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Independent State of Papua New Guinea v Ako [2022] PGSC 131; SC2323 (2 December 2022)

SC2323


PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCA NO. 38 OF 2021 (IECMS)


BETWEEN
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
First Appellant


AND
DAVID MANAU, SECRETARY FOR DEPARTMENT OF PETROLEUM AND ENERGY
Second Appellant


AND
ERIC HAVAI AKO for himself and on behalf of the Tuguba Nguane Major Clan Members
First Respondent


AND
HURIBA ANDAGO for himself and on behalf of Tamburumba Urabi Major Clan Members
Second Respondents


AND
TOLAI AWE for himself and on behalf of the Pate Major Clan Members
Third Respondents


AND
UMBRELLA HIDES PDL7 ASSOCIATION INC.
Fourth Respondent


AND
NATIONAL GAS CORPORATION
Fifth Respondent


AND
EXXON MOBIL (PNG) LIMITED
Sixth Respondent


Waigani: Gavara-Nanu & Manuhu JJ
2021: 24th November
2022: 22nd & 25th March & 02nd December

APPEAL – Landowners – Hides 4 PDL7 PNG LNG Project, Komo LLG, Hela Province - Royalty and other benefit payments – Social Mapping and Landowner Identification – Final Report – The project developer – Umbrella Benefit Sharing Agreement (UBS) – License Based Benefit Sharing Agreement (LBBSA) - Validity of Ministerial Determination – Oil and Gas Act, 1998; ss. 11, 47, 48, 49, 63 (a) (iii) and 169 (10).


APPEAL – Service of s. 5 notice under Claims By and Against the State Act, 1996 - Validity of the notice – Proceeding in the Court below – Validity of the proceeding - Whether statute barred – Frauds and Limitations Act, 1988; ss. 16 and 18 – Abuse of process – National Court Rules; Order 12 Rule 40.


APPEAL – Questions by the primary judge – Whether amounting unnecessary interjections – Duty of the Court – Duty of counsel – Whether questions by primary judge could constitute apprehended bias – Whether party denied a fair hearing by the Court.


Cases Cited:


Papua New Guinean Cases
Bernard v. Duban (2016) N6299
Esso P’Nyang Limited v. Alex Bernard [2017] PGSC 62; SC2001
Mamun Investment Ltd v. Koim [2015] PGSC 9; SC1409
Pelego v. Pok (2021) N8745
PNG Harbours Board v. Breni Kora (2005) N2834
Ripa v. Wak, Registrar of Title [1996] PGNC 17; N1462
Simon Pruaitch v. The State (2007) N3204
Specialist Centre PTY Ltd v. The State [1988-89] PNGLR 22
Tau Gumu v. PNGBC (2001) N2288
Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906


Overseas Cases


AWB Limited v. Honourable Terrence Rhoderic Hudson Cole (No. 2) [ 2006] FCA 913
Galea v. Galea [1990] 19 NSWLR 267
O’Reilly v. Mackman [1983] UKHL 1; [1983] 2 AC 237


Counsel:


G. Nindil-Awesa with M. Tukuliya, for the Appellants
A. Benny, for the First, Second, Third and Fourth Respondents

M. Tumul and W. Mai, for the Sixth Respondent

02nd December, 2022


  1. BY THE COURT: The third member of this bench, late Justice Koeget having passed on, the parties have pursuant to s. 3 of the Supreme Court Act, Chapter 37, agreed for the remaining two members of the bench decide this appeal. We now deliver our decision which is unanimous.
  2. The appellants are appealing the decision of Kandakasi DCJ, given on 19 April, 2021, in respect of proceeding OS No. 39 of 2021 between Erick Hawai Ako & 3 Others v. Exxon Mobil (PNG) Limited & 2 Others (‘the proceeding’), in which the learned primary judge dismissed their notice of motion filed on 30 March, 2021.
  3. In their notice of motion, the appellants sought the following orders by way of relief:

proceeding be dismissed for abuse of process for non-compliance with s. 5 (2) of the Claims By and Against the State Act, 1996.


(ii) Alternatively, pursuant to Order 12 r 40 (1) (b) of the National

Court Rules, the proceeding be dismissed for abuse of process for non-compliance with s. 16 (1) (a) of Frauds and Limitation Act, 1988.


(iii) Alternatively, pursuant to Order 12 r 40 (a) and (b) of the National Court Rules, the proceeding be dismissed for not disclosing any reasonable cause of action and for being frivolous and vexatious.

(iv) Pursuant to Order 12 r 8 (3) (a) of the National Court Rules, the

ex-parte orders obtained by the respondents on 19 March, 2021, be set aside and or discharged.


(v) Pursuant to s. 155 (4) of the Constitution and Order 12 r 1 of the National Court Rules, the first, second, third and fourth plaintiffs (respondents) be permanently restrained from bringing any further action(s) against the defendants (appellants) especially with respect to any claim(s) arising out of Hides 4 PDL7 PNG LNG project.

(vi) Costs of and incidental to the proceeding.

