N4104

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS NO 230 OF 2009

KEVIN VITOLO, GABRIEL PAGO & ULUK LUKE
FOR AND ON BEHALF OF THE ORIGINAL
HONDE-LAULIMI INCORPORATED LAND GROUP
Plaintiff

V

PHILIP MAUTU, PETER NULI & ALOIS DALA
FOR AND ON BEHALF OF THE NEWLY FORMED
HONDE-LAULIMI INCORPORATED LAND GROUP
Defendant

Kimbe: Cannings J
2009: 9, 23 October,
2010: 9 April

JUDGMENT

INCORPORATED LAND GROUPS – manner of removal of members of controlling body – manner of appointment of new members of controlling body – conduct of meetings – supervisory powers of Registrar of Incorporated Land Groups.

A meeting of the members of an incorporated land group was held, resulting in formation of an interim dispute settlement authority, which then held a separate meeting and resolved to remove from office some members of the group's controlling body – 'the committee' – and substitute them with new members. The former members of the controlling body (the plaintiffs) commenced proceedings by originating summons seeking declarations and orders that they had been unlawfully removed and that the newly constituted controlling body was unlawfully appointed.

Held:

(1)	The procedures for removal of members of the controlling body are not prescribed in detail by the Land Groups Incorporation Act or any other law or by the group's constitution but by implication the manner of removal is the same as the manner of appointment: by consensus of the members of the group.

(2)	Furthermore the rules of natural justice and procedural fairness apply. Committee members must be given notice of an intention to remove them and an opportunity to be heard on allegations against them.

(3)	The procedures were not followed in this case: the plaintiffs were denied natural justice and there was insufficient evidence of a consensus to remove them.

(4)	It followed that the plaintiffs were unlawfully removed from office and the new members of the controlling body were unlawfully appointed.

(5)	However, as there was evidence of serious and genuine allegations of financial mismanagement, it would not be appropriate to restore the plaintiffs to their former positions. Instead orders were made that there be a general meeting called and a fresh election of members of the controlling body supervised by the Registrar of Incorporated Land Groups, subject to endorsement by an order of the National Court.

Cases cited

The following cases are cited in the judgment:

Ben Pasisi v Vincent Bururu OS No 77 of 2009, 29.01.10
Commodore Peter Ilau v Rt Hon Sir Michael Somare OS No 889 of 2006, 12.01.07
David S Nelson v Patrick Pruaitch (2003) N2440
Eichorn v Ninikin, Yanz and the East Sepik Provincial Assembly [1988-89] PNGLR 222
Gegeyo v Minister for Lands and Physical Planning [1987] PNGLR 336
Phillip Aeava v The State (2001) N2136

ORIGINATING SUMMONS

These were proceedings in which former members of the controlling body of an incorporated land group claimed that they had been unlawfully removed from office and replaced by unlawfully appointed new members.

Counsel

G Linge, for the plaintiffs
J Gah, for the defendants

9 April, 2010

1. CANNINGS J: This case is about a battle for control of an incorporated land group. Honde-Laulimi Land Group Inc is established under the Land Groups Incorporation Act Chapter No 147. It holds a State Lease over Daleavu Plantation in the Kulu Dagi area, close to Kimbe. The bulk of its members come from Morokea village, while a much smaller number are from Ruango village.

2. Honde-Laulimi has a sub-lease agreement with New Britain Palm Oil Limited (NBPOL) under which NBPOL pays annual land rent and monthly royalties based on the value of the fruit harvested from Daleavu Plantation. Honde-Laulimi thus receives regular monthly income, which can total more than K1 million each year, which it is required to distribute to its members on a regular basis.

3. In recent times complaints of financial mismanagement have been levelled against the controlling body, especially the plaintiffs, Treasurer Kevin Vitolo, Secretary Gabriel Pago and committee member Uluk Luke. A pressure group was formed in 2008 consisting of various members including Peter Nuli and Alois Dala (two of the three defendants). On 25 November 2008 a meeting of Honde-Laulimi was held at Morokea village. Hundreds of members turned up and it was decided that an 'interim dispute settlement authority' should be formed.

4. The interim dispute settlement authority consisted of seven people: three members of the pressure group plus the chairman, Philip Mautu, and two members aligned with him plus the local ward member, Joe Reu. It held a closed-door meeting on 16 December 2008 at which it was decided, apparently, that the plaintiffs would be removed from office. It is unclear how that decision was made or even whether in fact it had already been made at the 25 November 2008 meeting or when exactly the decision was implemented. No documentation of the 16 December 2008 meeting or its decisions are in evidence. However, soon after 16 December 2008 the plaintiffs were regarded as being voted out of office and they ceased to be recognised as members of the committee.

