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Waghi Mek Plantations Ltd v Mundiye [2011] PGNC 111; N4383 (19 September 2011)

N4383

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 30 OF 2009

BETWEEN

WAGHI MEK PLANTATIONS LIMITED
Plaintiff

AND

ROBERT MUNDIYE, trading as JIMI VALLEY TRADERS LIMITED
First Defendant

AND

BEN KOMBAMGIL trading as GUNGE TRADING LIMITED
Second Defendant

AND

MICHAEL MONDO
Third Defendant

AND

LES KEWA
Fourth Defendant

AND

MOL GELE, trading as DONGUL TIMBERS LIMITED
Fifth Defendant

AND

PETER TURI
Sixth Defendant

AND

CR. ROBERT MUN
Seventh Defendant

AND

HENRY LAPUA
Eighth Defendant

AND
SAM YUANTS, trading as JIWAKA BUILDERS LIMITED
Ninth Defendant

AND

PAUL POU, trading as CHERRY BOI
Tenth Defendant

AND

HAN JOE
Eleventh Defendant

AND

KAWI KUPA, trading as BALA BUILDERS & CONTRACTORS
Twelfth Defendant

AND

ELIZAH AKANAI, trading as TROPICAL HIGHLANDS TIMBERS LIMITED
Thirteenth Defendant

Mount Hagen: Makail, J
2009: 17th September & 2011: 19th September

PRACTICE & PROCEDURE - Dismissal of proceeding - Application of - Grounds of - Failure to disclose a reasonable cause of action - Abuse of process - Appropriateness of proceeding and cause of action - Proceeding commenced by originating summons - Declaratory and permanent injunctive orders sought - Assertion of exclusive right of access and use of plantations - No dispute as to title - No real controversy between parties - Protection of trees from logging activities - Declaratory orders inappropriate - Action for trespass appropriate - Damages appropriate remedy - Proceeding dismissed - National Court Rules - Order 4, rule 2, Order 8, rules 3 & 4 & Order 12, rule 40(1)(a)&(c).

Facts

The plaintiff commenced proceeding by originating summons seeking declaratory orders to first, assert its right to exclusive access and use of fourteen coffee plantations located in the Waghi valley of the Western Highlands Province, secondly, declare the defendants' logging activities on the plantations illegal and thirdly, permanent injunction to restrain the defendants from conducting further logging activities on the plantations. It did not seek a declaratory order to assert its right of ownership as it was not disputed that it owned the plantations and did not authorize or permit the defendants to conduct logging activities on the plantations. It alleged, as a result of the defendants' logging activities on the plantations, it had suffered physical and monetary loss.

Pending the determination of the substantive proceeding, it applied by notice of motion and obtained ex-parte interim injunction restraining the defendants from conducting further logging activities, eviction of the defendants and confiscation of plant and equipment used by the defendants in the logging activities. The defendants brought several applications, one of them was to set aside the ex-parte interim injunction or alternatively to dismiss the proceeding for failing to disclose a reasonable cause of action, frivolous and vexatious and an abuse of process pursuant to Order 12, rule 40(1)(a), (b), (c) of the National Court Rules.

Held:

1. A declaration or declaratory order is a discretionary relief and is granted by the Court in cases where there is a real and not a hypothetical question between the parties.

2. As there was no dispute as to the plaintiff's ownership of the plantations and it did not authorize or permit the defendants to conduct logging activities on the plantations, it was a foregone conclusion the plaintiff had exclusive right of access and use of the plantations and the defendants' logging activities were illegal. Therefore, there was no real controversy as to the occupation and use of the plantations between the parties.

3. The plaintiff's primary concern was to protect its proprietary right to the trees on the plantations in terms of preventing physical and monetary loss from the cutting and falling of trees and milling and sale of logs for personal and commercial use. Given that concern, an action for trespass was an appropriate cause of action for the plaintiff to commence against the defendants where damages would be an appropriate and adequate remedy and an injunction may be avail of by the plaintiff if the alleged wrongful acts persisted.

4. As there was no real controversy in relation the plaintiff's title to the plantations and the plaintiff's exclusive right of access and use of the plantations, the proceeding failed to disclose a reasonable cause of action and was dismissed pursuant to Order 12, rule 40(1)(a) of the National Court Rules.

5. In commencing the proceeding by originating summons and seeking declaratory orders to declare the plaintiff's exclusive right of access and use of the plantations and the defendants' logging activities as illegal, the plaintiff has disguised the proceeding as one for trespass. This is improper and an abuse of process of the Court and the proceeding was dismissed pursuant to Order 12, rule 40(1)(c) of the National Court Rules.