(vii) Such further Orders as the Honourable Court deemed fit.
  1. Leave to appeal was granted on 17 May, 2021.
  2. The first, second, third and fourth respondents (‘the respondents’) who were plaintiffs in the proceeding are landowners from Hides 4 PDL 7 PNG LNG project (‘Hides PDL7’), Komo LLG, Tari, Hela Province.
  3. The respondents (plaintiffs) sought certain declarations and orders in the proceeding by way of relief, which can be summarized as follows:
  4. On 19 March, 2022, the respondents obtained ex-parte orders against the appellants and the sixth respondent from among others, paying royalties and other benefits to the people within Hides PDL7 area.
  5. The Hides PDL 7 is made up of six Blocks or regions, namely, Parepare, Middle, Tuguba, Ketereanda, Timalia-Gungulu and Tawanda Tojaku. The first respondent is from Paraya major clan in Tuguba block, the second respondent is from Tamburuma Urabi major clan in Timalia-Kangulu block. The third respondent is from Pate Clan in the Tawanda-Tojaku block. These are as determined in the Ministerial Determination of 13 March, 2019.

Grounds of Appeal


  1. The appellants raised six grounds of appeal which are pleaded in paragraph 3 of the notice of appeal, and they can be summarized as follows:

Ground 3.1


(a) The trial judge erred in fact and law in refusing to dismiss proceeding OS No. 39 of 2021, when the proceeding was statute barred pursuant to s. 16 (1) (a) of Frauds and Limitations Act, when the proceeding was brought outside the 6 year time limit and the cause of action arose in 2008 when the developer completed the SML studies and submitted a full scale report to the State and when the first respondent and the representatives of the second and third respondents signed the UBSA in 2008 and LBBS in 2009 respectively.

(b) The s. 5 notice under the Claims by and Against the State Act, dated 24 February, 2021, purportedly given by the first, second, third and fourth respondents was given outside the required 6 month period from when the cause of action accrued and was, pursuant to s. 5 (2) (a) of the Claims by and Against the State Act, invalid.

(c) Pursuant to s. 169 (10) of the Oil and Gas Act, 1998, the respondents were barred from challenging the Ministerial Determination of 13 March, 2019, because they lost their right to review the Determination within 28 days.

Ground 3.2


The trial judge erred in law and mix fact and law in applying the decision in Tau Gumu v. PNGBC (2001) N2288 to hold that the issue of statutory bar did not arise until 19 April, 2021 when the respondents became aware of the social mapping report in court when the report was tendered by the appellants, because the respondents were always aware of the existence of the social mapping studies report when they signed the UBSA in 2008 and LBBSA in 2009, then through the publication of the Ministerial Determination of 13 March, 2019, relating to social mapping in the National Gazette.


Ground 3.3


The trial judge erred in law and in fact when he failed to consider that the first, second, third and fourth respondents lacked standing to issue the proceeding because: -

(a) In proceeding OS (JR) No. 225 of 2019, Erick Hewali & Ors v. Minister Fabian Pok, Miviri J held that the plaintiffs (now respondents) lacked standing, resulting in that proceeding being dismissed.

(b) The issues of Ministerial Determination and SMLI which were raised before the trial judge were res judicata because they were already considered and judicially determined in proceeding OS (JR) No. 225 of 2019 by Miviri J.

Ground 3.4


The trial judge erred in fact and law when he failed to find that proceeding OS 39 of 2021 was an abuse of process because: -


(a) The proceeding was in essence challenging the Ministerial Determination of 13 March, 2019 by purporting to raise the issue of whether social mapping was carried out under s. 47 of the Oil and Gas Act.

(b) The proper mode of issuing proceeding was by a writ of summons seeking declaratory orders under Order 4 Rules 2 and 3 of the National Court Rules.

Ground 3.5


The trial judge erred in fact and law in not interpreting s. 47 of the Oil and Gas Act correctly, had the trial judge done so, he would have found that the SMIL report was a requirement for petroleum prospecting license to submit to the State for grant of a Petroleum Development License which is not for dissemination to the public until all the process under s. 169 of the Oil and Gas Act, is completed and a Ministerial Determination is done. Hence, the trial judge erred in both law and fact in: -


(a) Finding that the appellants failed to disclose the SMIL report to the first, second, third, and fourth respondents when the appellants were not obligated to do so under the Oil and Gas Act.

(b) Finding that the respondents were not duly informed of the Ministerial Determination and social mapping studies report which were published in the National Gazette and the daily newspapers.

(c) Finding that the Ministerial Determination was not conclusive and did not put an end to any argument from being raised again in any other proceedings when the effect of s. 169 (4) and (10) of the Oil and Gas Act, is that a challenge to a Ministerial Determination can only be done by way of judicial review and not by ordinary originating summons or a writ of summons.

(d) Finding that s. 47 of the Oil and Gas Act, had not been complied with when copy of the SMIL report had been accepted by the State.

(e) Finding that the content and merit of the SMIL report was questionable and needed substantial evidence at trial as to how it was done when his Honour should have concentrated on the only issue before the court for determination which was whether a social mapping study was carried out under s. 47 of the Oil and Gas Act, pertaining to PDL 7.

Ground 3.6


The trial judge erred in law and procedurally, in not giving a fair hearing on the appellants’ application in a notice of motion for dismissal of the proceeding when: -


(a) His Honour repeatedly interjected during the State counsel’s submission from the beginning to the end without letting the counsel to finish his submissions, contrary to the principles of natural justice and procedural fairness as was said in Mangope v. Haba [2015] SC1459.

