N3739

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS No. 207 OF 2008

BETWEEN

TAKOA PASTORAL CO. LIMITED
Plaintiff

AND:

DR. PUKA TEMU, MINISTER FOR LANDS
First Defendant

AND:

PEPI KIMAS, ACTING SECRETARY FOR LANDS
Second Defendant

AND:

BENJAMIN SAMSON, ACTING REGISTRAR OF TITLES
Third Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Kandakasi, J.
2009: 09th July
03rd September

PRACTICE AND PROCEDURE – Discovery – Purpose of – Enable parties to know of each other’s cases’ strengths and weaknesses and where possible settle or identify meritorious issues for trial – Application of further discovery on orders of the Court – Further discovery on discovery likely to delay proceedings - No need for further discovery upon discovery – Parties to consider effect of documents disclosed and serious consider settling out of Court or make appropriate applications – Order 9 rr. 1, 2, 5, 7, 9 & 25 National Court Rules 

PRACTICE & PROCEDURE – Discovery – Process available to all proceedings filed in Court - Partial and selective discovery made under order of the Court - Whether other party entitled to apply for further discovery upon discovery? - Res judicata or issue estoppel arises where application for discovery already heard and determined – Proper recourse for party wanting further discovery - Have the matter settled out of Court or apply for appropriate orders having regard to the effects of documents disclosed - Order 9 rr. 1, 2, 5, 7, 9 & 25 National Court Rules. 

JUDGMENTS & ORDERS – Effect of – Orders or decisions finally determining issues is final – Order for discovery – Finally order and res judicata or issue estoppel reached - Discovery not fully made – Recourse for other party – Assess effect of documents disclose and seek out of Court settlement and failing that apply for appropriate orders. 

Papua New Guinean Cases Cited:

Credit Corporation (PNG) Ltd v. Gerald Jee [1988-89] PNGLR 11.
Public Officers Superannuation Fund Board v. Imanakuan, (2001) SC677.
Aisip Duwa v. Ronald Moyo Senge [1995] PNGLR 140.
Ace Guard Dog Security Services Limited v. Yama Security Services Ltd & Ors (2003) N2459.
Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694.
Jeffrey Jimmy & Anor v. Beverely Kaleva & Ors (2004) N2715
Telikom PNG Ltd v. Independent Consumer and Competition Commission (2008) SC906.
Curtain Brothers (QLD) Pty Ltd & Kinhill Kramer Pty Ltd v. The Independent State of Papua New Guinea [1993] PNGLR 285; 
Pama Anio v. Aho Baliki and Bank South Pacific (2004) N2719

Counsel:

M.M. Varitimos and F. Griffin, for the Plaintiff/Applicant.
I. Molly and K. Sheehan, for the Defendants/Respondents.

3rd September, 2009

1. KANDAKASI J: Takoa Pastoral Co. Limited through its lawyer is applying for the defendants to give further discovery of their documents after the Court heard and determined a similar application, though not formal but as one of the relevant and necessary issues under Rule 7 (4) (k) of ADR Listings Rules. In making the application, Takoa claims the defendants have made selective and inadequate disclosures of the relevant and necessary documents. That requires the defendants to give further discovery.

2. The defendants oppose the application on two grounds. First, they say they have disclosed all of the relevant and necessary documents and there is neither a need, nor do they have any more documents to discover. Secondly, they say Takoa already made its application and a final decision was made on that application. Thus, the argument is that, Takoa’s application is res judicata or has reached issue estoppel. This means in other words that, Takoa is precluded from making this application again because the Court has already dealt with the subject matter of the application. 

Relevant Issues

3. From the arguments of the parties, it is clear that the following are the issues for this Court to consider and determine:

1. Are the defendants obliged to give further discovery? And

2. Is Takoa precluded from making this application on the basis of res judicata or issue estoppel?

4. We will deal with these two issues together preferably in the order in which they are presented. 

Further Discovery

5. Order 9, r 5 of the National Court Rules provides generally for the giving of discovery. Rules 7 and 9 of the same Order provide for orders for specific discovery, where "it appears, to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceedings" including a list of documents "that there exists some document or class of documents" relevant and relating to the proceedings or throw some light in the proceedings and are or may be in the custody of a party, unless they are privileged from production. It follows therefore that, a party who is in possession of any document that is relevant and relating to any proceedings must disclose them unless they are covered by privilege. Unfortunately, most litigants do not readily disclose documents in their possession but only for those that are in their favour. These rules and the case law built around them are there to compel the parties to give discovery of all relevant documents.

