N3890
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 77 OF 2009

BEN PASISI, CHAIRMAN, MOROA LAND GROUP INC
First Plaintiff

CHARLES SARERE, MANAGER, MOROA LAND GROUP INC
Second Plaintiff

V

VINCENT BURURU, FOR BAUMUMU CLAN
First Defendant

STANIS MAO, REPRESENTING LAGISE CLAN
Second Defendant

IDDIE RAVA, REPRESENTING KABILIMOSI CLAN
Third Defendant

MAX WAGI, REGISTRAR OF INCORPORATED LAND GROUPS
Fourth Defendant

ASHLEY BARNES, NEW BRITAIN PALM OIL LTD
Fifth Defendant

JOHN KANIOVISI, CO-ORDINATOR, OIL PALM INDUSTRY, WEST NEW BRITAIN PROVINCIAL GOVERNMENT
Sixth Defendant

Kimbe: Cannings J
2009: 24 June, 4 August,
2010: 29 January

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 – whether undue influence exercised by non-members of group.

Two meetings of the members of an incorporated land group were held, resulting in the chairman and other members of its controlling body – 'the committee' – being voted out of office and replaced by a new chairman and committee on the ground of financial mismanagement of the affairs of the group. The former chairman and former manager commenced proceedings by originating summons seeking declarations and orders that they had been unlawfully removed and that the new chairman and other members had been unlawfully appointed. Their claim for relief was based on various grounds including lack of evidence of mismanagement, failure to follow required procedures for calling of meetings, lack of quorum and undue influence by non-members of the group.

Held:

(1)	There was no requirement that there be proof of financial mismanagement prior to removal of the committee members.

(2)	The procedures for removal of the chairman and members of the committee were not prescribed in detail by the Land Groups Incorporation Act or any other law or by the group's constitution and therefore provided the members of the group had convened and there had been due notice of the meeting and the Registrar of Incorporated Land Groups supervised the meeting and it was conducted in a fair and orderly manner, the court should not intervene.

(3)	It was not proven that any third party was guilty of undue influence over the affairs of the group.

(4)	The plaintiffs failed to establish any good reason for overturning the outcome of the meetings of the land group. Accordingly all claims for relief were refused.

(5)	Declarations made affirming the status of the current chairman and members of the committee.

Cases cited

The following cases are cited in the judgment:

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 the former chairman and manager of an incorporated land group claimed that they had been unlawfully removed from office.

Counsel

G Linge, for the Plaintiffs
J K Abraham, for the 1st, 2nd & 3rd Defendants
J Elizah, for the 5th Defendant
J Kaniovisi, the 6th Defendant, in person

29th January, 2010 

1. CANNINGS J: This case is about a battle for control of an incorporated land group. Moroa Land Group Inc (Moroa) was established under the Land Groups Incorporation Act Chapter No 147 in 1998. It is the registered proprietor of a 915-hectare special agricultural and business lease in the Nakanai area of West New Britain Province. The group takes its name from the traditional name of the land, which is adjacent to the northern boundary of the Momota settlement blocks, 96 km by road from Kimbe. A land investigation report prepared in 1997 by land consultant Norm Oliver concluded that the land was owned by ten lineages of four clans:

•	Kabulubulu clan – Valulu, Sagali, Kaewa, Mama and Buo lineages
•	Kabilimosi clan – Kua and Buso lineages
•	Marea clan – Dome and Tauma lineages
•	Lagise clan – Vulea lineage. 

2. The landowning groups come from four villages:

•	Tarobi
•	Sisimi
•	Karapi
•	Vavua.

3. In 1999 Moroa entered into a sub-lease agreement with NBPOL to enable an oil palm mini-estate project to go ahead on the land. The agreement gives management of the project to NBPOL and in return Moroa receives land rent and monthly royalties based on the value of the fruit harvested. Moroa also acquired 20,200 NBPOL shares as part of the agreement. Ashley Barnes, NBPOL's Co-ordinator of Mini-Estates (the fifth defendant), estimates that in the 10-year life of the project to the beginning of 2009 Moroa received total project income (from rent, royalties and dividends) of K3 million.

4. Over the last few years complaints emerged from some members of Moroa that the plaintiffs, inaugural chairman Ben Pasisi and manager Charles Sarere, and other members of Moroa's controlling body – 'the committee' – were not doing a good job. A pressure group was formed consisting of various members including Vincent Bururu, Stanis Mao and Iddie Rava (the first, second and third defendants). They took their complaints and allegations of financial mismanagement and misappropriation to various authorities including Mr Barnes, the Registrar of Incorporated Land Groups Max Ragi (the fourth defendant) and the West New Britain Provincial Government's Oil Palm Industry Co-ordinator John Kaniovisi (the sixth defendant).

5. With the assistance of those authorities two meetings of the members of Moroa were held in 2008, on 30 April and 10 July, resulting in Mr Pasisi and Mr Sarere and other committee members being voted out of office. They were replaced by a new chairman, Pius Tokilta, and a new committee including Mr Bururu, Mr Mao and Ms Rava.

