national court of justice

AMBI KAMBERAN

V

PLACER HIGHLAND GOLD

waigani: salika j

11 May; 3 December 2004

MINING DEVELOPMENT CONTRACT – Landowners not party to contract – Privity of contract.

CONTRACT – Privity.

Facts

The defendants were parties to a mining development contract, which contained a reviewing provision. The plaintiff who were land owners sought to enforce the reviewing provisions to increase rates of the royalty and to impose on the developer certain conditions beneficial to themselves and their communities.

Held

The landowners who are not parties to the agreement have no locus standi to enforce the terms of the agreement.

Papua New Guinea cases cited
None

Counsel
Ambi Kamberan, in person.
R Bradshaw, for first defendants.
No appearance, for second and third defendants.

3 December 2004
Salika j. The plaintiff filed an originating summons on 19 October 2001 through Kubak Lawyers, his then lawyers, seeking the following orders:

1.	An order that the defendants forthwith review the current royalty payment rates under the relevant existing agreements for the Tuanda Clan Landowners of Porgera with the view to increasing such payment rates to commensurate with prevailing domestic and world economic conditions.

2.	An order that the Enga Provincial Government and the Independent State of Papua New Guinea ensure the continued payment of such revised payment rates throughout the lifetime of the Porgera Mine and thereafter.

3.	An order that the defendants forthwith facilitate the involvement and active participation of the Tuanda Clan landowners in suitable spin off businesses on the Porgera Mine site in accordance with existing applicable agreements.

4.	Costs.

5.	Such further orders as the court deems just and equitable.

The originating summons was then amended by an amended originating summons filed on 8 July 2002 through Powes Parkop Lawyers. This was further amended by another amended originating summons filed on 11 October 2002 by the plaintiff. That was further amended again by another amended originating summons filed on the 7 April 2003 by the plaintiff. In the amended originating summons filed on the 7 April 2003, the plaintiffs seek the following orders and declarations:

1.	A declaration that the plaintiffs are a party to the Mining Development Contract entered into between the Independent State of Papua New Guinea, Placer (PNG) Pty Ltd, Highlands Gold Properties Pty Ltd, RGC (PNG) Pty Ltd, (a joint venture) and landowners in respect of the Porgera Project (Mining) in the Porgera District of Enga Province on 12 May 1989.

2.	A declaration that under the said agreement the parties are required to review the agreement on 12 May 1996.

3.	A declaration that the parties are in breach of the said agreement by failing to review the agreement on 12 May 1996.

4.	A declaration that the landowners had not disrupt the operation of the mine in any way as required by Clause 25.1 of the said agreement. But they consulted the second and the third defendants as required by Clause 25.2 of the said agreement. However, the second and third defendants failed to resolve the difficulties as required. Thus, they are in breach of Clause 25.2.

5.	An Order for specific performance compelling the parties to review and renew the said agreement in the following terms.

(a)	That the defendants forthwith review the current rate of Royalty payment laid by the relevant existing agreement for all members of the Landowners Clans of Porgera an increase from one Hundred Kina (K100.00) per quarter to Five Hundred Kina (K500.00) per person for each fortnight, to commensurate with prevailing domestic and World economic conditions.

(b)	The Enga Provincial Government and the Independent State of Papua New Guinea ensure that the payment of such revised rate of Royalty Payments to each member of all Landowner Clans be continued throughout the life span of the Porgera Mining Operations and thereafter.

(c)	That the defendants deduct 7% from the royalty payments paid to the Enga Provincial Government and use 7% to set up a Bank or a Fund to be known as the Porgera Gold Mining Generation Service Bank or Fund of Papua New Guinea that would cater for needs of future generation from the Porgera Mine area and other people of the District and the Province of Enga.

(d)	That the defendant pays the Landowners royalty payment of K500.00 and the Life Insurance Policy payment into the proposed Porgera Gold Mining Generation Services Bank or Fund of Papua New Guinea for landowners to withdraw or maintain as savings deposits.