(b) The trial judge was not impartial and aggressively pursued arguments for the respondents which was contrary to principles of natural justice and procedural fairness and hence apprehension of biasness.

(c) There was an element of threat and intimidation when his Honour said to refer the State Lawyer to the Lawyers’ Statutory Committee for failing to present the SMIL study report to Court in his Honour’s previous LNG related matters when the report was not required in those matters as was in the lower court proceeding.
  1. Orders sought: -

4.1 The appeal be allowed.

4.2 The Orders of 19th April, 2021, be quashed.

4.3 The National Court proceeding styled OS No. 39 of 2021 –

Eric Hawai Ako & 3 Ors v. Exxon Mobil (PNG) Limited 7 2 Ors be dismissed in its entirety.

4.4 Alternatively, subject to subparagraph 4.3 the matter is remitted to the National Court before another judge.

4.5 Costs of an incidental to this appeal are borne by the First, Second,

Third and Fourth respondent’s

4.6 Any other orders this Court deems proper.


Submissions


(i) Appellants’ submissions
  1. Counsel for the appellants relied among others, on the affidavits of the second appellant. It was submitted that the sixth respondent (‘the Developer’) completed a full-scale social mapping and landowner identification (‘SMLI’) study on Hides PDL7 pursuant to s. 47 of the Oil and Gas Act, 1998. The finalized report on SMLI was submitted to the State through the Department of Petroleum and Energy (‘the DPE’) on 25 September, 2008, pursuant to s. 63 (a) (iii) of the Oil and Gas Act. The DPE accepted the report which resulted in the State granting the petroleum license for Hides PDL7 to the developer and its Joint Venture Partners.
  2. The finalized report on SMLI led to the subsequent signing of the Umbrella Benefit Sharing Agreement (‘UBSA’) in Kokopo in 2008 and License Based Benefit Sharing Agreement (‘LBBSA’) in 2009. It is claimed the respondents were fully aware of both UBSA and LBBSA.
  3. In March, 2021, the State and the Mineral Resources Development Company (‘the MRDC’) conducted an election of clan and Block representatives and opened bank accounts for the beneficiary clans from Hides PDL7 as identified in the Ministerial Determination.
  4. On 19 March, 2021, the respondents obtained ex-parte orders in the proceeding against the appellants and the sixth respondent from among others, taking any steps to pay royalties and other benefits to landowner clans within Hides PDL7 pending proper SMLI.
  5. On 30 March, 2022, the appellants in a notice of motion sought dismissal of the proceeding in its entirety for want of s. 5 notice under Claims By and Against the State Act, 1996, and the proceeding being statute barred under s. 16 (1) (a) of Frauds and Limitations Act,1988.
  6. On 19 April, 2021, the primary judge in an ex tempore ruling dismissed the appellants’ notice of motion with costs. In the ruling the primary judge held among others, that s. 5 notice was duly served on the State and the proceeding was not statute barred because the respondents were not aware of the report on SMLI until the hearing of the appellants’ notice of motion on 19 April, 2021, when the appellants tendered the report in court.
  7. It was submitted that the primary judge erred in finding that the proceeding was not statute barred because the cause of action arose in 2008 when SMLI was done. The finalized report on SMLI was then submitted to the State, which resulted in the State granting the petroleum license for Hides PDL7 to the developer. This then resulted in the signing of the UBSA and LBBSA in 2008 and 2009 respectively.
  8. Thus, the appellants argued that the proceeding was an abuse of process. Furthermore, the respondents lost their right to review the Ministerial Determination after 28 days of the Determination, pursuant to s. 169 (10) of the Oil and Gas Act.
  9. It was also argued that the primary judge erred in holding that SMLI is a pre-condition to any Ministerial Determination being made. The decision of Makail J in Pelego v. Pok (2021) N8745 was relied on for this argument. In that proceeding, the challenge to the validity of the Ministerial Determination of 13 March, 2019 was dismissed. The same issue viz; the validity of the same Ministerial Determination arose in the proceeding; the issue was therefore res judicata. Thus, it was submitted that the primary judge erred in not dismissing the proceeding for being an abuse of process.
  10. It was further argued that the primary judge also erred in holding that the respondents only became aware of the finalized SMLI report in court on 19 April, 2021. The primary judge therefore also erred in relying on Tau Gumu v. PNGBC (2001) N2288, which stands for the proposition that any statutory bar as claimed by the appellants could only start to run from the time the appellants became aware of the SMLI report. The primary judge also erred in holding that the appellants were required to distribute copies of the finalized report of the SMLI to all the affected parties and individuals, including the respondents in Hides PDL7.
  11. The appellants argued that the Ministerial Determination covered the respondents; therefore, the claims by the respondents have no basis in law. The only proper way for the respondents to challenge the Ministerial Determination was to review it, but they lost that right when they failed to review the Determination within 28 days of the Determination being made.
  12. The appellants argued that the primary judge also erred in his interpretation of s. 47 of the Oil and Gas Act, which they claimed is subject to the requirements of s. 169 of the Act. They argued the two provisions should be read together, which the primary judge failed to do.
  13. The Court was told that there was clear evidence of apprehended and or actual bias and lack of partiality by the primary judge towards the counsel for the appellants during the hearing of the appellants’ notice of motion. Thus, there was denial of fair hearing to the appellants by the primary judge as demonstrated by the repeated interjections by the primary judge during submissions by the appellants’ counsel from the start to the end. The appellants were as a result also denied natural justice and procedural fairness. The appellants argued that constant interjections by the primary judge during the appellants’ counsel’s submissions on the appellants’ notice of motion also denied the appellants from putting their case fully to the court. Therefore, there is a serious miscarriage of justice.
  14. The appellants also claimed that primary judge was unfair and unnecessarily harsh to the appellants’ counsel and threatened the counsel without proper basis to refer the counsel to the Lawyers Statutory Committee.
(ii) First to fourth respondents’ submissions
  1. The respondents submitted among others, that the proceeding was not statute barred because while they conceded that SMLI was done and completed in 2008 and the UBSA and LBBSA were signed in 2008 and 2009 respectively, and the Ministerial Determination was made in 2019, the respondents and their clan members were not made aware of the SMLI finalized report. They did not know about the report until it was tendered in court by the appellants during the hearing of the appellants’ notice of motion on 19 April, 2021. They relied on Tau Gumu v. Papua New Guinea Banking Corporation (supra), for this argument. Thus, it was argued that the SMLI report did not meet the requirements of s. 47 of the Oil and Gas Act and it lacked integrity. They claimed the SMLI exercise failed to identify individuals and clans who owned the land, which was covered by the petroleum license that was granted to the developer for Hides PDL7. It was claimed that this was in breach of s. 47. They relied on Bernard v. Duban (2016) N6299 for this argument.