6. In February 2009 Mr Pasisi and Mr Sarere commenced these proceedings seeking declarations that they had been unlawfully removed and that the new chairman and other members had been unlawfully appointed. They also seek a declaration that a new constitution registered in 2008 is null and void and consequential orders including an order that NBPOL be restrained from doing business with the new committee. Their claim for relief is based on ten grounds.

GROUND 1: MR SARERE'S CUSTOMARY PRE-EMINENT POSITION IN THE AFFAIRS OF MOROA HAS NOT BEEN RECOGNISED

7. Mr Linge for the plaintiffs submits that Mr Sarere is a leader of Kabulubulu clan and that he was one of the two committee members who signed the sub-lease agreement with NBPOL in 1999. Mr Sarere and the other signatory, Victor Varero, have therefore put themselves above all others and have the legal responsibility of ensuring that there is compliance with the terms and conditions of the sub-lease.

8. I see no merit in this submission. Mr Sarere signed the sub-lease as he was at that time regarded as a 'director' and became the manager of Moroa. Signing the document gave him no right to be manager on a permanent basis. His duty to ensure compliance with the terms and conditions of the sub-lease only arose by virtue of being the manager, not as a result of signing the document. 

Ground 1 is rejected. 

GROUND 2: ALLEGATIONS OF MISMANAGEMENT HAVE NOT BEEN PROVEN

9. It was argued that the serious allegations of mismanagement which was the pretext on which Mr Pasisi and others were removed from office had to be proven by credible evidence that they actually misused and mismanaged Moroa's affairs.

10. This argument has no merit. Nowhere in Moroa's constitution or in the Land Groups Incorporation Act or any other law does it say that the chairman or members of a land group's controlling body can only be removed from office if allegations of mismanagement are proven. No grounds or procedures for removal from office are prescribed.

Ground 2 is rejected. 

GROUND 3: THE PROCEDURES IN MOROA'S CONSTITUTION WERE NOT FOLLOWED

11. Mr Linge relied on clause 8(2) of Moroa's 2002 constitution, which states:

Special meetings shall be held at any time and are to be called at the request of the Chairman through the Secretary and no other.

12. Both the 30 April and 10 July 2008 meetings were special meetings but neither was called by Mr Pasisi who was the chairman immediately before each meeting as he was not removed at the first meeting; only at the second meeting was an attempt made to remove him. As the procedures set out in lawful basis, Mr Linge submitted.

13. I reject this argument as there is insufficient evidence that the 2002 constitution (brought into evidence as an annexure to Mr Pasisi's affidavit) is a lawful document. The constitution of an incorporated land group is an important part of the certificate of recognition of a land group issued by the Registrar under Section 5 (manner of recognition) of the Land Groups Incorporation Act. Mr Pasisi deposes that in November 2002 two meetings of Moroa were held at which it was resolved to remove the Kabilimosi clan from the group and to amend the 1998 constitution and substitute it with a new one. I find that those resolutions had no legal effect as there was no application for or approval of variation in the constitution as required by Section 9 (variation) of the Land Groups Incorporation Act. The 1998 constitution remained in force until 29 September 2008 when Mark Tola, a delegate of the Registrar, approved a variation and issued a new certificate of recognition.

14. The 1998 constitution does not say that only the chairman can call special meetings and does not limit the circumstances in which or purposes for which a special meeting can be called. 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.

15. 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 Act, which simply says in Section 8(1)(c) that a constitution must set out "the title, composition, membership and manner of appointment of the committee …".

16. There is a 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. The manner of their removal should be the same as the manner of their appointment. That means that the chairman and other members of the committee may be removed from office 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 Moroa's 1998 constitution to remove the chairman or 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.

17. I have examined the large amount of affidavit evidence on the circumstances leading up to the calling of the two meetings in 2008. I am satisfied that Mr Pasisi and Mr Sarere and other committee members knew of the allegations against them (through correspondence to them from the Registrar, conveyed to them by Mr Barnes) and were given adequate notice of the meetings (through broadcast of tok saves on Radio West New Britain and through word-of-mouth communication). The minutes of each meeting are in evidence and I am satisfied that the procedures were fair and that the decisions made at each meeting – most importantly, the first meeting – were the result of a consensus of the members of Moroa present. The procedures required by the 1998 constitution were followed.

Ground 3 is rejected.

GROUND 4: SOME CLANS NOT REPRESENTED AT THE MEETINGS

18. As to the 30 April 2008 meeting, it is argued that the Kabulubulu clan was not represented at all. According to the Oliver Report, Kabulubulu clan consists of three lineages from Tarobi village (Valulu, Sagali and Kaewa) and two lineages from Sisimi village (Mama and Buo). Mr Linge submitted that it is the principal clan so the meeting of 30 April 2008 was unlawful and the decisions at the meeting cannot be said to be the result of a consensus of the members of Moroa. The related argument is that the Marea and Lagise clans were not properly represented at both the 30 April and 10 July meetings.

