N8434

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 515 OF 2010

BETWEEN:
RABAUL SHIPPING LIMITED
First Plaintiff

AND:
PETER ROBERT SHARP
Second Plaintiff

AND
BRIAN RICHES – Interim Chairman and CHRIS RUPEN,
HENRY PARAKEI, ANNE GILMORE and DONALD
HEHONA as members of the Board of the
National Maritime Safety Authority
First Defendants

AND:
CHRIS RUPEN – General Manager, National
Maritime Safety Authority
Second Defendant

AND:
NATIONAL MARITIME SAFETY AUTHORITY
Third Defendant

Kokopo: Hartshorn J.
2011: 20th July & 25th August

Trial

COSTS – application by plaintiff seeking orders to prevent third defendant to pay legal fees for second defendant – whether plaintiffs have locus standi to bring this proceedings - , the decision to pay the legal fees of Mr. Rupen falls into the area of a managerial or administrative decision made within a lawful discretion, rather than that of a lawful duty owed by NMSA – plaintiff do not have standing to bring proceedings – proceedings dismissed

Cases Cited: 
Papua New Guinea Cases

Ken Norae Mondiai v. Wawoi Guavi Timber Co Ltd (2007) SC886 
Seeto v. Palaso (2008) N3653 
The State v. Central Provincial Government (2009) SC977 

Overseas Cases

Australian Conservation Foundation Inc v. The Commonwealth (1978-1980) 146 CLR 493 
Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438 
R. v. Internal Revenue Commissioners: Ex Parte National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617  

Counsel:
 
Mr. P. P. Yange, for the Plaintiffs
Mr. G. Geroro, for the Defendants

25th August, 2011

1. HARTSHORN J: The plaintiffs, Rabaul Shipping Ltd and Captain Peter Sharp seek to prevent the National Maritime Safety Authority (NMSA) from paying Mr. Chris Rupen’s legal fees and disbursements (legal fees). These legal fees were incurred by Mr. Rupen when he unsuccessfully sued Captain Sharp for defamation (defamation claim). The plaintiffs claim that the payment of the legal fees by NMSA is not expenditure that is authorised in NMSA’s enabling legislation, the National Maritime Safety Authority Act 2003 (NMSA Act) as the defamation claim was a private claim between two individuals. The plaintiffs commenced this proceeding seeking declaratory and injunctive relief.

2. NMSA and the other defendants submit that any expenditure made in respect of the defamation claim by NMSA has been properly authorised under the NMSA Act.

3. The agreed legal issues for determination do not include whether the plaintiffs have the necessary locus standi to seek the relief that they do. At the commencement of the trial I raised this with counsel. Counsel for the defendants informed that they were not pursuing that issue and that it is not one of the agreed issues for determination. Notwithstanding this, I informed counsel that I would consider this threshold issue.

4. The Supreme Court in Ken Norae Mondiai v. Wawoi Guavi Timber Co Ltd (2007) SC886 considered various overseas authorities on the question of locus standi in the context of whether a particular interest group could have sufficient interest. The Court noted that the House of Lords in R. v. Internal Revenue Commissioners: Ex Parte National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617 was of the opinion that the public duty owed and the nature of the breach of that duty upon which the applicant relied should be examined to determine whether the applicant has sufficient interest to seek relief. The Court also noted that the applicants in R. v. Internal Revenue Commissioners (supra) and the Australian High Court case of Australian Conservation Foundation Inc v. The Commonwealth (1978-1980) 146 CLR 493 had failed for similar reasons: the breaches complained of were decisions which fell in the areas of administrative discretion rather than statutory duty.

5. Putting aside relevant issues such as the relationship if any of Rabaul Shipping Ltd and Captain Sharp to the subject matter of the duty of NMSA that they may allege has been breached and whether they are generally concerned about the actions of NMSA about which complaint is made, or are mere “busybodies”, the action the subject of their complaint, the decision to pay the legal fees of Mr. Rupen, NMSA’s General Manager, falls into the area of a managerial or administrative decision made within a lawful discretion, rather than that of a lawful duty owed by NMSA.

6. As such, I am not satisfied that Rabaul Shipping Ltd and Captain Sharp have sufficient interest and the necessary locus standi to seek the relief that they do. Consequently, the proceeding should be dismissed.

7. If the proceeding is not so dismissed, a further consideration is whether Rabaul Shipping Ltd and Captain Sharp are able to seek the declaratory relief that they do. Both of the declarations that are sought are that certain payments or reimbursements, “is not authorized expenditure by or on behalf of (NMSA) under section 35 (2) NMSA Act or at all.”

8. Section 35 (2) (e) NMSA Act provides that the monies of NMSA shall be expended only-

 “for such other purposes as are consistent with the functions of the Authority as the Board, after consultation with the General Manager, shall determine.”

9. Mr. Rupen has deposed that:

“The Board of NMSA resolved and directed that a claim for defamation be instituted by myself against the Post Courier and Mr. Sharp, the Second Plaintiff in this action. It was further resolved and directed that the defamation claim would be funded by NMSA and that any damages recovered over and above the costs, if any, would be paid to the revenue of NMSA.”

10. This evidence is not contradicted. Pursuant to s. 48 (b) NMSA Act, proof is not required, unless evidence is given to the contrary, of a resolution of the Board of NMSA. Given this, this court is able to be satisfied that the payment of Mr. Rupen’s legal costs associated with the defamation claim have been authorised to be paid by NMSA pursuant to s. 35 (2) (e) NMSA Act as the Board of NMSA has authorised that Mr. Rupen's defamation claim be brought and that it be funded by NMSA and that any damages recovered over and above the costs would be paid to the revenue of NMSA.

11. As the payment of Mr. Rupen's costs associated with the defamation claim have been so authorised, the declaratory relief sought to the effect that payment or reimbursement is not authorised expenditure by or on behalf of NMSA under s. 35 (2) NMSA Act, is amongst others, of academic interest only.

12. In Seeto v. Palaso (2008) N3653 I considered the factors that are required to be established before a declaratory order can be made. These factors are set out in the case of Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448. This case was followed by the Supreme Court in The State v. Central Provincial Government (2009) SC977. The factors are:

a)	There must exist a controversy between the parties.

b)	The proceedings must involve a right.

c)	The proceedings must be brought by a person who has a proper or 	tangible interest in obtaining the order.

d)	The controversy must be subject to the court's jurisdiction.

e)	The defendant must be a person having a proper or tangible interest in opposing the plaintiff's claim.

f)	The issue must be a real one. It must not be merely of academic 	interest, hypothetical or one whose resolution would be of no practical utility.

13. For the above reasons, I am satisfied that the declaratory relief sought is of academic interest only, that there is no current issue or dispute between the parties or that there is any controversy existing between the parties. It is not appropriate therefore that the declaratory relief sought should be granted. This proceeding should be dismissed. Given this finding it is not necessary to consider the other submissions of counsel.

14. Consequently for the above reasons, this proceeding is dismissed. The plaintiffs’ shall pay the defendants’ costs of the proceeding, to be taxed if not agreed
____________________________________________________________
Warner Shand:  Lawyers for the Plaintiffs                                  
Leahy Lewin Nutley Sullivan:  Lawyers for the Defendants