6. I accept Mr. Varitimo’s, counsel for Takoa’s submissions as to the purpose of discovery. That submission is with the support of the leading Supreme Court decision in Public Officers Superannuation Fund Board v Imanakuan, and other cases. As these authorities make it clear, the purpose of requiring and giving discovery is not only to enable a party in any proceedings before the Court to obtain facts and information about the other’s case and work out both its own and the other’s case’s strength and weakness but also to help identify the relevant issues for trial and or enable a fair and reasonable out of Court settlement where possible. In that way, procedural equality and fairness is allowed, the Court’s limited time is spared and the parties are assisted to find a solution to their dispute promptly and save substantial costs. In view of that, discovery is therefore:

"… not a matter of bargaining or compromising or demanding an exact list of the documents sought. It is the obligation on a party unless privileged, to supply a list of all the documents, which might have any bearing on the subject matter in dispute." 

7. Given the purpose discoveries serve it would be incumbent on the parties to voluntarily disclose all relevant and necessary documents in their possession, without waiting for a request from the other side or an order of the Court. Where that does not take place and a request for discovery is necessary in the form of a notice to give discovery and such a notice is served, the party on whom the notice is served must discharge the obligation to give discovery promptly. Where a party fails to give discovery in breach of the obligation to do so, that party stands the risk of the Court in making the appropriate order at that party’s costs.

8. Such a process is necessary in our jurisdiction because as the Supreme Court said in Papua New Guinea Banking Corporation v. Jeff Tole:

"… our system of justice is not one of surprises but one of fair play. Reasonable opportunity must be given to each other by the parties to an action to ascertain fully the nature of the other’s case so that, if need be, a defendant can make a payment into Court." 

9. Hence, the need to give discovery is a very important one in our system of justice. That importance is emphasized in about three ways. First, there is an automatic right and or obligation to give general discovery under O.9, rr. 1 and 2. All that is required under these rules is for one of the parties to file and serve a notice for discovery on the other. When that happens, there is an immediate obligation on the party served with the notice of discovery to give discovery. This leads to the second way, which is, once a party serves on the other a notice for discovery or where an order for discovery is made under r. 9, and the party served with the notice or order to give discovery fails to give discovery, judgment or orders can be made against the defaulting party under r 25. The final way is in the attitude of the courts with their almost a ready grant of orders against defaulting parties as demonstrated by many decisions of the Supreme and National Courts some of which we have already referred to above, particularly in cases where no reasonable excuse for a failure to give discovery. 

10. There has neither been and nor can there be any dispute that, the provisions of O.9 applies to proceedings commenced and or pursued by pleadings. This is obvious from the opening lines of the first rule in the Order. One could therefore argue that, the need for discovery does not apply to proceedings commenced and pursued by other modes of commencement of proceedings such as Originating Summons as in this case. However, reading the provisions of r. 5 makes it clear that, the Court can make orders for general discovery at any stage of the proceedings. The same language used in r. 5 is used in r. 7 where the Court is empowered to make orders for specific discovery where the existence of a document is disclosed either in the pleadings or affidavits or other documents filed in Court by a party. The ADR Listings Rules, r 7 (4) (k) lists the need for any discovery as one of the issues the Court must give consideration to when making orders and or giving directions for an orderly and expeditious handling and disposal of a matter. There is nothing restricting the application of these rules but it is clear that, they do in fact apply to all proceedings. Accordingly, I am of the view that, although the automatic discovery procedures under O.9 rr.1 and 2 may not apply to proceedings that do not require pleadings, the rest of the provisions relating to discovery do apply in all cases before the Court. 