  2. Regarding the notice under s. 5 of the Claims by and Against the State Act, the respondents claimed it was served on the State on 24 February, 2021. They also claimed their cause of action was ongoing because the Integrated PNG LNG is an ongoing project. Therefore, the requirement that service of the s. 5 notice under the Claims By and Against the State Act, had to be made within 6 months of the cause of action accruing pursuant to s. 5 (2) did not apply to the proceeding.
  3. The respondents argued that they were not challenging the Ministerial Determination in the proceeding, rather they were challenging the whole process initiated by the DPE to conduct SMLI under s. 47 of Oil and Gas Act. This is the reason they invoked ordinary OS to seek declarations. Thus, they claimed they were not bound to review the Ministerial Determination within 28 days from the date of the Determination. Furthermore, it was argued that under Order 4 r 2 (3) of the NCR, they had a choice whether to invoke ordinary OS or a writ of summons to issue the proceeding. Because of the equitable nature of the relief sought, ordinary OS was invoked. The cases of Specialist Centre PTY Ltd v. The State [1988-89] PNGLR 22 and Ripa v. Wak , Registrar of Titles [1996] PNGLR N1462, were relied on for this argument.
  4. It was argued that the primary judge correctly applied Tau Gumu v. PNGBC (supra) because their challenge in the proceeding was also founded on the breach by the developer of its statutory duty to conduct proper SMLI by involving them to participate in such exercise. The action taken in the proceeding was equitable in nature as shown by the types of relief sought. They relied on Simon Puraituk v. The State (2007) N3204 for this argument. The proceeding was therefore exempted from statute bar stipulated under s. 16 of Frauds and Limitations Act, which imposes bar on actions based on tort or simple contract if proceedings are issued after 6 months of the cause of action accruing. The respondents relied on the exemption provided under s. 18 of Frauds and Limitations Act. They also relied on Mamun Investment Ltd v. Nixon Kua (2015) SC1409 for this argument. They also argued that no full-scale SMLI was conducted by the developer before being granted the petroleum license for Hides PDL7, as required under s. 47 of the Oil and Gas Act.
  5. The respondents argued that they had the authority of the landowners to represent them in the proceeding and they all had direct interest in the SMLI report, which they were not made fully aware of. Thus, they had interest and standing to issue the proceeding. In proceeding OS (JR) No. 225 of 2019, they claim their application was dismissed by the court for lack of standing without the court considering the merits of the case. Thus, the issue of res judicata did not arise in the proceeding as the proceeding did not raise the same issues as those raised in OS (JR) No. 225 of 2019. It was also argued that OS (JR) No. 225 of 2019 challenged the Ministerial Determination, whereas the proceeding was based on breach of statutory duty by the developer. The issues in the two proceedings were different. The respondents relied on the principles of res judicata as expounded by Injia DCJ (as he then was) in PNG Habours Board v. Breni Kora (2005) N2834 and the case of Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906. The ordinary OS was therefore the appropriate and proper process to invoke to issue the proceeding. The proceeding was therefore not an abuse of process.
  6. It was argued that the primary judge correctly interpreted s. 47 of Oil and Gas Act, because the respondents and their clan members had the right to know the reports on SMLI regarding Hides PDL7. Thus, the essence of the challenge by the respondents in the proceeding was for the State and the developer to properly identify genuine landowners who have the right to benefit from their land.
  7. Thus, there was no apprehended and or actual bias and unfairness and partiality exhibited by the primary judge towards the counsel for the appellants. The respondents argued the primary judge dealt with the counsel appropriately because the counsel was evasive in answering questions put to him by the primary judge.
  8. Consequently, it was argued that the appellants have failed to show that the primary judge fell into error in his decision in dismissing their notice of motion and the appeal should be dismissed.
(iii) Sixth respondent’s submissions
  1. The sixth respondent was a defendant with the appellants in the proceeding. The sixth respondent therefore supported the appellants’ notice of motion which sought dismissal of the proceeding in its entirety for being statute barred under s. 16 of Frauds and Limitations Act, for non-compliance with s. 5 (2) of the Claims By and Against the State Act, for non-compliance with s. 169 (10) of the Oil and Gas Act, and for being frivolous and vexatious and not disclosing a reasonable cause of action under Order 12 r 40 of the NCR. Thus, the proceeding was an abuse of process.
  2. It was also argued that the ultimate objective of the proceeding was to invalidate the UBSA and the LBBSA which were respectively signed in 2008 and 2009. Both agreements were based on SMLI which was undertaken by the State and the sixth respondent for Hides PDL7 in which the respondents were involved. Although the respondents allege that SMLI was not done properly and was in breach of s. 47 of the Oil and Gas Act, they have failed to prove their claims.
  3. The sixth respondent argued that the proceeding was based on tort and contract, therefore s. 16 (1) (a) of Frauds and Limitations Act, applied to it. The cause of action having accrued from 2008 and 2009, and the 6 year period having ended in 2014 and 2015 respectively, the proceeding was clearly time barred. The exemption provided by s. 18 of Frauds and Limitations Act, for claims based on equity does not apply to the proceeding because the ultimate relief sought in the proceeding was to invalidate the two agreements, namely UBSA and LBBSA.
  4. It was further argued that the respondents were aware of the SMLI for Hides PDL7 through their involvement in the processes which was the basis for the UBSA and the LBBSA being signed in 2008 and 2009 respectively. Thus, it was argued that Tau Gumu v. PNGBC (supra), was wrongly relied on by the primary judge.
  5. The service of s. 5 notice by the respondents on the State on 24 February, 2021, was therefore way past the 6 months requirement for such notice to be served on the State under s. 5 (2) of the Claims By and Against the State Act. No extension of time was sought by the respondents to serve the notice out of time. The notice was therefore invalid thus rendering the whole proceeding invalid.
  6. It was also argued that the proceeding was invalid because it essentially challenged the Ministerial Determination of 13 March, 2019. Under s. 169 (10) of the Oil and Gas Act, such challenge or review should have been made within 28 days of the Determination. Moreover, it was submitted that because the challenge was against a Ministerial action, the proper mode or process to invoke to challenge such action was by way of judicial review under Order 16 of the NCR. The challenge of such administrative action by an ordinary OS was therefore an abuse of process. The case of Esso P’Nyang Limited v. Alex Bernard [2017] PGSC 62; SC2001, was relied on for this argument.