19. The factual basis of these arguments is generally correct. However, as a matter of law the effective answer is that all clans and lineages were given notice of the meetings and had a reasonable opportunity to attend. The inference to be drawn from the evidence is that Mr Sarere and his supporters made a deliberate decision not to attend the meetings. As for Mr Pasisi he attended the first but not the second. His decision to absent himself from the second meeting was his own. He claims to have been under undue pressure and to have been the victim of threats and intimidation at various times but there is insufficient evidence to support those allegations.

20. I have already concluded that the members of Moroa were given proper notice of the meetings. The fact that there was under-representation by some lineages or clans was a product of deliberate decisions made by members of Moroa. No illegality has been proven in this regard.

Ground 4 is rejected. 

GROUND 5: MEETINGS WERE DOMINATED BY MEMBERS OF A CLAN, KABILIMOSI, WHICH WAS NO LONGER A PART OF MOROA

21. There is evidence in the form of affidavits by Joachim Malaga, Victor Vireo and Joachim Lesley Gah that in November 2002 the committee resolved to "delete" the Kabilimosi clan from Moroa. Kabilimosi clan members dominated the 30 April 2008 meeting in that 22 of the 51 people present belonged to that clan. For that reason it is argued that the meeting was not validly constituted.

22. I reject this argument as the exclusion of the Kabilimosi clan was not ratified by a lawful variation of the constitution. As I ruled in ground 3, the 2002 constitution, on which the plaintiffs rely, is of no legal effect. Kabilimosi clan remained in 2008 an integral part of Moroa, in accordance with the Oliver Report and the 1998 constitution.

Ground 5 is rejected.

GROUND 6: INCONSISTENCIES BETWEEN WHAT WAS ALLEGEDLY RESOLVED AT THE 10 JULY 2008 MEETING AND THE 29 SEPTEMBER 2008 CERTIFICATE OF RECOGNITION

23. Mr Linge points out that in the certificate of recognition issued by the Registrar the village name – Vere – ascribed to the four members of the dispute settlement authority is wrong. Vere is a name of Victor Vareo's tribe, not the name of a village.

24. I agree that this appears to be an error but it is not a material error and does not invalidate the certificate of recognition.

Ground 6 is rejected.

GROUND 7: 10 JULY 2008 MEETING WAS ILLEGAL AS IT WAS NOT CALLED BY THE CHAIRMAN

25. This ground fails for the same reasons set out in ground 3. It is correct that Mr Pasisi was still the chairman before the 10 July meeting. But it was not necessary for the meeting to be called by the chairman as that was a requirement of the 2002 constitution, which is not a lawful document. It was not a requirement of the 1998 constitution (which until 29 September 2008 was the relevant document) for special meetings to be called only by the chairman.

Ground 7 is rejected.

GROUND 8: UNDUE INFLUENCE BY MAX WAGI

26. The Registrar of Incorporated Land Groups has significant powers under the Land Groups Incorporation Act over the affairs of groups particularly regarding the recognition of such groups, the contents of their constitutions, the calling of meetings (Section 27 (supervisory powers etc)) and requiring them to supply him with information (Section 28 (requirement of information)). Mr Wagi took an active interest in Moroa's affairs and came to West New Britain from Port Moresby to attend and assist in the management of the meeting of 30 April 2008. The evidence before the court does not persuade me that he performed his powers, functions, duties and responsibilities in other than a proper, responsible and lawful manner.

Ground 8 is rejected.

GROUND 9: UNDUE INFLUENCE BY ASHLEY BARNES

27. Mr Barnes has prepared a detailed affidavit covering the history of Moroa and the many complaints, allegations and grievances he has fielded since 2002. He explained that it is in NBPOL's and the community's interests to have ILGs such as Moroa operating smoothly and professionally. I am satisfied that the steps he has taken to have those grievances resolved, which have resulted in a change in management of Moroa, have been taken in good faith and for proper motives. I reject the suggestion that he has been one-sided or exercised any improper influence.

Ground 9 is rejected. 

GROUND 10: UNDUE INFLUENCE BY JOHN KANIOVISI 

28. Mr Kaniovisi has been in a similar position to Mr Barnes. Moroa members have been coming to him and complaining over a long period about alleged mismanagement of Moroa funds. The steps he has taken have been motivated by a desire to see Moroa operating properly and to bring more accountability and transparency into its financial affairs for the benefit of all Moroa members.

Ground 10 is rejected.

CONCLUSION

29. No good reasons have been advanced for setting aside the changes in management of Moroa and the variation to its constitution that took place in 2008. All members of the group should now move on and work with the new chairman and committee members for the betterment of all. A dispute settlement authority is in place and should be used when required. If changes in the position of chairman or other members of the committee are necessary the procedure and guidelines set out in this judgment should be followed.

ORDER

(1)	All relief sought in the originating summons is refused.

(2)	It is declared that the chairman and members of the committee of Moroa Land Group Inc are those persons described in the Constitution of Moroa Land Group Inc registered on 29 September 2008.

(3)	The parties shall bear their own costs.

(4)	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
Jaminan Lawyers: Lawyers for the 1st, 2nd & 3rd Defendants
Lawyer for the 4th defendant: Nil
John Elizah: Lawyer for the 5th Defendant
Lawyer for the 6th defendant: Nil