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National Court of Papua New Guinea |
N5441
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS. NO. 189 of 2010
BETWEEN:
HARGY OIL PALM LIMITED
Plaintiff
AND:
EWASSE LANDOWNERS ASSOCIATION INCORPORATED
First Defendant
Waigani: Kandakasi, J.
2013: 10th May
02nd December
MEDIATION – Benefits of – Better avenue for parties to negotiate and arrive at resolutions they can live with – Agreement reached at mediation – Same effect as legally binding and enforceable contracts – Parties duties and responsibilities – Duty to act in “good faith” – “Good faith” does not require a compulsion to settle but to explore all possibilities – Difficulty with defining “good faith”- Suggested guide to determining - Parties under duty to comply with Court orders and do everything possible to enable mediation to proceed unimpeded – Breach of duties amount to “bad faith”- Duty includes requirement for a corporate entity, including the State to ensure person with power and authority to negotiate and reach agreement attends the mediation well prepared with all relevant material and unrestricted instruction to explore all possible options for resolutions and reach agreement if possible - Corporate entities failing to do so – Cannot form basis to opt out of agreement reached at mediation – Agreements reached at mediation open to invalidation on establishment of known and accepted groups for voiding contract not contributed to by party seeking to opt out - Rule 10 of Rules Relating to the Accreditation, Regulation and Conduct of Mediators
CONTRACT – Essential elements of a valid contract – Grounds for setting aside valid contracts considered – Agreements reached at mediation enforceable contracts provided essential elements of contract exist – A failure to disclose lack of authority and power in corporate representative during mediation process no basis to opt out of a mediated agreement but basis to find “bad faith” and finding that contract is binding – A party can opt out of a mediated agreement only upon establishing one or more of accepted basis for voiding contracts not contributed to by the party seeking to opt out.
LAWYERS – Duties of lawyers, before and during the course of mediation – Provide sound, accurate and fair advice to client and appropriately prepare client for mediation – Attend mediation with client and continue to provided legal advice as required - Lawyers have duty to assist parties to produce detailed written agreement reflecting and enshrining what the parties have agreed to at mediation.
LEGISLATION – Interpretation of statutory provisions – Unless word used by legislation is so plain that the ordinary meaning is to apply, a fair, large and liberal interpretation to be adopted and applied - Rule 10 of Rules Relating to the Accreditation, Regulation and Conduct of Mediators – Duties of Parties ordered to go to mediation – Duty to act in “good faith” – Difficulty with defining “good faith”- Suggested guide to determining - In summary parties under duty to comply with Court orders and do everything possible to enable mediation to proceed unimpeded – Breach of amount to “bad faith”- Duty includes requirement for a corporate entity, including the State to ensure person with power and authority to negotiate and reach agreement attends the mediation and before that properly prepare with all relevant and unrestricted instructions – Sch 1.5 (2) Constitution - Rule 10 of Rules Relating to the Accreditation, Regulation and Conduct of Mediators .
Cases Cited:
Papua New Guinea Cases
Shell Papua New Guinea Ltd v. Speko Investment Limited and Peandui Koyati (2004) SC767.
AGC (Pacific) Ltd v. Woo International Pty Ltd [1992] PNGLR 100.
Manorburn Earthmoving Ltd v. The State (No 2) (2008) N3287.
Hilary Singat v. Commissioner of Police (2008) SC910.
The State v. Zachary Gelu & Monoburn Earthmoving Limited (2003) SC 716.
Polem Enterprise Ltd v Attorney-General of Papua New Guinea Mr. Francis Damem (2008) SC911.
NCDC v. Yama Security Services Limited (2005) SC835.
Fly River Provincial Government v Pioneer Health Services (2003) SC705.
Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali and Benedict Waede; Ome Ome Forests Ltd v Ray Cheong, Jackson Whong and Bill
Garey (2002) N2289.
Mark Ankama v. Papua New Guinea Electricity Commission (2002) N2362.
PNG Ports Corporation Ltd v. Canopus No 71 Ltd (2010) N4288
Beecraft No 20 Limited v. Dr Fabian Pok as Minister for Lands and The Independent State of Papua New Guinea, (2001) N2125.
NCDC v. Yama Security Services Pty Ltd (2003) SC707
NCD Commission v. Yama Security Services (2005) SC835
Public Officers Superannuation Fund Board v. Sailas Imanakuan (2001) SC677
Overseas Cases Cited
In Anthony v. Andrews, 2009-Ohio-6378 (Court of Appeals of Ohio, 11th District, 2009),
In re A.T. Reynolds & Sons, Inc., 452 B.R. 374 (S.D.N.Y. 2011).
In re A.T. Reynolds & Sons, Inc., 424 B.R. 76, 78 (Bankr. S.D.N.Y. 2010).
Nick v. Morgan’s Foods, Inc.[2001] USCA8 685; , 270 F.3d 590, 596-97 (8th Cir. 2001)
Articles referred to:
“Developing A System of Court Annexed ADR In An Ever Increasing Litigious Society, Arguments For and Against: The PNG Experience” by Ambeng Kandakasi, Malayan Law Journal: Article Supplement, LexisNexis, 2007.
The United Nations General Assembly announcement GA 11242, 23rd May 2012. www/un.un.org/News/Press/docs/2012/ga11242.doc.htm and European
Union Directive EU Directive 2008/52/EC, 13th June 2008.
“Good-faith participation in compelled mediation” by Thomas J. Sartory and Gary M. Ronan, Daily Record: Oct. 31 2012 issue.
"Using Dispute System Design Methods to Promote Good-Faith Participation in Court-Connected Mediation Programs," by Professor John Lande,50 UCLA L. Rev. 69, 77 & n.25 (2002).
Counsel:
R. Lindsay, for the Plaintiffs
C. Narokobi, for the Defendant
02nd December 2013
1. KANDAKASI J: This case presents two interesting questions which revolve around one of the important principles in mediation, namely the need for parties to "attend mediation and negotiate in good faith". The questions are:
(a) What are the duties and responsibilities of parties attending mediation?
(b) On what basis can a higher authority or the governing body of a corporate entity opt either wholly or partially out of agreements reached at mediation?
Background
2. The background to these questions is simple. Hargy Oil Palm Limited (the Company), took out this proceeding against the Defendants who are local landowners (LOs) in the Bialla District of the West New Britain Province. The Defendants are coastal people living close to or near coastal areas in which the Company discharges waste from its oil palm milling plants. They claim that the Company's discharges and related activities has caused substantial damage to their marine areas resulting in serious and substantial damage to marine life, which they say they rely upon for their survival. They therefore claimed substantial amounts of money in compensation formally pursued in Court through a separate writ of summons proceeding. The Company declined to entertain that claim. That caused the LOs to take matters into their own hands resulting in some interference of the Company's business and operations generally. On the application of the Company, the Court granted an interim restraining order against the LOs. Then subsequently, with the agreement of the parties, the Court ordered them to go to mediation and attempt to have the matter resolved.
