N4107

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS NO 97 OF 2009

SAMSON MANGAE, JOE GORI & MONDO GORI,
REPRESENTING SOMALANI SUB-CLAN OF KALMARUHI CLAN
Plaintiffs

V

JACKSON AKA, PETER DAU & MAKIS MARK BAE,
REPRESENTING KALMARUHI CLAN
First Defendants

KAWAVOVO CLAN
Second Defendant

Kimbe: Cannings J

2009: 23, 26 June, 5 August, 11 September,
2010: 9 April

JUDGMENT

LAND – customary ownership – forestry – dispute amongst sub-clans about receipt of timber royalties – 40-year timber rights purchase agreement entered into 34 years ago – interpretation of agreement – whether subsequent arrangements purporting to alter distribution of timber rights amongst sub-clans have amended the agreement – whether original agreement is still valid and enforceable.

A number of sub-clans had a dispute over receipt of timber royalties generated by land customarily owned by their clan. A 40-year timber rights purchase (TRP) agreement regarding the land was entered into with the State in 1975. The agreement identified the interests of the four sub-clans, including the plaintiffs' sub-clan, but did not expressly address the question of the extent of their interests. The plaintiffs claimed that the agreement impliedly provided that each sub-clan would have an equal share in timber royalties. The defendants disputed that interpretation and claimed that there had been a number of meetings in recent times at which it was agreed that their sub-clan would be entitled to more royalties than others due to the location of the timber operations and other factors including that their sub-clan's population was greater than the plaintiffs' sub-clan.

Held:

(1)	The 1975 TRP agreement was a valid and enforceable agreement made under the forestry law of the day and operates for 40 years.

(2)	The ordinary and natural interpretation of that agreement is that timber royalties and other benefits generated by the land are to be equally divided amongst the four sub-clans.

(3)	None of the meetings relied on by the defendant had been properly recorded and there was no other evidence of agreements amongst the four sub-clans to alter the terms of the 1975 TRP agreement.

(4)	The 1975 TRP agreement continues to operate until 2015 and unless there is genuine and properly evidenced agreement amongst the four sub-clans to alter its terms, endorsed by a court order, timber royalties and other benefits must be equally divided.

Cases cited

The following case is cited in the judgment:

Roderick Tovo Bibilo v Gerard Balbagara (2008) N3291

ORIGINATING SUMMONS

This was an originating summons in which the plaintiffs sought declarations about their sub-clan's entitlement to timber royalties.

Counsel

G Linge, for the plaintiff
T Gene, for the defendants

9 April, 2010

1. CANNINGS J: This case is about timber royalties. There is a dispute amongst the four sub-clans who comprise the Kalmaruhi clan, which is the owner of a tract of customary land of 44,000 hectares in the Kove area of West New Britain Province. The dispute is not about ownership of land but about distribution of royalties and other benefits generated by ownership of the land.

2. The four sub-clans of the Kalmaruhi clan are:

•	Guhi sub-clan;
•	Rangihi sub-clan;
•	Somalani sub-clan;
•	Woge-Woge sub-clan.

3. A 40-year timber rights purchase (TRP) agreement regarding the Kalmaruhi clan's land, which forms part of the 'Kapaluk Extension Locality', was entered into with the State in 1975. The agreement identified the interests of the four sub-clans but did not expressly address the question of the extent of their interests.

THE PLAINTIFFS' POSITION

4. The plaintiffs are members of the Somalani sub-clan. They say that in recent times their sub-clan has been missing out on its fair share of royalties due to the conduct of the first defendants, Peter Dau and Makis Mark Bae (of the Guhi sub-clan) and Jackson Aki (of the Rangihi sub-clan). The plaintiffs say that most of the royalties (which are calculated and distributed by the PNG Forest Authority) have been received by the Guhi and Rangihi sub-clans and that this is illegal as it is contrary to the 1975 TRP agreement. They say that the first defendants have created a clan as a vehicle for receiving royalties and called it Kawavovo clan, when there is no such clan in fact or law; and this is also illegal.

5. The plaintiffs say that royalties must be distributed in accordance with the 1975 TRP agreement, which means equally amongst the four sub-clans. They say that the 1975 TRP agreement is still valid and enforceable, it has not been amended and there has been no proper agreement amongst the four sub-clans to alter its terms. They want the Court to make an order to that effect and also to order that K133,627.40 in royalties that the first defendants have illegally received since 2003 plus amounts received in the name of the second defendant, Kawavovo clan, be paid to the plaintiffs.