11. In the current case, the Defendants have filed on 30th March 2009, Affidavits by three witnesses, namely, the Honourable Dr Puka Temu, Minister for Lands, Kila Ai, Manager of the Konebada Petroleum Park Authority and Stephen Victory a consultant on the Konebada Petroleum Park Development. These affidavits speak of a Konebada Petroleum Working Group established and operating under the Ministerial Gas Projects Steering Committee. The Minister for Petroleum and Energy chairs the Working Group which was established to develop policies and procedures to implement a key component of the National Government’s White Paper on Gas Commercialization Strategy for the development of a downstream processing of Papua New Guinea’s gas reserves. 

12. The initial work of the Working Group was concerned with the Government’s policy to require some downstream processing of petroleum as part of the PNG Queensland Gas Project, including the identification of suitable sites for a downstream processing site and the establishment of an auxiliary pipeline. A major study commissioned by the Government, Oil Search Ltd and InterOil Ltd in 2003 assessed four potential sites for a downstream processing industry and nominated land around Napa Napa and Port Moresby which includes Takoa’s land.

13. At paragraph 9 of his affidavit, Dr. Temu talks about the purpose for the resumption of Takoa’s land. He says he formed the view that the land should be utilized for its highest and best use, namely, for industrial development as part of the Konebada Petroleum Park consistent with the Government’s White Paper on Gas Commercialization Strategy, which includes the development of Papua New Guinea’s natural gas reserves and their downstream processing at the Konebada Petroleum Park. 

14. Dr. Temu goes on to say, the proposed PNG LNG Project by the ExxonMobil consortium provides one of the means by which the Government may work towards achieving its objectives under the Gas Commercialization Strategy. He further says, in that Project, the State will indirectly hold a 19.4% equity interest, which includes any equity acquired on behalf of landowners.

15. I accept Mr. Varitimo’s submission that, no documents, whether NEC decisions or otherwise, relating to any interest, if any, the State will acquire in the project, the nature of any such interest or whether such interest is conditional or not. However, from the affidavit of Mr. Brian Andrews filed for and on behalf of Takoa, there is a media release issued by Santos and ExxonMobil, which they formally provided to the Australian Stock Exchange. That document has the date, 22nd June 2009. It raises some uncertainty as to any State interest in the LNG Project. That document points out amongst others that, participating interests are ExxonMobil, through various affiliates, including Esso Highlands Limited as Operator, 41.5%, Oil Search 34.0%, Santos 17.7%, Nippon Oil 5.4%, Mineral Resources Development Company 1.2%, and Eda Oil Limited 0.2%. It indicates that, participation will change when PNG State nominees join as equity participants at a later date.

16. In an affidavit deposed to by a Moses Koiri filed 14 November 2008 by Blake Dawson Lawyers, on behalf of IPBC, in separate proceedings, OS No. 685 of 2008, he says with reference to an agreement that, the State waives any right to equity under the Oil and Gas Act or any relevant Petroleum Agreement or otherwise. 

17. Dr. Temu as Minister for Lands has not disclosed any documents or evidence forming the foundation for him deciding in favour of resuming Takoa’s land. Similarly, next to no documents have been disclosed regarding the Konebada Petroleum Park. In this vacuum, it is clear to me on the material thus far before me that, the decision to resume Takoa’s land was based on ExxonMobil and partners view that the land was suitable. They arrived at that view based on their own investigations into available and suitable land required for their purposes. Initially, and before Takoa’s land was compulsorily acquired, the ExxonMobil led consortium indicated to the Working Group that it would require all of the Land for the LNG Project and some adjacent land, particularly while design was in progress and during construction. Subsequently, the ExxonMobil led consortium informed the State that, the land which it requires for its project included Takoa’s land, namely Portion 2456. Other available land could be used for other downstream processing projects and other ancillary industrial development uses as originally contemplated for the Konebada Petroleum Park.

18. One would expect much more documentation in this kind of case. Amongst other documents, there would be documents evidencing the various communication to and from the Minister for Lands, Oil Search, Exxon Mobile and others, documents identifying a public purpose, all the relevant and necessary technical and other details relative to the public purpose, the amount of land required for that purpose, non availability of suitable State or other land for the required purpose and the necessity to compulsorily acquire private land with the total amount of land area required by the public purpose. The latter would include detailed technical information including surveys and other relevant investigations and their reports and recommendations. Apart from only a very few documents that have been disclosed, there is nothing much from the defendants when much is reasonably expected. 

