cannings JJ.
    
15. It is not the case that judicial review is the only means by which any public law right may ever be raised. However, if, in substance, the proceeding alleges jurisdictional error on the part of a public official and claims, in substance, an order in the nature of mandamus, prohibition, certiorari or quo warranto, it is usually an abuse of process not to bring that proceeding by way of judicial review. That is this case. The first respondent was, in substance, seeking to quash the Minister’s determination and to prohibit him from holding the development forum or converting or issuing any licence. Quite apart from the requirement for leave found in Order 16 and the related requirement, derived from s 8 of the Claims by and against the State Act 1996 (PNG) for the State to be afforded an opportunity to be heard before any grant of leave, s169(10) of the Act mandated that a ministerial determination made pursuant to s 169, “shall not be reviewable before any court unless an application for review is made within 28 days of the ministerial determination”. The Act thus expressly contemplates that any challenge to the legality of a ministerial determination will be made by judicial review within a limited time. The procedure adopted by the first respondent, though admittedly timely, was subversive of the prescribed method of challenge and its related procedural safeguards.
    
16. Yet further, regard to the Minister’s determination discloses that, in respect of Kayangabip Village, the Wokfiyak Clan (spelt “Wokfiak” in the determination but, by necessary inference, the same clan) is one of those determined to be a beneficiary clan (see the Schedule, item 5, No 2). Questions as to whether the proceeding was correctly constituted as a representative proceeding apart, quite how, given the determination in its favour, the first respondent or his clan could ever be a person aggrieved by that determination so as to have standing to institute any challenge to it, by way of judicial review or otherwise, is elusive. The first respondent offered no evidence as to how either he or his family had some interest in any of the subject land separate from that of the clan of which he was a member.
    
17. Each of these considerations alone, and they were raised by the appellant in the National Court, should have dictated that that court granted no continuance of the interlocutory Injunction.
    
18. Instead, the learned primary judge embarked upon a consideration not just of the meaning of a “full-scale social mapping study and landowner identification study of customary land owners” in s 47(5) of the Act but also whether the appellant had produced such studies. Unfortunately, and with respect, in so doing his Honour reversed the onus of proof in respect of an application for an interlocutory injunction or its continuance. His Honour noted, at para 81, the absence in evidence of the social mapping and landowner identification studies (termed by way of abbreviation “SMLIS” in the judgment below) submitted by the appellant to the Minister prior to the making of the determination. He observed, again at para 81:
    

“Unfortunately, ... for reasons only known to [the appellant], none of the copies of the reports are in evidence, to confirm if the SMLIS covered any or all of the key areas that should have been covered in the study and in the report and thereby substantiate the claims.” (And see, to like effect, paras 9 and 86 of his Honour’s reasons for judgment).

But, with very great respect, it was not for the appellant to “substantiate its claim”. Assuming, contrary to our conclusions, that the proceeding was not an abuse of process and that the first respondent had standing, it was for him at least to adduce some evidence of non-compliance with s 47. This he did not do. His evidence rose no higher than bare assertions as to the adequacy of the Minister’s determination.

19. Further, it seems to us from his Honour’s reasons that the learned primary judge contemplated that it would be appropriate at trial for the court to make an evaluation of the merits of the social mapping and landowner identification studies conducted. Yet, by s 169, the Act contemplates that any challenge to a ministerial determination in the court is by way of judicial review, not merits review. The role of determining project area landowners for, materially, the purposes of a s 48 development forum is, by s 169(2) of the Act, consigned to the Minister, not the court. The learned primary judge undertook a lengthy and reflective consideration of the concept of social mapping and landowner identification studies as referred to in s 47 of the Act. It is not necessary, in order to resolve this appeal, for us to embark upon any corresponding lengthy consideration of that concept. It may be accepted that s 47 is to be construed in a purposive way and in the context of the Act as a whole. This yields a conclusion that the purpose of such studies is not only to facilitate the identification by ministerial determination under s 169(2) of project area landholders but also to understand the society(s) of which those landholders are members and thus the impact on that society of a proposed project or exploration activity. In this we are at one with the learned primary judge. But his Honour ventures further and expresses preferential views as to the contents of such studies and related preparation practices. In so doing, with respect, his Honour conflates the process of statutory construction with the questions of relative merit and weight. The latter are subjects for the Minister, not the court. Further, the Act contemplates that it will be the Minister, by regulation under s47(6), who will fix the scope of such studies and the requirements of any consequential reports. As it happens, no such regulation has been made but that is not, with respect, a licence for the court to undertake the Minister’s task.
    
20. It follows also from what must be the disposition of this appeal that, even if those subjects were otherwise apt (on which we express no view), this case is not an appropriate vehicle, at least at present, for any s18 constitutional reference, as contemplated by the learned primary judge at para 37 of his reasons for judgment and in the orders which he came consequentially to make on 27 May 2016.
    
21. The appellant conceded that, by O 5, r 13, the National Court Rules allowed for a representative proceeding. It contended that the procedural requirements for such a proceeding had not been observed in that no written authority to Mr Bernard authorising him to file proceedings as clan representative had been produced. It is true that none was in evidence although, if the members of the clan could be regarded as having standing to challenge the Minister’s determination and to seek prohibition of the granting of any licence the present absence of written authority was not an irremediable defect.
    
22. In short, there are numerous reasons, outlined above, why the primary judge ought to have concluded that there was no serious question to be tried and that, instead, the proceeding was an abuse of process. These take up and entail acceptance of particular grounds of appeal. It also follows that the submissions to the contrary of the first respondent, which essentially promoted as correct the reasons of the learned primary judge, must be rejected. The other respondents deliberately chose not to make any submissions in respect of the substantive appeal, confining their submissions to the objection to competency.
    
23. The appellant also submitted that the learned primary judge ought to have concluded that the balance of convenience did not favour the continuance of the interlocutory injunction on the basis that damages would be an adequate remedy. As an identified beneficiary clan, Mr Bernard’s clan stood to receive compensation, the amount of which was yet to be determined. In this sense, and in the absence of evidence as to some special harm, damages would always offer adequate redress to that clan. But the real vice is that the inclusion in the determination of the clan as a beneficiary clan meant that the clan members as a class could not be said to be aggrieved by that determination.
    
24. It follows that the appeal must be allowed and the orders made below by the National Court, including the order providing for the continuance of the interlocutory injunction, must be set aside.
    

ORDERS

1. The objection to competency be dismissed.
   
2. The appeal be allowed.
   
3. Save for Orders 3 and 6 made that day, the orders made by the National Court on 27 May 2016 be set aside.
   
4. In lieu thereof, it is ordered that:
   
   1. the interim injunction granted by the National Court on 4 December 2015 be dissolved; and
   2. the first plaintiff (first respondent on the appeal) and the first, second, third and fourth defendants (second, third, fourth and fifth respondents on the appeal) pay the fifth respondent’s (appellant’s on the appeal) costs of and incidental to the application to dissolve the interim injunction, to be taxed if not agreed.
      
5. The respondents pay the appellant’s costs of the appeal and of the objection to competency, to be taxed if not agreed.
   

________________________________________________________________

Allens Lawyers: Lawyers for the Appellant

Kolo & Associates Lawyers: Lawyers for the First Respondent

Solicitor General: Lawyers for the Second, Third, Fourth and Fifth Respondents