Cases cited:

Papua New Guinea cases:

Sioti Baut & Lavoi Nodai -v- Poliamba Pty Ltd [1990] PNGLR 278; (1990) N904

Overseas cases:
Pyx Granite Co -v- Ministry of Housing and Local Government [1958] 1 QB 554
Russian Commercial & Industrial Bank -v- British Bank for Foreign Trade Ltd [1921] 1 AC 438

Other References & Texts:
FH Lawson, Remedies of English Law, (2nd ed, 1980) Butterworths
DS De Smith, Judicial Review of Administrative Action (2nd ed)
John G Fleming, The Law of Torts, (9th ed, 1998), Law Book Co

Counsel:
Ms P Tamutai, for Plaintiff
Mr E Wamp, for 1st Defendant
Mr P Kopunye, for 2nd & 3rd Defendants
Mr G Anis, for 4th & 5th Defendants
Mr T Dalid, for 6th, 7th, 8th, 11th & 12th Defendants
Mr B Aipe, for 9th & 10th Defendants
Mr J Tonge, for 13th Defendant

RULING

19th September, 2011

1. MAKAIL, J: The plaintiff is the registered proprietor of fourteen agricultural leases located in the Waghi valley area of the Western Highlands Province. On these agricultural leases are coffee plantations with wet and dry coffee factories. Except for one, they were mortgaged to Bank South Pacific Limited (BSP Bank). Some years back, due to an uprising by the locals from the area to take over the management of the plaintiff and the plantations, the plaintiff had difficulties in repaying its loan to BSP Bank and fell into arrears. A company called Eastern Pacific Mines Limited came along and undertook to settle the plaintiff's debts. Eastern Pacific Mines Limited entered into a deed of assignment of debt with BSP Bank and paid the plaintiff's debts. In return, Eastern Pacific Mines Limited took over the management of the plantations. As part of the agreement, the plaintiff sub-leased its plantations to various local people in the area to manage so that it could make some money and repay its loan to Eastern Pacific Mines Limited.

2. Over the years, the defendants have entered and cut down trees on the plantations for personal and commercial use. Despite numerous efforts by the plaintiff and the police to stop the defendants' activities, they did not. It then commenced this proceeding by originating summons seeking orders to first, declare that is has exclusive right of access and use of the plantations, secondly, declare the cutting and falling of trees and removing of logs from the plantations as illegal and thirdly, permanently restrain the defendants from conducting any further logging activities on the plantations. It also sought an order for the police to assist evict the defendants from the plantations, to enable forest officers from the National Forest Authority to enter and assess the loss of timber, and further additional orders for the demolition of buildings and houses put up by the defendants and also for confiscation of logs, sawn timbers, vehicles, chainsaws, portable sawmills and other plant and equipment used by the defendants in the logging, milling, and transporting of timber.

3. It further sought and obtained an ex-parte interim injunction restraining the defendants from conducting further logging activities, eviction of the defendants and confiscation of plant and equipment used by the defendants in the logging activities pending the determination of the substantive proceeding. The defendants now apply to set aside the ex-parte interim injunction or alternatively, dismiss the entire proceeding for failure to disclose a reasonable cause of action, frivolous and vexatious and abuse of process of the Court pursuant to Order 12, rule 40(1)(a), (b) & (c) of the National Court Rules. Four of the defendants, namely the second, third, ninth and tenth defendants also applied to be removed as defendants in the proceeding pursuant to Order 5, rule 9 of the National Court Rules.

4. From the number of affidavits that have been filed by the plaintiff and also the responding affidavits of the defendants, there is no dispute between the parties as to the plaintiff's title to the plantations. That is to say, the defendants conceded the plaintiff is the registered proprietor of the plantations pursuant to fourteen agricultural leases. This is further confirmed by the fact that the plaintiff did not seek any declaratory order to assert its right of ownership of the plantations. In other words, the defendants were well aware of the plaintiff's ownership of the plantations and its exclusive right of access and use of them.

5. The only dispute is in relation to the defendants' logging activities on the plantations. The plaintiff alleged that it did not authorize or give permission to them to enter the plantations, cut trees, mill them and use them for personal or commercial purposes. The defendants conceded they did not get authority or permission from the plaintiff to enter and carry out their activities but alleged they did obtained authority or permission from the sub-lessees of the plaintiff.

6. As there is no dispute in relation to the title of the plaintiff, and that, the plaintiff did not authorize or give permission to the defendants to enter and conduct logging activities, I am of the view the plaintiff's application to declare first, its exclusive right of access and use of the plantations and secondly, the defendants' activities illegal is self serving. The fact of the matter is, the defendants are illegally carrying out logging activities because first, they know they do not own the plantations, hence had no right to be there in the first place. Secondly, they did not get authority or permission from the plaintiff to conduct logging activities there, and getting authority or permission from the sub-lessees is another matter which I will discuss in a moment.