19. I agree with learned counsel for Takoa that, since the LNG Project is a National Project, there should be much more documents than those that have been disclosed. Such documentations should cover much of what I have just mentioned above and should also include the relevant National Executive Council decisions, the relevant submissions and its supporting documentations which formed the basis for the NEC decisions, the decisions of the Minister for Lands giving effect to the NEC decision, the Lands Department’s investigations and the process followed and applied. Further, it is clear that a Ministerial Working Committee was established and an operations manager was appointed. It is thus obvious that both the Working Committee and the operations manager would have documents that would be relevant for example, identifying clearly a public purpose, identifying appropriate land for resumption, and the amount of land required by the proponents of the Konebada Petroleum Park. Despite that, nothing significant has been produced.

20. The issue of full and sufficient disclosure was the subject of an issue before the Court on 15th May 2009. Although the issue did not arise formally in terms of a formal motion by either of the parties, it was an issue before the Court in the context of directions hearing conducted pursuant to ADR Listings, under O. 10 as amended in 2005. I heard arguments from all of the parties on the issue and arrived at a decision, effectively requiring the defendants to give further discovery. 

21. The question then is whether applying for further discovery is an appropriate course to take for Takoa? Put another way, given the earlier decision, is Takoa precluded from making this application on the basis of res judicata or issue estoppel? That is the subject of the next issue. Accordingly, I turn to a consideration of that issue in that context now.

Res Judicata or Issue Estoppel

22. The principles governing res judicata and or issue estoppel are now well settled in our jurisdiction. In my decision in Telikom PNG Limited v. Independent Consumer and Competition Commission and Digicel (PNG) Limited (2007) N3144, I reviewed most of the authorities on point and noted that:

"… the rationale behind the principles of res judicata is to bring about finality in litigation and to avoid multiplicity of proceedings. This is a very important principle for the good of both the litigating public and the society which funds the court systems because, the principle saves a lot of time and costs for all involved. This is however, subject only to the right of an aggrieved party to appeal against any decision, where such a right is given, or judicial review. Given the importance of principles of res judicata, the principles extends to and applies to all decisions of a court as well as other tribunals however constituted, which are empowered and do come to a final decision on an issue or dispute between two or more disputing parties."

23. My decision went to the Supreme Court on appeal by Telikom (PNG) Limited. In its decision, referenced as Telikom (PNG) Limited v. ICCC & Digicel (PNG) Limited, the Supreme Court by the majority effectively endorsed those views and their application in that case. 

24. In this case, the issue of the need for full and sufficient disclosure of documents by the defendants came before me on the 15th of March 2009, albeit without a formal motion. All parties argued for their respective positions and I made a decision on it. Except only for anything new or fresh that has arisen since that decision, the decision cannot be revisited. The only way in which that can happen is by way of appeal to the Supreme Court. Hence, I do not consider it appropriate that, there should be applications for discovery upon discovery or further discovery upon further discovery. Adopting or allowing for such a process would defeat a proper management of cases which has the objective of arriving at a just outcome within a reasonable time frame with less delay and less costs to the parties.

25. I am firmly of the view that, all parties have an obligation to disclose or discover fully and completely all documents that are relevant and necessarily connected to a matter in dispute between the parties. As the relevant authorities on point (some of which we already cited above), make it clear, such disclosure or discovery serves a very important purpose. It enables the parties to carefully examine and asses their claims or defence as the case might be, and make an informed decision about their respective positions in the dispute. That would in turn enable the parties to either settle or failing that, help them to identify the real issues between them, which strictly speaking, require judicial hearing and determination. 

26. Given the important purpose that disclosures and discoveries serve, I venture to suggest to all litigants and their lawyers to readily disclose and give discovery. That they must do at the very beginning, rather than waiting to be served with a notice of discovery or court order on the application of the other party or parties. Indeed for lawyers, s. 8 (7) of the Professional Conduct Rules states in clear terms that:

"A lawyer shall, when in his client's best interests, seek his client's instructions to endeavour to reach a solution by settlement out of court rather than commence or continue legal proceedings." 