5. A before-and-after picture of the composition of the committee is given in the table below.

COMPOSITION OF CONTROLLING BODY ('THE COMMITTEE')
BEFORE AND AFTER THE CHANGES IN OR ABOUT DECEMBER 2008

Office	Before: as per 2006 constitution	After: meetings of 25 Nov and 16 Dec 2008	
Chairman	Philip Mautu	Philip Mautu	
Deputy Chairman	Peter Nuli	Augustine Bula	
Secretary	Uluk Luke	Peter Nuli	
Treasurer	Kevin Vitolo	Alois Dala	
Member	Gabriel Pago	Paul Luvi	
Member	Michael Chare	Linus Luvi	

6. In May 2009 the plaintiffs commenced these proceedings seeking declarations that they had been unlawfully removed and that the new committee members had been unlawfully appointed and an order that they be recognised as still holding their positions. In the alternative they seek an order for a fresh election of all committee members.

7. No objection has been taken to the Court exercising jurisdiction over this dispute. There is thus tacit agreement by all parties for the purposes of Section 23(1)(a) (jurisdiction of courts) of the Land Groups Incorporation Act that the dispute should be referred to the National Court.

8. Three issues arise for consideration:

1	Were the plaintiffs lawfully removed from office?

2	Was the newly constituted committee lawfully appointed?

3	What declarations or orders should the Court make?

1 WERE THE PLAINTIFFS LAWFULLY REMOVED FROM OFFICE?

9. This has not been a straightforward issue to determine as there are two versions of Honde-Laulimi's constitution in evidence. They are both annexed to an affidavit by Mr Vitolo (exhibit P1). The first one consists of 13 clauses and contains more detailed requirements as to the calling of meetings than the second, which consists of only six clauses. However, it is the second one that must be regarded as the proper, legally correct version as it is part of a certificate of recognition issued by the Registrar of Incorporated Land Groups under Section 5(1) of the Land Groups Incorporation Act Chapter No 147. It bears the Registrar's seal and is dated 27 September 2006.

10. It prescribes no procedures for removal from office of the chairman or other members of the committee. The only part of the constitution that touches on that subject is clause 3(3)(controlling body), which states:

Members of the Committee shall be appointed as necessary by consensus of the members of the Land Group.

11. As I pointed out in a recent case, Ben Pasisi v Vincent Bururu OS No 77 of 2009, 29.01.10 (called the Moroa case as it concerned the affairs of Moroa Land Group Inc, based in the Nakanai area of West New Britain) the question of removal from office of the chairman or members of a land group's controlling body is not addressed in detail by the Land Groups Incorporation Act. It simply says in Section 8(1)(c) that a constitution must set out "the title, composition, membership and manner of appointment of the committee …"

12. In these circumstances it is appropriate to draw on the general principle of administrative law in PNG that says that if the manner of removal of someone holding public office is not prescribed by law, it is taken to be the same as the manner of their appointment (see, eg, Eichorn v Ninikin, Yanz and the East Sepik Provincial Assembly [1988-89] PNGLR 222; Phillip Aeava v The State (2001) N2136; David S Nelson v Patrick Pruaitch (2003) N2440 and Commodore Peter Ilau v Rt Hon Sir Michael Somare OS No 889 of 2006, 12.01.07). I think it is fair and sensible to apply the same sort of principle to those who hold positions that are not public offices, particularly if they hold office in some sort of representative capacity, eg as members of the controlling body of an incorporated land group. In taking this approach – which was the same in the Moroa case – I am paying close regard to Section 60 (development of principles) of Papua New Guinea's Constitution, which requires that in development of rules of the underlying law particular attention shall be given to the development of a system of principles of natural justice and of administrative law specifically designed for Papua New Guinea, taking special account of the National Goals and Directive Principles and of the Basic Social Obligations, and also of typically Papua New Guinean procedures and forms of organization.

13. Therefore the manner of removal of members of the controlling body of Honde-Laulimi Land Group Inc should be the same as the manner of their appointment: by consensus of the members of the group. As to what 'consensus' is, that word should carry its ordinary meaning: a general agreement or concord, a majority of opinion (Macquarie Dictionary © 2001). Another requirement that should be borrowed from administrative law is that the rules of natural justice and procedural fairness should apply. Committee members should be given notice of any intention to remove them and an opportunity to be heard on any allegations against them (Gegeyo v Minister for Lands and Physical Planning [1987] PNGLR 336). To sum up, the procedures that had to be followed under Honde-Laulimi's 2006 constitution to remove any member of the committee from office were:

•	they had to be given notice of the proposal to remove them;
•	they had to be given a reasonable opportunity to be heard on allegations against them;
•	the decision had to be made by consensus.