  7. The sixth respondent also argued that the proceeding was res judicata and was therefore an abuse of process because the similar complaint by the respondents against the Ministerial Determination was made in proceeding OS (JR) 225 of 2019- Eric Hawai Ako & Ors v. Minister Fabian Pok, which was dismissed by the National Court. It was found by the court that the respondents lacked standing. The issue raised here is same as that in OS (JR) 225 of 2019.
  8. The requirements of ss. 47 and 48 of the Oil and Gas Act, were complied with by the developer because the SMLI was done as required under s. 47, and the finalized report was accepted by the State before the DPE convened a development forum pursuant to s. 48 in 2009. It was argued that in any event, the respondents failed to prove the alleged non-compliance of the requirements under these two provisions by the sixth respondent. Again, Esso P’Nyang Limited v. Alex Bernard & Ors (supra) was relied on for this argument.
  9. Consequently, the sixth respondent seeks orders that the appeal be allowed and the Orders given by the primary judge on 19 April, 2021 be quashed and the proceeding dismissed forthwith. The sixth respondent’s costs of and incidental of this appeal and the proceeding be paid by the first, second, third and fourth respondents.
(iv) Consideration and reasons for decision
  1. The appellants’ grounds of appeal raise four principal issues:
(ii) Whether the proceeding was statute barred under s. 16 (1) (a) of the Frauds and Limitations Act.
  1. The respondents do not deny that UBSA and LBBSA were signed in 2008 and 2009, respectively. What they deny is that they were not made aware of the finalized report on SMLI for Hides PDL7 until 19 April, 2021, when it was tendered in court by the appellants. The respondents also argued that the SMLI needs to be done properly so that all the genuine landowners including them are properly identified.
  2. There is no dispute that UBSA and LBBSA were executed after the SMLI for Hides PDL7 was completed and the finalized report on the SMLI was approved by the State It is also not disputed that the petroleum license for Hides PDL7 was granted to the developer by the State after the SMLI was approved by the State, thus indicating that the statutory requirements under the Oil and Gas Act, for these processes were complied with.
  3. There is also no dispute that a Ministerial Determination was made on 13 March, 2019, following which the State and the MRDC conducted an election of clan and Block representatives of Hides PDL7 as identified by the Ministerial Determination and opened bank accounts for clan beneficiaries.
  4. It is also not disputed that the Ministerial Determination was not challenged or reviewed by anyone, including the respondents within 28 days of the Determination being made under s. 169 (10) of the Oil and Gas Act.
  5. Under s. 47 (3) of Oil and Gas Act, it was a condition for the sixth respondent to undertake the SMLI for Hides PDL7, for it to be granted the petroleum license for Hides PDL7 by the State. Thus, the fact that the sixth respondent was granted the petroleum license for Hides PDL7, confirms that the sixth respondent conducted the SMLI for Hides PDL7 to the satisfaction of the State. This is the statutory process we have alluded to above.
  6. Whilst the respondents made it a major issue that they and other landowners were not served with the finalized report of the SMLI, the sixth respondent had no duty under the Oil and Gas Act to serve every landowner, not even clans with a copy of the report. Under s. 47 (7) of Oil and Gas Act, the only person entitled to be served with a copy of the report is the Director, appointed by the Minister under s. 11 of Oil and Gas Act. This requirement was complied with by the developer. Thus, the claim by the respondents that the report should have been served on them and other landowners has no basis in law.
  7. It is to be noted that under s. 48 of the Oil and Gas Act, before the petroleum license could be granted to the developer by the State, the Minister had to convene a development forum of the landowners of Hides PDL7, to discuss and agree amongst the landowners on benefit sharing from the project. Under s.49 of the Act, before the development forum could be held, a full-scale SMLI had to be completed by the developer. All these requirements were compiled with by the developer and the State. The process included the Ministerial Determination. The compliance with these processes paved the way for the signing of UBSA and LBBSA.
  8. As we alluded to earlier, under the Oil and Gas Act, the Ministerial Determination had to be based on SMLI already undertaken in the project area. This requirement was also met by the appellants and the sixth respondent. Other judicial review proceedings before the proceeding (OS 39 of 2021), including Pelego & Ors v, Pok & Ors (supra), challenged that Ministerial Determination. Those proceedings were all dismissed by the National Court. In the proceeding, (OS 39 of 2021), whilst the respondents argued that they were challenging the SMLI and not the Ministerial Determination, the ultimate objective of the proceeding was to challenge the validity of the Ministerial Determination of 13 March, 2019. Therefore, the issue in the proceeding before the primary judge was the same issue, viz; the validity of the Ministerial Determination that was already dealt with in the earlier proceedings. The result is the proceeding before the primary judge was res judicata and an abuse of process. It cannot be denied that this was the effect of the proceeding because the respondents were dissatisfied with the SMLI studies and its final report and the Minister’s allocation of equity and royalty benefits under the Ministerial Determination which was based on the SMLI.
  9. Having regard to the above, we accept the sixth respondent’s submission that the proceeding was also an abuse of process under s. 169 (10) of the Oil and Gas Act, because the respondents failed to challenge the Ministerial Determination through judicial review within 28 days of the Determination. The effect of s. 169 (10) is that such challenge must be by way of judicial review. This is consistent with the established principle of administrative law; that the Ministerial Determination being a public function as well as an administrative function, the proper mode to challenge the discharge of such function is by a judicial review. Section 169 (10) in our view is indeed expressly prescriptive of this mode by the use of the word “review” in the section. This is the only rationale interpretation we can give to the relief sought in the proceeding. This point was stressed in Esso P’Nyang Limited v. Alex Benard [2017] PGSC62; SC2001. The Supreme Court among others said, the court should look at the relief sought and if the proceeding alleges error on the part of a public official in the discharge of a public function, then it would be an abuse of process not to bring that proceeding by way of judicial review. The Court in adopting what was said by the House of Lords in O’Reilly v. Mackman [1983] UKHL 1; [1983] 2 AC 237, said among others:

“...it is an abuse of process for a party alleging public law rights to proceed by way of an action under the 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”.


  1. In the proceeding, the respondents invoked general civil law procedure by invoking ordinary OS to seek relief against exercise of public function by a public authority. The proceeding should have therefore been dismissed for abuse of process. Even if the respondents had not received the SMLI report, that was no bar in law for the primary judge to dismiss the proceeding because the developer had no statutory obligation to provide copies of the report to the respondents and other landowners. In any case, the decision as to whether the finalized report of the SMLI of the project area was satisfactory and compliant with Oil and Gas Act, was for the Minister to make, not the landowners. Thus, it was wrong under Oil and Gas Act, for any emphasis to be made that the landowners had to be satisfied first before the SMLI report could be considered valid and have legal effect.
  2. As we alluded to earlier in the judgment, in seeking declarations by invoking general OS, the respondents argued that the proceeding was not statute barred under s. 16 (1) (a) of Frauds and Limitations Act, because the relief sought were equitable in nature. Thus, it was argued that the proceeding fell within the exemption provided under s. 18 of the Frauds and Limitations Act. The case in point to address this issue is Mamun Investment Ltd v. Koim [2015] PGSC9; SC1409. In that case the Supreme Court was considering among others, whether declaratory relief in a proceeding could be considered equitable. The Supreme Court held that it was necessary to consider the grounds upon which the declaratory relief were sought to decide the actual nature of the relief sought. The Supreme Court went on to adopt a decision of the Federal Court of Australia in AWB Limited v. Honourable Terrence Rhoderic Hudson Cole (No. 2) [2006] FCA 913 in which Young J said: -

“It is a common misconception that a declaration is an equitable remedy. It is not, it is a statutory remedy that is conferred in terms emphasizing that its grant or refusal is within the discretion of the court. The discretion is to be exercised according to the facts and circumstances of the individual case, and the considerations that may be relevant to the exercise of the discretion are so numerous that it is not possible to enumerate”.