3. The Court ordered mediation took place on 23rd November 2012, at Kimbe. At the mediation, all parties except the State attended. The Company was represented by its General Manager Mr. Graham King and Miss Sohpie Mission who is the Company's Environment and Sustainability Manager. In attendance also for the Company was a Mrs. Joyce King with the Company's lawyer Mr. Robert Lindsay. For the LOs, the executives of their Association, with their lawyer, Mr. Camillus Narokobi attended. The mediation resulted in a resolution under the following six (6) main headings or categories:
1. Communication
2. Rehabilitation
3. Economy
4. Support
5. Representation
6. Court Cases
4. Mr. King informed the board of the Company of the above agreements. The board met on 3rd December 2012, and resolved to accept the agreements under terms (1) and (3) but not term (4) and part of term (2) by agreeing only to relocate the outlet between fingers of the wharves. This decision was communicated to the LOs through their lawyer.
5. The LOs took the position that, they reached an agreement at mediation with the Company and the Company was bound by that agreement. Consequently, they filed a motion seeking to enforce the agreement. I directed the parties to file affidavits of evidence they relied upon for their respective positions as well as written submissions. Only the LOs filed and served affidavits of evidence they relied upon. Despite not filing and serving its affidavits of evidence in accordance with the Court directions, the Company did file its written submissions in Court at the time of hearing of the LOs motion.
6. There is no contest between the parties that, the parties negotiated and reached agreement as per the 6 headings set out above. The only contest however, is in the Company's claim that, at the very beginning of the mediation and throughout the process Mr. King informed the parties and the mediator that he did not have the authority of the board to settle on any terms. Consequently, he indicated that, he will take any agreement reached at the mediation to the Company's board for the board's consideration and a final decision. On the other hand, the LOs argue that, Mr. King did not make any such representation but did holdout as having the necessary authority to negotiate and arrive at an agreement if possible to resolve this matter. Accordingly, they argue that the parties proceeded to mediation and reached an agreement which was final and not subject to the Company's board's consideration and approval.
7. The issue thus presented as two parts. The first is the factual question of did Mr. King disclose his lack of authority and or power to negotiate and reach an agreement at the mediation for and on behalf of the Company and thus bind the Company. The second is the legal question of was the Board at any liberty to reject parts of the mediated agreement? Both of these questions gives rise to the two main questions presented for my consideration and decision as set out at the beginning of this judgment. I will now deal firstly with the first of the two questions.
Did Mr. King disclose his lack of authority?
8. I think it important that we should start considering this question with a mention of what mediation is and what happens at mediation. As is now known, mediation is a process or an avenue parties in dispute can use to jointly explore and consider all options that might be available for an efficient, effective and final resolution of their disputes. Like any other negotiation, negotiations at mediations leads to a legally binding contract, but facilitated by a trained, and in most cases, experienced mediators who provide a neutral avenue for the parties to respectfully enter into a process of jointly exploring all possible options for the resolution of their dispute, undertake negotiations and where possible arrive at an agreement that is workable and they can live with. That being the case, the usual tests for determining whether a legally binding agreement was arrived at still continues to apply without any exception. The law in respect of these tests or considerations is well settled in our jurisdiction.
Relevant Law
9. In cases where parties have reached an agreement and the terms of their agreement is reduced into some form of a written record, no extrinsic evidence can be called or allowed. Instead, the document is usually allowed to speak for itself. However, this rule is general. Extrinsic evidence can be admitted to help resolve any ambiguity in a written document or record. The decision of the Supreme Court in Shell Papua New Guinea Ltd v. Speko Investment Limited and Peandui Koyati[1] restates this position in these terms:
"... if parties have wholly reduced their agreement into a written contract, extrinsic evidence should not be permitted to be admitted into evidence to elicit the intention of the parties evinced by the terms of the contract. The key word here is "if". If the parties have wholly reduced their agreement into the written contract, extrinsic evidence is not permissible. However, if they have not wholly reduced their agreement into the written contract, extrinsic materials are admissible. The Supreme Court (Amet CJ, Sheehan J, Kandakasi J) explained this in PNGBC v Jeff Tole (2002) SC694[2]:
'Under contract law, where parties have set down the whole of their agreement in writing, evidence seeking to add or subtract from or vary or qualify the written contract cannot be given and or accepted. This is what is called the parol evidence rule. For authorities on this, see Curtain Bros (Qld) Pty Ltd v The State [1993] PNGLR 285[3] ... It is a rule that does have exceptions to it. It is open to parties to assert that a written contract or document does ... not contain the whole of an agreement and at trial adduce evidence to support the contention. But that will require appropriate pleadings ...'"
10. The question in this case then is this. Did the parties reduce their agreement into writing? It is obvious in this case, that the parties did not execute a formal agreement fully setting out the specific details of their agreement. What is clear however is this. The parties reached agreement in a number of areas. These are set out in the mediator's notes which are not in contest and have been reproduced by the Company's lawyer, Mr. Lindsay in his letter to the LOs lawyers dated 04th February 2013, which I set out in paragraph 3 above.
11. There is no contest between the parties that they reach agreement in these terms. It is obvious that, these were a summary of what the parties agreed to. The relevant details would have been set out in a detailed agreement drawn up by the lawyers allowing themselves to be guided by the summary of what the parties agreed to at mediation. It seems clear however, that neither of the lawyers discharged their respective duties and responsibilities to their respective clients in that, they failed to produce a detail agreement on the matters the parties agree to at mediation. Learned counsel for the LOs, Mr. Narokobi had been to two mediations in which I was co-mediating with another mediator. This includes the mediation involving the landowners on Misima Island. There, it was made clear that lawyers attending mediation have a duty both to the mediation process and their respective clients to write a detailed agreement that accurately reflects the parties' agreement reached at mediation, if mediation results in an agreement. Nevertheless, notwithstanding the lack of a detailed agreement in this case, it is obvious that the parties agreed to certain specific matters as noted in paragraph 3 above.