27. In other words, s. 8(7) of the Professional Conduct Rules imposes a legal and professional obligation on lawyers to endeavour to have their client’s cases settled out of Court. These, they must do either before or after the commencement of proceedings. This duty is the final statement on a whole lot of duties of diligence imposed by s.8 on lawyers. The preceding subsection, instructs lawyers not to engage in conduct that would unnecessarily increase their clients costs. The recent developments in the Alternative Dispute Resolution front in our jurisdiction further strengthens and encourages the need to find ways to promptly resolve conflicts at less delay and costs to the parties in the dispute.

28. A Court with a well developed system of case management, the Court takes control of both the events and the timing of the various steps that must be taken in proceedings brought before them. Under such a system, the Court has a good working relationship with the bar with the Court closely supervising the case progress and sets the standards and goals for all to subscribe to and work toward achieving. A Court operating under such a system establishes a system of monitoring case progress and information system so as to ensure that all are functioning well to deliver prompt and quality justice to persons going before the courts. All of these results in both predictability and credibility of trial dates with better control over adjournments. Under such a system of case flow management, the issue of discovery would have been one of the first issues for the Court to address and issue appropriate orders and or directions. 

29. Our listings rules mirror the kind of case flow management I have just described although we do not have all of the necessary features. As we have already noted, discovery is an important feature under our listings rules. What this means is that, the defendants have an obligation to provide to Takoa copies of all of the documents that are relevant and necessarily connect to the decision to compulsorily acquire its land. That they should have done without waiting for a Court order or even a request from Takoa. That is something they could have attended to fully and completely long before if indeed, the Minister for Lands followed all proper procedure and correctly arrived at his decision and there was nothing to hide or be worried about. They would then have invited Takoa to consider withdrawing the proceedings. This seems not to have happened resulting in the first application for discovery made before me and this current application.

29. The decision for resumption by the Minister for Lands is a decision of a Minister of State who has various statutory duties and responsibilities under the Lands Act. Given that, and the fact that he is an integral part of the government that is in charge of the present public affairs of the State which is a big corporate entity, there is a reasonable expectation that, all of the decisions he makes, would be properly recorded, documented and kept. If that was observed here, documents would be readily available under a number of categories. The categories without limiting the list, in my view, would be:

(a) The process adopted and applied to identify and determine the public purpose for the purpose of the resumption and the factors taken into account to arrive at that decision; 

(b) The process adopted and applied to determine the kind and amount of land required by the public purpose;

(c) The process adopted and the kinds of steps and factors taken into account to arrive at the decision that Takoa’s land was the only suitable land and that the whole of Takoa’s land was reasonably required by the public purpose; and

(d) The kinds of investigations or inquiries carried out to see if there was other available State or private land;

30. As we have earlier noted, what this means is that, if due and proper consideration was given, there would have been a whole lot of documentations constituting amongst others investigations and or inquiries and reports under each of the above categories. There would also have been a number of specific technical investigations for example, land surveys, possible environmental and social impact investigations, studies and reports, draft map of the area with indications of where the various infrastructures are proposed to be and how much space each of those infrastructures would take, submissions and recommendations to the Minister for Lands with the supporting documents or evidence for the resumption. There would also be documents constituting the submissions and their supporting documents or evidence put to the NEC to the extent that the LNG Project was made a National Project by the government. Such documentations would include indications of what infrastructures were proposed to be on the ground and where those would be to give effect to the project. 

31. The government and the developers of the LNG Project have made no secret that, the magnitude of the LNG Project is far greater than anything the country has thus far seen. Various Ministerial and other working groups have been set up and have considered various things relative to actualizing the project. One would therefore expect to see a large number of documentations in these proceedings, including detailed mappings and drawings. Surprisingly, however, as noted the defendant’s disclosures of the relevant documents have been very minimal, to the point that some pertinent questions come to surface. Some of these questions are:

(1) How does the LNG Project and the Petroleum Park and anything related to it are or is a public purpose and not a private commercial undertaking by the developers of the project in partnership with the State?

(2) What is the total land area required by this project and how much of that is required in the Port Moresby area and in particular at Konebada?

(3) What investigations if any, the defendants carried out to establish available land that might be required by the project?

(4) Is Takoa’s land the only suitable and available land and that all of that land is reasonably required by the purpose for which it has been acquired?

(5) Did the NEC make any decision concerning or otherwise relating to the resumption of Takoa’s land and if so, on what basis? 