7. As these facts are undisputed, I am of the view that it is a foregone conclusion that the plaintiff has exclusive right of access and use of the plantations and that the defendants' logging activities are illegal. Consequently, there is no need for the Court to make a finding in relation to whether or not the plaintiff has exclusive right of access and use of the plantations and the defendants' logging activities are illegal.

8. I have reached this conclusion because at common law, a declaration or declaratory order is granted by the Court in cases where there is a real and not a hypothetical question between the parties. It is granted at the discretion of the Court. Just to emphasise the point, I refer to the text by, FH Lawson, Remedies of English Law, (2nd ed, 1980) Butterworths, at 234 where the learned author referred to the English cases of Pyx Granite Co -v- Ministry of Housing and Local Government [1958] 1 QB 554 at 571 and Russian Commercial & Industrial Bank -v- British Bank for Foreign Trade Ltd [1921] 1 AC 438 at 448 and said:

"Actions for declarations have now become a regular of litigation: and Lord Denning was probably only anticipating a little when he said in 1958 that:

'if a substantial question exists which one person has a real interest to raise, and the other to oppose, then the court has a discretion to resolve it by a declaration, which it will exercise if there is good reason for doing so'.

Nevertheless the courts still refuse to answer academic questions or decide upon theoretical issues. They would be guided by Lord Dunedin's pronouncement that:

'The question must be real and not a theoretical question; the person raising it must have a real interest to raise it: he must be able to secure a proper contradictor, that is to say someone presently existing who has a true interest to oppose the declaration sought."

9. S.A. De Smith had this to say on declaratory orders;

"The power of a Court to render a purely declaratory judgment is particularly valuable in cases where a legal dispute exists but no wrongful act entitling either party to seek coercive relief has been committed. By making an order declaratory of the rights of the parties the Court is able to settle the issue at a stage before the status quo has been disturbed......." (re "Judicial Review of Administrative Action" 2nd ed at 493 - 494). (Emphasis added).

10. And so the question is, is there a real and not a hypothetical question between the parties? Or what is the legal dispute that the Court has to determine? To my mind, the fact that it is not disputed that the plaintiff is the owner of the plantations and that, the defendants did not obtain authority or permission to conduct logging activities make them hypothetical questions for the Court to decide. As I said above, it is a foregone conclusion that the plaintiff has exclusive right of access and use of the plantations and the defendants' logging activities on the plantations are illegal and it would be a purely academic exercise for the Court to again, determine the question of the defendants' entry and use of the plantations.

11. My view has been fortified by the decision in Sioti Baut & Lavoi Nodai -v- Poliamba Pty Ltd [1990] PNGLR 278; (1990) N904 where my erstwhile brother Sheehan, J found that the plaintiffs did not seek any declaratory orders to protect their right of ownership when they filed proceeding by originating summons and sought declaratory orders and permanent injunction to restrain the defendant from entering and dealing with a parcel of land in Kenamana village in West New Britain Province. They also sought and obtained an ex-parte interim injunction to restrain the defendant from entering and dealing with the land but did not disclose to the Court at the time of the hearing of the application that there was a dispute in relation to whether or not the land was customary land.
At the hearing of the defendant's application to set aside the ex-parte interim injunction or dismissal of the proceeding, it was brought to the attention of the Court that there was a dispute in relation to whether or not the land was customary land and his Honour said that the dispute had to be dealt with by the Land Titles Commission. His Honour set aside the ex-parte interim injunction and dismissed the entire proceeding for failing to disclose a reasonable cause of action because the plaintiff had no issue with the defendant's title.

12. For all these reasons, I am of the view there is no basis for the plaintiff to pursue the case against the defendants in this proceeding. In other words, it serves no purpose if the proceeding is allowed to continue. I conclude the proceeding fails to disclose a reasonable cause of action and dismiss it pursuant to Order 12, rule 40(1)(a) of the National Court Rules.

13. Even if the defendants say that they had obtained authority or permission from the sub-lessees to enter the plantations and cut the trees, the plaintiff has disputed that and says it has reserved the exclusive right to harvest logs on the plantations and that the sub-lessees did not have its authority to give permission to the defendants to do what they did. If the Court is to accept the plaintiff's claim, there are two problems with it. First, if the sub-lessees did not have authority to allow the defendants to conduct logging activities on the plantations, the parties at fault are the sub-lessees. They have allegedly breached the sub-lease agreements and the plaintiff should have sued them for breach of agreement. Damages would be an appropriate and adequate remedy for the plaintiff, which I note, is essentially what it is after but has not sought in this proceeding.

14. Secondly, the plaintiff has not sought a declaratory order to declare the agreement between the sub-lessees and the defendants as being illegal on the basis of lack of or want of authority. That being the case, I am not satisfied that it has demonstrated it has a cause of action against the defendants. I would dismiss the proceeding for these further reasons.