THE FIRST DEFENDANTS' POSITION

6. The first defendants – representatives of the Guhi and Rangihi sub-clans – do not agree that the 1975 TRP agreement provides for equal distribution amongst the four sub-clans. They say that the agreement is silent on the subject of distribution and therefore the question of how much each sub-clan gets is left to the sub-clans to sort out amongst themselves. This has been done at numerous meetings of Kalmaruhi clan in recent years and the distributions that have been made are in accordance with agreements reached at those meetings.

7. They agree that the second defendant, Kawavovo clan, is not actually a clan but there is a good reason for this name of convenience being used for the purposes of distribution of royalties. This is an intra-clan dispute and the plaintiffs' grievances should be resolved in the village, not in the court, they argue.

ISSUES

8. Mr Gene, for the defendants, has raised the issue of whether it is appropriate for the court to be involved in this dispute. This is a jurisdictional issue and I will deal with it first. Other issues will be determined only if the jurisdictional issue is decided against the defendants.

9. The issues are:

1	Does the court have jurisdiction and should it exercise it?

2	Does the 1975 TRP agreement provide for equal distribution amongst the four sub-clans?

3	Has the 1975 TRP agreement been amended?

4	Is the 1975 TRP agreement still a valid and legally enforceable agreement?

5	What orders should the court make?

1	DOES THE COURT HAVE JURISDICTION AND SHOULD IT EXERCISE IT? 

10. Mr Gene submits that the 1975 TRP agreement does not say that royalties for the Kalmaruhi clan are to be distributed amongst the four sub-clans. He points out that the 1975 TRP agreement is a comprehensive document covering an area of 115,690 hectares, of which the land owned by the Kalmaruhi clan forms one part.

11. He submits – and this is a point on which the plaintiffs agree – that identification of the land covered by the 1975 TRP agreement – known as the Kapaluk Extension – is based on the findings of the Native Land Commission. In 1961-1962 Commissioner W J (Jack) Read conducted an inquiry and prepared a report on 'Native Land Rights in the Kombe Tribal Area of Talasea Sub-district, New Britain District'. He made findings about customary ownership of land under the Native Land Registration Ordinance 1952. He reported that the Kombe Tribal Area covers the 40-mile (64 km) coastal strip and offshore islands between Riebeck Bay on the east and Rein Bay on the west, an area of about 203,000 acres (81,200 hectares), belonging (in 1962) to 3,077 men, women and children. The Kombe Tribe is a patriarchy comprising five affiliated clans:

•	Kalmaruhi;
•	Monga Monga;
•	Poi;
•	Sapulo;
•	Talasea.

12. Each clan is comprised of sub-clans. Kalmaruhi (consisting of four sub-clans) was the largest clan in terms of land area owned (110,000 acres out of a total of 203,000 acres). Each clan and sub-clan holds in perpetuity a sub-division of the tribal land, traditionally defined and recognised as that which belonged to its earliest forebears, Commissioner Read found.

13. Mr Gene submitted that an examination of the Jack Read Report, as it has come to be known, makes it clear that the four Kalmaruhi sub-clans did not own the clan land in equal shares. Each sub-clan holds in perpetuity a subdivision, not only of the tribal land but also of the clan land; and these subdivisions, as defined in the Jack Read Report, are not of equal size. Furthermore the Jack Read Report does not say anything about how royalties or any benefits are to be divided, giving rise to the inference that it is up to the sub-clans themselves to resolve such issues.

14. The 1975 TRP agreement should be interpreted in a similar vein, Mr Gene contends. It was signed by representatives of the four sub-clans comprising Kalmaruhi clan, as well as by 15 other sub-clan representatives. But it is silent on the question of how royalties are to be calculated and distributed amongst the different sub-clans. The inference to be drawn from this, Mr Gene submits, is that the question of royalty distribution was always intended to be decided by the sub-clans themselves, and they would normally sort this out according to which sub-clan's land the logging or other royalty-generating activity was taking place.

