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Palma v Ganarafo and Kewa [1994] PGNC 13; N1250 (22 July 1994)

Unreported National Court Decisions

N1250

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

OS 209 OF 1994
GABRIEL PALMA - PLAINTIFF
V
RON GANARAFO - DEFENDANT
PETER KEWA - SECOND DEFENDANT

Mount Hagen

Woods J
8 July 1994
22 July 1994

PRACTICE AND PROCEDURE - Declaratory relief - locus standi - sufficient interest - not a member of the Corporation - no interest.

Cases Cited

Donigi v The State [1991] PNGLR 376

Re Petition of MT Somare [1981] PNGLR 265

Counsel

P Kunai for the Plaintiff

CR Hudson for the Defendants

8 July 1994

WOODS J: The Plaintiff has commenced these proceedings claiming to be acting for and on behalf of the smallholder coffee growers in Papua New Guinea and is seeking a declaration that the appointment of the First Defendant as acting Chief Executive of the Coffee Industry Corporation be declared null and void as it contravenes the provisions of the Coffee Industry Corporation (Statutory Functions and Powers) Act of 1991 and the Memorandum and Articles of the Corporation.

The Defendants have applied to the Court that the proceedings be dismissed and that the originating summons be struck out.

The main pointed raised in this application is that as the plaintiff is not prescribed in the Articles of Association of the Corporation as a member and in no other way can be said to be a member he has no right or standing to challenge any appointments that may be made by the Corporation. The plaintiff seems to be bringing a representative action involving a corporation in which he has no status.

The Coffee Industry Corporation was set up as a corporation in accordance with the Companies Act by way of a Memorandum and Articles of Association subscribed to in September 1991. It has further powers and functions under the Coffee Industry Corporation (Statutory Functions and Powers) Act 1991.

The membership of the Corporation is set out in Article 5 of the Articles of Association and appears to be expressed to cover all persons or bodies that may be interested in the coffee industry. Thus the membership comprises firstly Grower Associations which are representative of smallholder coffee growers by regions throughout the country. Then there are, a Coffee exporter Association, a Plantation Processor Association, a Block Development Association, and then various National Departmental Heads.

All the different Associations are to be properly incorporated. This careful detailing of the membership would seem to be to ensure a practical and manageable representation of the many people who may be concerned in the growing and processing and marketing of coffee. The argument presented to this court is that the plaintiff does not come within any of the memberships provided for, thus he is not a member of one of the regional associations nor any of the other associations. He suggests that he is acting for and on behalf of the smallholder growers in PNG however surely all the smallholder growers who are really interested in the operation of the corporation would be members of the regional associations and could and should take any complaints to the corporation through that membership. The plaintiff should be pressing his complaints through his member regional association.

By not being a member of a regional association how can he claim to be genuinely interested in the operation and running of the Corporation.

The matter that the Plaintiff is complaining about is the appointment by the Board of Directors of the Corporation of an acting Chief Executive. So what standing can the plaintiff have to challenge such internal decisions and appointments of the Board. This would be different from other cases which have come before the Courts. For example in SCA No 4 of 1980 re Petition of MT Somare [1981] PNGLR 265 the Supreme Court said that it was not possible to lay down a workable definition for all cases because each case is different, however it then found that the plaintiff as a member of Parliament belongs to the governmental body which has been invested with the power of law-making by the Constitution and he had raised a point that the law-making body had not complied with certain provisions of the Constitution in passing the Defence Force (Presence Abroad) Act.

That case can be contrasted with the case Donigi v The State [1991] 376 where the National Court found that the plaintiff’s claim was hypothetical and not founded on property rights actually affected and that the plaintiff’s interest as a citizen, landowner and President of the Law Society were objectively not sufficient to found the particular claim.

The above two cases cover some of the principles of representative actions but in the end each case is different and at the end of the day the question is asked what are the plaintiff’s interests. In the Somare case the plaintiff was a member of the law-making body responsible for the matter complained off and he had already made his complaint known at the start. However in the Donigi case he was far too remote and was claiming to represent such a wide ranging indeterminate class.

In the case before me now the plaintiff has not even show enough interest to affiliate himself with one of the representative bodies for whom the Corporation was formed. The representative bodies were created to enable him to join other parties who have an interest in the industry and through the appropriate means under the Companies Act make his views know.

Whilst the plaintiff may say that the activities of the Corporation have a public nature by virtue of the fact that it has been given powers and functions under the Coffee Industry Corporation (Statutory Functions and Powers) Act and such powers and functions can infringe on the financial livelihood and operation of coffee growers, the Act clearly allows the Corporation to carry on its business without prejudice:

See Sect. 4: Status of Coffee Industry Corporation

(1) The Coffee Industry Corporation:

(a) is not the State and does not represent the State except by express agreement; and

(b) except as provided by this Act, is not exempt from any rate, tax, duty or other impost imposed by or under any law; and

(c) cannot render the State liable for any debts, liabilities or obligations.

(2) Nothing in this Act shall prejudice the powers of the Coffee Industry Corporation to alter its Memorandum and Articles of Association or to dispose or, or deal with, its assets or to carry on or discontinue any part of its business, but any alteration to its Memorandum and Articles of Association shall be consistent with the paramount interest of the coffee industry.

Before the Plaintiff can complain about the internal management and appointments of the Corporation he must show his genuine interest and become an interested member by joining one of the regional associations, an avenue which has always been open to him.

I find that the Plaintiff has no standing or status to challenge the internal decisions of the Board of the Corporation and I therefore dismiss the proceedings and strike out the Originating Summons.

Lawyer for the Plaintiff: P Kunai

Lawyer for the Defendants: Gadens Ridgeway