12. A close examination of what the parties agreed to makes it clear that, there is no record whatsoever of the Company's general manager disclosing his lack of authority and or the power to bind the Company. Similarly, there is no record that the agreement the parties reached at mediation was subject to a consideration and approval by the Company's board. If indeed the General Manager's power and authority to represent, negotiate and reach settlement for and on behalf of the Company was an issue, this would have been one of the very first issues the parties and the mediators could have addressed, settled and recorded before proceeding with the mediation. The mediator's record of what was agreed upon clearly shows the subject matters the parties discussed and reached agreement on. In this scheme of things, it is clear that, the parties' discussions or considerations did not include the question of Mr. King's lack of power or authority to bind the Company and a need for the Company's board to approve any agreement that could be reached at mediation. Item 6 of the parties agreement in summary, is the only provision making reference to the Company's board but that is on the issue of compensation. This provision clearly demonstrates that the parties agreed for the Los to pursue their claim for compensation against the State with Sir Brown Bai assisting.
13. Besides, I note that the Company has not filed any affidavit evidence that puts beyond any question or argument that, it's General Manager attended mediation without the necessary power and authority to negotiate and reach an agreement on all of matters in controversy between itself and the LOs. On the other hand, the LOs and their lawyer have filed affidavit evidence clearly pointing out that, the General Manager's now claimed lack of power and authority was not an issue at all at the commencement and at any stage of the mediation process.
14. The law is clear in this kind of situation. The relevant legal principle has over time become known as "ostensible authority" in a company director, employee or agent. His Honour Sakora AJ., as he then was in AGC (Pacific) Ltd v. Woo International Pty Ltd[4] earlier discussed the relevant principles. Those principles have since been adopted and applied in many subsequent decisions of the Supreme and National Courts.
15. In the case of negotiations leading to settlement of cases filed in Court, I repeat what I observed in my decision in the matter of Manorburn Earthmoving Ltd v. The State (No 2)[5]. There I said:
"Until the decision in the Yama Group of Companies (supra) cases, the Courts have always been slow to set aside, the free compromise of Court actions through negotiated outcomes, except on very limited and well recognized exceptions. The exceptions are in the main, fraud and misrepresentation leading to the compromise. Arguments against the validity of such compromises on the basis of lack of authority of one of the parties have found no favour with the Courts based on longer and deeper roots in the common law as represented by judgments in our jurisdiction such as the one in Motor Vehicles Insurance (PNG) Trust v. Kulubala Salem... That case is authority for the proposition that, a lawyer has ostensible if not expressed authority to bind his or her client. This principle has given confidence to the parties to any litigation or any negotiation to freely and fairly enter into negotiations and settle a large number of cases. Indeed as I already noted, most of the courts the world over are actively encouraging the parties to settle through their own negotiations their disputes through what has now become well entrenched and known as alternative dispute resolutions (ADR), which the Supreme Court acknowledged in its decisions in the two Yama Group of Companies cases."
16. The Supreme Court in its decision in Hilary Singat v. Commissioner of Police[6], speaking in the context of a lawyer's ostensible authority on behalf of his or her client, endorsed the principles on ostensible authority. Then more significantly, the Supreme Court said:
The law or the doctrine of ostensible authority has developed in the way it has for good reason. One good reason is that, a third
party or the other contracting parties or parties to Court proceedings would not be parties or privy to any contract or relationship
between a lawyer and his client or an agent and his principle and communication taking place between them. It is entirely a matter
between, the agent and his principal or a lawyer and his client except as the law may otherwise permit. Another good reason is that,
a client in the case of a lawyer or a principal in the case of an agent acting without the appropriate and necessary instructions
has recourse against his lawyer, servant or agent. The lawyer, servant and or agents can be terminated and a cause of action would
accrue to the client or the principal to sue the lawyer or the servant or agent who acts without instructions. The third party, with
whom the lawyer, servant and or agent may have negotiated with and entered into any agreement, would have no such recourse. A further,
reason would be that, the general business efficacy including the orderly and timely handling and dispositions of cases in Court
and business generally would be adversely affected by the ready undoing of contracts or steps taken on the representation of a party
through his lawyer, servant or agent, and there would be no finality in sight for any litigation."
(Underlining supplied)
17. Again, given these reasons, the Courts have been very slow to voiding or nullifying the free agreements of the contracting parties, especially in cases where the agreements have resolved court proceedings. The only known exceptions in our jurisdiction on grounds of lack of authority is led by the decision of the Supreme Court in The State v. Zachary Gelu & Monoburn Earthmoving Limited[7], which was followed by the Supreme Court's subsequent decision in Polem Enterprise Ltd v Attorney-General of Papua New Guinea Mr. Francis Damem[8]. This line of cases makes it clear that Solicitor General has no authority or power to bind the State except with the approval of the Attorney General. The same goes for contracts involving the State which do not have the necessary approvals under the Public Finances (Management) Act 1995 (as amended) as demonstrated by decisions of the Supreme Court in NCDC v. Yama Security Services Limited[9] and Fly River Provincial Government v Pioneer Health Services[10]. This line of cases, also represent contracts that were considered illegal by reason of the relevant and applicable statutory provisions not being complied with.
Application of the law to the facts
18. For the case at hand, I note that all the parties attending mediation and negotiating through that process were private individuals and corporate entities negotiating a settlement of their private disputes and or issues. Consequently, this did not require the consideration and application of any particular legislation on their respective powers and authorities to enter into settlement discussions and if possible, reach a legally binding and enforceable agreement. The only exception would be the Fairness of Transactions Act 1993, in so far as the Act requires fairness in the negotiations and the terms of the parties' agreement once reached, which is not an issue in this case.
19. Here the Company was represented mainly by its general manager. In most cases, general managers of companies are usually very powerful persons. For such persons often represent their company or organization and often bind them in all transactions concerning and involving them. If there is any specific lack in authority or power in such a person, there has to be a clear and unequivocal disclosure of that fact. An absence of such a disclosure means, the general manager has the necessary power and authority to bind the company. Then, once the parties have entered into negotiations which result in an agreement, the company will have no power or the legal right to opt out or seek to opt out of its obligations under the agreement except only on the basis of the known exceptions such as fraud and misrepresentation, which goes into negotiating and reaching an agreement in bad faith.
20. As we already noted, here the Company's main representative was general manager. There is no evidence of the general manager disclosing his lack of power and or authority by reference to the Company's constitution or articles of incorporation, or its board's decision. Similarly, there is no evidence of the general manager or anybody on behalf of the Company informing the LOs and the mediator of the now claimed lack of authority or the power to participate in the mediation in good faith, explore all possible options and if possible, arrive at an agreement resolving the matters in dispute between itself and the LOs. Also, there is no evidence revealing and confirming the Company's claim that, the agreement reached at mediation was subject to the consideration and approval of the board of the Company.
