N6557
PAPUA NEW GUINEA 
   [IN THE NATIONAL COURT OF JUSTICE] 

OS 456 of 2015 

BETWEEN

OBERT LAKA, THOMAS TAMANOK, FRANK RETO, ANTON TAMANOK for themselves and members of their Anos Clan of Maragon Village whose names appear in Schedule 1 of the Originating Summons as well as all other landowners whose names appear in the said Schedule 1 
First Plaintiffs

AND

WILLIAM JONE, STEPHEN LASIM, LEN NEVEIL, TILUM GEMON for themselves and members of their Kes Kokomagieot Clan of Maragon Village whose names appear in Schedule 1 of the Originating Summons as well as all other landowners whose names appear in the said Schedule 1 
Second Plaintiffs

AND
STAN NEKITAL, Registrar of Tenements 
First Defendant

AND
MINERAL RESOURCES AUTHORITY
Second Defendant

AND
HON. BYRON CHAN, Minister for Mining
Third Defendant

AND
THE INDEPENDENT STATE OF 
PAPUA NEW GUINEA
Fourth Defendant

AND
NORD AUSTRALEX NOMINEES (PNG) LIMITED
Fifth Defendant

AND
SIMBERI GOLD COMPANY LIMITED
Sixth Defendant

Waigani: Hartshorn J 
          2015: 21st December 
	       2016: 19th  October	

Application to dismiss proceeding 

Cases: 
Bernard Kosie v. John Kapi Natto (2015) N6263
Bernard Kosie v. John Kapi Natto (2016) unreported SCA 55/15 delivered 6/5/16
H. Stanke & Sons Pty Ltd v. O’Meara [2007] SASC 246
Kerry Lerro v. Stagg & Ors (2006) N3050
Louis Lucian Siu v. Wasime Land Group Incorporated (2011) SC1107
Mamun Investment Ltd v. Onda Koim (2015) SC1409 
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 
Puri Ruing v. Allan Marat (2012) N4672
Rabaul Shipping Ltd v. Rupen (2008) N3289
Takori v. Yagari & Ors (2008) SC905 
Wan Global Limited v. Luxurflex Limited (2012) SC1199 
Counsel:	

Mr. R. Manrai, for the Plaintiffs
Mr. A. Mana, for the Fifth and Sixth Defendants

19th October 2016
1.	 HARTSHORN J:  This is a decision on an application to dismiss this proceeding. The application is made by the fifth and sixth defendants Nord Australex Nominees (PNG) Ltd (Nord Australex) and Simberi Gold Company Ltd (Applicants). It is opposed by the plaintiffs. The application is made pursuant to Order 12 Rules 1 and 40 National Court Rules on the basis that no reasonable cause of action is disclosed, the proceeding is frivolous or vexatious and that the proceeding is an abuse of process of the court.
Background
2. 	The plaintiffs, comprising persons described as landowners and members of the Anos and Kes Kokomagieot Clans of Simberi Island, Kavieng, New Ireland Province, seek by way of originating summons, amongst others, declaratory relief to the effect that the initial grant of an Exploration Licence to Nord Australex over their customary land and an application for its extension are unlawful and null and void.
This application
3. 	The Applicants contend that this proceeding should be dismissed as:
a)	the relief sought as to the initial grant of the Exploration Licence is statute barred, as Exploration Licence 609 was granted in May 1985;
b)	the relief sought as to the extension of the Exploration Licence is premature as the application for its extension is in progress and has not been completed. If an extension is granted and the plaintiffs take issue with such a grant, they can challenge such a grant by judicial review;
c)	this proceeding concerns amongst others, a dispute as to ownership of customary land in respect of which the court does not have jurisdiction;
d)	the relevant provisions of the Mining Act 1992 provides an exclusive process to be followed concerning any compensation claims, and that process has been exhausted in respect of the Exploration Licence;
4. 	The plaintiffs contend that the proceeding should not be dismissed as:
a)	the plaintiffs have only recently become aware that their land is the subject of an exploration license. They were not given the opportunity to raise objections to the Exploration Licence and so seek to nullify it;
b)	a time bar does not apply in this instance as the plaintiffs were not aware of their land being the subject of an exploration license;
c)	this proceeding does not concern a dispute as to the ownership of customary land and so this court does have jurisdiction.
Law
5. 	As to order 12 Rule 1 National Court Rules, this provision in essence allows the court at any stage of the proceedings on the application of any party, to make such orders as the nature of the case requires notwithstanding that the applicant does not make a claim for those orders in the originating process.

6. 	As to Order 12 Rule 40 National Court Rules, There are numerous authorities in respect of the principles which apply to applications under Order 12 Rule 40 National Court Rules and I refer to the following cases in this regard: Kerry Lerro v. Stagg & Ors (2006) N3050, Takori v. Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Louis Lucian Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows: 

“27.	The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State (2006) N3050; Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905. These cases say the same thing. 

28.	The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra). 

29.	The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim.  The principles stated by these cases can be summarized as follows:

(i)	A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.
 	
