Ipara v Porgera Landowners Association [2020] PGSC 61; SC1969 (7 July 2020)

SC1969

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 74 OF 2017

BETWEEN:
KURUBU IPARA, RUBEN NALAPE and JOHN ONDALANE
Appellants

AND:
PORGERA LANDOWNERS ASSOCIATION
First Respondent

AND:
CHRISTOPHER TRAINOR
Second Respondent

PAUL MAWA
Third Respondent

AND:
DONALD HEHONA
Fourth Respondent

Waigani: Manuhu, J, Makail, J, Tamate, J.
2020: 16^th June & 7^th July

SUPREME COURT APPEAL–Appeal against interlocutory rulings–Trust Deed, Trust Fund and Trustees –Exercise of discretion – Cause of action overtaken by events.

Cases Cited:

Bean v Bean [1980] PNGLR 307,
Curtain Brothers (PNG) Ltd v UPNG (2005) SC 788
Telikom PNG Limited v ICCC (2008) SC 906

Counsel:

J. Haiara, for the Appellants,
J. Nandape, for the First Respondent.
J. Brooks, for the Second Respondent,
P. Harry, for the Fourth Respondent.

7^th July, 2020.

1. BY THE COURT: This is an appeal against the rulings of Kariko, J in relation to three motions filed by the Appellants and one motion filed by the First Respondent.

2. It is settled law that an appellate court should be slow to interfere with the exercise of discretion by the lower court unless the appellate court is satisfied that the court below clearly erred in its decision.

3. An appeal may be allowed where there is a clear or identifiable error by the trial judge, or although there is no clear or identifiable error, the judgment is so unreasonable or plainly unjust on the facts that the appellate court may infer that a substantive error had occurred in the exercise of discretion by the trial judge: Bean v Bean [1980] PNGLR 307; Curtain Brothers (PNG) Ltd v UPNG (2005) SC 788; and Telikom PNG Limited v ICCC (2008) SC 906.

4. In relation to the motions filed by the Appellants, the first one sought to stay the orders of the National Court on 23^rd September 2015, the second one sought to set aside the same orders and the third one was for production of documents. The first respondent’s motion was for the termination of the appointment of the Interim Trustees.

5. The background of the proceeding is set out in the written judgment of Kariko J of 8^th May 2017. In short, a Trust Deed was executed in 1992 between the State, the Enga Provincial Government, the Porgera Development Authority, and the Trustees appointed pursuant to the Trust Deed. The Trust Fund was established for the benefit of the children of the Porgera Special Mining Lease Landowners. The Trust Deed provided for the appointment of Landowner Trustees and External Trustees. The Landowner Trustees hold office for 3 years.

6. The last Landowner Trustees terms expired in 2009 and since then there have been no appointment of Landowner Trustees. Any cheque payment out of the trust account required the signatures of one External Trustee and one Landowner Trustee. As there were no Landowner Trustee, no payment could be raised to pay school fees and children’s education were severely affected.

7. Under the Trust Deed, Landowner Trustees are appointed in an AGM but suffice to say attempts to have an AGM, for one reason or another, including legal proceedings, have been unsuccessful. The operation of the Trust Fund was in disarray.

8. The first two motions challenged the ex parte orders of 23^rd September 2019, which orders included an order for an Annual General Meeting to be held within two months. The motion to stay the order of 23^rd September 2015 was intended to preserve the status quo pending hearing and determination of the motion to set aside. His Honour rightly dismissed it because the motion to set aside was being heard then. A stay order was not necessary.

9. In relation to the motion to set aside, the argument by the Appellants was that motions Judge did not consider the explanation for the non-appearance by counsel. We have perused the transcript of the proceeding. Counsel explained that he did not appear because he mistook the date for the hearing of the motions but the motions Judge had the benefit of the audio record of the proceeding wherein the date of hearing, being 23^rd September 2015 at 9.30am, was mentioned three times by the motions Judge to counsel. We are of the view therefore that on the material before him, the motions Judge was entitled to reject the explanation for the non-appearance and it was open to him to dismiss the motion on that basis.

10. It was also argued that the motions Judge did not consider that the Appellants had a valid argument affecting the merits of the case. We are of the considered opinion that it was in the best interest of the Trust Fund that an AGM be held and Landowner Trustees appointed as soon as possible. This was one of the terms of the ex parte orders of 23^rd September 2017. The Appellants’ motion to set the ex parte order aside, if granted, would not be in the best interest of the Trust Fund and, consequently, the school children of the landowners would continue to suffer from non-payment of school fees. Therefore, on the merits, his Honour was justified in dismissing the motion to set aside.

11. In relation to the motion to produce documents, the motions Judge considered the Appellants’ contention that an AGM could not be held unless the financial statements and registration of SML children and landowner clans were finalised. The motion sought production of financial records and registers. His honour was of the view, however, that holding of an AGM, which would facilitate the appointment of Landowner Trustees, is a matter of priority. The motions Judge added:

“Any issues concerning the financial statements and registers could then be properly discussed at the meeting and appropriate resolutions reached. The trustees could address specific issues including financial statements or the registers and attend to them in the interests of the beneficiaries of the Trust Fund, which is their duty to do.”

12. We agree with the motions Judge that the holding of an AGM and the appointment of Landowner Trustees were matters of priority. Consequently, the motions judge properly exercised his discretion to dismiss the motion.

13. In relation to the First Respondent’s motion to terminate the appointment of Interim Trustees, his Honour ruled that rather than remove the Interim Trustees, it was appropriate, in all the circumstances, that the Interim Trustees be restrained from convening an AGM and ordered the appointed Trustees to convene an AGM by 31^st August 2017. In all the circumstances, it was open to the motions Judge to make this order.

14. The further argument that the Appellants were denied natural justice is unfounded. The motions were fully argued by the parties.

15. In relation to the argument that delay in the delivery of judgment has denied justice to the Appellants, in theory, yes, but in reality, the Appellants have failed to demonstrate actual prejudice to them. There was nothing preventing the convening of an AGM.

16. At this juncture, we note that the Trust Fund has made progress which have substantially overtaken the cause of action in the National Court proceedings as well as this appeal.

17. The parties, through counsel, have confirmed that on 17 August 2017, an AGM was held and new Landowner Trustees were elected. Together with the External Trustees, they have been running the Trust Fund since 17 August 2017.

18. This Appeal arose from National Court proceeding in OS 685 2013 Porgera Association Inc. v Christopher Trainor & Ors, wherein the court was being asked to give an Order in the nature of a declaration that it was and is practically impossible to convene an AGM for a number of reasons. What transpired on 17 August 2017 demonstrates that it was not “practically impossible” to hold an AGM and one was held on 17 August 2017. It is clear that the appointment of the Landowner Trustees on 17 August 2017 has rendered useless the cause of action in the National Court and this appeal.

19. We have been advised by counsel for the Appellants that the proceeding of the AGM on 17 August 2017 is disputed and the dispute is already before the Court. We have no reason to question the Appellants’ right to challenge the validity of the appointments of Landowner Trustees on 17 August 2017 but we are satisfied that events have overtaken these proceedings.

20. In all the circumstances, the entire appeal is without merit and is dismissed with costs which, if not agreed, shall be taxed.

Orders accordingly.

________________________________________________________________
Haiara’s Legal Practice: Lawyer for the Appellants
Nandape & Associates: Lawyer for the First Respondents
Ashurst Lawyers: Lawyer for the Second Respondent
Harry Lawyers: Lawyer for the Fourth Respondent