21. So what happened here? Before answering that question, I remind myself that, one of the usual practices for mediators is to note in either a white board or a butcher's paper a summary of what the parties agree to at mediation. Some mediators go one step further in getting the parties to sign off on the summary of the agreements. Such a summary is then used to arrive at a more appropriately detailed agreement. Some mediators would then draw up the detailed agreement for the parties to sign. This usually happens in simple and straight forward matters, especially in cases where no lawyers are involved. Where lawyers are however involved, they would be required and indeed expected to draft and come up with a more detailed agreement. If a draft detailed agreement is met with disagreement or if indeed there is a dispute that concerns whether a particular subject matter or issue was part of the mediation and was resolved, the summary of the agreement would be consulted to resolve the issue
Answer to the Question of lack of authority
22. The mediator's notes and the extract of that by Mr. Robert Lindsay, holds the key to resolving the question of, whether Mr. King had the necessary power and authority to bind the Company and that the agreement reached at mediation was subject to the Company's board's consideration and approval. A careful examination of these two documents reveals clearly that, these two issues did not form part of the mediation and in particular the agreement reached at mediation. Accordingly, I find that, Mr. King had the actual, if not, the ostensible authority and power to bind the Company. Consequently, and as a matter of fact, I find that the agreement reached between the parties was not subject to a consideration and approval of the same by the Company's board.
Company board's rejection of parts of the Mediated Agreement
23. Having determined the factual question, I now proceed to consider the legal question of, was the board of the Company at liberty to reject parts of the mediated agreement. This question, as already noted, gives rise to the two legal questions, the Court directed the parties to address. The questions again are:
(a) What are the duties and responsibilities of parties attending mediation? and
(b) On what basis can a higher authority or the governing body of a corporate entity opt either wholly or partially out of agreements reached at mediation?
Duties of Parties Attending Mediation
24. I turn first to a consideration of the first of these two questions. The starting point in our jurisdiction on that question is Rule 10 of the ADR Rules. This Rule reads in relevant parts:
Parties' Duties
(1) Each party shall, subject to any directions from the Court or the mediator, take such steps as may be necessary to ensure that the mediation conference occurs as soon as possible.
(2) Unless the Court or the mediator otherwise directs, each mediation session shall be attended by each party or, if a party is a corporation, by an officer of the corporation having authority to settle the proceedings.
(3) If the conduct of the proceedings by a party is controlled by an insurer, each mediation session shall also be attended by an officer of the insurer having authority to settle the proceedings.
(4) A person who is required by these rules to attend a mediation session must attend in person unless granted leave by the Court or the mediator to attend by telephone, video link, or other form of communication in consultation with the other party.
(5) Each party must participate in good faith in the mediation and not impede the mediator in conducting and completing the mediation process within the time set by these Rules or by the Court.
(6) Where the mediator forms an opinion that a party has impeded the mediation, or has not participated in good faith, the mediator
may provide a report to the Court of this opinion and the circumstances upon which it is based. Except to this extent, the mediator
shall not include in the report the substance of any discussions or negotiations between the parties relevant to the resolution of
the issues in the proceedings."
(Underlining mine)
25. The law in relation to the interpretation and application of statutory provisions from the Constitution to Acts of Parliament to subordinate legislation such as the Rules of Court are well settled in out jurisdiction. Where the words or expressions used in legislation is clear and is capable of being given their plain and ordinary meaning, the Court should adopt and apply that. In cases where this is not possible, the Court must give a fair large, and liberal meaning to ensure that the legislature's intention, spirit and purpose expressed in the provision is achieved.
26. Bearing these principles in mind, I will now go through the relevant provisions of Rule 10 of the ADR Rules as set out above. Each of these provisions is clear and is capable of being accorded their plain or ordinary meaning. A reading of these provisions as a whole, clearly bring out the objective of this provision. That objective is, once a matter is ordered and or parties agree to submit to mediation, they are obliged to do or take certain steps. First and foremost, the parties are required to take all of the steps that need to be taken to ensure that the mediation process proceeds smoothly without any unnecessary delay. Those steps, unless a Court making an order for mediation otherwise orders obviously includes:
(a) Promptly going through the list of available accredited mediators and agree upon the earliest available mediator;
(b) If the parties are not impecunious, they have to nominate an external mediator (a mediator who is not in the full time employment of the Court);
(c) Once they have made a choice on their mediator, immediately enter into discussions with the mediator and agree:
- (i) On the mediators fees, if the mediator is external, when and how those fees shall be paid;
- (ii) on the dates for the mediation intake per party, mediation conference and its conclusion; and
- (iii) who is going to do what, when and how other identified logistical matters such as booking of flights and venues and so on will be attended;
(d) Promptly calculate and pay the mediation service fees as prescribed in Schedule 3 of the ADR Rules, which is different from an external mediator's professional fees;
(e) Immediately provide the ADR Services of the Court, their respective lawyers' functional telephone, email and other contact details for easy flow of communication for the purposes of the mediation and to ensure there is no delay;
(f) If the conduct of the proceedings by a party is controlled by an insurer, ensure that each of the mediation sessions is attended by an officer of the insurer having authority to settle the proceedings.
(g) Ensure to attend all mediation sessions from preparatory meetings to the first per party intake to the joint conferences and all other sessions required by the mediator until the mediation process is concluded;
(h) Where the parties are legally represented, the lawyers:
(i) advising their respective clients and properly preparing them for mediation;
(ii) providing and ensuring to provide accurate legal advice throughout the entire mediation process with a view to enabling the parties to reach an agreement unless there is a serious legal impediment; and
(iv) attending mediation with their respective clients on time and be ready to help with jointly drafting any agreement that might be reached at the mediation;
(i) Ensuring in the case a of corporate entity, that all of the above and in particular the various mediation sessions and process are attended to by an officer of the corporation who has the necessary power and authority to negotiate and settle the proceedings and thus bind the corporation;
(j) Attending the mediation in good faith ready and willing to genuinely explore ways and means of satisfactorily resolving the matters in controversy between the parties rather than treat the process as a fishing trip;
(k) Taking all other steps as are necessary to ensure that the mediation commences and concludes on the days and times stipulated by the Court appreciating that the Rules allow for mediation to conclude within 2 months from the date when the order for mediation was made.
27. All of the above should be clear and self-explanatory. Two matters however, need further elaboration and clarification in the light of the questions raised in this proceeding. These are the matters set out in sub-rules (2) and (5), especially the parts, I have underlined. In respect of these two provisions the question then becomes:
(a) What does the phrase: "if a party is a corporation, by an officer of the corporation having authority to settle the proceedings" mean or entail?" and
(b) What does the phrase: "Each party must participate in good faith in the mediation" mean or entail?