(ii)	The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii)	The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv)	A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v)	A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30.	In an application under O.12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.”

Consideration

7. 	I consider first whether the declaration seeking that the initial grant of the Exploration Licence is unlawful and therefore null and void, is statute barred.

8. 	Counsel for the plaintiffs submitted that s. 16 Frauds and Limitations Act 1988 did not apply in this instance as the plaintiffs did not become aware of the existence of the Exploration Licence until recently, and not more than six years ago. No issue was taken by the plaintiffs, as I understand, with the Frauds and Limitations Act 1988 not applying on the basis that the relief that is sought is by way of declaration and that declaratory relief is equitable relief.

9. 	As to this point, although it was not raised by the plaintiffs, I am satisfied that although the relief sought is by way of declaration, it is founded on or based upon the initial grant of the Exploration Licence - a simple contract. The underlying basis therefore is not in equity and so s. 18 Frauds and Limitations Act 1988 does not apply. I refer in this regard to Mamun Investment Ltd v. Onda Koim (2015) SC1409 and H. Stanke & Sons Pty Ltd v. O’Meara [2007] SASC 246.

10. 	As to the contention that s. 16 Frauds and Limitations Act 1988 does not apply as the plaintiffs only recently became aware of the Exploration Licence within the last six years, in Mamun v. Koim (supra), the Supreme Court held amongst others, that the date that a cause of action accrues for the purposes of s. 16 Frauds and Limitations Act 1988 is not postponed or altered to run from when a plaintiff became aware of the cause of action. In this instance, the initial grant of the Exploration Licence 609 was in May 1985. That is the date when the plaintiffs’ cause of action in regard to the relief sought in paragraph 1 of the originating summons, accrued. Clearly the cause of action accrued more than six years ago. Consequently, the relief sought in paragraph 1 of the originating summons is statute barred and should be dismissed.

11. 	In the event that the relief sought in paragraph 1 of the originating summons is not statute barred, the relief that is being sought is in reality an order in the nature of certiorari but disguised as a declaration. Order 16 Rule 1(1) National Court Rules requires such relief to be sought pursuant to Order 16. That it has not been constitutes an abuse of process. This is particularly so, as by not commencing the proceeding pursuant to Order 16, leave to apply for judicial review has not been sought. I considered this issue in Puri Ruing v. Allan Marat (2012) N4672 and Wan Global Limited v. Luxurflex Limited (2012) SC1199 (see also Bernard Kosie v. John Kapi Natto (2015) N6263, an appeal from which was refused in Bernard Kosie v. John Kapi Natto (2016) unreported SCA 55/15 delivered 6/5/16). Consequently paragraph 1 of the originating summons should be dismissed.

12.	 As to the relief sought in paragraph 2 of the originating summons that the application for an extension of the term of the Exploration Licence is unlawful and therefore null and void, the Applicants submit that the relief sought is premature as at the time of the hearing of this application, the application for extension was still being processed and a decision had not been made on whether the application for extension would be successful. Further, if the application for an extension was granted, the plaintiffs at that stage could apply to judicially review the decision to grant.

13. 	Counsel for the plaintiffs did not make specific submissions on this point.

14.	 It is the case that if the application for an extension of the Exploration Licence is or is not granted, an aggrieved party is able to apply to judicially review that decision. Indeed, if an aggrieved party were to seek to have such a decision declared unlawful and null and void, an application to judicially review pursuant to Order 16 National Court Rules would be required: Rabaul Shipping Ltd v. Rupen (2008) N3289,  Puri Ruing v. Allan Marat (supra)and Wan Global Limited v. Luxurflex Limited (supra) (see also Bernard Kosie v. John Kapi Natto (2015) N6263, an appeal from which was refused in Bernard Kosie v. John Kapi Natto (2016) unreported SCA 55/15 delivered 6/5/16).

15. 	By seeking the relief that they do in paragraph 2 of the originating summons, the plaintiffs are prematurely attempting to obtain relief by avoiding the mandatory Order 16 National Court Rules procedure in circumstances where a decision has not been made as to whether the application for the extension of the term of an Exploration Licence has been made and in circumstances where a procedure is set out in Part VI Mining Act 1992 for objections to be made to an application for the extension of a term of an Exploration Licence. I am of the view that this constitutes an abuse of process. Paragraph 2 of the originating summons should be dismissed.

16. 	Consequently, as the remaining paragraphs of the originating summons are consequential upon the relief sought in paragraphs 1 and 2 being granted, they also should be dismissed. Given the above it is not necessary to consider the other submissions of counsel.

Orders

17. 

a)	This proceeding is dismissed;

b)	The plaintiffs’ shall pay the costs of the fifth and sixth defendants 	of and incidental to this proceeding to be taxed if not otherwise 	agreed;

c)	Time is abridged.

____________________________________________________________
Mannrai Lawyers		       : Lawyers for the Plaintiffs                                    
Mineral Resources Authority  : Lawyers for the First and Second Defendants    
Allens Lawyers 		        : Lawyers for the Fifth and Sixth Defendants