(e)	That the defendants forthwith facilitate the involvement and active participation of all members of Landowner clans in any suitable spin-off Business activities on and around the Porgera Mine Site in accordance with the existing applicable Agreement which has been fully lacking since the commencement of the mining operation.

(f)	That Placer (PNG) Limited, Highlands Gold Pty Ltd and RGC (PNG) Limited together with the Enga Provincial Government and the Independent State of Papua New Guinea ensure a continuous coverage of Life Insurance Policy for the members of all Landowner clans living in and around the Porgera Mining area.

(g)	That the defendants forthwith ensure that a proposal or a scheme is in place so as to improve the living conditions of all the Landowner clans of Porgera living in and around the mining area and more so, to assist them in constructing and setting up of permanent houses for the members of landowner clans with in the life span of Porgera Mining.

(h)	That the defendants ensure that the children of the Landowner clans and others living within the Porgera Mining are properly educated and that they have full access to education by way of providing educational facilities, including making available education fees or subsidizing such fees.

(i)	That the defendants ensure that the road leading from Wabag to Porgera Mine site be permanently sealed and also to ensure that the other truck roads/feeder roads leading in and out of the main road be fully maintained to ensure safe and free movement of all traffic.

(j)	That the defendants pay/compensate the Landowner clans for breaching the terms of the initial Agreement which is already in place, in failing to renew the said Agreement on the date stipulated by the same namely, 12 May 1996.

6.	An order that the defendant pay the complainant's cost to these proceedings.

7.	Such further Orders as the court deems just and equitable.

The plaintiff are seeking these orders and declarations on their behalf and claim that they are a party to the Mining Development Contract entered into between the State, Placer (GC) Pty Ltd and Landowners on 12 May 1989 and that by virtue of the contract they were required to review the Agreement on 12 May 1996.

The affidavits of Ila Temu sworn on 18 September 2003 and filed on 19 September 2003 and Kumbaran Ambi Kipu sworn on 10 April 2003 and filed on 11 April 2003 contain the relevant Mining Development Contract. On the face of the Mining Development Contract it is clear that the parties to the Agreement are the State and Placer (PNG) Pty Limited, Highlands Gold Properties Pty Limited and RGC (Papua New Guinea) Pty Limited, which was a Joint Venture. It is clear from that Mining Development Agreement that neither the plaintiff nor any other landowners are parties to this agreement.

The affidavits of Temu and Kipu also contain a Memorandum of Agreement relating to the Development of the Porgera Gold Mine project. This Memorandum of Agreement was between the State and the Porgera Landowners. The Memorandum of Agreement was also signed on 12 May 1989. For the State, Mr John Giheno Acting Minister for Finance at the time and Sir Rabbie Namaliu the Prime Minister at the time signed for and on behalf of the State while this plaintiff and other Porgera Land Owners signed on behalf of themselves and their clans.

The plaintiff in this matter is also a signatory to the Memorandum of Agreement relating to the development of the Porgera Gold Mine Project dated 11 May 1989 between the Enga Provincial Government and the Porgera Landowners.

The first defendant made an application under Order 12 Rule 40 of the National Court Rules to dismiss these proceedings on the basis that no cause of action is disclosed against the first defendants. I have read all the documents pertaining to this matter and have this to say.

These proceedings are misconceived because the plaintiff and his Taunda Clan are not parties to the Mining Development Contract. The Court cannot therefore make or grant the orders or declarations sought because they are not parties to the agreement. I also note the Enga Provincial Government and the State are second and third defendants respectively. The Enga Provincial Government is not a party to the Mining Development Contract. The State is a party to the Mining Development Contract with the first defendant but it has been brought to court by a plaintiff who is not party to the contract. One cannot bring an action in contract or by virtue of an agreement if one is not a party to that agreement.

In the circumstances I agree with the submission of the first defendant and order that the whole of the proceedings be dismissed.

Costs are awarded to the first defendant only.

I make no order for costs to the second and third defendants.

Lawyer for plaintiff: Nil
Lawyer for first defendant: Blake Dawson Waldron.