15. I agree with Mr Gene that the identification of land ownership in the 1975 TRP agreement is based on the 1962 Jack Read Report. Mr Linge, for the plaintiffs also agrees. It is clear that the Jack Read Report is still, 47 years on, widely regarded as an authoritative document setting out the ownership of customary land in the Kombe Tribal Area.

16. I also agree with Mr Gene that the 1975 TRP agreement is silent on the question of how royalties are to be divided amongst the four sub-clans comprising the Kalmaruhi clan (as well as amongst the other 15 sub-clans who are signatories to it).

17. However, I do not agree that it follows that the National Court's jurisdiction has been excluded or that in some way the plaintiffs or any other clan members are prohibited from invoking the jurisdiction of the National Court to resolve their grievances. The plaintiffs are, being the descendants of persons who signed the 1975 TRP agreement, parties to the agreement. On the assumption that the 1975 TRP agreement is still valid and enforceable (a proposition that is tested later in this judgment) they have lawful entitlements – proprietary, legal interests – that are capable of being determined by the National Court. The Court could perhaps have ordered that the plaintiffs go to a mediator to resolve their dispute before prosecuting it in the National Court, but no such order has been made. I therefore reject the submission that the Court has no jurisdiction or that it should decline to determine the matter and send the parties back to the village to sort out their grievances. The Court has jurisdiction and should exercise it.

2	DOES THE 1975 TRP AGREEMENT PROVIDE FOR EQUAL DISTRIBUTION AMONGST THE FOUR SUB-CLANS?

18. For the Kalmaruhi clan, the agreement was signed by four sub-clan agents:

•	Guhi sub-clan – Albert Aka;

•	Rangihi – Ipa Tukumi;

•	Somalani – Mangaea Kuloi;

•	Woge-Woge – Loga Puaea.

19. They each received the sum of K1,781.25, being a total of K7,125.00 on account of the Kalmaruhi clan. The Second Schedule to the agreement sets out a formula for further period payments for the duration of the agreement. No indication is given that the four Kalmaruhi sub-clans would receive anything other than the same amounts of periodic payments each. I therefore accept the submission of Mr Linge, for the plaintiffs, that the 1975 TRP agreement by implication provides that all royalties will be paid in equal amounts to the four Kalmaruhi sub-clans and to no other sub-clans, groups or persons.

3	HAS THE 1975 TRP AGREEMENT BEEN AMENDED?

20. Mr Gene submits that if the 1975 TRP agreement is interpreted as providing for royalties to be paid in equal amounts to the four Kalmaruhi sub-clans, the agreement has been, in effect, amended by agreement amongst the four sub-clans; and this has happened for good reason, he submits. The area owned by each sub-clan is not the same, the population of each sub-clan is not the same and logging does not take place on each sub-clan's land at the same time. If logging takes place over a certain period on one sub clan's land it is only fair that that sub-clan gets the royalties generated by logging on their land. If no logging occurs on a sub-clan's land that sub-clan should not get any royalties. Mr Gene submits that these factors are reflected in agreements reached at a series of meetings in the period from 1988 to 2008 referred to in affidavits by one of the first defendants, Peter Dau, admitted into evidence as exhibits D and E in these proceedings.

21. I agree with Mr Gene that it would seem to make sense to allow for flexibility in the 1975 TRP agreement and to take account of the difference in land areas, movements in population and the exact places within the Kalmaruhi clan-owned land that logging takes place. The 1975 TRP agreement does not expressly provide for such meetings or agreements but neither does it prohibit them. So it is open to the four sub-clans to reach an enforceable agreement to amend what on its terms the 1975 TRP agreement provides for: equal distribution amongst the four sub-clans. The problem is, however, that none of the meetings and agreements referred to in Mr Dau's affidavits have been documented. The plaintiffs are saying that they were not invited to all these meetings and were not parties to the agreements that were made. They were shutout of the process of amendment by the third defendants and that is why they have come to court. I accept the evidence of the plaintiffs. They cannot be bound to agreements that were entered into at meetings that they were not invited to.

22. This case has a lot of similarities with another West New Britain case, Roderick Tovo Bibilo v Gerard Balbagara (2008) N3291. There was a dispute between clans over royalties payable under a 40-year timber rights purchase agreement signed in 1968 over land in the Nakanai area. The plaintiffs were claiming that their right to receive royalties was being denied them because the Forestry Authority was giving effect to a 1986 cancellation agreement that they or their ancestors had allegedly signed, saying that the they were not the true customary landowners. I ruled that the cancellation agreement was ineffective: it did not on its terms cancel anything (it was just a precursor to a process of cancellation) and that the circumstances in which the document was signed were uncertain and unsatisfactory. The point emerging from that case is that if a TRP agreement is to be cancelled or amended, it must be done carefully and properly.