28. We deal firstly, with the question of what does the phrase "if a party is a corporation, by an officer of the corporation having authority to settle the proceedings" mean or entail. The starting point on that is this. A company or any other incorporated entity acquires separate personality or life upon incorporation and issuance of a certificate of incorporation from its shareholders or members. But as I observed in Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali and Benedict Waede[11]; Ome Ome Forests Ltd v Ray Cheong, Jackson Whong and Bill Garey[12], once incorporated, a company has no mind of its own. Instead, it acts and functions through the minds of its officers, from members of its board of directors at the highest, to managing directors, to general managers and other servants and agents at the lower levels. Each of this line of officers has certain level of power, authority and duties and responsibilities for and on behalf of a company with the board having the ultimate powers. Managing directors where there exists such a position or general managers are usually in charge of the day to day running of the companies businesses, taking their orders or directives and mandates from the board.
29. Like natural human beings, companies and other incorporated legal persons are not immune from conflicts or disputes. At one point or another, they would either be initiating or pursuing a claim against other persons or companies or they would be defending claims against them. In either case, company boards would be very much aware of the claims through the individual and collective board members and its executive and management teams. Undoubtedly, the board would consider the claims and decide how they should be pursued or defended. Sensible business owners and business executives would always be ready and willing to find ways and means to have the claims resolved promptly in a way that is efficient and effective to avoid harm and damage to their business operations and or their reputation and standing in society that may be forced upon them by prolonged and unresolved disputes or conflicts. But they need the willingness of their opponents to come to the table to together explore all possible options and arrive at an option that resolves the dispute or conflict once and for all.
30. Unfortunately, there a many people in the world that are in conflict or in dispute with others who have either deliberately decided not to or simply neglected to reason with their opponents to have their conflicts resolved. This has in the world's most recent history, seen many people turning to the formal court system for a resolution of their disputes. Sadly however, as I observed in my article, Developing A System of Court Annexed ADR In An Ever Increasing Litigious Society, Arguments For and Against: The PNG Experience[13], the courts resources are very limited and they can do only so much, in terms of the need to dispose of the cases efficiently and effectively in a timely and less costly manner. Consequently, a vast majority of the cases join an ever increasing list of pending cases which give rise to a serious backlog in the formal courts list, which is again also almost a worldwide problem with the exceptions of a very few countries. Numbers of factors contribute to this serious backlog problem. But one of the main factors is the parties' failure to enter into fair frank and open discussions of the matters in dispute between them and jointly explore options to resolving their dispute and resolve them. This is the position despite provisions being made in a number of legislation and elsewhere both internationally and locally where the parties are encouraged to have their disputes resolved out of court or without waiting for the court to come to a decision on the matters in dispute between them.
31. Given the above and the benefits of ADR and mediation which I will shortly get into, many jurisdictions have now formally introduced and provide for resolutions of matters already in Court through ADR and in particular mediation. The object of this in most cases is to:
32. As may be apparent from the above outline of objectives for adopting a system of court annexed ADR, the benefits of ADR, particularly in our case, mediation is clear. I have articulated the benefits in a paper titled "ADR/Mediation as a Nation Building Tool[14]" I presented in Sydney at the Australian National Mediation conference in 2012. The paper in summary highlights the fact that mediation:
(a) is the only conflict resolution process that is often future-focused whilst accepting but moving from what has happened in the past;
(b) is usually very cheap because it takes a very short time to resolve;
(c) helps restore any broken relationships and build new ones and/ or improve any fractured existing ones by involving everyone that is affected by the problem through a process of informed consensus reaching that accommodates the wishes and aspirations of all of the parties as best as is possible;
(d) works when direct negotiations between the parties do not seem to work and they make an informed choice to use it;
(e) empowers the parties own their dispute and decided on its resolution as opposed to their lawyers with the assistance of an independent third party trained and experienced mediator usually chosen by them;
(f) helps the parties to better understand and appreciate each other's positions and enable them to arrive at an agreement they can live with as opposed to one imposed on them;
(g) has rules like, mediation being a confidential process, parties required to make good faith efforts to finding a solution and the process being voluntary with the parties retaining the right to walk out at anytime which in turn makes it more conducive to have fair and open communication between the parties;
(h) requires only people who have the power and authority to make binding decisions to attend or participate in the process;
(i) able to address any power and other imbalances or otherwise make the negotiation environment as comfortable and conducive;
(j) respectfully gets to the real concerns and issues, widely, explore all of the issues involved and the ways in which they could be resolved and then arrive at an agreed resolution;
(k) allows for checking of how the agreed outcome is going to work who is required to do what, when and how and provide for them and thereby clarity and certainly on what the parties have agreed
(l) enable better communication and understand between the parties and enable them to remain focused on the most important things in their lives or businesses;
(m) enables commercial contracts and other projects negotiated and arrived at with a mediation model of facilitation to lasts longer achieve full implementation;
(n) enable businesses to spend less time, money, energy and other resources on conflict and spend much of that in furthering their business and other very useful and beneficial pursuits.
(o) enable businesses to promote and maintain a good public image and relations, keep their trade secrets and other confidential information confidential;[1]
(p) serves as a nation building tool simply through more prompt resolution of disputes, increase investor confidence, frequent and more use of it enable people to be focused on work, business and other important pursuits;
33. The same paper notes that, the World Bank/IFC's Doing Business report continues to put Singapore as one of the best countries in the world for investor confidence and doing business whilst others like PNG rank lower at 101 in a field of 183 economies. This result has come about because of a strong presence and use of mediation in that jurisdiction. Given, these benefits or advantages of mediation, the world has come to accept mediation as a preferred form of conflict resolution and reserves the formal court process only as a last resort. The paper further notes that, on 21st May 2008, the Council and the Parliament of the European Union issued Directive 2008/52/EC encouraging member states to use mediation as the preferred means of resolving cross border disputes and encouraged members to make similar provisions for the resolution of conflicts within their domestic jurisdictional levels. Most member states have begun to give effect to that directive. A good example is Italy, where much to the displeasure and opposition of lawyers, the Italian Parliament made mediation compulsory for all civil matters as a pre-condition to litigation by its Legislative Decree 28/2010 which came into force in March of 2011. Further the paper notes that, the United Nations from its President to the General Secretary have been recently calling for member states to provide for early resolution of conflict by mediation. Finally, the paper notes that, many jurisdictions now make mediation compulsory for the resolution of conflicts in certain industry or types of disputes. In Australia for instance the Family Law Act of 1975 makes mediation compulsory in most family law disputes before litigation and its Civil Dispute Resolution Act 2011, amongst others requires parties in certain cases to file statements that they have made genuine efforts to resolve their conflict before filing proceedings.