  1. In Mamun, like in the proceeding that was before the primary judge, the Supreme Court said the underlying basis of the declaratory relief sought was not equity. Rather, it was based on breach of contract of sale and upon tort of fraud, thus the relief sought in the OS could not be categorized as equitable under s. 18 of Frauds and Limitations Act, for it to be exempted from statute bar under s. 16 of Frauds and Limitations Act. The proceeding before the primary judge was same, it for all intent and purpose was grounded on contract as its effect and aim was to invalidate the UBSA and LBBSA in which they were involved through the initial process of SMLI for Hides PDL7 through clan participation and being signatory to the agreements as deposed to in the affidavits of the second appellant. Thus, we accept the submission by the sixth respondent that because the relief sought in the proceeding by the respondents were grounded on contract the proceeding was statute barred.
  2. We also note that in Mamun, the Supreme Court considered Tau Gumu in which the Supreme Court held that Tau Gumu did not apply to claims based on contract and tort because there is no exemption provided under s. 16 of Frauds and Limitations Act for such claims. The Supreme Court relevantly said:

“Given the above and that our Frauds and Limitations Act, does not provide for the exceptions referred to in particular in respect of a cause of action based on fraud, we are of the view that the decision in Tau Gumu’s case (supra) should not have been followed and that the trial judge erred in so doing and in finding as he did that the plaintiffs’ cause of action accrued from the date of the discovery of the alleged fraud. The date that the plaintiffs’ cause of action accrued at the latest, was 13th December, 1990, the registration date of the transfer of the title. Consequently, as the respondents’ action is founded on simple contract and on tort and it was brought after the expiration of six years commencing on the date on which the cause of action accrued, it is caught by s. 16 (1) Frauds and Limitations Act”.


  1. Regarding the service of s. 5 notice on the State, the Solicitor General, Mr. Tauvasa Tanuvasa deposed in his affidavit in responding to the facts deposed to by the first respondent (the first plaintiff in the court below), in his affidavit among others, that s. 5 notice was served on the Office of the Solicitor General on 24 February, 2021, said:

“Upon a careful search in our of our office file and our CMS system, I found out that my Office did not receive any section 5 notice at all from the Plaintiffs or their lawyers as claimed by Eric Hawai Ako in his affidavit”.


  1. Mr. Goli Kaki explained in his affidavit how the respondents (plaintiffs) served s. 5 notice on the State. Mr. Kaki relevantly deposed in his affidavit as follows:

“On the 02nd day of March, 2021 precisely at 11.10am I attended at the Office of Attorney General’s Office (sic.) located on the 11th Floor of the Sir Buri Kidu Haus, Waigani Office, National Capital District and did serve Section 5 Notice dated 24th February 202 (sic.) on one Jacinta Haooa an Executive Assistant in employ of the Attorney General.


When I noted that Ms. Haooa mistakenly signed on the cover of the letter indicated for the Solicitor General to sign. I informed her of her mistake but she assured me that she will send copy (sic.) of the same to the Office of Solicitor General and that I shall not necessarily serve on the Solicitor General on the 7th Floor within the building so I left to return to my office”.


  1. Mr. Kaki went on to explain in his affidavit that the date of s. 5 notice was 24 February, 2021. This confirms that the purported date of service of s. 5 notice was 02nd March, 2022.
  2. Section 5 of the Claims By and Against the State Act, is in these terms:

5. NOTICE OF CLAIMS AGAINST THE STATE.

(1) No action to enforce any claim against the State lies against the State unless notice in writing of intention to make a claim is given in accordance with this section by the claimant to–

(a) the Departmental Head of the Department responsible for justice matters; or

(b) the Solicitor-General.

(2) A notice under this section shall be given–

(a) within a period of six months after the occurrence out of which the claim arose; or


(b) where the claim is for breach of a contract, within a

period of six months after the claimant became aware of the alleged breach; or


(c) within such further period as–

(i) the Principal Legal Adviser; or
(ii) the court before which the action is instituted,

on sufficient cause being shown, allows.

(3) A notice under Subsection (1) shall be given by–

(a) personal service on an officer referred to in Subsection (1); or

(b) leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 a.m. and 12 noon, or 1.00 p.m. and 4.06 p.m., or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321)..