(6) Was resumption of Takoa’s land the only best option for the State to take to make land available for the public purpose for which the resumption took place and not other process? 

(7) On what basis did the Minister for Lands decide to compulsorily acquire Takoa’s land?

(8) Was the decision by the Minister for Lands for the resumption of Takoa’s land endorsed by the NEC or was pursuant to a NEC directive and if so, on what basis did the NEC arrive at that decision?

32. The defendants say they have disclosed all of the relevant and necessary documents. Hence, they say they have nothing further to disclose or give in discovery. Given that position, there is no need to order further discovery as is argued for by Takoa as that will serve no utility. What is reasonably required in the circumstances is this. The parties should carefully consider the documents that have already been disclosed and decide if the documents clearly show that:

(1) Due and proper consideration was given to the propose purpose for the resumption before arriving at the decision to do so;

(2) The underlying motivation for the resumption was for the provision of public services or facilities and not for the promotion or advancement of a private commercial interest;

(3) The State does not have a commercial interest in the project and was therefore not in a position of conflict of interest at the relevant times;

(4) The decision maker had sufficient factual and legal basis to determine and did decide in favour of "public purpose" for the resumption and not for the promotion or advancement of a private commercial interest;

(5) Proper and detailed investigations and studies have been carried to determine the actual amount of land required by the purpose for which the resumption took place and a considered conclusion was arrived at;

(6)  Proper and sufficient investigations and inquiries were carried out to identify available land required for the public purpose specified in the instrument of resumption;

(7)  The kind of investigations and inquires referred to in item (6) above resulted in the land that was resumed from Takoa was the only most suitable and available one; and 

(8) The total amount of land resumed from Takoa is reasonably required for the public purpose specified in the instrument of resumption.

33. If the disclosed documents demonstrate in terms of the above, Takoa should seriously reconsider its claim with a view to withdrawing these proceedings and pursue its other remedies under the Lands Act. If however, the documents fail to or fall short of demonstrating in terms of the above, the defendants shall seriously reconsider their position with a view to consenting to the relief sought or enter into settlement discussions through the parties’ direct negotiations or with the facilitation of a mediator. The Court will be happy to assist the parties in finding a mediator if they wish.

34. Taking into account all of the above, I am firmly of the view that, there is no need for further discovery upon discovery. I am also of the view that, Takoa is not at any liberty to apply for any further discovery. In the circumstances, I make the following formal orders:

(1) The application for further discovery is declined;

(2) Parties shall carefully consider the import of the documents that have been discovered and determine if the documents demonstrate the following:

(i) Due and proper consideration was given to the proposed purpose for the resumption before arriving at the decision to do so;

(ii) The underlying motivation for the resumption was for the provision of public services or facilities and not for the promotion or advancement of a private commercial interest;

(iii) The State does not have a commercial interest in the project and was therefore not in a position of conflict of interest at the relevant times;

(iv) The decision maker had sufficient factual and legal basis to determine and did decide in favour of "public purpose" for the resumption and not for the promotion or advancement of a private commercial interest;

(v) Proper and detailed investigations and studies have been carried to determine the actual amount of land required by the purpose for which the resumption took place and a considered conclusion was arrived at;

(vi) Proper and sufficient investigations and inquiries were carried out to identify available land required for the public purpose specified in the instrument of resumption;

(vii)  The kind of investigations and inquires referred to in item (6) above resulted in the land that was resumed from Takoa was the only most suitable and available; and 

(vii) The total amount of land resumed from Takoa is reasonably required for the public purpose specified in the instrument of resumption.

(3) Upon a careful consideration of the discovered documents, the parties shall enter into out of court settlement negotiations between themselves or through the involvement of a neutral third party mediator and endeavour to have the matter settled out of Court by or before 30th September 2009. 

(4) Failing any settlement, the parties shall identify to the satisfaction of the Court what if any serious and meritorious factual or legal issue exists that warrants only a court hearing and determination upon the return of the matter.

(5) The matter shall return to the Court on 15th October 2009.

________________________

Blake Dawson Lawyers: Lawyers for the Defendant/Applicants
Young & Williams Lawyers: Lawyers for the Plaintiff/Respondent.