14. I find that none of these requirements have been met. There is no evidence that the plaintiffs were given notice of the proposal to remove them from office. I distinguish the facts of this case from those in the Moroa case where it was clear that the committee members knew of the allegations against them (through correspondence to them from the Registrar of Incorporated Land Groups) and were given adequate notice of meetings (through broadcast of tok saves on Radio West New Britain and through word-of-mouth communication). Here, Mr Vitolo has testified that he attended the 25 November 2008 meeting but was unclear before the meeting what it was about. No allegations against him or his fellow committee members were put in writing. I accept that evidence.

15. The minutes of the 25 November 2008 meeting are in evidence but I am not satisfied that the procedures were fair and that the decision to remove the plaintiffs from office was the result of a consensus of the members of Honde-Laulimi. In fact, it is unclear, as I pointed out earlier, when and by what means the plaintiffs actually were removed from office. The 25 November 2008 meeting seems to have been focussed on the formation of the interim dispute settlement authority, which met on 16 December 2008 and apparently then resolved to remove the plaintiffs from office. Whatever the case, the plaintiffs were denied natural justice and there was insufficient evidence of a consensus to remove them.

16. Further, there is no provision in the 2006 constitution of an interim dispute settlement authority. It was formed without legal authority. It follows that the plaintiffs were not lawfully removed from office.

2 WAS THE NEWLY CONSTITUTED COMMITTEE LAWFULLY APPOINTED?

17. The newly constituted committee was appointed by a decision of the interim dispute settlement authority, which I have found had no lawful authority. It follows that the newly constituted committee was unlawfully appointed.

3 WHAT ORDERS SHOULD THE COURT MAKE?

18. I will make declarations that the plaintiffs were removed from office and the newly constituted controlling body was appointed contrary to the constitution of Honde-Laulimi Land Group Inc.

19. As to what orders should flow from those declarations, one option would be to order that the plaintiffs be reinstated. However there is sufficient evidence of serious, genuine and unresolved allegations of financial mismanagement to convince me that that would not be a good idea. A meeting of Honde-Laulimi should be called and there should be a spill of all positions on the controlling body and the dispute settlement authority. All members of Honde-Laulimi should be involved in electing and thereby appointing by consensus the members of the controlling body and the dispute settlement authority. An independent person should supervise this process and I believe the best person for that job is the Registrar of Incorporated Land Groups. I will allow three months for this to happen. In the meantime I think that rather than having more chopping and changing of the controlling body the best thing is to preserve the status quo. I will order that the members of the reconstituted controlling body continue to control the affairs of Honde-Laulimi Land Group Inc until further order of the National Court. I will also order that the results of the meeting be conveyed by the Registrar of Incorporated Land Groups to the National Court, which will then ratify the results.

20. As to costs, neither side has had a clear victory and in view of the nature of the dispute it is appropriate that the parties bear their own costs.

ORDER

(1)	It is declared that the plaintiffs, Kevin Vitolo, Gabriel Pago and Uluk Luke, were in or about December 2008 unlawfully removed from office as members of the controlling body of Honde-Laulimi Land Group Inc, contrary to the constitution of Honde-Laulimi Land Group Inc.

(2)	It is declared that the controlling body of Honde-Laulimi Land Group Inc, reconstituted in or about December 2008, was unlawfully appointed contrary to the constitution of Honde-Laulimi Land Group Inc.

(3)	The controlling body of Honde-Laulimi Land Group Inc reconstituted in or about December 2008 shall continue to control the affairs of Honde-Laulimi Land Group Inc until further order of the National Court.

(4)	The Registrar of Incorporated Land Groups shall within three months after the date of entry of this order call a meeting of all members of Honde-Laulimi Land Group Inc for the purpose of arranging the appointment by consensus of a newly constituted controlling body and a newly constituted dispute settlement authority and for the avoidance of doubt all parties to these proceedings are eligible for appointment.

(5)	The Registrar of Incorporated Land Groups shall ensure that proper notice is given to all members of the meeting and shall supervise the meeting and within seven days after the meeting shall file in the National Court at Kimbe an affidavit deposing to the results of the meeting and recommend to the Court the persons who should be regarded as being appointed to the controlling body and to the dispute settlement authority.

(6)	All reasonable costs incurred by the Registrar of Incorporated Land Groups in complying with these orders shall be paid to the Registrar of Incorporated Land Groups out of funds of Honde-Laulimi Land Group Inc.

(7)	The Assistant Registrar of the National Court, Kimbe, shall upon the filing of the affidavit referred to in order (5) set the matter down for mention in the National Court at Kimbe within seven sitting days; and the recommendation of the Registrar of Incorporated Land Groups shall be subject to endorsement by order of the National Court.

(8)	The parties will bear their own costs of these proceedings.

(9)	Time for entry of the order is abridged to the date of settlement by the Registrar which shall take place forthwith.

Orders accordingly.
____________________________

Linge & Associates: Lawyers for the Plaintiffs 
Motuwe Lawyers: Lawyers for the Defendants