15. This leads me to the second issue and that is, the appropriateness of the present proceeding and cause of action. I can see from the reliefs being sought by the plaintiff in the amended originating summons that it seeks to protect its plantations and trees from being invaded, interfered with and destroyed by the defendants as a result of the logging activities. If that is the plaintiff's primary concern, then that is another matter. If it has suffered and will continue to suffer physical and monetary loss in terms of destruction of its trees on the plantations and loss of profit from the sale of logs, then that too is another matter. These matters are not properly before the Court because this is not an action for trespass to property where damages would be the primary relief.

16. In this proceeding, the plaintiff seeks declaratory orders for an alleged legal dispute which I have found did not exist. It has been said in cases where there are alleged wrongful acts been committed and it is necessary for coercive relief to be made, declaratory relief may not be appropriate. Indeed, in this case, I note one of the plaintiff's key witnesses the plaintiff's Managing Director, Mr Dick Hunter Richard Hagon has stated in one of his affidavits that he has instructed lawyers to institute proceedings for conversion and detinue against the defendants. In my view this is an admission by the plaintiff that a declaratory relief may not be an appropriate remedy for resolving the dispute. It appears Mr Hagon's proposal may be a more appropriate course for the plaintiff to take in the light of the alleged wrongful acts of the defendants.

17. In my view, an action for trespass would be appropriate in the circumstances and speaking of trespass, John G Fleming in his book, The Law of Torts, (9th ed, 1998), Law Book Co at 58 said:

"[a]ny unprivileged interference with a chattel in the possession of another is a trespass, provided the injury is sufficiently direct and immediate ............... It may be committed by an act which brings the defendant into contact with the chattel, as by destroying, damaging, or merely using goods, beating or killing animals or removing an article from one place to another."

18. From the various affidavits filed by the plaintiff, it is apparent the plaintiff's primary concern is the protection of its trees on the plantations and that is made clearer from the affidavits of the plaintiff's witnesses. They have deposed that the defendants have interfered with the plaintiff's trees by cutting them down for personal and commercial use. There were even photographs of fallen trees, stock piles of logs, milling of timber and stock piles of timber annexed to some of the affidavits of the plaintiff's witnesses to verify the plaintiff's claim. Indeed, as I mentioned earlier, the plaintiff also seeks an order for police to assist in evicting the defendants so that forest officers from the National Forest Authority could enter the plantations and assess the plaintiff's loss. This is a re-affirmation of what the plaintiff is seeking against the defendants and in my view, an appropriate cause of action to commence to protect its proprietary interest in this respect would be one of trespass.

19. In my view, a cause of action based on trespass should appropriately be commenced by writ of summons with a statement of claim which would set out the material facts, allegations of breaches and relief sought. In a trespass action, the primary remedy is damages. Of course, an injunction is a remedy and may be avail of if the interference with the property persists. Where an action for trespass is commenced by writ of summons with a statement of claim, it gives the opposing party (defendant) an opportunity to respond to the allegations by way of a defence. The statement of claim and defence would identify the issues between the parties and the kind of evidence that may be led at trial: see Order 4, rule 2, Order 8, rules 3 & 4 of the National Court Rules.

20. As far as I can see, all these have not been done in the present case. In my view, in commencing the proceeding by originating summons and seeking declaratory orders to declare its exclusive right of access and use of the plantations and the defendants' logging activities illegal, the plaintiff has disguised the proceeding as one for trespass. In my view, this is improper and an abuse of process. I would dismiss it for being an abuse of process of the Court pursuant to Order 12, rule 40(1)(c) of the National Court Rules.

21. The further orders it seeks such as orders for the demolition buildings and houses, and confiscation of the plant and equipment used in the logging activities are, in my view, consequential orders. They are dependent on the primary relief and as I have found, there is no cause of action upon which the primary relief may be granted. It follows there is no basis to grant these consequential orders. Even if they are primary reliefs, I am not satisfied there is a proper basis in law to grant them. I would also dismiss the proceeding for these further reasons.

22. As I have dismissed the proceeding, it is not necessary to deal with the second, third, ninth and tenth defendants' application for removal as parties from the proceeding. As for the ex-parte interim injunction, it would die a natural death because of the dismissal of the proceeding.

23. Cost shall follow the event and time abridged.

Orders accordingly.
______________________________________________

Tamutai Lawyers: Lawyers for Plaintiff
Kunai & Co Lawyers: Lawyers for First Defendant
Kopunye lawyers: Lawyers for Second & Third Defendants
Simon Norum & Co Lawyers: Lawyers for Fourth & Fifth Defendants
Jerry Kiwai Lawyers: Lawyers for Sixth, Seventh, Eighth, Eleventh & Twelfth Defendants
Bosip Aipe Lawyers: Lawyers for Ninth & Tenth Defendants
Jerry Tonge Lawyers: Lawyers for Thirteenth Defendant