34. Given these developments, the Courts worldwide have fully embraced ADR and or mediation and have taken firm positions against parties who fail to use ADR and or mediation processes in good faith. In our jurisdiction, as the National Court noted in PNG Ports Corporation Ltd v. Canopus No 71 Ltd:
"The Courts have repeatedly made it clear that, almost all disputes that enter the Court are capable of settlement, by the parties' direct negotiations. The recent developments in ... Alternative, Active or Appropriate Dispute Resolution (ADR) further strengthens that position. Indeed the Supreme Court on 9th November 2001, in Public Officers Superannuation Fund Board v. Sailas Imanakuan.... confirmed that position in these terms:
'... Courts are there only to help resolve or determine disputes that cannot be resolved by the parties themselves despite their best endeavors to do so. All human conflicts and disputes are capable of settlement without the need for court action. That is possible only if the parties are prepared to allow for a compromise of their respective positions. People in other jurisdictions are already recognizing the benefits of settling out of court as it brings huge savings to the parties in terms of costs and delay and help maintain good relations between the parties. This is why in other jurisdictions, out of court settlements are actively being pursued through what has become known as Alternative Dispute Resolutions or ADRs. We in Papua New Guinea have briefly talked about it in workshops and seminars but have not formerly embraced that into our court process and procedures. Work is now being undertaken to do that.'"
35. Prior to Supreme Court decision, referred to above, I the National Court in Beecraft No 20 Limited v. Dr Fabian Pok as Minister for Lands and The Independent State of Papua New Guinea,[1] in the context of a lawyer's duty to their clients said:
"Lawyers should now seriously examine instructions they receive from their clients and explore the possibility of out of court settlements before resorting to court action or if court action has already been instituted allowing it to continue up to a trial. The Rules of the Court are now being seriously looked at toward encouraging more alternative ways of dispute resolution first before issuing proceedings or if already issued, before listing matters for trial. This will help and ... [resolve] those matters that need not go to trial and are capable of out of court settlement. That will help minimize the delay in the dispensation of justice and the associated costs there to."
36. Later the National in Mark Ankama v. Papua New Guinea Electricity Commission added:
"As the Supreme Court said in Public Officers Superannuation Fund Board v. Sailas Imanakuan ... all disputes and or conflicts between people are capable of settlement out of Court. Thus only matters that cannot settle after all serious efforts toward that should go to the Courts with agreement on almost everything except of the points in real contest. This should produce succinct issues for trial in the Courts. A good opening would then be able to assist the Court to focus its mind on the real issues for trial and come up with judgments on it. No doubt, this would save a lot of time, money and inconvenience for all of the parties involved, including the Courts."
37. The Courts in PNG have been repeating the call for more use of ADR and or mediation as per instance the decision of the Supreme Court in NCDC v. Yama Security Services Pty Ltd.[1] Then in 2008, Parliament amended the National Court Act allowing for Court Annexed ADR or mediation. The National Court decision in PNG Ports Corporation Ltd v. Canopus No 71 Ltd, speaking of the amendments said:
"Recognizing the importance of having matters resolved out of Court, the Parliament in 2008, amended the National Court Act and added sections 7A – 7E. These provisions, amongst others empower the National Court to order mediation and other forms of ADR at any stage of the proceedings. These provisions also empower the Court to promulgate appropriate rules to give effect to the legislative intent of making ADR/Mediation an integral part of the Court's process. In accordance with that mandate, the Judges recently on 30th March 2010 promulgated the "Rules Relating to, Accreditation, Regulation and Conduct of Mediators."
38. The Court went to observe that:
"All these now make it abundantly clear if not already done, the need for parties to seriously explore and exhaust out of Court settlement before coming to Court. If all parties involved in a dispute did that, they would be only appropriately reserving the courts for the hearing and determination of cases, which have merit that warrant only judicial consideration and determination....Thus, unless a case falls into such a category, most of the disputes should be settled and should never get to court. Hence, if they enter the courts without first exhausting out of court settlement options, the very first issue for the courts and the parties to address and resolve should be resolution of the matter through out of court settlement discussions which should take place under the shadow of the Court.... If such discussions fail, parties should be able to agree on what the relevant facts are and which of those facts are disputed and why and clearly set out or disclose the existence of a meritorious issue or issues, which warrant judicial consideration and determination. The parties should then be able to persuade the Court that, there is such an issue for the Court's consideration. Then on being satisfied that there is such an issue for trial, the Court can allow the parties to progress their matter to trial expeditiously."
39. More importantly, the Court then considers what could be the meaning of all these developments as said:
"What this means then is that, a party who fails to give any serious consideration and fails to make good faith efforts toward resolving a dispute out of Court should be responsible for the other party's costs. Where as in this case, one of the parties has taken all of the right steps toward having a dispute resolved through the parties own negotiations or with the assistance of a mediator or an independent and neutral third party and the matter subsequently settles after much costs have been incurred, the party concerned should be responsible for the costs thrown away on a solicitor and client basis, unless the parties otherwise agree."
40. A few imperatives are standing out clearly and prominently from the above discussions. The first is an imperative for parties and in particular businesses or corporations in a dispute or conflict to have their issues resolved as quickly as is possible because it makes business and economic sense to resolve their conflicts promptly. This can be achieved through direct negotiations between themselves. If however that fails, they have a duty to use other appropriate alternative processes facilitated by an independent third party who is appropriately trained, experience and accredited. A failure to act in accordance with this imperative attracts the risks of orders for costs or such other sanctions the Court might consider appropriate in each case. The only exception to this imperative is for cases which require without any further consideration a judicial consideration and determination, such as the interpretation of a statutory provision, or cases in which there is a need for setting a proper precedent.
41. Secondly, if despite their best efforts, the parties do not resolve their dispute or conflict, there is an imperative to use mediation to help look for a resolution. The purpose for using mediation is amongst others, to explore all possible options of resolving their dispute, with the facilitation of an appropriately trained and experienced mediator, who is a neutral third party. That means, in the case of a corporation which includes the State, its servant or agent attending mediation must be ready and willing to assist in the identification of all possible options there might be for a resolution of the dispute or conflict, jointly explore them and settle upon one that will satisfactorily, effectively and finally resolve all matters in controversy. This in turn means, a corporate or State servant or agent must attend mediation with an open mind as to the kind of possible solutions they can possibly come up with, without placing any limit or restriction on it exception only as may be restricted by a written law. In other words, subject to any written law which places a limit on how a dispute or conflict or a particular issue can and should be resolved, a corporate or State servant or agent should appropriately prepare and attend mediation with an open mind to search for and arrive at a solution of the issues between the parties.