  1. Clearly, the purported service of s. 5 notice by the respondents on the State did not comply with the mandatory requirements of the section. The breach of the mandatory statutory requirements for a proper and valid service of s. 5 notice renders even the purported service of s 5 notice by the respondents on the State futile, and destitute of any legal effect.
  2. The above scenario reveals another fundamental reason why the respondents’ argument that they only became aware of the SMLI finalized report on Hides PDL7 on 19 April, 2021 when it was tendered in court before the primary judge by the appellants, which was the basis for the primary judge to rely on Tau Gumu untenable. The immediate questions that arise are; why then was the purported s. 5 notice dated 24 February 2021 and why was the purported s. 5 notice served on the State on 02nd March, 2021? The only reasonable and rationale answer to these questions is that the respondents were aware of the SMLI finalized report on Hides PDL7, well before 19 April, 2021. This must also make the finding of the primary judge erroneous and untenable.
  3. In our considered opinion, the truth all along was that the respondents were aware of the finalized SMLI report on Hides PDL7 well before 19 April, 2021. This view is fortified by the fact that the respondents unsuccessfully challenged the Ministerial Determination for Hide PDL7 of 13 March, 2019, which was based on SMLI finalized report on Hides PDL7 in court. Second, respondents, either personally or through their clans were signatories to UBSA and LBBSA in 2008 and 2009, respectfully, which started the processes for the SMLI studies on Hides PDL7 and eventually the grant of petroleum license to the developer and the Ministerial Determination.
  4. Whilst the considerations and the reasons we have given regarding the first five grounds of appeal are enough basis for the Court to allow the appeal, the issue raised in the sixth and final ground of appeal regarding alleged apprehended bias against counsel for the appellants by the primary judge is important and the Court has the duty to address it. The transcript of the proceeding clearly shows interjections by the primary judge while counsel for the appellant was making his submissions. Those interjections were repeated and many times they resulted in the counsel being cut-off from completing what he wanted to say in his submissions. The ground of appeal therefore appears justified and has merit.
  5. We also note from the transcript that the primary judge threatened to refer the counsel to the Lawyers’ Statutory Committee. Having read the transcript of the proceeding, we do not find any basis for such referral of the counsel for the appellants to the Lawyers’ Statutory Committee.
  6. In making our observations, we begin by restating the first and foremost duty of every counsel that appears before a court or tribunal to, firstly, assist the court as an officer of the court and secondly, to represent his or her client to the best of his or her ability. To discharge that duty, counsel must put his or her client’s case fully to the court. The duty of the court is to decide the case on its merits based on the materials put before it by counsel, including submissions. An integral part of that duty is for the court to listen to counsel, asking counsel questions and interjecting when necessary for counsel to assist it fully understand the issues for determination. This will allow and enable the court to do justice between the parties and show in practical ways of being fair and impartial. This will also allow the court to exercise the power given to it by the people fairly to all parties.
  7. Unnecessary and unjustified interjections by the court may result in a party being denied a fair trial and it would constitute a strong ground for appeal. In this case, having read the transcript we find that the counsel for the appellant was trying his best to put his clients’ case fully to the primary judge as was his duty and as an officer of the court to assist the Court come to a fair decision.
  8. There must be proper and fair administration of justice by the court between disputing parties. This requirement is consonant with the oft. cited aphorism that justice must not only be done but must also be seen to be done. This means the parties must see or observe and feel that justice has been done between them by a fair and an impartial tribunal. This is the expectation of the people including those who appear before the courts whose power the courts exercise and dispense in hearing cases between disputing parties. This is a pillar principle for fair and proper administration of justice. Application of this principle is vital for the people, especially the disputing litigants to have full confidence in the courts.
  9. Any judge is entitled to ask questions of a counsel or a witness. In any trial it will almost inevitably be necessary for the presiding judge to occasionally ask questions either to counsel or witness to clarify a point of submission or a question. It may even be necessary to ask a series of questions. In such situations any fair-minded observer will see the reason for such questions and will accept that they are asked to assist the judge in understanding the case properly and to conduct a fair trial.
  10. However, should the questions or interventions as in this case become too frequent or appear to be taking over counsel's role they may be interpreted by the parties or an independent observer as demonstrating partiality by the judge. Every judge knows that counsel is acting under his lay client's instructions and must put the client’s case according to those instructions. Therefore, frequent interruptions through excessive and unnecessary questioning or interjections by the trial judge may lead counsel and possibly also his client to feel that the judge is bias.
  11. In Galea v. Galea [1990] 19 NSWLR 267, the court considered whether excessive questioning or inappropriate comments by the primary judge created a danger of an unfair trial. The Court said, if that happened the trial had to be set aside. In laying down the tests on the types of questions and comments by a primary judge which may create a real danger of an unfair trial, the Court said:

"The test to be applied is whether the excessive judicial questioning or pejorative comments have created a real danger that the trial was unfair. If so the judgement must be set aside....

Where a complaint is made of excessive questioning or inappropriate comments, the appellate court must consider whether such interventions indicate that a fair trial has been denied to a litigant because the judge has closed his or her mind to further persuasion, moved into counsel's shoes and into the perils of self-persuasion. The decision on whether the point of unfairness had been reached must be made in the context of the whole trial and in the light of the number, length, terms and circumstances of the interventions. It is important to draw distinction between intervention which suggests that an opinion has been finally reached which could not be altered by further evidence or argument and one which is provisional, put forward to test the evidence and to invite further persuasion.


The judge does not know what is in counsel's brief and the strength of cross examination may be destroyed if a judge, in a desire to get to what seems crucial, at any stage prematurely intervenes by putting questions." (Our underlining).


  1. Having regard to these principles which we respectfully adopt, we are respectfully of the view that the questioning and interventions by the primary judge during submissions by the counsel for the appellants amounted to unnecessary interjections. In our view such interjections were capable of amounting to actual or apprehended bias to an independent observer. The nature of the interventions also amounted to denial of a fair trial to the appellants.
  2. For all these reasons, we allow the appeal. The respondents will pay the appellants’ costs of and incidental to this appeal, which if not otherwise agreed are to be taxed.

Orders accordingly.


Solicitor General: Lawyers for the Appellants
NIUAGE Lawyers: Lawyers for the First, Second, Third and Fourth Respondents
Allens: Lawyers for the Sixth Respondent


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