23. A TRP agreement is a legal document and any cancellation or amendment must be accompanied by the same degree of formality as was involved in preparation and signing of the original document. In Bibilo there was at least a document in evidence that the court could interpret and witnesses were called and gave evidence about the circumstances in which the document was signed. But after all that, the court ruled that the document was ineffective. The evidence in the present case is of much less evidentiary value than the cancellation agreement in Bibilo. All the Court has is vague references to meetings and agreements over a 20-year period. This falls well short of showing that the 1975 TRP agreement has been amended. I conclude that it has not been amended.

4	IS THE 1975 TRP AGREEMENT STILL A VALID AND ENFORCEABLE AGREEMENT?

24. I have examined the document and conclude that it was valid and enforceable on and from its commencement, 21 May 1975, and continues to operate as a basis for payment of timber royalties generated by timber operations on land known as the Kapaluk Extension until 21 May 2015.

25. Though it was entered into under legislation long since repealed – the Forestry Act 1973 – it continues to have force and effect under Part X (savings and transitional) of the Forestry Act 1991. Section 137(1)(b) is the key provision. It states that timber rights purchase agreements granted under the repealed forestry laws "continue … to have full force and effect for the term for which they were granted or entered into or until they sooner expire or are revoked according to law".

5	WHAT ORDERS SHOULD THE COURT MAKE?

26. I will make orders that will ensure that the 1975 TRP agreement continues to have effect until its date of expiry. The only sub-clans entitled to receive royalties generated by logging on land owned by the Kalmaruhi clan are the four sub-clans recognised by the Jack Read Report and the 1975 TRP Agreement as comprising the Kalmaruhi clan. Those sub-clans must be paid in equal shares unless there is genuine and properly evidenced agreement amongst the four sub-clans to alter its terms.

27. In view of the lack of documentation of previous meetings and agreements, and the need for certainty, I will build into the order a requirement that any future agreement to amend the distribution of royalties must be endorsed by an order of the National Court or the Supreme Court. I make these orders under Section 155(4) of the Constitution, which says that the National Court has an inherent power to make in such circumstances as seems to it proper such orders as are necessary to do justice in the circumstances of a particular case.

28. The plaintiffs want me to order the first defendants to pay to them the amounts that the first defendants have illegally obtained since 2003. However, I consider that there is insufficient evidence on which to base such an order. Instead, I prefer to order that the correct method of calculation and distribution of royalties be applied with effect from the date of filing of the originating summons, 27 February 2009. If the plaintiffs want to pursue a claim in respect of the period before that, they will have to commence separate proceedings.

COSTS

29. Costs normally 'follow the event', ie the party that loses a case has to pay the costs of the winning party. But this is always a matter of discretion. In view of the nature of this dispute and the circumstances of the case, I will order that all parties bear their own costs.

ORDERS

(1)	The 1975 TRP agreement regarding the Kapaluk Extension Locality continues to have legal effect until the date of expiry, 21 May 2015.

(2)	All timber royalties and other benefits generated by logging and other activities referred to in the 1975 TRP agreement until that date, which relate to land owned by the Kalmaruhi clan, shall, until further order of this Court or the Supreme Court, be paid in equal shares to the four sub-clans party to that agreement and to no other clans, sub-clans or other persons or groups, namely:

(a)	Guhi sub-clan; and

(b)	Rangihi sub-clan; and

(c)	Somalani sub-clan; and

(d)	Woge-Woge sub-clan.

(3)	All persons responsible for calculation and payment of timber royalties, including the PNG Forestry Authority and officers of the National Forest Service, shall ensure that the method of calculation and distribution of royalties referred to in order No 2 above, is applied with effect from the date of filing of the originating summons, 27 February 2009.

(4)	Other relief claimed in the originating summons is refused.

(5)	The parties shall bear their own costs.

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

Judgment accordingly.
____________________________

Linge & Associates: Lawyers for the Plaintiffs
Paul Paraka Lawyers: Lawyers for the Defendants