42. Following on from the second imperative, the third imperative is an imperative to minimize delays and costs of resolving a dispute or a conflict. This requires proper preparation for mediation well in advance of attending the first preliminary in-take conference and all other conference as well as all the other processes that follow. In order to meet this imperative the servants and agents through whom a corporation or the State functions must (without limiting the list):
(1) seek and secure the relevant governing bodies or authorities' full and unrestricted authority or instructions to negotiate in good faith and find a solution;
(2) seek and secure their legal advices and if need be secure appropriate legal services for and during the mediation process;
(3) consult and get the inputs of other important and critical people where that is needed;
(4) have readily available persons they will need to consult or seek their approval during the course of mediation to promptly provide the required inputs or instructions;
(5) gather and put together all documentary and other evidence which they may required or wish to table at the mediation;
(6) carry out investigations and researches as may be considered relevant and necessary with results ready for use during the mediation process if need be;
(7) allow for quality undivided time and attention to the mediation process; and
(8) prepare and make full disclosure of information critical to arriving at a fair, just and a reasonable agreement.
Participate in good faith
43. An understanding of what we have discussed above, should pave the way for a better understanding of the requirement to "participate in good faith", which is the subject of the second question. To put it simplistically, this would mean that, if the parties attending mediation appreciate their above duties and obligations and meet or discharge them fully, they would be no doubt participating in "good faith." Where that happens, in most cases, parties often reach agreement. The opposite happens, that would amount to participating in "bad faith" and there would be no agreement even if one has been reached as that would be open to a set aside or nullification. It is the latter that, presents a challenge to the mediation process.
44. The challenge is simply that "good faith" is difficult to define just as it is difficult to define vague concepts like "honesty of purpose". This is because "good faith" is intangible and is an abstract concept which is open to each individual's "own mind and inner spirit." Given this difficulty, legislative provisions worldwide have avoided providing a definition. The courts that have gone the court annexed ADR path as in the US, tired to fill this void. Unfortunately, they were mainly subjective and where readily reversed on appeal as they impinged upon the fundamental principle of confidentiality and privileged communication during and in mediation. This is borne out clearly by two decisions. In Anthony v. Andrews, the Court maintained the confidentiality of the mediation process. On the other hand, the decision in Nick v. Morgan Foods, Inc, the court disregarded the confidentiality principle and reviewed details about a party's participation in mediation.
45. One of the few cases that appear to be an exception is the decision of the District Court in In re A.T. Reynolds & Sons, Inc. There, in reversing a bankruptcy decision, the Court gave a narrow meaning to the phrase "good faith" to connect it only to a requirement to comply with court orders to attend mediation, to provide pre-mediation statements, and to attend mediation with authority to settle. This may however, appear inadequate. Fortunately, however, some learned scholarly work on the subject like that of Professor Kimberlee Kovach as pointed out by Professor John Lande in an article entitled "Using Dispute System Design Methods to Promote Good-Faith Participation in Court-Connected Mediation Programs," provides some useful guide. This scholarly work proposes that the following list of behaviors would protect against a finding of a party acting in "bad faith":
(1) complying with legislative and other rules, standing orders or practice directions' or provisions that govern mediation;
(2) complying with orders referring a matter to mediation;
(3) personal attendance (excluding attendance by telephone) at the mediation by all parties who are fully authorized to settle the dispute,
(4) preparation for mediation by the parties and their representatives, which includes the exchange of any documents requested or as set forth in a rule, order or request of the mediator;
(5) participation in meaningful discussions with the mediator and all other participants during the mediation;
(6) acting in accordance with all contractual terms regarding mediation that the parties may have agreed to;
(7) following the rules set out by the mediator during the introductory phase of the process;
(9) remaining in the mediation process until the mediator determines that the process is at an end or excuses the parties;
(10) engaging in direct communication and discussion between the parties to the dispute, as facilitated by the mediator;
(11) engaging in accurate and honest representations to the other parties or the mediator during and for the purpose of the mediation; and
(12) in pending lawsuits, refraining from filing any new motions until the conclusion of the mediation.
46. It should be obvious that, engaging in conduct or behavior that is the opposite of the matters listed above would form the foundation for a finding of "bad faith." These sets of behaviors could be summarized in my view to read in terms of the parties being required to do everything possible and within their power or ability to ensure that the mediation proceeds from start to finish unimpeded but fully supported by them. As Thomas J. Sartory and Gary M. Ronan, suggest, "conforming with these behaviors is prudent in light of the uncertainty about how any individual judge will determine whether a party has acted in good faith". One thing is however, very clear and that is this. "Good faith" is not about forcing a party to settle. Rather, it is about parties being asked to explore fairly and fully and then exhaust all possible options of resolving their conflicts out of court, without insisting on fixed positions and or engaging in conduct that leads to a frustration of a mediation taking off the ground and or otherwise prevent the mediation process from proceeding smoothly.
47. Allowing myself to be guided by all of the above, I am of the view that, a balance needs to be struck between the two equally important principles of confidentially in mediation and participating in "good faith." That balance in my view is this. Whenever, there is an allegation or suggestion of "bad faith", an enquiring as to what the parties said or did should be around the kinds of steps the parties were required to take and the kinds of behaviors they should display and in any case, restricted to matters that a capable of establishing by appropriate evidence. This should include a case in which a party takes a position, let us say, on damages that is obviously beyond acceptable levels or beyond prevailing levels of damages assessed in similar cases and in respect of which, any rational human being could see at once the unreasonableness of a party without more. I am however of the view that, there should be no inquiry into cases in which there are requirements to ascertain a party's state of mind at any point in time, or it requires technical evidence and in any case, it is a matter in which opinions may well abound.
Application of the principles
48. In this case, the parties did attend mediation on 23rd November 2012, pursuant to a Court order issued under Rules 4 and 5 of the ADR Rules. The Defendants attended the mediation with persons who clearly had the power and authority to attend mediation, negotiate, make decisions binding on the defendants and if possible settle the matter on behalf of the defendants. On the other hand, the Company attended through people who now claim they did not have the necessary power and authority to negotiate, make binding decisions and settle the matter on behalf of the Company. I have already found that the Company's claim of its representatives' lacking power or authority to bind it, is not supported by any evidence. Nevertheless, if despite that finding, the Company representatives did not have the necessary power and authority that would no doubt amount to "bad faith" on the part of the Company. This would bring into play the provisions of Rule 10 (7), which reads:
"(7) Where the Court is satisfied that a party has not participated in good faith in the mediation or has impeded the mediation, it may:
(a) order that any claim for relief by the defaulting party is stayed until further order;
(b) take the defaulting party's conduct into account in awarding costs in the proceedings; or
(c) make such further or other order as it may think appropriate in the proceedings."
49. However, in view of this Court's finding on the factual question of whether Mr. King, the general manager of the Company, lacked the necessary power and authority to bind the Company, there is no need to give any consideration to the application of the provisions of Rule 10 (7). This then leads us to consider the remaining question of; on what basis can a higher authority or the governing body of a corporate entity choose not to accept the whole or part (s) of an agreement reach at mediation?
Seeking to opt out of agreement reached at mediation
50. As already mentioned mediation is a structured process of negotiation that leads to any of three outcomes namely: (1) a full settlement of the matters in dispute between the parties; or (2) a resolution of only some of the issues; and or (3) no resolution at all, despite the parties' best efforts at finding a solution. This would be the case where the parties attend and negotiate at mediation in "good faith", fairly and openly. An absence of such "good faith", fairness and reasonableness would have only one outcome, no binding agreement even if the parties reached an agreement. This is because as already noted, an agreement arrived at in "bad faith" and or in a manner that is unfair and unreasonable, is open to a set aside.
51. All agreements arrived at mediations are legally binding and enforceable, provided the essential elements of a valid contract are present. What then are the essential elements of a valid contract? A quick perusal of the relevant authorities[1] reaffirms and brings out clearly the following as the essential elements of a legally binding and enforceable contract:
(1) a clear offer and acceptance;
(2) an intention to create a legally binding contract;
(3) passage of valuable consideration each way; and
(4) Each of the parties has the legal capacity to negotiate and enter into a contract.
52. Generally, an agreement of the parties that meets these essential elements would qualify to be a legally binding and enforceable contract. In certain cases however, even where these essential elements are present, some contracts can be invalidated or nullified in certain known circumstances. Various authorities on contract law specify the following circumstances in which a contract could be nullified or invalidated:
(a) there is a failure to meet statutory requirements in cases where the contracts are regulated by statute;[1]
(b) the agreement is to commit a crime or commit an act that is illegal such as an agreement to carry out a bank robbery;[1]
(c) there has been fraudulent misrepresentation in some material respect at the negotiations which eventually leads to an agreement;[1]
(d) the terms of the contract are unreasonable and unfair;[1] and
(e) there has been use of force and or duress to obtain or secure the contract.[1]
53. It should clearly follow therefore that, unless a party is able to make out a case under anyone or more of these known grounds, they would be bound by the terms of their agreement. Hence, any action taken by any party against the clear terms of an agreement would no doubt, amount to a breach of contract. That would of course entitle the other innocent party to go for an appropriate enforcement of the contract.
54. The above general position equally applies to an incorporated entity, including State or public entities, attending mediation either voluntarily or by order of the Court or both. It should follow therefore that, unless the governing body or higher authority of a corporate entity is able to identify and establish any of the known grounds for voiding a contract and that it did not contribute to the existence of such a ground, it will remain bound by the terms of an agreement arrived at mediation. If for instance, a corporate entity is claiming lack of capacity in its representative, as in this case, it would not be a valid ground to seek to void the contract. This is because as we noted already, a corporate entity is duty bound to ensure that its representative at mediation has the necessary power and authority to represent it, explore in "good faith" all possible options, negotiate and help arrive at an agreement at mediation, unless there is a serious legal or other impediment beyond its control. A breach of that duty as already noted would amount to "bad faith" on the part of the corporate entity by reason of which certain adverse consequences could follow against it.
Present Case
55. Applying the above to the present case, I note that the Company has not alleged and establish any of the known grounds for voiding a contract, and hence the agreement arrived at the mediation in this matter. The only argument or claim the Company put before the court in choosing to reject parts of what was agreed to at mediation is a lack of authority in Mr. King at the mediation. This argument or claim cannot be sustained for two reasons. The first is the fact as already found that, there is no evidence of Mr. King's lack of authority at mediation or at all to represent the Company. In other words and as I have already found, the claim of lack of authority was not disclosed at mediation and was therefore not an issue at the mediation. Secondly, if despite that, it was and still an issue it is the Company's own doing in not ensuring that Mr. King and the others who attended on its behalf were appropriately equipped with the necessary and relevant authority, power and material necessary and relevant to assist in finding a lasting solution to the matters in dispute between the Company and the LOs.
56. Consequential on the foregoing discussions and findings of fact, I find that the Company's board was at no liberty to pick and choose which parts or terms of the agreement reached at mediation it can give effect to and which of them it can opt out of. The Company is instead, bound by the terms of the agreement reached at the mediation conducted and concluded on 23rd November 2012 at Kimbe, West New Britain Province. The only legitimate question if any, might be just what was it that the parties agreed to under each of the heads of agreement. This might be the only legitimate issue for the parties and for the Court to be concerned with. That is necessary in view of the lawyers failing to assist their respective clients and the mediation process in not recording the parties' agreement in a formal agreement fully setting out the relevant and necessary details, after the mediator completed its task in summing up the areas of agreement. If counsel discharged their duties and responsibilities the issues now resolved and any that might arise would have been avoided.
___________________________________________________________
Gadens Lawyers: Lawyers for the Plaintiff
Narokobi Lawyers: Lawyers for the Defendants
[1] (2004) SC767.
[2] (2002) SC694
[3] [1993] PNGLR 285
[4] [1992] PNGLR 100.
[5](2008) N3287.
[6] See for example the decision in (2008) SC910.
[7] (2003) SC 716.
[8] (2008) SC911.
[9] (2005) SC835.
[10] (2003) SC705.
[11] Andrew Daiva and Ome Ome Forests Ltd v. Lawrance Pukali and Benedict Waede
[12] (2002) N2289.
[13] “Developing A System of Court Annexed ADR In An Ever Increasing Litigious Society, Arguments For and Against: The PNG Experience” by Ambeng Kandakasi, Malayan Law Journal: Article Supplement, LexisNexis, 2007.
[14]
See for some of the authorities on point: NCD Commission v. Yama Security Services (2005) SC835; NCDC v Yama Security Services Pty Ltd (2003) SC707 and NCD Commission v Yama Security Services (2005) SC835
For sample of cases on point see: Fly River Provincial Government v. Pioneer Health Services (2003) SC705;
For a discussion and reference to this point see: Andrew Kinaram v. Vanimo Forest Products Ltd (20[1]1) N4413; Public Officers Superannuation Fund Board v. Sailas Imanakuan (2001) SC677 and Bank South Pacific Limited v Robert Tingke (2012) N4901. See also ss.4 and 5 of the Fairness of Transactions Act 1993.
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